MNE Selection Techniques for International Assignments
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The world has become the global village and globalization has become an important tool for the organizations to be successful in this rapidly changing world. So the coordination between different cultures and people with different backgrounds is increasing in a different multinational organization day by day. So it is very important to study that how the organizations deal with the multicultural set ups within an organization. During the past few decades the rapid changes in economic, social and political environment of the world has led organizations towards the globalization.
According to Harvey & Novicevic the increasing international activities and global competition resulted in increase in globalization. The process of recruitment and selection has always been very important in any organization. According to Dowling (1999) hiring and placing people in positions where they can perform effectively for the benefit of the organization is the goal of most organizations whether they are domestic or international.
Heraty et al (1997) suggested that, in these new changing global condition increasingly, many organizations are transforming jobs into new structures which are more likely based on self directed work teams, made up of empowered individuals with the diverse background are replacing traditional specialized workers. So in this new challenging environment competition is increasing day by day and organizations need such personalities who can adjust themselves with the change.
Burack and Singh (1995) also suggested that firms need adaptable people who can rapidly adjust themselves to the changing environment. So the people who are ready to change with the environmental changes always give advantage to the organization, and these kinds of people are very fruitful for the organization.
According to ones and Viswesvaran (1997) in this rapidly changing world where the change is taking place every minute the organizations have been sending their members to other parts of the world to complete their assignments.
According to Aycan and Kanungo expatriate is an employee of a business or government which is sent abroad to accomplish their organizational goals for temporary period which is more than six months and less than five years. International assignments not only give benefit to the individual expatriate but it also give the competitive advantage to the organization in the global environment. For many organizations sending of expatriate to the other countries to gain competitive advantage in global environment is the part of their overall human resource plan. (Caligiuri & Lazarova, 2001).
So keeping in view the importance of an expatriate the selection process of an expatriate is also very important step for an organization. According to Dowling the failure of expatriate is due to the selection error. This tells that selection plays an important role for a successful expatriate.
So with the changing world it is need to have such staff who can adjust itself with the change. In this paper an effort is being made to give the importance of selection techniques for expatriates within a multinational organization.
1.1 Key purpose of study
The world is globalizing day by day and now it is also called global village and specifically UK has become one of the biggest multicultural countries and there are a lot of multinational organizations working in UK
With the changing world more of MNEs are sending their expatriates in other parts of the world to accomplish their goals and to gain competitive advantage in global world.
As the selection is the most important step for any organization to choose its expatriate and it is always important for MNE’s to choose or select the right person for the given task.
In fact an expatriate failure is often result of a selection error, and often compounded by in effective expatriate management policies. (Dowling Welch & Schuler, 1999).
The key purpose of this study is to show the importance of selection techniques for a MNE when selecting an expatriate for an international assignment.
The aim of this study is to explore the proper selection techniques which can improve the performance of an expatriate and help him to retain.
To outline the factors that influences the selection of expatriates.
To examine different selection methods used for expatriate selection.
To discuss in detail, issues of cross cultural variation in selection process of expatriates.
The hypothesis which is developed for this study is stated as below
Without doing proper selection of expatriate much will be poor for the company and result in loss of company.
1.5 Theory an overview
There has been a lot of work done on selection techniques of expatriates in last couple of decades. Selection is the most important part of the success of any expatriate, and if the selection is not according to the needs of organization then the failure chances of expatriate. Dowling says that redirecting future performance potential when hiring or promoting staff is challenging at the best time but if operating in foreign environment certainly adds other level of uncertainty. So if the process of selection is beholds specific importance within a domestic organisation then it must have some extra importance while choosing an international staff.
The selection is kind of prediction of the organization’s peoples or decision makers keeping in view the profile of the candidate for the particular job (Hackett, 1991).
The selection is a complete process of analyzing and viewing the profile of the employee and then selecting for the required job.
Moore (2006) discussed this as the selection is the whole process which includes choosing the
right candidate for the position from those persons who have been recruited. This involves
testing and evaluating the skills of an individual is required for the particular job.
According to desler (2000) the selection is the process in which the recruited individual is whittled down by using screening tools like assessment centers, interviews, and different tests.
1.7 Methods of Selection:
There are various selection techniques available, and for the selection procedure all of these depending on the situation and culture of the organization. Some of these selection methods are given below.
Assessment centres (Beardwell and Holden, 2001)
So the above mentioned procedures are used by different organizations depending upon the nature of job and the normal practice they use within the organization.
