MC

HR ACTIVITIES

Utilize
Other
Allocate
Procure

Host
PCNs

CO

HCNs

UN
TR
IE
S

Home

TCNs
TYPE OF EMPLOYEES
2

 Additional HR activities:
International taxation, international relocation and orientation, administrative
services for expats, host government relations, language translation
services

Need for broader perspective

Non-uniform env for employee nationality, social culture, statutory req. etc.

Changing emphasis with variation in staff mix

As ops progress, proportion of PCN/TCN/HCNs vary, HR activity shifts.
e.g. emphasis may shift from cultural trg of PCN to tech trg of HCN

Need to cover higher risk exposure

Expatriate failure, underperformance, terrorism risk, etc

Broader external influences

Global Product
Structure

Transnational
Network

Global Matrix
Structure

Export Dep /
International Div

Global Geo
Structure

 Ethnocentric
Polycentric
Geocentric
Regoecentric

- H.V. Perlmutter, The Tortous Evolution of the

Multinational Corporation, Columbia Journal of
World Business, Vol.4, No.1 (1969)
- D.A.Heenan & H.V. Perlmutter, Multinational
Organization Development (1979)

Response to staffing issues determined by

Primary attitudes
Constraints by host country governments
Availability of staff

Lack of autonomy for foreign subsidiaries

Strategic decisions made at headquarters
Key positions held by headquarters personnel
Subsidiaries managed by PCN
Justification:
Perceived lack of qualified HCNs
Good communication, coordination and control
particularly at early stages of internationalization / acquisition;
ensures competence and compliance; assignment as control
Disadvantages:
Limits advancement of HCN; reduced productivity, increased turnover
Expat adaptation takes long; during that mistakes and poor decisions
PCN comp package viewed by HCN as unjustified
Status and lifestyle as expat may make PCN insensitive to HCN needs
High cost of maintaining PCN as expatriates
6

Each subsidiary treated as distinct national entity

Subsidiary usually managed by HCN
PCN rarely sent to subsidiary
HCN at subsidiary seldom elevated to headquarters
Justification:
Employing HCN eliminates language barriers, expat adjustment
Allows MNC to lie low if political situation is sensitive
Employing HCN less expensive
Enables continuity by avoiding turnover due to repatriation
Easy to comply with host govt. dictates on appointments if any
Compatible with business strategy of being perceives as local company
Disadvantages:
Gaps between HQ PCN and subsidiary HCN managers:
language, national loyalty, cultural diff (values, business attitude, etc)
Career implications of limited exposure (both PCN n HCN) managers
MNC may become a federation of independent national units

Global approach to operations taken.

Recognized that each part makes unique contribution
Worldwide integrated business; ability not nationality
PCN, HCN, TCN in key positions including board

Justification:
Enables developing international executive team which assists developing
global perspective and talent pool for deployment across global organization
Overcomes federation drawback of polycentric approach
Supports cooperation and resource sharing across units
Disadvantages:
Host governments want more HCN; may use visa/immigration controls
Expensive due to high training and relocation costs
Needs comp structure with standardized international base pay
Requires longer lead time for staffing as large numbers have to go abroad
Requires more centralized control, reducing independence of subsidiaries
8

 Similar to geocentric but limited to a region:

e.g. Europe, Americas, Asia-Pacific
Staff move outside the country but within region
Local subsidiaries staffed almost totally by HCN
Justification:
Allows interaction between employees transferred to regional headquarters
from subsidiaries and global headquarters
Higher sensitivity to local conditions
Intermediate stage if moving from ethnocentric or polycentric approach
to geocentric approach
Disadvantages:
May produce federalism even if at the regional level, preventing taking
a true global stance
Restricts career advancement beyond regional level
9

10

MC

11

Ethical Relativist
o No universal rights or wrongs;
depends on particular cultures values and beliefs
o When in Rome, do as Romans
o Appeals to those who fear cultural imperialism

Ethical Absolutist
o Primacy to parent country cultural values
o Even in Rome, do as home
o Confuse respect for local tradition with relativism?

Ethical Universalist
o Fundamental principles of right and wrong transcend cultures
o Distinguish between what is culturally different and morally
wrong

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The Gordian knot of international

business ethics is formed around the
vexing question, how should a
company behave when the standards
followed in the host country are
lower than those followed in the
home country.
- Thomas Donaldson and Thomas W. Dunfee,
When Ethics Travel The Promise and Peril of
Global Business Ethics, California Management
Review, Volume 41, Number 4, Summer 1991.

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