Chapter 19
Global Human Resource Management
True / False Questions
1. An expatriate manager is a citizen of one country who is working abroad in one of
the firm's subsidiaries.
True
False
2. HRM professionals have a critically important strategic role.
True
False
3. An organization's norms and value systems are known as its corporate culture.
True
False
4. The most attractive staffing policy is the ethnocentric approach.
True
False
5. A firm with an ethnocentric staffing policy will fill all key management positions
with parent-country nationals.
True
False
6. Cultural myopia refers to a firm's failure to understand host-country cultural
differences that require different approaches to marketing and management.
True
False
7. In the case of an ethnocentric approach, it is possible that managers may make
decisions that are ethically suspect because they do not understand the culture in
which they are managing.
True
False
8. A firm following a polycentric approach to staffing believes that the host country
lacks qualified individuals to manage subsidiaries.
True
False
9. A firm that adopts a polycentric approach to staffing is likely to suffer from cultural
myopia.
True
False
10. Firms may choose an ethnocentric approach to staffing as opposed to a
polycentric approach because of the cost savings it promotes.
True
False
11. A geocentric staffing policy seeks the best people for key jobs throughout the
organization, regardless of nationality.
True
False
12. A geocentric approach tends to weaken local responsiveness.
True
False
13. Many firms adopt a geocentric policy toward staffing because it is a relatively
inexpensive staffing policy.
True
False
14. An ethnocentric approach is compatible with both global standardization and
transnational strategies.
True
False
15. A citizen of Japan who moves to the United States to work at Microsoft would be
classified as an inpatriate.
True
False
16. Expatriate failure refers to a manager's failure to understand host-country cultural
norms and values, leading to ineffective work.
True
False
17. A seminal study, R. L. Tung, revealed that for European firms, the top reason for
expatriate failure was the inability of the manager to cope with larger overseas
responsibilities.
True
False
18. An executive who performs well in a domestic setting may not be able to adapt to
managing in a different cultural setting.
True
False
19. An expatriate needs to have language fluency to show willingness to
communicate.
True
False
20. The ability to understand why people of other countries behave the way they do is
perceptual ability.
True
False
21. Expatriate managers who have perceptual ability tend to treat foreign nationals as
if they were home-country nationals.
True
False
22. According to Mendenhall and Oddou, poorly-adjusted expatriates tend to be
nonjudgmental and nonevaluative in interpreting the behavior of host-country
nationals.
True
False
23. Cultural toughness refers to the relationship between the country of assignment
and how well an expatriate adjusts to a particular posting.
True
False
24. A manager might be sent on several foreign postings over a number of years to
build his/her cross-cultural sensitivity and experience as part of a management
development program.
True
False
25. Historically, most international businesses have been more concerned with
training than with management development.
True
False
26. English is considered the language of world business.
True
False
27. Where an expatriate community exists, firms often devote lesser effort to ensuring
that the new expatriate family is quickly integrated into that group.
True
False
28. Firms pursuing a transnational strategy increasingly are using management
development as a strategic tool.
True
False
29. Bringing managers together in one location for extended periods and rotating
them through different jobs in several countries helps the firm build a formal
management network.
True
False
30. A firm's performance appraisal systems are an important element of its control
systems.
True
False
31. Unintentional bias makes it difficult to evaluate the performance of expatriate
managers objectively.
True
False
32. Most expatriates believe that more weight should be given to an on-site
manager's appraisal than to an off-site manager's appraisal.
True
False
33. In ethnocentric firms, the lack of managers' mobility among national operations
implies that pay can and should be kept country-specific.
True
False
34. If a firm is serious about building an international cadre, it may have to pay its
international executives the same basic salary irrespective of their country of
origin or assignment.
True
False
35. Base pay in most firms is set with regard to global market conditions.
True
False
36. An expatriate's base salary normally varies from the base salary for a similar
position in the home country.
True
False
37. When a reciprocal tax treaty is in force, the firm typically pays the expatriate's
income tax in the host country.
True
False
38. From a strategic perspective, the key issue in international labor relations is the
degree to which organized labor can limit the choices of an international
business.
True
False
39. Labor unions generally prefer it if an international business keeps highly skilled
tasks in its home country and farms out only low-skilled tasks to foreign plants.
True
False
40. The international trade secretariats have had tremendous success.
True
False
Multiple Choice Questions
41. Which of the following is mainly concerned with the selection of employees for
particular jobs?
A. Retention policy
B. Staffing policy
C. Incentive policy
D. Appraisal policy
42. A Japanese firm prefers expatriate Japanese managers to head its foreign
operations because these managers have been socialized into the firm while
employed in Japan. This indicates that the firm:
A. believes that such managers cannot progress beyond middle-manager
positions in their parent company.
B. follows an ethnocentric staffing policy to maintain a unified corporate culture.
C. is trying to create value by transferring core competencies to a foreign
operation.
D. requires host-country nationals to be recruited to manage subsidiaries.
43. An ethnocentric staffing policy is one in which:
A. all key management positions are filled by host-country nationals.
B. host-country nationals are recruited to manage subsidiaries.
C. all key management positions are filled by parent-country nationals.
D. the best people are recruited for key jobs throughout the organization,
regardless of nationality.
44. Cultural myopia refers to a firm's failure to:
A. adapt to certain ethnocentric cultures.
B. act confidently in host-countries.
C. understand host-country cultural differences.
D. prevent gender discrimination within the firm
45. What is the difference between an ethnocentric and a polycentric staffing
approach?
A. An ethnocentric staffing approach alleviates cultural myopia, while a
polycentric staffing approach can lead to cultural myopia.
B. An ethnocentric staffing approach is more expensive compared to a polycentric
staffing approach.
C. An ethnocentric staffing approach seeks host-country nationals for all key
positions, while a polycentric staffing approach seeks the best people for key
jobs regardless of nationality.
D. An ethnocentric staffing approach is now used in most international
businesses, while the polycentric staffing approach is on the wane.
46. If a company recruits host-country nationals to manage subsidiaries while parentcountry nationals occupy key positions at corporate headquarters, the firm is
following a(n):
A. polycentric staffing policy
B. ethnocentric staffing policy
C. geocentric staffing policy
D. internal staffing policy
47. Which of the following is a drawback of the polycentric approach to staffing?
A. Firms are likely to suffer from cultural myopia.
B. Host-country nationals are vulnerable to cultural misunderstandings.
C. This approach increases the cost of value creation.
D. Host-country nationals have limited opportunities for advancement beyond
senior positions in their subsidiary.
48. A(n) _____ seeks the best people for key jobs throughout the organization,
regardless of nationality.
A. polycentric staffing policy
B. ethnocentric staffing policy
C. geocentric staffing policy
D. uniform staffing policy
49. A polycentric approach may be effective for firms pursuing a(n):
A. international strategy.
B. localization strategy.
C. transnational strategy.
D. global standardization strategy.
50. A firm using a polycentric staffing policy:
A. is less likely to suffer from cultural myopia.
B. seeks the best people for key jobs throughout the organization, regardless of
nationality.
C. will most likely follow an ethnocentric strategy.
D. is likely to have improved communication between host-country managers and
parent-country managers.
51. What is the most important advantage of using a geocentric staffing policy?
A. It enables the firm to build a cadre of international executives who feel at home
working in a number of cultures.
B. It may be less expensive to implement than other policies, reducing the costs
of value creation.
C. The higher pay managers on an international fast track enjoy is a source of
inspiration within a firm.
