Deck 17: Managing Global Human Resources
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Deck 17: Managing Global Human Resources
1
Use a library or Internet source to determine the relative cost of living in five countries as of this year, and explain the implications of such differences for drafting a pay plan for managers being sent to each country.
Japan is the most expensive Asia Pacific Rim country for expatriate packages followed by Australia and India. China and Hong Kong take fourth and fifth in the rankings.
General Guidelines -
The cost-of-living index shows the difference in living costs between cities. It is used as base factor for deciding expatriate compensation. If the cost-of-living index comes negative by 10%, the companies give same compensation as in home country. But when it is negative below 90%, then some companies reduce the compensation accordingly.
To design compensation, majority companies use the "Balance sheet approach". Some companies use "Host country-based approach" which is based on what competitors are paying and more importantly, how expatriate compensation compares with the compensation levels of local employees in comparable jobs.
Thus the employer would help to maintain the expatriate employee's standard of living throughout the assignment as well as on repatriation, by designing appropriate compensation package.
Case I - Hong Kong Manager going to Japan -
In Japan, both living costs and tax levels are high. Consumer price index in Tokyo, Japan is 86.74. Consumer Prices in Japan are 8.43% higher than in Hong Kong but Rent Prices in Japan are 63.17% lower than in Hong Kong.
Hong Kong takes 14th place in cost of living rankings. Hong Kong expats can expect a high percentage of their salary to be spent on a small but perfectly formed apartment. Public transport is cheap, clean and reliable. Education is expensive.
Japan is known for exorbitantly high cost of living for expats. Healthcare in Japan is both accessible and compulsory for expats who have a resident's visa. The accommodation, Transportation including public transport, vegetables and fruits are very expensive. It is also known for best food in the world. They have great infrastructure.
In Japan, "goods and services allowance" could be an additional added to base pay. In particular, all kind of allowances need to be added to the base salary, depending on the position, because comparatively both the countries are expensive.
Case II - Chinese Manager going to Australia -
Consumer Prices in Australia are 102.41% higher than in China. The monthly expenses of Australian expat will be determined by the city/state you choose, car facility, accommodation etc. The category of Australian visa decides the tax payments and schooling and healthcare costs.
Shortages of rental properties have established high cost of housing in Australia. Healthcare in Australia is of a high standard and is extremely affordable. Medicare allows permanent residents to take advantage of free comprehensive hospital care.
Australia's tax rates are high, and its tax system is confusing. So it is advised to directly deduct the tax from employee's monthly pay cheque. Some additional percentage can be added as foreign premium allowance.
Case III - Indian Manager going to Germany -
Consumer price index in Gurgaon, India is 32.92, while it is 83.53 in Frankfurt, Germany. Restaurant Prices in Germany are 358.51% higher than in India.
Germany pays high taxes. So it is advised that company pays for the additional taxes. The accommodation available varies widely in price and availability. Regular schooling and education are of an excellent standard and cheaper.
As overall living cost of Germany is quiet high compared to India. Indian Manager can be given specific foreign premium allowance. Also, some food coupons could be included in pay package. This will reduce manager's expenses on restaurants.
Case IV - French Manager going to China -
Shanghai is 30% cheaper than Paris in terms of local products and services. But the cost of purchasing imported items is significantly higher in China. The taxation goes upto 40% for high earning employees.
The living cost also depends on the city. In particular, Beijing and Shanghai claim cost of livings on par with major European capitals. Normal education cost is quite low, but international schooling is very high.
So the pay package should include all allowances like education, health, housing etc. if the employee is working at higher position, then only he can meet the living standard. However, as overall cost of living is much lower, base salary can be kept the same.
Case V - Australian Manager going to India -
Consumer Prices Including Rent in India are 76.49% lower than in Australia.
Overall cost of living is 65% cheaper in India than Australia. But accommodation is likely to be more expensive. India is having access to relatively cheap healthcare services. Everyday groceries are very cheap.
Indian visa rules are not as clear and concise as many other countries. But getting visa is easy. Though the individual tax is 30.9%, grossed-up tax goes up to 44.71%. So the expat agreement should be formed, so that burden is on the company.
General Guidelines -
The cost-of-living index shows the difference in living costs between cities. It is used as base factor for deciding expatriate compensation. If the cost-of-living index comes negative by 10%, the companies give same compensation as in home country. But when it is negative below 90%, then some companies reduce the compensation accordingly.
To design compensation, majority companies use the "Balance sheet approach". Some companies use "Host country-based approach" which is based on what competitors are paying and more importantly, how expatriate compensation compares with the compensation levels of local employees in comparable jobs.
Thus the employer would help to maintain the expatriate employee's standard of living throughout the assignment as well as on repatriation, by designing appropriate compensation package.
Case I - Hong Kong Manager going to Japan -
In Japan, both living costs and tax levels are high. Consumer price index in Tokyo, Japan is 86.74. Consumer Prices in Japan are 8.43% higher than in Hong Kong but Rent Prices in Japan are 63.17% lower than in Hong Kong.
Hong Kong takes 14th place in cost of living rankings. Hong Kong expats can expect a high percentage of their salary to be spent on a small but perfectly formed apartment. Public transport is cheap, clean and reliable. Education is expensive.
Japan is known for exorbitantly high cost of living for expats. Healthcare in Japan is both accessible and compulsory for expats who have a resident's visa. The accommodation, Transportation including public transport, vegetables and fruits are very expensive. It is also known for best food in the world. They have great infrastructure.
In Japan, "goods and services allowance" could be an additional added to base pay. In particular, all kind of allowances need to be added to the base salary, depending on the position, because comparatively both the countries are expensive.
Case II - Chinese Manager going to Australia -
Consumer Prices in Australia are 102.41% higher than in China. The monthly expenses of Australian expat will be determined by the city/state you choose, car facility, accommodation etc. The category of Australian visa decides the tax payments and schooling and healthcare costs.
Shortages of rental properties have established high cost of housing in Australia. Healthcare in Australia is of a high standard and is extremely affordable. Medicare allows permanent residents to take advantage of free comprehensive hospital care.
Australia's tax rates are high, and its tax system is confusing. So it is advised to directly deduct the tax from employee's monthly pay cheque. Some additional percentage can be added as foreign premium allowance.
