chapter

INTERNATIONAL HUMAN
15 RESOURCES MANAGEMENT

The rapid movement toward a global economy makes this chapter vital for all students interested in
management today. We begin the chapter with a brief overview of the different organizational forms
companies adopt (international, multinational, global, and transnational). Next we emphasize the
importance of understanding cultural, economic, political-legal, and environmental issues in
international business. The remainder of the chapter covers issues related to staffing, training,
compensation, appraisal and labor relations in an international environment.

CHAPTER LEARNING OBJECTIVES

Identify the types of organizational forms used for competing internationally.

Explain the economic, political-legal, and cultural factors in different countries that HR
managers need to consider.

Explain how domestic and international HRM differ.

Discuss the staffing process for individuals working internationally.

Identify the unique training needs for international assignees and their employees.

Identify the characteristics of a good international compensation plan.

Reconcile the difficulties of home-country and host-country performance appraisals.

Explain how labor relations differ around the world.

216
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Chapter 15: International Human Resources Management 217

LECTURE OUTLINE
I. MANAGING ACROSS BORDERS

• While estimates vary widely, approximately 70 to 85 percent of the U.S. economy

today is affected by international competition. Companies large and small in all parts of
the world are competing around the globe with one another.
• Use Presentation Slide 15-6: Increasing Importance of Global Human Presentation
Slide 15-6
Resources Understanding to provide a basis for discussion.
• Presentation Slide 15-5: Types of Organizations shows four basic Presentation
types of organizations that operate internationally. These differ in the Slide 15-5
degree to which international activities are differentiated to respond
to the local regions and integrated to achieve global efficiencies. Note
Figure 15.1
that this presentation slide is based on Figure 15.1 in the textbook.
1. The international corporation is essentially a domestic firm that
has built on its existing capabilities to penetrate overseas markets.
2. The multinational corporation (MNC) usually has fully autonomous units that oper-
ate in multiple countries and have latitude to address local issues.
3. The global corporation can be viewed as a multinational firm that has pulled control
of operations back into the home office. These companies operate much like domestic
firms, except that they view the whole world as their marketplace.
4. The transnational corporation attempts to achieve the local responsiveness of an MNC
while also achieving the efficiencies of a global firm. To balance this “global/local”
dilemma, a transnational corporation utilizes a network structure that coordinates spe-
cialized facilities positioned around the world.
• Note that although various forms exist, we generally refer to any company that conducts
business outside its home country as an international business.
• Use Figure 15.2: Top International Companies to discuss the largest
firms competing around the world. As the figure shows, the Figure 15.2
United States has no monopoly on international business.
A. How Does the Global Environment Influence Management?

• Events such as NAFTA, the collapse of the Soviet Union, the European unification,
and the rise of China as a world-trade leader have all had a tremendous impact on
international business.
• The cultural environment is of special importance to an HR manager in meeting
international objectives. Understanding the culture of the host
country (the country in which an MNC operates) is vital. Use Presentation
Slide 15-9
Presentation Slide 15-9: Cultural Environment of International
Business to provide an overview of the complexity of cultural
Figure 15.3
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218 Part 6: Expanding Human Resources Management Horizons
issues facing managers. Note that this presentation slide is identical to Figure 15.3 in
the textbook.
• Emphasize that different cultural environments require different organizational behav-
iors. What works in one cultural setting may be a failure in another.
B. Domestic versus International HRM
• While various international business journals have published articles on HRM, it was
not until 1990 that a journal devoted to this area, the International Journal of Human
Resource Management, was launched. Today, however, international HR
management is a front-and-center issue.
• International HRM differs from domestic HRM in several ways:
1. A greater number of HR functions must be performed, in many instances
requiring special expertise.
2. Special personnel services must be provided to employees.
3. Compensation is complex due to vast wage differentials around the world.
4. An overseas business failure is generally more costly than a domestic business
failure.
5. Even seemingly small cultural differences can create major headaches for
international HR managers. As a result, many companies rely on outsourcing
firms like Mercer Consulting and Korn/Ferry International to help them better
manage the challenges, risks, and regulations associated with their HRM
activities abroad
C. International Staffing
• There are three sources of employees with which to staff international operations:
(1) expatriates, or home-country nationals; (2) host-country nationals (natives of
the host country); and (3) third-country nationals (natives of a country other than
the home country or the host country). Countries sometimes restrict firm’s staffing
choices by passing laws and regulations designed to employ host-country
individuals. Tax incentives, tariffs, and quotas are also frequently implemented by
the host country to encourage local hiring.
• Use Figure 15.4: Changes in International Staffing over Time to show that at early
stages of international expansion, many organizations use home-country expatriates,
but as international operations grow, the use of host-country nationals is emphasized
more. There are three reasons for this: (1) hiring local citizens is less costly, (2) local
governments usually want good jobs for their citizens, and (3) most customers want
to do business with companies (and people) that they perceive are local. At later
stages, most companies employ a combination of host-country, home-country, and
third-country nationals in the top management team. Over time, companies
frequently replace U.S. expatriates with local managers. Some companies find it
more cost-effective to hire young, single, expatriates who are interested in their
career growth.