1.8 Approaches for the Multinational
There are four approaches for the recruitment and selection in any multinational organization. These four approaches are given as follows.
Ethnocentric: It is the type of the recruitment approach in which all the key positions and top management is filled by the nationals of the parent company. According to this approach all the top management decisions and the key strategies of the companies is made by the parent country headquarters.
Polycentric: It is the type of recruitment approach in which the host country fills all the key positions in the subsidiary. Each subsidiary is treated as the separate national entity. But all the key financial decisions are taken by the parent country headquarter.
Regiocentric: It is the type of recruitment approach in which regional talent is preferred. For example if the person is required on for the development of any product then the person who will be recruited will be from the host country.
Geocentric: This is the kind of approach where the persons are recruited without seen any race, religion or region. This approach is international based and is getting in practice in most of the developed countries like UK, USA etc.
1.9 Methods of international selection
The different methods of selection for the expatriate selection which most of the multinational organizations use is as follows
Coffee Machine System
1.10 Selection of an Expatriarate
The selection of expatriate is a bit different from the local selection of a local manager. For the selection of an international manager there are a lot of extra factors which needs to be considered by the selectors. The expatriate selection process results in higher cost to the multinationals including relocation process, allowance and accommodation apart from the training costs. (Hailey 2000, pg; 90). During the expatriate selection process, 02 conflicting forces operate within the expatriate’s mind. One that pulls the employee into moving to the new place, the other tends to stop him from going. (Baruch 2005, pg 129).
1.11 Factors involve in selection of an Expatriate.
According to Dowling and Welch the factor involve to determine an appropriate expatriate selection process are as
Cross Cultural Suitability
Family Requirements (Dowling, Welch, Schuler, 1999)
So keeping in view all the above mentioned factors an expatriate should be selected by a multinational organization.
(Kluckholn & Strodtbeck 1952) define culture as, “a set of basic assumptions-shared solutions to universal problems of external adaptation (and internal integration- which have evolved over time and are handed down form one generation to the next.’’
1.13 Corporate culture
Corporate culture includes the behavioral patterns, concept, values, ceremonies and rituals that take place in the organization. It gives the members of the organization meaning as well as the internal rule of behavior when these values and beliefs customs’ rules and ceremony are accepted shared and circulated throughout the organization. (Trompenaars & Turner 1997, pg 157-181)
1.14 Why consider culture?
Adjusting in a new culture is always difficult and it causes problems for both expatriate and family members, therefore it is important for an International HR to look for the similarities of the two cultures in order to deal with the challenges in the business world key activity.
dowling, welch,schuler, 1998 pg 132
Recent research shows that the expatriates who are unable to cope with the challenges find it difficult to adjust and incur costly implications. (Caligiuri, 1997, pg: 45-67). The factor of culture is very important for an expatriate selection process and HR managers will have to select such expatriate who is adjustable with the different cultured people and work with them for the cultural dimension Hofstede and Trompenaars cultural dimensions are given as follows
1.15 Hofstede’s four dimensions (1967-1973):
Gooderham & Nordhang (2003). ‘Culture is always a collective phenomenon, because it is at least partially shared with people who live or lived within the same environment, which is where it was learned. It is the collective programming of the mind which distinguishes the members of one group or category of people from another.’
Hofstede surveyed 116,000 IBM employees in 40 different nations about their preferences in the work environment. The analysis revealed the results creating 4 dimensions:
Power distance: The dimension indicates the extent to which a society expects and accepts a high degree of inequality in institutions and organizations.
Uncertainty avoidance: This refers to the degree to which a society prefers predictability, security and stability.
Individualism-Collectivism: this dimension relates to the extent to which people prefer to take care of themselves and their immediate families rather than being bound to some wider collectively such as extended family.
Masculinity-Femininity: Masculine societies value assertiveness, competitiveness and materialism as opposed to the feminine values of relationships and the quality of life.
1.16 Trompenaars’ cultural dimensions:
Trompenaars concluded four cultural dimensions that relate to the question of inter-personal relationships and work-related values Gooderham & Nordhang (2003).
Universalism vs. Particularism
Communitarism vs. Individualism:
Specific vs. diffuse
Achievement vs. ascription:
So these four dimensions of Trompenar also affect the selection process of an expatriate for international assignments.
1.17 Strategic choices in expatriate selection:
Organizations normally have some strategic choices while selection of an expatriate. These strategic choices are mentioned below.
Internal recruitment versus external recruitment
Individuals versus teams
Technical qualification versus other selection criteria
Extrinsic rewards versus intrinsic rewards.