Case III - Indian Manager going to Germany -
Consumer price index in Gurgaon, India is 32.92, while it is 83.53 in Frankfurt, Germany. Restaurant Prices in Germany are 358.51% higher than in India.
Germany pays high taxes. So it is advised that company pays for the additional taxes. The accommodation available varies widely in price and availability. Regular schooling and education are of an excellent standard and cheaper.
As overall living cost of Germany is quiet high compared to India. Indian Manager can be given specific foreign premium allowance. Also, some food coupons could be included in pay package. This will reduce manager's expenses on restaurants.
Case IV - French Manager going to China -
Shanghai is 30% cheaper than Paris in terms of local products and services. But the cost of purchasing imported items is significantly higher in China. The taxation goes upto 40% for high earning employees.
The living cost also depends on the city. In particular, Beijing and Shanghai claim cost of livings on par with major European capitals. Normal education cost is quite low, but international schooling is very high.
So the pay package should include all allowances like education, health, housing etc. if the employee is working at higher position, then only he can meet the living standard. However, as overall cost of living is much lower, base salary can be kept the same.
Case V - Australian Manager going to India -
Consumer Prices Including Rent in India are 76.49% lower than in Australia.
Overall cost of living is 65% cheaper in India than Australia. But accommodation is likely to be more expensive. India is having access to relatively cheap healthcare services. Everyday groceries are very cheap.
Indian visa rules are not as clear and concise as many other countries. But getting visa is easy. Though the individual tax is 30.9%, grossed-up tax goes up to 44.71%. So the expat agreement should be formed, so that burden is on the company.
2
Appendices A and B at the end of this book (pages 612-629) list the knowledge someone studying for the HRCI (Appendix A) or SHRM (Appendix B) certification exam needs to have in each area of human resource management (such as in Strategic Management, and Workforce Planning). In groups of several students, do four things:
(1) review Appendix A and/or B;
(2) identify the material in this chapter that relates to the Appendix A and/or B required knowledge lists;
(3) write four multiple-choice exam questions on this material that you believe would be suitable for inclusion in the HRCI exam and/or the SHRM exam; and,
(4) if time permits, have someone from your team post your team's questions in front of the class, so that students in all teams can answer the exam questions created by the other teams.
(1) review Appendix A and/or B;
(2) identify the material in this chapter that relates to the Appendix A and/or B required knowledge lists;
(3) write four multiple-choice exam questions on this material that you believe would be suitable for inclusion in the HRCI exam and/or the SHRM exam; and,
(4) if time permits, have someone from your team post your team's questions in front of the class, so that students in all teams can answer the exam questions created by the other teams.
Not Answer
3
An issue of HR Magazine contained an article titled "Aftershocks of War," which said that soldiers returning to their jobs from Iraq would likely require HR's assistance in coping with "delayed emotional trauma." The term delayed emotional trauma refers to the personality changes such as anger, anxiety, or irritability that exposure to the traumatic events of war sometimes triggers in returning veterans. Assume you are the HR manager for the employer of John Smith, who is returning to work next week after 1 year in Iraq. Based on what you read in this chapter, what steps would you take to help smooth John's reintegration into your workforce?
A meeting with psychologist -
Initially the psychologist and the soldier family can meet together. The psychologist can help the soldier's family to understand that the only way to overcome his "delayed emotional trauma" is to confront what happened and learn to accept it as a part of the past. The avoidance will ultimately harm the relationships, the ability to function, and the quality of life.
He can guide his family to support the soldier to reduce the effect of unreasonable negative memories. After observing the response for a few days, if required the psychologist can meet the soldier in one to one session. He can help him to reduce stress.
A small gathering with other soldiers and employees -
The simplest way to encourage him is to value his efforts. So a small get-together could be arranged where some of his soldier friends will also be invited as guests. A few of his good friends among colleagues can also join him.
Sometimes, the soldier will have the feeling that only soldiers can understand his feelings or what he is going through. This will help him to explore the thoughts and feelings about the trauma. He will feel a little relaxed.
HR Support -
HR manager can recognize soldier's contribution to the war through company announcement. The HR manager can allot the soldier less responsibility till he settles down. He can keep in touch with soldier to ensure that he recovers slowly. With all company support, the soldier will feel that the association between him and the company is strong.
The above steps would help the soldier's reintegration into the workforce.
Initially the psychologist and the soldier family can meet together. The psychologist can help the soldier's family to understand that the only way to overcome his "delayed emotional trauma" is to confront what happened and learn to accept it as a part of the past. The avoidance will ultimately harm the relationships, the ability to function, and the quality of life.
He can guide his family to support the soldier to reduce the effect of unreasonable negative memories. After observing the response for a few days, if required the psychologist can meet the soldier in one to one session. He can help him to reduce stress.
A small gathering with other soldiers and employees -
The simplest way to encourage him is to value his efforts. So a small get-together could be arranged where some of his soldier friends will also be invited as guests. A few of his good friends among colleagues can also join him.
Sometimes, the soldier will have the feeling that only soldiers can understand his feelings or what he is going through. This will help him to explore the thoughts and feelings about the trauma. He will feel a little relaxed.
HR Support -
HR manager can recognize soldier's contribution to the war through company announcement. The HR manager can allot the soldier less responsibility till he settles down. He can keep in touch with soldier to ensure that he recovers slowly. With all company support, the soldier will feel that the association between him and the company is strong.
The above steps would help the soldier's reintegration into the workforce.
4
"Boss, I Think we Have a Problem"
Central Steel Door Corporation has been in business for about 20 years, successfully selling a line of steel industrial-grade doors. The company had gradually increased its presence from the New York City area, first into New England and then down the Atlantic Coast, then through the Midwest and West, and finally into Canada. The company's basic expansion strategy was always the same: Choose an area, open a distribution center, hire a regional sales manager, and then let that regional sales manager help staff the distribution center and hire local sales reps.
Unfortunately, the company's traditional success in finding sales help did not extend to its overseas operations, when Mel Fisher, president of Central Steel Door, decided to expand his company into Europe. He tried for 3 weeks to find a sales manager by advertising in the International New York Times , which is read by businesspeople in Europe and by American expatriates living and working in Europe. Although the ads placed in the Times also ran for about a month on the Times 's website, Mr. Fisher so far has received only five applications. One came from a possibly viable candidate, whereas four came from candidates who Mr. Fisher refers to as "lost souls"-people who seem to have spent most of their time traveling aimlessly from country to country, sipping espresso in sidewalk cafés. When asked what he had done for the last 3 years, one told Mr. Fisher he'd been on a "walkabout."
