NME-COMMERCE Human Resource Management Lesson: International Staffing Lesson Developer: Dr. Shachi Yadav College/Dept: Ramjas College

Transcription

1 NME-COMMERCE Human Resource Management Lesson: International Staffing Lesson Developer: Dr. Shachi Yadav College/Dept: Ramjas College University of Delhi Institute of Lifelong Learning, university of Delhi 1

2 Lesson: International Staffing: Ethnocentric, Geocentric, Polycentric Approaches Table of Contents: 1: Learning Outcomes 2: Introduction 3: International Staffing 4: Staffing Orientation 4.1. Host Country Nationals (HCNs) 4.2. Parent Country Nationals (PCNs) 4.3. Third Country Nationals (TCNs) 5: Approaches of International Staffing 5.1. Ethnocentric Approach 5.2. Polycentric Approach 5.3. Geocentric Approach 6: Cultural Aspects of International Staffing 7: Challenges of International Staffing 8: Legal Aspects of International Hiring 9: What makes a Manager Successful in International Assignments? Summary Glossary Exercises References 1. Learning Outcomes: After reading this lesson, you should be able to: comprehend the theoretical framework, behind the concept of international staffing; demonstrate an understand the differences between national and international staffing; analyse the different staffing orientations of the firms; critically evaluate the different approaches to international staffing; recognize and demonstrate the variety of factors that influence international staffing, in the context of culture; examine the challenges, faced by HR managers, in staffing multinational organizations; analyse the important legal aspects of international staffing; exhibit an understand the key considerations, for staffing the international organization; appreciate the competencies, required by the manager, to be successful in an international assignment. Institute of Lifelong Learning, university of Delhi 2

3 2. Introduction: Organizations, in the backdrop of globalization, have realized that they must seek sustainable competitive advantage, not only from new products and technology, but also from the effective management of human resources. The world of today s business is evidenced by the diminished trade barriers and regional economic alliances. For some organizations, it may mean a minimal physical presence in a foreign country, while for others it may involve setting up of foreign operations to exceed the size of domestic operations. The strategic opportunities, in the global marketplace, are resulting in global expansion of the organizations. A multinational organization is characterized by geographical dispersion. Multinational organizations, not withstanding their size or structural form, are operating in several countries at the same time. A multinational organization is a type of multi- unit business organization which usually has a corporate centre in the home country and its business units in various host countries. With the increase in global revenues, the need of multinational companies for international staffing shows little signs of slowing down. The slow growth of workforces, in all the developed nations, fuels the need to look international staffing as a crucial activity. It is evident, from the above discussion that a divisional or the multi-unit structure adds to the complications for the management of human resources of a multinational company. The management of a Multinational company, theoretically speaking, can decide to run the organization somewhere on a continuum between two distinct choices of centralized or a decentralized approach. In centralized approach, the managers are given the responsibility of several sites, based at head office. This centralized approach gives recognition to the needs of the corporation as a whole and operates with a cost effective and standardized human resourcing, based on the policies and culture at the centre. While in decentralized approach, the human resourcing function operates at the business unit level. This may lead to some inconsistency in the way employees are managed Institute of Lifelong Learning, university of Delhi 3

4 across the business units. The philosophy of the organization, regarding the nationality of its international managers, has a key role to play in the extent of internationalization and also the degree of centralization or decentralization. The decision, regarding international staffing, has a strong bearing on a company s success and is also of critical concern for the person who is engaged internationally. A crucial point, in this debate, is the often quoted edict of think globally, act locally. How might it be possible to think globally and yet act locally? No matter how appealingly simple it may sound in the first instance, the management of the human resource function, across the countries of a multinational enterprise, will always present difficulties. It becomes all the more important when the managers are faced with the challenges of pursuing local diversity and corporate integration simultaneously. In the opinion of Gamble, an MNC does not simply transmit capital, what it transfers along is management know-how. Managers play a great role in transferring practices and management styles of the MNCs to the affiliate countries. The home country national is supposed to be more familiar with home country expectations as well as company s practices and procedures. At the same time, a manager, associated with the host country, will be more familiar with the local laws and customs. Such is the stuff of international staffing. Having said this, it is also true that the area of international staffing involves dimensions that are worthy of particular analysis. Value Addition :1 Discussion Forum Challenges of Internationalization Discuss the human resourcing activities from the perspective of internationalization characterized by geographical dispersion. Also discuss the new human resourcing challenges that a Multinational Company faces when it adopts a global business strategy. 2. International Staffing: Institute of Lifelong Learning, university of Delhi 4

