Managing HR in International Business

Managing human resources in international business is based on the understanding of the cultural context pertaining to different countries. Hofstede’s model on cultural dimensions across the globe has immense significance in understanding the cultural aspects of various countries.

Hofstede’s cultural dimensions theory: Hofstede’s cultural dimensions theory is a framework for cross-cultural communication, developed by Geert Hofstede. It describes the effects of a society’s culture on the values of its members, and how these values relate to behavior. This model has six major cultural dimensions which are Power distance index (PDI), Individualism (IDV) vs. collectivism, Uncertainty avoidance index (UAI), Masculinity (MAS), vs. femininity, Long-term orientation (LTO), vs. short term orientation and Indulgence versus restraint (IVR). Putting together national scores (from 1 for the lowest to 120 for the highest), Hofstede’s six dimensions model allow international comparison between cultures.

Value Dimension  Value Description  High Score  Low Score
Power Distance Index (PDI)  The degree of equality, or inequality, between people in the country’s society  Indicates that inequalities of power and wealth have been allowed to grow within the society. These societies are more likely to follow a caste system that does not allow significant upward mobility of its citizens.  Indicates the society de-emphasizes the differences between citizen’s power and wealth. In these societies equality and opportunity for everyone is stressed.
Individualism (IDV)  Degree to which a society reinforces individual or collective achievement and interpersonal relationships.  Indicates that individuality and individual rights are paramount within the society. Individuals may tend to form a larger number of looser relationships.  Typifies societies of a more collectivist nature with close ties between individuals. Reinforce extended families and collectives where everyone takes responsibility for fellow members of their group.
Masculinity (MAS)  Degree to which a society reinforces, or does not reinforce, the traditional masculine work role model of male achievement, control, and power  Indicates the country experiences a high degree of gender differentiation. Males dominate a significant portion of the society and power structure, with females being controlled by male domination.  Indicates the country has a low level of differentiation and discrimination between genders. Females are treated equally to males in all aspects of the society.
Uncertainty Avoidance Index (UAI)  Level of tolerance for uncertainty and ambiguity. within the society – i.e. unstructured situations.  Indicates the country has a low tolerance for uncertainty and ambiguity Creates a rule-oriented society that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty.  Indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions. Reflected in a society that is less rule-oriented, more readily accepts change, and takes more and greater
Long-Term Orientation (LTO)  Degree to which a society embraces, or does not embrace, long-term devotion to traditional, forward thinking values.  Indicates the country prescribes to the values of long-term commitments and respect for tradition. This is thought to support a strong work ethic where long-term rewards are expected as a result of today’s hard work. However, business may take longer to develop in this society, particularly for an “outsider”.  Indicates the country does not reinforce the concept of long-term, traditional orientation. In this culture, change can occur more rapidly as long-term traditions and commitments do not become impediments to change.

Differences between cultures on the values dimensions:

Power distance index shows very high scores for Latin and Asian countries, African areas and the Arab world. On the other hand Anglo and Germanic countries have a lower power distance (only 11 for Austria and 18 for Denmark).

Individualism index: Regarding the individualism index there is a clear gap between developed and Western countries on one hand, and less developed and eastern countries on the other. North America and Europe can be considered as individualistic with relatively high scores: for example, 80 for Canada and Hungary. In contrast, Asia, Africa and Latin America have strong collectivistic values: Colombia scores only 13 points on the IDV scale, and Indonesia 14.

Masculinity is extremely low in Nordic countries: Norway scores 8 and Sweden only 5. In contrast, Masculinity is very high in Japan (95), and in European countries like Hungary, Austria and Switzerland influenced by German culture. In the Anglo world, masculinity scores are relatively high with 66 for the United Kingdom for example. Latin countries present contrasting scores: for example Venezuela has a 73 point score whereas Chile’s is only 28.

High long term orientation scores are typically found in East Asia, with China having 118, Hong Kong 96 and Japan 88. They are moderate in Eastern and Western Europe, and low in the Anglo countries, the Muslim world, Africa and in Latin America.

Indulgence scores are highest in Latin America, parts of Africa, the Anglo world and Nordic Europe; restraint is mostly found in East Asia, Eastern Europe and the Muslim world.

The Top 5 Common Problems Suffered By Expats

The basic reasons behind the failure of an expatriate assignment are discussed below.

  1. Loneliness

If there is one common problem suffered by expats it would have to be the problem of loneliness when moving to a new country. There is no doubt that when moving to a foreign land, especially where a foreign language is used, it can be difficult to settle in and settle down in the new environment. Loneliness happens to many expats as they miss the familiar things from home (mainly family and food).

  1. Cultural differences

Adjustment to the new culture and copping with that culture is an integral part of expatriates success or failure. The level of comfort a person enjoys in his or her environment determines how far he can go in his foreign assignment. When expatriates are not well prepared for the new environment on foreign land, there are tremendous consequences on the performance of the expatriates. It can cause an early withdrawal or total failure of expatriates. Work adjustment is clearly job-related, cultural adjustment is primarily non-work-related, and interaction adjustment overlaps the work and non-work environments. This is why the expats are advised to do the homework with regards to the proposed new found homeland to ensure that they will be able to accommodate their cultures while also appreciating their own beliefs and culture.