Other aspects of his international HR activities have been equally problematic. Fisher alienated two of his U.S. sales managers by sending them to Europe to temporarily run the European operations, but neglecting to work out a compensation package that would cover their relatively high living expenses in Germany and Belgium. One ended up staying the better part of the year, and Mr. Fisher was rudely surprised to be informed by the Belgian government that his sales manager owed thousands of dollars in local taxes. The two managers had hired about 10 local people to staff each of the two distribution centers. However, the level of sales was disappointing, so Fisher decided to fire about half the distribution center employees. That's when he got an emergency phone call from his temporary sales manager in Germany: "I've just been told that all these employees should have had written employment agreements and that in any case we can't fire anyone without at least 1 year's notice, and the local authorities here are really up in arms. Boss, I think we have a problem."
Based on this chapter and the case incident, compile a list of 10 international HR mistakes Mr. Fisher has made so far.
Central Steel Door Corporation has been in business for about 20 years, successfully selling a line of steel industrial-grade doors. The company had gradually increased its presence from the New York City area, first into New England and then down the Atlantic Coast, then through the Midwest and West, and finally into Canada. The company's basic expansion strategy was always the same: Choose an area, open a distribution center, hire a regional sales manager, and then let that regional sales manager help staff the distribution center and hire local sales reps.
Unfortunately, the company's traditional success in finding sales help did not extend to its overseas operations, when Mel Fisher, president of Central Steel Door, decided to expand his company into Europe. He tried for 3 weeks to find a sales manager by advertising in the International New York Times , which is read by businesspeople in Europe and by American expatriates living and working in Europe. Although the ads placed in the Times also ran for about a month on the Times 's website, Mr. Fisher so far has received only five applications. One came from a possibly viable candidate, whereas four came from candidates who Mr. Fisher refers to as "lost souls"-people who seem to have spent most of their time traveling aimlessly from country to country, sipping espresso in sidewalk cafés. When asked what he had done for the last 3 years, one told Mr. Fisher he'd been on a "walkabout."
Other aspects of his international HR activities have been equally problematic. Fisher alienated two of his U.S. sales managers by sending them to Europe to temporarily run the European operations, but neglecting to work out a compensation package that would cover their relatively high living expenses in Germany and Belgium. One ended up staying the better part of the year, and Mr. Fisher was rudely surprised to be informed by the Belgian government that his sales manager owed thousands of dollars in local taxes. The two managers had hired about 10 local people to staff each of the two distribution centers. However, the level of sales was disappointing, so Fisher decided to fire about half the distribution center employees. That's when he got an emergency phone call from his temporary sales manager in Germany: "I've just been told that all these employees should have had written employment agreements and that in any case we can't fire anyone without at least 1 year's notice, and the local authorities here are really up in arms. Boss, I think we have a problem."
Based on this chapter and the case incident, compile a list of 10 international HR mistakes Mr. Fisher has made so far.
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5
"Boss, I Think we Have a Problem"
Central Steel Door Corporation has been in business for about 20 years, successfully selling a line of steel industrial-grade doors. The company had gradually increased its presence from the New York City area, first into New England and then down the Atlantic Coast, then through the Midwest and West, and finally into Canada. The company's basic expansion strategy was always the same: Choose an area, open a distribution center, hire a regional sales manager, and then let that regional sales manager help staff the distribution center and hire local sales reps.
Unfortunately, the company's traditional success in finding sales help did not extend to its overseas operations, when Mel Fisher, president of Central Steel Door, decided to expand his company into Europe. He tried for 3 weeks to find a sales manager by advertising in the International New York Times , which is read by businesspeople in Europe and by American expatriates living and working in Europe. Although the ads placed in the Times also ran for about a month on the Times 's website, Mr. Fisher so far has received only five applications. One came from a possibly viable candidate, whereas four came from candidates who Mr. Fisher refers to as "lost souls"-people who seem to have spent most of their time traveling aimlessly from country to country, sipping espresso in sidewalk cafés. When asked what he had done for the last 3 years, one told Mr. Fisher he'd been on a "walkabout."
Other aspects of his international HR activities have been equally problematic. Fisher alienated two of his U.S. sales managers by sending them to Europe to temporarily run the European operations, but neglecting to work out a compensation package that would cover their relatively high living expenses in Germany and Belgium. One ended up staying the better part of the year, and Mr. Fisher was rudely surprised to be informed by the Belgian government that his sales manager owed thousands of dollars in local taxes. The two managers had hired about 10 local people to staff each of the two distribution centers. However, the level of sales was disappointing, so Fisher decided to fire about half the distribution center employees. That's when he got an emergency phone call from his temporary sales manager in Germany: "I've just been told that all these employees should have had written employment agreements and that in any case we can't fire anyone without at least 1 year's notice, and the local authorities here are really up in arms. Boss, I think we have a problem."
How would you have gone about hiring a European sales manager? Why?
Central Steel Door Corporation has been in business for about 20 years, successfully selling a line of steel industrial-grade doors. The company had gradually increased its presence from the New York City area, first into New England and then down the Atlantic Coast, then through the Midwest and West, and finally into Canada. The company's basic expansion strategy was always the same: Choose an area, open a distribution center, hire a regional sales manager, and then let that regional sales manager help staff the distribution center and hire local sales reps.
Unfortunately, the company's traditional success in finding sales help did not extend to its overseas operations, when Mel Fisher, president of Central Steel Door, decided to expand his company into Europe. He tried for 3 weeks to find a sales manager by advertising in the International New York Times , which is read by businesspeople in Europe and by American expatriates living and working in Europe. Although the ads placed in the Times also ran for about a month on the Times 's website, Mr. Fisher so far has received only five applications. One came from a possibly viable candidate, whereas four came from candidates who Mr. Fisher refers to as "lost souls"-people who seem to have spent most of their time traveling aimlessly from country to country, sipping espresso in sidewalk cafés. When asked what he had done for the last 3 years, one told Mr. Fisher he'd been on a "walkabout."