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Chapter 15: International Human Resources Management 219
D. Recruiting Internationally
• Improved telecommunications and travel have made it easier to match up employers
and employees of all kinds worldwide. This is important because many developed
countries, including China, face future labor shortages.
• Recruitment is subject to more government regulation abroad than in the United
States. Virtually all countries require work permits, or visa. Various methods are
used to recruit from internal and external sources. However, following 9/11, U.S.
firms have experienced a shortage of foreign workers due to tighter U.S. work
permit and visa restrictions relative to other countries.
• MNCs tend to use the same kinds of international recruiting both in their home
countries and abroad. Higher-level managers are often recruited via search firms and
firms that specialize in international recruiting. While unskilled labor may be readily
available in a developing country, many employers discover that the best way to find
these workers is through referrals and radio announcements, for example, if the
countries’ literacy rates are low.
• Some industries, especially those that hire seasonal employees, such as the hotel
industry, and those facing acute talent shortages, recruit guest workers. (See the case
at the end of the chapter on the nursing industry.)
• In European countries in particular, apprenticeships are a primary source of
recruitment.
• Transnational teams are composed of members from different nationalities
working on projects that span multiple countries and time zones. This has the
advantage of speeding products to market because projects can be worked on around
the clock, if need be. Many transnational teams are temporary arrangements.
Others, however, become permanent. Cross-cultural training can benefit trans-
national teams by helping them overcome language and cultural barriers.
E. Selecting Employees Internationally
A major difference in HR selection practices is that U.S. firms generally hire on the
basis of talent and merit, whereas in many countries, family ties, social status, language,
and common origin are more likely to be the major elements in hiring decisions. In
addition to a person’s qualifications, various other hiring laws, particularly those related
to discrimination are enforced around the world. Highlights in Highlights in
HRM 1: Global Laws and Pacts Prohibiting Discrimination HRM 1
outlines some of these laws and international labor agreements.
1. Selecting Global Managers
• The selection process should emphasize different factors, depending on the
extent of contact the business will have with the local culture and the degree
to which the foreign environment differs from the home environment. For
example:
a. If the job involves community contact, this should be given appropriate weight.
b. The difference among the political, legal, socioeconomic, and cultural systems
of the host country and those of the home country should be assessed.
c. If the candidate is to live and work in a foreign environment, an indication of
his or her tolerance of cultural differences should be obtained.

