Module IV

Amity School of Business

International Recruitment, Selection & Training Approaches to Recruiting (ethnocentric, polycentric, regiocentric and geocentric) Factors in expatriate selection, Role of expatriate training, Pre Departure Training, Developing staff through international assignments.
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Recruitment
Recruitment is the process of identifying and attracting potential candidates from within and outside an organisation to begin evaluating them for future employment. Once candidates are identified, an organisation can begin the selection process. This includes collecting, measuring and evaluating information about the candidates qualifications for specified positions. Organisations use these processes to increase the likelihood of hiring individuals who possess the right skills and abilities to be successful in their jobs.
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International Recruitment
Recruitment, selection and staffing in international context are not only crucial for an MNCs success, but it is also an important personal decision taken by the individual, assigned for international assignment. Therefore, a thorough job analysis is required to determine the level of skills, technical abilities, competencies and personal attributes, required flexibility of the employee needed, etc.
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A judicious mix in terms of providing healthy and competitive career paths to existing employees at home, along with giving host country nationals a chance( having due regard to the legal requirements as well as their career mobility) to excel in their assignments is needed.
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INTERNATIONAL MANAGERS/ EXPATRIATES

PCNs

HCNs

TCNs
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Parent Country Nationals PCNs

Advantages: 1. Maintenance and facilitation of org. control and coordination. 2. Possess necessary skills and expertise. 3. Talented and committed managers are given international experience. 4. There is assurance that subsidiary will comply with org. objectives and policies,etc.

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Parent Country Nationals PCNs

Disadvantages: 1. Promotional opportunities to HCNs will be limited. 2. Adaptation to host country may take a long time. 3. Tendency of PCNs to impose HQ style. 4. Differing compensation for PCNs and HCNs.
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Advantages: 1. Salary and benefit requirements may be lower than for PCNs. 2. TCNs may be better informed about the host country environment than PCNs. Disavantages: 1. Transfers must consider possible national animosities. 2. The host govt. may resent hiring of TCNs. 3. TCNs may not want to return to their country after assignment.
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Third Country Nationals TCNs

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Host Country Nationals HCNs

Advantages: 1. Elimination of language and other barriers. 2. Reduction in hiring costs and elimination of work permit requirements. 3. Continuity of management improves, since HCNs stay longer in positions. 4. Policy dictation by host govt. in hiring HCNs. 5. Better morale as they see future career potential in assignment.
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Host Country Nationals HCNs

Disadvantages: 1. HQs control and coordination may be impeded. 2. Outside the subsidiary they have limited career opportunity. 3. PCNs may be at disadvantage to gain foreign exposure due to hiring of HCNs.
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If a Japanese multinational wishes to appoint a new marketing director for its US subsidiary, it may decide to fill the position by selecting from marketing staff available in its parent operations( i.e. PCN), Or to recruit locally( an HCN) Or seek a suitable candidate from one of its other subsidiaries( a TCN)
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The decision is determined by factors such as: 1. Its general staffing policy on key positions in HQs and subsidiaries. 2. The constraints placed by the host government on hiring policies. 3. Staff availability.

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Staffing approaches
The IHRM literature uses four terms to describe MNCs approaches to managing and staffing their subsidiaries. These terms are taken from the seminal work of H.V. Perlmutter. These are: Ethnocentric Polycentric Geocentric Regiocentric
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1. 2. 3. 4.

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Ethnocentric Approach
All key management positions in domestic and foreign operations are filled by parent company nationals. Subsidiaries are managed by the staff from the home country.
May believe the host country lacks qualified individuals. May see this as the best way to maintain a unified corporate culture. May believe it is the best way to send PCNs to a foreign operation as you can place a degree of interest in them and which can moderate the perceived high risk involved in foreign activities.

Disadvantages
Limits advancement opportunities for host-country nationals -> resentment, lower productivity & increased turnover Can lead to cultural myopia failure to understand host country cultural differences that require different approaches to management & marketing. A US study found that 50 percent of responding firms estimated that the average cost of expatriates was three to four times that of normal salary, and 18 percent indicated more than four times the salary.
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Polycentric Approach
Each subsidiary is treated as a distinct national identity with some decisionmaking autonomy. Subsidiaries are usually managed by local nationals(HCNs), who are seldom promoted to positions at headquarters, and PCNs are rarely transferred to foreign subsidiary operations.
It eliminates language barriers, avoids the adjustment problems of expatriate and their families and removes the need for expensive cultural awareness training programs. Lesser compensation packages as compared to PCNs. Gives continuity to the management.