Other aspects of his international HR activities have been equally problematic. Fisher alienated two of his U.S. sales managers by sending them to Europe to temporarily run the European operations, but neglecting to work out a compensation package that would cover their relatively high living expenses in Germany and Belgium. One ended up staying the better part of the year, and Mr. Fisher was rudely surprised to be informed by the Belgian government that his sales manager owed thousands of dollars in local taxes. The two managers had hired about 10 local people to staff each of the two distribution centers. However, the level of sales was disappointing, so Fisher decided to fire about half the distribution center employees. That's when he got an emergency phone call from his temporary sales manager in Germany: "I've just been told that all these employees should have had written employment agreements and that in any case we can't fire anyone without at least 1 year's notice, and the local authorities here are really up in arms. Boss, I think we have a problem."
How would you have gone about hiring a European sales manager? Why?
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6
"Boss, I Think we Have a Problem"
Central Steel Door Corporation has been in business for about 20 years, successfully selling a line of steel industrial-grade doors. The company had gradually increased its presence from the New York City area, first into New England and then down the Atlantic Coast, then through the Midwest and West, and finally into Canada. The company's basic expansion strategy was always the same: Choose an area, open a distribution center, hire a regional sales manager, and then let that regional sales manager help staff the distribution center and hire local sales reps.
Unfortunately, the company's traditional success in finding sales help did not extend to its overseas operations, when Mel Fisher, president of Central Steel Door, decided to expand his company into Europe. He tried for 3 weeks to find a sales manager by advertising in the International New York Times , which is read by businesspeople in Europe and by American expatriates living and working in Europe. Although the ads placed in the Times also ran for about a month on the Times 's website, Mr. Fisher so far has received only five applications. One came from a possibly viable candidate, whereas four came from candidates who Mr. Fisher refers to as "lost souls"-people who seem to have spent most of their time traveling aimlessly from country to country, sipping espresso in sidewalk cafés. When asked what he had done for the last 3 years, one told Mr. Fisher he'd been on a "walkabout."
Other aspects of his international HR activities have been equally problematic. Fisher alienated two of his U.S. sales managers by sending them to Europe to temporarily run the European operations, but neglecting to work out a compensation package that would cover their relatively high living expenses in Germany and Belgium. One ended up staying the better part of the year, and Mr. Fisher was rudely surprised to be informed by the Belgian government that his sales manager owed thousands of dollars in local taxes. The two managers had hired about 10 local people to staff each of the two distribution centers. However, the level of sales was disappointing, so Fisher decided to fire about half the distribution center employees. That's when he got an emergency phone call from his temporary sales manager in Germany: "I've just been told that all these employees should have had written employment agreements and that in any case we can't fire anyone without at least 1 year's notice, and the local authorities here are really up in arms. Boss, I think we have a problem."
What would you do now if you were Mr. Fisher?
Central Steel Door Corporation has been in business for about 20 years, successfully selling a line of steel industrial-grade doors. The company had gradually increased its presence from the New York City area, first into New England and then down the Atlantic Coast, then through the Midwest and West, and finally into Canada. The company's basic expansion strategy was always the same: Choose an area, open a distribution center, hire a regional sales manager, and then let that regional sales manager help staff the distribution center and hire local sales reps.
Unfortunately, the company's traditional success in finding sales help did not extend to its overseas operations, when Mel Fisher, president of Central Steel Door, decided to expand his company into Europe. He tried for 3 weeks to find a sales manager by advertising in the International New York Times , which is read by businesspeople in Europe and by American expatriates living and working in Europe. Although the ads placed in the Times also ran for about a month on the Times 's website, Mr. Fisher so far has received only five applications. One came from a possibly viable candidate, whereas four came from candidates who Mr. Fisher refers to as "lost souls"-people who seem to have spent most of their time traveling aimlessly from country to country, sipping espresso in sidewalk cafés. When asked what he had done for the last 3 years, one told Mr. Fisher he'd been on a "walkabout."
Other aspects of his international HR activities have been equally problematic. Fisher alienated two of his U.S. sales managers by sending them to Europe to temporarily run the European operations, but neglecting to work out a compensation package that would cover their relatively high living expenses in Germany and Belgium. One ended up staying the better part of the year, and Mr. Fisher was rudely surprised to be informed by the Belgian government that his sales manager owed thousands of dollars in local taxes. The two managers had hired about 10 local people to staff each of the two distribution centers. However, the level of sales was disappointing, so Fisher decided to fire about half the distribution center employees. That's when he got an emergency phone call from his temporary sales manager in Germany: "I've just been told that all these employees should have had written employment agreements and that in any case we can't fire anyone without at least 1 year's notice, and the local authorities here are really up in arms. Boss, I think we have a problem."
What would you do now if you were Mr. Fisher?
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7
Carter Cleaning Company
Going Abroad
Jack Carter decided to take his first long vacation in years and go to Mexico for a month in January 2013. What he found surprised him: He spent time in Mexico City and was surprised at the dearth of cleaning stores, particularly considering the amount of air pollution. Traveling north, he passed through Juarez, Mexico, and was similarly surprised at the relatively few cleaning stores he found there. As he drove back into Texas, and back toward home, he began to think about whether it would be advisable to consider expanding his chain of stores into Mexico.
Aside from the possible economic benefits, he liked what he saw in Mexico. Starting a new business again also appealed to him. "I guess entrepreneurship is in my blood," is the way he put it.
As he drove home to have dinner with Jennifer, he began to formulate the questions he would have to ask before deciding whether to expand abroad.
Assuming they began by opening just one or two stores in Mexico, what do you see as the main HR-related challenges Jack and Jennifer would have to address?
Going Abroad
Jack Carter decided to take his first long vacation in years and go to Mexico for a month in January 2013. What he found surprised him: He spent time in Mexico City and was surprised at the dearth of cleaning stores, particularly considering the amount of air pollution. Traveling north, he passed through Juarez, Mexico, and was similarly surprised at the relatively few cleaning stores he found there. As he drove back into Texas, and back toward home, he began to think about whether it would be advisable to consider expanding his chain of stores into Mexico.
Aside from the possible economic benefits, he liked what he saw in Mexico. Starting a new business again also appealed to him. "I guess entrepreneurship is in my blood," is the way he put it.
As he drove home to have dinner with Jennifer, he began to formulate the questions he would have to ask before deciding whether to expand abroad.
Assuming they began by opening just one or two stores in Mexico, what do you see as the main HR-related challenges Jack and Jennifer would have to address?
