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Chapter 4

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  1. Chapter 4 Recruiting and Selecting Staff for International Assignments IBUS 618 Dr. Yang

  2. Chapter Objectives • In Part I, we demonstrated how people play a central role in sustaining international operations. As international assignments are an important vehicle for staffing, it is critical that they are managed effectively, and the expatriates are supported so that performance outcomes are achieved. IBUS 618 Dr. Yang

  3. Chapter Objectives (cont.) • The focus of this chapter is on recruitment and selection activities in an international context. 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 IBUS 618 Dr. Yang

  4. 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. IBUS 618 Dr. Yang

  5. Current Expatriate Profile 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. IBUS 618 Dr. Yang

  6. Expatriate Failure • Definition: Premature return of an expatriate • Under-performance during an international assignment • Retention upon completion IBUS 618 Dr. Yang

  7. Expatriate Failure Rates Recall Rate Percent Percent of Companies US Multinationals 20 - 40% 7% 10 - 20% 69 < 10 24 European Multinationals 11 - 15% 3% 6 - 10 38 < 5 59 Japanese Multinationals 11 - 19% 14% 6 - 10 10 < 5 76 IBUS 618 Dr. Yang

  8. Reason for Expatriate Failure • US Firms • Inability of spouse to adjust • Manager’s inability to adjust • Other family problems • Manager’s personal or emotional immaturity • Inability to cope with larger overseas responsibilities • Japanese Firms • Inability to cope with larger overseas responsibilities • Difficulties with the new environment • Personal or emotional problems • Lack of technical competence • Inability of spouse to adjust European Multinationals: Inability of spouse to adjust. IBUS 618 Dr. Yang

  9. Direct costs: Airfares Associated relocation expenses Salary and benefits Training and development Averaged $250,000 per early return Costs vary according to: Level of position Country of destination Exchange rates Whether ‘failed’ manager is replaced by another expatriate Costs of Expatriate Failure IBUS 618 Dr. Yang

  10. 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 IBUS 618 Dr. Yang

  11. Factors Moderating Expatriate Performance • Inability to adjust to the foreign culture • Length of assignment • Willingness to move • Work-related factors • Psychological contract/employment relationship IBUS 618 Dr. Yang

  12. 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 IBUS 618 Dr. Yang

  13. The Dynamics of the Employment Relationship IBUS 618 Dr. Yang

  14. Likelihood of Exit IBUS 618 Dr. Yang

  15. International Assignments: Factors Moderating Performance IBUS 618 Dr. Yang

  16. The Phases of Cultural Adjustment IBUS 618 Dr. Yang

  17. 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 IBUS 618 Dr. Yang

  18. 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 IBUS 618 Dr. Yang

  19. 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 IBUS 618 Dr. Yang

  20. Selection Criteria • Technical ability • Cross-cultural suitability • Family requirements • Country-cultural requirements • MNE requirements • Language IBUS 618 Dr. Yang

  21. 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 IBUS 618 Dr. Yang

  22. Factors in Expatriate Selection IBUS 618 Dr. Yang

  23. Mendenhall and Oddou’s Model • Self-oriented dimension • Perceptual dimension • Others-oriented dimension • Cultural-toughness dimension IBUS 618 Dr. Yang

  24. Harris and Brewster’s Selection Typology IBUS 618 Dr. Yang

  25. 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 IBUS 618 Dr. Yang

  26. Barriers to Females Taking International Assignments IBUS 618 Dr. Yang

  27. Equal Employment Opportunity Issues • Cultural Variations • Law and enforcement • Social values • Corporate practices • The United States • EEOA within the country • International approach IBUS 618 Dr. Yang

  28. Chapter Summary This chapter has addressed 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.) IBUS 618 Dr. Yang

  29. Chapter 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.) IBUS 618 Dr. Yang

  30. Chapter 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. IBUS 618 Dr. Yang

  31. Chapter 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. IBUS 618 Dr. Yang

  32. Chapter 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 IBUS 618 Dr. Yang

  33. Chapter 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. • Another area that remains ignored is the selection of non-expatriates, that is, the international business travelers we discussed in Chapter 3. In our survey of current literature, there is a paucity of recognition of this group. • (cont.) IBUS 618 Dr. Yang

  34. Chapter Summary(cont.) The various consulting firm surveys conducted into relocation trends in 2002 that we draw on in this chapter indicate that more multinationals are resorting to replacing traditional assignments with business travel as a way of overcoming staff immobility. Likewise, there is a need for further work into the performance–selection link surrounding non-standard assignments, including commuter and virtual assignments. IBUS 618 Dr. Yang