5 Planning and staffing organizations abroad is a critical activity of international human resource management. The alternatives and the environment, associated with international staffing, might be very different from those confronted by domestic-only organizations. Effective staffing of an organization is an important step towards achieving organization s long term success. The path of international staffing is laced with an increased range and complexity of political, economic, cultural issues, employment legislations, and labour market conditions, present in foreign countries, as against domestic environment. An organization s success greatly relies on the skills, knowledge and efforts of its employees. International staffing depicts how managers attend to the problem of sourcing these human resources to enable the organizations to continue in the long run. Staffing policy is concerned with selection of employees for particular jobs. The Multinational organizations need to identify potential applicants for positions in the home country and overseas to begin their evaluation for future employment. In international staffing, one of the great challenges is to use the human resource processes in order to increase the likelihood of hiring individuals who possess the right skills and abilities to be successful in their jobs. In the views of E.H.Schein, at one level, international staffing is concerned with selection of skilled employees, to do a particular job, at another level, it can be seen as a tool to develop and promote the corporate culture. Organization planning, for sustained growth and existence, mandatorily has to develop an international perspective as far as staffing is concerned. The success of international organizations greatly depends upon the efforts to hire the right candidate for the right job at the right time. It should be noted that managers would make human resourcing decisions, based on their interpretation of societal and organizational factors. The managers entrusted with the task of international staffing may view it as a complex task and therefore there is a need to address this complexity by conducting investigations, taking expert advice, hiring a consultant, and so on. Taking forward the debate of Think Globally and Act Locally, it should be well understood that international staffing, in particular, would have far reaching implications for the organizations. It is therefore essential for multinational concerns to achieve a dynamic balance between the pressures for central control and the pressures for local responsiveness, across the countries they are operating. As stated earlier, at one level, staffing involves selection of individuals, having the required skills to perform their jobs and on the other hand, it is also concerned with developing and promoting corporate culture. It is thus evident that while staffing, the managers are required to give due attention to the fact that the selected individuals not only have required skills to perform jobs they are selected for but also fit for the prevailing culture of the organization. The problems, regarding international staffing, can be reduced by careful selection and training. Much of the international staffing literature is focused on the expatriate selection. Expatriate refers to an employee who works and resides in a foreign country. In general, the terms international managers and expatriate managers are considered synonymous in the global business context. The international staff can be pooled in variety of ways. The managers working in multinational organizations can be parent country nationals, host country nationals or third country nationals. The staffing policy mirrors the general dilemma of central versus local i.e. whether to transfer dominant norms of MNC s national culture or utilize intellect and make use of those of the local culture. Institute of Lifelong Learning, university of Delhi 5