D. It reduces the need for futile and time consuming documentation.
52. An ethnocentric approach to staffing is appropriate for firms that are pursuing
a(n):
A. localization strategy.
B. international strategy.
C. global standardization strategy.
D. transnational strategy.
53. Which of the following staffing approaches will be most effective for a firm that is
pursuing a transnational strategy?
A. A polycentric staffing policy
B. An ethnocentric staffing policy
C. A geocentric staffing policy
D. An internal staffing policy
54. A geocentric staffing policy _____.
A. requires host-country nationals to be recruited to manage subsidiaries, while
parent-country nationals occupy key positions at corporate headquarters
B. leads to ineffective use of human resources
C. requires extensive documentation
D. is compatible with both international and localization strategy.
55. A citizen of France who moves to the U.S. to work at Ford is a(n):
A. host-country national.
B. local.
C. inpatriate.
D. acquired citizen.
56. Expatriate failure refers to:
A. expatriates who follow host-country norms instead of their home-country
norms.
B. the inability of expatriate managers to treat foreign nationals as if they were
home-country nationals.
C. the premature return of an expatriate manager to his or her home-country.
D. the ethical drawbacks of the ethnocentric staffing approach.
57. In a seminal study, R. L. Tung found that for American multinationals, the biggest
impediment to expatriate success was:
A. the inability of the spouse to adjust.
B. the manager's inability to adjust.
C. the manager's inability to cope with larger overseas responsibilities.
D. the lack of adequate technical training.
58. In a seminal study, R. L. Tung found that for Japanese multinationals, the biggest
impediment to expatriate success was:
A. the inability of the spouse to adjust.
B. inadequate compensation.
C. the manager's inability to cope with larger overseas responsibilities.
D. the lack of adequate technical training.
59. Mendenhall and Oddou's "others-orientation" dimension, in their study on what
predicts success in foreign jobs postings, refers to:
A. the expatriate's self-esteem, self-confidence, and mental well-being.
B. the expatriate's ability to interact effectively with host-country nationals.
C. the expatriate's ability to understand why people of other countries behave the
way they do.
D. the relationship between the country of the assignment and how well an
expatriate adjusts to a particular posting.
60. Which dimension of Mendenhall and Oddou's study suggests that an expatriate
with high self-esteem, self-confidence, and mental well-being is likely to succeed
in a foreign job posing?
A. Self-orientation
B. Others-orientation
C. Cultural toughness
D. Perceptual ability
61. _____ is the ability to understand why people of other countries behave the way
they do.
A. Others-orientation
B. Cultural myopia
C. Perceptual ability
D. Cultural toughness
62. Mendenhall and Oddou identified cultural toughness as one of the dimensions in
their study on dimensions that predict success in foreign jobs postings. This
dimension refers to the:
A. expatriate's self-esteem, self-confidence, and mental well-being.
B. expatriate's ability to interact effectively with host-country nationals.
C. expatriate's ability to understand why people of other countries behave the way
they do.
D. relationship between the country of the assignment and how well an expatriate
adjusts to a particular posting.
63. Which of the following issues was not addressed by Mendenhall and Oddou's
study?
A. Expatriate failure due to a spouse's inability to adjust.
B. Expatriate failure due to a manager's lack of self-esteem.
C. Expatriate failure due to lack of relationship development.
D. Expatriate failure due to a manager's inability to empathize.
64. Which of the following statements is true regarding management development?
A. Historically, most international businesses have been more concerned with
management development than with training.
B. Management development facilitates the creation of an informal network for
sharing knowledge within the multinational enterprise.
C. Management development refers to specific training efforts to prepare homecountry nationals for foreign postings.
D. Typically, management development programs use standard psychological
tests to select managers for specific foreign postings.
65. Practical training is:
A. provided to foster an appreciation for the host country's culture.
B. aimed at helping expatriates improve their communication skills.
C. aimed at helping expatriate managers to build relationships in the host-country.
D. aimed at helping the expatriate manager and family ease themselves into dayto-day life in the host country.
66. Management development programs aims to:
A. facilitate an ethnocentric approach to staffing.
B. reduce job rotations of managers.
C. build a formal management network.
D. build a unifying corporate culture.
67. Bringing managers together in one location for extended periods and rotating
them through different jobs in several countries is a part of:
A. the ethnocentric approach.
B. the global standardization strategy.
C. cultural toughness programs.
D. management development programs.
68. _____ makes it difficult to evaluate the performance of expatriate managers
objectively.
A. Cultural relativism
B. Internal documentation
C. Unintentional bias
D. Others-orientation
69. When evaluating expatriates, home-country managers usually rely on:
A. the manager's ability to develop cross-cultural awareness.
B. hard data such as market share.
C. the ability of the expatriate to work with local managers.
D. a set of subjective criteria such as interpersonal skills
70. Which among the following should be done in order to reduce bias in the
performance appraisal process for expatriates?
A. More weight should be given to an off-site manager's appraisal than to an onsite manager's appraisal.
B. The on-site manager should be of a different nationality as the expatriate
manager.
C. Home-office managers should be consulted before an on-site manager
completes a formal termination evaluation.
D. A former expatriate who served in the same location as a current expatriate
should not be allowed to participate in the appraisal.
71. Which of the following is the most common approach to expatriate pay?
A. Balance sheet approach
B. Net-to-net approach
C. Host-country approach
D. Cost-based approach
72. A foreign service premium is:
A. paid when the expatriate is being sent to a difficult location.
B. the extra pay that an expatriate receives for working outside his or her country
of origin.
C. normally given to ensure that the expatriate can afford the same quality of
housing in the foreign country as at home.
D. paid to ensure that the expatriate enjoys the same standard of living in the
foreign posting as at home.
73. A hardship allowance is paid:
A. when the expatriate is being sent to a location where such basic amenities are
grossly deficient by the standards of the expatriate's home country.
B. to ensure that an expatriate's children receive adequate schooling (by homecountry standards).
C. to ensure that the expatriate will enjoy the same standard of living in the
foreign posting as at home.
D. to ensure that the expatriate can afford the same quality of housing in the
foreign country as at home.
74. Which of the following is a concern of organized labor regarding multinational
firms?
A. A company can counter a union's bargaining power with the power to move
production to another country.
B. An international business will keep low-skilled tasks in its home country and
farm out only highly skilled tasks to foreign plants.
C. An international business can attempt to import employment practices and
contractual agreements from its host-country.
D. A multinational company is more likely to receive government support in the
case of hostile labor relations.
75. Which of the following is NOT an action taken by organized labor to respond to
the increased bargaining power of multinational corporations?
A. Trying to establish international labor organizations
B. Increasing competition between national unions
C. Lobbying for national legislation to restrict multinationals
D. Trying to achieve international regulations on multinationals through such
organizations as the United Nations
76. What is the long-term goal of international trade secretariats (ITSs)?
A. To increase the competition between national unions
B. To be able to bargain transnationally with multinational firms
C. To accommodate wide variation in union structure
D. To be able to regulate multinationals with regard to labor policies
77. The international trade secretariats (ITS) have had virtually no real success.
Which of the following is NOT a cause of the ITS's ineffectiveness?
A. National unions compete with each other to attract investment from
international businesses.
B. The structure and ideology of unions tend to vary significantly from country to
country.
C. Organized labor has had only limited success in its efforts to get national and
international bodies to regulate multinationals.
D. The codes of conduct developed by International Labor Organization and the
Organization for Economic Cooperation and Development prevented the ITSs
from exercising absolute power.
78. Which of the following is true regarding approaches to labor relations?
A. International businesses use mostly similar approaches to international labor
relations.
B. The trend is toward greater decentralized control of international labor
relations.
