International Human Resource Management Policies And Practices For Multinational Enterprises By Ibra

Chapter 1 The Internationalization of Human Resource Management TRUE/FALSE 1. The practice of IHRM was becoming and has now become more complex due to the management of HRM in multiple countries.

ANS: T 2. International human resource management is the study and application of all human resource management activities as they impact managing human resources in enterprises in the global environment.

ANS: T 3. Over 7.8 million Americans worked for foreign-owned subsidiaries in 2018 in the United States.

ANS: T 4. The term internationalization or globalization refers to the ever-increasing interaction, interconnectedness, and integration of people, companies, cultures, and countries.

ANS: T 5. When a business internationalizes, the human resource management responsibilities, such as recruitment and hiring, compensation, and health and safety, take on international characteristics requiring international human resource management professionals to facilitate human resource management practices with a global focus.

ANS: T 6. Surveys show that enterprises from small or developing and emerging markets are not contributing increasingly to global trade.

ANS: F 7. As some economists put it, we are no longer in an era of globality (e.g., with everyone competing with everyone from everywhere for everything).

ANS: F 8. The many surveys and rankings of organizations, such as the Fortune Global 500, illustrate that the

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global economy is limited to technology products and services from numerous organizations located primarily in Asia.

ANS: F 9. Fortune magazine developed a list of the top global companies for leaders.

ANS: T 10. Bloomberg Businessweek has also developed a list of the 100 Best Global Brands, which includes firms from over 40 countries, ANS: F 11. The United Nations Conference on Trade and Development (UNCTAD) tracks the world's Micro MNEs, analyzing how important these firms are to the global economy.

ANS: F 12. The UNCTAD developed the Transnational Index (TNI) based on the average of two ratios.

ANS: F 13. The largest firms by foreign assets are not necessarily the largest by sales or number of employees.

ANS: T 14. Exhibit 1.2 in the textbook shows the top 20 non-financial transnationals ranked by the value of their foreign sales.

ANS: F 15. The first most common setting for IHRM involves the HR manager working in his or her home country but being employed by a local subsidiary or acquiring a foreign MNE. ANS: F MULTIPLE CHOICE 1. Which of the following is a pressure driving the internationalization of business? a increased travel . b rapid and extensive global communication . c migration of large numbers of people . d all of the above .

ANS: D 2. Measures of the growth of international business include which of the following: 2

a . b . c . d .

the numbers of enterprises conducting business across borders the growth in foreign direct investment (FDI) the value of trade between countries all of the above

ANS: D 3. Reasons for the need for most firms to consider internationalization and its impact on them from an HR perspective include all of the following EXCEPT a . b . c . d .

the need to know how to merge cultures to develop strategies for managing diverse languages to effectively manage the HR budget the need to address different expectations of employees from multiple countries

ANS: C 4. The Transnational Index (TNI) was developed by a . b . c . d .

Large multinational organizations Fortune Magazine United Nations Conference on Trade and Development Harvard Business Review

ANS: C 5. Which of the following job settings involves managing IHRM issues? a HR manager in a domestic (local) firm . b HR manager in a firm with foreign owners . c HR manager in regional headquarters of an MNE . d all of the above .

ANS: D 6. The HR manager working in their home country for a local subsidiary of a foreign MNE faces particular challenges, including: 3

a . b . c . d .

being on the receiving end of policy and practice from foreign headquarters integrating local, national culture plus the foreign organizational culture a lack of understanding of employment laws and practices from the parent company all of the above

ANS: D

7. In many countries, the domestic (local) firms confront IHRM specific challenges, including a responding to changes in local legislation . b the hiring of employees who come from another country . c training employees in the use of new systems . d all of the above .

ANS: B 8. The HR manager in a domestic (local) firm who recruits immigrants may have the same types of internationalization concerns as those faced by traditional MNEs, such as: a merging cultures, languages, and work expectations . b managing people with different attitudes towards supervision . c managing different expectations of performance management and compensation . d all of the above .

ANS: D

9.

The IHRM functions and activities associated with managing employees who are sent on international assignments include all of the following EXCEPT a understanding foreign taxes . b lowering the level of risk and liabilities . c work visas . d assistance with international relocations .

ANS: B

10. Which of the following is not how IHRM differs from domestic HRM? 4

a . b . c . d .

more HR functions and activities broader expertise and perspective less involvement in people's lives more external factors and influences

ANS: C 11. The IHRM-related questions that need to be answered within an MNE as it creates its international strategy include a Will we find and recruit the talent necessary for international operations? . b Should we pursue centralized or localized HRM policies? . c How many local employees will we need to recruit, and does the local labor force have . the necessary skills? d All of the above. .

ANS: B

12. Which of the following is not codified as a domain of IHRM knowledge? a Global strategic HR . b Global staffing . c Global tariffs and trade regulations . d Global compensation and benefits .

ANS: C 13. The internationalization of HRM involves a developing a global mindset inside the HR function . b aligning core HR processes and activities with global competition requirements . c enhancing global competencies and capabilities within the HR function . d all of the above .

ANS: D 14. IHRM professionals are now much more proactive in dealing with new challenges and issues, such as: a attracting, engaging, and retaining thousands of employees in many different countries .

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b . c . d .

aligning core HRM policies and practices and responding to local requirements enhancing global competencies within the IHRM department, including global centers of excellence all of the above

ANS: D

SHORT ANSWER 1. As the book indicates, Today's innovations combined with digitalization and access to the Internet have put being international within everyone's reach. Briefly describe many of the drivers of this internationalization.

ANS: See Exhibit 1.1 - These drivers are creating new global realities for all organizations – large and small, publicly traded, privately held, family-owned, government-owned, web-based, and NGOs.

2. Describe the issues that HR managers need to confront as they begin internationalizing ANS: See Exhibit 1.3 1. Do we have knowledgeable staffing for a global strategy?

2. Are the countries being considered for global expansion good from an 3. IHRM's point of view will it be easy to operate within a different set of employment laws?

4. Does the firm have adequate personnel to implement foreign operations?

5. How many employees will need to be relocated? How many local employees 6. will we need to hire, and does the local labor force have the necessary skills?

7. Will we find and recruit the talent required for international operations?

8. Should we pursue centralized or localized HRM policies?

3. Provide two examples of how IHRM professionals can be proactive in dealing with the many new challenges and issues they face.

ANS: 1. Attracting, engaging, and retaining thousands of MNE employees in many different countries to achieve strategic global business objectives.

2. Aligning core HRM policies and practices with new requirements of competing internationally while also responding to local issues.

3. Enhancing global competencies and capabilities within the IHRM department.

1.

2.

3.

ESSAY QUESTIONS 1. The internationalization of business means that many HR professionals will find themselves in6

volved in international human resource management activities. Identify the main settings in which international human resource management competency is now needed.

ANS: 1. Headquarters of multinationals (central or regional) - developing and overseeing HRM practices in all foreign operations.

2. Home-country subsidiaries of foreign-owned firms - working in the home country for a foreign MNE. 3. Domestic firms - hiring migrants, different languages, cultures 4. Government agencies and non-governmental organizations - embassies, NGOs, humanitarian organizations.

2. What are the significant differences between domestic and international HR? ANS: IHRM is responsible for: 1. More HR functions and activities - e.g., management of international assignments, visas, relocations 2. A broader expertise and perspective - knowledge about foreign countries their employment laws and practices and cultural differences 3. More involvement in employees' lives - as relocating employees and families 4. Dealing with and managing a much wider mix of employees - added complexity, each type of international employee needs different training, compensation, benefits 5. More external factors and influences - multiple governments, country laws 6. Greater level of risk - greater exposure to problems and difficulties so greater exposure to much greater liabilities for making mistakes in HR decisions (e.g. legal compliance).

The base knowledge of HRM creates the same foundation, and the IHRM role adds to that foundation with these additional requirements (in terms of knowledge, skills and experiences) and unique features to address.

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IHRM 6th Edition Chapter 2 Strategic International Human Resource Management TRUE/FALSE

1. Since firms differ in their levels of international development and the extent of their international operations, IHRM managers must develop the capabilities to assist in that development and those various levels of global operation.

ANS: T 2. SIHRM is the part of IHRM that focuses on creating and implementing IHRM policies and practices that help achieve an MNE's international vision and objectives, that is, its international strategy.

ANS: T 3. As a firm internationalizes, it moves through only two stages, and in each stage, it must make a choice of methods for market entry.

ANS: F 4. Portfolio investment historically has been the initial step of internationalization for most firms and usually occurs while the firm is relatively small.

ANS: F 5. If foreign sales or purchasing increase in importance, the fi rm will assign a sales manager or purchasing agent responsible for international sales.

ANS: T 6. International professional employer organization (PEO) involves paying someone else in the foreign country who provides all the necessary organizational site or location (e.g., physical building) and management (e.g., employees and back-office expenses such as payroll, local taxes, organizational legalities, human resource management (HRM), etc.).

ANS: T 7. As firms progress through becoming more internationalized and increasing their international activities, their IHRM responsibilities become increasingly less complex to manage.

ANS: F 8. Licensing the rights to manufacture or market a product or service in an option for internationalization that does not involve the setting up of directly owned subsidiaries.

ANS: T 9. Subsidiaries can be developed in a number of ways, including involvement in greenfield or brownfield projects.

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ANS: T 10. There has been a steady decline in the use of international joint ventures (where two or more firms create a new business entity) as an internationalisation option.

ANS: F 11. The terms off-shoring and Outsourcing should not be used interchangeably.

ANS: T 12. An MNEs business strategy is primarily guided by the extent of integration and/or local responsiveness required by the firm to manage its worldwide operations.

ANS: T 13. Adopting a multi-domestic business strategy typically means that a firm views each national market as a specialized market for its particular subsidiaries' products and services, and, as such, involves being responsive to the needs, values, and demands of the local market.

ANS: T 14. The tension between integration (centralisation) and differentiation (localization) is seldom a major dilemma for global firms and their HR managers.

ANS: F 15. MNEs with a Multidomestic business strategy use an approach that attempts to maximize both responsiveness and integration.

ANS: F 16. An IHRM strategy's effect on organizational effectiveness is always dependent on how well the IHRM strategy fits with and supports an MNE's business strategy.

ANS: T

MULTIPLE CHOICE 1. Strategic IHRM is the part of IHRM that focuses on

a . b . c . d .

developing budgets creating and implementing IHRM policies and practices to achieve international objectives networking with industry partners all of the above

ANS: B

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2. The two essential needs that compel senior executives to develop specific strategies for their organizations

are a . b . c . d .

to react to changes in the environment and respond to new legislation to resolve issues in emerging markets and keep customers satisfied to actively shape how a business will be conducted and to mold a coordinated approach across the company to actively downsize the business and meet shareholder needs

ANS: C 3. Once the decision is made to go international (whether this is a pro-active or reactive choice), the task of

all managers – including HR managers – is a to implement that decision b

to convert the strategic plan into action and

c

to get on with whatever needs to be done to achieve the international vision and targeted objectives all of the above

d

ANS: D 4. An element of the strategic management process used to develop a global business strategy is

a . b . c . d .

environmental scanning downsizing outsourcing all of the above

ANS: A 5. For a long time,

has been the first step of internationalization for most firms while they were

still relatively small. a importing . b exporting . c franchising . d licensing .

ANS: B 6. McDonald's is an example of a firm that adopted a

strategy to package the successful elements of their operations in their home market and offer this package to overseas investors, with perhaps training and marketing support.

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a . b . c . d .

sub-contracting exporting franchising all of the above

ANS: C 7. The reason why some new enterprises operate almost immediately across the globe ("born global") is

a . b . c . d .

the nature of their products the global networking of the engineers and scientists involved marketing through the internet all of the above

ANS: D 8. Off-shoring involves the relocation of one or more aspects of an organization's business processes to a lo-

cation in another country for the purpose, at least initially, of a creating career paths . b developing networks and relationships . c lowering costs . d all of the above .

ANS: C 9. Market entry choices for an internationalizing firm are dictated by

a . b . c . d .

the firm's internationalization strategy options available to the firm in particular countries timing of its entry into markets all of the above

ANS: D 10. Methods of entry into international business include

a . b .

licensing and subcontracting outsourcing and off-shoring

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c . d .

mergers and acquisitions all of the above

ANS: D 11. Organizations can also use a variety of auxiliary methods to internationalize their operations, such as:

a . b . c . d

Importing Outsourcing Exporting All of the above

ANS: B 12. Which of the following statement about Outsourcing is true

a . b . c . d

Outsourcing is a form of exporting Outsourcing began in 2010 The term "outsourcing" was developed to describe this process of contracting with an external firm to provide products or services that would otherwise be completed internally All of the above

ANS: C 13. Reasons for entering into IJV agreements include

a . b . c . d .

to avoid host government requirements and insistence to gain reduced economies of scale to shift the risks to the IJV partners none of the above

ANS: D 14. Outsourcing success depends on all of the following factors except

a . b . c . d .

executive-level support in the client organization for its outsourcing mission ample communication to affected employees the efforts of competing firms to manage contracts and agreements the firm's ability to manage its service providers

ANS: C

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15. Issues that firms should consider when relocating services off-shore are

a . b . c . d .

expertise in managing remote locations cost of labor language skills all of the above

ANS: D 16. The extent to which the subsidiaries and the headquarters of a firm develop a unified whole and therefore

achieve a range of competitive advantages (such as economies of scale) is defined as a geocentric . b integration . c responsiveness . d decentralization .

.

ANS: B 17. A MNE business strategy that enables subsidiaries to respond to local differences and encourages

modification of products or services to meet local needs and increase local competition is called . a ethnocentric . b integration . c local responsiveness . d reactionary .

ANS: C 18. Adopting a global business strategy means that an MNE implements the same unified approach in all

countries regardless of their differences so that there is a high degree of a integration . b decentralization . c proactivity . d regiocentric .

ANS: A 19. A MNE strategy that attempts to maximize both responsiveness and integration so that each subsidiary is

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responsible for making adaptations to suit the local needs, while still being able to draw on the global expertise and resources a ethnocentric . b multi-domestic . c global . d transnational .

ANS: D 20. Using a home country standard as a reference in managing international activities is indicative of

a(n) orientation a geocentric . b regiocentric . c polycentric . d enthnocentric .

ANS: D 21. A firm has reached the level of a global orientation, a(n)

mindset will develop and be

adopted a ethnocentric . b geocentric . c polycentric . d regiocentric .

ANS: B 22. IHRM strategy is the creation and implementation of international HR practices that help the firm to

achieve its international vision and business strategy as well as a relocating employees . b creating business opportunities for employees . c reacting to resolve HR challenges . d strategically managing the HR function .

.