6 Value Addition :2 Activity Search the Website of Proctor & Gamble Search the website of Proctor and Gamble. Visit the worldwide operations and select the P & G affiliates e.g., P & G India, P & G Australia and P & G Canada. Document the history of the local affiliate and find out how P & G first entered domestic market it evolved subsequently. Gauge whether P & G use expatriates or hires local managers. 3. Staffing Orientation: Source: Multinational organizations need to identify potential applicants for openings in the home country and abroad. The employees may come from two broad categories: those already working in the organization and new hires. The reassignment of present employees, in addition to filling the job opening offers an opportunity to the employee for career advancement. On the flip side, Culture, family and language are some of the obstacles that prevent experienced managers to apply for positions abroad. Dual career families, children, adjustment problems and high cost of expatriate failure are some of the problems that are associated with present employees. Because of these problems, the range of options for international staffing is expanding. Many multinational corporations are turning to locally engaged employees or third country nationals. Increased level of education, across the globe, and emergence of trained technical employees, in emerging economies, has significantly expanded the pool of talent from which multinational companies can draw. But the organizations are experiencing a war of talent. The reason being, despite greater levels of education, there is still a shortage of skilled talent. In the words of Anderson, expatriate selection refers to be a matter of good luck than management. MNC s can tap three basic sources for global positions: Institute of Lifelong Learning, university of Delhi 6

7 4.1. Home-Country Nationals: Home country nationals or parent country nationals are managers who are the citizens of the country where the MNC headquarters are located. The employees who live and work outside their home country are commonly called expatriates. As a common trend, multinational companies are likely to use home country managers for key managerial and technical positions. Major reasons for using home country nationals include, starting up the operations and leveraging the technical expertise. It also helps the multinational company to maintain financial control over the operations. Recently, multinational companies have shifted their focus from expatriates to hiring local managers, as high cost of keeping expatriates overseas has a strong bearing on declining company s profits. Moreover, the growing number of well qualified managers makes it no longer necessary to rely heavily on expatriates. In the past, most of the expatriates were men but there has been a growing number of female expatriates, as women have proven that they are ready to tackle challenges that accompany foreign assignments. Value Addition :3 Discussion Forum Glass Border The term Glass Border refers to the perception of the senior management of parent country about the suitability of females for international assignments. To what extent consideration of gender still relevant for international assignments. What can be done to ensure equal opportunity for women managers? 4.2. Host-Country Nationals: Host- country nationals are the local managers who are the citizens of the country where the subsidiary is located. They are hired by the multinational company to handle their operations. Staffing subsidiaries with local talent is advantageous as these managers are familiar with the local cultural needs, are able to stay longer in their respective positions, and involve a low cost than expatriates in hiring and maintaining. It is unlikely to staff whole of the subsidiary with home country nationals, keeping the size of operations in mind. Also, the cost of hiring and maintaining the expatriates in the host country would be prohibitive. In some countries, government regulations dictate a certain percentage of employees to be of the host country citizenship. Many Governments, across the globe, do exercise real and subtle pressures on the multinational companies for hiring local nationals. The main disadvantage of using host country nationals, as perceived by the multinational companies, is the difficulty in exercising an effective control over subsidiary operations. The concerns also revolve around the level of commitment that locals may have towards the organization and how effective communication will take place between home country and host country. However, careful selection and training can reduce many of the potential problems, associated with host country nationals Third-Country Nationals: Institute of Lifelong Learning, university of Delhi 7