C. Historically, most international businesses have centralized the labor relations
function.
D. Many firms are now using the threat to move production to another country in
their negotiations with unions.
Essay Questions
79. What is human resource management? Why is HRM an important strategic
component?
80. What are the four strategies pursued by international companies, and what is the
role of HRM in these?
81. Discuss corporate culture. How is corporate culture related to a firm's
performance?
82. What are the three types of staffing policies in international business? Briefly
describe each one. Which is the most attractive approach and why?
83. Why should a firm pursue an ethnocentric approach to staffing? What are the
disadvantages of this approach?
84. Discuss the advantages and disadvantages of a polycentric approach to staffing.
85. How can polycentric approach to staffing result in the creation of a "federation"
within the firm? Why is this a disadvantage for the firm?
86. What are the advantages of the geocentric staffing policy?
87. What is expatriate failure?
88. Discuss the reasons why expatriate managers fail to complete their foreign
assignment. Do
89. A number of other studies have consistently confirmed that the inability of a
spouse to adjust remains a major reason for continuing high levels of expatriate
failure. Discuss the reasons behind the difficulties a spouse faces in adapting to a
new country.
90. Discuss Mendenhall and Oddou's assertion that an executive who performs well
in a domestic setting may not adapt to a different cultural setting.
91. What is cultural toughness?
92. What are the three types of training for expatriate managers?
93. Discuss why the repatriation process is so difficult for so many expatriates.
94. Describe the notion of management development programs as a tool for
increasing the overall skill levels of managers. What is the goal of this type of
program?
95. How can firms reduce the bias in performance appraisals of expatriate
managers?
96. Should a firm pay executives in different countries according to the prevailing
standards in each country, or should it equalize pay on a global basis?
97. What is the most common approach to expatriate pay? Explain what comprises
this form of compensation. What is the advantage of this approach?
98. Consider the allowance component of a typical expatriate compensation package.
What types of allowance are included in this component?
99. Discuss the concerns of organized labor.
100.What are the three actions taken by organized labor to respond to the increased
bargaining power of multinationals? How successful have these efforts been?
Chapter 19 Global Human Resource Management Answer Key
True / False Questions
1.
An expatriate manager is a citizen of one country who is working abroad in one
of the firm's subsidiaries.
TRUE
An expatriate manager is a citizen of one country who is working abroad in one
of the firm's subsidiaries.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-01 Summarize the strategic role of human resource management in international business firms.
Topic: Introduction
2.
HRM professionals have a critically important strategic role.
TRUE
The HRM function, through its staffing, training, compensation, and
performance appraisal activities, has a critical impact upon the people, culture,
incentive, and control system elements of the firm's organization architecture.
Thus, HRM professionals have a critically important strategic role.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-01 Summarize the strategic role of human resource management in international business firms.
Topic: The Strategic Role of International HRM
3.
An organization's norms and value systems are known as its corporate culture.
TRUE
Corporate culture refers to the organization's norms and value systems. A
strong corporate culture can help a firm to implement its strategy.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
4.
The most attractive staffing policy is the ethnocentric approach.
FALSE
An ethnocentric staffing policy is one in which all key management positions
are filled by parent-country nationals. The policy is now on the wane in most
international businesses.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
5.
A firm with an ethnocentric staffing policy will fill all key management positions
with parent-country nationals.
TRUE
An ethnocentric staffing policy is one in which all key management positions
are filled by parent-country nationals.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
6.
Cultural myopia refers to a firm's failure to understand host-country cultural
differences that require different approaches to marketing and management.
TRUE
An ethnocentric policy can lead to cultural myopia, the firm's failure to
understand host-country cultural differences that require different approaches
to marketing and management.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
7.
In the case of an ethnocentric approach, it is possible that managers may make
decisions that are ethically suspect because they do not understand the culture
in which they are managing.
TRUE
an ethnocentric policy can lead to cultural myopia, the firm's failure to
understand host-country cultural differences that require different approaches
to marketing and management. Expatriate managers may also make decisions
that are ethically suspect simply because they do not understand the culture in
which they are managing.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
8.
A firm following a polycentric approach to staffing believes that the host country
lacks qualified individuals to manage subsidiaries.
FALSE
A polycentric staffing policy requires host-country nationals to be recruited to
manage subsidiaries, while parent-country nationals occupy key positions at
corporate headquarters.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
9.
A firm that adopts a polycentric approach to staffing is likely to suffer from
cultural myopia.
FALSE
An ethnocentric policy can lead to cultural myopia, the firm's failure to
understand host-country cultural differences that require different approaches
to marketing and management. A polycentric staffing policy requires hostcountry nationals to be recruited to manage subsidiaries, while parent-country
nationals occupy key positions at corporate headquarters.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
10.
Firms may choose an ethnocentric approach to staffing as opposed to a
polycentric approach because of the cost savings it promotes.
FALSE
A polycentric approach may be less expensive to implement, reducing the
costs of value creation. Expatriate managers can be expensive to maintain.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
11.
A geocentric staffing policy seeks the best people for key jobs throughout the
organization, regardless of nationality.
TRUE
A geocentric staffing policy seeks the best people for key jobs throughout the
organization, regardless of nationality.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
12.
A geocentric approach tends to weaken local responsiveness.
FALSE
The multinational composition of the management team that results from
geocentric staffing tends to reduce cultural myopia and to enhance local
responsiveness.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
13.
Many firms adopt a geocentric policy toward staffing because it is a relatively
inexpensive staffing policy.
FALSE
A geocentric staffing policy also can be expensive to implement. Training and
relocation costs increase when transferring managers from country to country.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
14.
An ethnocentric approach is compatible with both global standardization and
transnational strategies.
FALSE
Broadly speaking, an ethnocentric approach is compatible with an international
strategy, a polycentric approach is compatible with a localization strategy, and
a geocentric approach is compatible with both global standardization and
transnational strategies.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
15.
A citizen of Japan who moves to the United States to work at Microsoft would
be classified as an inpatriate.
TRUE
Sometimes the term inpatriates is used to identify a subset of expatriates who
are citizens of a foreign country working in the home country of their
multinational employer.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
16.
Expatriate failure refers to a manager's failure to understand host-country
cultural norms and values, leading to ineffective work.
FALSE
A prominent issue in the international staffing literature is expatriate failure —
the premature return of an expatriate manager to his or her home country.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
17.
A seminal study, R. L. Tung, revealed that for European firms, the top reason
for expatriate failure was the inability of the manager to cope with larger
overseas responsibilities.
FALSE
Tung asked her sample of multinational managers to indicate reasons for
expatriate failure. Managers of European firms gave only one reason
consistently to explain expatriate failure: the inability of the manager's spouse
to adjust to a new environment.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
18.
An executive who performs well in a domestic setting may not be able to adapt
to managing in a different cultural setting.
TRUE
Domestic performance and overseas performance potential are not the same
thing. An executive who performs well in a domestic setting may not be able to
adapt to managing in a different cultural setting.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
19.
An expatriate needs to have language fluency to show willingness to
communicate.
FALSE
Although language fluency helps, an expatriate need not be fluent to show
willingness to communicate. Making the effort to use the language is what is
important.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
20.
The ability to understand why people of other countries behave the way they do
is perceptual ability.
TRUE
Perceptual ability is the ability to understand why people of other countries
behave the way they do; that is, the ability to empathize.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
21.
Expatriate managers who have perceptual ability tend to treat foreign nationals
as if they were home-country nationals.