  1. Cost of living

Very often employees move for a larger pay packet and a larger benefits package which can often put their previous income in the shade. However, very often a larger pay packet and a larger benefits package will be associated with an area of the world where the cost of living may be significantly higher than the country that expats have just left. This is not always the case, but it is certainly sensible to do the homework before even contemplating a move overseas, even if the employment package is the “best that have been ever seen”.

  1. Relationship problems

Family context factors, expatriates spouses and family members have huge influence on the success or failure of the foreign worker. It can be very difficult for one party if perhaps the other is working all day and they are left to fend for themselves. It is difficult enough being stuck in the home watching children 24 hours a day seven days a week in familiar surroundings, but being stuck in a foreign land with children to look after can be mind blowing. This is where a social life and routines will come into play thereby allowing each party to plan ahead and perhaps even to look forward to certain events. In reality many relationships break up after a relatively short period of time in their new found homeland.

  1. Healthcare

Even if the new found homeland is in the best of health there will be a time when either the expat or the family may require medical assistance. Healthcare has become a major issue amongst the expat community over the last few years as the cost of private healthcare continues to grow and the level of public healthcare in some countries continues to fall.

Other reasons:

Power Distance: “Power distance refers to this general relationship between superiors and subordinates.” The way an employee interacts with his/her superiors may vary from country to country. When the nature of interaction fits the employee, they tend to perform better. If the expats do not suit to the style of the power distance, performance becomes a challenge.

Compared to Arab countries where the power distance is very high and Austria where it very low, Germany is somewhat at an average. Germany does not have a large gap between the wealthy and the poor, but have a strong belief in equality for each citizen.

Individualism versus Collectivism: Individualism is the degree to which the people in a country prefer to act as individuals rather than as members of groups. Collectivism describes societies in which people, form birth onwards, are integrated into strong, cohesive in-groups which protect them in exchange for unquestioning loyalty.

Employees who seek challenges in the working environment are epitomized by high individualism and their prime motivator is self-actualization. Japan has a more collectivist culture than the individualist of the United States. When human resource managers send employees abroad, it means that the employee needs to relocate. Relocating means that the family members must also relocate and find new jobs, thus the employee’s geographic mobility can be restricted.

Requirement of different skills: One of the most distinctive features of an expatriate assignment is the requirement of different skills. Unlike work usually done by support staff in home country, expatriates usually lack such support in doing the work on foreign country.

Most of the expatriates lack these skills and those that have the skills are too burden and lack motivation as there are no proper support staff to help with the work load. They end up withdrawing or underperform in their job.

REPATRIATION:

Repatriation

Repatriation is the process of returning a person to their place of origin or citizenship. It is an activity of bringing expatriate back to the home country. Repatriation is the final step in the expatriation process. This even includes the process of returning refugees or soldiers to their place of origin following a war.

The repatriation process becomes a challenge since going back home can be difficult for employee as well as the family. Not the employee has to deal with reverse culture shock but also with the disbelief and confusion. Dealing with reverse culture shock as well as the home country employees, relatives and friends becomes a challenge.

Some employees feel that it is an acute loss in status and significance throughout their repatriation process. When they go back to a more mundane sort of life back home, their loved ones do not know what the expats miss so much. Next to having to adjust to fundamental cultural differences, it is especially the sense of newness and freshness that so often characterizes a stay abroad which is acutely missed throughout the repatriation process.

 

Problem with Repatriation:

The below mentioned model, “Basic framework of Repatriation Adjustment” highlights the basic issues for repatriation. It is divided into two parts; Pre return Adjustment –which include factors that influence repatriation adjustment before expatriates return home and Post return Adjustment –which consist of factors that affect adjustment after they return home.

Pre-return Repatriation Adjustment:

There are important sources of information about change in the home country and company that can influence the repatriation adjustment of expatriates returning home. Just as expatriates make adjustments before leaving on an international assignment, they also make adjustments before returning home from their time abroad. These adjustments prior to repatriation are mainly psychological in nature. This implies that expatriates, before they have actually returned home, begin to make changes in their mental maps of what work and living will be like in their home country.

Post-return Repatriation Adjustment

When the expatriate has returned to home country, there are some factors that can ease or hinder their adjustment to work, to interaction, and to the culture in general. Accordingly, these factors are grouped into (a) Individual-, (b) Job, (c) Organizational and (d) Non-work categories as could be seen in the figure above.

Individual variables

Individual factors important and relevant to both an effective cross-cultural adjustment and the repatriation adjustment process are self-oriented factors, -which is connected to how strong self-image the expatriate has; relational-oriented factors, -which stands for the willingness to communicate with home nationals; perceptual-oriented factors, -which describes the ability to understand invisible cultural maps and rules. These three factors are expected to facilitate the cross-cultural adjustments during the international assignment and also to have a positive impact on the repatriation adjustment

Job variables

Another significant issue in the adjustment process of repatriation is connected to job factors. Clear job description and high role clarity is relevant in repatriation adjustment to home company. Generally expatriates take their global assignment with the hope of promotion after a successful international assignment. However, this is not usually equivalent to the reality of repatriation. In fact, international assignments can be seen more like a punishment in terms of an expatriates’ carrier, since many expatriates returning home are demoted to lower-level positions than they had held overseas.