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8
Carter Cleaning Company
Going Abroad
Jack Carter decided to take his first long vacation in years and go to Mexico for a month in January 2013. What he found surprised him: He spent time in Mexico City and was surprised at the dearth of cleaning stores, particularly considering the amount of air pollution. Traveling north, he passed through Juarez, Mexico, and was similarly surprised at the relatively few cleaning stores he found there. As he drove back into Texas, and back toward home, he began to think about whether it would be advisable to consider expanding his chain of stores into Mexico.
Aside from the possible economic benefits, he liked what he saw in Mexico. Starting a new business again also appealed to him. "I guess entrepreneurship is in my blood," is the way he put it.
As he drove home to have dinner with Jennifer, he began to formulate the questions he would have to ask before deciding whether to expand abroad.
How would you go about choosing a manager for a new Mexican store if you were Jack or Jennifer? For instance, would you hire someone locally or send someone from one of your existing stores? Why?
Going Abroad
Jack Carter decided to take his first long vacation in years and go to Mexico for a month in January 2013. What he found surprised him: He spent time in Mexico City and was surprised at the dearth of cleaning stores, particularly considering the amount of air pollution. Traveling north, he passed through Juarez, Mexico, and was similarly surprised at the relatively few cleaning stores he found there. As he drove back into Texas, and back toward home, he began to think about whether it would be advisable to consider expanding his chain of stores into Mexico.
Aside from the possible economic benefits, he liked what he saw in Mexico. Starting a new business again also appealed to him. "I guess entrepreneurship is in my blood," is the way he put it.
As he drove home to have dinner with Jennifer, he began to formulate the questions he would have to ask before deciding whether to expand abroad.
How would you go about choosing a manager for a new Mexican store if you were Jack or Jennifer? For instance, would you hire someone locally or send someone from one of your existing stores? Why?
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9
You are the president of a small business. What are some of the ways you expect "going international" will affect HR activities in your business?
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10
Carter Cleaning Company
Going Abroad
Jack Carter decided to take his first long vacation in years and go to Mexico for a month in January 2013. What he found surprised him: He spent time in Mexico City and was surprised at the dearth of cleaning stores, particularly considering the amount of air pollution. Traveling north, he passed through Juarez, Mexico, and was similarly surprised at the relatively few cleaning stores he found there. As he drove back into Texas, and back toward home, he began to think about whether it would be advisable to consider expanding his chain of stores into Mexico.
Aside from the possible economic benefits, he liked what he saw in Mexico. Starting a new business again also appealed to him. "I guess entrepreneurship is in my blood," is the way he put it.
As he drove home to have dinner with Jennifer, he began to formulate the questions he would have to ask before deciding whether to expand abroad.
The cost of living in Mexico is substantially below that of where Carter is now located: How would you go about developing a pay plan for your new manager if you decided to send an expatriate to Mexico?
Going Abroad
Jack Carter decided to take his first long vacation in years and go to Mexico for a month in January 2013. What he found surprised him: He spent time in Mexico City and was surprised at the dearth of cleaning stores, particularly considering the amount of air pollution. Traveling north, he passed through Juarez, Mexico, and was similarly surprised at the relatively few cleaning stores he found there. As he drove back into Texas, and back toward home, he began to think about whether it would be advisable to consider expanding his chain of stores into Mexico.
Aside from the possible economic benefits, he liked what he saw in Mexico. Starting a new business again also appealed to him. "I guess entrepreneurship is in my blood," is the way he put it.
As he drove home to have dinner with Jennifer, he began to formulate the questions he would have to ask before deciding whether to expand abroad.
The cost of living in Mexico is substantially below that of where Carter is now located: How would you go about developing a pay plan for your new manager if you decided to send an expatriate to Mexico?
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11
What are some of the specific, uniquely international activities an international HR manager typically engages in?
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12
Carter Cleaning Company
Going Abroad
Jack Carter decided to take his first long vacation in years and go to Mexico for a month in January 2013. What he found surprised him: He spent time in Mexico City and was surprised at the dearth of cleaning stores, particularly considering the amount of air pollution. Traveling north, he passed through Juarez, Mexico, and was similarly surprised at the relatively few cleaning stores he found there. As he drove back into Texas, and back toward home, he began to think about whether it would be advisable to consider expanding his chain of stores into Mexico.
Aside from the possible economic benefits, he liked what he saw in Mexico. Starting a new business again also appealed to him. "I guess entrepreneurship is in my blood," is the way he put it.
As he drove home to have dinner with Jennifer, he began to formulate the questions he would have to ask before deciding whether to expand abroad.
Present a detailed explanation of the factors you would look for in your candidate for expatriate manager to run the stores in Mexico.
Going Abroad
Jack Carter decided to take his first long vacation in years and go to Mexico for a month in January 2013. What he found surprised him: He spent time in Mexico City and was surprised at the dearth of cleaning stores, particularly considering the amount of air pollution. Traveling north, he passed through Juarez, Mexico, and was similarly surprised at the relatively few cleaning stores he found there. As he drove back into Texas, and back toward home, he began to think about whether it would be advisable to consider expanding his chain of stores into Mexico.
Aside from the possible economic benefits, he liked what he saw in Mexico. Starting a new business again also appealed to him. "I guess entrepreneurship is in my blood," is the way he put it.
As he drove home to have dinner with Jennifer, he began to formulate the questions he would have to ask before deciding whether to expand abroad.
Present a detailed explanation of the factors you would look for in your candidate for expatriate manager to run the stores in Mexico.
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13
What intercountry differences affect HRM? Give several examples of how each may affect HRM.
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14
IMPROVING PERFORMANCE at The Hotel Paris
Managing Global Human Resources
The Hotel Paris's competitive strategy is, "To use superior guest service to differentiate the Hotel Paris properties, and to thereby increase the length of stay and return rate of guests, and thus boost revenues and profitability." HR manager Lisa Cruz must now formulate functional policies and activities that support this competitive strategy and boost performance by eliciting the required employee behaviors and competencies.
With hotels in 11 cities in Europe and the United States, Lisa knew that the company had to do a better job of managing its global human resources. For example, there was no formal means of identifying or training management employees for duties abroad (either for those going to the United States or to Europe). As another example, recently, after spending upwards of $200,000 on sending a U.S. manager and her family abroad, they had to return her abruptly when the family complained of missing their friends back home. Lisa knew this was no way to run a multinational business. She turned her attention to developing the HR practices her company required to do business more effectively internationally.
