{"id":148,"date":"2017-05-01T20:26:50","date_gmt":"2017-05-02T00:26:50","guid":{"rendered":"https:\/\/pressbooks.bccampus.ca\/hrm1stcanadianedition\/?post_type=chapter&p=148"},"modified":"2017-05-05T18:51:54","modified_gmt":"2017-05-05T22:51:54","slug":"15-2-staffing-internationally","status":"publish","type":"chapter","link":"https:\/\/pressbooks.bccampus.ca\/hrm1stcanadianedition\/chapter\/15-2-staffing-internationally\/","title":{"raw":"15.2\u00a0Staffing Internationally","rendered":"15.2\u00a0Staffing Internationally"},"content":{"raw":"
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Learning Objectives<\/h3>\r\nBy the end of this section, you will be able to:\r\n
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  1. Be able to explain the three staffing strategies for international businesses and the advantages and disadvantages for each.<\/li>\r\n \t
  2. Explain the reasons for expatriate failures.<\/li>\r\n<\/ol>\r\n<\/div>\r\nOne of the major decisions for HRM when a company decides to operate overseas is how the overseas operation will be staffed. This is the focus of this section.\r\n

    Types of Staffing Strategy<\/h2>\r\n
    Expatriates<\/strong>: employees from the home country are given international assignments.<\/div>\r\nThere are three main staffing strategies a company can implement when entering an overseas market, with each having its advantages and disadvantages. The first strategy is a\u00a0home-country\u00a0national\u00a0strategy. This staffing strategy uses employees from the home country to live and work in the country. These individuals are called expatriates<\/strong>. The second staffing strategy is a\u00a0host-country\u00a0national\u00a0strategy, which means to employ people who were born in the country in which the business is operating. Finally, a third-country national strategy means to employee people from an entirely different country from the home country and host country.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
    <\/td>\r\n\r\n

    Home-Country National<\/strong><\/p>\r\n<\/td>\r\n

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    Host-Country National<\/strong><\/p>\r\n<\/td>\r\n

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    Third-Country National<\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n

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    Advantages<\/strong><\/p>\r\n<\/td>\r\n

    		Greater control of organization<\/td>\r\nLanguage barrier is eliminated<\/td>\r\nThe third-country national may be better equipped to bring the international perspective to the business<\/td>\r\n<\/tr>\r\n
    Managers gain experience in local markets<\/td>\r\nPossible better understanding of local rules and laws<\/td>\r\nCosts associated with hiring such as visas may be less expensive than with home-country nationals<\/td>\r\n<\/tr>\r\n
    Possible greater understanding and implementation of business strategy<\/td>\r\nHiring costs such as visas are eliminated<\/td>\r\n<\/tr>\r\n
    Cultural understanding<\/td>\r\n<\/tr>\r\n
    Morale builder for employees of host country<\/td>\r\n<\/tr>\r\n
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    Disadvantages<\/strong><\/p>\r\n<\/td>\r\n

    		Adapting to foreign environment may be difficult for manager and family, and result in less productivity<\/td>\r\nHost-country manager may not understand business objectives as well without proper training<\/td>\r\nMust consider traditional national hostilities<\/td>\r\n<\/tr>\r\n
    Expatriate may not have cultural sensitivity<\/td>\r\nMay create a perception of \u201cus\u201d versus \u201cthem\u201d<\/td>\r\nThe host government and\/or local business may resent hiring a third-country national<\/td>\r\n<\/tr>\r\n
    Language barriers<\/td>\r\nCan affect motivation of local workers<\/td>\r\n<\/tr>\r\n
    Cost of visa and hiring factors<\/td>\r\n<\/tr>\r\n
    Table 15.4<\/strong>\u00a0Advantages and Disadvantages of the Three Staffing Strategies<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nTable 15.4 \"Advantages and Disadvantages of the Three Staffing Strategies\"\u00a0lists advantages and disadvantages of each type of staffing strategy. Whichever strategy is chosen, communication with the home office and strategic alignment with overseas operations need to occur for a successful venture.\r\n
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    Human Resource Recall<\/h3>\r\nCompare and contrast a home-country versus a host-country staffing strategy.\r\n\r\n<\/div>\r\n

    Expatriates<\/h2>\r\nAccording to Simcha Ronen, a researcher on international assignments, there are five categories that determine expatriate success. They include job factors, relational dimensions, motivational state, family situation, and language skills. The likelihood the assignment will be a success depends on the attributes listed in\u00a0Table 15.5 \"Categories of Expatriate Success Predictors with Examples\". As a result, the appropriate selection process and training can prevent some of these failings. Family stress, cultural inflexibility, emotional immaturity, too much responsibility, and longer work hours (which draw the expatriate away from family, who could also be experiencing culture shock) are some of the reasons cited for expatriate failure.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
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    Job Factors<\/strong><\/p>\r\n<\/td>\r\n

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    Relational Dimensions<\/strong><\/p>\r\n<\/td>\r\n

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    Motivational State<\/strong><\/p>\r\n<\/td>\r\n

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    Family Situation<\/strong><\/p>\r\n<\/td>\r\n