Disadvantages
Host country nationals have limited opportunities to gain experience outside their own country & cant progress to senior positions. Gap can form between host country managers & parent country isolating HQ staff from various foreign subsidiaries. Lack of management transfers can lead to lack of integration -> a federation of largely independent national units with only nominal links to HQ. Difficult to transfer core competencies or realize experience curve & location economies.
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Geocentric Approach
It seeks the best people for the job throughout the company, regardless of nationality. Enables firm to make the best use of its human resources. Enables the firm to build a cadre of international executives who are at home working in a number of cultures. Reduce cultural myopia & enhance local responsiveness. It overcomes the federation drawback of the polycentric approach. Disadvantages Immigration laws can require the employment of host-country nationals. Expensive to implement training & relocation costs. Need a compensation structure with a standardized international base pay level higher than national levels in most countries.
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Regiocentric Approach
It seeks to reflect the geographic strategy and structure of the multinational. Staff may move outside their countries but only within the particular geographic region. Regional mangers may not be promoted to HQs positions but enjoy a degree of regional autonomy in decision making. For eg. A US-based firm could create three regions: Europe, America and Asia-Pacific. European staff would be transferred throughout the European region( like a French national to Belgium and a German national to Spain). Staff transfers to Asia-pacific region from Europe would be rare, as would transfers from the regions to HQs in the US.
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Recruitment Methods
1. Using head hunters: in international recruitment, especially for the top management positions, headhunters need to offer an integrated service with no international obstacles to cross-border cooperation. In doing so, proper coordination between the international HR manager and the head-hunters is important. Recent trend is that of a partnership between headhunters and the executive search firms. A number of firms use supplier relationship including American Express, Philips, Pepsi Cola, Motorola and so on. It allows a wider search in terms of wider geographical location and number of candidates. The highest growth areas include China, Malaysia, Korea and India.
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2. Cross-national Advertising: there is a shift away from press advertising to creative alternatives, such as, outdoor poster sites, airport lounges, airline magazine. Knowledge about the best suitable recruitment media, national custom, culture and values are important while developing the themes, pictures, design and language of the advertisements.

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E-recruitment

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Internet recruitment has become one of the most popular and effective recruitment methods today, especially to the internationally mobile managers, and small companies seeking specialists from another country.

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International Graduate Program

Students are managed and trained in a manner which helps to develop an international management career.

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Determinants of IHRM Amity School of Business approaches and activities

Country A
Contextual variables Legal system Cultural distance

Approach to staffing Firm-specific variables Situation Variables

Country B

Country C
etc

IHRM activities
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Individuals motives for international assignment

1. 2. 3. 4. 5. 6. 7. To gain new job experience. Better compensation. Sense of obligation to the company. Possibility of advancement upon return. Improved lifestyle abroad. Exposure to new culture. Restricted career possibilities within parent company.

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Position filling; the most common reason is to fill a skill gap, followed by the launch of a new endeavour and technology transfer. Management development; assist in development of common corporate values. Organisation development; greater staff mobility supports the global corporate culture and assists in cross-fertilisation of ideas and practices.
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Reasons for international assignments

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Types of international assignments

Depends on the purpose of transfer and the nature of the task to be performed. Companies tend to classify types according to the length or duration of the assignment: 1. Short-term(<3months); troubleshooting or project supervision. 2. Extended (< 1yr.); similar activities as above. 3. Long-term( 1-5yrs.); MD of a subsidiary, also termed as traditional expatriate assignment.
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1. 2. 3. 4.

Within these three broad categories, some non-standard assignments are also there: Commuter assignment, Rotational assignments, Contractual assignments, Virtual assignments.

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International assignments: moderating factors

Moderators
Inability to adjust to foreign Culture Length of assignment Willingness to move Work-related factors Psychological contract

Performance
Intention to stay or leave

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The phases of cultural adjustment

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Culture Shock
Exposure to a foreign culture can produce a predictable series of reactions:
A period of fascination. Culture shock. Adaptation.

Dealing with culture shock involves:

Preparation. Language skills. Preparing the host country personnel who will work with the expatriate.

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The Expatriate Manager in the MNC

80 percent of all middle- to large-size companies use expatriates
Many companies are not effectively selecting and preparing employees for overseas assignments. American expatriates fail more often than their Japanese and European counterparts. Only 57 percent of companies provide cross-cultural training.

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Expatriate failure
Definition: Premature return of an expatriate Now recognized that under-performance during an international assignment, and retention upon completion, should be included.
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Expatriate failure
Direct costs of failure: airfares, associated relocation expenses, and salary and training
Varies according to level of position concerned. Country of destination. Exchange rates. Whether failed manager is replaced by another expatriate.

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Expatriate failure
Indirect costs (invisible)
Damaged relationships with key stakeholders in the foreign location. Negative effects on local staff. Negative effects on expatriate concerned. Family relationships may be affected.
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Factors associated with expatriate failure:

Uncertain technical competency Weak language skills Unsure about going overseas Family problems Low spouse support Behavioral rigidity Inability to adapt Poor relational ability Weak stress management skills
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Factors associated with expatriate success:

Good technical and language skills Strong desire to work overseas Specific knowledge of overseas culture Well-adjusted family situation Complete support of spouse Behavioral flexibility Adaptability and open-mindedness Good relational ability Good stress management skills

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Selecting the Expatriate Manager

Success in domestic operations may have little to do with success overseas
Many expatriates believe too little attention is paid to other critical factors during the selection process

Expatriate selection should focus on the managers:

Self-image Normal way of interacting with others Perceptual orientation
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Selecting the Expatriate Manager

The role of the expatriates family should not be underestimated
Dual career marriages are another difficult issue.