On reviewing the data, it was apparent to Lisa and the CFO that the company's global human resource practices were probably inhibiting the Hotel Paris from being the world-class guest services company that it sought to be. For example, high-performing service and hotel firms had formal departure training programs for at least 90% of the employees they sent abroad; the Hotel Paris had no such programs. Similarly, with each city's hotel operating its own local hotel HR information system, there was no easy way for Lisa, the CFO, or the company's CEO to obtain reports on metrics like turnover, absences, or workers' compensation costs across all the different hotels. As the CFO summed it up, "If we can't measure how each hotel is doing in terms of human resource metrics like these, there's really no way to manage these activities, so there's no telling how much lost profits and wasted efforts are dragging down each hotel's performance." Lisa received approval to institute new global human resources programs and practices.
In instituting these new programs and practices, Lisa had several goals in mind. She wanted an integrated human resource information system (HRIS) that allowed her and the company's top managers to monitor and assess, on an ongoing basis, the company's global performance on strategically required employee competencies and behaviors such as attendance, morale, commitment, and service-oriented behavior. To address this need, she received approval to contract with a company that integrated, via the Internet, the separate hotels' HR systems, including human resource and benefits administration, applicant tracking and résumé scanning, and employee morale surveys and performance appraisals.
She also contracted with an international HR training company to offer expatriate training for Hotel Paris employees and their families before they left for their foreign assignments, and to provide short-term support after they arrived. That training company also helped create a series of weeklong "Managers' Seminars." Held once every 6 months at a different hotel in a different city, these gave selected managers from throughout the Hotel Paris system an opportunity to meet and to learn more about the numerous new HR programs and practices that Lisa and her team had been instituting for the purpose of supporting the company's strategic aims. With the help of their compensation specialist, Lisa and her team also instituted a new incentive program for each of the company's local managers, to focus their attention more fully on the company's service-oriented strategic aims. By the end of the year, the Hotel Paris's performance on metrics such as percent of expatriates receiving pre-departure screening, training, and counseling were at or above those of high-performing similar companies. She and the CFO believed, rightly, that they had begun to get their global HR system under control.
Provide a one-page summary of what individual hotel managers should know in order to make it more likely incoming employees from abroad will adapt to their new surroundings.
Managing Global Human Resources
The Hotel Paris's competitive strategy is, "To use superior guest service to differentiate the Hotel Paris properties, and to thereby increase the length of stay and return rate of guests, and thus boost revenues and profitability." HR manager Lisa Cruz must now formulate functional policies and activities that support this competitive strategy and boost performance by eliciting the required employee behaviors and competencies.
With hotels in 11 cities in Europe and the United States, Lisa knew that the company had to do a better job of managing its global human resources. For example, there was no formal means of identifying or training management employees for duties abroad (either for those going to the United States or to Europe). As another example, recently, after spending upwards of $200,000 on sending a U.S. manager and her family abroad, they had to return her abruptly when the family complained of missing their friends back home. Lisa knew this was no way to run a multinational business. She turned her attention to developing the HR practices her company required to do business more effectively internationally.
On reviewing the data, it was apparent to Lisa and the CFO that the company's global human resource practices were probably inhibiting the Hotel Paris from being the world-class guest services company that it sought to be. For example, high-performing service and hotel firms had formal departure training programs for at least 90% of the employees they sent abroad; the Hotel Paris had no such programs. Similarly, with each city's hotel operating its own local hotel HR information system, there was no easy way for Lisa, the CFO, or the company's CEO to obtain reports on metrics like turnover, absences, or workers' compensation costs across all the different hotels. As the CFO summed it up, "If we can't measure how each hotel is doing in terms of human resource metrics like these, there's really no way to manage these activities, so there's no telling how much lost profits and wasted efforts are dragging down each hotel's performance." Lisa received approval to institute new global human resources programs and practices.
In instituting these new programs and practices, Lisa had several goals in mind. She wanted an integrated human resource information system (HRIS) that allowed her and the company's top managers to monitor and assess, on an ongoing basis, the company's global performance on strategically required employee competencies and behaviors such as attendance, morale, commitment, and service-oriented behavior. To address this need, she received approval to contract with a company that integrated, via the Internet, the separate hotels' HR systems, including human resource and benefits administration, applicant tracking and résumé scanning, and employee morale surveys and performance appraisals.
She also contracted with an international HR training company to offer expatriate training for Hotel Paris employees and their families before they left for their foreign assignments, and to provide short-term support after they arrived. That training company also helped create a series of weeklong "Managers' Seminars." Held once every 6 months at a different hotel in a different city, these gave selected managers from throughout the Hotel Paris system an opportunity to meet and to learn more about the numerous new HR programs and practices that Lisa and her team had been instituting for the purpose of supporting the company's strategic aims. With the help of their compensation specialist, Lisa and her team also instituted a new incentive program for each of the company's local managers, to focus their attention more fully on the company's service-oriented strategic aims. By the end of the year, the Hotel Paris's performance on metrics such as percent of expatriates receiving pre-departure screening, training, and counseling were at or above those of high-performing similar companies. She and the CFO believed, rightly, that they had begun to get their global HR system under control.
Provide a one-page summary of what individual hotel managers should know in order to make it more likely incoming employees from abroad will adapt to their new surroundings.
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15
You are the HR manager of a firm that is about to send its first employees overseas to staff a new subsidiary. Your boss, the president, asks you why such assignments often fail, and what you plan to do to avoid such failures. How do you respond?
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16
IMPROVING PERFORMANCE at The Hotel Paris
Managing Global Human Resources
The Hotel Paris's competitive strategy is, "To use superior guest service to differentiate the Hotel Paris properties, and to thereby increase the length of stay and return rate of guests, and thus boost revenues and profitability." HR manager Lisa Cruz must now formulate functional policies and activities that support this competitive strategy and boost performance by eliciting the required employee behaviors and competencies.
With hotels in 11 cities in Europe and the United States, Lisa knew that the company had to do a better job of managing its global human resources. For example, there was no formal means of identifying or training management employees for duties abroad (either for those going to the United States or to Europe). As another example, recently, after spending upwards of $200,000 on sending a U.S. manager and her family abroad, they had to return her abruptly when the family complained of missing their friends back home. Lisa knew this was no way to run a multinational business. She turned her attention to developing the HR practices her company required to do business more effectively internationally.