Organizational variables

Furthermore, the home company’s overall approach to the repatriation process can have an important impact on the adjustment of expatriates that have returned home. Expatriates feel that their companies have communicated a very vague picture of the repatriation and additionally to clarifying the repatriation process; firms also need to pay special attention to financial compensation packages when expatriates have returned to home country. Moreover, training and orientation after an international assignment can improve repatriation adjustment.

Non-working variables

Finally, non-work factors such as shift in social status and changes in housing conditions have been associated with the repatriation adjustment of expatriates. Many expatriates experience an increase of social status during their international assignment. However, when they return home some expatriates experience that they lose social status since they no longer are “special”. Next to the shift in social status, changes in housing conditions can have a significant influence in the repatriation adjustment for the expatriate and his/her family. Before leaving for the overseas assignment some expatriates sell their house/apartment or terminate their rental agreement. Consequently, upon return some expatriates might not have a home to come back to which can have a negative effect on the repatriation process.

Another area that might be seen as a problematic is the integration of the family (spouse and children). If the family fails to adjust back to the new situation, the repatriation can be affected negatively. For example, it is quite usual that the spouse gave up his or her employment to follow the expatriate on the international assignment. Therefore, on return to home country the spouse might have problems finding a new post. Family problems can make the repatriate feel uncomfortable and insecure, which could make the repatriation process function less smoothly. It is therefore important that the organization tries to help both the repatriate and his/her family with unforeseen problems that can occur during the repatriation process.

According to the model suggested by Black et al. (1992a) above presented factors are considered crucial in the influence of the repatriation adjustment.

Steps for Effective repatriation:

Jassawalla et al. (2004) have made a model of effective repatriation. The model (figure below) identifies action steps taken prior to departure, during the assignment and upon the return, which appear to determine the organizational and individual outcomes

Prior to departure:

Three factors that can improve the outcome of a repatriation process in prior to departure are: task clarity, career counseling and formal policies and guidelines for repatriation. Expatriates who are satisfied with their repatriation process report high levels of clarity about their task assignment. With other word, they are clear about what is expected of them and when their performance will be evaluated.

Task clarity seems to be essential because: (1) it increases the expatriates’ focus on task and lessens his/her anxiety while overseas, (2) it creates a sense of accomplishment when the international assignment is completed, and (3) it reduces the expatriates anxiety upon his/her return and therefore eases the transition into the home company. Moreover, since unclear task expectations can lead to negative repatriation experiences, it is important to ensure a high level of task clarity. This can be done by: (a) communicating performance expectations, which include milestones and deadlines, and (b) explaining performance consideration criteria. These actions emerge as the primary steps in an effective repatriation process

Another factor that appears to be strongly connected with the effectiveness of the repatriation process is the presence and quality of policy guidelines for foreign assignments. firms need to develop formal policies that govern the pre-visits, visits and post-visits expectations of expatriates. Here “pre-visit” refers to a visit before the definite move, “visit” occurs during the international assignment, while “post-visit” refers to a visit in direct linkage to the repatriation process.

During their stay:

During the overseas assignment expatriates can feel that they have lost connection with the home company and therefore consider themselves as isolated. Problems can arise from these thoughts. Actions taken to reduce the feeling of isolation and enhance the sense of connection appear to contribute to effective repatriation. Two steps that can be taken by organizations during expatriates’ time abroad are: perception of support while on assignment and nature and frequency of communication.

Many expatriates that reported that they had been through an effective repatriation process felt supported by their home company while on their international assignment. However, the presence of support from home company did not enhance satisfaction, but their absence significantly increased dissatisfaction and resentment. For instance, when expatriates are left to fend for themselves in for example finding accommodation etc. the level of resentment appears to be high. The attitude of inadequate support during the stay not only heightens their anxiety and diffuses their focus on tasks, but it is also take to mean as a clear signal of the poor repatriation yet to come.

Often in these cases expatriates return dissatisfied. Consequently, it is important that firms manage their expatriates’ perceptions of support by taking actions that suggest their concern for the wellbeing of the expatriate and his/her family. Hence frequent visits to home company and country can contribute to the feeling of connectedness among expatriates. Likewise, the maintenance of social networks in the home company is also viewed as highly beneficial. It has been indicated that frequent communication reduces the feelings of isolation, but also: (a) improves the motivation and moral of the expatriate, (b) ensures expatriate that he/she is still a part of the organization, and (c) keeps the expatriates updated to any change in the organization, which leads to trust. Consequently, expatriates who have less communication with their home company run a higher risk of feeling isolated and purposelessness. The feeling of being out of touch seems to interfere with expatriates’ motivation, increase resentment and raise anxiety about returning to the home company.

