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University of Sunderland Faculty of Business and Law

ASSESSMENT ON: UNIT NAME: APPLIED RESEARCH METHODS UNIT NO PGBM30 Level: Master Submitted By: Name: Kishorkumar Chinubhai Patel Submitted To: University of Sunderland Student Reference Num.: 109139568

INDEX

Topic

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INTROCDUCTION Aims and objectives Literature review Research methodology Research question Data collection Productivity objectives Interpersonal effect Limitations References

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Introduction: An expatriate is the person who is the citizen of that nation in which the companys head office is established. An expatriate either can be collective individual or can be a collective group of the people sent to any other nation for any international business assignment either temporary assignment or permanent assignment. The effect of the global economy has become significant element in variance of two different parameters. And it is general and human resource. Multinational business units are growing very rapidly on an extensive scale and the MNCs are concentrating not only on their domestic markets but are on the verge of growing international as well Therefore they have to send their highly skilled expatriate management staff to abroad to manage everything perfectly. For example Tesco is operating 5380 stores in 14 countries. If Tesco open new store then they have to train new management staff or they have to send their highly skilled managers as an expatriate at there. Expatriate remuneration can be analysed through depth study which includes different constraints and segmentation. Expatriate remuneration refers to an individual who is working in some other country rather than his home nation and has been hired by some business organisation. This research will be conducted using a qualitative methodological approach as the topic is more subjective in nature. Qualitative methodology will be more prominent in gathering useful and accurate information with help of questionnaire. It assists in understanding performance, attitude and observations of an individual which in very beneficial in evaluating data and come down to conclusion (Miles and Huberman, 2002). Qualitative research helps in enhanced understanding in research as it turn into more exploratory form which provides additional elasticity (Adams and Schvaneveldt, 1991). Questionnaire design would be more useful as compared to other qualitative analysis as it would be more numerical based on facts and figures. Secondly it will save time as compared to focus group discussions. To find out actual effectiveness of remuneration, Pareto analysis will be used in calculating threshold value. The variables can be differentiated using weighted factor analysis which will help in finding expatriate remuneration. This report will also include any critical issue involved in carrying out the research.

Aims and Objectives of study: The central aim of this research is to examine the effectiveness of expatriate remuneration in a multinational business organisation. The usefulness of expatriate remuneration is carried out through a feasible study which provides better understanding about the topic. This investigation scrutinizes the constraint into various different parameters that will be used to calculate expatriate remuneration. It will also investigate the obstacles faced by expatriates in this study. Literature Review: An expatriate is a highly skilled worker with unique expertise who is sent to work in another unit of the same company located in a foreign country, generally on a temporary basis (Romero, 2002). Expatriate managers play a significant role in success of multinational business unit as they help in facing challenges and achieving organisational objectives (Shih et al., 2001). According to Bartlett and Ghoshal (1989), multinational business organisation is reorganized coalition with circulated capitals and delegated responsibilities that lets overseas workers in responding to their home-grown variances. Furthermore, Michael Porter described multinational business unit as an organisation which functions in any other nation apart from home country. Now-a-days, with a growth in developing countries, multinational companies send their representatives to other nation for any international project which also helps in improving their knowledge and skills (Downes & Thomas, 1999). There has been tremendous growth in retail business unit. For example, the growth of Tesco supermarket has increased substantially on an international background. Tesco had open store in Hungary, Thailand, Czech, States, Poland and Korea. Its financial performance has also goner high in past 7 years. Their net earnings per share have also gone high and their product lines have also increased overall. There are some researchers which oppose the permanency of multinational business organisation in international business with a point stating that MNC will require planned business marketing plan along with human resource management (Haile S, 2002). An organisation should use all the resources in a rational way and should be able to manage their resources effectively for its success. At times, multinational companies can also face losses because of failure of an expatriate to discharge his role and responsibilities successfully
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because the amount spend on expatriate manager is generally very high as compared to local manager. Desatnick and Bennett also say that 30-50% of USA expatriates do not complete their assignments in developed countries and 70% in developing nation At times, expatriate also return to their home nation without the expiry of their contract. The multinationals organisations should be more particular about their selection and training process. Professionals should focuses more on skills and knowledge of an individual and also be very precise about their appraisal. Appraisal should be done in accordance with their probationary period and if professionals are not satisfies with the performance of an individual then their probationary period should be extended (Martin and Bartol, 2003). There has been significant rise in number of multinational organisation because of the globalization. Measuring performance of managers has become key aspect of performance appraisal. Armstrong and Baron (1998) describes performance management as a process which is intended to improve organisational, team and individual performance and which is owned and driven by line managers. An expatriate learn to adapt themselves with the surroundings because the role and duties which they perform in some other country is totally different from their home country this gives them an opportunity to manage new tasks, role and responsibilities and act as pioneer. There are many problems which an expatriate has to face in another country which includes cultural differences, standards of assessment and subjectivity of an expatriate. Cultural differences play unique role in achievement of an expatriate. It is not possible all the time that managers would have same standards and criteria for measuring performance of an expatriate as compared to home country. It takes time for an expatriate manager to understand new culture and norms and thereby work accordingly. Few researchers believe in the fast that it take approximately around 4-6months for an expatriate to adjust in new environment and to understand his role and responsibilities. In multinational business unit, the performance of an expatriate is measured through quarterly or half yearly review (Martin and Bartol, 2003). Review helps in measuring the performance which alternatively also has a significant effect on performance appraisal. Performance appraisal plays crucial role to achieve higher positions and career of an expatriate manager. An expatriate manager should perform all his duties and achieve organisational goals according to business expectations. Achieving organisational

