Which method should HR employ to support an international assignee during their assignment?

Ch 12. Strategic HRM Management of International Assignments

2007, International Business

Abstract

International managers constitute valuable resources that organizations do not always use to the best of their potential. Further, senior managers assigned to positions in foreign subsidiaries do not always live up to their bosses’ expectations. When they succeed in their international assignments, they often leave the organization upon returning to their country of origin. Organizations can reverse this trend by encouraging managers’ international mobility, through better planning of assignments, better recruitment and selection practices for international assignments, better pre-departure preparation, better performance management, and better management of the return of their international managers. The following challenges are associated with the strategic management of international assignments: • Assigning the right kind of international manager to the right position, at the right time • Designing international HR practices for balancing generic and local needs on the one hand, and control, coordination, and autonomy needs on the other • Establishing balance between global competitiveness and reactiveness to the local environment’s peculiarities • Identifying the needs for international personnel with a high degree of precision • Strategic management of international assignments and of international personnel at the lowest cost: what type of international employee must be chosen, and to fulfill which position? Which type of contract must be drafted? In the following sections, we will first look at the different approaches to international staffing, the reasons for using international assignments, and the different types of international employees. Then, we will propose a model for the strategic management of international assignments. Finally, we will look at the role played by women in the global arena.

1944 Bretton Woods agreement

first fully negotiated multilateral trade accord and so perhaps the start of modern global commerce

• economics
• Climate change
• Pandemics
• Changes in governmental power

Globalization according to Friedman

The inevitable integration of markets, nation-states and technologies to a degree never witnessed before-in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper, and cheaper than ever before and in a way that is enabling the world to reach into individuals, corporations and nation-states farther, faster and deeper and cheaper than ever before

What are three dominant global forces?

• global forces require careful analysis
• Should be viewed in terms of their connections
• have unique cultural connoatations

Foreign Direct Investment (FDI)

the investment of foreign assets into domestic structure, equipment, and organizations

A mass migration of a group from its homeland to multiple destinations

the workforce in emerging economies is becoming disproportionately young while the workforce in developed economies is rapidly aging.

Exacerbated by longer life spans, increased standards of living and lower population growth rates worldwide

refers to innovations created for or by emerging-economy markets and the nimported to developed-economy markets

increasing digital interconnection of people and things anytime and anyplace - purely digital.virtual aspect

How does Kyle Lundby define a successful global organization in Going Global

An organization that effectively leverages and capitalizes on its global footprint by incorporating four structural/strategic components:

• Physical Dispersion - multiple countries
• Diversity of thought, people, and culture that is actively leveraged by strategic objective
• Unified through a clear single organizational identity
• global for a reason; self-aware of their global reach and leveraging geographic and cultural diversity to achieve success as they have defined it

How does HR support global strategic management?

• creating the global strategy
• aligning HR processes and activities with the global strategy: attract/attain leaders and employees with the right knowledge and skill, develop organization awareness/appreciation or constituent cultures, and implement processes to increase integration and exchange of knowledge
• Enhancing communication between org. and stakeholders
• Ensure HR has skill, knowledge and resources to fulfill role
• adapting processes to cultural and legal contexts

What are push factors for globalization and what are some examples that are common reasons?

Pushed toward globalization in reaction to changes in the business environment

• a need for new markets
• increased cost pressures and competition
• shortfalls in natural resources and talent supply
• government policies
• trade agreements
• a globalized supply chain

Tax Inversion/Expatriation

Avoiding higher taxation rates by acquiring foreign-based competitors and then moving their headquarters to their acquisition's home base

What are pull factors for globalization and what are some examples that are common reasons?

Organizations have been pulled toward change through the promise of achieving greater organizational value through globalization:

• Greater strategic control
• government policies that promote outward foreign investment
• Trade Agreements

In what ways can an organization "go global"?

• creating a new entity
• acquiring a subsidiary that will be wholly owned and operated through merger or acquisition
• entering into an alliance or partnership
• outsourcing all or specific tasks to a supplier or performer in the new market
• offshoring an existing capability to the new location

Depends on core strategic goals, capabilities/resources in economy and the org. itself, and distance that must be bridged physically

Perlmutters four orientations for multinational corporations:

• ethnocentric: headquarters maintains tight control over subsidiaries "One best way"
• Polycentric: Subsidiaries are allowed a large measure of independence as long as they are profitable. "many best ways"
• Regiocentric: Subsidiaries are grouped into regions and strategic coordination is high between regions but not region and headquarters.
• Geocentric: Subsidiaries are neither satellites taking orders nor independent bodies setting their own course. Participants in a network each contributing unique expertise "a team way"

emphasizes consistency of approach, standardization of processes, and a common corporate culture across global operations. takes advantage of standard processes and economics of scale which lower operation costs and increase price flexibility and profit.