ANS: D 23. Designing a IHRM strategy that concentrates authority and decision making at the top of the firm (the

headquarters) is similar to the concept of integration, is considered as a decision to 7

.

a . b . c . d .

regionalize centralize decentralize localize

ANS: B 10. An IHRM strategy's effect on organizational effectiveness is IHRM strategy fits with and supports a MNE's business strategy a . b . c . d .

dependent on how well the

often rarely always sometimes

ANS: C 11. A firm pursuing an active IHRM strategy is characterized by HR at corporate headquarters and HR at the subsidiary trying to the control over HR decision making. a avoid . b balance . c re-allocate . d decentralize .

ANS: B 10.

12.

12. The use of parent-company policies and procedures throughout a firm's global operations is known as a convergence . b divergence . c outsourcing . d restructuring .

ANS: A 13. An integrative framework for strategic international HRM in MNEs includes consideration of a exogenous factors 8

. b . c . d .

strategic MNE components endogenous factors all of the above

ANS: D

SHORT ANSWER

1. Identify and explain the five stages of the internationalization process that most organizations experience as they begin to evolve their global operations.

ANS: stage 1: portfolio investment, exporting stage 2: sales subsidiary/local sales office - sending staff to the location initially stage 3: [producing products directly in foreign countries in these following 3 stages] operations through licensing/franchising/contracting/sub-contracting/ International professional employer organization (PEO) stage 4: operations through wholly-owned subsidiaries stage 5: operations through international alliances, partnerships, consortia or operations through international mergers & acquisitions, or operations through international joint ventures.

2. Describe the Born-Global Firm.

ANS: Although many existing firms internationalize through stages, some new enterprises, primarily but not exclusively in the IT industry, are born global and almost immediately operate across the globe. The reasons they use in key global markets from their inceptions essentially stem from the nature of their products (Internet products, IT applications, and other highly specialized products with global niches), the global networking and possible partnering on projects among the engineers and scientists involved, and the marketing by these firms through the Internet 3. MNE business strategies can be categorized based on how they manage the forces of integration versus local responsiveness. Identify and explain the four types of business strategies in terms of their focus on integration versus local responsiveness.

ANS: 1. international: limited local responsiveness, little integration 2. multi-domestic: high local responsiveness, low integration 3. global: high degree of integration, low local responsiveness 4. transnational: high local responsiveness and high integration

4. How does a transnational business strategy differ from a global business strategy?

ANS: 9

The transnational firm differs from the global firm in that, rather than developing global products, services, brands, and standardized processes and policies and procedures, the transnational organization works hard to localize, to be seen, not only as a global firm, but as a local firm as well, albeit one that draws upon global expertise, technology, and resources. In a transnational firm, the focus is simultaneously on global integration, local responsiveness, and knowledge sharing among the different parts of the organization.

5. Explain the central trade-offs involved in making a decision about whether to centralize or decentralize IHRM decisions.

ANS: Centralization (similar to integration) concentrates authority and decision making in HQs (towards the top of the firm), whereas decentralisation (as local responsiveness) allows for dispersion of authority and decision making to operating units throughout the organization. The tension between these is a growing dilemma for IHRM and large global firms. Firms must become highly differentiated and more integrated all at the same time. Locals want to run the business, and in some cases, local laws require deployment of particular HR practices that are managed differently in other countries.

ESSAY QUESTIONS

1. Describe an organization's IHRM strategy. Why is it important to have an IHRM strategy?

ANS: As IHRM becomes more involved with helping organizations be successful in their international endeavors, it hopefully will develop a strategic focus itself. It will develop its own strategies to hire, manage, and retain the best employees (employees who will help achieve the organization's global strategies) throughout the organization's IB activities. It will thus contribute to the firm's overall international strategic planning. IHRM strategy is defined as the creation and implementation of IHR practices that help achieve an MNE's international vision and objectives, i.e., it's business strategy. It also involves the strategic management of the HR function and department itself. Like the MNE's business strategy, a fi rm's IHRM strategy serves as a guiding principle that helps shape and govern its international activities, particularly as they relate to the firm's HR worldwide. IHRM strategies are implemented through IHRM policies and practices 2. Identify and explain the three types of IHRM strategies.

ANS: Similar to an MNE's business strategy, IHRM strategy has to deal with the issue of whether to standardize IHRM policies and practices from HQs, or to localize them to meet local conditions, or do both (e.g., a combination of core policies established by HQs with localized methods to accommodate local culture and practices). There are three types of IHRM strategies that can be aligned with MNE business strategy and HQs' international orientations. Figure 2.6 show and describes these strategies.

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IHRM 6th Edition Chapter 3 Design and Structure of the Multinational Enterprise TRUE/FALSE

1. The traditional needs for control and integration when applied across national borders in the highly complex global economy make organizational design problems especially difficult.

ANS: T 2. Organizational design is an outcome, whereas organizational structure is a process.

ANS: F 3. Obviously, no one type of international organization structure embodies the right system for all firms.

ANS: T 4. This integration-responsiveness grid categorizes the internationalized structure of the firm in terms of the HQ-subsidiaries relationship into four types.

ANS: T 5. You could describe the basic global structure of every MNE in terms of how it is designed to manage the competing demands of integrating activities in different countries and coordinating foreign subsidiaries with headquarters.

ANS: T 6. Using a matrix structure for reporting relationships resolves the dilemma associated with having managers reporting to a local, national boss and a regional functional office.

ANS: F 7. In a shared service model, individual country operations can specialize in varying aspects of international HR services. Then other countries can access these services and products without developing them all themselves.

ANS: T 8. The level of trust between team members is the critical variable in the successful functioning of virtual teams.

ANS: T

MULTIPLE CHOICE 1. International organizations need appropriate structure to effectively

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a . b . c . d .

conduct business in the chaotic and interconnected global economy manage an increasing number of partnerships develop new mental mindsets all of the above

ANS: A 2. Which of the following is TRUE about Organizational Design a .

b . c . d .

Organizational design is the process used by management to determine the formal arrangement of components such as the headquarters, subsidiaries, business units/ divisions within the headquarters and subsidiaries, product lines, jobs, positions, tasks, and reporting relationships in the organization Organizational design is the outcome, whereas organizational structure is the process.

The organizational design depends on how well MNEs can determine their core business and their ability to expand All of the above

ANS: A 3. Organizational refers to the formalized arrangement of organizational components such as headquarters, business units, and product lines in an organization a systems . b structure . c design . d silos ANS: B 4. The process or style used by management to arrange the various components of the organization is referred to as a organizational design . b organizational change . c organizational structure . d none of the above .

ANS: A 5. Which of the following is a factor in determining organizational structure: a The firm's stage of international development 2

. b . c . d .

The diversity and complexity of business operations The amount of cross-border coordination required by the firm's strategy All of the above

ANS: D 6. The emphasis on increased layers and size of formal organizational structures and more sophisticated systems has a slowed down communication, learning, and decision-making . b limited firms' abilities to adapt to local differences . c increased managements' ability to respond to local issues . d A and B .

ANS: D 7. Organizations with an international structure face a weak pressures for local responsiveness . b fewer coordination and control issues than those with a global structure . c weak pressures for worldwide integration . d all of the above .

ANS: D 8. Organizations that bring together the production of goods and services from their many locations around the globe to deliver value to clients worldwide have adopted a structure. a global matrix . b globally-integrated . c product integrated d functional .

ANS: B

9. Organizations that are in the early stages of internationalization usually have ture. a global matrix . b geographic 3

divisional struc-

. c d .

product functional

ANS: D 10. Managers can have a significant impact upon the success of internationalized firms by developing informal throughout the many centers of the firm. a systems . b networks . c practices . d teams .

ANS: B 11. Two major new challenges related to the successful implementation of cross-border teams are a managing people you can't see and redefining the role of management itself . b managing conflict and working in isolation . c supporting managers with appropriate IHRM strategies and rewarding performance . d managing communications in large teams and increasing diversity .

ANS: A 12. a . b . c . d .

The use of virtual teams will become more prevalent because technology now makes it easier for cross-border teams to meet in a virtual fashion this approach costs firms less in terms of travel and relocation expenses the complexity of international business requires the interaction of people with multiple competencies from many locations all of the above

ANS: D 10.

12.

SHORT ANSWER 1. Describe the structure of a transnational firm and explain how it differs from a global firm.

ANS: 1. The transnational firm has strong pressures for integration and local responsiveness.

2. It is characterized by the interdependence of resources and responsibilities across all business units regardless of national boundaries.

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3. Subsidiaries are integral parts of a complete system – with global and local objectives.

4. The transnational firm has a global focus; however, rather than developing global products, services, brands, and standardized processes and policies, it puts a lot of effort into localizing to be seen not only as a global firm but as a local firm as well.

5. The focus is simultaneously on global integration, local responsiveness, and knowledge sharing among the different parts of the organization.

2. Describe the concerns with the Global Matrix Structure.

ANS: The matrix structures involve two or more lines of reporting. Typically, there will be a country "leg" to the matrix with managers reporting to a local, national boss and reporting to a product group or regional or HQs functional office. Sometimes, there are three or more legs. They may be given equal importance (solid line reporting) or may have different priority levels, with a solid line for direct reporting and a dotted line for more indirect reporting relationships. These structures cause a new set of dilemmas and require new skills. The many diverse global business demands require the global firm to give management focus to both the local and the corporate levels. The matrix doesn't resolve this dilemma, making it a permanent part of the management environment. At best, the matrix structure allows local and global realities to be reconciled; at its worst, it will enable individual managers to pursue narrow objectives without regard to their impact on the other legs of the matrix, that is, on the different parts of the organization 3. Discuss the Challenges of Cross-Border Teams.

ANS: The cross-border teams represent a dramatic change in the ways managers function, presenting two significant new challenges. Both of these challenges stem from issues related to the physical separation of workers and managers made necessary by globalization and made possible by modern technology such as Zoom, Cisco Webex Meetings, Blackboard Collaborate, Microsoft Teams, Skype, GoToMeeting, and BlueJeans. The first challenge has to do with managing people you can't see. Managers must transition from managing activities to managing projects and their results. The second managerial challenge is to redefine the role of management since the "virtual" nature of cross-border teams creates much uncertainty as to whether managers still have a role to play in managing employees who are no longer present in the same locale.

4. List five strategies for improving the effectiveness of cross-border and virtual teams.

ANS: 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Develop an e-mail protocol Select appropriate people (e.g., self-starters) Identify team leader at the start Keep teams focused on the task Provide adequate face-to-face social time to build trust Celebrate reaching targets and completion of projects Identify barriers and work together to resolve them Provide cultural mentors Identify what to do when a crisis occurs Identify ground rules

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ESSAY QUESTIONS

1. Identify and explain how IHRM can help ensure firms' success with a global organizational structure.

ANS: Firms with a global organizational structure face strong pressures for worldwide integration but face weak pressures for differentiation or local responsiveness. This type of structure looks like a centralized hub. IHRM helps here to create a corporate culture, a mindset, that binds the firm together regardless of national borders. The emphasis is upon operating so as not to have to be concerned with national cultural and legal differences. Critical HR decisions are made at the HQ level and implemented worldwide. Employees are hired everywhere globally, wherever the skills, training, and experience can be found.

2. Evaluate the merits of developing networks and a learning organization approach to how this helps facilitate competitive advantage for MNEs. ANS: Individual managers' informal networks are often among the most important competencies that hold together complex global businesses. Networks help handle the practical components of day to day activity in multi-layered complex organizational structures. These networks directly help to integrate the management and executive workforce. Management development processes need to specifically provide time and means to develop these networks and build trust in each other. A learning organization approach also aims to bind the global firm together by building on its intellectual and social capital in the knowledge, skills, and experience held by employees worldwide. Creating a learning organization approach facilitates sharing knowledge and skills for use on a global basis. Facilitating learning globally is seen as a competitive advantage for MNEs. It helps them be responsive to change and grow faster from experience across the world, at a rate faster than their smaller counterparts can manage.

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IHRM 6th Edition Chapter 4 International Mergers and Acquisitions, International Joint Ventures, and Alliances TRUE/FALSE 1. Firms seldom use international mergers and acquisitions to access technology and skilled people.

ANS: F 2. Firms with headquarters in different countries and who work together in a partnership can be referred to as international combinations.

ANS: T 3. In the merger and acquisition process, an essential element for HR is participating in the 'due diligence' review of the target company to identify information such as management capabilities and any labor problems.

ANS: T 4. Non -Equity-based international combinations involve long-term relationships – with one partner buying all or most of the equity in the other partner.

ANS: F 5. Equity international combinations share profits, responsibilities, and resources according to specific contractual relationships – but do not involve one party buying equity in the other party.

ANS: F 6. The actual process of the IM&A combination usually proceeds through four stages.

ANS: F 7. One of the primary reasons for the high failure rate in cross-border acquisitions and IJVs involves the lack of attention before "signing the agreement."

ANS: T 8. As both parties typically state that the merger or acquisition is a combination of equals, in practice, one group always dominates in the acculturation process.

ANS: T 9. The overriding motive in most JVs seems to be the desire by one or all parties to gain knowledge and learn from their partner(s).

ANS: T 10. As with IM&A and IJVs, there is only one way to design an international alliance.

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ANS: F

MULTIPLE CHOICE 1. Drivers of the growth of international acquisitions include all of the following except a the need to grow the business to compete with other global firms. . b to acquire assets and resources needed to compete. . c a faster way to develop a presence in the local market. . d the desire to develop all of the required resources internally. .

ANS: D

2. Unlike an acquisition, an international alliance is ongoing and needs to be governed throughout as a . a process . b relationship . c task . d none of the above .

ANS: B 3. Which of the following is not typically a reason for pursuing an acquisition or international alliance? a To enhance industry consolidation. . b To enable geographic expansion. . c To form a firm with superior market advantages. . d To create a niche market. .

ANS: D

4. The typical due diligence review of target firms during the pre combination phase considers the critical people, organizational, and HR issues that often provide the reasons for the success or failure of the combination. a often . b sometimes . c rarely 2

. d .

never

ANS: C 5. Which of the following is not an activity HR professional can do as part of a due-diligence process? a Creating a SWAT team . b Creating a checklist of items to evaluate . c Developing an action plan once the process has started . d Dealing with concerns about the nature of the new firm .

ANS: C 6. IHRM due diligence includes examining concerns, including a adequate funding of health care plans. . b foreign employment regulations. . c HR department practices, policies, and organization. . d all of the above. .

ANS: D 7. A general resistance to a technology . b management . c change . d all of the above .

is a frequently-mentioned cause of integration problems.

ANS: C 8. The process of acculturation can result in one of the following: a Dissimilation . b Assumption . c Revision . d Assimilation .