8 Third country nationals are the nationals of country where neither subsidiaries nor the headquarters are located and are given managerial responsibilities in the subsidiaries. The recruitment and selection of the managers take place globally and most competent employees can be identified. The competency of the managers overweighs the considerations of the individual s country of origin. These people have necessary expertise to adapt to different cultures and usually are multilingual. The third country nationals have very good working knowledge of the region and often speak in the local language. It helps the multinationals to build in a pan-global culture with a better talent pool. The different perspective of the third country national can complement and expand on the sometimes narrowly focused viewpoints of both host country nationals and home country nationals. They are truly international in the sense that they bring in unique cross cultural sensitivity to the relationship. The major obstacle, in the way of hiring and maintaining third country nationals, is the complicated human resource processes. Most multinational companies would require dedicated human resource unit to handle all ongoing employee issues. 5. Approaches to International Staffing: Approaches to international staffing have important implications for recruitment and selection practices. Approach to staffing is basically concerned with selection of employees for particular jobs. At one hand, it involves selection of skilled employees, required to do specific jobs, and on the other hand, it can serve as a tool for promoting and developing organizational norms and value systems. Research has affirmed at least three approaches to international staffing: the ethnocentric approach, the poly centric approach and the geocentric approach. A particular approach is identified through its stance on different national cultures Ethnocentric Approach: The ethnocentric approach tends to rely on formal structures and control systems. In this approach, there is a tendency to regard one s own culture as superior to others. All the key positions are filled by parent country nationals. This is done to make sure that the organization s culture will mirror the culture of home country and very little attention is placed towards the culture of home country. The reasons cited for the adoption of this particular stance include:- A perception that the qualified host country managerial talent may not be available. To ensure maintenance of a unified corporate culture. Transference of core competencies of the parent company. To ensure that the coordination and communication, with the parent company, are maintained adequately. The ethnocentric approach is criticised to be too narrow in its focus and suffers from the following disadvantages:- The approach limits the advancement opportunities for the host country nationals and often becomes the cause of resentment and low productivity. It also severe the problem of employees turnover. Institute of Lifelong Learning, university of Delhi 8

9 The parent country nationals may suffer from what is known as cultural myopia, the organization s failure to understand and respond to host country cultural differences. The adaptation time of expats may be quite high, leading to more mistakes and poor decisions. Value Addition: 4 Dutch Mafia Did You Know? In Dutch firm, Philips, at one point in time, all important positions were filled by Dutch nationals who were termed by their colleagues as Dutch mafia Polycentric Approach: This approach represents a conscious belief that the host country nationals understand the culture of host country better than the parent country nationals. Hence, host country nationals are recruited to manage subsidiaries. This may be seen as a response to the shortcomings of the ethnocentric approach and claims to have the following advantages:- The host country nationals are less susceptible to cultural myopia as they are more familiar to the culture of the country than the expats. It is less expensive to implement as expatriate managers may be quite expensive to maintain. The satisfaction level of the host country nationals is high due to advancement opportunities and fair appraisals. The polycentric approach is criticised on the following grounds:- It may cause isolation of the subsidiary as the culture cannot be exchanged from the headquarters of the parent country. Bridging the gap between the host country managers and parent country managers may be quite difficult due to language barriers, cultural differences and national loyalties. A major drawback cited for this approach is lack of career mobility for host country nationals. The host country nationals have limited opportunity to gain experience outside their country, this approach restricts their mobility among subsidiaries. This may lead to resentment and dissatisfaction among the host country managers Geocentric Approach: The geocentric approach calls for recruiting people, based on their skills and competencies, regardless of their nationalities. It ensures the selection of most appropriate candidate for the jobs from any part of the world. There are a number of advantages, associated with this approach. Some of them are listed below:- It enables most effective utilization of human resources. It promotes a multicultural environment and enables the firm to leverage cultural diversity. This approach may reduce cultural myopia in true senses and lead to an increased local responsiveness. Institute of Lifelong Learning, university of Delhi 9

