Staffing Internationally LEARNING OBJECTIVES<\/p>\n
1. Be able to explain the three staffing strategies for international businesses and the advantages<\/p>\n
and disadvantages for each.<\/p>\n
2. Explain the reasons for expatriate failures.<\/p>\n
One of the major decisions for HRM when a company decides to operate overseas is how the overseas<\/p>\n
operation will be staffed. This is the focus of this section.<\/p>\n
Types of Staffing Strategy<\/p>\n
There are three main staffing strategies a company can implement when entering an overseas market,<\/p>\n
with each having its advantages and disadvantages. The first strategy is a home-country national strategy.<\/p>\n
This staffing strategy uses employees from the home country to live and work in the country. These<\/p>\n
individuals are calledexpatriates. The second staffing strategy is a host-country national strategy, which<\/p>\n
means to employ people who were born in the country in which the business is operating. Finally, a third-<\/p>\n
country national strategy means to employee people from an entirely different country from the home<\/p>\n
country and host country. Table 14.4 “Advantages and Disadvantages of the Three Staffing Strategies” lists<\/p>\n
advantages and disadvantages of each type of staffing strategy. Whichever strategy is chosen,<\/p>\n
communication with the home office and strategic alignment with overseas operations need to occur for a<\/p>\n
successful venture.<\/p>\n
Table 14.4 Advantages and Disadvantages of the Three Staffing Strategies<\/p>\n
Home-Country National Host-Country National Third-Country National<\/p>\n
Advantages<\/p>\n
Greater control of organization<\/p>\n
Language barrier is<\/p>\n
eliminated<\/p>\n
The third-country national<\/p>\n
may be better equipped to<\/p>\n
bring the international<\/p>\n
perspective to the business<\/p>\n
Managers gain experience in<\/p>\n
local markets<\/p>\n
Possible better<\/p>\n
understanding of local rules<\/p>\n
and laws<\/p>\n
Costs associated with hiring<\/p>\n
such as visas may be less<\/p>\n
expensive than with home-<\/p>\n
country nationals<\/p>\n
Possible greater understanding<\/p>\n
and implementation of business<\/p>\n
strategy<\/p>\n
Hiring costs such as visas<\/p>\n
are eliminated<\/p>\n
Home-Country National Host-Country National Third-Country National<\/p>\n
Cultural understanding<\/p>\n
Morale builder for employees<\/p>\n
of host country<\/p>\n
Disadvantages<\/p>\n
Adapting to foreign<\/p>\n
environment may be difficult<\/p>\n
for manager and family, and<\/p>\n
result in less productivity<\/p>\n
Host-country manager may<\/p>\n
not understand business<\/p>\n
objectives as well without<\/p>\n
proper training<\/p>\n
Must consider traditional<\/p>\n
national hostilities<\/p>\n
Expatriate may not have<\/p>\n
cultural sensitivity<\/p>\n
May create a perception of<\/p>\n
\u201cus\u201d versus \u201cthem\u201d<\/p>\n
The host government and\/or<\/p>\n
local business may resent<\/p>\n
hiring a third-country<\/p>\n
national<\/p>\n
Language barriers<\/p>\n
Can affect motivation of<\/p>\n
local workers Cost of visa and hiring factors<\/p>\n
HUMAN RESOURCE RECALL<\/p>\n
Compare and contrast a home-country versus a host-country staffing strategy.<\/p>\n
Expatriates<\/p>\n
According to Simcha Ronen, a researcher on international assignments, there are five categories that<\/p>\n
determine expatriate success. They include job factors, relational dimensions, motivational state, family<\/p>\n
situation, and language skills. The likelihood the assignment will be a success depends on the attributes<\/p>\n
listed in Table 14.5 “Categories of Expatriate Success Predictors with Examples”. As a result, the<\/p>\n
appropriate selection process and training can prevent some of these failings. Family stress, cultural<\/p>\n
inflexibility, emotional immaturity, too much responsibility, and longer work hours (which draw the<\/p>\n
expatriate away from family, who could also be experiencing culture shock) are some of the reasons cited<\/p>\n
for expatriate failure.<\/p>\n
Table 14.5 Categories of Expatriate Success Predictors with Examples<\/p>\n
Job Factors<\/p>\n
Relational<\/p>\n
Dimensions Motivational State<\/p>\n
Family<\/p>\n
Situation Language Skills<\/p>\n
Technical skills<\/p>\n
Tolerance for<\/p>\n
ambiguity Belief in the mission<\/p>\n
Willingness of<\/p>\n
spouse to live<\/p>\n
abroad<\/p>\n
Host-country<\/p>\n
language<\/p>\n
Familiarity with host<\/p>\n
country and<\/p>\n
headquarters<\/p>\n
operations Behavioral flexibility<\/p>\n
Congruence with<\/p>\n
career path<\/p>\n
Adaptive and<\/p>\n
supportive<\/p>\n
spouse<\/p>\n