goals will help him to boost his career on a higher scale. There are about 9 different constraints which plays crucial role in measuring performance of an expatriate; interpersonal abilities, finish the given role and responsibilities, capability of mixing with individuals belonging to different cultural background, starting and upholding relations which nurtures enhanced job performance, innovativeness in work, tool to measure efficiency, effective communication skills, elasticity in adjusting to diverse roles and spousal adjustment (Sinangil and Ones, 2001). In competitive scenario there are also some barriers that are faced by multinational business organisation on return on investments. Yearly budget per individual has gone considerably high because of globalisation therefore there should be optimum utilisation of allocated resources. Return on investment should be specific depending upon expenses and profits. Its very difficult to calculate returns as its very uncertain to know when the project will get completed therefore its a futuristic long term investment. Research Methodology: Qualitative methodology will used to carry on this study as it mentioned in the research itself that there is no need in collecting any primary data. Secondary data is ore time saving as helps in justifying primary data with more specialised specifications. Secondary data can be well-defined as, information collected by various different sources for some particular purpose which can be dissimilar from ours (Ghauri and Gronhaug, 2002). Secondary data can be found more useful during certain analysis, where missing information during conducting primary research can be collected by secondary research. Arithmetical approaches should be engaged so that the productivity can be calculated accurately as result oriented variables cannot be structured and planned in accordance with objectives allocated at the beginning stage of the research as effectiveness of expatriate remuneration it is subjective occurrence. In order to estimate intangible constraints, secondary data will be divided into different segmentations which includes adaptableness, competency and interpersonal skills. Using qualitative methodology which includes in-depth interviews, case- study analysis and questionnaire, if we consider the time analysis factor, questionnaire is best suited methodology which should be used for this research as it is much time saving as compared to in-depth interviews. Interviews takes long time go gather data because of open- ended questions on

which discussions or argument can be last for a long time. Questionnaire design will be more equivalent in measuring the effectiveness of expatriate remuneration in multinational business organisation. Hypothesis: Hypothesis helps in explaining the relationships between independent and dependent variables. Hypothesis helps in explaining perfect consequence and outcome of the study. Research Question: Examine the effectiveness of expatriate remuneration in a multinational business organisation? It is very important to collect additional relevant information before framing a questionnaire so we should analyse various factors which comprises of demographic factors which includes age, sex as well as the location is very important. The

research will be carried on multinational organisation based in United States as it is developed nation and due to highly developed multinational organisation because of latest developed technology which will further help to carry out research in comprehensive manner which will be more reliable to interpret. Data Collection: In a multinational business unit, growth and success of the business can be measured through psychological, socio- cultural and work territorial factors. It requires at least 6months for a new manager to get accustomed to new working environment. Therefore, time term taken to understand the nature, role and responsibilities of new working environment should be kept zero value for time taken which is lesser or equivalent to 6months. In case when time term taken is more than 6months to one year then, it should be valued as 1 on a scale of 5 accepted. Furthermore, for every increase in term, evaluation will increase by 1 in additional to previous one. Generally, in most of business unit the performance appraisal period is equal to 13weeks or 3months but it may also further be extended considering any backgrounds. Therefore, there is no particular tenure for measuring performance appraisal of expatriate. Variable is given 0.5 as weighted factor, which is rating multiplied by weighted factor.

Earlier tenure as will be taken as an expatriate: Any proficient and skilled person employed by any multinational organisation to measure the effectiveness of expatriate does not determined whether the project has been domestic or overseas in any point of time. It is measured on different consideration on various constraints. Previous experience will be more helpful and beneficial for expatriate as it will to understand his role and responsibilities more quickly will further help him to adjust in new environment with higher flexibility. In this study, more importance is given to previous experience in comparison with quantity of projects undertaken. Therefore, in questionnaire variables will be responded in terms of yes or no but well ahead will be transformed into 1 or 0 numerical terms with weighted factor of .5 respectively. Productivity Objectives: The goals can be achieved and will be measured objectively as by using qualitative methodology i.e., framing a questionnaire design, it will provide greater flexibility to identity variables. It depends upon organisation that what are the main objectives that should be achieved in accordance with the time. It will be rated as 1 to 5 and weighted factor will be taken as 1 and should be specified with respect of expatriate. Period occupied to finish the task: It is very important for an expatriate to fulfil his role and responsibilities on time or else it will increase the total overhead cost of an organisation. Here, the weighted ratio which is 1 is directly related to the assignment and the period taken to finish the task is calculated in percentages in relation to predicted time on rating from 1 to 5, and with task of 20% of time is expressed as 5. Interpersonal Effect: There is always a difference between cultures. People react to different situations in different manner. An expatriate should be able to cope up with different people and should be able in maintaining a healthy relation with local managers. This will help an expatriate to build trust and confidence in minds of local managers and staff which will further help him to complete his desired task on time with great results. An expatriate is able to overcome the gap of cultural barriers, than will gain entire
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backing from his new team for accomplishing great results and reaching targets on time. The reactions of people are identified into 3 different parameters: decent, wicked and worst. These reactions are rated in scale as 1, 2 and 3 respectively considering 0.5 as weighted factor. The table below gives brief outline about the variables and weighted factor in accordance with tenure, previous year tenure, objectives, time taken and interpersonal effect. VARIABLES MAX Tenure 0 Previous Year 0 Objectives Time Consumed Interpersonal Effect TOTAL: 1 to 5 1 to 5 1 to 3 1 1 0.5 5 5 1.5 14.5 1 1 0.5 2.5 1-0 0.5 0.5 SCORE/GRADE MIN 0-5 0.5 2.5 WEIGHTED FACTOR