Chapter 2 Literature Review:
In this chapter researcher tried to discuss all the related studies which are done in past and are available in literature. A lot of work has been done in the literature on the topic of selection. Before proceeding to the actual topic it is necessary to look at the different methods of selection which an organization uses and see that what are the different techniques and criteria which are used for the selection of staff.
Moore (2006) discussed this as the selection is the whole process which includes choosing the right candidate for the position from those persons who have been recruited. This involves testing and evaluating the skills of an individual is required for the particular job.
According to Dessler (2000) the selection is the process in which the recruited individual is whittled down by using screening tools like assessment centers, interviews, and different tests.
2.2 Expatriate selection:
According to (Dowling, Welch, Schuler, 1999, pg: 154) Multinationals take great care in their selection process, however predicting future performance potential of the concerned staff is challenging at the best of times especially operating in foreign environments adds another level of uncertainty. The expatriate selection process results in higher cost to the multinationals including relocation process, allowance and accommodation apart from the training costs. (Hailey 2000, pg; 90). During the expatriate selection process, 02 conflicting forces operate within the expatriate’s mind. One that pulls the employee into moving to the new place, the other tends to stop him from going (Baruch 2005, pg 129).
2.3 Importance of an Expatriates and International Assignments:
The world is globalizing very rapidly and change has become necessary for the organization to survive and to gain competitive advantage internationally. According to Harris and Brewster, 1999. The rapidly globalizing world has increased the need for the international assignments and many of the organizations started considering international management experience for the top management. So the international assignments are becoming an important part for the success of an organization to gain competitive advantage.
As discussed by Chen, Tzeng & Tang, 2005 that organizations internationalize their operation to gain success and to increase its market value internationally and for this purpose an organization needs effective expatriate who can perform its task properly. In this new era the importance of expatriate has increased because expatriates are the ones who can give an organization proper international exposure and make the organization successful.
2.4 Selection Process:
One of the most studied areas for the expatriate selection is the selection process of the expatriate. The selection of expatriate has always been difficult procedure for the multinational organizations. Swaak quotes one HR executive who said. “My job is to find people in a hurry.” So this system is highly crisis-oriented and unsophisticated. Swaak , 1995. Further confirming the problems for the nature of the selection process Still and Smith (1997) report the results of Australian research, which shows that there were a number of different ways through which expatriates were selected. They studied that the most impressive and important form of selection or evaluation of the expatriate was recommendation of the person by the line manager including chief executive officer or specialist persons.
Mostly expatriates in the multinational organizations in a knee-jerk reaction to the need to fill a new or unexpected vacancies overseas. Actually there are well informed intercultural trainers or a good HR professional who selects the expatriates but basically it is HR department within multinational organization who selects the expatriate finally. Managements choose the most technical and competent candidates which makes the expatriates successful internationally. (Shilling, 1993 pg 58).
2.5 Types of selection Process:
Coffee machine system
2.5.1 Psychometric Tests:
According to Passmore, 2008 Psychometrics are the widely used testing method for the selection of the employee and personal development. The psychological test is always important for the selection of the employee especially for the selection of an international manager. According to the validity of psychological tests is disputed. According to Sparow and Brewster (2007) the psychologists the variation between the different natured job test is very small (Schmidt and Hunter , 1998). According to a survey done by The Graduate Recruitment in 2007 two third or about 67 percent of 219 respondents surveyed said that the results of psychometric test had some influence on recruiting and selection decisions, and 24 percent said that it has strong influence, and only 2 percent said that these test does not have any influence. So the above figure shows the importance of psychometric tests.
According to Sparow and Brewster (2007) psychological assessment increasingly involves the application of tests in different cultural contexts, either in a single country or different countries. Now a day the demand of cross cultural assessment test is increasing due to the increasing factor of globalization to gain competitive advantage in international market. According to Mendenhall and Oddou, 1985 one of the important option for evaluating the selection process is the use of psychological tests and evaluation dvices. There are number of instruments available to measure the stress level of an individual.
Figure: 2.1 (Source: article by Jonathan Passmore, Bread and butter “How to use psychometrics for coaching”)
In figure 2.1 the real importance of psychometric test is shown. Psychometric tests are reliable that the selected person will be the one on whom one can rely. And obviously these kinds of tests are valid for any kind of job. The most important point in this test is that it does not include any biasness and the selectors cannot show the biasness while selecting on the basis of psychometric tests. These tests are also standard for different jobs. So all the above mentioned qualities and factors involve in the psychometric tests. In other words one can say that almost all the abilities present in an individual’s mind can be noticed, and the end result will always ends up in the right selection of expatriate.