TRUE
Perceptual ability is the ability to understand why people of other countries
behave the way they do; that is, the ability to empathize. Expatriate managers
who have this ability tend to treat foreign nationals as if they were homecountry nationals.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
22.
According to Mendenhall and Oddou, poorly-adjusted expatriates tend to be
nonjudgmental and nonevaluative in interpreting the behavior of host-country
nationals.
FALSE
According to Mendenhall and Oddou, well-adjusted expatriates tend to be
nonjudgmental and nonevaluative in interpreting the behavior of host-country
nationals and willing to be flexible in their management style, adjusting it as
cultural conditions warrant.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
23.
Cultural toughness refers to the relationship between the country of assignment
and how well an expatriate adjusts to a particular posting.
TRUE
Cultural toughness refers to the relationship between the country of assignment
and how well an expatriate adjusts to a particular posting. Some countries are
much tougher postings than others because their cultures are more unfamiliar
and uncomfortable.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
24.
A manager might be sent on several foreign postings over a number of years to
build his/her cross-cultural sensitivity and experience as part of a management
development program.
TRUE
As part of a management development program, a manager might be sent on
several foreign postings over a number of years to build his or her crosscultural sensitivity and experience. At the same time, along with other
managers in the firm, the person might attend management education
programs at regular intervals.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
25.
Historically, most international businesses have been more concerned with
training than with management development.
FALSE
Historically, most international businesses have been more concerned with
training than with management development. Plus, they tended to focus their
training efforts on preparing home-country nationals for foreign postings.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
26.
English is considered the language of world business.
TRUE
English is the language of world business; it is quite possible to conduct
business all over the world using only English.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
27.
Where an expatriate community exists, firms often devote lesser effort to
ensuring that the new expatriate family is quickly integrated into that group.
FALSE
Where an expatriate community exists, firms often devote considerable effort to
ensuring the new expatriate family is quickly integrated into that group.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
28.
Firms pursuing a transnational strategy increasingly are using management
development as a strategic tool.
TRUE
International businesses increasingly are using management development as a
strategic tool. This is particularly true in firms pursuing a transnational strategy,
as increasing numbers are.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
29.
Bringing managers together in one location for extended periods and rotating
them through different jobs in several countries helps the firm build a formal
management network.
FALSE
Bringing managers together in one location for extended periods and rotating
them through different jobs in several countries helps the firm build an informal
management network.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
30.
A firm's performance appraisal systems are an important element of its control
systems.
TRUE
A firm's performance appraisal systems are an important element of its control
systems, which is a central component of organization architecture.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-05 Explain how and why performance appraisal systems might vary across nations.
Topic: Performance Appraisal
31.
Unintentional bias makes it difficult to evaluate the performance of expatriate
managers objectively.
TRUE
Unintentional bias makes it difficult to evaluate the performance of expatriate
managers objectively. In many cases, two groups evaluate the performance of
expatriate managers—host-nation managers and home-office managers—and
both are subject to bias.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-05 Explain how and why performance appraisal systems might vary across nations.
Topic: Performance Appraisal
32.
Most expatriates believe that more weight should be given to an on-site
manager's appraisal than to an off-site manager's appraisal.
TRUE
Most expatriates appear to believe more weight should be given to an on-site
manager's appraisal than to an off-site manager's appraisal. Due to proximity,
an on-site manager is more likely to evaluate the soft variables that are
important aspects of an expatriate's performance.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-05 Explain how and why performance appraisal systems might vary across nations.
Topic: Performance Appraisal
33.
In ethnocentric firms, the lack of managers' mobility among national operations
implies that pay can and should be kept country-specific.
TRUE
In ethnocentric firms, the issue can be reduced to that of how much homecountry expatriates should be paid. As for polycentric firms, the lack of
managers' mobility among national operations implies that pay can and should
be kept country-specific.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
34.
If a firm is serious about building an international cadre, it may have to pay its
international executives the same basic salary irrespective of their country of
origin or assignment.
TRUE
If a firm is serious about building an international cadre, it may have to pay its
international executives the same basic salary irrespective of their country of
origin or assignment. Currently, however, this practice is not widespread.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
35.
Base pay in most firms is set with regard to global market conditions.
FALSE
Except for a relative small cadre of internationally mobile executives, base pay
in most firms is set with regard to local market conditions.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
36.
An expatriate's base salary normally varies from the base salary for a similar
position in the home country.
FALSE
An expatriate's base salary is normally in the same range as the base salary for
a similar position in the home country. The base salary is normally paid in
either the home-country currency or in the local currency.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
37.
When a reciprocal tax treaty is in force, the firm typically pays the expatriate's
income tax in the host country.
FALSE
When a reciprocal tax treaty is not in force, the firm typically pays the
expatriate's income tax in the host country. In addition, firms normally make up
the difference when a higher income tax rate in a host country reduces an
expatriate's take-home pay.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
38.
From a strategic perspective, the key issue in international labor relations is the
degree to which organized labor can limit the choices of an international
business.
TRUE
The HRM function of an international business is typically responsible for
international labor relations. From a strategic perspective, the key issue in
international labor relations is the degree to which organized labor can limit the
choices of an international business.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-07 Understand how organized labor can influence strategic choices in international business firms.
Topic: International Labor Relations
39.
Labor unions generally prefer it if an international business keeps highly skilled
tasks in its home country and farms out only low-skilled tasks to foreign plants.
FALSE
A concern of organized labor is that an international business will keep highly
skilled tasks in its home country and farm out only low-skilled tasks to foreign
plants. Such a practice makes it relatively easy for an international business to
switch production from one location to another as economic conditions warrant.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-07 Understand how organized labor can influence strategic choices in international business firms.
Topic: International Labor Relations
40.
The international trade secretariats have had tremendous success.
FALSE
In the 1960s, organized labor began to establish international trade secretariats
(ITSs) to provide worldwide links for national unions in particular industries.
However, the ITSs have had virtually no real success.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-07 Understand how organized labor can influence strategic choices in international business firms.
Topic: International Labor Relations
Multiple Choice Questions
41.
Which of the following is mainly concerned with the selection of employees for
particular jobs?
A. Retention policy
B. Staffing policy
C. Incentive policy
D. Appraisal policy
Staffing policy is concerned with the selection of employees for particular jobs.
At one level, this involves selecting individuals who have the skills required to
do particular jobs.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
42.
A Japanese firm prefers expatriate Japanese managers to head its foreign
operations because these managers have been socialized into the firm while
employed in Japan. This indicates that the firm:
A. believes that such managers cannot progress beyond middle-manager
positions in their parent company.
B. follows an ethnocentric staffing policy to maintain a unified corporate culture.
C. is trying to create value by transferring core competencies to a foreign
operation.
D. requires host-country nationals to be recruited to manage subsidiaries.
An ethnocentric staffing policy is one in which all key management positions
are filled by parent-country nationals.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
43.
An ethnocentric staffing policy is one in which:
A. all key management positions are filled by host-country nationals.
B. host-country nationals are recruited to manage subsidiaries.
C. all key management positions are filled by parent-country nationals.
D. the best people are recruited for key jobs throughout the organization,
regardless of nationality.
An ethnocentric staffing policy is one in which all key management positions
are filled by parent-country nationals.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
44.
Cultural myopia refers to a firm's failure to:
A. adapt to certain ethnocentric cultures.
B. act confidently in host-countries.
C. understand host-country cultural differences.
D. prevent gender discrimination within the firm
an ethnocentric policy can lead to cultural myopia, the firm's failure to
understand host-country cultural differences that require different approaches
to marketing and management.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
45.
What is the difference between an ethnocentric and a polycentric staffing
approach?
