San Francisco State University

IBUS 330

International Business

Chapter 20 International Human Resources

1. Why is management of international human resources more difficult than directing human resources at the domestic level?
   1. the complications that arise from political, cultural, legal, and economic differences between countries

1. 2. the challenge posed by managers in other countries that aim to achieve global objectives for the company no matter the costs imposed on national objectives
   3. the greater similarity among foreign subsidiaries than among domestic subsidiaries in terms of dependence on headquarters for resources
   4. the complications posed by dealing with competing agendas from different labor unions in different countries

2. HRM refers to the range of activities that a company, whether solely domestic or thoroughly global, undertakes to                                                                    .
   1. direct its strategy
   2. staff its operations
   3. improve its responsiveness
   4. integrate business functions

3.                        refers to the activities that an organization carries out to put the right person into the right job in the right place at the right time for the right salary.
   1. Work force analysis
   2. Staff development
   3. Human resource management
   4. Leadership planning

4. Generally, HRM is more difficult for international companies for all of the following reasons EXCEPT which one?
   1. Dual career and family obligations make it tough to convince executives to leave the home office to join a foreign subsidiary.
   2. Leadership styles and management practices are so similar from country to country that it is difficult to create a culture of innovation.
   3. Complications arise due to enduring political, cultural, legal, and economic differences between countries.
   4. Labor markets are dramatically different in the mix of workers, costs, and productivity.

5. The Human Capital Index, based on a comprehensive global study of more than 2,000 companies, found that superior human capital practices were                                                correlated with a firm's financial returns and were a(n)                                                                                                                    indicator of increased shareholder value.
   1. negatively; lagging
   2. positively; leading
   3. insignificantly; timely
   4. weakly; accurate

6. There is growing consensus that human resource managers must hire, develop, reward, and retain people whose performance explicitly improves the                                                                             .
   1. productivity of the firm's core competencies
   2. fit between the firm's practices and industry standards
   3. firm's engagement of political authorities
   4. firm's responsiveness to customer complaints

7. Which of the following is LEAST connected to superior HR management at an MNE?
   1. increased productivity
   2. competitive advantage
   3. foreign regulations
   4. value creation

8. Mona, a native of India, is employed by IBM in the firm's facility in New Delhi. Mona is best described as a(n)      .
   1. expatriate
   2. local
   3. third-country national
   4. home-country national

9. Home-country nationals are                              .
   1. used a great deal abroad by polycentric companies
   2. citizens of the countries in which they are working
   3. citizens of the country where the company is headquartered
   4. noncitizens of the countries in which they are working

10. An example of a third-country national is a                                   .
    1. dual citizen (Canadian and U.S. citizenship) working for a Mexican company in Mexico

1. 2. Canadian citizen working for a U.S. company in Canada
   3. U.S. citizen working for a U.S. company in Canada
   4. Canadian citizen working for a U.S. company in Mexico

11. Jeanette Thompson, a native Texan, is being sent by her company, Samsung of South Korea, to head up a new facility in Hong Kong. Jeanette would be considered a(n)

                     .

1. 1. inpatriate
   2. host-country citizen
   3. third-country national
   4. local executive

12. Growing demand for expatriates stems from which of the following trends?
    1. the emergence of developing countries as high-growth markets
    2. the resurgence of developed countries as high-growth markets
    3. the reduced need for localized expatriate assignments
    4. the longer-term assignments created in response to the global credit crisis

13. Today, most expatriate assignments are for                                .
    1. less than one year
    2. one to three years
    3. three to five years
    4. five to ten years

14. Traditionally, expatriates were                               ; today, HRM increasingly considers

                     .