After they return:

Employees who have been abroad for a couple of years often return to an organization that has undergone significant changes in structure, information and assessment systems, and formal and informal processes. Some of these changes also give way for new rules and power structures. Social issues can be a source of anxiety for expatriates returning home. However, these problems are nothing compared to the issues related to receiving credits for the foreign assignment, utilization of their newly acquired skills, and having a choice of assignment upon their return. Hence the expatriate must gain access to a position that recognizes the newly required competencies and enables the expatriate to achieve a career that is comparable to colleagues not taking on an international assignment. The new position must in one way or another be similar to the foreign assignment in order to gain efficiency.

Two major factors that seems to make a difference when returning is the quality of interaction with supporters and the perception of organizational support. Employees that take on international assignments often feel highly valuable during their assignments. This creates an effective response. The expatriates tend to enjoy greater autonomy and are in the centre of the attention. However, when they return they miss the autonomy, attention, lifestyle and monetary benefits that come with the international assignment. Upon return, the expatriate face difficulties adjusting to a new work environment with new players. Thus, the expatriate’s perception of the support they receive upon return appears to be a complex concept. It indicates a mixture of issues related to: (1) receiving credits and recognition for the foreign assignment, (2) selecting a new assignment in the home company, (3) using their new perspectives in the new position, (4) adjusting to the positive or negative diversities in job related autonomy and responsibilities of the new position compared to the foreign assignment, and (5) utilization of the repatriation programs, if any, assigned to reorient the expatriate to the organization and home country. Hence firms should provide support to expatriates upon their return. This can be done in terms of repositioning them on posts that indicates that the company values them as much as they were valued overseas.

To sum up, there are many different actions companies can take in the accomplishment of an effective repatriation. An effective repatriation is achieved when the repatriate is satisfied with their repatriations process. When the repatriate is satisfied it will most likely lead to reduction of issues arising from an unsuccessful repatriation such as “underutilization of key employees”, “loss of key employees” and “inability to recruit employees into overseas positions”. These issues can in many cases lead to indirect and unexpected costs. For companies to become more efficient and avoid these costs it is central that they realize the importance of an effective repatriation.

To do’s for an employer in effective repatriation:

  • Before sending an employee on a global assignment, consider how to use their newly acquired culture- and market-specific skills during the early phases of the selection process.
  • Create a repatriation contract to clarify the expatriate’s future within the company and his/her job on return.
  • Provide an intercultural repatriation programme for the entire family, addressing each family member’s needs.
  • Establish a mentoring programme to inform expatriates of company policies and events while on global assignments. Keep them connected and provide a support system.
  • Offer a company orientation programme for your returning expatriates addressing changes that have taken place during their absence, including shifts in policy and strategy.
  • Demonstrate appreciation towards your returning expatriates upon their return.
  • Provide spousal career consulting assistance to employees with accompanying spouses/partners.

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Why Can’t Organizations Retain Their Expatriate Employees?

With the rise of globalization, international experience is becoming a critical asset for global companies. International assignment experience is valuable. In the right context, it can create a competitive advantage — both for expatriates and the companies that employ them.

There are many problems with expatriate/family repatriation back into the home country. However, I will limit the discussion here to career issues.

Returning expatriates (returnees) bring these things to the company:

  • Ability to work and manage effectively in other countries.
  • Information about specific local markets and customers.
  • Ability to accelerate the transfer of knowledge between countries.

Why is this process so difficult?

Some of the problems include:

  • Unclear expectations: During pre-assignment, top management may emphasize that international experience is critical for the company to survive in the new global business environment. Post-assignment— it is as though top management is suffering from amnesia. Management doesn’t quite know how to utilize that experience.
  • Learning a “new” organization: Returnees see old co-workers that have been promoted while they have been gone. They wonder if the assignment hurt their career. They also must get up to speed quickly about changes in organization, strategy, management, culture, etc.
  • Under-utilization of overseas experience: Many expatriate jobs are highly challenging and very autonomous. Expatriates are chief spokespeople for the company with the host country government, professional business organizations, customers, legal entities, etc.

Management simply does not grasp that a reassignment as a sales manager for Wyoming, Montana, and Utah, doesn’t cut it for a person that has been the regional sales manager for Europe, for example. Then they are surprised when that person leaves. And to top it all off, the receiving company is thrilled to hire someone with international experience!

What companies can do for this issue:

  • Clarify objectives before the assignment as well as how knowledge can be used and what kind of job will be targeted upon return.
  • Appoint a key line executive as a sponsor for each expatriate. This needs to be someone that is high enough in the company to have easy access to top management and preferably from a different business unit/division/functional area than the expatriate.
  • Quarterly reviews should be held with expatriate, home/host manager and a VP. Having a VP present sends a positive message and recognition. It also allows the VP a chance to understand the challenges and accomplishments of the expatriate.
  • A year before repatriation starts, expatriate/sponsor need to discuss positions that are suitable back home.
  • Sponsor/returnee link should continue for a year after return to make certain “re-entry” works.

What returning employees can do for this issue?

  • Find someone to confide in and “vent” to (preferably not the spouse!) — a personal friend, former expat — who will understand, or at least listen to frustrations.
  • Keep in touch with home country friends and co-workers.
  • Use the sponsor relationship to focus on career advancement issues as well as to highlight accomplishments and results
  • As part of repatriation planning, take inventory of new skills gained during the assignment. Discuss these with the sponsor to begin job search at home that will be a good “fit.”