ANS: D 3

9. Which of the following is an option for managing international alliances? a Service model. . b Operator model. . c Flexible model. . d Owner model. .

ANS: B 10. People issues in international alliances include all of the following EXCEPT a the need for a clear organizational structure and reporting relationships. . b the development of cultural awareness. . c the need to develop succession plans. . d the need to ignore any previous scandals or negativity about the potential partner. .

ANS: D SHORT ANSWER 1. How does an international joint venture differ from an international alliance?

ANS: 1. IJV = two or more firms create a separate entity 2. International alliance = two or more firms enter into formal or non-formal agreements without creating a separate entity

2. International mergers and acquisitions typically follow a process of combination that proceeds through three stages. Identify these stages and explain the role HR should play in each stage.

ANS: 1. Phase 1 – Pre-combination. HR role: closely involved with each of these steps, particularly the due diligence process, since many aspects of the integration will involve issues of primary concern to HR 2. Phase 2 – Combination planning and signing of the agreement. HR role: significant role in providing advice on how to implement the deal and anticipating problems during the implementation.

3. Phase 3 – Post-combination and implementation of the deal. HR role: key role in helping to facilitate the integration with the merged firm. Creating and providing employee communication about the nature of the merger and the vision for the business. Training employees to accept and to fit into the new situation. They are developing new assignments and staffing and designing further compensation and benefits systems.

4

2. List three HR-related questions that must be answered so that cultural integration after a merger can be managed effectively.

ANS: 1.

2.

3.

4.

Have cultural gaps and differences been identified and addressed?

Is there an executive leadership group visibly leading the change process?

Has a shared vision been created and communicated?

Has a link been made between business strategy and the quality, skills, and number of people to achieve the business plan?

5. Has a decision to consolidate the processes and procedures around compensation, incentives, and recognition been made?

6. Is there a plan to consolidate or maintain existing retirement and health and welfare benefits?

7. Are measures and rewards established, communicated, and aligned with the organization's desired state?

3. Discuss how HR practices such as job design, selection, performance, and compensation have been used to create and sustain successful international joint ventures.

ANS: 1.

2.

3.

4.

Job design – can be enhanced when partners are willing to learn from each other Selection- policies should be well-defined in the early stages of the venture Performance – appraisals need clear objectives, clearly assigned accountabilities, flexibility Compensation – compensation and benefits policies should be uniform to avoid employee feelings of inequity

4. Discuss the role of IHRM in international alliances.

ANS: Depending on the size of the international alliance itself, there may well be IHR professionals assigned to it. Typically, the IHR professional assigned to an international partnership or international alliance has not only to deal with many more decision-makers (from all of the partners), thus having to exercise much greater negotiation skills, but also tends to have to take on more extensive responsibilities, combining those of local nature and those of an international nature.

ESSAY QUESTIONS: 1.

Explain the role of HRM in facilitating success in international mergers or acquisitions and provide recommendations for HR's involvement in the process.

ANS: HR should play a significant role in the successful planning for and implementing international mergers and acquisitions. The typical process that HRM is involved in contains a series of steps.

Process of combination:  Pre-combination - HR should be involved in the due diligence process, as many aspects of the integration will include issues of primary concern to HR and the workforce.  Combination planning and signing of the agreement - HR provides advice on how to implement the deal and anticipate problems during implementation.  Post-combination and implementation of the deal - HR has a key role in helping to facilitate the 5

integration with the merged firm. HR creates and provides employees communication about the nature of the merger and the vision for the business that will result. HR trains employees to gain acceptance and to be able to fit into the new situation, new assignments, staffing.

2.

Compare and contrast some reasons why an MNE would choose international expansion through acquisition, an international joint venture, or an alliance. What are the variables that would influence the decision?

ANS: An MNE would choose international expansion through acquisition, joint venture, or alliance to access new global markets and global resources (such as technology and skilled people). Firms use acquisitions or mergers to access or expand their global business. The pressure to constantly grow the business, buy a foreign competitor, or acquire assets necessary to compete would take too long or be too expensive to develop internally. The acquisition is usually seen as quicker for entry into a new market and more effective in building a presence in the market than building capability from scratch.

In some cultures, and countries, the only way in is through partnership as this is the only way foreigners can do business in the country, so the choice here is joint ventures or other forms of combination.

3. Explain the General HR issues in international alliances.

ANS: Several concerns might be referred to as simply "people and general management issues" in international alliances for which HR might be expected to be the source of expertise and advice. If they are not addressed by HR, they are likely not to be addressed. Most of these issues are similar to those faced by IM&A and IJVs as well:  Organizational structure and reporting relationships: a clear managerial structure is often nonexistent in a partnership, and staff members – including HR professionals – tend to report to many people.  Culture: as with all other forms of an international organization, national and corporate cultures need to be assessed for incompatibilities. This is important for all interactions within the partnership and between the partnership and the parent firms.  Pre-alliance due diligence: this requires that the parties be aware of any "skeletons in the closet" of their potential partners, e.g., scandals involving senior executives, recent negative media stories, nepotism (employment of family members), etc.  Global workforce: Since the international alliance will involve employees and managers from more than one culture, the cross-cultural skills of involved executives also need to be assessed, both of those executives assigned to the international alliance and those who must work with the international alliance.  Management capabilities: Will the international alliance get high priority for the assignment of top talent by all partners? If the latter is the case, assessing the quality of the talent to be assigned becomes particularly important if the partners are truly committed to the partnership's success.

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IHRM 6th Edition Chapter 5 Country and Company Culture and International Human Resource Management TRUE/FALSE 1. The more countries with which an MNE interacts (sells, sources, hires or transfers employees, develops joint ventures and partnerships, etc.), the less complex and less difficult conducting business becomes.

ANS: F 2. Development of cross-cultural competence assumes that a person must first understand her or his own cultural values and beliefs before she or he can develop an appreciation and respect for cultural differences.

ANS: T 3. Hofstede found that certain countries consistently show similarities on a series of work-related factors but also that there are clear differences between the various groupings of countries on these value dimensions.

ANS: T 4. Research that helps to form groupings of countries based on cultural similarities is highly valuable for MNEs in that it simplifies the problems encountered in adjusting to varying national cultures by limiting the number of significantly different countries or regions.

ANS: T 5. Culture can be seen as a series of concentric circles, or multiple layers, as in an onion.

ANS: T 6. People with extensive international experience will probably suggest that some of the country culture clusters or groupings hide significant within-group (between countries that are in the same group) differences ANS: T 7. One major issue that affects the relationship between national culture and corporate culture has to do with the conflict between centralization/standardization and localization/customization, ANS: T 8. Researchers have found it valuable that there are consistent and specific definitions of terms like culture and performance.

ANS: F 9. The Etic focus of researchers tries to identify culture-specific aspects of concepts/behavior, i.e., differences across cultures.

1

ANS: F 10. The results achieved through cross-cultural research may be due to the nature of the research itself (the scales, the language, the wording, the translations, administration, etc.) rather than with any ―real‖ differences in the variables being studied.

ANS: T

MULTIPLE CHOICE 1.

is the characteristic way of behaving and believing that a group of people have developed over time and share. a Animosity . b Culture . c Linguistics . d Formalities .

ANS: B 2. Culture is developed over time and provides people within that culture will all of the following EXCEPT . a the capacity to adapt to changing circumstances . b a sense of who they are . c the inability to pass their knowledge on to the next generation . d expectations in terms of management processes and how people solve problems .

ANS: C

3. The layer of culture includes dress, food, architecture, and customs. a invisible . b tactile . c hidden . d surface .

ANS: D 4. The layer of culture includes values, religions, and philosophies. a invisible 2

. b . c . d .

tactile hidden surface

ANS: C 5. The layer of culture includes universal truths. a invisible . b tactile . c hidden . d surface .

ANS: A 6. The development of cross-cultural competence includes a education . b reflection . c openness . d all of the above .

ANS: D 7. Hofstede‘s research of national culture identifies country differences and similarities identified ‗power distance‘ as cultural dimension, in cultures with low power distance we see a the expectation that power is distributed quite equally . b the acceptance that power is distributed to less powerful individuals . c an emphasis on challenging authority and expecting autonomy . d all of the above .

ANS: D 8. Based on Hofstede‘s research of national culture, highly individualistic cultures focus on a animosity . b the belief that the individual is more important than the group .

3

c . d .

decisions are based on individual needs and interests B and C

ANS: D 9. National cultures such as those of China, Japan and Korea that accept that business results may take time to achieve is an example of a orientation. a short-term . b long-term . c tenure . d pragmatic .

ANS: B 10. The significant aspect for MNEs of Hofstede‘s findings about national culture was that the practice of imposing managerial and organisational systems as developed in the parent country and parent company of an MNE upon all of the MNE‘s foreign subsidiaries was a wrong . b correct . c best practice . d an emerging trend .

ANS: A 11. Trompenaar‘s and Hampden-Turner‘s cultural dimensions include all of the following EXCEPT a universalism versus particularism . b individualism versus communitarianism . c specific versus diffuse . d power versus distance .

ANS: D 12. Wanting to conclude contract negotiations in the shortest possible time would be cross-cultural characteristic of a -focus pattern of business behavior. a deal . b relationship . c monochromic 4

. d .

polychromic

ANS: A is evidenced in the adoption of similar ―best practices‖ by firms.

13. a . b . c . d .

Convergence Divergence Emergence Standardization

ANS: A 14. Which of the following is a frustration experienced by international researchers a Inconsistent and vague definitions of terms like culture . b Inaccurate translation of key terminology . c Difficulty in isolating cultural differences . d All of the above .

ANS: D 15. Which of the following is not a form of IHRM research? a Cross-cultural . b Monocultural . c Multicultural . d HR practices in other countries .

ANS: B

16. An IHR researcher with a(n) a antic . b emic . c etic . d metric .

research focus is trying to identify culture-common aspects.

5

ANS: C

SHORT ANSWER 1. What are the dangers of oversimplification of cultural differences of countries?

ANS: The focus on country differences falls short on two levels: (1) that it provides little explanation of within-group differences, that is, it treats countries or cultures as homogeneous wholes, with everyone within the country or culture being alike; and (2) it provides little understanding of how cultures change, that is, it tends to treat cultures as a given—impermeable and static. Brannen suggests that experience shows that cultures are not nearly as homogeneous or as static as these studies suggest. There are considerable differences within cultures and cultures do, in fact, change over time.

2. Identify and explain the three basic models and/or assumptions that underlie cross-cultural research.

ANS: a) Universal. A researcher with a universalist assumption has the attitude that there exist some universal cultural characteristics; his or her research task is to identify them and thus demonstrate that certain management and HR practices will work anywhere. b) Situational. A researcher with this perspective maintains that there are different managerial practices for different situations; thus his or her task is to identify the cultural situations in which HR or management practices differ or which practices differ based on which cultural variables. c) Convergent. A researcher with this perspective begins with a view (and tries to verify) that countries with similar industrial and cultural backgrounds will converge to a common set of management practices as they approach similar levels of economic maturity.

REF: 141 3.Identify and explain the three critical equivalence issues that arise in conducting cross-cultural and cross-national research.

ANS: a) Metric (stimulus) equivalence. This deals with trying to ensure that the psychometric properties of various forms of the research instruments. b) Conceptual equivalence. The concern here is to ensure that not only do the words translate the same, but that they have the same meaning in different cultures and produce the same level of consistency in results, i.e., the measurement results are similar. c) Functional equivalence. This form of equivalence is concerned with ensuring that the terms used and the translations developed are viewed in each culture in similar ways.

4. Define and describe the concept of culture ANS: Culture is the characteristic way of behaving and believing that a group of people have developed over time and share in common. Culture gives them a sense of who they are, of belonging, of how they should behave. Culture provides people with the capacity to adapt and to transmit this knowledge to 6

the next generation (in countries) or to new employees (in organizations). Culture affects every aspect of the management process - how people think, solve problems and make decisions (country or firm).

5. Explain the three layers of the ‗layers of meaning‘ concept of culture. How can IHRM professionals use the layers of meaning concept of culture as an educational tool within the business to raise awareness of cultural issues?

ANS:  Surface or explicit culture (outer layer). Things that are readily observable.  Hidden culture (middle layer). Values, religions and philosophies about things like child rearing and what is right or wrong.  Invisible or implicit culture (the core). The culture‘s universal truths, the bases for all of a culture‘s values and beliefs.  IHRM professionals can use this model to raise awareness about the parts of culture (in countries and firms) that are obvious to us, and that there are more deeper elements of culture that are more difficult to understand and become aware of. To learn about the culture of the country in which they are working or planning to work in they need to go deeper than just looking at the observable, surface layer of culture as HR practices and procedures also include values and deeper philosophies that differ across cultural groups.

ESSAY QUESTIONS 1. Are national cultures converging or diverging? Discuss the implications of this for the MNE and their IHRM strategies and practices.

ANS: Due to increasing globalization, some believe that there is growing convergence of cultural values and characteristics across countries. Evidence supports the view that technology and the modernizing of industries around the world is influencing firms to adopt similar best practices (convergence), as well as support for the view that countries‘ cultural values and practices continue to exert quite strong influences on their business and HR practices (divergence). The reality is likely somewhere in between.

Implications for the MNE and IHRM - cultural differences are still likely to influence IHRM in a number of complex ways (for example in performance management, compensation, training and development). Practices will be influenced by large MNEs and large growing economies as well as successful smaller economies and potentially creating many different forms of hybrid systems.

2. Identify and explain what you consider to be the most important factors of culture in terms of their impact on business.

ANS: Presents their own views - the following material from the chapter would support the answer: Important factors: culture is the characteristic way of behaving and believing that a group of people have developed over time and share in common. In terms of national culture the important factors are that culture: • gives a sense of purpose, sense of belonging, how to behave • provides people with capacity to adapt to circumstances, and transmit knowledge 7

• affects every aspect of the management process - how people think, solve problems, make decisions, perceive management.

All of these aspects impact the process of doing business and managing people and teams within a business that operates across country cultures.

What is problematic is that the underlying values and assumptions of culture are not very obvious, and so there is the risk that you can offend people or not meet their expectations without being aware of the shared values and beliefs. (layers of meaning) Impact on business: variations in people‘s values, beliefs, and behavioural patterns are important in terms of planning and managing activities such as cross-national negotiations, sales interactions between people from different countries, performance management of employees from different countries. The firm needs to understand the differences and be able to manage the differences effectively.