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220 Part 6: Expanding Human Resources Management Horizons
d. If local nationals have the technical competence for the job, they might be
considered before a search for an expatriate is undertaken.
• Although home-country and third-country nationals must possess managerial
and technical skills, they are frequently more familiar with physical, cultural, and
language issues. There has been a steady shift toward using local employees to
fill vacancies. For managerial positions, third-country Presentation
expatriates are frequently employed. Slide 15-17
• Use Presentation Slide 15-17: Comparison of
Advantages in Sources of Overseas Managers to Figure 15.5
discuss the advantages of each of the three types of
managers. Note that a company may not have a choice; the host country may
dictate that local personnel be used. Point out that this presentation slide is
adapted from Figure 15.5 in the textbook.
• Use Figure 15.6: Expatriate Selection Criteria to show
Figure 15.6
that expatriate selection decisions are typically driven by
an overriding concern with technical competence and
professional experience.
• Highlights in HRM 2: Skills of Expatriate Managers Highlights in
shows a set of core skills that are critical for success HRM 2
abroad and a set of augmented skills that help expatriate
managers succeed.
• The failure rate among expatriates is estimated to range from 25 to 50
percent, with an average cost of $200,000 to $2.1 million. Use Figure 15.7:
Causes of Expatriate Assignment Failure to discuss the
most prevalent reasons for failure among expatriates. A Figure 15.7
poor cultural fit is a major reason why assignments fail.
A lack of expatriate support from headquarters is another major cause. In
addition to evaluating potential managers for expatriate assignments, some
companies evaluate their spouses and families. Generally, firms that engage
spouses and families early in the process have more success retaining their
expatriate managers.

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Chapter 15: International Human Resources Management 221
II. TRAINING AND DEVELOPMENT
A lack of training is one of the principal causes of failure among employees working
internationally. Employees need to know as much as possible about (1) the place they are
going; (2) their own culture, and (3) the history, values, and dynamics of their own
organization.
A. Content of Training Programs
There are at least four essential elements of training and development programs needed
to prepare employees for international assignments (1) language training (2) cultural
training (3) assessing and tracking career development (4) managing personal and
family life, and (5) repatriation, a final, but critical step.
1. Language Training
• Most employees find language to be their biggest problem when it comes to
traveling and living abroad. Students who plan careers in international
business should learn one or more foreign languages.
• Fortunately for most Americans, English is the primary language for international
business. However, while this may be advantageous for Americans, it places
the burden of communications on host-country nationals.
• Learning the language is only part of communicating in
another culture. One must also learn how the people Highlights in
HRM 3
think and act in their relations with others. Highlights in
HRM 3 in the textbook illustrates that some of our everyday gestures have
very different meanings in other cultures.
2. Cultural Training
• Cross-cultural differences are the most elusive aspect of international
business, but successfully done, it tends to improve the satisfaction and
success of expatriates and their employees. Managerial attitudes and
behaviors are influenced by the society in which managers receive their
education and training. Similarly, reactions of employees are the result of
cultural conditioning. A successful expatriate manager understands the way
things are normally done abroad and recognizes that changes cannot be made
abruptly.
• While each individual is different, it has been possible to
cluster nations on the basis of work goals, values, needs, Figure 15.9
and job attitudes. The underlying factors for clustering
are geography, language, and religion. Figure 15.9: A Synthesis of Country
Clusters shows the results of Ronen and Shenkar’s research that groups
together countries with similar cultures.
• Each culture has its expectations for the roles of manager and subordinate.
Note that participation in decision making is desirable in some cultures, not
in others. Japanese managers lie at the most participatory end of the
continuum. South American and European managers tend to be autocratic.
3. Assessing and Tracking Career Development
• International assignments provide definite benefits, such as responsibility and
power, and enhance a person’s understanding of the global marketplace.

Figure
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different from the
U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
222 Part 6: Expanding Human Resources Management Horizons
•In recent years, an increasing number of foreign-born CEOs are filling the top
slots of American countries. Refer students to Figure 15.10: Selected
Foreign-Born Executives.
4. Managing Personal and Family Life
• As noted earlier, personal and family stress are among the most frequent
causes of an employee’s failure to complete an international assignment.
Culture shock is very real and must be dealt with in development programs.
• Some of the primary sources of stress at different stages Highlights in
of an international assignment are shown in Highlights HRM 4
in HRM 4.
• Also note that more organizations are offering informal job help to spouses to
accommodate the special needs of dual-career families. The U.S. Chamber of
Commerce and the U.S. State Department, for example, have initiated job
counseling in several business centers.
5. Repatriation
• After returning from an international assignment, what can an individual
manager expect in terms of a new position in the organization? What financial
burdens will the individual incur as a result of being overseas? Will that person
be able to readjust to U.S. culture? Note that companies such as Monsanto and
Ciba-Geigy provide repatriation programs to reverse any “return” culture shock
and facilitate the readjustment of expatriates.
• Many companies often do not fully utilize the knowledge and understanding of
their expatriates after their assignments. The result is that a huge number of
expatriates leave their companies within a year or two of returning home. Both
the firms and employees suffer as a result.
• A repatriation checklist is shown in Highlights in HRM 5. Highlights in
A firm able to retain its current repatriates, will have better HRM 5
success recruiting future expatriates.

