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Recruiting and Selecting

Staff for International


Assignments

Dr Subhash Gupta
Objectives
 We will address the following issues:
 The myth of the global manager
 The debate surrounding expatriate failure
 Factors moderating intent to stay or leave the
international assignment
 Selection criteria for international assignments
 Dual-career couples
 Gender issues

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Why international staffing?
Motives behind international staffing are of two types:
 Company motives
 Fill- positions
 Management development
 Organizational development

 Individual motives
 To gain new job experience.
 Better compensation.
 Sense of obligation to company.
 Possibility of advancement upon return.
 Improved life style abroad.
 Exposure to new culture.
 To shoulder greater professional responsibility.
 Desire to escape from personal problems at home.
 Restricted career possibilities within parent company

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International recruitment: Some
issues
 Stereotypes, ignorance, assumptions and
general lack of cross-cultural competencies
can mean that the right people may not always
be given the opportunities they deserve.
Equipping staff with the skills to be able to
identify and manage cross- cultural differences
in interviews is vital. Cross cultural differences
in areas such as body language,
communication, self-presentation, gender, eye
contact, questioning and privacy can influence
an intercultural interview

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International recruitment: Some
issues
 Cross-cultural factors play a significant role while
recruiting abroad. Hiring the right people is a
tough task, particularly when they are located
thousands of miles away. Selectors need to be
trained in and sensitized to the candidates’
culture. The cultural differences must be taken
into account while recruiting an individual.
Otherwise, good candidates may be rejected only
because of an unaware interviewer and hiring
managers, and lack of effective communication
between the interviewer and interviewee

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Recruitment & Selection
 US favors open form of recruitments and selection
based on open and public advertisements, hiring is
generally based on competence and qualifications
 More traditional societies rely on social status, family
background and ties, wealth, education, race,
religion, or connections to military or ruling elite
– Need to understand these factors
 Collectivist societies also place emphasis on
background factors such as family, school attended
etc.
– The major rationale is to find someone who will be
loyal and fit the organization

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Some Country Examples

 Korea – backdoor recruitment – role of high


school and university
 Japan – graduates from the two major public
and private universities dominate business and
public leadership
 Malaysia – favor Malays over Chinese and
Indian population – bumiputra policy – sons of
the soil

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Research Evidence for Recruitment

 More socialist countries (France, Norway,


Spain, Slovenia etc.) – when looking for jobs,
people prefer to use methods such as:
registering with public agencies, asking friends
or relatives
 More capitalist/individualist societies (US,
Australia, Japan) – people prefer open
advertisements and applying directly for jobs

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Selection criteria and techniques

Tung (1981) has identified the following criteria that contribute to


success or failure of an expatriate and thus, need to be considered
while selecting them:
 Technical competency
 Personal attributes
 Ability to cope with environmental variables
 Family situation

Apart from the above-mentioned criteria, certain other criteria also


need to be considered in selection of expatriates:
 Country- specific requirements
 Company-specific requirement
 Language

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Factors in Expatriate Selection

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Mendenhall and Oddou’s Model
 Self-oriented dimension
 Perceptual dimension
 Others-oriented dimension
 Cultural-toughness dimension

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•The self-oriented dimension reflects the degree to
which the expatriate expresses an adaptive concern for
self-preservation, self-enjoyment, and mental hygiene.
The perceptual dimension reflects the expertise the
expatriate possesses in accurately understanding why
host nationals behave the way they do.
The others-oriented dimension reflects the degree to
which the expatriate is concerned about host-national
co-workers and desires to affiliate with them.
The cultural-toughness dimension reflects a mediating
variable that recognizes that acculturation is affected by
the degree to which the culture of the host country is
incongruent with that of the home country.
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Using Traits and Personality Tests to
Predict Expatriate Success
 Although some tests may be useful in suggesting
potential problems, there may be little correlation
between test scores and performance
 Most of the tests have been devised in the United
States, thus culture-bound
 In some countries, there is controversy about the
use of psychological tests ( different pattern of
usage across countries)
 Use of personality traits to predict intercultural
competence is complicated by the fact that
personality traits are not defined and evaluated in
similar way in different cultures
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The global manager
Myth 1: There is a universal approach to
management.
Myth 2: People can acquire multicultural
adaptability and behaviors.
Myth 3: There are common characteristics
shared by successful international
managers.
Myth 4: There are no impediments to mobility.