A. An ethnocentric staffing approach alleviates cultural myopia, while a
polycentric staffing approach can lead to cultural myopia.
B. An ethnocentric staffing approach is more expensive compared to a
polycentric staffing approach.
C. An ethnocentric staffing approach seeks host-country nationals for all key
positions, while a polycentric staffing approach seeks the best people for
key jobs regardless of nationality.
D. An ethnocentric staffing approach is now used in most international
businesses, while the polycentric staffing approach is on the wane.
A polycentric approach may be less expensive to implement, reducing the
costs of value creation. Expatriate managers can be expensive to maintain.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
46.
If a company recruits host-country nationals to manage subsidiaries while
parent-country nationals occupy key positions at corporate headquarters, the
firm is following a(n):
A. polycentric staffing policy
B. ethnocentric staffing policy
C. geocentric staffing policy
D. internal staffing policy
A polycentric staffing policy requires host-country nationals to be recruited to
manage subsidiaries, while parent-country nationals occupy key positions at
corporate headquarters.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
47.
Which of the following is a drawback of the polycentric approach to staffing?
A. Firms are likely to suffer from cultural myopia.
B. Host-country nationals are vulnerable to cultural misunderstandings.
C. This approach increases the cost of value creation.
D. Host-country nationals have limited opportunities for advancement beyond
senior positions in their subsidiary.
A polycentric approach also has its drawbacks. Host-country nationals have
limited opportunities to gain experience outside their own country and thus
cannot progress beyond senior positions in their own subsidiary.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
48.
A(n) _____ seeks the best people for key jobs throughout the organization,
regardless of nationality.
A. polycentric staffing policy
B. ethnocentric staffing policy
C. geocentric staffing policy
D. uniform staffing policy
A geocentric staffing policy seeks the best people for key jobs throughout the
organization, regardless of nationality.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
49.
A polycentric approach may be effective for firms pursuing a(n):
A. international strategy.
B. localization strategy.
C. transnational strategy.
D. global standardization strategy.
Although a polycentric approach may be effective for firms pursuing a
localization strategy, it is inappropriate for other strategies.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
50.
A firm using a polycentric staffing policy:
A. is less likely to suffer from cultural myopia.
B. seeks the best people for key jobs throughout the organization, regardless
of nationality.
C. will most likely follow an ethnocentric strategy.
D. is likely to have improved communication between host-country managers
and parent-country managers.
One advantage of adopting a polycentric approach is that the firm is less likely
to suffer from cultural myopia. Host-country managers are unlikely to make the
mistakes arising from cultural misunderstandings to which expatriate managers
are vulnerable.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
51.
What is the most important advantage of using a geocentric staffing policy?
A. It enables the firm to build a cadre of international executives who feel at
home working in a number of cultures.
B. It may be less expensive to implement than other policies, reducing the
costs of value creation.
C. The higher pay managers on an international fast track enjoy is a source of
inspiration within a firm.
D. It reduces the need for futile and time consuming documentation.
Geocentric policy enables the firm to build a cadre of international executives
who feel at home working in a number of cultures. Creation of such a cadre
may be a critical first step toward building a strong unifying corporate culture
and an informal management network, both of which are required for global
standardization and transnational strategies.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
52.
An ethnocentric approach to staffing is appropriate for firms that are pursuing
a(n):
A. localization strategy.
B. international strategy.
C. global standardization strategy.
D. transnational strategy.
Broadly speaking, an ethnocentric approach is compatible with an international
strategy, a polycentric approach is compatible with a localization strategy, and
a geocentric approach is compatible with both global standardization and
transnational strategies.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
53.
Which of the following staffing approaches will be most effective for a firm that
is pursuing a transnational strategy?
A. A polycentric staffing policy
B. An ethnocentric staffing policy
C. A geocentric staffing policy
D. An internal staffing policy
Broadly speaking, an ethnocentric approach is compatible with an international
strategy, a polycentric approach is compatible with a localization strategy, and
a geocentric approach is compatible with both global standardization and
transnational strategies.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
54.
A geocentric staffing policy _____.
A. requires host-country nationals to be recruited to manage subsidiaries, while
parent-country nationals occupy key positions at corporate headquarters
B. leads to ineffective use of human resources
C. requires extensive documentation
D. is compatible with both international and localization strategy.
Most countries, including the United States, require firms to provide extensive
documentation if they wish to hire a foreign national instead of a local national.
This documentation can be time consuming, expensive, and at times futile.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
55.
A citizen of France who moves to the U.S. to work at Ford is a(n):
A. host-country national.
B. local.
C. inpatriate.
D. acquired citizen.
The term inpatriates is used to identify a subset of expatriates who are citizens
of a foreign country working in the home country of their multinational
employer.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
56.
Expatriate failure refers to:
A. expatriates who follow host-country norms instead of their home-country
norms.
B. the inability of expatriate managers to treat foreign nationals as if they were
home-country nationals.
C. the premature return of an expatriate manager to his or her home-country.
D. the ethical drawbacks of the ethnocentric staffing approach.
A prominent issue in the international staffing literature is expatriate failure —
the premature return of an expatriate manager to his or her home country.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
57.
In a seminal study, R. L. Tung found that for American multinationals, the
biggest impediment to expatriate success was:
A. the inability of the spouse to adjust.
B. the manager's inability to adjust.
C. the manager's inability to cope with larger overseas responsibilities.
D. the lack of adequate technical training.
Tung asked her sample of multinational managers to indicate reasons for
expatriate failure. For U.S. multinationals, the reasons, in order of importance,
were: 1. Inability of spouse to adjust. 2. Manager's inability to adjust. 3. Other
family problems. 4. Manager's personal or emotional maturity. 5. Inability to
cope with larger overseas responsibilities.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
58.
In a seminal study, R. L. Tung found that for Japanese multinationals, the
biggest impediment to expatriate success was:
A. the inability of the spouse to adjust.
B. inadequate compensation.
C. the manager's inability to cope with larger overseas responsibilities.
D. the lack of adequate technical training.
For the Japanese firms, the reasons for failure were: 1. Inability to cope with
larger overseas responsibilities. 2. Difficulties with new environment. 3.
Personal or emotional problems. 4. Lack of technical competence. 5. Inability of
spouse to adjust.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
59.
Mendenhall and Oddou's "others-orientation" dimension, in their study on what
predicts success in foreign jobs postings, refers to:
A. the expatriate's self-esteem, self-confidence, and mental well-being.
B. the expatriate's ability to interact effectively with host-country nationals.
C. the expatriate's ability to understand why people of other countries behave
the way they do.
D. the relationship between the country of the assignment and how well an
expatriate adjusts to a particular posting.
The attributes of "others-orientation" dimension enhance the expatriate's ability
to interact effectively with host-country nationals.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
60.
Which dimension of Mendenhall and Oddou's study suggests that an expatriate
with high self-esteem, self-confidence, and mental well-being is likely to
succeed in a foreign job posing?
A. Self-orientation
B. Others-orientation
C. Cultural toughness
D. Perceptual ability
The attributes of the self-orientation strengthen the expatriate's selfesteem,
self-confidence, and mental well-being. Expatriates with high self-esteem, selfconfidence, and mental well-being were more likely to succeed in foreign
postings.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
61.
_____ is the ability to understand why people of other countries behave the way
they do.
A. Others-orientation
B. Cultural myopia
C. Perceptual ability
D. Cultural toughness
Perceptual ability is the ability to understand why people of other countries
behave the way they do; that is, the ability to empathize. This dimension seems
critical for managing host-country nationals.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
62.
