1. An expatriate manager is a citizen of one country who is working abroad in one of

Transcription

1 Chapter 19 Global Human Resource Management True / False Questions 1. An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries. True False 2. HRM professionals have a critically important strategic role. True False 3. An organization's norms and value systems are known as its corporate culture. True False 4. The most attractive staffing policy is the ethnocentric approach. True False

2 5. A firm with an ethnocentric staffing policy will fill all key management positions with parent-country nationals. True False 6. Cultural myopia refers to a firm's failure to understand host-country cultural differences that require different approaches to marketing and management. True False 7. In the case of an ethnocentric approach, it is possible that managers may make decisions that are ethically suspect because they do not understand the culture in which they are managing. True False 8. A firm following a polycentric approach to staffing believes that the host country lacks qualified individuals to manage subsidiaries. True False 9. A firm that adopts a polycentric approach to staffing is likely to suffer from cultural myopia. True False

3 10. Firms may choose an ethnocentric approach to staffing as opposed to a polycentric approach because of the cost savings it promotes. True False 11. A geocentric staffing policy seeks the best people for key jobs throughout the organization, regardless of nationality. True False 12. A geocentric approach tends to weaken local responsiveness. True False 13. Many firms adopt a geocentric policy toward staffing because it is a relatively inexpensive staffing policy. True False 14. An ethnocentric approach is compatible with both global standardization and transnational strategies. True False

4 15. A citizen of Japan who moves to the United States to work at Microsoft would be classified as an inpatriate. True False 16. Expatriate failure refers to a manager's failure to understand host-country cultural norms and values, leading to ineffective work. True False 17. A seminal study, R. L. Tung, revealed that for European firms, the top reason for expatriate failure was the inability of the manager to cope with larger overseas responsibilities. True False 18. An executive who performs well in a domestic setting may not be able to adapt to managing in a different cultural setting. True False 19. An expatriate needs to have language fluency to show willingness to communicate. True False

5 20. The ability to understand why people of other countries behave the way they do is perceptual ability. True False 21. Expatriate managers who have perceptual ability tend to treat foreign nationals as if they were home-country nationals. True False 22. According to Mendenhall and Oddou, poorly-adjusted expatriates tend to be nonjudgmental and nonevaluative in interpreting the behavior of host-country nationals. True False 23. Cultural toughness refers to the relationship between the country of assignment and how well an expatriate adjusts to a particular posting. True False 24. A manager might be sent on several foreign postings over a number of years to build his/her cross-cultural sensitivity and experience as part of a management development program. True False

6 25. Historically, most international businesses have been more concerned with training than with management development. True False 26. English is considered the language of world business. True False 27. Where an expatriate community exists, firms often devote lesser effort to ensuring that the new expatriate family is quickly integrated into that group. True False 28. Firms pursuing a transnational strategy increasingly are using management development as a strategic tool. True False 29. Bringing managers together in one location for extended periods and rotating them through different jobs in several countries helps the firm build a formal management network. True False

7 30. A firm's performance appraisal systems are an important element of its control systems. True False 31. Unintentional bias makes it difficult to evaluate the performance of expatriate managers objectively. True False 32. Most expatriates believe that more weight should be given to an on-site manager's appraisal than to an off-site manager's appraisal. True False 33. In ethnocentric firms, the lack of managers' mobility among national operations implies that pay can and should be kept country-specific. True False 34. If a firm is serious about building an international cadre, it may have to pay its international executives the same basic salary irrespective of their country of origin or assignment. True False

8 35. Base pay in most firms is set with regard to global market conditions. True False 36. An expatriate's base salary normally varies from the base salary for a similar position in the home country. True False 37. When a reciprocal tax treaty is in force, the firm typically pays the expatriate's income tax in the host country. True False 38. From a strategic perspective, the key issue in international labor relations is the degree to which organized labor can limit the choices of an international business. True False 39. Labor unions generally prefer it if an international business keeps highly skilled tasks in its home country and farms out only low-skilled tasks to foreign plants. True False

9 40. The international trade secretariats have had tremendous success. True False Multiple Choice Questions 41. Which of the following is mainly concerned with the selection of employees for particular jobs? A. Retention policy B. Staffing policy C. Incentive policy D. Appraisal policy

10 42. A Japanese firm prefers expatriate Japanese managers to head its foreign operations because these managers have been socialized into the firm while employed in Japan. This indicates that the firm: A. believes that such managers cannot progress beyond middle-manager positions in their parent company. B. follows an ethnocentric staffing policy to maintain a unified corporate culture. C. is trying to create value by transferring core competencies to a foreign operation. D. requires host-country nationals to be recruited to manage subsidiaries. 43. An ethnocentric staffing policy is one in which: A. all key management positions are filled by host-country nationals. B. host-country nationals are recruited to manage subsidiaries. C. all key management positions are filled by parent-country nationals. D. the best people are recruited for key jobs throughout the organization, regardless of nationality.