10 Though it seems to be the most favourable approach, it is also criticised on the following grounds: The political pressure may demand the organizations to fill the positions with the host country nationals, the immigration controls by the host country government may be tight, making this a difficult task in practice. The cost, associated with this approach, may be quite high because of relocation and training costs involved. As we have seen the above approaches showcase the dominant management orientation of the multinational organizations. This has important implications on how international staffing would be done by the organizations. The choice of approach would impact decisions, regarding national differences and cross cultural issues. The repercussions on other functional and strategic aspects of the organizations are huge and so they deserve a lot of attention by the decision makers. Value Addition : 5 Case Situation International Staffing at Coca- Cola Coca- Cola represents one of the most successful multinational enterprises. However, Coca Cola refers to itself as multi-local company. Coca- Cola tries to create a global mind- set that all the employees share and, at the same time, grant freedom to national businesses to create market appropriate mechanism. Coca- Cola manages its operations through operating divisions, organized under regional groups. Go to the company s website and look at the career opportunities it offers overseas. Read what the company has to say in this area. You can also contact any official of the company via address, provided on the website for information, regarding opportunities available in the company. Question: Comment on the international staffing approach adopted by Coca- Cola for filling managerial positions. Is it ethnocentric, polycentric or geocentric? Do you think it is appropriate? Source: D.A. Amfuso, HR unites the world of Coca Cola, Personnel Journal, Nov 1994, pp Cultural Aspects of international Staffing: It is very evident from the above discussion that there are choices available before human resource professionals with respect to international hiring. The above mentioned analysis revealed how an MNC s human resources might be managed. All the decisions taken in the area of international staffing are greatly influenced by the different national contexts and culture of the subsidiary s local community. Vast differences can be observed among countries and it is well accepted how much they matter in managing business effectively. These differences can be accorded to the differences in cultural set-up of the country. Greet Hofstede, a cross cultural expert has defined culture as, the collective programming of the mind which distinguishes the members of one human group from another. It is the institutional set-up of countries that influences the expectation of people and their orientation towards life. Academicians, Hofstede (1991) and Hall (1990), have defined this and designed comparative frameworks, demonstrating relevant attributes of national culture. Hofstede Cultural Dimensions: Institute of Lifelong Learning, university of Delhi 10

11 There are several models which explain how culture influence work behaviour. Perhaps the most commonly referred to is the Hofstede s theory of the cultural relativity of organizational practices. As per Hofstede, culture differs in at least following five ways, that should be understood, as it has strong implications for understanding business. Individualism Versus collectivism Culture differs with respect to the relationship a person has to his family. In some societies, like USA and Australia, more emphasis is laid down on individual actions, accomplishments and goals. In contrast, collectivist societies, like Taiwan and Japan, group s achievements and accomplishments will be emphasized. Power Distance Cultures also differ in their view of power relationships. The cultures with high power distance tend to emphasize human inequalities. Large power distance cultures characterize this with symbols of power, such as, large offices, titles, and so on. In countries with low power distance such emphasis is less. Uncertainty avoidance The cultures with low uncertainty avoidance tend to take things day by day in contrast to the high uncertainty avoidance cultures which attempt to predict, control, and influence future events. In high uncertainty avoidance culture, like Japan, there is rigid use of managerial control systems in order to reduce uncertainty. Masculinity This dimension refers to the traditionally accorded roles by the society to the males and females. Masculine cultures have predominantly strict gender roles. The feminine cultures, on the other hand, have less well defined roles. Long term versus short term orientation This fifth dimension is the result of studies, involving Chinese values by him and it did not feature in the original work by him. It refers to the extent to which cultures think, in terms of the future, or in terms of immediate events. Every aspect of Human resource management and more specifically, staffing decisions are influenced by the above dimensions. To understand the implication of culture, over international staffing, our approach would be to go beyond (without ignoring) such broad classification and critically evaluate the actual situation of the host country subsidiary. The true knowledge of the shared nature of the beliefs, philosophies and norms is critical for the success of the organization at least for two reasons. First, it is important for crafting and executing human resource staffing strategy that guides how the organization attempts to achieve competitive advantage in a given environment and secondly, to foster high level of commitment from the employees. While designing HR Practices that enhance productivity and ensure staff retention in an foreign subsidiary, it may be required to amend or modify parent country systems and practices. For example, recruitment in china as a norm is greatly influenced through personal or government connections, it may be wise to give exclusively impersonal selection criteria a second thought. Institute of Lifelong Learning, university of Delhi 11