 

Sending women managers abroad

The percentage of women in international assignments increased from 3 percent to 16 percent in the late 1990s. Throughout the 2000s, the percentage increased, though very slowly. Most recent studies have either put the percentage of women in international assignments at or slightly below 20 percent, despite being better equipped to handle the pressures of working abroad.

Some of the highlights from the international seminar at Macquarie University, attended by management leaders from across Australia, Dr Rosalie L. Tung presented her findings on the complexity of doing business in Asia and dispelled myths related to women in international assignments.

Three myths surround the theory of sending women managers abroad:

  • Women don’t want overseas assignments (due to family considerations)
  • Other countries don’t want female expatriates in business dealings
  • Women lack the skills/competencies to succeed

Reality 1: More women than men are willing to accept an international assignment, even when their family objected to the assignment. Women know that they would be missing out on an important career development opportunity if they refused the assignment. Therefore, they were willing to make more sacrifices.

Reality 2: Even many male-dominated countries are willing to deal with international women for two primary reasons: curiosity (they assume that if they are sent by their company, they must be very good) and foreign women are considered to be different from local women.

Reality 3: Studies indicate that women have an 18 percent higher success rate than men. Women possess traits deemed critical in cross-cultural situations, such as style flexing through adaptability; skill at building teams and relationships in a non-threatening way; communication skills such as listening closely to the verbal and intuiting the non-verbal; patience and persistence also known as “grace under pressure”; and an open-minded approach to diverse and different circumstances. These traits, combined with excellent technical skills, make a woman working overseas a powerful force. Women have what it takes to succeed internationally.

There is no difference is found between men and women in supervisor-rated performance and instances of early-return from a posting. However, women encounter more problems related to adjustment, explained by the lack of support systems in place.

Female managers were better able to cope with isolation abroad, because women place greater emphasis on harmony and cooperation in their interactions with local people.

Female expatriates may in fact be the ‘model’ global manager. Additionally, it is important to recognize that not all countries high on the gender inequality index behave in the same manner, and tailored training and support is the key to successful postings.

4 major areas that are considered important for obtaining job satisfaction of women employees in global assignments:

  • The way in which organizations design their overseas jobs: The way jobs are designed has an impact on the level of job satisfaction for expatriate women managers. When the jobs are enriched, women gain intrinsic rewards and have high job satisfaction.
  • Women’s skills and characteristics: Expatriate women managers with certain demographic characteristics and skills, like adaptability, foreign language skills, technical skills, professional overseas experience, communication skills, emotional stability, cultural empathy, intercultural competence, and interest in the host culture are more likely to succeed in overseas assignments than those without these characteristics. Demographic characteristics such as the level of education, marital status and the number of children influence the level of job satisfaction of the women managers.
  • International human resource policies of companies: Organizational support also contributes to the satisfaction of women expatriates. Training, mentoring and repatriation preparations have high impact on women’s success and satisfaction. Some of the factors which are needed to taken care of are equal pay among genders, equitable selection methods, promotion at overseas, justifiable job upon return, future preparation etc. Hence international human resources policies of companies play a role in selection and support of women expatriates. At the practical level, it is recommended for each candidate’s needs to be evaluated individually to fit the right cultural setting. When women are recruited to overseas positions, companies are expected to control the barriers preventing women from professional development.
  • The cultural environment of host countries: Women accepting overseas positions may face different reactions from the people living in the local culture. In countries where there are not too many women managers, being a woman expatriate may scare the local people. This type of reaction may be disturbing to women.

Areas of concern for women expats:

  • Culture Change
  • Emotional Problems
  • Political Climate
  • Medical Assistance

Solutions to the problem:

  • Flexibility: The importance of cultural empathy and flexibility in an overseas work environment helped the women managers to cope up better with the new environment,
  • Good communication skills – (Foreign language skills)- When the women expats are fluent in the local language spoken at the workplace, women spent longer listening to and understanding others and then can use the familiar vocabulary to eliminate the preconceived opinions about them. It also helps to improve relationships with people in the host country.
  • Job Competence: Adequate training and self learning methods to develop the job competence in an international assignment
  • Self Image: Once women expats gain the flexibility to adapt new changes in the culture, understands the host country people and develop the job related competencies, they become emotionally strong and posses a better cultural quotient.

Strategies to be adopted while sending women workforce to international assignments:

Strategy 1: MNCs should select female expatriates who demonstrate the technical or managerial skills for the position.

Strategy 2: MNCs should select women for global assignments who are self-confident in their knowledge, skills, and abilities.

Strategy 3: MNCs should select female expatriates who possess a greater perceptual-orientation (e.g., openness, flexibility).

Strategy 4: MNCs should select female expatriates who possess a positive orientation toward others (higher in sociability, high-context communicators). MNCs should also examine if the same communication style that may be deemed ineffective (i.e., unassertive) in the home culture may be appropriate for the host culture.

Strategy 5: The MNC should provide pre-departure training that addresses the specific needs of female expatriates. Cross-cultural training programs generally support the position that accurately exposes the host culture. For female expatriates, pre-departure cross-cultural training affects global assignment success. The training must facilitate an integration of the newly-learned behaviors into a woman’s repertoire of behavioral responses. This may include training on the norms, values and traditions of a host country regarding women, and deriving solutions for the potentially challenging situations that female expatriates may encounter.