11 44. Cultural myopia refers to a firm's failure to: A. adapt to certain ethnocentric cultures. B. act confidently in host-countries. C. understand host-country cultural differences. D. prevent gender discrimination within the firm 45. What is the difference between an ethnocentric and a polycentric staffing approach? A. An ethnocentric staffing approach alleviates cultural myopia, while a polycentric staffing approach can lead to cultural myopia. B. An ethnocentric staffing approach is more expensive compared to a polycentric staffing approach. C. An ethnocentric staffing approach seeks host-country nationals for all key positions, while a polycentric staffing approach seeks the best people for key jobs regardless of nationality. D. An ethnocentric staffing approach is now used in most international businesses, while the polycentric staffing approach is on the wane.

12 46. If a company recruits host-country nationals to manage subsidiaries while parentcountry nationals occupy key positions at corporate headquarters, the firm is following a(n): A. polycentric staffing policy B. ethnocentric staffing policy C. geocentric staffing policy D. internal staffing policy 47. Which of the following is a drawback of the polycentric approach to staffing? A. Firms are likely to suffer from cultural myopia. B. Host-country nationals are vulnerable to cultural misunderstandings. C. This approach increases the cost of value creation. D. Host-country nationals have limited opportunities for advancement beyond senior positions in their subsidiary. 48. A(n) seeks the best people for key jobs throughout the organization, regardless of nationality. A. polycentric staffing policy B. ethnocentric staffing policy C. geocentric staffing policy D. uniform staffing policy

13 49. A polycentric approach may be effective for firms pursuing a(n): A. international strategy. B. localization strategy. C. transnational strategy. D. global standardization strategy. 50. A firm using a polycentric staffing policy: A. is less likely to suffer from cultural myopia. B. seeks the best people for key jobs throughout the organization, regardless of nationality. C. will most likely follow an ethnocentric strategy. D. is likely to have improved communication between host-country managers and parent-country managers.

14 51. What is the most important advantage of using a geocentric staffing policy? A. It enables the firm to build a cadre of international executives who feel at home working in a number of cultures. B. It may be less expensive to implement than other policies, reducing the costs of value creation. C. The higher pay managers on an international fast track enjoy is a source of inspiration within a firm. D. It reduces the need for futile and time consuming documentation. 52. An ethnocentric approach to staffing is appropriate for firms that are pursuing a(n): A. localization strategy. B. international strategy. C. global standardization strategy. D. transnational strategy.

15 53. Which of the following staffing approaches will be most effective for a firm that is pursuing a transnational strategy? A. A polycentric staffing policy B. An ethnocentric staffing policy C. A geocentric staffing policy D. An internal staffing policy 54. A geocentric staffing policy. A. requires host-country nationals to be recruited to manage subsidiaries, while parent-country nationals occupy key positions at corporate headquarters B. leads to ineffective use of human resources C. requires extensive documentation D. is compatible with both international and localization strategy. 55. A citizen of France who moves to the U.S. to work at Ford is a(n): A. host-country national. B. local. C. inpatriate. D. acquired citizen.

16 56. Expatriate failure refers to: A. expatriates who follow host-country norms instead of their home-country norms. B. the inability of expatriate managers to treat foreign nationals as if they were home-country nationals. C. the premature return of an expatriate manager to his or her home-country. D. the ethical drawbacks of the ethnocentric staffing approach. 57. In a seminal study, R. L. Tung found that for American multinationals, the biggest impediment to expatriate success was: A. the inability of the spouse to adjust. B. the manager's inability to adjust. C. the manager's inability to cope with larger overseas responsibilities. D. the lack of adequate technical training. 58. In a seminal study, R. L. Tung found that for Japanese multinationals, the biggest impediment to expatriate success was: A. the inability of the spouse to adjust. B. inadequate compensation. C. the manager's inability to cope with larger overseas responsibilities. D. the lack of adequate technical training.