2.5.2 Assessment Centre:
As the assessment centers are considered to be one of the best selection techniques so according to Sparow and Brewster assessment centers will be the best idea as a selection technique to assess the competency of international managers. This is rarely the case, however. According to sparrow (1999) Even where assessment centers are used to select the managers in international settings, the key cross cultural assessment centers seems to be to design the assessment process so that it is very adaptable to local environment in which it will be operated. So there is need of cross culture assessment centers in which international managers can be assessed accordingly with the changing environment.
Krause and Gebert (2003) have done study on international literature on the conception, operation and evaluation of assessment centers. He examined 281 German firms whose language was German and he compares them with the previously studied firms of United States of America. Study showed that both the American and German firms use the assessment centers but the purpose of some of them was different from the basics. For example the competencies assessed for job analysis might be identified through the use of interviews with job incumbents in 79% of US firms and only 39% of German firms. Most of the German firms rely on interviews for the selection of international managers or expatriates.
so the assessment centers are considered to be an important process for expatriate selection.
2.5.3 Coffee Machine System
This system was the idea of Harris and Brewster (1999) the key findings of the study show the reality of the selection process for expatriate selection in the organizations. In many organizations the selection process falls under what we call ‘coffee machine system’ and this system is the most common form of expatriate selection. What happens is that the senior line manager is standing by the coffee machine when he/she is joined by the colleague:
‘How’s it going?’
‘Oh, you know, overworked and underpaid.’
Actually Jimmy in Mumbai has just fallen ill and is being flown home. I don’t know who I can choose to work over there at very short notice of time. It is driving me crazy.
‘Have you met Simon on the fifth floor?’ he is working in the same line of work. He is very good and bright and looks like going a long way. He was telling me that he and his wife had great holiday in Goa a couple of years ago. He seems to like India. Could be worthy to speak to him.
Hey, thanks I will check and speak to him.
‘No problem. They don’t seem to be able to improve this coffee though, do they?’
What happen in the organization next is that the manger will take some decision and will have informal discussion with his seniors about Simon and then that man will be called and interviewed and selected for the required position. Accordingly HR department and financial department will be involved in the process and the formal and systematic process will be started.
This method is rarely used in the organizations in particular cases when there is an urgent need to fill the position of expatriate.
2.6 Niche Assessments
According to Bolt (2008 ) Many assessment venders specialize in certain niches and offer off-the-shelf products to meet clients’ testing needs. However, vendors can find such persons or individuals for the company who can fit in the organizations new environment and can coop with the new organization’s culture. Testing is the most important part of the application process of the candidate because testing gives the good idea of the individual’s abilities and competencies.
2.7 Factors involved in selection Process:
There are number of factors which affect the performance of expatriate. Dowling, Welch, Schuler, (1999) recognised some of the important and most affective factors and these are the factors which involved to determine an appropriate expatriate selection process. All the factors are shown in a model below.
Figure: 2.2 Source: (Factors in expatriate selection, pg 77
Dowling, Welch, Schuler, 1999).
Figure 2.2 shows the factors which are required for an expatriate each of the above mentioned factors is discussed in detail below.
2.7.1 Technical Ability:
According to Hays, 1971 All expatriates are assigned abroad to complete some task weather its building a dam, running some business, or teaching it all depends on the personal technical ability to perform that task. Obviously it is important to consider the individuals’ personal ability to perform the required task assigned to the expatriate. So in selection it is another important area which needs to look at. Different research findings show that the multinational organization give a lot of importance to the technical abilities of the individuals going abroad for international assignments at the time of their selection.
According to Harvey and Novicevic,(2001) that technical and functional expertise has been the primary criterion for selecting expatriate managers for assignments. Hixon found that the selection was based on technical ability and willingness to reside abroad. If the individual is selected without keeping in view its technical ability. It can create the big problems for the multinational organizations to complete its related task or assignment. Reinforcing the emphasis on technical skills is the relative ease with which the multinational may assess the potential candidate’s potential, since technical and managerial competence can be determined on the basis of past performance of the individual who is going to be selected as expatriate.