3. Discuss the statement ―Just as countries develop unique patterns of values, norms, beliefs, and acceptable behavior, so also do companies.‖ ANS Most MNEs take great pride in their ―organizational cultures,‖ which reflect, at least initially, the values of their founders and evolve to create corporate personalities that give employees a template for how to behave, including how to make decisions, the importance and acceptance of operational concerns such as continual improvement, safety, and ethics, and how to treat fellow employees and customers. For many firms, these organizational values take precedence over country cultures, particularly when there is a conflict between the two.

AN

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IHRM 6th Edition Chapter 6 International Employment Law, Labor Standards, and Ethics TRUE/FALSE

1. Employment law and regulation is one of the most important components of the global context for IHRM. ANS: T 2. The UN plays a relatively insignificant role in establishing employment laws or standards.

ANS: T 3. The World Bank sets two types of labor standards – conventions and recommendations – in industrial categories ANS: F 4. The OECD has many directorates dealing with many aspects of economic and social development, including a Directorate for Employment, Labour, and Social Affairs.

ANS: T 5. The best known (and most fully developed) of the regional trade agreements is the European Union (EU) (with the recent 2020 exit of Great Britain) ANS: T

\

6. Mercosur/Mercosul is a ―common market‖ agreement signed for the free circulation of goods and services and the adoption of common trade and tariff policies between three North American countries ANS: F 7. Every MNE must consider the application of its parent-country laws to its overseas operations (referred to as the extraterritorial application of national law).

ANS: T 8. The concept of ―employment at will,‖ as practiced in the US (where the employer, with a few exceptions, has the right to terminate an employee at will and the employee has the right to quit at any time for any reason), also exists in most developed countries.

ANS: F 9. One of the basic ethical dilemmas for IHR and MNEs involves what management should do when an employment practice that is illegal or viewed as wrong in the home country is legal or acceptable in the host country.

ANS: T 1

10. A cosmopolitanism approach requires the reconciliation of seemingly opposing differences in ethical choices and requires debate, effort, and compromise.

ANS: T MULTIPLE CHOICE 1. There are at least three different major legal systems operating in the nations of the world. Overall, law a shapes government . b establishes rules for behavior . c serves as a mediator between people and organizations . d all of the above .

ANS: D 2. The common law system, the civil code approach, and religious law has their unique methodologies for a creating laws . b developing the content of laws . c enforcing laws . d all of the above .

ANS: D

R

3. The common law system, adopted in the United States, legislation and statutes tend to be quite general, and interpretation about questions or disagreements is done in court, so that legislation establishes basic principles, with and determining what people can and cannot do. a Judges and lawyers . b MNEs and SMEs . c precedence and practice . d all of the above .

ANS: C 4. Understanding the differences between very different legal systems is essential if firms are to know what to expect and how to act about the law, especially in terms of HR practices such as which will vary between countries. a standards proscribing discrimination for various groups 2

. b . c . d .

determining holiday and termination standards A and B none of the above

ANS: C 5. The International Labor Organization‘s (ILO) Declaration on Fundamental Principles and Rights at Work attempts to establish consensus on basic employment rights and includes all of the following EXCEPT a restricting association and limiting collective bargaining . b abolition of child labor . c elimination of forced labor . d elimination of discrimination in regards to employment .

ANS: A

6. The United Nations Global Compact asks businesses worldwide to embrace 10 principles in the areas of human rights, labor standards, and the environment. The principles that directly involve IHR include a businesses should support and respect the protection of internationally proclaimed human . rights b businesses should pay appropriate amounts for all forms of forced labor . c businesses should improve practices that discriminate against various groups . d none of the above .

ANS: A 7. The Mercosur/Mercosul ―common market‖ agreement was signed by a Argentina . b Boliva . c Columbia . d Peru .

ANS: A 8. Which of the following is not an institution within the structure of the EU? 3

.

a . b . c . d .

European Parliament European Commission World Trade Organization Court of Auditors

ANS: C 9.

is an emerging interdisciplinary field that aims at influencing foreign government policy and regulatory decisions that affect global trade. a International business bargaining . b Commercial diplomacy . c Private business-government negotiation . d Non-government organizational policy-making .

ANS: B

10. IHR policy and decisions result from attempting to deal with a ―patchwork‖ of different legislative powers (national, international, extraterritorial). IHR managers must a comply with the laws of the countries in which it operates. . b comply with international standards and supranational regulations. . c comply with the extraterritorial laws of its own country. . d all of the above .

ANS: D 11. Which of the following is not legally binding on EU member states? a Directives . b Regulations . c Opinions . d Decisions .

ANS: C 12. Overall, EU directives have been a somewhat . b rarely

effective.

4

c . d .

moderately very

ANS: D 13. HR‘s tactical role in a visa application process consists of a anticipating roadblocks in the application process. . b being aware of the procedural requirements in different countries. . c complying with the necessary record keeping and tracking of visas. . d all of the above ANS: D 14. Under the 1998 EU directive on the protection of employee privacy, personal data on European employees transferred out of the EU unless the country in which the data recipient resides has acceptable privacy protection standards in place. a generally is not . b cannot be . c consistently is . d none of the above ANS: B 15. On an ethical continuum, ethical right. a relativism . b revolution . c absolutism . d none of these .

suggests that what is right is whatever a society defines as

ANS: A SHORT ANSWER 1. Describe the legal environment in which MNEs and their international human resources (IHR) managers operate.

The legal environment in which MNEs and their international human resources (IHR) managers operate is complex. At least three different major legal systems operate in the nations of the world. In general, the law establishes rules for behavior, usually enforced through a set of institutions. It shapes government, economics, and society in numerous ways and serves as a primary social mediator of 5

relations between people, organizations, and organizations. Consequently, each of these three legal systems has its unique methodologies for creating laws, developing the content of laws, and enforcing laws. These three systems include 1) the common law system as developed in England and its colonies, including the US, and even Russia; 2) the civil code approach (often referred to as the Napoleonic code), as developed in France and Germany, even used in China; and 3) religious law, the most common form of which, today, is Islamic law, or Sharia, as practiced in several Islamic states, such as Saudi Arabia and Iran. .

2. Why do IHR managers need to understand international employee (IE) relations from different perspectives?

For many IHR managers, their responsibilities allow them relative autonomy to develop IHR policy and make decisions that can be applied in all countries. Since there is such a ―patchwork‖ of varying legislative powers (at national, international, and extraterritorial levels), IHR must:  Comply with the laws of the countries in which they operate, requiring knowledge of local laws and regulations;  Comply with international standards and supra-national regulations, requiring knowledge of international labor standards and supra-national binding regulations;  Comply with extraterritorial laws of their headquarters‘ country, requiring knowledge of extraterritorial laws.

3. What is Corporate Social Responsibility? What does it encourage MNEs to do?

ANS: 1. The continuing commitment by businesses to behave ethically and contribute to the economic development of the communities in which they operate and to improve the quality of life of their workforces, their families, and society at large.

2. CSR encourages MNEs to be aware that they produce both benefits and harm simply because they operate globally. Therefore, they should be as concerned about their global ecological footprints or the impact of their actions on the natural environment as they generate growth and profits.

4. Define sustainability and identify sustainable HR practices. How do they affect employees?

ANS: Sustainability is meeting the needs of the present without compromising the ability of future generations to meet their own. Work towards finding the ‗sustainability sweet spot,‘ which is the common ground shared by business interests and the interests of the public. For HR, this is where the pursuit of organizational interests seamlessly blends with the purpose of employee interests. HR practices = are decisions fair to employees; is the decision sustainable in the long run? is the decision green in terms of pollution and the carbon footprint? Is the decision-making process transparent and open for scrutiny?

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ESSAY QUESTIONS

1. Which employment laws and standards are most important for MNEs to pay attention to? Why? ANS: The employment laws and standards most important for MNEs should include: 1. immigration regulations 2. data privacy 3. anti-discrimination laws 4. termination laws 5. intellectual property protection.

The answer should note: many of these areas overlap, so IHRM needs to know these connections and consider them when making decisions about workforces in other countries in which they operate.

2. You are an IHRM manager. You need to make recommendations to your senior management team about designing a code of conduct and ensuring effective implementation of ethical standards of worldwide operations. Explain the important steps in developing such a code of conduct and what you would have to do to ensure effective implementation.

ANS: The proposed steps should include reference to: 1. reasons for developing a global ethics program 2. formalize standards 3. consult all stakeholders 4. choose the words carefully 5. translation of codes 6. translate the ‗ethics code‘ training materials 7. designate an ethics officer 8. highlight international law 9. recognize the business case 10. recognize the common threads

7

IHRM 6th Edition Chapter 7 International Employee Relations TRUE/FALSE 1. Comparing union membership in different countries is as easy as analyzing and comparing most other forms of international data.

ANS: F 2. The strength of trade unions is usually measured by union membership (relative to the number of people eligible to join a union) and reflects what unions do and how effective they are.

ANS: F

3. As MNEs become more global and more connected across borders, they must deal with these ILOs and the widely varying national and local unions.

ANS: T 4. MNEs often develop worldwide approaches to issues such as executive compensation, but such a global approach to labor and employee relations is quite rare.

ANS: T 5. Unions view that MNEs ask workers in one country to volunteer to ―bid down‖ their wages and benefits to keep their jobs to compete with workers in other countries.

ANS: F 6. Works councils are a critical component of worker relations in many countries, mainly Europe.

ANS: T 7. One of the most important pressures for international human resource management (IHRM) and MNEs in international employment law and employee relations is the increased possibility of litigation.

ANS: T MULTIPLE CHOICE

1. Obstacles to multinational bargaining include all of the following EXCEPT a widely varying industrial relations laws and practices among different countries. . b major economic and cultural differences among different countries. . c presence of centralized decision-making authority for unions. .

1

d .

none of these

ANS: C 2. Which of the following is NOT an approach to employee relations followed by IHR departments within MNEs? a Hands-off . b Monitor . c Guide and advise . d Assimilation ANS: D 3. The term political unionism refers to unions who tend to be very political and generally achieve their objectives through political action rather than through direct bargaining. a business . b collective . c census . d none of the above ANS: B 4. Major differences in labor relations can be found relative to issues such as a the level at which bargaining takes place. . b the type of workers involved. . c the degree of centralization of union-management relations. . d all of the above ANS: D 5. Current U.S. employee relations practices are quite different from those in other countries. Primary features include: a typically professional and technical workers do not form or join unions . b contracts between unions and employers are negotiated primarily at the local level be. tween a single union and a single employer c collectively bargained contracts typically last for three years . d all of the above ANS: D 6. In the U.S., the only mandatory subjects for bargaining are wages, hours, and 2

.

a . b . c . d

working conditions performance standards benefit payments all of the above

ANS: A 7. Wherever they operate, MNEs must seek out clarification regarding labor practices, including a scope of unions. . b type of workers who belong to unions. . c affiliations. . d all of the above ANS: D 8. Work have the right to receive information and to provide consultation relative to many decisions a firm makes. a councils . b consultants . c counselors . d contractors ANS: A 9. Co-determination is a legal requirement in which employees are boards of directors. a represented . b consultants . c advisors . d none of the above

on supervisory boards or

ANS: A 10. Errors in judgment and decisions in foreign jurisdictions, mistakes when dealing with foreign employees, and international assignees are all forms of a bargaining terms. . b litigation risks. . c IHRM practices. .

3

d

none of the above

ANS: B SHORT ANSWER 1. List and briefly describe the various international federations and labor union organizations.

ANS: 1.

2.

3.

4.

5.

6.

7.

World Federation of Trade Unions (WFTU) The International Confederation of Free Trade Unions (ICFTU) The International Trade Union Confederation (ITUC) European Trade Union Confederation (ETUC) World Confederation of Labour (WCL) Trade Union Advisory Committee (TUAC) to the OECD Global Union Federations (GUFs)

See pages 192 to 194 for descriptions

2. What questions need to be addressed before global labor relations can evolve?

ANS: 1. What rules will apply to the resolution of disputes?

2. What rules will apply to the process of negotiations?

3. What law will cover the negotiations, e.g., between companies in two or more countries?

3. Identify and explain three approaches to labor relations in the global context.

ANS: Possible answers: hands-off; monitor; guide and advise; strategic planning; set limits and approve exceptions; manage totally from headquarters; integration of headquarters IHR and line management in the field

ESSAY QUESTIONS: 1. What are the primary concerns of the labor relations movement about the operation of MNEs? ANS: Primary concerns: MNEs can manipulate local unions (and workers) in collective bargaining as they can move work to areas of the world that either have no unions or where unions are weak, or where wages and benefits are lower and less protected. Unions are not organized globally, no international laws require bargaining on a cross-border basis, and unions tend to be primarily focused on local and national concerns. Perceive that the power balance is skewed towards businesses and MNEs.

2. Discuss the litigation risks MNEs face in global employee relations

4

ANS: One of the most significant pressures for international human resource management (IHRM) and MNEs in international employment law and employee relations is the increased possibility of litigation. These risks involve errors in judgment and decisions in foreign jurisdictions and mistakes when dealing with foreign employees and international assignees (IAs). There has been a significant upward trend toward holding MNEs accountable in various courts for their protection (or lack thereof) of employee and human rights in their foreign operations. Increasingly, MNEs are being sued in their home jurisdictions based on allegations of breaches arising from the fi rm‘s activities in foreign jurisdictions.

In the past, MNEs have been able to block such actions because the home courts were not the appropriate jurisdictions in which to litigate the disputes. However, recent cases are illustrating that this defense may not be sufficient as foreign courts are increasingly willing to hold parent firms accountable under both their parent-country laws and those of the foreign country in which such litigations are initiated.

5

IHRM 6th Edition Chapter 8 International Workforce Planning and Staffing TRUE/FALSE 1. International workforce planning and staffing refers to the process of estimating employment needs, recruiting, selecting, and repatriating talent in organizations with operations in different countries.

ANS: T 2. The term ―labor force‖ applies to the pool of potential employees, the labor market, from which a firm attracts and hires its workforce.

ANS: T 3. Outsourcing, offshoring, and insourcing are strategies some MNEs use to access talent outside their organizations.

ANS: T 4. The term ―labor force‖ applies to an enterprise‘s employees.

ANS: F 5. MNEs can safely assume that local labor forces will be adequate to provide the talent they need.

ANS: F 6. An alternative to brain drain is to export the work and jobs from the developed economies to developing countries through subsidiaries, ANS: T 7. In staffing the MNE, firms can use two approaches ANS: F 8. Host country nationals (HCNs) are typically defined as citizens of the country of the headquarters of the MNE and employed by the firm in the country of its headquarters.

ANS: F 9. When PCNs are transferred (posted/assigned/relocated) to another country, to work in a foreign subsidiary or other type of operation (such as a joint venture or alliance) of the MNE for more than one year, they are generally referred to as repatriates or international assignees (IAs).