17 59. Mendenhall and Oddou's "others-orientation" dimension, in their study on what predicts success in foreign jobs postings, refers to: A. the expatriate's self-esteem, self-confidence, and mental well-being. B. the expatriate's ability to interact effectively with host-country nationals. C. the expatriate's ability to understand why people of other countries behave the way they do. D. the relationship between the country of the assignment and how well an expatriate adjusts to a particular posting. 60. Which dimension of Mendenhall and Oddou's study suggests that an expatriate with high self-esteem, self-confidence, and mental well-being is likely to succeed in a foreign job posing? A. Self-orientation B. Others-orientation C. Cultural toughness D. Perceptual ability

18 61. is the ability to understand why people of other countries behave the way they do. A. Others-orientation B. Cultural myopia C. Perceptual ability D. Cultural toughness 62. Mendenhall and Oddou identified cultural toughness as one of the dimensions in their study on dimensions that predict success in foreign jobs postings. This dimension refers to the: A. expatriate's self-esteem, self-confidence, and mental well-being. B. expatriate's ability to interact effectively with host-country nationals. C. expatriate's ability to understand why people of other countries behave the way they do. D. relationship between the country of the assignment and how well an expatriate adjusts to a particular posting.

19 63. Which of the following issues was not addressed by Mendenhall and Oddou's study? A. Expatriate failure due to a spouse's inability to adjust. B. Expatriate failure due to a manager's lack of self-esteem. C. Expatriate failure due to lack of relationship development. D. Expatriate failure due to a manager's inability to empathize. 64. Which of the following statements is true regarding management development? A. Historically, most international businesses have been more concerned with management development than with training. B. Management development facilitates the creation of an informal network for sharing knowledge within the multinational enterprise. C. Management development refers to specific training efforts to prepare homecountry nationals for foreign postings. D. Typically, management development programs use standard psychological tests to select managers for specific foreign postings.

20 65. Practical training is: A. provided to foster an appreciation for the host country's culture. B. aimed at helping expatriates improve their communication skills. C. aimed at helping expatriate managers to build relationships in the host-country. D. aimed at helping the expatriate manager and family ease themselves into dayto-day life in the host country. 66. Management development programs aims to: A. facilitate an ethnocentric approach to staffing. B. reduce job rotations of managers. C. build a formal management network. D. build a unifying corporate culture. 67. Bringing managers together in one location for extended periods and rotating them through different jobs in several countries is a part of: A. the ethnocentric approach. B. the global standardization strategy. C. cultural toughness programs. D. management development programs.

21 68. makes it difficult to evaluate the performance of expatriate managers objectively. A. Cultural relativism B. Internal documentation C. Unintentional bias D. Others-orientation 69. When evaluating expatriates, home-country managers usually rely on: A. the manager's ability to develop cross-cultural awareness. B. hard data such as market share. C. the ability of the expatriate to work with local managers. D. a set of subjective criteria such as interpersonal skills

22 70. Which among the following should be done in order to reduce bias in the performance appraisal process for expatriates? A. More weight should be given to an off-site manager's appraisal than to an onsite manager's appraisal. B. The on-site manager should be of a different nationality as the expatriate manager. C. Home-office managers should be consulted before an on-site manager completes a formal termination evaluation. D. A former expatriate who served in the same location as a current expatriate should not be allowed to participate in the appraisal. 71. Which of the following is the most common approach to expatriate pay? A. Balance sheet approach B. Net-to-net approach C. Host-country approach D. Cost-based approach

23 72. A foreign service premium is: A. paid when the expatriate is being sent to a difficult location. B. the extra pay that an expatriate receives for working outside his or her country of origin. C. normally given to ensure that the expatriate can afford the same quality of housing in the foreign country as at home. D. paid to ensure that the expatriate enjoys the same standard of living in the foreign posting as at home. 73. A hardship allowance is paid: A. when the expatriate is being sent to a location where such basic amenities are grossly deficient by the standards of the expatriate's home country. B. to ensure that an expatriate's children receive adequate schooling (by homecountry standards). C. to ensure that the expatriate will enjoy the same standard of living in the foreign posting as at home. D. to ensure that the expatriate can afford the same quality of housing in the foreign country as at home.