Strategy 6: Organizational support and championing: Prior to the global assignment, MNCs should provide developmental experiences for their female expatriates such as short-term business trips and necessary domestic experiences. In addition, the organisation should allow potential female expatriates the opportunity to role play or to simulate (e.g., through interactive video) a variety of difficult situations that female expatriates, in particular, may encounter (e .g ., “after-hours” socializing, peer pressure for sexual favors, and, for single females, strategies for coping with the loneliness that often characterizes global assignments to “culturally-distant’ ‘lands) .

Strategy 7: In-country support and mentoring: Once women are in their host countries, MNCs can enhance their success through in-country support and mentoring programs. MNC’s should assign sponsors or in-country consultants to support women in their new roles.

Strategy 8: The adoption of policies that support the fair treatment of women: They should actively promote policies that support women in global assignments. Promoting an organisation culture that supports women’s efforts to advance and grow professionally will improve the assimilation and acculturation of these women in organizations. MNCs should have (and explicitly implement) policies worldwide regarding the fair and equal treatment of all employees, regardless of race, gender, creed, age, disability, or religion . That is, these policies should be integral parts of an MNC’s worldwide culture, rather than adopted solely in the spirit of legal compliance.

Strategy 9: Realistic job preview: Realistic job previews will enhance job survival by helping individuals form realistic impressions about their future positions. These realistic expectations may also help to reduce anxiety during the stressful period of being a newcomer in the position.

Strategy 10: MNCs should offer mechanisms to improve the likelihood: MNC’s should ensure that that the children of female expatriates will adjust well cross-culturally (e.g., day care, educational assistance, language classes). Similarly MNC’s should ensure that that the spouses or partners of female expatriates adjust well cross-culturally (e.g., training for spouses, male-oriented social networks, language classes).

Managing Virtual Employees:

Virtual Employees: These employees are physically not present in the premises of the organisation. It is the best alternative to hiring a local employee. It provides low-cost and skilled virtual employees who work from a remote location.

With advancements in technology, it is possible to outsource many of the responsibilities that an organisation to someone in another part of the world. The remote worker can handle these tasks and make sure that the job is being taken care in the way the parent organisation would have managed them.

Ways to manage virtual employees:

  • Setting the ground rules: In order to ensure efficient employee performance from the virtual workers, it is important that to set the groundwork from day one. Employees should have a dedicated working space and working hours. Within that space and hours, they are expected to be within reach of their phones or computers. Transparent goals and deadlines are essential to share a common expectation. This allows the virtual employee the flexibility to get their work accomplished within your guidelines.

Some firms allow more flexibility than others, but the company’s policy needs to be clearly stated so that employees can be held accountable. Most of the policies in the handbook should be all inclusive for both virtual workers and in-house staff.

  • Provide some “face time”: For both the sanity of the employee and the manager, there needs to be some “face time” throughout the week. Since many of the employees may be scattered throughout the world, this face time does not need to be in person.

Instead webcams and video conferences can be sued for meetings and make it a requirement. General communication tends to be through email.  In a typical office setting, walking to the next door of the co-workers is possible for clarification on an email. This is not easy with a virtual employee. Instead brief meetings via webcam can be scheduled to get any clarification that is needed. Webcams allow you to see expressions and overall tones that might have been lost in translation. Skype is widely used by many for webcam conferencing which is free of cost. It also has the ability to have multiple people on webcams at the same time sharing their cameras.

  • Reporting: Adequate reporting measure must be established since monitoring on a spontaneous basis is not possible. “Basecamp” software is used for project management system to track the flow of projects as well as to track time. The employees (and contractors) log their time and their tasks into Basecamp and link any critical files with those tasks. This puts everything into a central place and allows for easier managing.
  • Google Documents is also a great place to share and setup report templates. Dropbox is an additional tool that can be used for file sharing. The staff “drops” their daily reports and files into a folder. Those files are then immediately uploaded to their manager’s computer. Daily, weekly and monthly reporting is absolutely essential.  Getting consistent reports eliminates any worries that someone may not be putting in their time.
  • In-person meetings: This is the one that is most often overlooked and is a cause for concern if overlooked for too long; in-person meetings. Having virtual employees is great, but spending at least a few days a year meeting and bonding in-person is essential.

Many people also work behind computers and webcams to make the final work into a success, hence such in-person meetings helps to appreciate the partners. Yearly company retreat somewhere fun focusing on team-building and bonding helps the virtual employees feel bonded with the company.

  • Forget Micromanaging: Building trust among the virtual workforce without micromanaging is essential which means no constant phone calls, hourly progress reports or frequent requests for updates. The faith in their abilities, confidence upon the virtual employees will allow each worker to do their job without your interference.
  • Training for virtual employees: Virtual employees must be trained correctly in the area of organisation values, mission, goals as well as the standard operating procedure. In case of a technical upgrade, investment in the proper equipment for them to their job is essential. Even though the virtual employees work in another location or from home, they are still part of the core team and must be availed with the same conveniences as the parent organization’s staff.
  • Participative Management: The virtual workers complete the organization’s team. Including them in all decisions creates a sense of belongingness among them towards the organisation. Their input and opinions are an integral part of the core business.
  • Be Aware of Cultural Differences – The virtual employees may reside in another country. Understanding the various cultural nuances such as dealing with the Chinese New Year, a Filipino “yes”, or the Indian circular head nod is essential to manage a business across the globe.