1. 1. men; women
   2. women; men
   3. midlevel and midcareer executives; older employees and younger employees
   4. older employees and younger employees; midlevel and midcareer executives

15. A company that decides to "localize" expatriate assignments will offer an expatriate the option of .
    1. serving a shorter assignment in the host country
    2. becoming a naturalized citizen of the host country
    3. moving to an emerging market closer to the home country

1. 4. retaining a foreign assignment provided he or she accepts the status of a local hire

16. Monica, a Brazilian citizen, earned an MBA from Stanford University and has been working at the New York branch of Goldman Sachs for one year. Monica is being transferred to Goldman Sachs' office in Brazil where she will best be characterized as a(n)          .
    1. local
    2. expatriate
    3. reverse expatriate
    4. third-country national

17. Apex Enterprises, an MNE based in the U.S., is spending too much money on expatriate assignments. Which of the following methods would LEAST likely help Apex reduce expatriate costs?
    1. offering cross-border commuter assignments
    2. designing more short-term projects
    3. establishing a localization policy
    4. expanding core competencies

18. Which of the following most accurately describes the current state of HRM efforts to staff international operations?
    1. Fewer women are accepting international assignments.
    2. The length of permanent assignments is rising among middle-managers.
    3. There are historic shortages of executive talent for international assignments.
    4. Third-country nationals are quickly being replaced by localized expatriates.

19. The three types of interpretative frameworks in international businesses are

                     .

1. 1. ethnocentric, polycentric, and geocentric
   2. ethnocentric, intercentric, and monocentric
   3. monocentric, neocentric, and polycentric
   4. intracentric, geocentric, and neocentric

20. Dixon Manufacturing, a British MNE, believes that its business practices are superior, so it does not make any policy changes in foreign markets. Dixon Manufacturing most likely takes a(n)           approach to staffing.

1. 1. ethnocentric
   2. polycentric
   3. geocentric
   4. monocentric

21. A(n)                         staffing policy framework assumes that the practices and procedures that work at headquarters will work in foreign operations; as such, executive slots are filled by home country nationals.
    1. polycentric
    2. intercentric
    3. ethnocentric
    4. geocentric

22. Watson Electronics, an MNE based in Canada, tends to follow an ethnocentric staffing model. From which group will it most likely hire for upper-level management positions in its new facility in Germany?
    1. home country nationals
    2. third country nationals
    3. host country nationals
    4. local citizens

23. What is the primary advantage of an MNE using an ethnocentric framework?
    1. minimizing relocation costs
    2. developing community support
    3. transferring core competencies abroad
    4. encouraging innovative business practices

24. A(n)                         manager champions the ways of foreign markets as comparable, if not more enlightened, than the practices of his or her parent company and home nation.
    1. ethnocentric
    2. geocentric

1. 3. monocentric
   4. polycentric

25. Ferguson Manufacturing, an American MNE, has facilities in India and Mexico. Ferguson fills management positions at the facility in India with Indians and management positions in Mexico with Mexicans. Ferguson most likely follows a(n)

                      approach to staffing.

1. 1. ethnocentric
   2. geocentric
   3. polycentric
   4. intercentric

26. Which of the following is a drawback of the polycentric approach?
    1. Host-country nationals become more committed to company headquarters than to their local colleagues.
    2. Successful local units may increasingly function independently and pay less attention to headquarters.
    3. Local units depend too much on headquarters for resources and innovations, with little incentive to develop their own.
    4. Local managers study international business and cultural practices in other markets in preparation for international assignments at the expense of not fully investing in understanding the host country.

27. Advantages of adopting a polycentric approach include which of the following?
    1. capitalizing on the availability of qualified local managers
    2. helping transfer core competencies from the home nation to local subsidiaries
    3. increasing the international career mobility for local managers
    4. offsetting tendencies for the company to adapt excessively to the local market

28. The staffing policy at Hanover International is to seek the best people for key jobs

throughout the organization, regardless of nationality. Hanover most likely follows a(n)

                      staffing approach.