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Review: Roles & Tasks of
International Management

Top Management Provide direction


Leverage corporate performance
Ensure continual renewal

Global Business Manager Worldwide business strategist


Architect of asset and resource configuration
Cross border coordinator

Worldwide Functional Worldwide intelligence scanner


Manager Cross pollinator of best practices
Champion of transnational innovation

Geographic Subsidiary National defender and advocate


Manager (Country Manager) Frontline implementer of corporate strategy
Bicultural interpreter

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Skills of a Global Manager

 Ability to seize strategic opportunities


 Ability to manage highly decentralized
organizations
 Awareness of global issues
 Sensitivity to issues of diversity
 Competence in interpersonal relations
 Skill in building a community

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The Employment Relationship
 The nature of the employment relationship
 Relational: broad, open-ended and long-term
obligations
 Transactional: specific short-term monetized
obligations
 The condition of the relationship
 Intact: when employee considers there has
been fair treatment, reciprocal trust
 Violated: provoked by belief organization has
not fulfilled its obligations
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The Dynamics of the Employment
Relationship

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Likelihood of Exit

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Organizational Commitment
 Affective component
 Employee’s attachment to, identification with
and involvement in, the organization
 Continuance component
 Based on assessed costs associated with
exiting the organization
 Normative component
 Employee’s feelings of obligation to remain

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Why consider the psychological
contract?
 Nature, location and duration of an
international assignment may provoke
intense, individual reactions to perceived
violations
 Expatriates tend to have broad, elaborate,
employment relationships with greater
emphasis on relational nature
 Expectations and promises underpin this
relationship
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Current Expatriate Profile
Category PCN (42%) HCN (16%) TCN (42%)

Gender Male (82%) Female (18%)


Age (Yrs) 30-49 (60%) 20-29 (17%)
Marital status Married (65%) Single (26%)
Partner (9%)

Accompanied by Spouse (86%) Children (59%)


Duration 1-3 years (52%) Short-term (9%)
Location Europe (35%) Asia-Pacific (24%)
Primary reason Fill a position
Prior international experience 30%

Source: based on data from global Relocation Trends: 2002 Survey Report, GMAC Global Relocation Services,
National Foreign Trade Council and SHRM Global Forum, GMAC-GRS 2003.

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Expatriate Failure
 Definition: Premature return of an expatriate
 Under-performance during an international
assignment
 Retention upon completion

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Reasons for Expatriate Failure

 Definition of “failure” includes other aspects,


e.g. under-performance during an international assignment
 Inability to cope with larger responsibility
 Lack of technical competence
 Lack of motivation for overseas assignment; willingness to
move
 Lack of emotional maturity, personality or person’s intentions
 Failure to adjust to the foreign culture over time; initial
rejection may “stick”
 Length of assignment
 Psychological contract

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Reason for Expatriate Failure
 US Firms  Japanese Firms
Inability of spouse to  Inability to cope with
adjust larger overseas
responsibilities
Manager’s inability to  Difficulties with the new
adjust environment
Other family problems  Personal or emotional
Manager’s personal or problems
emotional immaturity  Lack of technical
Inability to cope with competence
larger overseas  Inability of spouse to
responsibilities adjust

European Multinationals: Inability of spouse to adjust.


