Chapter 3Chapter ObjectivesChapter Objectives (cont.)Approaches to StaffingEthnocentricPolycentricGeocentricSlide 8RegiocentricEthnocentric ApproachPolycentric ApproachSlide 12Geocentric ApproachRegiocentric ApproachParent-Country NationalsHost-Country NationalsThird-Country NationalsSlide 18Reasons for International AssignmentsTypes of International AssignmentsNon-standard AssignmentsSlide 22Roles of an ExpatriateThe Role of Non-expatriatesA Glamorous LifeBut a High Level of Stress!Various Roles of Corporate HRThe Role of the Corporate HR FunctionChapter SummaryChapter Summary (cont.)Slide 31IBUS 618 Dr. Yang 1Chapter 3IHRM: Sustaining International Business OperationsIBUS 618 Dr. Yang 2Chapter ObjectivesIssues related to various approaches to staffing foreign operations;Reasons for using international assignments: position filling, management development and organizational development;(cont.)Issues related to various approaches to staffing foreign operations;Reasons for using international assignments: position filling, management development and organizational development;(cont.)The previous two chapters have concentrated on the global environment and organizational contexts. We now focus on the ‘managing people’ aspect. The aim is to establish the role of HRM in sustaining international business operations and growth. We will cover the following:IBUS 618 Dr. Yang 3Chapter Objectives (cont.)Various types of international assignments: Standard assignments: Short-term, extended, and longer-term; Non-standard arrangements: Commuter, rotator, contractual, and virtual.The role of expatriates and non-expatriates (international business travellers) in supporting international business activitiesThe role of the corporate HR functionsVarious types of international assignments: Standard assignments: Short-term, extended, and longer-term; Non-standard arrangements: Commuter, rotator, contractual, and virtual.The role of expatriates and non-expatriates (international business travellers) in supporting international business activitiesThe role of the corporate HR functionsIBUS 618 Dr. Yang 4Approaches to StaffingFactors affecting approaches to staffingGeneral staffing policy on key positions at headquarters and subsidiariesConstraints placed by host governmentStaff availabilityEthnocentricPolycentricGeocentricRegiocentricIBUS 618 Dr. Yang 5Ethnocentric Strategic decisions are made at headquarters;Limited subsidiary autonomy;Key positions in domestic and foreign operations are held by headquarters’ personnel; PCNs manage subsidiaries.IBUS 618 Dr. Yang 6PolycentricEach subsidiary is a distinct national entity with some decision-making autonomy;HCNs manage subsidiaries who are seldom promoted to HQ positions;PCNs rarely transferred to subsidiary positions.IBUS 618 Dr. Yang 7GeocentricA global approach - worldwide integration;View that each part of the organization makes a unique contribution;Nationality is ignored in favor of ability:Best person for the job;Color of passport does not matter when it comes to rewards, promotion and development.IBUS 618 Dr. Yang 8Geocentric Staffing RequirementsIBUS 618 Dr. Yang 9RegiocentricReflects a regional strategy and structure; Regional autonomy in decision making; Staff move within the designated region, rather than globally;Staff transfers between regions are rare.IBUS 618 Dr. Yang 10Ethnocentric ApproachAdvantages:To ensure new subsidiary complies with overall corporate objectives and policiesHas the required level of competenceAssignments as controlDisadvantages:Limits the promotion opportunities of HCNs, leading to reduced productivity and increased turnover among the HCNsLonger time for PCNs to adapt to host countries, leading to errors and poor decisions being madeHigh costConsiderable income gap, high authority, and increased standard of living may relate to lack of sensitivityIBUS 618 Dr. Yang 11Polycentric ApproachAdvantages:Employment of HCNs eliminates language barriers, avoids adaptation of PCNs, reduces the need for cultural awareness training programsEmployment of HCNs allows a multinational company to take a lower profile in sensitive political situationsEmployment of HCNs is less expensiveEmployment of HCNs gives continuity to the management of foreign subsidiaries (lower turnover of key managers)IBUS 618 Dr. Yang 12Polycentric ApproachDisadvantages:Difficult to bridge the gap between HCN subsidiary managers and PCN managers at headquarters ( language barriers, conflicting national loyalties, cultural differences)HCN managers have limited opportunities to gain experience outside their own countryPCN managers have limited opportunities to gain international experienceResource allocation and strategic decision making will be constrained when headquarter is filled only by PCNs who have limited exposure to international assignmentIBUS 618 Dr. Yang 13Geocentric ApproachAdvantages:Ability of the firm to develop an international executive teamOvercomes the federation drawback of the polycentric approachSupport cooperation and resource sharing across unitsDisadvantage:Host government may use immigration controls in order to increase HCNs employmentExpensive to implement due to increased training and relocation costsLarge numbers of PCNs, HCNs, and TCNs need to be sent across bordersReduced independence of subsidiary managementIBUS 618 Dr. Yang 14Regiocentric ApproachAdvantages:Allow interaction between executives transferred to regional headquarters from subsidiaries in the region and PCNs posted to the regional headquartersProvide some sensitivity to local conditionsHelp the firm to move from a purely ethnocentric or polycentric approach to a geocentric approachDisadvantages:Produce federalism at a regional rather than a country basis and constrain the firm from taking a global stanceStaff’s career advancement still limited to regional headquarters, not the parent country headquartersIBUS 618 Dr. Yang 15Parent-Country NationalsAdvantagesOrganizational control and coordination is maintained.Rising stars are given international experience.PCNs may be the best people for the specific job due to special skills and experience.An assurance that the subsidiary will comply with company objectives & policies.AdvantagesOrganizational control and coordination is maintained.Rising stars are given