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Chapter 7. Human Resource Selection and Development Across Cultures
Chapter 7. Human Resource Selection and Development Across Cultures
McGraw-Hill/Irwin .
Objectives
1. IDENTIFY the basic sources that MNCs can tap when
filling management vacancies in overseas operations.
2. DESCRIBE the selection criteria and procedures when
making final decisions.
3. DESCRIBE the training process, the most common
reasons for training, and the types of training that often
are provided.
Chapter 7
2. Host-Country Nationals
3. Third-Country Nationals
4. Inpatriates
1. Sources of Human Resources
Home-Country Nationals
• Expatriate managers who are citizens of the
country where the multinational corporation is
headquartered.
• Expatriates/expats: manager who live and
work outside their home country.
Discuss: Reasons to use home-country nationals?
Home-country nationals: reasons to use
1)To start up operations;
2)To provide technical expertise;
3)To help the MNC maintain financial control
4)To provide promising managers with international experience…
5)To maintain and facilitate coordination and control;
6)The unavailability of managerial talent in the host country;
7) Foreign operation as short lived;
8)The host country’s multiracial population, and selecting a manager of
either race would result in political or social problems;
9)To maintain a foreign image in the host country;
10) The belief that a home-country manager is the best person…
Discuss: Is the trend of using home-
country nationals increasing or
decreasing? Why?
1. Sources for Human Resources
1.2. Host-Country Nationals: Local managers hired by
the MNC
• Common reasons to use:
o Familiarity with the culture
o Knowledge of the language
o Good public relations
o Less expensive.
1. Sources for Human Resources
1.3. Third-Country Nationals (TCN)
• Managers who are citizens of countries other than the
country in which the MNC is headquartered or the one in
which the managers are assigned to work
• Reasons to use?
o Salary and benefit package usually is less than that of a
home-country nationals
o Knowledge of the region or speak the same language as
the local people.
1. Sources for Human Resources
1.4. Inpatriates
• Individuals from a host country or third country who
are assigned to work in the home country.
• Help MNCs develop their global core competencies.
ethnocentric
Overall
geocentric Management
polycentric
Philosophy
regiocentric
EPRG Model
4.1. The Impact of Overall Management Philosophy on Training
Ethnocentric
(home-country
nationals)
May be third-
regiocentric
country nationals
Review Which philosophy:
1. High costs?
ethnocentric 2. Suitable for high-level
positions?
3. Requires managers to have
geocentric Management a high adaptability to
Philosophy polycentric various different cultures?
Expatriates:
base
taxes salary 2-5 times as much as
home-country
incentives benefits counterparts
10 times as much as
allowances local nationals
5. Compensation
1) Base salary
• Amount of money that an expatriate normally receives in
the home country
2) Benefits
• 1/3 of compensation.
• MNCs provide with extra vacation, special leaves
• Many MNCs pay the airfare for expats and their families to
make an annual visit home, for emergency leave
5. Compensation
3) Allowances
• Cost-of-Living Allowance
• Payment for differences between the home country and
the overseas assignment.
• Including relocation, housing, education, and
hardship…
4) Incentives
• A growing number of firms have replaced the ongoing
premium with a lump-sum premium
5. Compensation
5) Taxes
• An expatriate may have two tax bills for the
same pay (in US, if exceeds $100,800)
• MNCs usually pay the extra tax burden (tax
equalization)
Chapter 7
1.Sources for Human Resources
2.Selection Criteria for International Assignments
3.International Human Resource Selection Procedures
4.Training in International Management
5. Compensation
Thank you!