Mendenhall and Oddou identified cultural toughness as one of the dimensions
in their study on dimensions that predict success in foreign jobs postings. This
dimension refers to the:
A. expatriate's self-esteem, self-confidence, and mental well-being.
B. expatriate's ability to interact effectively with host-country nationals.
C. expatriate's ability to understand why people of other countries behave the
way they do.
D. relationship between the country of the assignment and how well an
expatriate adjusts to a particular posting.
Cultural toughness refers to the relationship between the country of assignment
and how well an expatriate adjusts to a particular posting. Some countries are
much tougher postings than others because their cultures are more unfamiliar
and uncomfortable.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
63.
Which of the following issues was not addressed by Mendenhall and Oddou's
study?
A. Expatriate failure due to a spouse's inability to adjust.
B. Expatriate failure due to a manager's lack of self-esteem.
C. Expatriate failure due to lack of relationship development.
D. Expatriate failure due to a manager's inability to empathize.
Mendenhall and Oddou did not address the problem of expatriate failure due to
a spouse's inability to adjust. According to a number of other researchers, a
review of the family situation should be part of the expatriate selection process.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
64.
Which of the following statements is true regarding management
development?
A. Historically, most international businesses have been more concerned with
management development than with training.
B. Management development facilitates the creation of an informal network for
sharing knowledge within the multinational enterprise.
C. Management development refers to specific training efforts to prepare
home-country nationals for foreign postings.
D. Typically, management development programs use standard psychological
tests to select managers for specific foreign postings.
Management development is seen as a tool to help the firm achieve its
strategic goals, not only by giving managers the required skill set, but also by
helping to reinforce the desired culture of the firm and by facilitating the
creation of an informal network for sharing knowledge within the multinational
enterprise.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
65.
Practical training is:
A. provided to foster an appreciation for the host country's culture.
B. aimed at helping expatriates improve their communication skills.
C. aimed at helping expatriate managers to build relationships in the hostcountry.
D. aimed at helping the expatriate manager and family ease themselves into
day-to-day life in the host country.
Practical training is aimed at helping the expatriate manager and family ease
themselves into day-to-day life in the host country. The sooner a routine is
established, the better are the prospects that the expatriate and his or her
family will adapt successfully.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
66.
Management development programs aims to:
A. facilitate an ethnocentric approach to staffing.
B. reduce job rotations of managers.
C. build a formal management network.
D. build a unifying corporate culture.
Management development programs help build a unifying corporate culture by
socializing new managers into the norms and value systems of the firm.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
67.
Bringing managers together in one location for extended periods and rotating
them through different jobs in several countries is a part of:
A. the ethnocentric approach.
B. the global standardization strategy.
C. cultural toughness programs.
D. management development programs.
Management development programs are designed to increase the overall skill
levels of managers through a mix of ongoing management education and
rotations of managers through a number of jobs within the firm to give them
varied experiences.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
68.
_____ makes it difficult to evaluate the performance of expatriate managers
objectively.
A. Cultural relativism
B. Internal documentation
C. Unintentional bias
D. Others-orientation
Unintentional bias makes it difficult to evaluate the performance of expatriate
managers objectively. In many cases, two groups evaluate the performance of
expatriate managers—host-nation managers and home-office managers—and
both are subject to bias.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-05 Explain how and why performance appraisal systems might vary across nations.
Topic: Performance Appraisal
69.
When evaluating expatriates, home-country managers usually rely on:
A. the manager's ability to develop cross-cultural awareness.
B. hard data such as market share.
C. the ability of the expatriate to work with local managers.
D. a set of subjective criteria such as interpersonal skills
Home-office managers are often not aware of what is going on in a foreign
operation. Accordingly, they tend to rely on hard data in evaluating an
expatriate's performance, such as the subunit's productivity, profitability, or
market share. Such criteria may reflect factors outside the expatriate manager's
control.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-05 Explain how and why performance appraisal systems might vary across nations.
Topic: Performance Appraisal
70.
Which among the following should be done in order to reduce bias in the
performance appraisal process for expatriates?
A. More weight should be given to an off-site manager's appraisal than to an
on-site manager's appraisal.
B. The on-site manager should be of a different nationality as the expatriate
manager.
C. Home-office managers should be consulted before an on-site manager
completes a formal termination evaluation.
D. A former expatriate who served in the same location as a current expatriate
should not be allowed to participate in the appraisal.
When the policy is for foreign on-site managers to write performance
evaluations, home-office managers should be consulted before an on-site
manager completes a formal termination evaluation. This gives the home-office
manager the opportunity to balance what could be a very hostile evaluation
based on a cultural misunderstanding.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-05 Explain how and why performance appraisal systems might vary across nations.
Topic: Performance Appraisal
71.
Which of the following is the most common approach to expatriate pay?
A. Balance sheet approach
B. Net-to-net approach
C. Host-country approach
D. Cost-based approach
The most common approach to expatriate pay is the balance sheet approach.
According to Organizational Resources Consulting, some 80 percent of the 781
companies it surveyed used this approach.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
72.
A foreign service premium is:
A. paid when the expatriate is being sent to a difficult location.
B. the extra pay that an expatriate receives for working outside his or her
country of origin.
C. normally given to ensure that the expatriate can afford the same quality of
housing in the foreign country as at home.
D. paid to ensure that the expatriate enjoys the same standard of living in the
foreign posting as at home.
A foreign service premium is extra pay the expatriate receives for working
outside his or her country of origin. It is offered as an inducement to accept
foreign postings.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
73.
A hardship allowance is paid:
A. when the expatriate is being sent to a location where such basic amenities
are grossly deficient by the standards of the expatriate's home country.
B. to ensure that an expatriate's children receive adequate schooling (by
home-country standards).
C. to ensure that the expatriate will enjoy the same standard of living in the
foreign posting as at home.
D. to ensure that the expatriate can afford the same quality of housing in the
foreign country as at home.
A hardship allowance is paid when the expatriate is being sent to a difficult
location, usually defined as one where such basic amenities as health care,
schools, and retail stores are grossly deficient by the standards of the
expatriate's home country
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
74.
Which of the following is a concern of organized labor regarding multinational
firms?
A. A company can counter a union's bargaining power with the power to move
production to another country.
B. An international business will keep low-skilled tasks in its home country and
farm out only highly skilled tasks to foreign plants.
C. An international business can attempt to import employment practices and
contractual agreements from its host-country.
D. A multinational company is more likely to receive government support in the
case of hostile labor relations.
A principal concern of domestic unions about multinational firms is that the
company can counter its bargaining power with the power to move production
to another country.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-07 Understand how organized labor can influence strategic choices in international business firms.
Topic: International Labor Relations
75.
Which of the following is NOT an action taken by organized labor to respond to
the increased bargaining power of multinational corporations?
A. Trying to establish international labor organizations
B. Increasing competition between national unions
C. Lobbying for national legislation to restrict multinationals
D. Trying to achieve international regulations on multinationals through such
organizations as the United Nations
Organized labor has responded to the increased bargaining power of
multinational corporations by taking three actions: (1) trying to establish
international labor organizations, (2) lobbying for national legislation to restrict
multinationals, and (3) trying to achieve international regulations on
multinationals through such organizations as the United Nations.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-07 Understand how organized labor can influence strategic choices in international business firms.
Topic: International Labor Relations
76.
What is the long-term goal of international trade secretariats (ITSs)?