12 A recognition that same HR systems and practices will not produce the same effect in different cultural environments will go a long way in organizational success. 7. Challenges of International Staffing: An enterprise, with international staff, is characterised by greater complexity and cultural diversity. The workforces in these organizations often consist of people from variety of ethnic, racial and cultural backgrounds. Managing the performance of this diverse workforce is posed with challenges. Well known author, Adler (1991), has suggested that culturally diverse groups can perform either extremely well or extremely poorly. She further says that diversity may well be a boon for creativity and divergent thinking but may prove to be rather a bane and a source of friction in the decision making phase. The success of an enterprise will depend on the inter-culturally competent people. The ability to create a shared vision through collective participation, negotiation and empathy will lead to culturally aligned Human Resource Practices. Apart from only people, it is the highly complex economic and political nature of countries, which affirms the need of an intensive international research to develop successful HR strategies. International staffing presents unique contingencies, in the form of taxation issues, exchange rates, co-ordinating foreign currencies,compensation plans, etc. in short, it requires addressing broader range of functional areas. It also involves more involvement in employee s personal life. The employee needs assistance in acquiring accommodation in host country, selling or leasing domestic accommodation, school arrangements for the employee s children, recreational and cultural opportunities for the employee etc. International staffing enables organizations to enjoy choice. Culturally diverse people bring unique perspectives to the organizations. Understanding these differences and managing them effectively can help organizations to capitalize on diversity. International staffing, if managed well, can become an asset for the organization ; managed badly can turn into a liability. 8. Legal Aspects of International Staffing: The impact of law on HRM practices/ is enormous. There is a steeping rise in the number of suits by employees and job candidates against employers. It is therefore in the best interest of organization that the HRM unit develops policies and procedures in accordance with the law. Equal employment opportunity is the area which has implications for every aspect of international staffing. It is very important to devote time and attention to the dimension of Equal Employment Opportunity (EEO) to make sure that HRM practices comply with the law, avoid penalties, and develop a discrimination free working environment. Various countries of the world have enacted elaborate laws, prohibiting business houses from discrimination against employees, on the basis of race, colour of skin, religion, gender or national origin. The Human resource managers have compliance responsibilities, in light of these laws, to ensure non- discrimination and equal opportunities. Besides the state and national Governments, the courts are constantly interpreting the laws and there should be due attention given to the various rulings that come from time to time. The growth in the area of equal employment opportunity has given employees specific rights in their employment relationships. HR professionals from US firms will find Institute of Lifelong Learning, university of Delhi 12

13 substantial differences in the area of employment discrimination. The various laws worth giving attention with respect to prohibiting employment discrimination in USA are Title VII of the 1964 Civil Rights Act, Age Discrimination Act, Americans with Disabilities Act of 1990, Civil Rights Act of 1991 and so on. The major point in focus here is that many of these laws are applicable to American corporation s overseas operations as well. The above discussion indicates that any attempt to become international organization must be inclusive of a systematic analysis of diverse legal background as well. 9. What Makes a Manager Successful in International Assignments? International assignments account for managing a workforce which comes from diverse cultural backgrounds. The complexity, arising out of the need for successful integration of culturally diverse team members, calls for managers endowed with specific attributes. Orla Leonard (2002) suggests the managers to be having the following traits to be successful at work across national boundaries: Curiosity about local cultures An aptitude to learn more about the culture of the host country may go a long way in understanding the prevailing public opinion. A manager has to work like a cultural anthropologist instead of relying only on the understanding he had of the host country. This can be put to action by reading local publications and having a keen interest in understanding the local customs and rituals. Focussing on reciprocal learning and integration Managing diversity at work place calls for genuine interest in learning from people. A manager is expected not only to make others understand and succumb to his point of view but allow for expanding his own point of view. A lot of reciprocal learning and integration is required to succeed in the efforts of managing culturally diverse team members. Tolerance for mistakes An acceptance that mistakes may well be made can go a long way in making the manager successful. Such an acceptance may make the managers risk taking rather than following rule of thumb. The managers to be successful should have the courage to stand by their mistakes and learn from them for success in the long run. An open and inquisitive mind An open mind allows the managers to listen to the views, different from their own, in a constructive manner. It allows for a better understanding of the world around them and broadens their world view. Confidence Institute of Lifelong Learning, university of Delhi 13