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Role of an Expatriate
Expats Roles
Expats home location Agent of direct control Agent of socialisation Network Builder Boundary spanner Language node Transfer of competence and knowledge
Foreign location

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Assumptions in staff selection

There is a universal approach to management. People can aquire multicultural adaptability and behaviours. There are common characteristics shared by successful international managers. There are no impediments to mobility.
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Expatriate Selection
1. Technical competency; 90% of companies base international selections on technical expertise, downplaying other areas. 2. Personal attributes 3. Ability to cope with environmental variables 4. Family situation 5. Country-specific requirements 6. Company-specific requirements 7. Language
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Factors in expatriate selection

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Only 10% of 50 Fortune 500 firms tested for important traits such as cultural sensitivity, interpersonal skills, adaptability & flexibility. 4 dimensions predict success in a foreign posting (Mendenhall & Oddou)
Self-orientation self-esteem, self-confidence, & mental well being. Others-orientation ability to interact effectively with host country nationals (relationship development & willingness to communicate). Perceptual ability ability to understand why people in other countries behave the way they do. Cultural toughness relationship between country of assignment & how well an expatriate adjusts to a particular posting.
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Expatriate Training
From the organisational point of view there are two beliefs1. Pre-departure training really does not help, since all this practically has to be learnt at the location of posting by experiencing that particular environment. 2. Such training is costly and adds a little value and is also a time consuming affair.
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The key people who are in need of training are expatriates, spouses, children. There are two main requirements for the expatriates to be successful in their international assignments: 1. The general knowledge of the new countrys demographics, history, politics, business practices, education system, etc. and sociocultural norms. 2. The understanding of the difference in cultural values, and how it affects perceptions, values and communication.
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Objectives of expatriate trianing

1. To maximise the cultural sensitivity of relocating employees, in preparing them to conduct business with colleagues from other cultures. 2. To learn how to avoid misunderstanding based on cultural differences. 3. To learn how to communicate verbally and nonverbally with colleagues in other cultures. 4. To understand the role of learning and communication styles in work, everyday living and how to work effectively with people having differing styles.
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5.To learn to anticipate the factors leading to culture shock and how to manage it, for oneself and ones family. 6.Role- based training inputs for ensuring due performance of the jobs and achievement of business goals in line with the companys expectations.

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Necessity of training
1. 2. 3. 4. 5. The problem which may arise due to lack of effective preparation before taking up a foreign assignment could be many. Some of them are: The manager may be incompetent to shoulder the responsibilities of the assignment. The unwillingness to work abroad. The personality and the emotional maturity of the manager may prove inadequate. The manager may find it very difficult to adapt to the new environment. There can be family-related issues.
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1. 2. 3. 4. 5. 6.

Researches have revealed more than 80 attributes which could be possessed by an expatriate to become effective and successful. The six most significant among these are: Leadership skills Initiative Emotional stability Motivation Ability to handle relationships Cultural sensitivity
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Expatriate training cycle

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Selecting the manager for foreign posting

Resume for the job at Parent country

Identification of country specific training needs and identification of individual training needs

Support and Monitoring from Parent country Orientation in the host country

Training

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Levels of training
1st level: Learning about the host country-their culture, language, politics, business, geography, religious values and history. This can be done through seminars, videos, meeting with citizens of the country before assignment begins. 2nd level: Understanding the requirements of the assignment-technical skills, managerial knowledge. 3rd level: Preparation for the new job: at the new location. 4th level: Providing assistance-to adjust and adapt to the new environment. 5th level: Re-entry- contact with family, visit to home during vacations.
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Pre-departure training
The essential components of predeparture training programs that contribute to a smooth transition to a foreign location include: Cultural awareness programs. Preliminary visits. Language instruction Practical assistance with day-to day matters.

1. 2. 3. 4.

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Effective Pre-departure Training: a contingency framework

1. The level of expected interaction between the expatriate and the HCNs: High or low; need of cultural coping is lower if this level is low; so focus on technical skills. 2. The degree of dissimilarity between the individuals native culture and the host culture: high or low; need of more crosscultural development if this degree is high.
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Developing Staff through International Assignments

Organizational Development

Accumulating a stock of knowledge, skills and abilities: fostering innovation and proficiency. Developing a global mindset: fostering a sense of corporate identity despite cultural diversity. Expatriates as agents of direct control and socialization in the transfer of knowledge and competence.
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International Cadre: Another Choice

Separate group of expatriate managers who specialize in a career of international assignments

Have permanent international assignments. Move from international assignments to international assignments. Recruited from any country. Sent to worldwide locations to develop crosscultural skills.

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Fosters innovation, organizational learning and transfer of knowledge. Assists breaking down of functional and national boundaries. Encourages diverse inputs. Assists in developing broader perspectives. Develops shared values.

How international teams benefit the multinational

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Developing International Teams through Amity School International Assignments of Business

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