Local Responsiveness (LR)

Emphasizes adapting to the needs of local markets and allows subsidiaries to develop unique products, structure, and systems. make the org. more flexible and agile. If culture is highly influential will also need skills to adapt to the cultural needs.

What are the four drivers of a globalization strategy?

• Market: homogeneity of customer needs, availability of global distribution networks, and opportunities for shared marketing.
• Cost: Economies of scale, transportation costs, R&D costs, and transferable technology advantages.
• Government: trade policies, technical standards and requirements, and regulatory climates
• Competitive: extent and methods of globalization by industry competitors.

How does the global challenge by Evans, Pucik and Bjorkman say the advantages of globalization are?

• achieving economics of scale by centralizing critical activities or tightly networking specialized centers around the world.
• integrating value chain activities from R&D through logistics
• ability to serve globally integrated customers
• global branding, which increases the efficiency of advertising and merchandising resources
• sharing organizational capabilities and knowledge
• better quality assurance through shared standards and processes
• leveraging global assets for local competition

What are the ways in which organizations can achieve global integration?

• people
• assignees
• processes
• culture

What do Evans Pucik and Bjorkman describe as strengths of local responsiveness?

• ability to respond to local customer needs or the demands of local distribution
• Efficiency gained from using local substitutes
• ability to remain compliant with local laws and regulations

How do local managers support the localization efforts?

• understand local customer needs and business practices
• provide a more familiar and trusted connection with local governments, business networks, and media
• understand how to attract and retain quality workforce

Multinational enterprises

organizations that own or control production or service facilities in one or more countries other than the home country

Low in both global integration and local responsiveness.

little advantage in tailoring products or services to individual foreign markets

suits organizations with strong global brand identity or very specialized products or services that enjoy weak local competition

"Coordinated federation"

organizations with subsidiaries in multiple countries that operate with a fair degree of independence from each other and from headquarters

"decentralized federations"

Essentially mirror the home-country enterprise in foreign locales. Key managers/decisions will come from headquarters

Low in global integration because strategy does not focus on increasing efficiency through integration and high in local responsiveness in that they recognize that their offerings must be adapted to the needs and preferences of different markets

a strategy that is high in global integration but low in local responsiveness. Headquarters has strong relationship with each subsidiary

Subsidiaries have less freedom to adapt to local markets

"hub and spoke" - centralized hub makes key strategic decisions and exerts tight but simple controls on subsidiaries

suited to firms selling standardized technology and facing strong competition

Transnational organizational structure

resulting from simulataneous pressure to standardize and localize. locates value in chain activities whereever most advantageous. Strong local competition - so subsidiaries need freedom to adapt - result is globalization

an organization with a strong global image but an equally strong local identity. high global integration and local responsiveness

talent and personnel move between subsidiaries or from subsidiaries to the parent - R&D may be distributed over divisions or located in a country separate from the parent country

How does Nancy Adler associate global organization types to globalization strategies?

• ethnocentrism = international strategies with headquarters focus
• polycentrism = multidomestic strategies "confederation" style
• Regiocentrism = global organizations - bias toward home country
• Geocentrism = transnational organizations - networks of highly integrated equals

Briscoe, Schuler and Tarique upstream/downstream strategies

Upstream - decisions made at HQ, decisions apply to strategy and coordination and focus on standardization of processes and integration of resources

• workforce alignment
• organizational development
• sharing of knowledge and experience

Downstream - decisions are made at local level, aim at adapting strategic goals and plans to local realities (Local responsiveness):

• agreements with local workforce groups
• adjustments to standard policies on working conditions to reflect local cultural practices
• adjustments based on local legal requirements

Going Global Lundy and Jeffrey Joltons distinguish between identity alignment and process alignment

Identity alignment - extent to which diversity is embraced in management of people, products/services, and branding. Differences among locations are embraced and product/service offerings and brand identity may be adjusted to accommodate local cultures.

• challenges: unless well established corporate brand localized offerings may dilute brand. Local approaches may diffuse core identity

Process Alignment: extent to which underlying operations such as IT, finance or HR integrate across locations

• challenges: businesses built through acquisitions often have separate processes; tendency is for each unit to operate independently and retain many of its original practices.

practice where a company transfers portions of work to outside suppliers rather than completing it internally - usually goal of reducing costs and freeing up personnel/resources

Just means external not necessarily in a different country

practice of relocating processes or production to another country.