A. To increase the competition between national unions
B. To be able to bargain transnationally with multinational firms
C. To accommodate wide variation in union structure
D. To be able to regulate multinationals with regard to labor policies
In the 1960s, organized labor began to establish international trade secretariats
(ITSs) to provide worldwide links for national unions in particular industries. The
long-term goal was to be able to bargain transnationally with multinational
firms.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-07 Understand how organized labor can influence strategic choices in international business firms.
Topic: International Labor Relations
77.
The international trade secretariats (ITS) have had virtually no real success.
Which of the following is NOT a cause of the ITS's ineffectiveness?
A. National unions compete with each other to attract investment from
international businesses.
B. The structure and ideology of unions tend to vary significantly from country
to country.
C. Organized labor has had only limited success in its efforts to get national
and international bodies to regulate multinationals.
D. The codes of conduct developed by International Labor Organization and
the Organization for Economic Cooperation and Development prevented the
ITSs from exercising absolute power.
International organizations as the International Labor Organization (ILO) and
the Organization for Economic Cooperation and Development (OECD) have
adopted codes of conduct for multinational firms to follow in labor relations.
However, these guidelines are not as far-reaching as many unions would like.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-07 Understand how organized labor can influence strategic choices in international business firms.
Topic: International Labor Relations
78.
Which of the following is true regarding approaches to labor relations?
A. International businesses use mostly similar approaches to international labor
relations.
B. The trend is toward greater decentralized control of international labor
relations.
C. Historically, most international businesses have centralized the labor
relations function.
D. Many firms are now using the threat to move production to another country
in their negotiations with unions.
Because labor costs account for such a large percentage of total costs, many
firms are now using the threat to move production to another country in their
negotiations with unions to change work rules and limit wage increases.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-07 Understand how organized labor can influence strategic choices in international business firms.
Topic: International Labor Relations
Essay Questions
79.
What is human resource management? Why is HRM an important strategic
component?
Human resource management refers to the activities an organization carries
out to use its human resources effectively. These activities include determining
the firm's human resource strategy, staffing, performance evaluation,
management development, compensation, and labor relations. None of these
activities is performed in a vacuum; all are related to the strategy of the firm.
HRM has an important strategic component. Through its influence on the
character, development, quality, and productivity of the firm's human resources,
the HRM function can help the firm achieve its primary strategic goals of
reducing the costs of value creation and adding value by better serving
customer.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-01 Summarize the strategic role of human resource management in international business firms.
Topic: Introduction
80.
What are the four strategies pursued by international companies, and what is
the role of HRM in these?
The four strategies pursued by international businesses are localization, where
value is created by emphasizing local responsiveness; international, where
value is created by transferring products and competencies overseas; global
standardization, where value is created by realizing experience curve and
location economies; and transnational, where value is created by doing all of
these things simultaneously. HRM policies must be congruent with the firm's
strategy.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-01 Summarize the strategic role of human resource management in international business firms.
Topic: The Strategic Role of International HRM
81.
Discuss corporate culture. How is corporate culture related to a firm's
performance?
Corporate culture refers to the organization's norms and value systems. A
strong corporate culture can help a firm to implement its strategy. If employees
are predisposed toward the organization's norms and value systems by their
personality type, the firm will be able to attain higher performance.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
82.
What are the three types of staffing policies in international business? Briefly
describe each one. Which is the most attractive approach and why?
There are three types of staffing approaches in international business. First, the
ethnocentric approach is one in which all key management positions are filled
by parent-country nationals. Second, the polycentric approach involves
recruiting host-country nationals to manage subsidiaries while parent-country
nationals occupy key positions at corporate headquarters. Third, the geocentric
policy seeks the best people for key jobs throughout the organization,
regardless of nationality. This approach is probably the most attractive because
it enables the firm to make the best use of its human resources, and it allows
the firm to build a cadre of international executives who feel at home working in
a number of cultures.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
83.
Why should a firm pursue an ethnocentric approach to staffing? What are the
disadvantages of this approach?
Firms pursue an ethnocentric staffing policy for three reasons. First, the firm
may believe there is a lack of qualified individuals in the host country to fill
senior management positions. Second, the firm may see an ethnocentric
staffing policy as the best way to maintain a unified corporate culture. Third, if
the firm is trying to create value by transferring core competencies to a foreign
operation, it may feel that the best way to do this is to transfer parent-country
nationals who have knowledge of that competency to the foreign operation.
The disadvantages of ethnocentric approach to staffing is that the policy limits
advancement opportunities for host-country nationals, which can lead to
resentment, lower productivity, and increased turnover among that group. The
policy can also lead to cultural myopia.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
84.
Discuss the advantages and disadvantages of a polycentric approach to
staffing.
A polycentric staffing policy requires host-country nationals to be recruited to
manage subsidiaries, while parent-country nationals occupy key positions at
corporate headquarters. One advantage of adopting a polycentric approach is
that the firm is less likely to suffer from cultural myopia. Host-country managers
are unlikely to make the mistakes arising from cultural misunderstandings that
expatriate managers are subject to. Another advantage of the polycentric
approach is that it may be less expensive than other approaches to implement.
However, because host-country nationals have limited opportunities for
advancement, resentment may arise. Furthermore, a gap may form between
host-country managers and parent-country managers leading to a lack of
integration between corporate headquarters and foreign subsidiaries.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
85.
How can polycentric approach to staffing result in the creation of a "federation"
within the firm? Why is this a disadvantage for the firm?
A polycentric approach can lead to a gap between host-country managers and
parent-country managers. Language barriers, national loyalties, and a range of
cultural differences may isolate the corporate headquarters staff from the
various foreign subsidiaries. The lack of management transfers from home to
host countries, and vice versa, can exacerbate this isolation and lead to a lack
of integration between corporate headquarters and foreign subsidiaries. The
result can be a "federation" of largely independent national units with only
nominal links to the corporate headquarters.
Within such a federation, the coordination required to transfer core
competencies or to pursue experience curve and location economies may be
difficult to achieve. The federation that may result from a polycentric approach
can also be a force for inertia within the firm.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
86.
What are the advantages of the geocentric staffing policy?
A geocentric staffing policy has a number of advantages. First, it enables the
firm to make the best use of its human resources. Second, a geocentric policy
enables the firm to build a cadre of international executives who feel at home
working in a number of cultures. Creation of such a cadre may be a critical first
step toward building a strong unifying corporate culture and an informal
management network, both of which are required for global standardization and
transnational strategies. Firms pursuing a geocentric staffing policy may be
better able to create value from the pursuit of experience curve and location
economies and from the multidirectional transfer of core competencies than
firms pursuing other staffing policies. In addition, the multinational composition
of the management team that results from geocentric staffing tends to reduce
cultural myopia and to enhance local responsiveness.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business firms.
Topic: Staffing Policy
87.
What is expatriate failure?
A prominent issue in the international staffing literature is expatriate failure —
the premature return of an expatriate manager to his or her home country.
Expatriate failure represents a failure of the firm's selection policies to identify
individuals who will not thrive abroad. The consequences include premature
return from a foreign posting and high resignation rates.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
88.
Discuss the reasons why expatriate managers fail to complete their foreign
assignment. Do
The question of why expatriates fail to complete their foreign assignments was
studied by R. L. Tung who found that U.S. firms experienced a significantly
higher failure rate than either European or Japanese firms. For American firms,
the reasons for expatriate failure, in order of importance, were: (1) inability of
spouse to adjust, (2) manager's inability to adjust, (3) other family problems, (4)
the manager's personal or emotional maturity, and (5) inability to cope with
larger overseas responsibilities. However, for Japanese firms the reasons for
expatriate failure, in order of importance, were: (1) inability to cope with larger
overseas responsibilities, (2) difficulties with new environment, (3) personal or
emotional problems, (4) lack of technical competence, and (5) inability of
spouse to adjust. Perhaps the most striking difference between these two lists
is that the importance of the spouse was most important for U.S. expatriate
managers but ranked only fifth for Japan. Tung comments that this difference is
not surprising given the role and status to which Japanese society traditionally
relegates the wife and the fact that most of the Japanese expatriate managers
in the study were men. Finally, European firms gave only one reason to explain
expatriate failure: the inability of a spouse to adapt. Tung's research has been
confirmed by a number of subsequent studies of expatriate failure.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
89.