III. COMPENSATION
• This is one of the most complex areas of international HRM. Since different countries have
different norms for employee compensation, human resource managers and their consultants
should consider carefully the motivational use of incentives and rewards.
A. Compensation of Host-Country Employees
• Hourly wages and benefits (including vacation days) vary
dramatically from country to country. Refer students to Figure Figure 15.11
5.11: Hourly Wages in Different Countries. The vast
differences are likely to surprise them. Host-country employees are usually paid on
the basis of productivity, time spent on the job, or a combination of these. Profit
sharing is legally required for certain categories of industry in Mexico, Peru, Pakistan,
India, Egypt, and among the less developed countries.
• Because labor costs are generally a firm’s largest expense, they play a key role in
international HR decision making. However, some companies have generated bad

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Chapter 15: International Human Resources Management 223
press by capitalizing on these wage differences to an extreme. As a result, firms are
coming under increasing pressure to exercise greater global responsibility.
B. Compensation of Host-Country Managers
Overall, international firms are moving toward a narrowing of the salary gap between
the host-country manager and the expatriate. Firms are also beginning to offer their
host-country employees a full range of training programs, benefits, and pay comparable
with their domestic employees but adjusted for local differences. These programs are
known as global compensation systems.
C. Compensation of Expatriate Managers
• Use Presentation Slides 15-37-39: Expatriate Compensation Presentation
Systems, and the others, to discuss why compensation plans Slide 15-37-39
for expatriates must be competitive, cost-effective, motivating,
fair, easy to understand, consistent with international financial management, easy to
administer, and simple to communicate.
• For shorter assignments, usually those that are project-based, expatriate managers
are usually given per-diem pay. These managers are lese likely to bring their family
members with them, and the assignment becomes more like a commuting
assignment.
• For longer assignments, there are two approaches: Home-based pay, based on the
balance-sheet approach, usually involves four facets: (1) base pay, (2) cost-of-
living allowances, (3) incentives, and (4) assistance programs. Increasingly,
however, companies are moving to host-based pay, or localization. This is
compensation that is s equivalent to compensation earned by local managers in the
country where the expatriate is assigned. Some companies localize only certain
aspects of the expatriate’s pay package or do so gradually over the course of a
number of years. Under a split pay system, expatriates are given a portion of their
pay in the local currency to cover their day-to-day expenses. The rest of their pay is
distributed in their home currency to safeguard their earnings should changes in
foreign exchange rates or inflation adversely affect their salaries.
• Forcing a manager to entirely “go local” in terms of her pay can sometimes
jeopardize an international assignment and end up costing a company more money
than it would have saved by localizing the employee. That said, not localizing an
employee’s pay can breed resentment among local staff members if they are earning
significantly less. This can affect the amount of local cooperation given an
expatriate and adversely affect the success of an assignment.
• Other issues include compensation and the availability of good medical care for
expatriate employees and their families. Still another issue is the need to provide
expatriate employees and their families relocated to high-risk countries with
personal security. These employees can sometimes command three times their
domestic pay. Lastly, what competitors are paying should also factor into the
compensation mix.