24 74. Which of the following is a concern of organized labor regarding multinational firms? A. A company can counter a union's bargaining power with the power to move production to another country. B. An international business will keep low-skilled tasks in its home country and farm out only highly skilled tasks to foreign plants. C. An international business can attempt to import employment practices and contractual agreements from its host-country. D. A multinational company is more likely to receive government support in the case of hostile labor relations. 75. Which of the following is NOT an action taken by organized labor to respond to the increased bargaining power of multinational corporations? A. Trying to establish international labor organizations B. Increasing competition between national unions C. Lobbying for national legislation to restrict multinationals D. Trying to achieve international regulations on multinationals through such organizations as the United Nations

25 76. What is the long-term goal of international trade secretariats (ITSs)? A. To increase the competition between national unions B. To be able to bargain transnationally with multinational firms C. To accommodate wide variation in union structure D. To be able to regulate multinationals with regard to labor policies 77. The international trade secretariats (ITS) have had virtually no real success. Which of the following is NOT a cause of the ITS's ineffectiveness? A. National unions compete with each other to attract investment from international businesses. B. The structure and ideology of unions tend to vary significantly from country to country. C. Organized labor has had only limited success in its efforts to get national and international bodies to regulate multinationals. D. The codes of conduct developed by International Labor Organization and the Organization for Economic Cooperation and Development prevented the ITSs from exercising absolute power.

26 78. Which of the following is true regarding approaches to labor relations? A. International businesses use mostly similar approaches to international labor relations. B. The trend is toward greater decentralized control of international labor relations. C. Historically, most international businesses have centralized the labor relations function. D. Many firms are now using the threat to move production to another country in their negotiations with unions. Essay Questions 79. What is human resource management? Why is HRM an important strategic component?

27 80. What are the four strategies pursued by international companies, and what is the role of HRM in these? 81. Discuss corporate culture. How is corporate culture related to a firm's performance?

28 82. What are the three types of staffing policies in international business? Briefly describe each one. Which is the most attractive approach and why? 83. Why should a firm pursue an ethnocentric approach to staffing? What are the disadvantages of this approach?

29 84. Discuss the advantages and disadvantages of a polycentric approach to staffing. 85. How can polycentric approach to staffing result in the creation of a "federation" within the firm? Why is this a disadvantage for the firm? 86. What are the advantages of the geocentric staffing policy?

30 87. What is expatriate failure? 88. Discuss the reasons why expatriate managers fail to complete their foreign assignment. Do

31 89. A number of other studies have consistently confirmed that the inability of a spouse to adjust remains a major reason for continuing high levels of expatriate failure. Discuss the reasons behind the difficulties a spouse faces in adapting to a new country. 90. Discuss Mendenhall and Oddou's assertion that an executive who performs well in a domestic setting may not adapt to a different cultural setting.

32 91. What is cultural toughness? 92. What are the three types of training for expatriate managers? 93. Discuss why the repatriation process is so difficult for so many expatriates.

33 94. Describe the notion of management development programs as a tool for increasing the overall skill levels of managers. What is the goal of this type of program? 95. How can firms reduce the bias in performance appraisals of expatriate managers?

34 96. Should a firm pay executives in different countries according to the prevailing standards in each country, or should it equalize pay on a global basis? 97. What is the most common approach to expatriate pay? Explain what comprises this form of compensation. What is the advantage of this approach?

35 98. Consider the allowance component of a typical expatriate compensation package. What types of allowance are included in this component? 99. Discuss the concerns of organized labor.

36 100. What are the three actions taken by organized labor to respond to the increased bargaining power of multinationals? How successful have these efforts been?

37 Chapter 19 Global Human Resource Management Answer Key True / False Questions 1. An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries. TRUE An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries. Blooms: Remember Difficulty: 1 Easy Learning Objective: Summarize the strategic role of human resource management in international business firms. Topic: Introduction

38 2. HRM professionals have a critically important strategic role. TRUE The HRM function, through its staffing, training, compensation, and performance appraisal activities, has a critical impact upon the people, culture, incentive, and control system elements of the firm's organization architecture. Thus, HRM professionals have a critically important strategic role. Blooms: Remember Difficulty: 1 Easy Learning Objective: Summarize the strategic role of human resource management in international business firms. Topic: The Strategic Role of International HRM 3. An organization's norms and value systems are known as its corporate culture. TRUE Corporate culture refers to the organization's norms and value systems. A strong corporate culture can help a firm to implement its strategy. Blooms: Remember Difficulty: 1 Easy Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

39 4. The most attractive staffing policy is the ethnocentric approach. FALSE An ethnocentric staffing policy is one in which all key management positions are filled by parent-country nationals. The policy is now on the wane in most international businesses. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy 5. A firm with an ethnocentric staffing policy will fill all key management positions with parent-country nationals. TRUE An ethnocentric staffing policy is one in which all key management positions are filled by parent-country nationals. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

40 6. Cultural myopia refers to a firm's failure to understand host-country cultural differences that require different approaches to marketing and management. TRUE An ethnocentric policy can lead to cultural myopia, the firm's failure to understand host-country cultural differences that require different approaches to marketing and management. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy 7. In the case of an ethnocentric approach, it is possible that managers may make decisions that are ethically suspect because they do not understand the culture in which they are managing. TRUE an ethnocentric policy can lead to cultural myopia, the firm's failure to understand host-country cultural differences that require different approaches to marketing and management. Expatriate managers may also make decisions that are ethically suspect simply because they do not understand the culture in which they are managing.

