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International and Comparative Human

Resource Management

Creating an International Workforce:


IHRM orientation and staffing strategy

Alhajie Saidy Khan


LAIBS

Lecture outline
The context for international HR resourcing
Internationalisation strategy/stage and international
staffing strategy
International orientation and staffing
International assignment success factors
Selection criteria for international assignment
Expatriate selection and strategy
Conditions for using expatriates for international
assignments
Expatriate failure and its consequences

Context for international staffing


Globally integrated and co-ordinated systems and need local
sensitivity and responsiveness.
Global approach to talent source and thus, diverse workforce.
Blurring of traditional lines HR functions and need for resourcing
specialists to also focus on range of related (not necessarily
traditional) HR functions
Increase Merger and acquisition requires staffing in a changing
environment as well as harmonisation of HR practices.
Global networks of integrated systems greater opportunities for
learning from diverse practices, but also fast and continuously
Rapidly changing and volatile business situations and global
markets and thus speed to recruit, deploy, develop and shed people
CIPD, 2013

Internationalisation strategy and


IHRM orientation
Early

stages of internationalisation = ethnocentric


orientation
Multi-local strategies = ethno, poly and regiocentric
orientation
Regional strategies = regiocentric with element of
geocentric IHRM orientation
International strategy = ethno and plycentric
orientation
Global strategy = geocentric orientation
Edwards and Rees, 2006/11; Harzing and Pinnington, 2011; Perlmutter,

Ethnocentric staffing orientation


Key management positions filled by parent-country
nationals
Advantages:

Overcomes lack of qualified managers in host nation


Unified and coordinated policy that help maintain head

quarter control over subsidiaries


Could help transfer core competencies from and to HQ

Disadvantages:
Could produces resentment in host country
Can lead to cultural myopia

Polycentric staffing orientation


Host-country nationals manage subsidiaries and PCNs hold
key headquarter positions
Best suited to multi-domestic businesses
Advantages:
Could help alleviates cultural myopia.
Relatively inexpensive approach to international staffing
Helpful for transfer core competencies
Disadvantages:
Limits opportunity for experience of host-country nationals
outside their own country.
Can create gap between home-and host-country operations
Limit HQ ability to coordinate and control subsidiaries

Regiocentric staffing orientation


Nationals of regions manage subsidiaries within their
respective regions
Parent company nationals hold key HQ positions
Advantages
Allows for greater regional interaction and sharing of across regional
experiences
Shows greater sensitivity to local conditions and demands
Relatively lower wage bills
Eases transition to a global, geocentric orientation

Disadvantages
Could potentially inhibit ability to see the necessity for global HRM orientation

Potential to improve regional career opportunities at the expense of


wider international career opportunities
Animosities between neighbouring countries could hinder success and
undermine wider strategic vision

Geocentric staffing orientation


Seek best people, regardless of nationality
Advantages:
Enables the firm to make best use of all its human resources
Equips executives to work in different international context
Helps build strong unifying and informal management
network
Disadvantages:
National immigration policies may limit implementation
Expensive to implement due to training and relocation costs
Compensation structure can be problematic

Conditions for successful


Geocentric staffing
Availability of highly competent or potentially
competent employees
Some international experience within top
management
Competent or potentially competent cadre of
managers willing and ready for international
deployment
Willingness to learn and an openness to new
and different experiences and ideas

Key international assignment


success factors
Professional/technical competence
Relational ability
Motivation
Family situation
Language skills
Acceptance of assignment
Torrington et al, 2007

Criteria for selection for


international assignment
Specific organisation
requirements (technical)

Family requirement

Selection decision

Cross-national and
cross-regional
requirements

Host country requirements


Norms and traditions
Language
Knowledge of institutions
and legal system etc.
Mendenhall and Oddou, 1985; See Sparrow, 2007

Corporate and technical criteria


Easily evaluated technical and managerial competencies
of assignee are most important

Organisational situational factors including:


Requirements to send expatriates to carryout assignments
in certain regions than otherwise
Involvement of partners as in joint ventures and crossborder alliances
Using specific skills and function and training as selection
criteria

Cross-national criteria
Individual traits and characteristics that

impact success
or failure of international assignment (e.g. cultural
empathy, adaptability, language ability etc.).