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224 Part 6: Expanding Human Resources Management Horizons
IV PERFORMANCE APPRAISAL

One of the biggest problems with managing employees abroad is that it is difficult to evalu-
ate their performance. Problems in this area can lead to higher failure rates and even derail a
person’s career.
A. Who Should Appraise Performance?
• People working abroad may have multiple allegiances: to the home country, to the
host country, and so on. Superiors in each location may have very different views
and expectations for performance.
• Use Presentation Slide 15-40: Performance Appraisal of Inter- Presentation
national Managers to discuss the advantages and disadvantages Slide 15-40
of different sources of appraisal.
B. Home- versus Host-Country Evaluations
Domestic managers may be unable to understand the expatriate’s experiences, and
geographic distance poses communication problems, although e-mail, instant messaging
and HR information systems have helped close the gap. Local managers are likely to be
in the best position to observe performance. However, cultural biases may affect their
performance evaluations, and they may not have a broad perspective of how the
individual is contributing to the organization as a whole.
C. Performance Criteria
Because expatriate assignments are extremely costly, many HR managers are increasingly
under pressure to calculate the return-on-investment of these assignments. What did the
firm get for the millions of dollars it spent to send an expatriate abroad? Calculating the
ROI can involve complex cost accounting or simple calculations to see if the expatriate
covered the cost of keeping them on assignment. How well the total cost of the
assignment was managed, taking into account any tax efficiencies, and whether the right
mix of expatriates, third-country nationals, and locals were used to minimize the
assignment’s costs can also to be taken into account..
• The danger with ROI calculations is that there is a temptation to resort to
using “easy” criteria such as productivity, profits, and market share, which
might not capture the full range of an expatriate’s responsibilities. More
subtle factors should be included, such as how well she or he has assumed the
implicit role of ambassador for the organization. In addition, some criteria are
hard to measure over short-term assignments. Improving one’s leadership
skills, for example, is a longer-term proposition that can’t be quickly
measured.
• Other performance factors are less under an expatriate’s control. For example,
It is typically easier to adjust to a culture similar to your own than to one that
is very different. In addition, the adjustment process and expatriate’s
performance can be hampered if the organization has not yet established a
good base of operations in the region.
• The U.S. State Department and defense forces have developed rating systems
to distinguish whether regional assignments are (1) somewhat more difficult
than the United States, (2) more difficult than the United States, or (3) much

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Chapter 15: International Human Resources Management 225
more difficult than the United States. These difficulty factors can be built into
the appraisal system.
• Bottom-line measures of success may not capture the level of learning gained
from a foreign assignment, yet learning may be the most important reason for
sending someone abroad. Knowledge gained—if shared—can help other
expatriates adjust and home-country employees adapt to changing global
competition.
D. Providing Feedback
• In addition to receiving feedback from home-country and host-country managers, the
expatriate should also provide feedback about the support she or he is receiving.
• The expatriate should receive immediate debriefing upon her or his return home.

V. THE LABOR ENVIRONMENT WORLDWIDE

Labor relations and the labor environment abroad differ significantly from that in the in the
United States. The role of unions, for example, varies from country to country and depends on
many factors, such as level of per capita income, mobility between management and labor,
homogeneity of labor, and level of employment. Labor unions in Europe have traditionally
wielded a great deal of power and are often allied with political parties. However, some of
the power of these unions has waned in recent years due to outsourcing and globalization. By
contrast, in other countries, including many in Central America and Asia, labor unions not
only lack power but are illegal.
A. Collective Bargaining in Other Countries
In some countries the government plays a major role in collective bargaining. In
Australia and New Zealand, for example, for most of the twentieth century, labor courts
had the authority to impose wages and other employment conditions on a broad range of
firms. By contrast, in developing countries, labor unions may do little more than attempt
to increase wages, and there is very little government involvement with regard not only
to wages but to working conditions. In the United States, the number of union workers
has risen slightly in the past couple of years. However, the jobs being unionized are
more likely to be lower-wage, service-sector jobs rather than higher-wage
manufacturing jobs.
B. International Labor Organizations
The most active international union has been the International Confederation of Free Trade
Unions, which represents 125 million trade unionists in 145 countries and territories.
The European Trade Union Confederation represents 60 million trade unionists from 36
Western, Central, and Eastern European countries. The International Labor
Organization (of the United Nations) is also active and influential. The ILO involves
both employers, employees, and nation-states in the labor process. In recent years, the
ILO has redefined its mission based on the “Decent Work Agenda”—the notion that all
people, including sole-proprietors such as farmers, deserve decent homes, food,
education, and social programs to protect people when they are elderly, disabled, or
unemployed. A new initiative of the ILO is to support fairness in economies that are
globalizing.