Common reasons:

• lower costs
• closer proximity to necessary production resources
• more favorable economic climate for corporate taxation
• financial incentives

Caligiuri, lepak and bonache additional reasons for offshoring benefits?

access to talen

round-the-clock shifts - 24/7 operations

follow the sun - time zones allow project work to be uninterrupted.

What are associated risks and challenges to offshoring?

• unpatriotic backlash
• cultural differences
• distance issues
• high turnover rates
• problems in quality control
• technical degrees that do not reliably indicate actual technical skills
• language issues
• intellectual property loss
• impaired productivity due to political instability
• loss of reputation from unethical behavior or practices of local management.

the relocation of business processes or production to a lower-cost location inside the same country as the business. can also occur when business pushes WFH abilities

a company contracting part of its business processes or production to an external company located in a country that is relatively close.

more likely to have shared cultural values and a similar mindset

What are due diligence topics for moving work (always for offshoring not always for nearshorring or onshoring

Cost and Quality: wage structure relative to other options, tax structure, real estate, infrastructure (ex. telecommunications)

Risk Levels: Political and labor unrest, natural disasters, IT security, Personal and property security, intellectual property rights, economic stability including fluctuations in currency exchange value, and regulator stability

Sociopolitical environment: government receptivity and amount of regulations, ethical environment of political and business communities, quality of life, and accessibility

Talent Pool: Language and cultural differences, size of labor force with required skills, size of offshore sector and share of exports, and availability of vendors for specific services (such as IT)

Strategic-systematic approach to global assignments:

• approach global assignments as long-term initiatives
• develop future executives with essential global perspectives and experiences to formulate and implement competitive strategies
• increase the effectiveness of critical coordination and control functions between and among the home office and foreign operations
• effectively disseminate information, technology, and values throughout the worldwide organization

Tactical-Reactive approach to global assignments:

• approach global assignments as short-term expenses
• focus on a quick-fix problem in a foreign operation
• randomly and haphazardly perform some functions of assignments and focus attention as problems arise
• fail to systematically integrate the worldwide organization in terms of values, technology, products and brand

Purely tactical can result in global assignment failure rates being high.

How would a multidomestic/international strategy approach global assignments compared to a global strategy?

Multidomestic/international

• choose average and good performers as assignees
• send their assignees to another country to manage a project or get a particular job done

Global

• use a wide variety of global assignment types
• choose high-potential managers and top executives as assignees
• view assignments as leadership, career, and organizational development opportunities
• make assignments for many reasons other than situational project management or remedial intervention to fix a problem

an employee who is being reassigned to an international jurisdiction

generally refers to anyone who is not a citizen of the country in which they reside and doesn't intend to become a permanent resident

Types of Global Assignments

• Globalists: Spend their entire careers in international assignments, moving from one locale to another
• Local Hires: Hired locally in subsidiary countries (host-country nationals aka HCs)
• Short-term assignments: On assignment for less than a year but more than a few weeks, often without moving the family
• International assignees: Traditional expatriates on full relocation assignments lasting one to three years
• Commuters: Travel across a country border for work regularly
• Just in time expatriates: Ad hoc or contract workers hired for a single assignment

What international allegiances can develop while international assignees are working accordingly to Black, Gregersen and Mendenhall?

"Homebound" refusal to assimilate into the local culture

"go native" full embrace of local culture and work modes

Actions to take:

• identify and recruit the individual best for assignment
• acquaint assignee with allegiance challenges and stressors possible
• anticipate repatriation and support unique needs

Why does recognizing and considering all dimensions of the assignment process matter to enhancing global assignment success?

What should you do?

Family, logistical, legal, cultural, organizational, immediate employee concerns. Identify risks and make sure that all criteria functional competence and communication skills are considered during selection.

Why does viewing the international assignment as a process and not an activity matter to enhancing global assignment success?

what should you do?

Overall business strategy and leadership development activities

Why does conducting thorough and professional assessments of candidates matter to enhancing global assignment success?

What should you do?

Confirm selection process is based on right criteria, involve the right people, and plan ahead to allow adequate time for selection

Why should you establish and maintain realistic expectations to enhance global assignment success? AKA what should you do?

Avoid turning selection into selling/marketing campaign, communicate benefits and challenges, and encourage candidate to talk to repatriated assignees

Why does providing appropriate health and safety support matter to enhance global assignment success?

• make sure that assignee receives necessary vaccinations
• make plans for in-country security, health-care coverage, and emergency evacuation if needed.
• Establish a communication system that allows the organization to locate assignees at all times and confirm their status. Assignees should also have the means for emergency contact.

Why does providing training matter to enhance global assignment success? AKA What should you do?