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Reasons for Expatriate Failure

 Nine (9) of ten (10) expatriate failures are family-related


 Unhappy spouses is a major reason for early return
 Inability of spouse / partner to adjust
 Other family related problems

 Dissatisfaction with quality of life overseas


 Inadequate cultural and language preparation
 Inadequate support for employee and/or family
 Company lose a “million-dollar corporate-training
investment” in the executive

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Costs of Expatriate Failure
 Direct costs:  Costs vary
 Airfares according to:
 Associated  Level of position
relocation expenses  Country of
 Salary and benefits destination
 Training and  Exchange rates
development  Whether ‘failed’
 Averaged $250,000 manager is replaced
per early return by another
expatriate

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Indirect Cost of Expatriate Failure
 Damaged relationships with key
stakeholders in the foreign location
 Negative effects on local staff
 Poor labor relations
 Negative effects on expatriate
concerned
 Family relationships may be affected
 Loss of market share

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Expatriate failure:

 Expatriates’ families and spouses face isolation, loneliness and


boredom in the new country and suffer from emotional and physical
problems.
 Reward package is not sufficient to survive and maintain life style.
 In host countries, expatriates have to face uncertainties, relate with
people with different culture, values and beliefs.
 Conflicting goals between the parent company, subsidiary or the
joint venture company result in to role conflict.
 Culture shock
 Inadequate career support and repatriation plan.
 Lack of support from headquarters.

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Causes of Expatriate Assignment Failure

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The Phases of Cultural Adjustment

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Phases of Cultural Adjustment:
Effects of Culture Shock on Adjustment
7

6 Phase 4:
Phase 1: Mastery
5.5
Degree of Adjustment

Tourist /
Honeymoon
Phase 3:
Pulling Up /
Adjustment

2.5 See Turnover /


2 Failure Rate:
Phase 2: Shock effect?
Crisis /
Culture Shock – May Exit?
0
0-2 3-4 4-6 6-9 10-12
Dr Subhash 13-24
Gupta 25-36 46-48 49+ 32

Time in Months
Expatriate Adjustment Stages

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Source: GMAC Relocation Services, used with permission.
The Phases of Adjustment
 The U-Curve is not normative
 The time period involved varies between
individuals
 The U-Curve does not explain how and why
people move through the various phases
 It may be more cyclical than a U-Curve
 Needs to consider repatriation

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EXPATRIATES CULTURAL SHOCK

LEVEL OF CULTURAL
PHYSICAL DIFFERENCES
DIFFERENCES DISORIENTATION
STRESS
UNEASE

REACTIONS

FLIGHT FIGHT ACCEPT GOES NATIVE

• reject •hostility •interested • enthusiast


• retreat •disgust •look for contacts •adapt local practice
• insulate •disaprove •learn about “culture” food, dress, style
• local “companion”

THE THE
THE LOCALIZED
“COLONIALIST” COSMOPOLITAN
EXPAT EXPAT

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Factors Moderating Expatriate
Performance
 Inability to adjust to the foreign culture
 Length of assignment
 Willingness to move
 Work-related factors
 Psychological contract/employment
relationship

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International Assignments: Factors
Moderating Performance

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Transfer archetypes

 Free agents:

 41% expatriates fall in this type


 Allegiance to host country firm is low
 Allegiance to parent firm is low
 Flexible, innovative and adventurous

This type of expatriates can be further divided into two sub-


categories

Hired gun free agent
 Plateaued-career free agent
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The Dual Allegiance of Expatriate
Managers

Allegiance to parent firm


Low High

Expatriates who Expatriates who


Low
see themselves leave their
as Hearts at
Free Agents Home
Allegiance
to local firm

Expatriates who
Expatriates who
High see themselves
“Go Native”
as
Dual Citizens

Dr Subhash Gupta 39
Source: Black & Gregersen (1992). Serving two masters: Managing the dual
allegianc
e of expatriate employees. Sloan Management Review, 34, 61-71.
The Dual Allegiance of Expatriate Managers

Pattern Pros Cons

Free Agent  Often have superior international capa-  Often leave with little warning
bilities (e.g., language, negotiation)  Replacement costs may be significant
 Often somewhat less costly than traditional  May serve self-interests more than
expatriates company interests

Go  Adjust well and quickly to local culture  May fight global initiatives
native  Usually effective in local environment,  May be slow to implement directives from
including interactions with employees, headquarters
customers, suppliers, etc.  Likely to leave firm after repatriation

Heart at  Quick to implement directives from  Adjusts poorly and slowly to local culture
Home headquarters and environment
 More likely to stay with firm after  Likely to inappropriately implement
repatriation directives from the parent organization