1. geocentric
2. intercentric
3. polycentric
4. ethnocentric

29. Which of the following interpretative frameworks does NOT automatically presume that a particular nation provides a solution to every problem or an explanation for every action?
    1. ethnocentric
    2. geocentric
    3. polycentric
    4. intercentric

30. An advantage of the geocentric outlook to staffing is                                   .
    1. encouraging workers to appreciate the unique virtues of a particular country
    2. giving people a flexible perspective for fitting operations to different countries
    3. removing most behavioral barriers to fully adapting to the chosen local market
    4. tapping learning opportunities around the world to generate ideas that enhance core competencies

31. Microsoft has a tendency to hire home country nationals for jobs outside the United States. Microsoft's leadership supports a(n)                                                                         approach to staffing.
    1. geocentric
    2. ethnocentric
    3. adaptive
    4. polycentric

32. The HRM requirements of a(n)                                 strategy is well matched with an ethnocentric staffing policy.
    1. multidomestic
    2. transnational
    3. international

1. 4. global

33. The HRM requirements of a(n)                                 strategy is well matched with a polycentric staffing policy.
    1. transnational
    2. international
    3. multidomestic
    4. global

34. The HRM requirements of a(n)                                 strategy is well matched with a geocentric staffing policy.
    1. multidomestic
    2. transnational
    3. domestic
    4. international

35. Firms with global strategies versus those implementing multidomestic strategies are more likely to use      .
    1. expatriate managers
    2. host country nationals in top management positions abroad
    3. local managers
    4. home country nationals in corporate positions

36. Historically, the most important criterion in selecting individuals for posting to an expatriate slot has been .
    1. foreign language abilities
    2. technical competence
    3. leadership skills
    4. flexibility

37. According to the text which of the following is the most important competency in the expatriate selection process?
    1. flexibility
    2. business acumen
    3. global mindset
    4. geographic knowledge

38. Which of the following accurately describes a difference between jobs in the home office versus those in a foreign subsidiary?
    1. Cultural empathy is essential for employees in the home office, but is not necessary for employees in a foreign subsidiary.
    2. Employees in the home office do not need to be familiar with a second language, but employees in a foreign subsidiary must be proficient in the language of the subsidiary's host country.
    3. Expatriate executives in foreign subsidiaries are less expensive for a company to employ than executives in the home office.
    4. Employees in foreign subsidiaries typically have broader job responsibilities than employees in the home office.

39. Generally, HRM does not emphasize which of the following characteristics when evaluating the adaptiveness of an expatriate candidate?
    1. self maintenance
    2. technology skills
    3. cultural empathy
    4. sensitivity to host environments

40. Expatriate failure, defined in broad terms, refers to the                                    .
    1. manager's premature return home due to poor job performance
    2. manager's miscues, which give competitors a market advantage
    3. unintentional dilution of the company's core competency
    4. poor expatriate selection procedures of the MNE

41. Today, which of the following circumstances is LEAST likely to cause expatriate failure?
    1. inability of the expatriate's family to adjust
    2. resistance from the expatriate's partner
    3. inadequate technical expertise
    4. inability to adjust

42. According to the text, what is the most common concern that expatriates have before they move overseas?
    1. reestablishing a social life
    2. missing friends and family
    3. learning a foreign language
    4. adapting to the culture

43. Shelly, a sales manager at Best Computers, has recently moved from Dallas to Hong Kong for an expatriate assignment. Shelly is feeling disoriented, irritable, and stressed about her new job and living arrangements in Hong Kong, which means that she is most likely experiencing   .
    1. uncertainty dislocation
    2. melancholy
    3. culture shock
    4. cultural transition

44. The most common predeparture training for an expatriate is                                       .
    1. an informational briefing
    2. role playing
    3. in-depth cultural seminars
    4. language training

45. According to research, expatriates posted to                                  encounter the greatest difficulty in finding accommodations, locating health care, and setting up finances.
    1. Australia
    2. Saudi Arabia
    3. Thailand
    4. South Africa

46. The                         approach to expatriate compensation equalizes purchasing power

across countries; this helps employees enjoy the same living standard in their foreign posting that they enjoyed at home.