• provide cross-cultural training for whole family
• provide language training - usually essential requirement

Why does providing well-planned ongoing training and support matter to enhance global assignment success? AKA what should you do?

• anticipate potential assignee challenges and prepare contingency plans
• make sure that the assignee doesn't feel abandoned during the assignment

Why does planning, preparing for, and supporting repatriation with the same care as expatriation matter to enhance global assignment success? AKA what should you do?

• Develop plans to ensure retention of the repatriate; repatriates who leave represent a loss of the organization's investment in their development
• recognize that the greatest contribution to both the organization and the employee may occur when the employee returns home

Why does addressing problems quickly, thoroughly and responsively matter to enhance global assignment success? AKA what should you do?

• recognize that problems will occur
• look for the reason a problem occurred after responding to it.

Management knowledge guidelines for global assignments

• the country or countries to which they are sending assignees
• essential development assignments and experiences
• the specific job function and assignment objectives and what effects the assignment location will have on these factors
• the process of cross-cultural adjustment to anticipate the feelings the assignee may experience
• cultural dimensions and the effect these dimensions have on the way different cultures look at life.
• potential problem areas associated with the assignment

Checklist for effective global assignment management:

• Select based on qualitative and quantitative skills
• cultural adaptability training for assignee and family is essential
• cross cultural training for assignee and family is essential
• create policies, counseling and management systems that span pre- to post-departure through on-site management to completion and repatriation
• foster and retain intercultural competences and global knowledge management practice programs
• clear international assignment policy
• repatriation planning begins before assignee starts
• maintain POC
• repatriation training for assignee and family is a must
• international assignment orientation programs
• debriefing pre and post assignment
• link social responsibility and ethics - tie in ethical values to accountability
• comply with local laws

Describe step 1 in the global assignment process

Assessment and selection

• right people right place right time
• develop the selection criteria that is specific and create potential talent pool
• Involve the right people including contact candidates, their families or significant others as appropriate/legal as possible. Have home and host country managers participate in assessment and coordinate vendors/consultants needed
• Choose the best selection methods and tools by developing multiple data-gathering instruments and conducting interview and ensure surveys are completed
• complete the assessment/make a recommendation by analyzing the data, subsequent interviews/assessments, and final recommendation/selection.

Describe step 2 in the global assignment process

Management and Assignee Decision

• analysis of the costs and benefits of the assignment
• preparation of the assignment plan (memorandum of understanding - benefits/expectations)
• Candidate acceptance or rejection of the assignment offer - they should consider long-term career advantages, adequate financial incentives, opportunities for growth and learning, family support and opportunities to balance interruption of children's education and spouses career, and desirability of the location.

Describe step 3 in the global assignment process

Pre-Departure Preparation

• visas and work permits
• security briefings: personal and family safety abroad and business aspects of security including physical and intangible threats to the organization's employees, assets and intellectual property
• Cross-cultural counseling: Before and during increases success - should include - preliminary situation and needs assessment, country overview and information on everyday life, business overview, personal cultural awareness activities, discussion of family and international relocation issues, country specific case studies, and customized and detailed support and settling-in program

Describe step 4 in the global assignment process

On Assignment

Stages (usually experienced twice pre/post):

• honeymoon - new and exciting
• Culture shock - novelty and enjoyment turn to disillusionment and dissatisfaction
• adjustment - working/living in assignment gets easier. takes interest and motivation and time
• mastery - after several years - biculturalism stage - can participate fully in the local culture

how can HR support international assignees?

• assist in obtaining host-country tax ID number and drivers license
• coordinate assistance with band and credit cards to host country
• perform host-country orientation
• review and approve host country leases and security deposit issues
• update allowances and deductions as conditions change in host country
• process/track required tax payments
• collect compensation and tax data that is needed for home-country reports
• coordinate emergency leaves and visits to home country
• communicate regularly with their mentor(s)
• begin active repatriation at least 6 months before assignment ends
• Process visa and work permit renewals and extensions

Describe step 5 in the global assignment process

Completing the assignment

Repatriation - reintegrating the employee back into the home country after international assignment (including culture shock)

Redeployment - does not always involve repatriation if they go to another location

What can make the repatriation go ineffectively in an organization?

• lack of adequate notice of assignment ending
• lack of clear repatriation plan
• lack of assurance that the skills and experiences acquired will be used effectively in new assignment
• no repatriation support services

Which method should HR employee to support an international assignee during their assignment?

How does HR support strategic management in a global organization quizlet?

What are the HR issues in global assignments?

What is one thing an organization can do to help ensure a global assignments success for both the individual and the organization?