MGMT 4300—Managing A Virtual Workforce

Instructor: Ed Martinez
Weight: 50 points - No partial credit. All questions must be answered in order to receive a grade.

Assignment #5
Instructions: Read Case 6.1 and Case 6.2. Then, answer its respective questions as shown at the bottom of the case.
After this assignment is complete, please submit the WORD document to Blackboard.
Note: While I am primarily interested on your analysis, spelling check is appreciated.

Case 6.1. Brazil’s economic boom needs more talent

Multinational companies are taking extra measures to secure qualified employees in Brazil's booming economy. To cope with a
talent shortage, many are increasing internship programs, spending more on training and salaries, and relocating workers
from flat or declining markets. There is a growing demand for English-speaking managers and engineers, as well as those with
experience in business development. Brazil's economy has soared in recent years as its oil, gas, and ethanol sectors have
thrived. In 2010, U.S. foreign direct investment in Brazil totaled $6.2 billion, up from $2.4 billion in 2003, according to the
Banco Central do Brasil. From January through April 2013, U.S. investment reached $3.1 billion.

Similar to the situation in other emerging markets, such as China, foreign companies looking to expand in Brazil are competing
with flourishing local firms for new hires. Also, local colleges and universities in Brazil were caught off guard by the economic
boom. For-profit schools are attempting to fill the gap, but for now many multinational companies say they have to educate
their own employees. Audio-equipment maker Harman International Industries Inc. trains its Brazilian engineers at company
research centers in California and Indiana for three to six months at a time, according to Chief Executive Dinesh Paliwal.
Brazilians trained by multinational corporations are widely sought after, Mr. Paliwal says, "You train them for six or nine
months your way and then all of a sudden, their market value doubles."

Poaching is an issue. "The market is trying to steal my people,' says Luis Maurette, president of Liberty Seguros Brazil, Liberty
Mutual Insurance Co.'s Brazilian company. In the past eight months, Mr. Maurette says, competitors, both foreign companies
and Brazilian firms, have tried to recruit 70 of his 1,500 employees, including underwriters, field sales managers, and affinity
specialists. Twenty actually made the move, he says. In November, a key manager in Liberty's affinity business approached Mr.
Maurette, saying a competitor had offered her a better-paying job. Mr. Maurette gave her a promotion and a raise, and she
stayed.

Companies also say they have to rely more heavily on interns to feed the pipeline. Siemens AG has ten thousand employees in
Brazil and expects to add around eight hundred in 2011, says Marcos Cunha, Siemens's Director of Human Resources in Brazil.
To fill the spots, the company plans to hire about 90 percent of its interns, he says. Many of them will fill engineering and
finance positions. Mr. Cunha says it is increasingly difficult to find people with five to ten years of experience, so the company
prefers to develop talent from universities instead. For more technical jobs, Siemens is relocating employees from flat or
declining markets like Spain, Portugal, and the United States. Otis Elevator Co. is adding over one hundred new employees in
Brazil, targeting mechanics before they finish school. Otis partners up with technical schools across Brazil and recruits
upcoming graduates as interns for a six-month program. It hires about 60 percent of the interns who complete the program.

Hiring also came into play when choosing the location of a new 200,000 square foot factory. Rather than locating where costs
would be lower, the company decided to build the plant just a few miles from its existing facility in Sã o Bernardo so that it
could keep its existing workers rather than hire new ones. Randy Wilcox, president of Otis's North and South American
operations, says "We knew it would be a challenge to get new employees."

Source: Adapted from D. Mattioli, "Brazil's Boom Needs Talent; Multinationals Beef Up Training; English-Speaking Managers
Are in Demand," Wall Street Journal, June 27, 2011.

QUESTIONS FOR CASE ANALYSIS AND DISCUSSION

1. How are MNCs coping with a talent shortage driven by the economic boom in Brazil?

Well MNCs are increasing internship programs, spending more on training and salaries, and relocating workers from flat or
declining markets. As well, there is a growing demand for English-speaking managers and engineers, as well as those with
experience in business development.
2. Do MNCs rely more on internal or external staffing, and why? What are particular advantages of using internal versus
external sources of staffing?