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226 Part 6: Expanding Human Resources Management Horizons
C. Labor Participation in Management
In many European countries provisions for employee representation are established by law.
Employee representation is present in worker councils, safety and hygiene committees,
and boards of directors.

ANSWERS TO END-OF-CHAPTER DISCUSSION QUESTIONS

1. As organizations expand internationally, HR managers have to be aware of the need to bal-
ance global and local concerns. Selection concerns relate to the use of expatriates versus local
managers. Training concerns range from language training to cultural awareness and skill
building. A performance appraisal has to balance local managers’ observations and opinions
with the views from the corporate offices. Reward systems have to balance lifestyle and
cost-of-living concerns as well as provide incentives for global moves and foster notions of
fairness among foreign staff. These same issues need to be taken into account in designing
career systems. Labor relations and the labor environment also vary from country to
country, so it is impossible to expect one contract to apply across a global workforce. Other
specific but no less important concerns arise from the business and cultural challenges of global
business.
2. Joint ventures are likely to affect HRM in the following ways:
• Expatriate employees will be required to adjust to attitudes and behaviors of foreign man-
agers and their style of managing.
• Because of the joint arrangement, there may not be a single adherence to policies, thus cre-
ating some confusion among the subordinates who must administer the policies.
3. One could prepare for a career in international HRM by taking coursework and getting any pos-
sible experience in the topics shown in summarized in Highlights in HRM 3 and Figure 15.8
in the textbook, with emphasis on learning one or more languages as thoroughly as possible.
4. Some of the ways that different components of the cultural environment can affect HRM in an
international organization are:
• Language: The number of languages spoken in a given organization increases the com-
plexity of communication with and between employees. The degree of language skills of
managerial personnel affects the ease of communication and understanding within the
organization.
• Religion: Religion affects the values, attitudes, and motivation of members of a culture. It
can affect the way people relate to one another, for example, if there is a social class or
caste system. Religion determines holidays and celebrations.
• Values and attitudes: Some cultures have values that are favorable to economic growth and
MNC activities, whereas others have values that are unfavorable. Attitudes toward time, work
and achievement, change, science, and so on, can affect HRM.
• Education: It affects the quality of people available for employment, how they are
recruited, and determines an operation’s efficiency and productivity. It also affects the type
of training that can be used effectively.
• Social organization: The use of power, economic rewards, and social pressure within a cul-
ture affects employment situations. Kinship and family relationships may make it easier or

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Chapter 15: International Human Resources Management 227
harder for individuals to relate to one another in work organizations. The desire to have or
not have social interaction will affect the way in which employees relate to each other and
cooperate on the job.
• Technology: How people view technology will influence their job motivation, attitudes
toward an MNC, and so on. An MNC whose success is based on technology may be viewed
as either harmful to the society or a savior, thus affecting the motivation of employees and
their attitudes toward the MNC. The effect that technological change has on job skills
and habits may create problems.
• Politics and law: How an MNC is viewed in terms of the national interests and goals of the
host country affects the way employees react to all aspects of their jobs and their
companies. The relationship between the MNC’s home country and the host country affect
all operations.
5. Expatriates have the advantage of knowing the products, technical systems, organizational
policies, company culture, and the likes of Starbucks. Host-country nationals, on the other
hand, are more likely to understand their customers’ specific needs and wants. They may also
be more familiar with legal issues in their country, but they certainly have a better
understanding of the national culture and norms. For these reasons, they may be in a good
position to customize Starbucks’ products and processes for their local markets. In all
likelihood, companies such as Starbucks would want to blend a team of locals and expatriates
to get the franchise going, but would eventually turn things over to the host-country
managers after they have gotten the technical training and experience they need.
6. American managers can experience difficulties in their relationships with employees in foreign
operations including:
• The failure to recognize and accommodate taboos, rituals, attitudes toward time, social
stratification, or kinship.
• The failure to recognize that changes cannot be made abruptly.

• The failure to recognize the degree of subordinate participation desired.