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    Language Skills<\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n

    Technical skills<\/td>\r\nTolerance for ambiguity<\/td>\r\nBelief in the mission<\/td>\r\nWillingness of spouse to live abroad<\/td>\r\nHost-country language<\/td>\r\n<\/tr>\r\n
    Familiarity with host country and headquarters operations<\/td>\r\nBehavioral flexibility<\/td>\r\nCongruence with career path<\/td>\r\nAdaptive and supportive spouse<\/td>\r\nNonverbal communication<\/td>\r\n<\/tr>\r\n
    Managerial skills<\/td>\r\nNonjudgmentalism<\/td>\r\nInterest in overseas experience<\/td>\r\nStable marriage<\/td>\r\n<\/tr>\r\n
    Administrative competence<\/td>\r\nCultural empathy and low ethnocentrism<\/td>\r\nInterest in specific host-country culture<\/td>\r\n<\/tr>\r\n
    Interpersonal skills<\/td>\r\nWillingness to acquire new patterns of behavior and attitudes<\/td>\r\n<\/tr>\r\n
    Table 15.5<\/strong>\u00a0Categories of Expatriate Success Predictors with Examples<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nSource: Adapted from Simcha Ronen,\u00a0Training the International Assignee\u00a0(San Francisco: Jossey-Bass, 1989), 426\u201340.\r\n\r\n[caption id=\"attachment_623\" align=\"aligncenter\" width=\"600\"]\"\"<\/a> Figure 15.2<\/strong>\u00a0Phases of Expatriate Adjustment[\/caption]\r\n\r\nMost expatriates go through four phases of adjustment when they move overseas for an assignment. They include\u00a0elation\/honeymoon,\u00a0resistance,\u00a0adaption, and biculturalism. In the elation phase, the employee is excited about the new surroundings and finds the culture exotic and stimulating. In the resistance phase, the employee may start to make frequent comparisons between home and host country and may seek out reminders of home. Frustration may occur because of everyday living, such as language and cultural differences. During the adaptation phase, the employee gains language skills and starts to adjust to life overseas. Sometimes during this phase, expatriates may even tend to reject their own culture. In this phase, the expatriate is embracing life overseas. In the last phase, biculturalism, the expatriate embraces the new culture and begins to appreciate his old life at home equally as much as his new life overseas. Many of the problems associated with expatriate failures, such as family life and cultural stress, have diminished.\r\n

    Host-Country National<\/h2>\r\nThe advantage, as shown in\u00a0Table 15.4 \"Advantages and Disadvantages of the Three Staffing Strategies\", of hiring a host-country national can be an important consideration when designing the staffing strategy. First, it is less costly in both moving expenses and training to hire a local person. Some of the less obvious expenses, however, may be the fact that a host-country national may be more productive from the start, as he or she does not have many of the cultural challenges associated with an overseas assignment. The host-country national already knows the culture and laws, for example. In Russia, 42 percent of respondents in an expatriate survey said that companies operating there are starting to replace expatriates with local specialists. In fact, many of the respondents want the Russian government to limit the number of expatriates working for a company to 10 percent.\u00a0[1]\u00a0When globalization first occurred, it was more likely that expatriates would be sent to host countries, but in 2011, many global companies are comfortable that the skills, knowledge, and abilities of managers exist in the countries in which they operate, making the hiring of a host-country national a favorable choice. Also important are the connections the host-country nationals may have. For example, Shiv Argawal, CEO of ABC Consultants in India, says, \u201cAn Indian CEO helps influence policy and regulations in the host country, and this is the factor that would make a global company consider hiring local talent as opposed to foreign talent.\u201d\u00a0[2]\r\n

    Third-Country Nationals<\/h2>\r\nOne of the best examples of third-country nationals is the US military. The US military has more than seventy thousand third-country nationals working for the military in places such as Iraq and Afghanistan. For example, a recruitment firm hired by the US military called Meridian Services Agency recruits hairstylists, construction workers, and electricians from all over the world to fill positions on military bases.\u00a0[3]\u00a0Most companies who utilize third-country national labour are not new to multinational businesses. The majority of companies who use third-country national staffing have many operations already overseas. One example is a multinational company based in the United States that also has operations in Spain and transfers a Spanish manager to set up new operations in Argentina. This would be opposed to the company in the United States sending an American (expatriate) manager to Argentina. In this case, the third-country national approach might be the better approach because of the language aspect (both Spain and Argentina speak Spanish), which can create fewer costs in the long run. In fact, many American companies are seeing the value in hiring third-country nationals for overseas assignments. In an\u00a0International Assignments Survey,[4]\u00a061 percent of United States\u2013based companies surveyed increased the use of third-country nationals by 61 percent, and of that number, 35 percent have increased the use of third-country nationals to 50 percent of their workforce. The main reason why companies use third-country nationals as a staffing strategy is the ability of a candidate to represent the company\u2019s interests and transfer corporate technology and competencies. Sometimes the best person to do this isn\u2019t based in the host country.\r\n
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    Key Takeaways<\/h3>\r\n