Mgt 351.

26 Spring 2019

Assignment

“Case Study # 5”

Prepared by: Mahjabeen Bashar

ID: 1330318630

MGT 351.26

Spring 2019

Date: 18. 4. 2019

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Mahjabeen Bashar
Mgt 351.26 Spring 2019

Case study

“Carter Cleaning Company Going Abroad”

1. Assuming they began by opening just one or two stores in Maxico, what do
you see as the main HR related challenges he and Jennifer would have to
address?

Answer:

Since Carter Cleaning Company is going to be international, they are to be

faced With international human resource management issues. In this type Of
globalization cases, the employer typically faces an array of social, political,
legal and cultural differences. What works in one country may not work for
another. The same is applied to Carter Cleaning Agency, too. Thus, the main
HR problem Jack and Jeniffer is going to face is to create effective Human
Resource practices, both for the local ones at each country and for the company
as a whole.

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2. 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 your existing stores? Why?

Answer:

If I were Jack or Jennifer, I would go for a "Geocentric" staffing policy. Since the
manager needs to have the technical knowledge and skills as well as intelligence
and people skill, thus the most competent manager is needed for the oversees
branch. But, as this is the first foreign branch, I would have preferred a "Local"
instead of a "Host Country National", but that local should have skills to compete
with existing managers. If I would have no other alternatives but to send an
expatriate, then I would have arrange a "adaptability screening" as part of the
selection process to make sure the manager can sustain abroad.

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3. 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 decide to send expatriate to Mexico?

Answer:

Until a global pay system is established, I would have followed the "Balance
Sheet Approach" for paying the expatriate manager. The balance-sheet approach
provides international employees with a compensation package that equalizes cost
differences between the international assignment and the same assignment in the
home country of the individual or the corporation. The balance-sheet approach is
based on some key assumptions:

HOME-COUNTRY REFERENCE POINT

The compensation package is developed to keep global employees at a level
appropriate to their jobs in relation to similar jobs in the home country. Special
benefits or allowances are provided to allow the global employees to maintain a
standard of living at least equivalent to what they would have in the home country.

LIMITED DURATION OF GLOBAL ASSIGNMENT

Another basic premise of the balance- sheet approach is that expatriate employees
generally have international assignments lasting two to three years. The
international compensation package is designed to keep the expatriates “whole” for
a few years until they can be reintegrated into the home-country compensation
program. Thus, the “temporary” compensation package for the international
assignment must be structured to make it easy for the repatriated employee to
reenter the domestic compensation and benefits programs. Also, it is assumed that
the international employee will retire in the home country, so pension and other
retirement benefits will be home country- based.

Tax Concerns
Many international compensation plans attempt to protect expatriates from
negative tax consequences by using a tax equalization plan. Under this plan, the
company adjusts an employee’s base income downward by the amount of
Estimated U.S. tax to be paid for the year. Thus, the employee pays only the
foreign-country tax. The intent of the tax equalization plan is to ensure that
expatriates will not pay any more or less in taxes than if they had stayed in the
United States.

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4. Present a detailed explanation of the factors you would look for in your
candidate for expatriate manager to run the stores in Mexico.

Answer:

The factors I would look for an expatriate manager is as follows:

 Family Support: If the manager accepts an overseas assignment,

his/her family will also be affected. It is essential to assess the
family's readiness and willingness to live overseas.

 Career Motivation: It is another trait that is needed to be taken care

of. If the manager has high career motivation, then it would be easier
for him/her and the company to deliver better on foreign soil.

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