41 Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy 8. A firm following a polycentric approach to staffing believes that the host country lacks qualified individuals to manage subsidiaries. FALSE A polycentric staffing policy requires host-country nationals to be recruited to manage subsidiaries, while parent-country nationals occupy key positions at corporate headquarters. Blooms: Remember Difficulty: 1 Easy Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

42 9. A firm that adopts a polycentric approach to staffing is likely to suffer from cultural myopia. FALSE An ethnocentric policy can lead to cultural myopia, the firm's failure to understand host-country cultural differences that require different approaches to marketing and management. A polycentric staffing policy requires hostcountry nationals to be recruited to manage subsidiaries, while parent-country nationals occupy key positions at corporate headquarters. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy 10. Firms may choose an ethnocentric approach to staffing as opposed to a polycentric approach because of the cost savings it promotes. FALSE A polycentric approach may be less expensive to implement, reducing the costs of value creation. Expatriate managers can be expensive to maintain. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

43 11. A geocentric staffing policy seeks the best people for key jobs throughout the organization, regardless of nationality. TRUE A geocentric staffing policy seeks the best people for key jobs throughout the organization, regardless of nationality. Blooms: Remember Difficulty: 1 Easy Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy 12. A geocentric approach tends to weaken local responsiveness. FALSE The multinational composition of the management team that results from geocentric staffing tends to reduce cultural myopia and to enhance local responsiveness. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

44 13. Many firms adopt a geocentric policy toward staffing because it is a relatively inexpensive staffing policy. FALSE A geocentric staffing policy also can be expensive to implement. Training and relocation costs increase when transferring managers from country to country. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy 14. An ethnocentric approach is compatible with both global standardization and transnational strategies. FALSE Broadly speaking, an ethnocentric approach is compatible with an international strategy, a polycentric approach is compatible with a localization strategy, and a geocentric approach is compatible with both global standardization and transnational strategies. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

45 15. A citizen of Japan who moves to the United States to work at Microsoft would be classified as an inpatriate. TRUE Sometimes the term inpatriates is used to identify a subset of expatriates who are citizens of a foreign country working in the home country of their multinational employer. Learning Objective: Explain why managers may fail to thrive in foreign postings. Topic: Staffing Policy 16. Expatriate failure refers to a manager's failure to understand host-country cultural norms and values, leading to ineffective work. FALSE A prominent issue in the international staffing literature is expatriate failure the premature return of an expatriate manager to his or her home country. Learning Objective: Explain why managers may fail to thrive in foreign postings. Topic: Staffing Policy

46 17. A seminal study, R. L. Tung, revealed that for European firms, the top reason for expatriate failure was the inability of the manager to cope with larger overseas responsibilities. FALSE Tung asked her sample of multinational managers to indicate reasons for expatriate failure. Managers of European firms gave only one reason consistently to explain expatriate failure: the inability of the manager's spouse to adjust to a new environment. Learning Objective: Explain why managers may fail to thrive in foreign postings. Topic: Staffing Policy 18. An executive who performs well in a domestic setting may not be able to adapt to managing in a different cultural setting. TRUE Domestic performance and overseas performance potential are not the same thing. An executive who performs well in a domestic setting may not be able to adapt to managing in a different cultural setting. Learning Objective: Explain why managers may fail to thrive in foreign postings.

