CHAPTER#05 degree of regional autonomy in Determinants of staffing choices:

APPROACHES TO STAFFING: decision making. The external and internal

There are staffing issues that The advantages and contingencies facing an
internationalizing firms confront disadvantages of using PCNs, internationalizing firm influence its
that are either not present in a TCNs and HCNs staffing choices. These include the
domestic environment, or are Parent country nationals: following:
complicated by the international Advantages: Organizational control Context specificities: the local
context in which these activities and coordination is maintained and context of the headquarters as well
take place. The IHRM literature facilitated. Promising managers are as of the subsidiary can be described
uses four terms to describe MNE given international experience. by cultural and institutional
approaches to managing and PCNs may be the best people for the variables. Cultural values may differ
staffing their subsidiaries. These job because of special skills and considerably between the
terms are taken from the seminal experiences. There is assurance that headquarters and the host country
work of Perlmutter, who claimed the subsidiary will comply with context. MNEs tend to staff cultural
that it was possible to identify MNE objectives, policies, etc. distant subsidiaries with PCNs
among international executives Disadvantages: The promotional which had a positive effect on labor
three primary attitudes: opportunities of HCNs are limited. productivity.
Ethnocentric: In ethnocentric Adaptation to host-country may take Firm specific variables: these are
firms, few foreign subsidiaries have a long time. PCNs may impose an mainly depicted from the
any autonomy and strategic inappropriate HQ style. framework on strategic HRM in
decisions are made at headquarters. Compensation for PCNs and HCNs multinational enterprises. The most
Key positions in domestic and may differ. relevant variables are MNE
foreign operations are held by Third-country nationals: structure and strategy, international
managers from headquarters. Advantages: Salary and benefit experience, corporate governance
Subsidiaries are managed by staff requirements may be lower than for and organizational culture which
from the home country (PCNs). PCNs. TCNs may be better describe the MNE as a whole.
PCNs are favored. informed than PCNs about the host- Local unit specificities: as the
Polycentric: Using a polycentric country environment. staffing approach may vary with the
approach involves the MNE treating Disadvantages: Transfers must cultural and institutional
each subsidiary as a distinct national consider possible national environment it may also be
entity with some decision-making animosities (e.g. India and dependent on the specificities of the
autonomy. Subsidiaries are usually Pakistan). The host government may local unit. An important factor here
managed by local nationals (HCNs), resent hiring of TCNs. TCNs may is the establishment method of the
who are seldom promoted to not want to return to their home subsidiary, whether it is a greenfield
positions at headquarters, and PCNs country after the assignment. investment, a merger, an acquisition
are rarely transferred to foreign Host-country nationals: or a shared partnership.
subsidiary operations. Advantages: Language and other Furthermore, the strategic role of a
Geocentric: With a geocentric barriers are eliminated. Hiring costs subsidiary, its strategic importance
approach, the MNE is taking a are reduced and no work permit is for the MNE as a whole and the
global approach to its operations, required. Continuity of management related questions of the need for
recognizing that each part improves, since HCNs stay longer control and the locus of decision-
(subsidiaries and headquarters) in their positions. Government making can influence staffing
makes a unique contribution with its policy may dictate hiring of HCNs. decisions.
unique competence. It is Morale among HCNs may improve IHRM practices: selection, training
accompanied by a worldwide as they see future career potential. and development, compensation,
integrated business, and nationality Disadvantages: Control and and career management (including
is less important than ability. coordination of HQ may be expatriation and repatriation) play
Regiocentric: This approach impeded. HCNs have limited career an important role in the
reflects the geographic strategy and opportunity outside the subsidiary. development of effective policies
structure of the MNE. Like the Hiring HCNs limits opportunities required to sustain a preferred
geocentric approach, it utilizes a for PCNs to gain foreign staffing approach.
wider pool of managers but in a experience. Hiring HCNs could
limited way. Staff may move encourage a federation of national
outside their home countries but rather than global units.
only within the particular
geographic region. Regional
managers may not be promoted to
headquarters positions but enjoy a
Reasons for international Rotational assignments: 2--The need for knowledge and
assignments: The international employees commute from the home information to travel dyadically, that
management and IHRM literature country to a place of work in is, between the expatriate and the
has consistently identified three key another country for a short, set host location, and back to the
organizational reasons for the use of period followed by a break in the expatriate’s home location, if the
various forms of international home country. multinational is to benefit from
assignments: Contractual assignments: used in international assignments as a
Position filling: The organization situations where employees with mechanism for knowledge transfer.
has a need and depending on the specific skills vital to an 3--Despite the recognition of the
type of position and the level international project are assigned for importance of personal networks in
involved will either employ a limited duration of 6 to 12 months. knowledge and information transfer,
someone locally or transfer a Virtual assignments: where the staffing decisions are often made
suitable candidate. PCN works employee does not relocate to a host without regard to their effect on
abroad. location but manages, from home- network relationships.
Management development: Staff base, various international 4--There is a link between the
are often moved into other parts of responsibilities for a part of the duration of the assignment and the
the organization for training and organization in another country. effective transfer of knowledge.
development purposes and to assist Self-initiated assignments: While Some knowledge may be transferred
in the development of common standard expatriations are usually quickly while other skills and
corporate values. Headquarters staff initiated by the organization, self- knowledge may take longer.
may be transferred to subsidiary initiated assignments are initiated by 5--Much of what is transferred
operations, or subsidiary staff the individual. Many organizations depends on the expatriate concerned
transferring into the parent do not systematically track and in terms of ability to teach others
operations, or to other subsidiary manage these kinds of assignments. and motivation to act as an agent of
operations. Differences between traditional knowledge transfer.