14 A manager should show utmost maturity while dealing with issues that were unknown to him earlier. Managers on international assignments should expect the unexpected to happen and be ready for the same with confidence. Approaching business issues with creativity Bringing in flexibility and displaying appropriate negotiating traits and behaviour, befitting the given situation, is the real test of competency of the managers. The major challenge, before them, is to strike a balance between the organizational objectives and local customs and policies. They should be conscious of who they are but emanate a great deal of creativity while operationalising the rulebook. An ability to tolerate ambiguity Ability to interpret silent cues about the culture and public opinion rather than waiting for information as supplicated by the headquarters or the local unit would enable them to make decisions quickly and more realistically. Executives, emanating above characteristics, ensure development of strong bond between the home and the host country operations. Besides training and development, picking of such people would go a long way in the organizational success. Summary: Effective staffing of an organization is an important step towards achieving organization s long term success. The decision, regarding international staffing, has a strong bearing on a company s success and is also of critical concern for the person who is engaged internationally. The alternatives and the environment, associated with international staffing, might be very different from those confronted by domestic-only organizations. MNC s can tap three basic sources for global positions viz., home country nationals, host-country nationals, and third-country nationals. Home country nationals or parent country nationals are managers who are the citizens of the country where the MNC headquarters are located. Host- country nationals are the local managers who are the citizens of the country where the subsidiary is located. Third country nationals are the nationals of country where neither subsidiaries nor the headquarters are located and are given managerial responsibilities in the subsidiaries. Different approaches to international staffing have important implications for recruitment and selection practices. Institute of Lifelong Learning, university of Delhi 14

15 Research has affirmed at least three approaches to international staffing: the ethnocentric approach, the poly centric approach, and the geocentric approach. The ethnocentric approach tends to rely on formal structures and control systems. In this approach, there is a tendency to regard one s own culture as superior to others. The polycentric approach represents a conscious belief that the host country nationals understand the culture of host country better than the parent country nationals. The geocentric approach calls for recruiting people, based on their skills and competencies, regardless of their nationalities. Equal employment opportunity is the area which has implications for every aspect of international staffing. Any attempt to become international organization must be inclusive of a systematic analysis of diverse legal background as well. All the decisions taken in the area of international staffing are greatly influenced by the different national contexts and culture of the subsidiary s local community. Greet Hofstede, a cross cultural expert, has defined culture as, the collective programming of the mind which distinguishes the members of one human group from another. As per Hofstede, culture differs in at least following five ways that should be understood as it has strong implications for understanding business Viz., Individualism Versus collectivism, Power distance, uncertainty avoidance, masculinity, and long term vs. short term orientation. An enterprise with international staff is characterised by greater complexity and cultural diversity. Culturally diverse people bring unique perspectives to organizations. Understanding these differences and managing them effectively can help organizations to capitalize on diversity. International assignments account for managing a workforce which comes from diverse cultural backgrounds. An open mind allows the managers to listen to the views, different from their own, in a constructive manner. Managing diversity, at work place, calls for genuine interest in learning from people. Glossary: Ethnocentric Approach: a nationalistic predisposition of management where the interest and values of home country guide decision making. Expatriates: employees who work away from their home country. Polycentric Approach: an approach where management appoints local nationals in key positions and allow for development of these professionals. Geocentric Approach: calls for integrating a global systems approach to decision making, giving emphasis to skill of individuals rather than nationality. Multicultural Group: a group where there are individuals from more than two ethnic backgrounds. Subsidiary: an overseas operation that is totally owned and controlled by an MNC. Diversity Management: managing people in a way that recognizes differences among people and values these differences as a source of productive potential to be leveraged. Institute of Lifelong Learning, university of Delhi 15