On reviewing the data, it was apparent to Lisa and the CFO that the company's global human resource practices were probably inhibiting the Hotel Paris from being the world-class guest services company that it sought to be. For example, high-performing service and hotel firms had formal departure training programs for at least 90% of the employees they sent abroad; the Hotel Paris had no such programs. Similarly, with each city's hotel operating its own local hotel HR information system, there was no easy way for Lisa, the CFO, or the company's CEO to obtain reports on metrics like turnover, absences, or workers' compensation costs across all the different hotels. As the CFO summed it up, "If we can't measure how each hotel is doing in terms of human resource metrics like these, there's really no way to manage these activities, so there's no telling how much lost profits and wasted efforts are dragging down each hotel's performance." Lisa received approval to institute new global human resources programs and practices.
In instituting these new programs and practices, Lisa had several goals in mind. She wanted an integrated human resource information system (HRIS) that allowed her and the company's top managers to monitor and assess, on an ongoing basis, the company's global performance on strategically required employee competencies and behaviors such as attendance, morale, commitment, and service-oriented behavior. To address this need, she received approval to contract with a company that integrated, via the Internet, the separate hotels' HR systems, including human resource and benefits administration, applicant tracking and résumé scanning, and employee morale surveys and performance appraisals.
She also contracted with an international HR training company to offer expatriate training for Hotel Paris employees and their families before they left for their foreign assignments, and to provide short-term support after they arrived. That training company also helped create a series of weeklong "Managers' Seminars." Held once every 6 months at a different hotel in a different city, these gave selected managers from throughout the Hotel Paris system an opportunity to meet and to learn more about the numerous new HR programs and practices that Lisa and her team had been instituting for the purpose of supporting the company's strategic aims. With the help of their compensation specialist, Lisa and her team also instituted a new incentive program for each of the company's local managers, to focus their attention more fully on the company's service-oriented strategic aims. By the end of the year, the Hotel Paris's performance on metrics such as percent of expatriates receiving pre-departure screening, training, and counseling were at or above those of high-performing similar companies. She and the CFO believed, rightly, that they had begun to get their global HR system under control.
In previous chapters you recommended various human resource practices Hotel Paris should use. Choose one of these, and explain why you believe they could take this program abroad, and how you suggest they do so.
Managing Global Human Resources
The Hotel Paris's competitive strategy is, "To use superior guest service to differentiate the Hotel Paris properties, and to thereby increase the length of stay and return rate of guests, and thus boost revenues and profitability." HR manager Lisa Cruz must now formulate functional policies and activities that support this competitive strategy and boost performance by eliciting the required employee behaviors and competencies.
With hotels in 11 cities in Europe and the United States, Lisa knew that the company had to do a better job of managing its global human resources. For example, there was no formal means of identifying or training management employees for duties abroad (either for those going to the United States or to Europe). As another example, recently, after spending upwards of $200,000 on sending a U.S. manager and her family abroad, they had to return her abruptly when the family complained of missing their friends back home. Lisa knew this was no way to run a multinational business. She turned her attention to developing the HR practices her company required to do business more effectively internationally.
On reviewing the data, it was apparent to Lisa and the CFO that the company's global human resource practices were probably inhibiting the Hotel Paris from being the world-class guest services company that it sought to be. For example, high-performing service and hotel firms had formal departure training programs for at least 90% of the employees they sent abroad; the Hotel Paris had no such programs. Similarly, with each city's hotel operating its own local hotel HR information system, there was no easy way for Lisa, the CFO, or the company's CEO to obtain reports on metrics like turnover, absences, or workers' compensation costs across all the different hotels. As the CFO summed it up, "If we can't measure how each hotel is doing in terms of human resource metrics like these, there's really no way to manage these activities, so there's no telling how much lost profits and wasted efforts are dragging down each hotel's performance." Lisa received approval to institute new global human resources programs and practices.
In instituting these new programs and practices, Lisa had several goals in mind. She wanted an integrated human resource information system (HRIS) that allowed her and the company's top managers to monitor and assess, on an ongoing basis, the company's global performance on strategically required employee competencies and behaviors such as attendance, morale, commitment, and service-oriented behavior. To address this need, she received approval to contract with a company that integrated, via the Internet, the separate hotels' HR systems, including human resource and benefits administration, applicant tracking and résumé scanning, and employee morale surveys and performance appraisals.
She also contracted with an international HR training company to offer expatriate training for Hotel Paris employees and their families before they left for their foreign assignments, and to provide short-term support after they arrived. That training company also helped create a series of weeklong "Managers' Seminars." Held once every 6 months at a different hotel in a different city, these gave selected managers from throughout the Hotel Paris system an opportunity to meet and to learn more about the numerous new HR programs and practices that Lisa and her team had been instituting for the purpose of supporting the company's strategic aims. With the help of their compensation specialist, Lisa and her team also instituted a new incentive program for each of the company's local managers, to focus their attention more fully on the company's service-oriented strategic aims. By the end of the year, the Hotel Paris's performance on metrics such as percent of expatriates receiving pre-departure screening, training, and counseling were at or above those of high-performing similar companies. She and the CFO believed, rightly, that they had begun to get their global HR system under control.
In previous chapters you recommended various human resource practices Hotel Paris should use. Choose one of these, and explain why you believe they could take this program abroad, and how you suggest they do so.
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17
As an HR manager, what program would you establish to reduce repatriation problems of returning expatriates and their families?
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18
IMPROVING PERFORMANCE at The Hotel Paris
Managing Global Human Resources
The Hotel Paris's competitive strategy is, "To use superior guest service to differentiate the Hotel Paris properties, and to thereby increase the length of stay and return rate of guests, and thus boost revenues and profitability." HR manager Lisa Cruz must now formulate functional policies and activities that support this competitive strategy and boost performance by eliciting the required employee behaviors and competencies.
With hotels in 11 cities in Europe and the United States, Lisa knew that the company had to do a better job of managing its global human resources. For example, there was no formal means of identifying or training management employees for duties abroad (either for those going to the United States or to Europe). As another example, recently, after spending upwards of $200,000 on sending a U.S. manager and her family abroad, they had to return her abruptly when the family complained of missing their friends back home. Lisa knew this was no way to run a multinational business. She turned her attention to developing the HR practices her company required to do business more effectively internationally.