Nonverbal<\/p>\n
communication<\/p>\n
Managerial skills Nonjudgmentalism<\/p>\n
Interest in overseas<\/p>\n
experience<\/p>\n
Stable marriage<\/p>\n
Administrative<\/p>\n
competence<\/p>\n
Cultural empathy and<\/p>\n
low ethnocentrism<\/p>\n
Interest in specific<\/p>\n
host-country culture<\/p>\n
Interpersonal skills<\/p>\n
Willingness to<\/p>\n
acquire new patterns<\/p>\n
of behavior and<\/p>\n
attitudes<\/p>\n
Source: Adapted from Simcha Ronen, Training the International Assignee (San Francisco: Jossey-Bass,<\/p>\n
1989), 426\u201340.<\/p>\n
Most expatriates go through four phases of adjustment when they move overseas for an assignment. They<\/p>\n
include elation\/honeymoon, resistance, adaption, andbiculturalism. In the elation phase, the employee is<\/p>\n
excited about the new surroundings and finds the culture exotic and stimulating. In the resistance phase,<\/p>\n
the employee may start to make frequent comparisons between home and host country and may seek out<\/p>\n
reminders of home. Frustration may occur because of everyday living, such as language and cultural<\/p>\n
differences. During the adaptation phase, the employee gains language skills and starts to adjust to life<\/p>\n
overseas. Sometimes during this phase, expatriates may even tend to reject their own culture. In this<\/p>\n
phase, the expatriate is embracing life overseas. In the last phase, biculturalism, the expatriate embraces<\/p>\n
the new culture and begins to appreciate his old life at home equally as much as his new life overseas.<\/p>\n
Many of the problems associated with expatriate failures, such as family life and cultural stress, have<\/p>\n
diminished.<\/p>\n
Host-Country National<\/p>\n
The advantage, as shown in Table 14.4 “Advantages and Disadvantages of the Three Staffing Strategies”,<\/p>\n
of hiring a host-country national can be an important consideration when designing the staffing strategy.<\/p>\n
First, it is less costly in both moving expenses and training to hire a local person. Some of the less obvious<\/p>\n
expenses, however, may be the fact that a host-country national may be more productive from the start, as<\/p>\n
he or she does not have many of the cultural challenges associated with an overseas assignment. The host-<\/p>\n
country national already knows the culture and laws, for example. In Russia, 42 percent of respondents in<\/p>\n
an expatriate survey said that companies operating there are starting to replace expatriates with local<\/p>\n
specialists. In fact, many of the respondents want the Russian government to limit the number of<\/p>\n
expatriates working for a company to 10 percent. [1] When globalization first occurred, it was more likely<\/p>\n
that expatriates would be sent to host countries, but in 2011, many global companies are comfortable that<\/p>\n
the skills, knowledge, and abilities of managers exist in the countries in which they operate, making the<\/p>\n
hiring of a host-country national a favorable choice. Also important are the connections the host-country<\/p>\n
nationals may have. For example, Shiv Argawal, CEO of ABC Consultants in India, says, \u201cAn Indian CEO<\/p>\n
helps influence policy and regulations in the host country, and this is the factor that would make a global<\/p>\n
company consider hiring local talent as opposed to foreign talent.\u201d [2]<\/p>\n
Third-Country Nationals<\/p>\n
One of the best examples of third-country nationals is the US military. The US military has more than<\/p>\n
seventy thousand third-country nationals working for the military in places such as Iraq and Afghanistan.<\/p>\n
For example, a recruitment firm hired by the US military called Meridian Services Agency recruits<\/p>\n
hairstylists, construction workers, and electricians from all over the world to fill positions on military<\/p>\n
bases. [3] Most companies who utilize third-country national labor are not new to multinational<\/p>\n
businesses. The majority of companies who use third-country national staffing have many operations<\/p>\n
Figure 14.2 Phases of Expatriate Adjustment<\/p>\n
already overseas. One example is a multinational company based in the United States that also has<\/p>\n
operations in Spain and transfers a Spanish manager to set up new operations in Argentina. This would be<\/p>\n
opposed to the company in the United States sending an American (expatriate) manager to Argentina. In<\/p>\n
this case, the third-country national approach might be the better approach because of the language<\/p>\n
aspect (both Spain and Argentina speak Spanish), which can create fewer costs in the long run. In fact,<\/p>\n