ANS: F 10. When HCNs are relocated to the headquarters of the parent firm, they are generally referred to as inpatriates.

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ANS: T 11. When PCNs are transferred (posted/assigned/relocated) to another country, to work in a foreign subsidiary or other type of operation (such as a JV or alliance) of the MNE for more than one year, they are generally referred to as repatriates ANS: F 12 There is just one approach to describe the purposes for sending people on IAs ANS: F

MULTIPLE CHOICE

1. The most important labor force issue for developed economies is their a global . b diverse . c aging . d all of these .

populations.

ANS: C 2. Male and female labor force participation rates vary from country to country that this factor alone has a major impact on the size of any country‘s labor pool. a so little . b so much . c somewhat . d none of these .

ANS: B 3. Which of these research challenges fall to IHRM when a firm wants to develop a foothold in a developing country? a Labor costs . b Cultural differences . c Benefits and compensation . d All of these .

ANS: D 2

4. Within the global labor market, people with the education and skills needed in today‘s global economy are increasingly available everywhere, making potential employees available from a all racial and ethnic origins and nationalities. . b a limited number of ethnic origins and nationalities. . c within the global MNE. . d all of these .

ANS: A 5. A developing country is experiencing a(n) for jobs with better pay in the developed countries. a skills shortage . b external migration . c brain drain . d all of these .

when its educated and skilled citizens leave

ANS: C 6. When using a(n) staffing approach, MNEs tend to hire from the headquarters country and send employees on international assignment to the subsidiaries. a ethnocentric . b polycentric . c geocentric . d regiocentric .

ANS: A 7. When using a(n) try. a ethnocentric . b polycentric . c geocentric . d regiocentric .

staffing approach, MNEs prefer to use locals from the subsidiary coun-

ANS: B

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8. When using a(n) a ethnocentric . b polycentric . c geocentric . d regiocentric .

approach, MNEs source talent from anywhere in the world.

ANS: C 9. When using a(n) a ethnocentric . b polycentric . c geocentric . d regiocentric .

approach, MNEs favor using talent from the region.

ANS: D 10. A reason for sending people on learning-driven international assignments is a transfer of knowledge. . b organizational control. . c to perform functional tasks. . d all of the above .

ANS: A SHORT ANSWER 1. Define ‗brain drain‘ and explain how it differs from ‗job exporting‘?

ANS: • ―Brain drain‖ refers to what many countries, especially emerging and developing countries, call it when their educated and skilled citizens leave for jobs with better pay in the developed countries.

• Developing countries take the view that it is often wrong for firms from rich countries to recruit and relocate their citizens after the significant resources that they have expended on educating and training their citizens. They feel they need these human resources to develop their economies.

• ―Job exporting‖ is an alternative to this brain drain and one that is increasingly pursued by many global firms and is encouraged by the governments of developing economies. It involves exporting the work and jobs from the developed economies to developing countries through subsidiaries, joint ventures, outsourcing, and offshoring. Both sides can benefit from this 4

arrangement - the firm gets top talent from the foreign countries in a period and location of labor shortage in their home country and at a lower cost, and the developing country gets to hold on to its top talent and gets jobs and income from the MNEs. 2. How does a ―demand-driven‖ purpose for sending people on international assignments differ from a ―learning-driven‖ purpose?

ANS: • Demand-driven purposes include – using general managers or directors for subsidiary start-ups and to roll out new products, for technology transfer, to solve problems, to perform functional tasks, and for organizational control.

• Learning-driven purposes include – management development (of both international business skills and general management skills for both PCNs and HCNs), transfer of knowledge, and the socialization of locals into the corporate culture and values.

3. List three HR-related questions that IHR and the global firm need to address to manage their global workforces better?

ANS: • What is the extent of the use of each type of IE? • How does the preparation and support for each type of IE vary?

• Does the international strategy or structure of the firm influence the type of IE employed?

• Which international-business or cross-cultural competency is required by which type of international employee?

• Which performance management problems arise for which type of international employee? And which solutions are most appropriate?

• Are there specific management, organizational, and IHR outcomes that differ according to the type of international employee?

• For which type of work or business purposes (management, sales, control, etc.) are the various types of international employees used?

4. As the book indicates, international assignees can and do come from just about everywhere, not just the HQ of the traditional large MNE. List and describe five different types of International Assignees.

ANS: See Exhibit 8.3.

ESSAY QUESTIONS: 1. Explain the options available to MNEs for staffing their operations in terms of the different types of international employees that MNEs can draw on.

ANS: Needs to acknowledge that MNE employees can come from anywhere. That it is no longer reasonable to focus only on expatriates. Some of the options that could be discussed include:  local hires or nationals  domestic internationals 5

          

international commuters short-term international assignees international assignees stealth employees immigrants (A) immigrants (B) internships returnees outsourced employees virtual IEs self-initiated foreign workers

2.

As the textbook indicates, the increased variety of employees presents all sorts of new challenges for the selection, preparation, deployment, and management of a global workforce. Discuss these challenges.

ANS: This increased variety of employees presents many challenges. Not the least of these is the increased need by all managers – and for IHR managers in particular – to increase their cross-cultural awareness, knowledge, and skills, their foreign language abilities, and their overall management competencies within this new international setting. In addition, firms have much to learn about how to manage the performance of a global workforce. The cross-national interaction among all the many different types of IEs described in this chapter and between global managers, and IEs creates many new performance management problems. Furthermore, Pay and Support services are also likely to be structured differently for different types of IEs. Also see Exhibit 8.4 E

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IHRM 6th Edition Chapter 9 International Recruitment, International Selection, and Repatriation TRUE/FALSE 1. Recruiting involves gathering and analyzing information about applicants.

ANS: F 2. Selection involves searching for and attracting qualified applicants to create an applicant pool.

ANS: F 3. External recruiting sources are often favored because they reduce labor costs, are valued by employers and employees, and can enhance the company's reputation as an employer of choice.

ANS: F 4. Only one factor influences an individual's receptivity to an international career or willingness to accept an IA. ANS: F 5. A good selection decision will identify, but does not have to predict, IAs who are likely to perform well on the assignment (in a different culture).

ANS: F 6. Most firms primarily base their choices for international assignments on candidates' technical expertise.

ANS: T 7. Success or failure for IAs is usually defined in terms of five types of failure.

ANS: F 8. Remarkably, over the last twenty-five years, the percentage of women on international assignments has not increased.

ANS: F 9. For many expatriates and their families, the move "back home" is even more difficult than the original move abroad ANS: T 10. Career-related planning for expatriates needs to begin before an IA and be updated regularly during the assignment.

ANS: T 1

MULTIPLE CHOICE 1. Repatriating refers to the from the foreign assignment. a policy . b process . c intention . d none of these .

of bringing the international assignee and family back "home"

ANS: B 2. The process of selection involves all of the following EXCEPT a gathering information. . b analyzing information. . c considering profiles of successful candidates. . d attracting qualified applicants. .

ANS: D 3. Recruiting is highly dependent on the workforce planning process – recruiting begins after the firm's immediate and long-term needs are defined. a strategic . b population . c labor . d management .

ANS: C 4. The process of finding candidates from labor markets that are geographically dispersed is called a sourcing. . b outsourcing. . c offshoring. . d all of these .

ANS: A

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5. Which of the following is NOT an example of an internal recruiting source? a Nominations . b Global talent management inventories . c In-house global leadership programs . d Executive search firms .

ANS: D 6. Two benefits related to the use of internal recruiting sources are a increasing the size of the applicant pool and reducing infighting. . b increasing the quality of the applicant pool and enhanced reputation. . c reduced labor costs and enhanced reputation . . d all of these .

ANS: C 7. Selections for international transfer are most successful when based on which of the following factors? a Maturity of the candidate . b Ability to handle foreign languages . c Desire to for an overseas assignments . d All of these .

ANS: D 8. The most important selection criteria for international assignments include all of the following EXCEPT a job suitability. . b cultural adaptability. . c developing cultural sensitivity. . d desire for foreign assignments. .

ANS: C 9 Which of the following is not one of the categories for spousal support programs that are critical to trailing spouses' satisfaction with their foreign relocations? a Personal adjustment .

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b . c . d .

Career maintenance Offset of loss of income Education opportunities

ANS: D 10 To manage the costs of international assignees, MNEs are replacing them with a more short-term assignments . b reduced business trips . c reassignment of tasks to locals . d all of the above .

ANS: A

11. Expatriate success is defined as a completion of the foreign assignment (achieving the original goals and objectives). . b cross-cultural adjustment while on assignment. . c good performance on the job while on the foreign assignment. . d all of these. .

ANS: D 12. ‗Exemplary practice‘ or best practice in international assignee selection processes includes . a selecting based on job tenure . b focusing on the international assignee without involving family members . c involving HR in assignment decisions and support services . d all of these. .

ANS: C 13. Several practices are useful for helping repatriate international assignees at the end of their assignment, including all of the following except a assigning a 'sponsor' back home . b providing career counseling .

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c . d .

use of the skills acquired overseas in special task forces assuming that the international assignee is aware of the changes in the firm while they were away.

ANS: D 14. The three phases of support that can be provided to repatriates includes activities that occur during the foreign assignment such as a regular communication between home office and the expatriate . b opportunities to travel back to the home country to share experiences and knowledge . c assigning mentors to guide future career development . d all of the above .

ANS: D 15. Due to the international knowledge gained from the overseas experience and the insights gained about how the firm is viewed in another country, the repatriate plays an important role in accelerating the from host countries to headquarters and vice versa. a transfer of visas . b transfer of knowledge . c cultural exchange . d none of the above .

ANS: B

SHORT ANSWER 1. Identify two HR-related questions that need to be addressed before the recruitment process starts?

ANS: • How many applicants does the organization need in the short term (less than a year) and the long term (one to three years)?

• Does the organization need applicants with short-term commitment or a long-term commitment?

• Does the organization offer compensation packages that are below market average, at market average, or above market average?

• Does the organization want applicants who are different from the company's current employees?

• What type of competencies does the organization need in new applicants?

2. List three selection methods that organizations may use to select individuals for international 5

assignments.

ANS: • • • • • • •

Interviews (IA and spouse/partner) Formal assessment Committee decision Career planning Self-selection Internal job posting an individual bid Recommendations

3. List five types of interventions that firms can use to provide support for expatriate spouses.

ANS: • • • • • • • • • • • • • • • • • • • • •

Pre-acceptance assessment sessions and site visits Career and life planning counseling Pre-departure and re-entry job hunting trips Couple/family counseling Specially adapted cross-cultural/language training Relocation assistance to help spouse settle in and network quickly Search firm retained to help spouse find employment Company employment or consulting opportunities Intra and inter-company networking and job search assistance Visa and work permit assistance Shorter-term assignments for expatriate employee Commuter marriage support Tuition and/or training reimbursement Paying for professional development trips Arranging and paying for child care provisions Partial compensation replacement for spouse Increased employee compensation, bonus, and non-cash benefits Re-entry outplacement services (to find job upon return to home country) Tax equalization for second income Spouse "inconvenience" or incentive payment Set allowance to be applied to a "cafeteria" selection of assistance programs

4. What are the implications of the increasing equality of jobs and talent associated with MNEs use of third-country nationals (TCNs) in staffing their foreign subsidiaries?

ANS: 1. Massive relocation of people 2. Decline in protectionism 3. Boost nations with surplus human capital 4. Raise labor productivity in labor-short nations 5. Standardization of labor practices

ESSAY QUESTIONS: 1.

Many of the challenges presented by international assignees involve their families. Discuss strategies the MNE can use to make the assignment successful for both the employee and their family.

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ANS: pre-acceptance assessment sessions and site visits couple/family counselling specially adapted cross-cultural/language training relocation assistance to help spouse settle in and network quickly • Search firm retained to help spouse find employment • Company employment or consulting opportunities for spouse • Shorter-term assignments for expatriate employee • Commuter marriage support • Arranging and paying for child care provisions • Increased employee compensation, bonus, and non-cash benefits • Spouse "inconvenience" or incentive payment • Set allowance to be applied to a "cafeteria" selection of assistance programs

2. Discuss the support practices MNEs can provide to repatriates before the foreign assignment, during the foreign assignment, and after the completion of the foreign assignment.

ANS: MNEs can provide several support practices to repatriates. These practices can be organized into three phases: before the foreign assignment, during the foreign assignment, and after the completion of the foreign assignment. Figure 9.2 shows the various IHRM practices that support the repatriation process.

For example, career-related planning for expatriates needs to begin before an IA and be updated regularly during the assignment. After returning from the assignment, the readjustment is not only challenging for the IA but the family members as well. Repatriates and their families often have trouble adjusting to the lifestyle back home. Reverse cultural shock (readjustment to the home culture) is often experienced by the IA (and accompanying family). Most people are changed by the foreign experience and not only must relearn their original culture and lifestyle but probably view it quite differently than when they left. Indeed, time does not stand still while the expatriate is abroad.

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IHRM 6th Edition Chapter 10 International Training and Management Development TRUE/FALSE 1. Think and act globally means that a global enterprise must think about and prepare for a presence in a favored few select markets in the world, not just it's home region.

ANS: F 2. The instructional model, referred to by the acronym ADDIE 9 (analysis, design, development, implementation, evaluation), as commonly used by instructional designers, focuses on the various stages of T&D. ANS: T 3. Transfer-of-learning issues are not always critical in cross-border T&D. ANS: F 4. An important issue in global T&D involving language has to do with whether to provide training for the global workforce in a single, common language or translate training programs into varying languages for the global workforce.

ANS: T 5. One of the reasons that the provision of training to multiple subsidiaries worldwide can be straightforward and lacking in complexity is that the primary educational infrastructure varies little from country to country.

ANS: F 6. MNEs cannot be obligated by local laws to provide training in the language(s) of the country in which they operate.

ANS: F 7. There will always be a need to develop T&D interventions around common processes, practices, and organizational principles in a globally integrated enterprise.

ANS: T 8. Given the increase in global connectedness and the development of new communication technologies, sizes of teams as a norm in MNEs have continued to shrink.

ANS: F 9. Research has shown that an individual's preferred team role tendency does not impact the team's overall effectiveness.

ANS: F 1

10. The increased performance of well-managed heterogeneous teams is due to the synergy that comes from their diversity.

ANS: T 11. The main finding of GLOBE is that charismatic/transformational leadership styles are strongly endorsed only in Western cultures.

ANS: F 12. Transformational leaders get to know the people they work with and what these people need to know to perform at their best.

ANS: T 13. Developing a global mindset is both an emotional education and an intellectual one.

ANS: T 14. The greater the distance between the home culture and the host culture (e.g., cultural distance), the more extensive and lengthier the training should be.