On reviewing the data, it was apparent to Lisa and the CFO that the company's global human resource practices were probably inhibiting the Hotel Paris from being the world-class guest services company that it sought to be. For example, high-performing service and hotel firms had formal departure training programs for at least 90% of the employees they sent abroad; the Hotel Paris had no such programs. Similarly, with each city's hotel operating its own local hotel HR information system, there was no easy way for Lisa, the CFO, or the company's CEO to obtain reports on metrics like turnover, absences, or workers' compensation costs across all the different hotels. As the CFO summed it up, "If we can't measure how each hotel is doing in terms of human resource metrics like these, there's really no way to manage these activities, so there's no telling how much lost profits and wasted efforts are dragging down each hotel's performance." Lisa received approval to institute new global human resources programs and practices.
In instituting these new programs and practices, Lisa had several goals in mind. She wanted an integrated human resource information system (HRIS) that allowed her and the company's top managers to monitor and assess, on an ongoing basis, the company's global performance on strategically required employee competencies and behaviors such as attendance, morale, commitment, and service-oriented behavior. To address this need, she received approval to contract with a company that integrated, via the Internet, the separate hotels' HR systems, including human resource and benefits administration, applicant tracking and résumé scanning, and employee morale surveys and performance appraisals.
She also contracted with an international HR training company to offer expatriate training for Hotel Paris employees and their families before they left for their foreign assignments, and to provide short-term support after they arrived. That training company also helped create a series of weeklong "Managers' Seminars." Held once every 6 months at a different hotel in a different city, these gave selected managers from throughout the Hotel Paris system an opportunity to meet and to learn more about the numerous new HR programs and practices that Lisa and her team had been instituting for the purpose of supporting the company's strategic aims. With the help of their compensation specialist, Lisa and her team also instituted a new incentive program for each of the company's local managers, to focus their attention more fully on the company's service-oriented strategic aims. By the end of the year, the Hotel Paris's performance on metrics such as percent of expatriates receiving pre-departure screening, training, and counseling were at or above those of high-performing similar companies. She and the CFO believed, rightly, that they had begun to get their global HR system under control.
Choose one Hotel Paris human resources practice that you believe is essential to the company specifically for achieving its high-quality-service goal, and explain how you would implement that practice in the firm's various hotels worldwide.
Managing Global Human Resources
The Hotel Paris's competitive strategy is, "To use superior guest service to differentiate the Hotel Paris properties, and to thereby increase the length of stay and return rate of guests, and thus boost revenues and profitability." HR manager Lisa Cruz must now formulate functional policies and activities that support this competitive strategy and boost performance by eliciting the required employee behaviors and competencies.
With hotels in 11 cities in Europe and the United States, Lisa knew that the company had to do a better job of managing its global human resources. For example, there was no formal means of identifying or training management employees for duties abroad (either for those going to the United States or to Europe). As another example, recently, after spending upwards of $200,000 on sending a U.S. manager and her family abroad, they had to return her abruptly when the family complained of missing their friends back home. Lisa knew this was no way to run a multinational business. She turned her attention to developing the HR practices her company required to do business more effectively internationally.
On reviewing the data, it was apparent to Lisa and the CFO that the company's global human resource practices were probably inhibiting the Hotel Paris from being the world-class guest services company that it sought to be. For example, high-performing service and hotel firms had formal departure training programs for at least 90% of the employees they sent abroad; the Hotel Paris had no such programs. Similarly, with each city's hotel operating its own local hotel HR information system, there was no easy way for Lisa, the CFO, or the company's CEO to obtain reports on metrics like turnover, absences, or workers' compensation costs across all the different hotels. As the CFO summed it up, "If we can't measure how each hotel is doing in terms of human resource metrics like these, there's really no way to manage these activities, so there's no telling how much lost profits and wasted efforts are dragging down each hotel's performance." Lisa received approval to institute new global human resources programs and practices.
In instituting these new programs and practices, Lisa had several goals in mind. She wanted an integrated human resource information system (HRIS) that allowed her and the company's top managers to monitor and assess, on an ongoing basis, the company's global performance on strategically required employee competencies and behaviors such as attendance, morale, commitment, and service-oriented behavior. To address this need, she received approval to contract with a company that integrated, via the Internet, the separate hotels' HR systems, including human resource and benefits administration, applicant tracking and résumé scanning, and employee morale surveys and performance appraisals.
She also contracted with an international HR training company to offer expatriate training for Hotel Paris employees and their families before they left for their foreign assignments, and to provide short-term support after they arrived. That training company also helped create a series of weeklong "Managers' Seminars." Held once every 6 months at a different hotel in a different city, these gave selected managers from throughout the Hotel Paris system an opportunity to meet and to learn more about the numerous new HR programs and practices that Lisa and her team had been instituting for the purpose of supporting the company's strategic aims. With the help of their compensation specialist, Lisa and her team also instituted a new incentive program for each of the company's local managers, to focus their attention more fully on the company's service-oriented strategic aims. By the end of the year, the Hotel Paris's performance on metrics such as percent of expatriates receiving pre-departure screening, training, and counseling were at or above those of high-performing similar companies. She and the CFO believed, rightly, that they had begun to get their global HR system under control.
Choose one Hotel Paris human resources practice that you believe is essential to the company specifically for achieving its high-quality-service goal, and explain how you would implement that practice in the firm's various hotels worldwide.
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19
Working individually or in groups, outline an expatriation and repatriation plan for your professor, whom your school is sending to Bulgaria to teach HR for the next 3 years.
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20
What special training do overseas candidates need? In what ways is such training similar to and different from traditional diversity training?
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21
Give three specific examples of multinational corporations in your area. Check on the Internet or with each firm to determine in what countries these firms have operations. Explain the nature of some of their operations, and summarize whatever you can find out about their international employee selection and training HR policies.
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22
Your boss wants you to transfer from headquarters in Columbus, Ohio to the firm's Moscow, Russia office. You're pretty sure you're suited to work abroad, but to be sure you decide to write a short essay based on what you learned in this chapter titled "Why I think I would be successful in an overseas assignment", What would you say in your essay?
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23
Choose three traits useful for selecting international assignees, and create a straightforward test to screen candidates for these traits.
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24
MyManagementLab only-comprehensive writing assignment for this chapter.
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