A number of other studies have consistently confirmed that the inability of a
spouse to adjust remains a major reason for continuing high levels of expatriate
failure. Discuss the reasons behind the difficulties a spouse faces in adapting
to a new country.
The failure of spouse to adjust appears to be related to a several factors. Often
spouses find themselves in a foreign country without the familiar network of
family and friends. Language differences make it difficult for them to make new
friends, making the spouse feel trapped at home. If immigration rules prohibit
employment, the spouse may find it even more difficult to adapt. Research
suggests that a main reason managers now turn down international
assignments is concern over the impact the assignment might have on their
spouse's career.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
90.
Discuss Mendenhall and Oddou's assertion that an executive who performs
well in a domestic setting may not adapt to a different cultural setting.
According to Mendenhall and Oddou, many managers tend to equate domestic
performance with overseas performance potential. However, the researchers
suggest that success in a foreign job posting depends not on domestic
performance, but instead on four dimensions. First, an expatriate's selforientation will affect performance. Expatriates with high self-esteem, selfconfidence, and mental well-being are more likely to succeed in foreign jobs.
Second is others-orientation. The more effectively an expatriate interacts with
host-country nationals, the more likely he/she is to succeed. Third, an
expatriate's perceptual abilities are important to success. Managers need to be
able to understand why people of other countries behave the way they do.
Finally, cultural toughness is a measure of how well an expatriate adjusts to a
particular situation, especially when the assignment involves a culture that is
very different from the home-country culture.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
91.
What is cultural toughness?
Mendenhall and Oddou identified four dimensions that seem to predict success
in a foreign posting: self-orientation, others-orientation, perceptual ability, and
cultural toughness. Cultural toughness refers to the relationship between the
country of assignment and how well an expatriate adjusts to a particular
posting. Some countries are much tougher postings than others because their
cultures are more unfamiliar and uncomfortable.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
92.
What are the three types of training for expatriate managers?
Training can help a manager and spouse cope with issues of adjusting to the
foreign environment. Three types of training are important. Cultural training
seeks to foster an appreciation for the host country's culture. The belief is that
understanding a host country's culture will help the manager empathize with
the culture, which will enhance his/her effectiveness in dealing with hostcountry nationals. Language training is vital to an expatriate's ability to interact
with host-country nationals. Finally, practical training is aimed at helping the
expatriate manager and family ease themselves into day-to-day life in the host
country.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
93.
Discuss why the repatriation process is so difficult for so many expatriates.
Preparing expatriates for reentry into their home-country organization is
generally overlooked, yet represents a huge challenge for firms. Often when
expatriates return home after a stint abroad they face an organization that
doesn't know what they have done for the last few years, doesn't know how to
use their new knowledge, and doesn't particularly care. In the worst cases,
reentering employees have to scrounge for jobs, or firms create standby
positions that don't use the expatriate's skills and capabilities and fail to make
the most of the business investment the firm has made in that individual.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
94.
Describe the notion of management development programs as a tool for
increasing the overall skill levels of managers. What is the goal of this type of
program?
Management development programs are designed to increase the overall skill
levels of managers through a mix of ongoing management education and
rotations of managers through a number of jobs within the firm to give them a
broad range of experience. The goal of this type of program is to improve
overall productivity and quality of the firm's management resources. As a
strategic tool, management development programs can play an important role
in international businesses. These programs can help a firm build a corporate
culture that is sensitive to international business issues. Moreover, by rotating
managers, firms can build informal management networks, networks that can
then be used as a conduit for exchanging information within an organization.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of human
capital in international business firms.
Topic: Training and Management Development
95.
How can firms reduce the bias in performance appraisals of expatriate
managers?
Unintentional bias makes it difficult to evaluate the performance of expatriate
managers objectively. This bias can be reduced in several ways. First, most
expatriates believe that more weight should be given to an on-site manager's
appraisal than to an off-site manager's appraisal. If the on-site manager is of
the same nationality as the expatriate manager, cultural bias can also be
reduced. Finally, when the policy is for foreign on-site managers to write
performance evaluations, home-office managers, in an effort to avoid cultural
misunderstandings, should be consulted before an on-site manager completes
a formal termination evaluation.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-05 Explain how and why performance appraisal systems might vary across nations.
Topic: Performance Appraisal
96.
Should a firm pay executives in different countries according to the prevailing
standards in each country, or should it equalize pay on a global basis?
Substantial differences exist in the compensation of executives at the same
level in various countries. These differences raise the question of whether a
firm should pay its expatriate managers the prevailing wage rate in the country
that they are working in, or whether the firm should pay all of its expatriate
managers at the same level of responsibility a similar amount of pay? For a
U.S. firm, this could mean raising the compensation of foreign nationals to U.S.
levels, a policy that could prove to be very expensive. Yet, if a firm does not
equalize pay, it could cause considerable resentment among foreign nationals
who work with U.S. managers.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
97.
What is the most common approach to expatriate pay? Explain what comprises
this form of compensation. What is the advantage of this approach?
The most common approach to expatriate pay is the balance sheet approach.
This approach has the advantage of equalizing purchasing power across
countries so that employees can enjoy the same living standard in their foreign
posting as they enjoyed at home. In addition, the approach provides financial
incentives to offset qualitative differences between assignment locations. The
typical expatriate compensation package is comprised of a base salary, a
foreign-service premium, allowances of various types, tax differentials, and
benefits.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
98.
Consider the allowance component of a typical expatriate compensation
package. What types of allowance are included in this component?
There are four types of allowances that are usually included in an expatriate's
compensation package. A hardship allowance is paid when the expatriate is
being sent to a location where basic amenities are grossly deficient as
compared to the home country. A housing allowance may be included to
ensure that the expatriate can afford the same quality of housing in the foreign
country as in the home country. A cost-of-living allowance may be paid to
ensure that the expatriate enjoys the same standard of living in the foreign
location as at home. Finally, education allowances may be included to ensure
that an expatriate's children receive adequate schooling.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
99.
Discuss the concerns of organized labor.
A principle concern of domestic unions about multinational firms is that a
company can counter its bargaining power with the power to move production
to another country. Another concern is that an international business will keep
highly skilled tasks in its home country and farm out only low-skilled tasks to
foreign plants. A final concern arises when an international business attempts
to import employment practices and contractual agreements from its home
country. When these practices are alien to the host country, organized labor
fears the change will reduce its influence and power.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-07 Understand how organized labor can influence strategic choices in international business firms.
Topic: International Labor Relations
100. What are the three actions taken by organized labor to respond to the
increased bargaining power of multinationals? How successful have these
efforts been?
Organized labor has responded to the increased bargaining power of
multinationals by taking three actions. First, organized labor is trying to
establish international labor organizations. Second, labor is lobbying for
national legislation to restrict multinationals. Finally, organized labor is trying to
achieve international regulations on multinationals through organizations such
as the UN. To date, success in these efforts has been limited.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-07 Understand how organized labor can influence strategic choices in international business firms.
Topic: International Labor Relations