Managing International Work Force

Globalization has become something that can come from anywhere and go everywhere. As organisations stake their growth strategies on global expansion and pursuit of new markets, their ability to forge a human capital strategy and HR capability that is both globally consistent and locally relevant will be critical to success.

Having team members dispersed around the globe with some never meeting face-to-face is becoming the norm in many organisations. This change brings new challenges for managers who need leadership support, training and development to lead remote teams successfully. Leaders today have to engage, motivate and encourage innovation across the team. They must communicate aspects of the business and work, and drive performance and results through others. And they have to do all this with little or no face-to-face contact with staff.

R E A C H  APPROACH:

  • Emphasize responsiveness – An organisation should be available and visible to remote staff as to local ones by being flexible and accessible in many ways. Establishing the best way to respond to individuals such as by email, phone, text or in person and using this to regularly check in with the individuals while knowing when to step back or intervene. Rotating conference call times so they’re scheduled to accommodate different time zones and to be fair to all members of the team.
  • Use empathy – Learning about individuals’ perspectives, traditions, languages and ways of thinking, and encouraging team members to learn about one another. Using this knowledge to tune into people’s viewpoints and taking these into account in every interaction.
  • Accelerate accountability – Clearly communicating who is accountable in the team for delivering which goals to build a sense of ownership for results. Identifying any language barriers and ensuring individuals understanding what is expected of them, explaining what, why, when things need to be delivered and considering cultural circumstances and differences. For example, religious holidays may mean some of the team are unable to deliver to certain deadlines.
  • Create connection – Using technology to build links between the team and the organisation, but knowing when face-to-face meetings are a must and who needs more close contact to help achieve results. Great leaders create the impact of face-to-face meetings through virtual ones, which also helps to spot any physical cues that could signal problems.
  • Help – Anticipating any support that may be needed, asking the staff if they need help and responding quickly when they do ensures smooth management of international work force.

Other approaches:

  • Employee value proposition (EVP) or employment deal: A formalized and differentiated EVP can help attract and retain employees who have critical skills and can engage workers by striking a sensible balance between employee and employer needs. Achieving these objectives requires re-allocating scarce program resources to the key drivers of sustainable engagement, and sharpening and differentiating the organization’s EVP for critical employee segments.
  • New Skills Required to Manage Global Workforce effectively: a repositioning of employee skill sets across all levels of employment will be required. Four broad areas are anticipated to be in greatest demand: these include digital capability; swift thinking; and interpersonal and communication skills. In addition, managers will need to develop global operating skills, including the ability to manage diverse employees, an understanding of international markets, a willingness to work in multiple overseas locations and a facility for foreign languages and cultural sensitivity.

Organizations will need workforce mobility to ease global talent mismatches and innovation in talent management.

  • Global Consistency: Large organizations with an increasing scale of global operations should strive for global consistency in total rewards strategy, as well as design and delivery of programs. Global consistency helps to meet multiple organizational objectives, including better alignment of programs with business strategy, improved governance of total rewards, better ability to manage program costs, heightened efficiency and quality of analysis, and greater support for global talent mobility.
  • Leveraging Technology: To be most useful, rewards and talent management technologies must be integrated, easy to use and connected to broader talent management and rewards strategies.
  • Manager Effectiveness: To do so, organizations should consider changing training strategies and re-skilling the current cadre of managers. Financially high-performing organizations achieve better outcomes by providing training on managing cross-cultural teams and cross-cultural sensitivity. Companies focus on training managers thoroughly to allocate work, develop people, deliver on the organization’s employment deal, lead and energize change and, perhaps most critically act with authenticity and engender trust among their teams. All of these capabilities are to managing a diverse global workforce.
  • Communication Effectiveness: Articulating the “deal” to employees before they join and while they are employed is a hallmark of effective programs. Companies that do this effectively will find themselves in a much stronger position to attract, retain and integrate top-performing employees across the globe.
  • Preparing for Better Outcomes Ahead: Global employers think and act differently in  a decade ahead. They will apply business rigor to human capital planning, think broadly and creatively about talent sourcing, embrace the virtual workplace, invest more heavily in retraining and re-skilling, rethink and restructure work, and attend to sustainable engagement over time.

International division of labour

The division of labour is the specialization of laborers who perform specific tasks and roles because of the large amount of labour is saved by giving workers specialized tasks.

International division of labor (NIDL) is an outcome of globalization. The international division of labour refers to the breaking up of the production process in different locations around the world. It can involve a firm setting up offshore branches or divisions in different countries, outsourcing tasks to businesses in other countries, or outsourcing employment to individuals in other countries using technology.