Dual Citizen  Adjust well and quickly to local culture  Requires serious thought and commitment
 Usually effective in local environment from the company to develop into dual
 Facilitates the coordination of global citizen
 Are a rare breed and are attractive to
initiatives
other firms who may try to steal them
 Responsive to directives from head-
quarters away

Dr Subhash
Source: Black & Gregersen Gupta
(1992). 40
Serving two masters. Sloan Management Review, 34, 61-71.
Heart at home
 12% expatriates fall in this type
 Allegiance to host country firm is low
 Allegiance to parent firm is high
 Committed towards the company
 Determined to achieve the target

Going native
 15% expatriates fall in this type
 Allegiance to host country firm is high
 Allegiance to parent firm is low
 Empathetic towards host country culture
 Willing to communicate and mix with local people

Dual citizens
 32% expatriates fall in this type
 Allegiance to host country firm is high
 Allegiance to parent firm is high
 Open-minded and goal-oriented
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The above-mentioned typology clearly indicates the following:

 Dual citizens are most effective and committed. They are most
effective in balancing the job demands with role clarity.
 An expatriate, over-committed to home organization (heart at
home), will have difficulty to adopt the host country practices and
will not be able to manage host country managers, effectively.
 If an expatriate is over-committed to the host country organization
(going native), overall integration, coordination and control
becomes difficult within the MNC.
 The largest group of expatriates falls into the category of free
agents, who have low commitment for both the host and home
country organizations.
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Solutions to the Dual-career Challenge

 Alternative assignment arrangements


 Short-term
 Commuter
 Other (e.g. unaccompanied, business travel,
virtual assignments)
 Family-friendly policies
 Inter-company networking
 Job-hunting assistance
 Intra-company employment
 On-assignment career support
Dr Subhash Gupta 43
Barriers to Females Taking
International Assignments
External Barrier Self-established Barriers

 HR managers reluctant to  Some women have limited


select female candidates willingness to relocate
 Culturally tough locations or  The dual-career couple
regions preclude female  Women are often a barrier to
expatriates their own careers by behaving
 Those selecting expatriates according to gender based
have stereotypes in their role models.
minds that influence decisions

Dr Subhash Gupta 44
Summary
Key issues affecting recruitment and selection
for international assignments. We have covered:

 Four myths related to the concept of a global


manager
 The debate surrounding the definition and
magnitude of expatriate failure.
(cont.)

Dr Subhash Gupta 45
Summary (cont.)
 Cultural adjustment and other moderating factors
affecting expatriate intent to stay and performance.
 Individual and situational factors to be considered in
the selection decision.
 Evaluation of the common criteria used revealed the
difficulty of selecting the right candidate for an
international assignment and the importance of
including family considerations in the selection
process.
(cont.)

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Summary (cont.)
 Dual-career couples as a barrier to staff mobility,
and the techniques that multinationals are utilizing
to overcome this constraint.
 Female expatriates and whether they face different
issues to their male counterparts.
It is clear that, while our appreciation of the issues surrounding
expatriate recruitment and selection has deepened in the past 20 years,
much remains to be explored.
The field is dominated by US research into predominantly US samples
of expatriates, although there has been an upsurge in interest from
European academics and practitioners.

Dr Subhash Gupta 47
Summary
It is also apparent that staff selection remains critical.
Finding the right people to fill positions, particularly
key managers – whether PCN, TCN or HCN – can
determine international expansion.
However, effective recruitment and selection are only
the first step.
We will explore in the next chapter that maintaining
and retaining productive staff are equally important.

Dr Subhash Gupta 48
Summary
 Corporate philosophy on recruiting and selection
 Selection criteria and issues of concern
 Local and home countries’ policies on foreign labor
 Variations in national labor law and labor markets
 Inter-company networking
 Intra-company arrangement
 Career assistance programs
 Training and continuous adaptation

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Summary (cont.)
Will the factors affecting the selection decision be similar for
multinationals emerging from countries such as China and
India?
If more multinationals are to encourage subsidiary staff to
consider international assignments as part of an intra-
organizational network approach to management, we will need
further understanding of how valid the issues discussed in this
chapter are for all categories of staff from different country
locations.

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