ANS: T 15. Early international experiences are rarely found in third culture kids (TCKs).

ANS: F MULTIPLE CHOICE 1. The following are all imperatives for establishing global organizational learning and training and development, EXCEPT a develop global leadership skills. . b become an equidistant global learning organization. . c make learning a core competence. . d focus on all the individual training programs. .

ANS: D 2. The instructional various stages of T&D. a ADDIE . b LEARN . c TEACH .

model, commonly used by instructional designers, focuses on the

2

d .

SMART

ANS: A 3. The types of problems the MNE confronts when determining the need for training of its local workforces include a determining who should deliver the training. . b establishing if there are cultural differences in preferred training delivery. . c determining whether training programs should be exported from headquarters. . d all of these. .

ANS: D 4. As well as cross-cultural differences, the effectiveness of training and development is likely to be impacted by structural concerns, including all the following EXCEPT a legal obligations to train . b labor force educational levels . c similar education qualifications . d different approaches to educational systems .

ANS: C 5. MNEs must also consider national laws and regulations in relation to training and development, as these laws may a to provide training on certain subjects . b require firms to spend a certain percent of payroll expenses on training . c require the firm to translate material into the local language . d all the above .

ANS: D 6 Transfer of is the extent to which people on training programs can (and/or do) apply what they learn in training programs to their day-to-day jobs. a ability . b capability . c learning . d skills 3

.

ANS: C 7. Implementation and cultural acceptance issues with e-learning may include: a Does everyone have access to the technology? . b How acceptable is the type of training being offered? . c Have all of the on-line courses been developed only in the country of headquarters? . d all of the above .

ANS: D 8. Best practices related to virtual team leadership include all of the following EXCEPT a establishing and maintaining trust . b having face-to-face meetings and the beginning and end of the project . c ensuring that distributed diversity is understood . d enhancing visibility of virtual team members within the team and outside the organiza. tion ANS: B 9. The careers of high-potential employees and their job assignments need to be closely monitored and managed to ensure that a they experience job assignments of adequate variety . b they experience job assignments of appropriate challenge and length . c they learn how to achieve results in new settings . d all of the above .

ANS: D 10. Which of the following is included in the core set of global attributes of global leaders? a Impulsiveness . b Inquisitiveness . c Inertia . d Identification .

ANS: B 11. Essentially peoples'

are the interpretive frameworks that come from their experiences and 4

cultures and that guide how they classify and discriminate events and people in ways that help them to understand what they observe and perceive. a attitudes . b biases . c mind-sets . d prejudices .

ANS: C 12. Culture is the set of psychological and emotional responses people experience when they are overwhelmed by their lack of knowledge and understanding of the new, foreign culture and the negative consequences that often accompany their inadequate and inexperienced behavior. a disjuncture . b blocking . c shock . d misadaptation .

ANS: C 13. The preparation of international assignees prior to going overseas (and after arrival) is as important to their successful performance as selecting the right candidate and family in the first place. a not . b at least . c seldom . d none of the above .

ANS: B 14. Training for cross-cultural adjustment has a focus on helping international assignees and their families to do all of the following EXCEPT a become aware that behaviors vary across cultures. . b provide practice in observing cultural differences in behavior. . c build a mental map of the new culture. . d develop an understanding of what they value in their own culture. .

ANS: D 5

15. Designing an effective cross-cultural training initiative includes a determining the specific cross-cultural training needs. . b using one cross-cultural training program for all types of global assignments. . c standardizing a cross-cultural training program for use across the globe. . d all of the above .

ANS: A

SHORT ANSWER 1. List four abilities of managers with global mindsets.

ANS: 1. Manage global competitiveness 2. Work and communicate with multiple cultures 3. Manage global complexity, contradiction, and conflict 4. Manage organizational adaptability 5. Manage multicultural teams 6. Manage uncertainty and chaos 7. Manager personal and organizational learning

2. Explain the role of cross-cultural preparation in international assignment management.

ANS: The training and preparation of international assignees and their families. Cross-cultural training should focus on helping IAs and their families do three things (1) become aware that behaviors vary across cultures, including being different than what they are used to, and provide practice at observing these differences (2) build a mental map of the new culture so they can understand why the local people values certain behaviors and ideas and how they might integrate into those behaviors and ideas and (3) practice the behaviors they will need to be effective. This training helps people learn how to adapt to their new cultures far more effectively than they would without the training.

3. Identify the four Ts of successfully acquiring a global mindset and explain what experience is required for developing a global mindset.

ANS: 1. Travel 2. Training 3. Team 4. Transfer Plus, living in another culture and going through the culture shock necessary to learning how to accept and enjoy living in the foreign culture.

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4. Describe how Adult third culture kids can be described as having distinct characteristics that are a different than that of their peers without early international experiences.

ANS: Adult third culture kids can be described as having distinct characteristics that are a different than that of their peers without early international experiences in terms of having an open mind, having a flexible and positive attitude toward other cultures, and being tolerant of others' behaviors, perspectives, and beliefs; being committed to and supportive of multi-culturalism, diversity, inclusion; having a high level of tolerance for ambiguity; and being fluent in multiple languages. It is important to point out that MNEs can design policies and practices to identify ATCKs to develop them for future expatriate and/or global leadership roles.

ESSAY QUESTIONS: 1. Identify and explain the major issues related to international training and development. How do these compare to the issues associated with national (or domestic) training and development?

ANS: Decisions made during all stages of the instructional model (ADDIE - analysis, design, development, implementation, evaluation) and impacted in an MNEs management of international training as there are issues about locations, cultures, and languages. Local requirements mean that needs analyses need to be done at a local level, so it is difficult to have one standard package of training implemented across all locations. In design there are differences across cultures in terms of approaches to training and learning styles. The MNE must consider how to adapt training to suit different cultures. Domestic training and development faces similar issues in terms of getting the needs analysis done effectively, but there are fewer complexities in terms of designing the material to suit the learners (their culture, language and learning styles) than in international training and development.

2. How can the effectiveness of global virtual teams be improved? In what ways do you think social media could help?

ANS: Best practices related to virtual team leadership include: 1. establishing and maintaining trust through the use of communication technology 2. ensuring that distributed diversity is understood and appreciated 3. managing virtual work-life cycle meetings 4. monitoring team progress using technology 5. using team building to enhance virtual team performance 6. continuing periodic face-to-face meetings (every 3 months) 7. enhancing visibility of virtual members with the team and outside the organization 8. enabling individual members of the virtual team to benefit from the team The answer should include some acknowledgement of the fact that virtual teams (especially the ones that are getting larger, 100+ members) need effective management and monitoring in order to be successful, they can't just be left alone to try to find their way.

3. Provide recommendations of how an MNE develops their global leadership capabilities.

ANS: IHR must design global training and management develop programs and central to this is the 7

development of global leadership capabilities and the recognition that being a global leader requires specific skills and experiences. There need to be processes in place to identify and develop management talent. There needs to be monitoring processes and mentoring of those individuals who are seen as candidates for executive leadership. There is a need for leaders to have global competencies and experiences so MNEs can modify job descriptions to make sure that key leaders and managers can identify the forces behind the globalization of business, connect global market trends, frame day to day management issues in a global context and create and effectively lead worldwide business teams.

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IHRM 6th Edition Chapter 11 International Compensation, Benefits, and Taxes TRUE/FALSE 1. Global remuneration deals with the compensation and benefits structure for employees of the MNE in various locations/subsidiaries around the world.

ANS: T 2. International assignment compensation deals with the compensation and benefits of globally mobile employees—or those who cross borders as part of their employment with the MNE, either short-term international assignees or long-term expatriates.

ANS: T 3. In general, labor costs have relatively decreased over time in most countries.

ANS: F 4. MNEs often create three classifications about compensation: ANS: F 5. A defined benefit plan pays a fixed periodic benefit upon retirement.

ANS: T 6. A defined contribution plan distributes the retirement benefit based on contributions to the plan.

ANS: T 7. Most countries and companies make an effort to consider religious observances of all or most major religions.

ANS: T 8. Stock options have virtually no impact on shareholder value.

ANS: F 9. American MNEs have experienced few difficulties extending their employee stock ownership plans overseas.

ANS: F 10. One of the most important considerations for MNEs in the design of their IA C&B programs is the problem of comparability ANS: T 1

11. The housing norm is a normative expense for housing in the host country.

ANS: T 12. The localization approach addresses many problems of low cost and perceived equity among staff in foreign subsidiaries.

ANS: F 13. The general rule is that, as the currency exchange rate goes up, the firm's compensation differential to the international assignee goes down.

ANS: T 14. Inflation/deflation can occur in either the home or host country or both.

ANS: T 15. Countries with social security systems negotiate 'Totalization agreements' with each other so that international assignees do not face double taxation.

ANS: T MULTIPLE CHOICE 1. The salary–benefit ratio, or the amount of compensation that is salary versus benefit, may also differ by country as a result of a cultural practice. . b laws. . c regulations. . d all of these .

ANS: D 2. MNEs are beginning to examine flexible benefits for their global operations, designing global flexbenefit plans because a they have been successful in the US. . b as a way to provide diverse benefits to all workers. . c as a way to attract workers with diverse benefit needs. . d all of the above. .

ANS: D 3.

parity is a commitment to offering something from each core category of benefit to 2

every employee worldwide. a Absolute . b Relative . c Qualitative . d Quantitative .

ANS: C 4. In at least one survey, percent of expatriates surveyed were dissatisfied with their salaries and benefits and their international compensation packages in general. a 22 . b 44 . c 77 . d 88 .

ANS: C 5. Maintaining competitive and equitable salaries and benefits among the various operations of the organization is one component involved in managing the problem of . a comparability . b co-existence . c uniqueness . d bargaining .

ANS: A 6. Which of the following objectives must the compensation package of international assignees meet to be effective? a providing an incentive to leave the home country for a foreign assignment . b maintaining a given standard of living . c taking into consideration career and family needs . d all of these .

ANS: D 7. Approaches to determining international assignee compensation include all of the following EXCEPT a negotiation.

3

. b . c . d .

income statement. localization. lump sum.

ANS: B 8. When designing financial packages for IAs, we also need to pay close attention to non-compensation factors such as to ensure overall satisfaction. a career planning . b base pay . c competitive salary . d none of the above .

ANS: A 9. The is the norm for goods and services or the portion of salary spent on goods and services in the home country according to salary and family size of the international assignee. a differential country spendable . b home country spendable . c host county spendable . d none of these .

ANS: B 10. The is the amount for goods and services that the international assignee is expected to spend in the host country as an international assignee or the amount needed for the spendables in the assignment location. a . b . c . d .

differential country spendable home country spendable host county spendable None of these

ANS: C 11. The extent of hardship in an overseas posting is evaluated using the following criteria?

4

a . b . c . d .

Physical threat Level of discomfort Inconvenience All of these

ANS: D 12. Cultural isolation is considered within the following categories in evaluating the extent of hardship in an overseas posting? a Physical threat . b Level of discomfort . c Inconvenience . d Localization .

ANS: B 13. A(n) agreement exists between countries that have established social security systems - they have negotiated bilateral social security treaties with each other in order to eliminate double taxation. a coordination . b equalization . c balancing . d totalization .

ANS: D SHORT ANSWER 1. List the five main objectives for the typical MNE global C&B program.

ANS: 1. Attract and retain the best-qualified talent to staff the MNE. 2. Attraction and retention of employees who are qualified for international assignments.

3. Facilitation of transfers between the various employment locations within the MNE. 4. Establish and maintain a consistent and reasonable relationship between the compensation of employees of all affiliates, both at home and abroad.

5. Maintenance of compensation that is reasonable to the practices of competitors yet minimizes costs to the extent possible.

2. What is the global law of economics?

5

ANS: The global law of economics, about staffing, states that work should be located where the quality and cost of the production of goods and services are optimized.

3. What is implied by an MNE adopting the global staffing approach?

ANS: A global staffing approach within the MNE implies that the right people are hired, with the right skills, and are located at the right place, at the right time, at the right cost.

4. Describe three options that MNEs have for establishing a worldwide compensation system.

ANS: One option is the use of a headquarters scale. In this approach, worldwide salary levels are established at headquarters with differentials for each affiliate subsidiary according to their differing living costs.

This option is usually reserved for managerial and executive-level positions.

A second option is to base the salary scale on local geography. This option tends to be used for the broader employee base (usually excluding executives and globally mobile employees).

A third option is to determine a global base per position for everyone, possibly with affiliate differentials. This, then, becomes a form of equal pay for equal work worldwide.

5. Discuss the various approaches to IA compensation?

ANS: MNEs often use multiple compensation systems to suit their types of IA and global/local contextual needs. These include ad hoc negotiation, balance sheet, localization, lump sum, cafeteria, regional, and global plans. Thus, this discussion revolves around what each compensation approach entails and when it is most appropriate to use each approach.

ESSAY QUESTIONS: 1. Explain the basic objectives of global compensation and benefits ANS: A well-designed C&B system will balance the costs and benefits for the company while ensuring that the total reward system retains attractiveness for the recruitment and retention of employees. Main objectives therefore include: 1.

2.

3.

4.

attraction and retention of the best-qualified talent to staff the MNE attraction and mention of employees who are qualified for international assignments facilitation of transfers between the various employment locations within the MNE establishment and maintenance of a consistent and reasonable relationship between the compenstion of employees at home and overseas 5. maintenance of compensation that is reasonable in relation to both practices of competitors yet minimizes cost to the extent possible

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2. Identify and discuss the major issues related to the effectiveness of global remuneration plans ANS: The major issues related to global/international remuneration plans include developing an overall philosophy of how the MNE pays its employees - a common set of principles on which the firm bases its reward system, and taking consideration of the external constraints placed by the various countries in which the MNE operates.

The same dilemma about centralizing or localizing impacts C&B practices - with MNEs usually opting to standardize rewards strategy and localize the C&B practices.

The particular locations and national context also require specific approaches to meet legal and cultural requirements.

The IHRM team, and consultants, need to have up-to-date information about local requirements to make informed decisions about C&B practices and policies.

3. Explain the difference between global remuneration and international assignment compensation.

ANS: Global remuneration deals with the compensation and benefits structure for employees of the MNE in various locations/subsidiaries around the world.

International assignment compensation deals with the compensation and benefits of globally mobile employees - or those who cross borders as part of the employment - including long-term and shortterm.

Global remuneration looks at the total compensation and benefits system in all operations locations. At the same time, the IA compensation is a particular component where IHRM devises strategies and practices to support, motivate and reward IAs so that they are not disadvantaged from their overseas assignments.