• The failure to understand differences in cultural attitudes and values.

• Not speaking the language.

Problems can be avoided or their severity reduced through an attitude of understanding, accep-
tance, and freedom from bias and prejudice.
7. The following are steps companies can take to increase the likelihood that the assignments
are successful experiences for spouses and families:
• Include the spouse in planning, whenever possible.

• Provide a thorough orientation for the spouse and the family.

• Let the spouse know that his or her interests and welfare are important to the organization.

• Use MNC personnel and outside personnel to help meet the needs of the spouse and family.

8. Information obtained from student interviews with foreign students or foreign-born coworkers
would make an interesting class discussion.
9. If the cost of living is lower in the foreign country, organizations must make accommoda-
tions for these differences. It could potentially be damaging if expatriates went on an interna-
tional assignment and “lived like kings.” In many cases, organizations equalize an expatriate’s
pay to make the purchasing power roughly equal to local managers of the same standing. The

© 2010 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the
U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
228 Part 6: Expanding Human Resources Management Horizons
surplus amounts of pay (as well as contributions to pensions, and so on) are often put in an
account until the expatriate returns home. Sometimes split pay systems are used. HRM
managers are responsible for making these decisions along with top managers and ensuring
they are implemented fairly across all expatriates.
10. Grooming managers for leadership might include setting specific developmental goals for
expatriate, host-country, and third-country managers (e.g., accomplishing training
programs, meeting new people, and so on) that employees can be evaluated on. For example,
regardless of profits, sales, and the like, employees can be evaluated on the degree to which
they have come up with new ideas (e.g., new markets, products, and so on), tried those ideas
(overcome obstacles to implementing the ideas), and documented what was learned (e.g.,
understanding of the cultures, markets, laws, and so on of the country to which they are
assigned).
11. The major differences between labor-management relations in Europe and those in the United
States are as follows:
• In Europe, companies typically negotiate with the union at the national level through an
employer association.
• European unions have more political power than those in the United States.

• There is a greater tendency for managerial personnel to be unionized in Europe.

• Unions occupy a more accepted place in Europe.

• Government plays a bigger role in collective bargaining in many European countries.

12. Codetermination involves having representatives of labor on the board of directors as required
by law. Students will have different opinions on whether codetermination will become popu-
lar in the United States.

NOTES FOR END-OF-CHAPTER CASE STUDIES

Case Study 1: International HRM at Molex, Inc.
1. One of the major challenges Molex faces with regard to HR is establishing a consistent set of
policies around the globe while still providing local units enough flexibility to customize their
practices to their particular conditions, cultures, and the like.
2. The standardized procedures add consistency and more efficient operations as well as a degree
of professionalism that might not be present otherwise. In many of the countries where Molex
operates, there tend not to be formalized HR systems in place (such as employee handbooks).
There are advantages to having a consistent set of policies that can be shared around the world.
3. The option of local customization avoids the tendency to assume that “one size fits all” in every
location.
4. With such a broad-reaching organization, culture tends to be a very strong integrating force that
pulls the organization together when other forces might be pulling it apart. With different cul-
tures, in different countries, with different laws and practices, Molex has found that culture is a
type of “glue” that keeps the organization acting more as a unified whole. Communications, in
turn, is a chief mechanism for sharing information, best practice, and building the culture.

© 2010 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the
U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 15: International Human Resources Management 229
Case Study 2: How Deloitte Builds Global Expertise
5B

1. Some of the goals of this program are to help people understand the culture and values of other
people with whom they will be working, to enable employees to understand the practices and
business standards of their clients in different parts of the world, and to build an knowledge-base
of cultural awareness within the organization.
2. A noteworthy feature is that employees were able to learn how their clients operated in their head-
quarter countries as well as other parts of the world. Another feature is that the program matches
employees’ skills to a region in which they might benefit the company most. Another feature is
that the program allowed for flexibility in duration and place of global assignment.
3. One particular concern would be how companies maintain the talent they develop within their
organization. Another concern may be that as the program grows, how will they monitor the
value added from the program.

© 2010 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with content that may be different from the
U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.