In fact domestic selection cannot be equal to the international selection but person can be selected on the basis of past domestic records which he has performed domestically as the basic criteria is always the same in all the multinational organizations so on the basis of past abilities there should not be any problem for the organizations to select the expatriates. This approach is also found by Foster and Johnsen,(1996) who report the results of the research into the expatriate selection practices for the newly internationalized UK organizations which shows that organizations keep in view the technical skills, and previous domestic records while selecting expatriate for international assignments.
2.7.2 Cross Cultural Suitability:
The environment and the culture where an expatriate is going is an important factor for an expatriate. So the selectors of the expatriates should always consider the factor of culture for the expatriate. Although these factors does not guarantee for an expatriate for his successes but if these factors are not considered it can lead it towards the failure of expatriate. If the culture is considered then it is always important to study the Hofsted’s dimensions for cross culture and Trompenaar’s dimensions so these researches are explained in detail as follows.
Culture is always important for any expatriate selection, so it is very necessary for HR managers and selectors to keep the factor of culture in view while selecting expatriate for international assignments.
There have been a lot of studies on culture and there are a lot of different definitions of culture some of them are given below.
(Kluckholn & Strodtbeck 1952) define culture as, “a set of basic assumptions-shared solutions to universal problems of external adaptation (and internal integration- which have evolved over time and are handed down from one generation to the next.’’
The life style of people living in the society is called culture it includes the social, economical, political, religious, life style of the individuals in the country. According to Drennan, 1992 “whatever is going around is called culture.”
Culture is the way of life of a group of people. There are obvious differences between the different cultures such as language, dress, religion, beliefs, and behaviours of the people, and there are also implicit differences between the two cultures such as in values, assumptions about how things should be.
so these different degrees of explicitness are often called the culture.(Scullion&Linehan,2005). So the culture is very important factor for the selection of expatriate because the individuals move from one culture to another culture for the completion of their assignment.
2.7.4 Hofstede’s Cultural Dimensions
Greet Hofstede’s culture’s consequences (1980, 2001) explores the differences in thinking and social action at the country level between members of 50 nations and three regions. Hofstede originally used IBM employees’ answers to company attitude survey conducted twice, around 1968 and 1972. The survey generated more than 116,000 questionnaires with the number of respondents used in the analysis being approximately 30,000 in 1969 and 41000 in 1973. Hofstede identified and validated four cultural dimensions from respondents patterned answers. For each dimension, he presented possible origins as well as predictors and consequences for management behavior.
Hofsted’s four dimensions are as follows
Individualism versus Collectivism
Masculinity versus Femininity
Another dimension which is fifth dimension presented by Michael Bond is Long term versus Short term Orientation was subsequently developed from a research to accommodate non-western orientations and has been adopted from the Chinese Culture Connection study.
Power distance: The dimension indicates the extent to which a society expects and accepts a high degree of inequality in institutions and organizations. It refers to the relationship between supervisors and subordinates. It reflects the extent to which the less powerful members of organisations expect and accept that power is distributed unequally.
In organisations an illustration of a high power distance score is generally represented as a highly vertical hierarchical pyramid. Subordinates are often told or ordered about a particular task but they are not normally entitled to discuss the decision made by the top management so basically the meaning of power distance is that higher the person in hierarchy the more difficult will be this person to approach. So there are some barriers for that person to see their top management. The barriers can be of different ways like the person barriers or the employee is not allowed to see the top manager or they are not allowed to attend the high managerial level meetings in which decisions are made. So basically power distance shows the distance between a supervisor and his employee.
Uncertainty avoidance: This refers to the degree to which a society prefers predictability, security and stability. According to Hofsted the extent to which the members of a culture feel threatened by uncertain or unknown situations. He argued that high uncertainty avoidance is expressed for example by a company’s need for regulations which tends to minimize in the behaviour of its employees. Company rules are such thing which cannot be broken by the employees even if he think that breaking the rule is in company’s best interest in such sort of environment the work stress is more and uncertainty avoidance is high. On the other hands if the employees are less affected by uncertainty is called low uncertainty avoidance.
Individualism-Collectivism: this dimension relates to the extent to which people prefer to take care of themselves and their immediate families rather than being bound to some wider collectively such as extended family. Hofsted ask the IBM individuals that how important is to keep in view his work goals rather than the organisation. If there is preferred work goals stress dependence on organisation. For example good physical working condition, good ventilation enough space individualism in the work place can be seen. Collectivism can be seen in preference of collective organisation.
Masculinity-Femininity: Masculine societies value assertiveness, competitiveness and materialism as opposed to the feminine values of relationships and the quality of life. Males tend to express preferences for assertiveness recognition when doing good job. Whereas females prefer the interpersonal aspect of work.