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IHRM 6th Edition Chapter 12 International Employee Performance Management TRUE/FALSE 1. The PM process is commonly described by practitioners in Western enterprises as the ―performance wheel.‖ ANS: T 2. Western companies have moved towards the use of more objective measures of performance, involvement of multiple raters and ongoing coaching and development of employees as critical features of their performance management system.

ANS: T 3. There are two broad purposes for performance appraisal: evaluation and remuneration.

ANS: F 4. In collectivistic, high-power distance cultures, PM is culturally more compatible with a focus on broad performance targets than with specific performance criteria.

ANS: T 5. Cultural value dimensions such as power distance, collectivism, harmony, and face have been shown to have minimal influence on the way in which performance is evaluated.

ANS: F 6. Companies with strong corporate cultures and decentralized decision making may be less inclined to favor a more standardized PM system.

ANS: T 7. The evaluation phase deals with the choices that management of an MNE must make with regard to its PM system.

ANS: F 8. Conducting 360-degree reviews for an IA is logistically simple.

ANS: F 9. In view of the geographical, communicative, and cultural distance between the foreign subsidiary or JV and the home-country appraiser, local management is seldom called in to give an opinion.

ANS: F 10. The many difficulties involved with the performance appraisal of international assignees in 1

international operations indicate the need to collect multiple perspectives to enhance the accuracy and validity of an expatriate‘s performance evaluation.

ANS: T MULTIPLE CHOICE 1. International PM systems are complex because a managing the PM of international assignees presents particular challenges. . b of the impact of culture on management practices. . c decisions about standardized practices versus divergent systems must be made. . d all of the above. .

ANS: D

2. Critical components of PM in large Western firms have shifted towards a greater accountability of employee performance, and involvement of multiple raters. . b use of more objective measures and metrics. . c ongoing coaching and development of employees. . d all of these. .

ANS: D 3. Helping managers to improve their performance, develop future potential, motivating employees by recognizing their efforts and career planning are all forms of a evaluation goals. . b developmental goals. . c appraisal goals. . d none of the above. .

ANS: B 4.

in PM is the application of a relatively similar appraisal concept but adapting the process to align with cultural characteristics. a . b . c

Divergence Convergence Crossvergence 2

. d .

Emergence

ANS: C 5. The impact of culture is particularly evident in which area of PA? a Performance criteria . b Method of appraisal . c Performance feedback . d all of these .

ANS: D 6. Developing a PM system in the home country and transferring it to foreign units is a(n) strategy a adaptive . b exportive . c integrative . d differentiation .

ANS: B 7. Developing unique PM practices in each foreign unit is a(n) a adaptive . b exportative . c integrative . d differentiation .

PM strategy

ANS: A 8. Combining local PM practices with those in the region and around the world is a(n) strategy a adaptive . b exportative . c integrative . d Differentiation .

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PM

ANS: C 9. Which of the following is a factor affecting PM practices? a International mergers . b Joint ventures . c acquisitions . d All of the above .

ANS: D 10. Decisions about the purpose of the PM system, performance criteria, methods of evaluation and rater identification have to be made during the phase of the IPM system. a final . b design . c implementation . d evaluation .

ANS: B 11. Effective performance management of international assignees is critical to the success of the MNE, especially because a expatriates have lower than average turnover rates upon their return from an assignment. . b expatriates are very expensive in terms of their compensation arrangements. . c many international assignees are successful and leave their assignment early. . d all of the above. .

ANS: D 12. Effective performance management of international assignees requires recognition of the value of their foreign experience and approaches to evaluating their performance. a flexible . b responsive . c formal . d in-frequent .

ANS: C

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13. The PM system needs to be able to recognize that international assignees have developed specific skills, such as , and these need to be considered in the evaluation of their performance. a being flexible in dealing with people and systems . b ensuring that the global directives are enforced . c managing a workforce with many similarities . d all of the above .

ANS: A 14. Disadvantage(s) of using a home country manager as a rater of an international assignee‘s performance include a they may have little knowledge of local circumstances. . b they may not be aware of the local culture and its impact on performance. . c there are no disadvantages. . d A and B .

ANS: D 15. Based on the limited research available related to the PM of international assignees, it is recommended that MNEs a set clear performance expectations for the international assignee. . b specify what successful performance in the host country entails. . c conduct frame-of-reference training for both the raters and the rater. . d all of the above. .

ANS: D SHORT ANSWER 1. List three reasons for the complexity of an international PM system.

ANS: • Culture heavily impacts management practice in terms of issues such as the meaning of performance management, employee acceptance of the review process, and the cultural value dimensions that affect performance appraisal (PA).

• Designers of PM systems in MNEs face a major dilemma in terms of reconciling whether PM should be a single, standardized practice throughout the organization or whether divergent systems can be used to reflect local culture and local management practices.

• The PM of international assignees (IAs) presents particular challenges for managers and employees alike.

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2. List four evaluation goals for performance appraisals in the international environment.

ANS: 1. Provide feedback to employees so they will know where they stand.

2. Develop valid data for pay, promotion, and job assignment decisions, and to provide a means of communicating these decisions.

3. Identify high-potential employees and manage their talent for optimal performance and retention.

4. Help management in making discharge and retention decisions, and to provide a means of warning employees about unsatisfactory performance.

3. What are four things that can be done to improve the effectiveness of an MNE‘s IPM system?

ANS: 1. Ensure relevance in the evaluation criteria and the IPM evaluation process.

2. Establish acceptability of the IPM by both evaluators and ratees.

3. Ensure that the IPM system is culturally sensitive.

4. Design the IPM for ease of use.

4. What tactical issues arise in the evaluation of international assignees?

ANS: The central themes in the expatriate PM literature relate mainly to the tactical issues (what? who? when? how?) inherent in managing the performance of an employee who is sent abroad on assignment.

That is, they focus on what criteria are appraised, who does the PA, when (and how often) an appraisal is done, and how the appraisal is carried out (i.e., what format is used). In addition, they focus on the cultural and structural contexts of managing the performance of IAs as well as the repercussions for failing to do so effectively.

ESSAY QUESTIONS: 1. Explain how the international character of the MNE impacts the design, implementation, and evaluation of the PM system ANS: Explains the broader concept of the philosophy that the firm has about performance management and development, and the culture of the home country and how this viewpoint guides the design, implementation, and evaluation of the system.

In terms of design - decisions about purpose, performance criteria, raters and standardized or local approach will be influenced by culture/vision/strategy of MNE In terms of implementation - communication of expectations, training and performance feedback are all influenced by the culture/values/vision of the MNE home country In terms of evaluation - again the culture will influence the way in which evaluation is done, who is involved and what happens to the results.

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2. Identify and explain the characteristics of a successful IPM system ANS: 1. Design - there is a clear purpose, performance criteria, combination of methods, ongoing informal feedback for developmental purposes, multiple raters 2. Implementation - clarify global and local performance expectations, reinforce the importance of the manager in PM training, understand the importance of nationality of rater/ratee, identify culturally appropriate ways to provide performance feedback.

3. Evaluation - ensure that the system is fair (in methods used, in the quality of the treatment, and the use of due process).

Also - Relevance (understanding local elements of the job and being able to assess these), Acceptability (evaluators and ratees need to accept the criteria and processes), Sensitivity (must be designed with the local culture in mind), Practical (process and methods must be easy to use).

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IHRM 6th Edition Chapter 13 Well-being of the International Workforce and International HRIS TRUE/FALSE

1. Employee health, well-being and safety are increasingly important topics for MNEs, particularly as there are increasing numbers of employees at potential risk because of increased global trade.

ANS: T 2. It still remains difficult to compare occupational health and safety regulations and experience between countries.

ANS: T 3. The European Union has pioneered the legal framework for family-friendly policies.

ANS: T 4. Business travelers and international assignees are not overly concerned about health issues as there is strong evidence that health problems abroad are on the decrease.

ANS: F 5. Business travelers and international assignees need to be briefed as to what to expect, how to prepare, and how to react when confronted with health or safety problems.

ANS: T 6. When designing a global HRIS strategy, MNEs do not need to consider establishing controls for the movement of the data between locations as this is regulated by international laws.

ANS: F 7. HR has its own uses for technology and customized software, which can greatly enhance its ability to perform its responsibilities specifically in situations in which physical overseas travel is not possible (as was the case with the COVID-19 pandemic).

ANS: T 8. The area of relocation and orientation has traditionally been one of the most time-consuming for IHR. ANS: T MULTIPLE CHOICE 1. Concern for employee health and well-being are increasing because of a increasing attention to employee well-being around the world. .

1

b . c . d .

increasing numbers of employees at potential risk because of increased global trade. increasing risk factors. all of these.

ANS: D 2 Concern for the well-being of the MNEs global workforce involves a establishing health and safety policies on a global basis for all employees. . b managing the health and safety regulations that vary from country to country. . c dealing with natural and man-made disasters. . d all of the above. .

ANS: D 3. World Health Organization data suggest that, worldwide, approximately of the world‘s workers are employed in hazardous jobs, both from risk of injury or illness and from death. a one-third . b one-fifth . c one-half . d one-tenth .

ANS: C 4 Research indicates that where a country has a strong safety measures have been developed and actively enforced. a unification . b policy . c union . d safety .

movement effective health and

ANS: C 5 Which of the following is a factor affecting the development of occupational safety standards in developing countries? a Pressure to reduce jobs. . b Limited funds for enforcing safety laws.

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. c . d .

The use of new equipment.

All the above.

ANS: B

6. Family-friendly policies and work-life balance raise new opportunities for IHR to consider in foreign operations as these reflect a growing concern internationally over a lengthening work hours and stress. . b quality of work life. . c meeting needs of today‘s complex and demanding workforce. . d all of the above. .

ANS: D 7. Responding to an employer‘s duty of care and potential liabilities and handling crises well will contribute positively to a(n) a MNE policy. . b employer‘s brand. . c employer‘s experience. . d all of the above. .

ANS: B 8. IHR must take a leading role in crisis management and execution because a IHR deals most directly with travel and relocation issues for employees. . b it is likely no other part of the organization will. . c they are usually the first point of contact for the media and families. . d all of the above. .

ANS: D 9. Keeping track of workforces in each country of operation, long-term IAs, termination liabilities, and employee contracts are all special complexities that MNEs. a global HRISs offer to . b no other part of the organization will offer to .

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c . d .

are usually the first point of contact for the media and families within all of the above

ANS: A 10 New social networks and technology, such as blogging, tweeting and zoom, can now help IHR to enhance many of its projects and systems, such as a communication with employees and potential employees worldwide. . b enhancing the firm‘s employment brand. . c global recruiting. . d all of the above. .

ANS: D SHORT ANSWER 1. List three characteristics of a risk that must be assessed when doing IHR crisis planning.

ANS: 1. Size of the risk 2. Types of potential problems for each locale 3. Relative risk for each situation

2. List four administrative support services that are typically managed by IHR as a result of doing these activities to ease the process of transferring employees from one country to another.

ANS: 1. Making travel arrangements 2. arranging housing in foreign locales 3. determining the availability and operation of local transportation 5. office services (translation, translators, printing documents) 6. currency conversion 7. local bank accounts 8. government relations 4.

o ff ice s er ies

3. Identify special issues that need to be considered when establishing expatriate crisis management programs.

ANS: One important way for IHR to add to the value of their services, is to design and implement crisis management programs for dealing with the many forms of trauma and health and safety problems that individual employees and their employing organizations confront in today‘s global environment. Exhibit 13.1 highlights issues that may be considered when developing expatriate crisis management programs.

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ESSAY QUESTIONS: 1. Describe IHRM‘s role in managing a global health, well-being, safety, and security program. How does this contrast to managing these issues within a domestic firm?

ANS: IHRM takes a lead role in developing strategy and policy and practices to support the operation of the MNEs all over the world, and to ensure that the brand of the company is enhanced through the way in which it looks after its workforce.

Includes - understanding the health and safety regulations and expectations in every country operating in; establishing global health and safety policies, dealing with specific concerns, managing risks associated with potential events (such as natural disasters, kidnapping), the work-life balance of workers in markets with differing levels of economic development. Also includes developing the preparation materials for business travelers and IAs so that they are prepared before they travel for what may occur and know what to do if they are unwell or injured while in a foreign country.

Contrast to domestic: While domestic firms also need to manage strategy development and implementation of policies across these areas the complexities are greatly reduced as you are only managing one country and the main cultural expectations of employees within that country and one national set of regulations/legislation. There may be state by state variations but the complexity and hence degree of challenge is not as significant.

2. Discuss the Specific health and safety concerns for BTs and IAs. ANS: Even though potential problems related to terrorism, crime, kidnapping, civil unrest and riots, natural disasters, local diseases, epidemics, global pandemics, and other traumatic events can seem overwhelming, it is often more likely that MNEs and IHR will have to deal with a number of specific health problems unrelated to these sorts of traumas. BTs and IAs and their families frequently (if not usually) suffer from less serious health complaints ranging from intestinal disorders due to exposure to new bacteria to major exotic illnesses, to which their systems have built no immunities.

Under all circumstances, BTs and expatriates need to be briefed as to what to expect, how to prepare for conditions in the country or countries to which they are going, and how to react when confronted with health or safety problems. There can be several situations in which the lack of attention to health issues when an individual was sent on foreign assignment caused major problems for both the individual involved and the organization, for example, death while on assignment.

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IHRM 6th Edition Chapter 14 Comparative IHRM: Operating in Other Regions and Countries TRUE/FALSE 1. Comparative IHRM examines how differences between countries create similarities and differences in IHRM policies and practices across countries and regions.

ANS: T 2. Comparative IHRM is a well-established field, and the challenge now is to find new areas to investigate.

ANS: F 3. The diversity of IHRM policies and practices across nations are often examined using the convergence and divergence framework.

ANS: T 4. Today‘s MNEs have little difficulty in developing IHRM policies and practices that demonstrate consistency throughout the entire global organization and within regions.

ANS: F 5. Countries in the European Union, an economic region within Europe, are economically and politically linked and operate with a single market.

ANS: T 6. The various regional clusters within Europe share similarities in terms of their HRM practices.

ANS: F 7. For HR planning purposes, many MNEs view the region of North America in terms of the U.S. and Canada.

ANS: T 8. The U.S. has a less individualistic labor force than most other countries.

ANS: F 9. An important HRM issue in the European region is the management of the challenges associated with talent flow , ANS: F 10. There is a strong collectivistic and a paternalistic attitude toward work values in African countries.

ANS: F 1

MULTIPLE CHOICE 1. Comparative IHRM is a a developing . b diverging . c regional . d all of the above .

field of inquiry.

ANS: A 2. The perspective suggests that over time organizational structures and business practices and values in differing countries and regions will become similar. a convergence . b divergence . c regional . d none of these .