47 Topic: Staffing Policy 19. An expatriate needs to have language fluency to show willingness to communicate. FALSE Although language fluency helps, an expatriate need not be fluent to show willingness to communicate. Making the effort to use the language is what is important. Blooms: Remember Difficulty: 1 Easy Learning Objective: Explain why managers may fail to thrive in foreign postings. Topic: Staffing Policy 20. The ability to understand why people of other countries behave the way they do is perceptual ability. TRUE Perceptual ability is the ability to understand why people of other countries behave the way they do; that is, the ability to empathize. Blooms: Remember Difficulty: 1 Easy Learning Objective: Explain why managers may fail to thrive in foreign postings. Topic: Staffing Policy

48 21. Expatriate managers who have perceptual ability tend to treat foreign nationals as if they were home-country nationals. TRUE Perceptual ability is the ability to understand why people of other countries behave the way they do; that is, the ability to empathize. Expatriate managers who have this ability tend to treat foreign nationals as if they were homecountry nationals. Learning Objective: Explain why managers may fail to thrive in foreign postings. Topic: Staffing Policy 22. According to Mendenhall and Oddou, poorly-adjusted expatriates tend to be nonjudgmental and nonevaluative in interpreting the behavior of host-country nationals. FALSE According to Mendenhall and Oddou, well-adjusted expatriates tend to be nonjudgmental and nonevaluative in interpreting the behavior of host-country nationals and willing to be flexible in their management style, adjusting it as cultural conditions warrant.

49 Learning Objective: Explain why managers may fail to thrive in foreign postings. Topic: Staffing Policy 23. Cultural toughness refers to the relationship between the country of assignment and how well an expatriate adjusts to a particular posting. TRUE Cultural toughness refers to the relationship between the country of assignment and how well an expatriate adjusts to a particular posting. Some countries are much tougher postings than others because their cultures are more unfamiliar and uncomfortable. Learning Objective: Explain why managers may fail to thrive in foreign postings. Topic: Staffing Policy

50 24. A manager might be sent on several foreign postings over a number of years to build his/her cross-cultural sensitivity and experience as part of a management development program. TRUE As part of a management development program, a manager might be sent on several foreign postings over a number of years to build his or her crosscultural sensitivity and experience. At the same time, along with other managers in the firm, the person might attend management education programs at regular intervals. Learning Objective: Recognize how management development and training programs can increase the value of human capital in international business firms. Topic: Training and Management Development 25. Historically, most international businesses have been more concerned with training than with management development. FALSE Historically, most international businesses have been more concerned with training than with management development. Plus, they tended to focus their training efforts on preparing home-country nationals for foreign postings.

51 Blooms: Remember Difficulty: 1 Easy Learning Objective: Recognize how management development and training programs can increase the value of human capital in international business firms. Topic: Training and Management Development 26. English is considered the language of world business. TRUE English is the language of world business; it is quite possible to conduct business all over the world using only English. Blooms: Remember Difficulty: 1 Easy Learning Objective: Recognize how management development and training programs can increase the value of human capital in international business firms. Topic: Training and Management Development 27. Where an expatriate community exists, firms often devote lesser effort to ensuring that the new expatriate family is quickly integrated into that group. FALSE Where an expatriate community exists, firms often devote considerable effort to ensuring the new expatriate family is quickly integrated into that group. Blooms: Remember Difficulty: 1 Easy Learning Objective: Recognize how management development and training programs can increase the value of human

52 capital in international business firms. Topic: Training and Management Development 28. Firms pursuing a transnational strategy increasingly are using management development as a strategic tool. TRUE International businesses increasingly are using management development as a strategic tool. This is particularly true in firms pursuing a transnational strategy, as increasing numbers are. Learning Objective: Recognize how management development and training programs can increase the value of human capital in international business firms. Topic: Training and Management Development 29. Bringing managers together in one location for extended periods and rotating them through different jobs in several countries helps the firm build a formal management network. FALSE Bringing managers together in one location for extended periods and rotating them through different jobs in several countries helps the firm build an informal management network.

53 Learning Objective: Recognize how management development and training programs can increase the value of human capital in international business firms. Topic: Training and Management Development 30. A firm's performance appraisal systems are an important element of its control systems. TRUE A firm's performance appraisal systems are an important element of its control systems, which is a central component of organization architecture. Blooms: Remember Difficulty: 1 Easy Learning Objective: Explain how and why performance appraisal systems might vary across nations. Topic: Performance Appraisal 31. Unintentional bias makes it difficult to evaluate the performance of expatriate managers objectively. TRUE Unintentional bias makes it difficult to evaluate the performance of expatriate managers objectively. In many cases, two groups evaluate the performance of expatriate managers host-nation managers and home-office managers and both are subject to bias.