16 Globalization: a process whereby there is an integration of national economies, political structures and social systems. The constraints of time and space become less significant. Culture: the collective programming of the mind which distinguishes the members of one human group from another. Exercises: A. Objective Type Questions: 1. Do as Directed: a) Match the following International Staffing concepts: Match the Following A. Expatriate 1. Nationals of country occupying managerial positions, where neither subsidiaries nor the headquarters are located B. Third-Country National 2. Local managers who are the citizens of the country where the subsidiary is located. C. Ethnocentric Approach 3. Recruiting people based on their skills and competencies regardless of their nationalities. D. Host-Country National 4. Employee working away from home country E. Geo-Centric Approach 5. A nationalistic predisposition of management where the interest and values of home country guide decision making. b) Choose the Right Answer: Which of the following approaches is not an approach to international staffing? A. Polycentric Approach B. Macro Political Approach C. Ethnocentric Approach D. Geocentric Approach 2. Fill in the Blanks: a approach calls for recruiting people, based on their skills and competencies, regardless of their nationalities. b are the local managers who are the citizens of the country where the subsidiary is located. B. Short Answer Type Questions: 1. What do you mean by international staffing? Institute of Lifelong Learning, university of Delhi 16

17 2. Define the term expatriate. 3. Define host-country nationals. 4. List the advantages of international staffing. 5. Critically evaluate the ethnocentric approach to international staffing. 6. What is geocentric orientation, with reference to international staffing? 7. What do you mean by Culture? 8. List Greet Hofstede s dimensions of culture. 9. What are the challenges to international staffing? 10. List some managerial competencies for success in an international assignment. C. Long Answer Type Questions: 1. What do you mean by international staffing? Give your opinion, regarding the importance of international staffing, in light of increasing globalization. 2. Discuss in detail the advantages and disadvantages of hiring home-country, hostcountry and third-country nationals. 3. Critically evaluate the ethnocentric, polycentric and geocentric approaches of international staffing. When is each approach appropriate? 4. How is international staffing different from domestic staffing? What are the major challenges of international staffing? 5. Elaborate the requirements for a manager to be successful on an international assignment. 6. Prepare a detailed analysis of how the culture affects staffing decisions. 7. Write a note on legal aspects of international staffing. Answers to Objective Type Questions: Correct answer 1a A.4 B.1 C.5 D.2 E.3 Correct answer 1b B. macro political approach Correct answer 2a Correct answer 2b Geocentric Host- country nationals References: A. Work Cited and Suggested Readings: Adler, N.J. and Ghader, F.(1989) International Business Research for the twenty first century: Chanda s new research agenda, in A. Rogosan (ed.) Research in Global Strategic Management: A Canadian Perspective, Greenwich, CT: JAI Press. Anderson, B.A.(2005) Expatriate selection : Good Management or Good Luck? International Journal of Human Resource Management, 16(4): D.A. Amfuso, HR unites the world of Coca Cola, Personnel Journal, Nov 1994, pp Institute of Lifelong Learning, university of Delhi 17

18 E.H.Schein, Organization culture and leadership (San Francisco:Josssey-Bass,1985). Gamble,J.(2003) Transferring human resource practices from the United Kingdom to China: the limits and potential for convergence. International Journal of Human Resource Management, 14(3): Greet Hofstede(1984), Culture s Consequences: International Differences in Work related Values( Newbury Park, CA: Sage Publishing) Greet Hofstede(1993), Cultural Constraints in Management Theories, Acdemy of Management Executive, pp Orla Leonard(2002), Away Winners, Financial Management, March B. Web Links: C. Video Links: Visit the link to listen to John Drake on Global Human Resource Management Visit the link to listen to Ernest Antoine on best practices to support returning expats Visit the link to know more about international recruitment Institute of Lifelong Learning, university of Delhi 18