ANS: A 3. The perspective suggests that institutional, national and business values are deeply integrated and embedded in a society and resist change to accommodate policies and practices introduced by foreign MNEs. a convergence . b regional . c divergence . d none of these .

ANS: C 4. A ―region‖ can be described by various attributes, such as a economic system. . b geography. . c governmental jurisdiction. . d all of these. .

ANS: D 2

5. The San Diego-Tijuana region is an example of a a trade . b macro-region . c cross-border . d all of these .

region.

ANS: C

6. A(n) include independent countries that share certain attributes such as social, economic and cultural characteristics: a micro-region . b cross-border region . c macro-region . d none of these .

ANS: C 7. Africa, Asia, Europe and Latin America are examples of a micro-regions. . b cross-border regions. . c macro-regions. . d sub regions. .

ANS: C 8. The flexibility-security nexus refers to a the balance needed under the free-trade rules of the EU as well as under global free-mar. ket competition to provide the increased flexibility within European labor markets b The general sense of responsibility toward various types of employee representation and . protection c The extensive government regulations in terms of labor standards and legislation . d The intrusiveness of labor laws .

ANS: A 9. Due to the flexibility-security nexus in the European Union, the HR function has an important role to a increase flexibility while still protecting employees.

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. b . c . d .

be broker between management and the workforce. develop, implement and maintain policies to satisfy multiple stakeholders. all of the above.

ANS: D 10. Compared to other regions, the HRM issues in North America include all of the following EXCEPT a the HRM function becoming a strategic business partner. . b low levels of unionization. . c a relatively fast population growth. . d less intrusive labor laws. .

ANS: C 11. The transition from collectivism to individualism in HRM policies and practices, especially in countries such as is an important issue and has major implications for HR practices such as compensation. a France and Germany . b India and China . c Australia and India . d Canada and Mexico .

ANS: B 12. Employee‘s view a movement away from the traditional collectivist-oriented employment contract constitutes a violation of the . a psychological contract . b employment contract . c sociological contract . d none of the above .

ANS: A 13. Governments in Latin American countries generally have an authoritarian approach that strongly the economy, labor markets and organizational relationships. a regulates .

4

b . c . d .

liberates innovates all of these

ANS: A 14. Latin American employees a view the supervisor/manager as a ‗father‘ . b value hierarchy . c dislike confrontation with superiors . d all of these .

ANS: D SHORT ANSWER 1. Compared to most European countries, the U.S. has relatively low levels of unionization. List three reasons for the decline in union membership.

ANS: 1. Shift from manufacturing to services sectors 2. Increase in white collar jobs 3. Greater interaction between management and workers and the general belief by management that treating people better will improve performance 4. Federal and state laws that provide legislation and agencies which provide considerable protection to employees

2. In North America in recent years the HRM function as become recognized as a strategic partner. Provide two examples of how HRM serves as a strategic partner to an MNE. ANS: 1. Focusing on HRM systems rather than on individual policies and practices 2. Determining which HRM systems are better than others in terms of improving organizational effectiveness 3. By showing the financial impact of these HRM systems.

4. Designing metrics or measures to capture the impact of HRM systems on financial measures and demonstrate the ROI of HR policies.

3. What does ―talent flow‖ mean, and what are the HRM challenges associated with talent flow in the Asia Pacific region?

ANS: 1. Talent flow – refers to the migration of talented individuals between countries for a variety of reasons (studies, work experience) and then returning to their country of origin to take advantage of 5

economic opportunities and development.

2. Countries such as India, China and Taiwan high tech industries are developing and are trying to attract back natives trained overseas.

3. HRM function – must develop training and development programs for individuals moving back home and from country to country.

4. Also have to develop policies and practices to retain individuals, such as talent development and life-long learning strategies (Singapore and Hong Kong).

ESSAY QUESTIONS: 1. Compare and contrast the important features of IHRM in Europe, Asia-Pacific and North America.

ANS:  Europe: extensive government regulations; role of unions varies from country to country but there is a general sense of responsibility towards various types of employee representation and protection; flexibility-security nexus (the balance needed to provide flexibility to be competitive but may also require deregulation).  Asia-Pacific: Compared to Europe and North America, HRM in AsiaPacific has been strongly shaped by globalization, technology, and the communication revolution; a gradual shift to free-market policies; transition from collectivist to individualistic cultural values; varied influence of labor unions; changes in the traditional employment contract; and challenges associated with talent flow.  North America: perceived intrusive labor laws (but less than compared to Europe); low levels of unionization; individualistic and merit-based values in the labor force; and the view that HR is a strategic business partner. They are all experiencing significant changes and shifting expectations of the workforce.

2. What are the major differences between macro- and micro-regions? What are the implications for MNEs and IHRM? ANS:  Macro-region - these regions or clusters include independent countries that share characteristics such as social, economic, political, cultural, geographical. The most important ones for defining a macro-region include geography, economic and cultural perspectives.  Micro-region - usually an area bigger than a municipality but smaller that the state in which it is in. (includes mega-cities with populations greater than 10 million). If spread across borders, it is called a cross-border region.  Implications for MNEs and IHRM - need to understand both types of regions, the developments underway, and the social, economic, and cultural dimensions to effectively operate within these regions and across them. Developing a regional approach can help reduce some of the complexities involved in IHRM.

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IHRM 6th Edition Chapter 15 The IHRM Department, Global Workforce Analytics, Professionalism and Future Trends TRUE/FALSE 1. Finding ways to develop a corporate ‗glue‘ that will hold the organization effectively together is required to support the global and cultural aspects of international business.

ANS: T 2. A world-class IHR department operates only at the operational level.

ANS: F 3. There is a growing realization, particularly in large MNEs, that there is a lack of HR talent around the world.

ANS: T 4. There is too little consistency in HR infrastructures for delivery of IHR programs around the world.

ANS: T 5. One of the most significant challenges for IHR is that the HR function is, for many reasons, not a highly globalized function.

ANS: T 6. Quality benchmarks for IHR departments include the ability of IHRM to deal with events proactively and the inclusion of IHRM in key business issues.

ANS: T 7. The changing nature of IHRM means that IHR departments need more specialists.

ANS: F 8. Demonstrating the contribution of the IHRM department involves research to determine best IHR practices around the world and using them to assess the quality of the firm‘s activities as well as to develop better IHR practices.

ANS: T 9. Global workforce analytics refers to approaches organizations use to utilize specific data analysis tools/techniques and relevant metrics to analyze IHRM-related data for effective decision-making.

ANS: T

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10. One strategy to strengthen the IHR department and to develop more competency in IHR is to assign domestic HR generalists to overseas regional locations for two-to three-year periods.

ANS: T MULTIPLE CHOICE 1. MNEs will need and expect their IHR executives to assist a in the strategic management of their global businesses. . b in developing IHR policies for operations around the globe. . c in hiring and developing highly productive workforces in multiple countries. . d all of these. .

ANS: D 2. The on-going professionalization of IHR requires a the recognition by top executives that IHRM is critical to the success of the global enter. prise. b development of IHRM managers. . c increased opportunities for formal education in IHR. . d all of the above. .

ANS: D 3. The Human Resource Certification Institute is identifying and codifying the ―body of knowledge‖ in IHR and designing a testing procedure for a certifying professional skill and knowledge in IHRM. . b certifying IHRM practices and policies. . c certifying that IHRM regulations have been adhered to. . d all of the above. .

ANS: A 4. The competent IHR manager of the future will have to demonstrate their ability to a develop global leadership. . b implement effective recruiting and staffing strategies to attract the best talent for a global . workforce. c design and implement global HR systems. . d all of the above 2

.

ANS: D 5. The new structures for delivering IHR services (such as outsourcing, shared services, and centers of excellence) are incorporated into HR development. a already being . b not being . c extensively . d always .

ANS: B 6. IHRM professionals are constantly challenged by a changing global workforce who demand a top level leadership from within their own countries. . b respect by corporate HQs for local office dynamics. . c that the parent firm initiate development opportunities for local employees. . d all of the above. .

ANS: D 7. Technology has made it possible for the transaction type of HR activities to be managed through insourcing and outsourcing, so now HR professionals must focus on the of HR processes and managing HR projects across organizational and boundaries. a reduction, within domestic . b integration, national . c segregation, national . d integration, within domestic .

ANS: B 8. Which of the following is NOT a factor in the continuing development of IHRM within MNEs? a Managing the shift from domestic HRM to international HRM. . b Ensuring effective knowledge management. . c Providing HR services cost-effectively. . d Maintaining access to the current high levels of available IHRM professionals. .

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ANS: D 9. HR business partners play a critical role whether it is a implementing strategy at the local level. . b designing and overseeing the transactional services at the bottom. . c figuring out how to engage employees. . d all of the above. .

ANS: D 10. Critics claim that IHR a is not being a true business partner. . b do not have the IHR competencies that are required to meet all of the needs of the busi. ness. c are not going to be able to deliver innovation and flexibility. . d all of the above. .

ANS: D 11. Which of the following is NOT a capability required for IHRM roles in the future? a Ability to educate and influence line managers. . b Being computer and technology-literate. . c Developing specialist knowledge. . d Focusing on quality of IHR services. .

ANS: C 12. One way to improve the firm‘s overall international business competency is to who have global knowledge and experience: a centralize . b identify . c disperse . d all of the above .

ANS: C

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the people

SHORT ANSWER 1. List five general competencies of IHR professionals.

ANS: • Cross-cultural interpersonal skills • Ability to learn about multiple cultures • Local responsiveness (develop and maintain relationships with local colleagues and officials, know and understand local markets, regulations, and current affairs) • Cross-national adaptation • Change and diversity management and international team skills • Coaching and development of global literacy (in themselves and others) • Ability to manage global risks, such as those presented by ―accidental expatriates,‖ global compliance, and global benefits and tax regulations • Identifying procedures and measures for demonstrating the ROI, triple bottom-line, and balanced scorecard metrics for IHRM initiatives • Global strategic leadership for the whole organization and its many HR departments and HR managers.

2. Identify five interventions that IHR can do in order to proactively ensure the on-going future development of the MNE? ANS: 1. Hire for international experience. IHR must convince managers of the MNE of the importance to global competitiveness of having a workforce that knows and understands international business. Thus, the firm needs to appreciate the importance of including international knowledge and experience as criteria in the recruiting and hiring process.

2. Disperse people with international experience throughout the firm (including in HR). One way to improve the firm‘s overall IB competency is to disperse the people who have global knowledge and experience throughout the enterprise.

3. Learn how to recruit and assign on a global basis. IHR must develop the ability to recruit talent from around the world and to assign such global hires throughout the firm‘s global operations.

4. Increase the firm’s international information diet. IHR should take a proactive role in providing all locations of the enterprise with information (e.g., general international magazines and newspapers) about not just the firm‘s global operations, but about global affairs in general, including actions of governments and competitors in countries where the firm operates.

5. Train everyone in cross-cultural communication, etiquette, protocol, negotiation styles, and ethics. This is one additional, but specific, aspect of providing information to the workforce about global business. These are areas of concern that greatly increase a global firm‘s competency in the conduct of international business.

6. Ensure international developmental assignments. IHR must make sure the global enterprise understands and supports the necessary system for ensuring that international assignments are kept as a major component in all executive development programs.

7. Pursue GPHR certification. HR practitioners who want to work in the global arena should acquire the basic global HR body of knowledge.

8. Development of IHR managers - this could include:  understanding how the enterprise makes money,  knowing how to measure global ROI on IHR programs,  developing and using a global HR balanced scorecard  developing relationships and networks throughout the global enterprise, 5



creating a global HR learning organization

ESSAY QUESTIONS: 1. Based on the fact that MNEs face many HR challenges when conducting business on a global scale, identify and explain the components on the ―agenda‖ that IHRM departments should be encouraged to focus upon within their particular firm.

ANS: Answer should include coverage of the following key points, and demonstrate understanding of the importance of taking this lead role in the business.       

Lead - take the lead in developing processes and concepts for top management as they develop the global strategy Contribute - ensure IHR contribution as an integral partner in formulating the global strategy for the firm Competencies - develop the necessary competence among the senior HIHR staff so that they can contribute as partners in the strategic management Develop - build a framework to help top management fully understand the complex organizational structure and people implications of globalization Implement - implementation of global strategy, identifying key skills that will be required by management and employees assessing current global competencies in IHRM and in the rest of the management team, developing strategies for locating outside talent Evaluate - develop the abilities to determine the value and return of the contribution of IHR practices and to explain these to senior management Share - distribute and share the responsibilities for IHRM. Line management, IHR managers and work teams share objectives of ensuring the effective hiring, development deployment and retention of the firm‘s human resources.

2. In what ways does IHRM need to become more professionalized in order to deliver essential IHRM outputs to the firm?

ANS: Answer should include coverage of the following key points:  Importance of the function - all levels of the business need to recognize IHRM as being critical to the success of the global enterprise, as a valued part of becoming more competitive.  Development of IHRM managers - important for IHR managers to have experience in line management and in global assignments as well. Need to develop a broader perspective on the global enterprise. Assist with strategic management, develop IHR policies for operations around the world, and hire and develop highly productive workforces in multiple countries (developing the strategic IHR manager).  Development could involve - assigning HR generalists to overseas regional posts for two to three year periods. Assigning repatriated IAs from any function into IHR in an operating division or HQ - overseas experience adds credibility and can utilize their insights and experiences. Assigning graduate HR degree employees to overseas posts, perhaps pay them as locals. 6

 Education - from a formal perspective, increasing the number of HR professionals in the firm with postgraduate qualifications (it may be IHR units as part of a Masters degree as there are limited degrees available) assists in gaining more in-depth knowledge and skills. Certification - pursue the option of getting a number of IHR staff certified by the Society for Human Resource Management and the Human Resource Certification Institutes (they have identified the ‗body of knowledge‘ for IHR). Possessing this credential shows a high degree of knowledge, and credibility within the organization, in this relatively new area of HRM. 

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3. Discuss the importance of Global Workforce Analytics.

ANS: As IHRM increases its ability to better use the data it generates to show the benefits of its various activities such as programs, policies, and practices, the IHRM function will become better able to get support and approval for those activities. See Exhibit 15.2 for suggestions about the kinds of changes in its reporting and analysis that new global workforce analytics allow.

A variety of issues can be addressed by global workforce analytics, such as      

Determining the return on investment of foreign assignments Predicting the success and/or effectiveness of foreign assignments Collaborating and sharing of knowledge gained during assignments Predicting future types of assignments and developing appropriate compensation, benefits, and reward trends Determining career progression of expatriates to improve retention upon repatriation Facilitating future scenario planning and what-if analyses

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