1. 1. balance sheet
   2. equalization
   3. merit
   4. differential

47. The                         of compensation determines an expatriate's compensation on the prevailing pay scales in the locale of the foreign assignment.
    1. headquarters-based method
    2. home-based method
    3. culturally based method
    4. host-based method

48. The                         sets the expatriate's salary in terms of the salary of a comparable job in the city where the MNE has its headquarters.
    1. host-based method
    2. home-based method
    3. headquarters-based method
    4. culturally based method

49. Cost-of-living allowances given to an expatriate during his or her foreign assignment

                     .

1. 1. usually involve a compensation reduction because of lower costs abroad
   2. are due to the difficulty of duplicating a particular way of living abroad
   3. are usually eliminated over time
   4. increase the longer the individual is overseas

50. Kevin, a marketing executive with Ace Electronics, has relocated to India for an expatriate assignment. Kevin's wife, Julia, and three children have joined him. Ace Electronics provides the family with money intended to help Julia find a job and develop cross-cultural skills. Which of the following is Ace providing the family?
    1. repatriation allowance
    2. hardship allowance
    3. housing allowance
    4. spouse allowance

51. Johnson Construction is an MNE that designs and builds commercial buildings around the world. Johnson has a new contract to construct a building in Pakistan. Tom, a construction manager, will be relocating to Pakistan with his wife, and he will receive additional pay to compensate for the dangerous environment. Which of the following has Johnson Construction most likely offered Tom?
    1. repatriation allowance
    2. hardship allowance
    3. housing allowance
    4. spouse allowance

52. Terrell, a manager with Qualsys Technologies, has been on an expatriate assignment in Russia for the last three years. Terrell's foreign assignment has ended, and he is working with HR to return to the U.S. and begin a new job at the firm's headquarters in Philadelphia. In which activity is Terrell most likely involved?
    1. expatriation
    2. repatriation
    3. demotion
    4. promotion

53. Which of the following is NOT an area in which expatriates experience repatriation frustration?
    1. change in personal finances and compensation

1. 2. readjustment to home country corporate structure
   3. change in technical competence
   4. readjustment to life at home

54. Companies often face problems repatriating executives from foreign assignments to the home nation due to which of the following?
    1. The vacant position cannot be filled overseas.
    2. The firm must increase compensation substantially.
    3. Different departments compete excessively to hire the repatriated manager.
    4. The returning expatriate has less social status and autonomy than when abroad.

55. All of the following would most likely improve the successful repatriation of expatriates EXCEPT     .
    1. encouraging repatriated workers to take sabbaticals upon return
    2. developing mentoring programs to smooth transitions
    3. integrating foreign assignments into career plans
    4. providing repatriated workers with desirable jobs

56. Studies indicate that the main cause of nearly half of failed expatriate assignments is the inability of the expatriate to                                                                    .
    1. meet performance expectations
    2. initiate a fair compensation package
    3. adapt to the host culture
    4. learn the local language

57. Which of the following trends has LEAST likely led to the increased demand for expatriate talent?
    1. market developments
    2. technology changes
    3. globalization
    4. nationalism

58. Which of the following best explains why MNEs often employ more locals than expatriate managers in foreign facilities?
    1. lower compensation expense
    2. better support from unions
    3. improved economies of scale
    4. better grasp of core competencies

59. Which of the following is a characteristic of India that discourages MNE investment?
    1. slow market growth
    2. restrictive labor laws
    3. poor communication infrastructure
    4. government controlled market

60. Fundamentally, the task of HRM is putting the right person into the right job in the right place at the right time for the right salary.

61. The various activities of HRM perform best when managers link them to the strategy of the firm.

62. There is a strong yet inconsistent relationship between the strategic performance of an MNE and the decisions it has made in managing its human resources.

63. Companies have found that superior human resources are instrumental to improving their ability to create and sustain competitive advantage.