Organization development: Here and short-term assignments 6--The success of the knowledge
the more strategic objectives of the Traditional assignments: transfer process depends not only on
operation come into play: the need Purpose-Filling positions or skills the motivation and abilities of the
for control; the transfer of gaps • Management development • assignee but also on the local
knowledge, competence, procedures Organizational development. employees and their relationships.
and practices into various locations; Duration-Typically 12–36 months. THE ROLE OF NON-
and to exploit global market Family’s Position-Family joins the EXPATRIATES
opportunities. assignee abroad. Selection- Formal Home and family issues – such as
procedures. Advantages-• Good missing important anniversaries and
Types of international relationships with colleagues • school events. The more frequent
assignments Constant monitoring. the travel, the greater the potential
Short-term: up to three months. Disadvantages- Dual-career for family and marital relationships
These are usually for considerations • Expensive • Less to be strained.
troubleshooting, project supervision, flexibility. Work arrangements – the
or a stopgap measure until a more Short-term assignments: • Skills ‘domestic’ side of the job still has to
permanent arrangement can be transfer/problem solving • be attended to even though the
found. Management development • person is traveling internationally.
Extended: up to one year. These Managerial control. Typically, up to Modern communications allow
may involve similar activities as that 6 or 12 months. Assignee is work to accompany the business
for short-term assignments. unaccompanied by the family. traveler who is often expected to
Long-term: varies from one to five Mostly informal, little bureaucracy. remain up to date with home-office
years, involving a clearly defined Flexibility • Simplicity • Cost- issues while away from the office.
role in the receiving operation. The effectiveness. Taxation • Side- Travel logistics – airline
long-term assignment has also been effects (alcoholism, high divorce connections, hotel accommodation,
referred to as a traditional expatriate rate) • Poor relationships with local and meeting schedules.
assignment. colleagues • Work permit issues. Health concerns – poor diet, lack
Commuter assignments: special Factors influence effectiveness of of physical exercise, lack of sleep,
arrangements where the employee international assignments: coping with jetlag, and exposure to
commutes from the home country 1--The creation of an environment viruses and other health problems.
on a weekly or bi-weekly basis to of openness and support for cross- Host culture issues – as
the place of work in another fertilization of ideas and international business is conducted
country. Cross-border workers or implementation of ‘best practice’. in other cultural settings, the person
daily commuters are not included. is still expected to be able to operate
Drivers for recruiting and career • Development of the
transferring inpatriate managers relationships and social networks •
Desire to create a global core Finding and using mentors as well
competency and a cultural diversity as corresponding with female
of strategic perspectives in the top expatriates for advice and guidance.
management team, thus, increasing On-assignment strategies: •
the capability of organizations to Finding and using mentors as a key
‘think global and act local’. to success • Develop the willingness
Desire to provide career and skill to absorb knowledge from
opportunities for high potential the local settings.
employees in host countries, i.e., Post-assignment strategies: •
HCNs and TCNs. Simply acknowledging that the
The emergence of developing likelihood of extensive use of
markets which often represent knowledge is unlikely • Female
difficult locations for expatriates in expatriates may think and act more
terms of quality of life and cultural entrepreneurially, taking even
adjustment. greater responsibility for managing
DUAL CAREER COUPLES their careers.
Inter-firm networking – Here the For MNEs:
multinational attempts to place the Pre-assignment strategies: • Begin
accompanying spouse or partner in a with a thorough review of their
suitable job with another selection criteria for overseas
multinational – sometimes in a assignments • Eliminate, through
reciprocal arrangement. policy and training, any overt or
Job-hunting assistance – Here the subtle gender biases in the selection
MNE provides spouse/partner process • Train selection decision-
assistance with the employment makers to avoid the subtle gender
search in the host country. This may biases in the selection process •
be done through employment Trailing spouse and ‘dual-career’
agency fees, career counseling, or issues should be discussed and
simply work permit assistance. provided for regardless of the
Some may provide a fact-finding manager’s gender • Make a more
trip to the host location before the concerted effort to insert women
actual assignment into the relevant informal and
Intra-firm employment – This is formal organizational networks.
perhaps a logical but often a On-assignment strategies: •
somewhat difficult solution. It Consider assigning female
means sending the couple to the expatriates to countries where they
same foreign facility, perhaps the are likely to have a greater
same department. Not all opportunity to adjust quickly,
multinationals (nor all couples) are develop, and grow, particularly
comfortable with the idea of having earlier in their careers • Consider
a husband and wife team in the and develop possibilities for short-
same work location and there can term assignments • Continued
often be significant difficulties training and mentoring.
obtaining work visas for such Post-assignment strategies: •
arrangements. Psychological contract must be
Strategies for breaking the fulfilled when an expatriate return
expatriate glass ceiling e.g. pay particularly attention to the
Females expatriates: continued mentoring and training,
Pre-assignment strategies: • Self- opportunities for the expatriates to
awareness • Understanding their use their new expertise.
own strengths, and recognize the
values and emotions that one
identifies with based on upbringing
and culture • Using those strengths
and skills to the fullest advantage •
Planning one’s life as well as one’s