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Chapter 1
What are the main similarities and differences between domestic and international HRM?
Page 5. The complexity of operating in different countries and employing different national
categories of workers is a key variable that differentiates domestic and international HRM.
There are not really any major differences between the HRM activities performed by either
domestic or international HRM.
International HRM complexity can be attributed to six factors according to Dowling: more HR
activities, the need for a broader perspective, more involvement in employees’ personal lives,
changes in emphasis as the workforce mix of expatriates and locals varies, risk exposure, and
broader external influences.
Chapter 2
What is the global area division structure?
Pages 31- 32. A structure that involves growth through geographical expansion. The MNE
strives to adapt its HRM activities to each host country’s specific requirements. It is a more
decentralized structure. As the MNE grows it moves to a more “think global, act local” paradox.
In this structure the headquarters divides up the organization based on geographic area, instead
of product or service. For example, you may have divisions for North America, Latin America,
Middle East, etc.
Country of origin influences the firm’s approach to organization structure. As MNEs from
China and India internationalize, to what extent are they likely to differ from that observed for
Japanese, European, and US MNEs?
Pages 38-40. The Chinese like to maintain family control of their businesses. This will become
more and more difficult as their international activities continue to expand. Shen’s 2001 study of
ten Chinese firms, mostly state owned enterprises from various industries, reports an incremental
approach. They would start by moving into neighboring East and South East Asia before
expanding into North America. Global area divisional or global functional structures were
utilized. There is little information on both Chinese and Indian MNEs. It is yet to be determined
exactly what will happen when they do internationalize.
Chapter 3
What are some typical problems that arise during a cross-border merger/acquisition?
Page 53. Within the first year of a merger, it is not uncommon for a company’s top management
level to lose up to 20 percent of its executives. Over a longer time frame, this percentage tends
to increase even further. Personnel issues are often neglected. This is especially a problem if
you are in a high integration situation. In this case the two company cultures combine to become
one new culture. This leads to problems with personnel when they must change their ways.
Finally, a high number of M&As fail or do not produce the intended results.
What are the development stages of IJVs, and what are their HRM implications?
Page 61. In the partnership role, HR managers should take all stakeholders’ needs into account
(including those of the counterparts in the other parent firms and in the IJV) and demonstrate a
thorough understanding of the business and the market.
As a change facilitator and strategy implementer, HR managers should be able to conceptualize
and implement new strategies involving trust-based communication and cooperation with
relevant partners. This also requires the creation of a stable learning environment.
As an innovator, the HR manager should be able to identify talent for executing IJV strategies
and adapting to changes in the IJV stages.
Finally, as a collaborator, the HR manager’s strengths should lie in creating win-win situations
characterized by sharing rather than competing between the different entities engaged in the joint
venture.
Chapter 4
What are some of the disadvantages to an ethnocentric approach of managing and staffing
subsidiaries?
Pages 80-81. It limits the promotion opportunities of HCNs, which may lead to reduced
productivity and increased turnover among that group. Another disadvantage is that the
adaptation of expatriate managers to host countries often takes a long time, during which PCNs
often make mistakes and poor decisions.
More disadvantages include things like compensation packages. When PCN and HCN
compensation packages are compared, the often-considerable income gap in favor of PCNs is
often viewed by HCNs as unjustified. A final disadvantage is that for many expatriates a key
overseas position means new status, authority, and an increase in the standard of living. These
changes may affect expatriates’ sensitivity to the needs and expectations of home country
subordinates.
What are the primary reasons for international assignments?
Page 89. The first reason is for position filling. The organization has a need and depending on
the type of position and level involved will either employ someone locally or transfer a suitable
candidate. This is the most common reason for international assignments. Another reason is
management development. Staff can be moved into other parts of the organization for training
and development purposes and to assist in the development of common corporate values. The
third primary reason is for organization development. Here the strategic objectives of the
operation come into play: the need for control, the transfer of knowledge, competence,
procedures and practices into various locations, and to exploit global market opportunities.
Chapter 5
When selecting an employee for an expatriate position, is prior experience with
international assignments generally a requirement?
Page 112. Prior international experience is not generally a requirement, in fact only 12 percent
of assignees had prior international experience. So, more often than not the expatriate has no
prior international experience.
Discuss the proposition that most expatriate selection decisions are made informally, as
suggested by the “coffee machine” solution.
Page 126. The “coffee machine” solution is a scenario that begins with executives chatting
around the coffee machine, or water cooler. Through casual conversation one of them brings up
an assignment need confronting them. Another executive can volunteer the name of a potential
expatriate, thus starting a short list of candidates. What happens next, is that the multinational’s
processes are activated to legitimize the decision that has, in effect, already been taken around
the coffee machine.
Chapter 6
What has changed about MNE policy concerning pre-departure expatriate training in
recent years?
Page 139. Since the primary selection criterion for most MNE is technical ability most literature
is devoted to pre-departure training activities that are concerned with developing cultural
awareness. Recently pre-departure expatriate training has been extended to include the spouse
and/or children. This is due to the fact that one of the top reasons for expatriate failure is that the
rest of the family fails to adjust.
Chapter 7
Describe the main differences in the Going Rate and Balance Sheet Approaches to
international compensation.
Pages 165-168. The going rate approach is based on local market rates. The expatriate’s base
salary is linked to that of the host country. If working in a low-pay country the multinational
usually supplements base pay with additional benefits and payments. This approach leads to
equality with local nationals, simplicity, and helps the expatriate to identify with the host
country. One of the main problems is it can lead to a variation between assignments for the same
employee. Meaning, the same employee can hold a similar position in two different countries
and make more money in one than the other.
The basic objective of the balance sheet approach is the maintenance of home-country living
standard plus a financial inducement. This is the most common system used in multinational
firms. The balance sheet approach is designed to equalize the purchasing power of employees at
comparable position levels living overseas and in the home country, and to provide incentives to
offset qualitative differences between assignment locations.
What should be the main objectives for a multinational firm with regard to its
compensation policies?
Page 161. First, the policy should be consistent with the overall strategy, structure, and business
needs of the multinational. The policy must work to attract and retain staff in the areas where the
multinational has the greatest needs and opportunities. The policy should also facilitate the
transfer of international employees in the most cost-effective manner for the firm. Finally, the
policy must give due consideration to equity and ease of administration.