There are 5 different columns which include variable, score/grade, and weighted factor, maximum and minimum. Here, Maximum Score= Weighted factor * Maximum Score/Grade Minimum Score= Weighted factor* Minimum Score/Grade Expatriate is calculated on five diverse scales which is down the variable column. Calculation: Analysis is done according 80-20 principle established by an Italian economist named Vilfredo Pareto in 1906. He developed this principle to determine uneven distribution of wealth in his nation. This principle states, 20% of persons preserved 80% of wealth. In this analysis, 80 per cent will be considered as a base value out of
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overall assessment of survey form. The actual pay out of local manager or a person who is hired as an expatriate manager will help to calculate exact expatriate remuneration base value. The actual pay should be multiplied by 20% of factors to reach at expatriate payment a and 80% of expatriate remuneration has to be 80% of a. Limitations: The study helps in understanding the effectiveness of expatriate remuneration in multinational organisation using qualitative methodology. Qualitative methodology which includes a questionnaire design helps to understand this study. There are also some limitations like timely performance appraisal plays very significant role in success of the organisation and if it is not done effectively than can hinder the performance in overall. The choice of evaluator is very crucial to avoid bias outcomes and negotiations which are done during selecting a segment. There are possibilities of minor error because of use of weighted factor analysis as it is used to regulate primary as well as secondary effect of variables therefore there should be comprehensive experimental study. This research does not focuses on long term future benefits which an expatriate can bring into an multinational business unit and those skills can be transmitted to alternative individual within the organisation. The honesty and truthfulness with respect to privacy of an expatriate payment is a vital aspect considering moral viewpoint. In addition, the research which is carried out by questionnaire design should also be authenticated by other research methods like group discussions or survey as there is no use of primary methodology in this research. Using of other methods at the end will help in having more assurance about the conclusion.

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References:

Romero, E., J., (2002), The Effect of Expatriate Training on Expatriate Effectiveness, Journal of Management Research, Volume 2, Number 2, pp: 73-77. Ghauri, P., Gronhaug, K., (2002), Research Methods in Business Studies, Prentice Hall. Miles MB, Huberman M. The qualitative researchers companion: classic and contemporary reading. Sage Publications Inc, 2002 Adams, G. and Schvaneveldt, J. (1991) Understanding Research Methods. New York: Longman.

Shih, H. A., Chiang, Y. & Kim, I. (2001) Expatriate performance management from MNEs of different national origins; Journal of International Journal of Manpower Vol. 26, No. 2, Pp. 157 176. Downes, M., & Thomas, A. S. (1999). Managing overseas assignments to build organizational knowledge. Human Resource Planning, 22(4), 33 48. Bartlett,

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Transnational Solution. Boston: Harvard Business School, 1989. Desatnick, R.A and Bennett, M.L. (1978) Human Resource Management in Multinational Company, New York: Nichols. Porter, E. M. (1990). The competitive advantage of nations, New York: The Free Press, 18.

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Hiale, S. (2002), Challenges in International Benefits and Compensation Systems of Multinational Corporation, The African Economic and Business Review, Vol. 3, No. 1, Spring 2002. Martin,D.,C. and Bartol,K.M. (2003), Factors influencing expatriate performance appraisal system success: an organizational perspective, Journal of International Management 9 (2003) 115132. Armstrong, M., & Baron, A. (1998) Performance Management: The New Realistic, Institute of Personnel and Development, London. Martin,D.,C. and Bartol,K.M. (2003), Factors influencing expatriate performance appraisal system success: an organizational perspective, Journal of International Management 9 (2003) 115132. Sinangil, H. K., & Ones, D. S. (2001), Expatriate management, In N. Anderson, D. S. Ones, H. K.Sinangil, & C. Viswesvaran (Eds.), Handbook of industrial, work & organizational psychology, Vol. 1 (pp. 425443). London: Sage.

Citations:

http://www.itchybrainscentral.com/tesco-business-strategy.html http://www.harzing.com/download/failurerates.pdf http://www.survivalbooks.net/top-tips/culture-shock/

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