64. Expatriates are locals from the country of the foreign subsidiary.

65. An example of an expatriate would be a Canadian manager working for a Canadian firm in China.

66. Executives from the home office typically demand richer compensation packages and impose higher relocation costs than third-country nationals do.

67. The past few years have seen fewer females sent on international assignments.

68. Companies around the world typically find it easy to locate a number of executives able and willing to run foreign operations.

69. The ethnocentric and polycentric staffing policies, unlike the geocentric staffing policy, rely on extensive use of expatriate managers.

70. The MNE that aims to control the transfer of its unique core competencies overseas usually prefers an ethnocentric staffing policy.

71. Unlike the geocentric and polycentric mindsets, the ethnocentric mindset is not tied to a particular home or host nation.

72. An executive with a polycentric staffing policy presumes that successful business practices at home need not change when transferred to foreign markets.

73. A key disadvantage of a polycentric staffing policy is that it limits the career mobility of subsidiary executives.

74. A geocentric staffing policy seeks the best qualified people for key jobs throughout the organization, irrespective of their nationality.

75. A geocentric staffing policy is one in which all key management positions throughout the company's global operations are filled by host-country nationals.

76. An ethnocentric staffing policy is well matched with a multidomestic strategy.

77. A polycentric staffing policy is well matched with a transnational strategy.

78. Historically, companies searching their ranks for potential expatriates looked first for individuals with the necessary language proficiency and then evaluated their technical competence.

79. Companies find it challenging to judge a potential expatriate's adaptability to foreign places, people, and processes.

80. Expatriate failure, broadly defined, indicates there is a breakdown in a company's selection policies to staff its foreign operations.

81. Failure rates for overseas postings fall typically between 30 and 50 percent, and usually reduce performance, sidetrack careers, and corrode morale.

82. Upon selection of an executive for an expatriate posting, the most common predeparture training involves a range of instructive profiles of major aspects of the host country.

83. Practical predeparture training for the expatriate is often geared toward developing his or her sensitivities to overcome culture fright.

84. The headquarters-based compensation method bases the expatriate's compensation on the salary of a comparable job in the city where the MNE has its headquarters.

85. A hardship allowance nullifies the risk that an expatriate will suffer a decline in his or her standard of living due to the exorbitant expense of a particular city.

86. Historically, companies have not been particularly concerned with the challenge of repatriation in managing their international human resources.

87. Studies of repatriated employees regularly report that most knew what their company position would be when they returned home but were uncertain about their likely new workplace practices.

88. A growing number of MNEs are increasing expatriate allowances to entice employees to move overseas.

89. A growing number of MNEs in Asia and Latin America are using performance- based pay to link compensation with business results.

90. What are the differences between ethnocentric, polycentric, and geocentric frameworks?

91. What types of employees are increasingly being chosen for expatriate assignments? What characteristics are firms seeking when selecting expatriates?

92. Why is global HRM more difficult than domestic HRM? How can staffing a foreign facility with locals alleviate some of these HRM

difficulties?

1. For someone to really globalize their career, becoming professionally successful requires

2. The tasks and processes involved in managing human resources are                               for the multinational enterprise than it is for its domestic counterpart.

93. What individual characteristics and qualifications should a company consider when choosing managerial candidates for foreign assignments? Which one do you think is most important? Why?

94. List and compare the three common methods of implementing a balanced compensation plan.

95. List and discuss the main components of an expatriate's compensation package.

96. What problems do managers commonly encounter when repatriated from foreign assignments? How can HRM improve the repatriation process?

97. What are the current trends in expatriate allowances? What are the reasons for these changes?

98. Why are third-country nationals increasingly being used to fill expatriate assignments? How do third-country nationals fit into the concept of geocentrism?

99. How do MNEs benefit from superior international HRM especially when filling expatriate positions? What costs do MNEs face when expatriate assignments are unsuccessful?