3. What are the main concerns and practices of MNCs in retaining talented employees?

Some main concerns and practices mentioned in this case in retaining talented employees was by Luis Maurette, when he said
that “"The market is trying to steal my people” “which as president of Liberty Seguros Brazil, Liberty Mutual Insurance Co.'s
Brazilian company. In the past eight months,

CASE 6.2. MNC staffing practices and local anti-discrimination laws

The U.S. legal landscape is full of lawsuits by minorities and women claiming discrimination at the hands of whites and men.
And in recent years there also have been many claims by whites claiming "reverse discrimination" against preferential
treatment with affirmative action. But the case against Marubeni America, the New York subsidiary of a big Japanese trading
company, involves a different sort of alleged prejudice—a U.S.-based foreign-owned company discriminating against people
who fall outside of their ethnic group or national origin. This pattern of discrimination is a growing concern due to the
increasing presence of MNCs in the United States. Though the Marubeni case isn't unprecedented, the e-mails and other
evidence cited in this case offer a rare inside look into the employment practices of an MNC operating in a host country where
local law conflicts with employment practice.

The plaintiffs in this case—two Caucasian executives—accused the local subsidiary, general manager, chief financial officer,
and head of human resources of discriminating against Americans, non-Asian minorities, and women. The suit alleges that
non-Asians are promoted less frequently and paid less than Asians. The two-hundred-worker company has no African
Americans or females and just one Hispanic among its 121 top officers and managers, the suit says, and just three African-
American lower-level employees. The suit also claims that weekly meetings were conducted in Japanese, effectively excluding
non-Japanese-speaking employees, and that some executives frequently used racial and ethnic slurs. The suit was brought by
Kevin Long, a senior HR employee, and Ludvic Presto, the company's top internal auditor, both of whom were placed on paid
administrative leave—a move their lawyers claim was retaliation for complaining about discrimination. The two men are
asking for a minimum of $4 million each in severance payments, plus pension and other benefits, and $55 million in damages
and legal costs. Two current female HR workers also filed similar complaints with the U.S. Equal Employment Opportunity
Commission.

Although Marubeni strongly contests the validity of these claims about discrimination, damning e-mail records suggest
otherwise. Mr. Long received the following e-mail from Yuji Takikawa, a vice president of the U.S. company's textile unit,
requesting help hiring a salesperson: "I want a person who has aggressiveness, high IQ. We prefer male and 25 to 30 years old.
Asian, like Chinese, Japanese, of course American or others is fine. As you know, in case of American guy, once reach high
income, all of a sudden stop working. This is my feeling." On another occasion, an executive wrote in an e-mail to Mr. Long that
two other top company officials had discussed replacing a pregnant employee because they were worried "about her unstable
situation after the delivery." Mr. Long replied that their grounds for wanting to replace the woman, who had been with the
company for fifteen years, were "inappropriate and considered pregnancy discrimination in this country." The head of human
resources of the local operation, in a farewell e-mail upon retirement, wrote that the company's outside lawyers had "done a
masterful job" at protecting the company from litigation from groups that he described using racial slurs.

Marubeni isn't the first Japanese-owned U.S.-based company accused of national-origin discrimination. In 1980, thirteen
female American secretaries sued Sumitomo Shoji America, Inc., alleging it hired only male Japanese nationals for management
jobs. The company claimed it was immune from the suit based on a 1953 treaty with the United States that gave both
countries' corporations limited immunity from each other's employment discrimination laws so they could make sure that
only their own citizens held targeted positions in operations based in the other country. But the U.S. Supreme Court rejected
this argument, ruling that all foreign-owned subsidiaries in the United States are subject to U.S. employment laws. Sumitomo
agreed in a settlement to pay more than $2.6 million to current and former employees and to accelerate efforts to recruit and
promote qualified women.

Source: Adapted from K. Scannell, "Lawsuit Charges US Unit of Japanese Company with Bias," Wall Street Journal, January 20,
2005: B1, B2.

QUESTIONS FOR CASE ANALYSIS AND DISCUSSION

1. What message does this case have for MNCs as they plan and carry out staffing and other workforce management activities
in their foreign host operations?

Well the message this case has for MNCs, is that they must understand that in recent years there have been many claims by
whites claiming "reverse discrimination" against preferential treatment with affirmative action. So, the message that is being
said is that so they can try to not do anymore discrimination against women from foreign countries.

2. What evidence does this case provide that local management was guilty of unfair discrimination according to U.S. labor
laws?
One evidence that was mentioned was about. “Mr. Long, he received the following e-mail from Yuji Takikawa, a vice president

3. Do you believe that the behavior of local Marubeni managers would be acceptable in other counties where it is not
specifically prohibited by local labor laws?

No I don’t believe the behavior of Marubeni managers would be acceptable, but unfortunately in the real world, everybody one
another take advantage of each and try their best to twist these laws and use them for their advantage around their employees
around the whole world.

4. Besides avoiding legal costs, can you think of any other reasons to avoid discriminatory behavior when making staffing
decisions in global workforce management?

Well some ways MNCs should be aware of to avoid discriminatory behavior is by simply, not writing emails to other people
about the things mentioned they don’t like