Firms have a range of options available to them globally: choosing to produce in a rich country versus a poor country, an urban area versus a non-urban area, outsourcing different functions to different locations, using technology to outsource functions without relocation. Firms can still outsource routine tasks to low wage countries whilst retaining more complex tasks in high wage countries.

Basis of International division of labour

  1. Cost of production
  2. Availability of manpower
  3. Availability of resources
  4. Scale of the company
  5. Availability of technology
  6. Existing wages rates
  7. Rules and regulations of the parent country
  8. Impact of trade unions

International Staffing:

International Staffing refers to the process of providing staff for the subsidiary/ subsidiaries in various countries. This means that international staffing is concerned with the recruitment and selection of both the expatriates (wherever applicable) and also the host country nationals or local people in the country where the subsidiary is located.

Sources:

  • Company can send employees from its home country, which are referred to as expatriates
  • It can recruit host country nationals (natives of the host country)
  • It can hire third country nationals who are natives of a country other than the home country or the host country.

Approaches to International Staffing:

Ethnocentric approach: Choosing only from the citizens of the parent country to work in host nations, it is called an ethnocentric approach.  Generally higher-level foreign positions are filled with expatriate employees from the parent country.

The general rationale behind the ethnocentric approach is that the staff from the parent country would represent the interests of the headquarters effectively and link well with the parent country. The recruitment process in this method involves four stages: self-selection, creating a candidate pool, technical skills assessment, and making a mutual decision. Self-selection involves the decision by the employee about his future course of action in the international arena. In the next stage, the employee database is prepared according to the manpower requirement of the company for international operations. Then the database is analysed for choosing the best and most suitable persons for global assignments and this process is called technical skills assessment. Finally, the best candidate is identified for foreign assignment and sent abroad with his consent.

Polycentric approach: Limiting recruitment to the nationals of the host country (local people), it is called a polycentric approach. The purpose of adopting this approach is to reduce the cost of foreign operations gradually.

The primary purpose of handing over the management to the local people is to ensure that the company understands the local market conditions, political scenario, cultural and legal requirements better. The companies that adopt this method normally have a localized HR department, which manages the human resources of the company in that country

2012, July: Indian Information Technology companies supported nearly 2.8 lakh jobs in America in the year 2011 by way of foreign direct investment through acquisitions of IT companies. India invested nearly $ 5 billion in foreign direct investment. Top Indian IT companies like TATA, HCL technologies India’s fourth largest software export, Infosys and Wipro stepped in United States to set up their subsidiaries and recruited American nationals from colleges and experienced professionals who had the local knowledge and domain expertise. local employees have the requisite knowledge and understanding of culture, people and were in a particular region.

Geocentric approach: When a company adopts the strategy of recruiting the most suitable persons for the positions available in it, irrespective of their nationalities, it is called a geocentric approach.

Large international companies generally adopt the geocentric strategy with considerable success.

Regiocentric Approach: Company’s international business is divided into international geographic regions. The regiocentric approach uses managers from various countries within the geographic regions of business. Although the managers operate relatively independently in the region, they are not normally moved to the company headquarters.

International Selection:

While choosing employees for overseas operations, usually prefer people with

  • highly developed technical skills
  • good language and communication skills
  • tolerance towards other culture, race, creed, colour, habits, and values
  • high level of motivation
  • stress resistance
  • goal-oriented behaviour

Finally, at the time of selection for international assignments, an organization should consider the previous overseas experience, family circumstances and cultural-adaptability level of the candidates aspiring for the global jobs.

Inter cultural Training: Updating the employees about different cultures, their differences and similarities.

Basic Inter cultural training modules include:

Or

Training of foreign employees by HR manager

  • Information about the country, introduction to culture and history
  • The norms and values of the society
  • The role and the characteristics of communication
  • Social contacts: Friends and acquaintances
  • Women – life and role
  • Leisure activities and customs
  • Eating and drinking
  • The relations at work and management
  • Doing business in the country
  • Education
  • Studies and professional training
  • Norms, laws, and taboos
  • Action plan for the first two months in the country

Reasons for Inter cultural training:

  • Understand the culture
  • Developing a global mind set
  • Understand the belief system
  • Better control over the third party team
  • Helps to understand the language and feeling of other culture
  • Not to violate the laws
  • Develop respect for the other culture
  • Better conflict management
  • Get the work done easily from others once understood people from other culture

International Performance Management:

Challenges:

  • Total Company VS Parts of it
  • Standard format VS Customized format
  • Uniformity of Data of performance
  • Environmental Variations
  • Validity of Performance Criteria
  • Time and distance variation
  • Varied level of maturity
  • Rater’s competence
  • Cultural Adjustments

Effective Performance Management:

  • Understanding and adapting towards organisational culture
  • Motivational skills
  • Managing environmental influences
  • Integrity
  • Cultural issues of various countries
  • Interpersonal relationship skills
  • Leadership
  • Team building
  • Parent Company and subsidiary expectations

Managing International work force:

  • Understanding the culture
  • Developing the value proposition in attracting the talents
  • Selection on attitude based
  • Understand the motivational factors
  • Design the reward systems
  • Customize the performance criteria
  • Communication effectiveness
  • Training on developing a global mind set
  • Encourage diversity

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