many American companies are seeing the value in hiring third-country nationals for overseas<\/p>\n
assignments. In an International Assignments Survey,[4] 61 percent of United States\u2013based companies<\/p>\n
surveyed increased the use of third-country nationals by 61 percent, and of that number, 35 percent have<\/p>\n
increased the use of third-country nationals to 50 percent of their workforce. The main reason why<\/p>\n
companies use third-country nationals as a staffing strategy is the ability of a candidate to represent the<\/p>\n
company\u2019s interests and transfer corporate technology and competencies. Sometimes the best person to<\/p>\n
do this isn\u2019t based in the United States or in the host country.<\/p>\n
KEY TAKEAWAYS<\/p>\n
\uf0b7 There are three types of staffing strategies for an international business. First, in the home-<\/p>\n
country national strategy, people are employed from the home country to live and work in the<\/p>\n
country. These individuals are called expatriates. One advantage of this type of strategy is easier<\/p>\n
application of business objectives, although an expatriate may not be culturally versed or well<\/p>\n
accepted by the host-country employees.<\/p>\n
\uf0b7 In a host-country strategy, workers are employed within that country to manage the operations<\/p>\n
of the business. Visas and language barriers are advantages of this type of hiring strategy.<\/p>\n
\uf0b7 A third-country national staffing strategy means someone from a country, different from home<\/p>\n
or host country, will be employed to work overseas. There can be visa advantages to using this<\/p>\n
staffing strategy, although a disadvantage might be morale lost by host-country employees.<\/p>\n
EXERCISES<\/p>\n
1. Choose a country you would enjoy working in, and visit that country\u2019s embassy page. Discuss the<\/p>\n
requirements to obtain a work visa in that country.<\/p>\n
2. How would you personally prepare an expatriate for an international assignment? Perform<\/p>\n
additional research if necessary and outline a plan.<\/p>\n
[1] \u201cRussia Starts to Abolish Expat jobs,\u201d Expat Daily, April 27, 2011, accessed August 11, 2011, http:\/\/www.expat-<\/p>\n
daily.com\/news\/russia-starts-to-abolish-expat-jobs\/.<\/p>\n
[2] Divya Rajagorpal and MC Govardhanna Rangan, \u201cGlobal Firms Prefer Local Executives to Expats to Run Indian<\/p>\n
Operation,\u201d Economic Times, April 20, 2011, accessed September 15,<\/p>\n
2011, http:\/\/articles.economictimes.indiatimes.com\/2011-04-20\/news\/29450955_1_global-firms-joint-ventures-<\/p>\n
investment-banking.<\/p>\n
[3] Sarah Stillman, \u201cThe Invisible Army,\u201d New Yorker, June 6, 2011, accessed August 11,<\/p>\n
2011,http:\/\/www.newyorker.com\/reporting\/2011\/06\/06\/110606fa_fact_stillman.<\/p>\n
[4] \u201cMore Third Country Nationals Being Used,\u201d n.d., SHRM India, accessed August 11,<\/p>\n
2011,http:\/\/www.shrmindia.org\/more-third-country-nationals-being-used.<\/p>\n
http:\/\/www.expat-daily.com\/news\/russia-starts-to-abolish-expat-jobs\/
\nhttp:\/\/www.expat-daily.com\/news\/russia-starts-to-abolish-expat-jobs\/
\nhttp:\/\/articles.economictimes.indiatimes.com\/2011-04-20\/news\/29450955_1_global-firms-joint-ventures-investment-banking
\nhttp:\/\/articles.economictimes.indiatimes.com\/2011-04-20\/news\/29450955_1_global-firms-joint-ventures-investment-banking
\nhttp:\/\/www.newyorker.com\/reporting\/2011\/06\/06\/110606fa_fact_stillman
\nhttp:\/\/www.shrmindia.org\/more-third-country-nationals-being-used<\/p>\n
—<\/p>\n
International Recruiting OBJECTIVES FOR LEARNING<\/p>\n
1. Be able to explain the three international business staffing techniques and their benefits.<\/p>\n
and each has perks and downsides.<\/p>\n
2. Describe the causes of expatriate failures.<\/p>\n
When a company decides to expand worldwide, one of the important decisions for HRM is how the overseas operations will be managed.<\/p>\n
operation will be staffed. This is the section’s main point.<\/p>\n
Types of Staffing Strategy<\/p>\n
There are three main staffing strategies a company can implement when entering an overseas market,<\/p>\n
with each having its advantages and disadvantages. The first strategy is a home-country national strategy.<\/p>\n
This staffing strategy uses employees from the home country to live and work in the country. These<\/p>\n
individuals are calledexpatriates. The second staffing strategy is a host-country national strategy, which<\/p>\n
means to<\/p>\n","protected":false},"excerpt":{"rendered":"
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