54 Blooms: Remember Difficulty: 1 Easy Learning Objective: Explain how and why performance appraisal systems might vary across nations. Topic: Performance Appraisal 32. Most expatriates believe that more weight should be given to an on-site manager's appraisal than to an off-site manager's appraisal. TRUE Most expatriates appear to believe more weight should be given to an on-site manager's appraisal than to an off-site manager's appraisal. Due to proximity, an on-site manager is more likely to evaluate the soft variables that are important aspects of an expatriate's performance. Blooms: Remember Difficulty: 1 Easy Learning Objective: Explain how and why performance appraisal systems might vary across nations. Topic: Performance Appraisal

55 33. In ethnocentric firms, the lack of managers' mobility among national operations implies that pay can and should be kept country-specific. TRUE In ethnocentric firms, the issue can be reduced to that of how much homecountry expatriates should be paid. As for polycentric firms, the lack of managers' mobility among national operations implies that pay can and should be kept country-specific. Learning Objective: Explain how and why compensation systems might vary across nations. Topic: Compensation 34. If a firm is serious about building an international cadre, it may have to pay its international executives the same basic salary irrespective of their country of origin or assignment. TRUE If a firm is serious about building an international cadre, it may have to pay its international executives the same basic salary irrespective of their country of origin or assignment. Currently, however, this practice is not widespread. Learning Objective: Explain how and why compensation systems might vary across nations.

56 Topic: Compensation 35. Base pay in most firms is set with regard to global market conditions. FALSE Except for a relative small cadre of internationally mobile executives, base pay in most firms is set with regard to local market conditions. Learning Objective: Explain how and why compensation systems might vary across nations. Topic: Compensation 36. An expatriate's base salary normally varies from the base salary for a similar position in the home country. FALSE An expatriate's base salary is normally in the same range as the base salary for a similar position in the home country. The base salary is normally paid in either the home-country currency or in the local currency. Learning Objective: Explain how and why compensation systems might vary across nations. Topic: Compensation

57 37. When a reciprocal tax treaty is in force, the firm typically pays the expatriate's income tax in the host country. FALSE When a reciprocal tax treaty is not in force, the firm typically pays the expatriate's income tax in the host country. In addition, firms normally make up the difference when a higher income tax rate in a host country reduces an expatriate's take-home pay. Learning Objective: Explain how and why compensation systems might vary across nations. Topic: Compensation 38. From a strategic perspective, the key issue in international labor relations is the degree to which organized labor can limit the choices of an international business. TRUE The HRM function of an international business is typically responsible for international labor relations. From a strategic perspective, the key issue in international labor relations is the degree to which organized labor can limit the choices of an international business.

58 Learning Objective: Understand how organized labor can influence strategic choices in international business firms. Topic: International Labor Relations 39. Labor unions generally prefer it if an international business keeps highly skilled tasks in its home country and farms out only low-skilled tasks to foreign plants. FALSE A concern of organized labor is that an international business will keep highly skilled tasks in its home country and farm out only low-skilled tasks to foreign plants. Such a practice makes it relatively easy for an international business to switch production from one location to another as economic conditions warrant. Learning Objective: Understand how organized labor can influence strategic choices in international business firms. Topic: International Labor Relations 40. The international trade secretariats have had tremendous success. FALSE In the 1960s, organized labor began to establish international trade secretariats (ITSs) to provide worldwide links for national unions in particular industries. However, the ITSs have had virtually no real success.

59 Learning Objective: Understand how organized labor can influence strategic choices in international business firms. Topic: International Labor Relations Multiple Choice Questions 41. Which of the following is mainly concerned with the selection of employees for particular jobs? A. Retention policy B. Staffing policy C. Incentive policy D. Appraisal policy Staffing policy is concerned with the selection of employees for particular jobs. At one level, this involves selecting individuals who have the skills required to do particular jobs. Blooms: Remember Difficulty: 1 Easy Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

60 42. A Japanese firm prefers expatriate Japanese managers to head its foreign operations because these managers have been socialized into the firm while employed in Japan. This indicates that the firm: A. believes that such managers cannot progress beyond middle-manager positions in their parent company. B. follows an ethnocentric staffing policy to maintain a unified corporate culture. C. is trying to create value by transferring core competencies to a foreign operation. D. requires host-country nationals to be recruited to manage subsidiaries. An ethnocentric staffing policy is one in which all key management positions are filled by parent-country nationals. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

61 43. An ethnocentric staffing policy is one in which: A. all key management positions are filled by host-country nationals. B. host-country nationals are recruited to manage subsidiaries. C. all key management positions are filled by parent-country nationals. D. the best people are recruited for key jobs throughout the organization, regardless of nationality. An ethnocentric staffing policy is one in which all key management positions are filled by parent-country nationals. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