Ability to implement technical and managerial tasks and


be reasonably comfortable in a foreign environment

These criteria are, however, sometimes very difficult to


determine and measure

Host country requirements


Copping

with alternative social norms and forms of


organisation

Ability to manage hardship postings (remote locations,


high security risks, poor standard of living conditions)

Capacity to work and live under what might be perceived


as repressive political and social contexts

Legal requirements (e.g. need and difficulty of acquiring


work permit)

Language and other social criteria


Core

situational factor: knowledge and ability to directly


communicate in the language of the host is critical for both
assignee and spouse/family

Family:

could make potential international assignee refuse


international assignment

Gender:

despite steady increase in dual expatriate careers


couples, some country may be less suitable for female
international assignees

Mendenhall, M. and Oddous four


dimensional criteria
Self-Orientation

Possessing high self-esteem and self-confidence

Ability to develop relationships with host-country nationals


Willingness to communicate

The ability to understand why people of other countries behave the


way they do
Being non-judgmental and flexible in management style

Ability to adjust to the ways of country of assignment

Others-Orientation
Perceptual Ability

Cultural Toughness

Source: Academy of Management Review, Vol. 10:1 (pp. 39-47)


See also, Reich and Harzing (2011) in Harzing and Pinnington (eds.);
Tahvanainen and Suutari (2005) in Scullion and Linehan (eds.)

Changing context and changing


nature of international staffing
From expatriate management to, e.g.:

International commuters & assignees on short term or medium term


business trips
Contract expatriates
Employees used on long-term business trips
Cadres of global managers
International transferees (from one subsidiary to another)
self-initiated movers (SIMS) - live and work away from their home
country
Virtual international employees active in cross-border project teams
Domestically based employees dealing with international suppliers and/or
clients
Overseas workers attracted to a domestic labour market.
(CIPD)

Expatriate management remain Core


aspect of international staffing function
According

to CIPD, various types of international


employees indicate that the claim changing business
context and requirements have reduced the reliance on
longer term expatriation in more mature markets and
grown in developing ones and, in the global
community.

Nevertheless, expatriates management remains a major


aspect of work of HR practitioners responsible for
international assignments

Definitions
Expatriate: citizens of one country working
in another

Inpatriates: expatriates who are citizens of


a foreign country working in the home
country of their multinational employer

Conditions for using expatriates


When there is desire for international expansion, but lack
of prior international experience
Need or desire to transfer of firm-specific knowledge
An ethnocentric orientation underpinned by strong singlestatus Corporate outlook and strategy
Having new subsidiaries that require guidance
Significant differences between parent country and host
country culture and institutional frameworks
When host country regulations cast doubts on fulfilment of
contracts

Why MNCs use expatriates


Management development - acquiring international
management skills and competencies

Coordination and control of/over diverse and


dispersed operations and activities

Effective communication of local needs and strategic


information to and from headquarters

Expatriate failure
Expatriate failure refers to the premature return
of an expatriate manager before the completion
of his or her international assignment due to
the persons failure to attain the expected
performance levels and due to the persons
continuing inability to adjust to the new work
and cultural environment in the host country

The Cost of Expatriate Failure


Expatriate failure has two cost components:

Direct Costs: Can be easily measured in monetary terms (e.g.:


air fare, relocation expenses, salary and training). Varies
according to position, country of assignment, exchange rates
and nature of replacement

Indirect Costs: Cannot be measured easily in monetary terms,


but may be significantly higher than the direct costs. Examples
include: loss of reputation and market share, morale and
productivity in the local work force, complications with the
host government, lost of credibility and career advancement