62 44. Cultural myopia refers to a firm's failure to: A. adapt to certain ethnocentric cultures. B. act confidently in host-countries. C. understand host-country cultural differences. D. prevent gender discrimination within the firm an ethnocentric policy can lead to cultural myopia, the firm's failure to understand host-country cultural differences that require different approaches to marketing and management. Blooms: Remember Difficulty: 1 Easy Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

63 45. What is the difference between an ethnocentric and a polycentric staffing approach? A. An ethnocentric staffing approach alleviates cultural myopia, while a polycentric staffing approach can lead to cultural myopia. B. An ethnocentric staffing approach is more expensive compared to a polycentric staffing approach. C. An ethnocentric staffing approach seeks host-country nationals for all key positions, while a polycentric staffing approach seeks the best people for key jobs regardless of nationality. D. An ethnocentric staffing approach is now used in most international businesses, while the polycentric staffing approach is on the wane. A polycentric approach may be less expensive to implement, reducing the costs of value creation. Expatriate managers can be expensive to maintain. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

64 46. If a company recruits host-country nationals to manage subsidiaries while parent-country nationals occupy key positions at corporate headquarters, the firm is following a(n): A. polycentric staffing policy B. ethnocentric staffing policy C. geocentric staffing policy D. internal staffing policy A polycentric staffing policy requires host-country nationals to be recruited to manage subsidiaries, while parent-country nationals occupy key positions at corporate headquarters. Blooms: Remember Difficulty: 1 Easy Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

65 47. Which of the following is a drawback of the polycentric approach to staffing? A. Firms are likely to suffer from cultural myopia. B. Host-country nationals are vulnerable to cultural misunderstandings. C. This approach increases the cost of value creation. D. Host-country nationals have limited opportunities for advancement beyond senior positions in their subsidiary. A polycentric approach also has its drawbacks. Host-country nationals have limited opportunities to gain experience outside their own country and thus cannot progress beyond senior positions in their own subsidiary. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

66 48. A(n) seeks the best people for key jobs throughout the organization, regardless of nationality. A. polycentric staffing policy B. ethnocentric staffing policy C. geocentric staffing policy D. uniform staffing policy A geocentric staffing policy seeks the best people for key jobs throughout the organization, regardless of nationality. Blooms: Remember Difficulty: 1 Easy Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

67 49. A polycentric approach may be effective for firms pursuing a(n): A. international strategy. B. localization strategy. C. transnational strategy. D. global standardization strategy. Although a polycentric approach may be effective for firms pursuing a localization strategy, it is inappropriate for other strategies. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

68 50. A firm using a polycentric staffing policy: A. is less likely to suffer from cultural myopia. B. seeks the best people for key jobs throughout the organization, regardless of nationality. C. will most likely follow an ethnocentric strategy. D. is likely to have improved communication between host-country managers and parent-country managers. One advantage of adopting a polycentric approach is that the firm is less likely to suffer from cultural myopia. Host-country managers are unlikely to make the mistakes arising from cultural misunderstandings to which expatriate managers are vulnerable. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

69 51. What is the most important advantage of using a geocentric staffing policy? A. It enables the firm to build a cadre of international executives who feel at home working in a number of cultures. B. It may be less expensive to implement than other policies, reducing the costs of value creation. C. The higher pay managers on an international fast track enjoy is a source of inspiration within a firm. D. It reduces the need for futile and time consuming documentation. Geocentric policy enables the firm to build a cadre of international executives who feel at home working in a number of cultures. Creation of such a cadre may be a critical first step toward building a strong unifying corporate culture and an informal management network, both of which are required for global standardization and transnational strategies. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

70 52. An ethnocentric approach to staffing is appropriate for firms that are pursuing a(n): A. localization strategy. B. international strategy. C. global standardization strategy. D. transnational strategy. Broadly speaking, an ethnocentric approach is compatible with an international strategy, a polycentric approach is compatible with a localization strategy, and a geocentric approach is compatible with both global standardization and transnational strategies. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy

71 53. Which of the following staffing approaches will be most effective for a firm that is pursuing a transnational strategy? A. A polycentric staffing policy B. An ethnocentric staffing policy C. A geocentric staffing policy D. An internal staffing policy Broadly speaking, an ethnocentric approach is compatible with an international strategy, a polycentric approach is compatible with a localization strategy, and a geocentric approach is compatible with both global standardization and transnational strategies. Learning Objective: Identify the pros and cons of different approaches to staffing policy in international business firms. Topic: Staffing Policy