Michele Bond’s Research about cultural dimensions:
Another dimension which is mentioned above is Long-term versus Short –term Orientation. In 1987 a questionnaire was developed by Michele bond with the project Chinese Culture Connection (CCC). He developed a questionnaire representing fundamental and basic values of Chinese people. This questionnaire was then given to the students of 23 Asian and non Asian countries. The statistical analysis developed four different dimensions. Three out of four were same as it was of Hofsted’s the fifth was different from Hofsted.
2.7.5 Trompenaars and Hampden-Turner
Like Hofsted Trompenaar also studied different dimensions of cultures. According to him different culture deals with different universal problems. He proposed three problems which are as follows
Passage of time
Relationship to the Environment
These cultural dimensions describe the characteristics that each culture provides an answer to three fundamental problems. In multinational and international organizations cultural dimensions will be based on the the responses of the managers. The dimensions found by the Tropenaar and Hampden are discussed in detail as below.
2.7.6 Trompennar’s Cultural Dimensions
The Trompenaar’s cultural dimensions are discussed as follows.
Neutral versus Affective: This dimension is particularly based on the certain situation. Trompenaar measured this dimension with the particular question which was how would you behave if you face any problem at work and you feel upset about it? Would you express your feelings openly? The answers and responses were different from different countries. The resulting cultural dimension tells us that in particular countries emotion is being displayed together with rationale arguments. This may be confusing for the people coming from the culture where rational argument is provided instead of emotions so that dimension was recognized by Tropmpanaar
Individualism versus Communitarianism: this dimension of trompanaar resembles to the dimension of Hofsted which is on employees. This dimension mainly focus on employees goals within an organization the way they work within an organization and their responsibilities.
Universalism versus Practiclarism: This dimension is about the personal behavior and its implement on universal rules for example not telling lie and following the rules and regulations. People can either consider that principles apply whatever the situation, or specificity of each situation determines whether one should apply them or not.
Achievement versus Ascription: This dimension is tells us about the personal achievement of the employees within an organization. In the work environment which is achievement versus ascription the employees judge themselves at their own and make decisions. They are also motivated to work more good and to work more hard within the organization.
Specify versus Diffuseness: this type of dimension tells us that in most of the cultures the people compartmentalize themselves and divide their work in different phases. Being good friend at work does never means that they should know each other family and of course for good relatives it’s not necessary to know their work environment. For example a manager will never meet its subordinate while playing golf, he will instead meet some golf coach or golf specialist to improve his game. So that is kind of culture which describe such kind of dimension.
Sequential versus Synchronic the time is divided in to two main themes to perform in certain time frame and orientation. Hall, 1959 introduced monochromic and polychromic. Monochrony is a perception that time is linear sequential and definite whereas polychrony is a perception that time is multilinear. So these two types of times differ for two different cultures. Trompenaars, 1993 develops these themes regarding their implication for action made sequentially or synchronically in an organization.
Inner versus Outer Directedness: This dimension reflects the belief either that individuals can control and influence their environment or that they limited ability to do so. Consequences for management are reflected for example in strategic plan either they will tend to plan and provoke changes or try to take best advantage of the available situation.
2.7.7 Family Requirements:
Family factors composed of five criteria: marital status, children, spouse’s attitude, spouse’s employment and spouse adjustment (Chen, Tzeng&Tang, 2005). It is always important for the HR department of MNE to consider the personal life of an expatriate. So the contribution of the family particularly spouse plays an important role for the success of an expatriate for the completion of international assignment. Black and Stephens examined the influence of the spouse on American expatriate adjustment.
They surveyed 220 U.S expatriates and their spouses working in Japan, Taiwan, and Hong Kong, they found that the adjustment of the expatriate working abroad for international assignment is positively related to the spouse’s adjustment. The adjustment of the spouse is highly correlated with the adjustment of the expatriate. Likewise there was an Australian research into the psychological impact of relocation on the partners of 58 expatriate managers. They found that the decisions which were made by most of the expatriates to relocate highly depend on the decision of his partner.
The above two mentioned researches show that the family of the expatriate highly depends upon the settlement of expatriate abroad.
2.7.8 Country/Cultural Requirements:
The host country may be an important determinant. Some regions and countries are hard to adjust like the remote areas away from the cities, or the war zone countries and now days there are some countries which are not safe as far as terrorism is concerned. Accompanying the family members will again be a big responsibility for the multinational organizations. In most of the countries where it is very hard for the Europeans to go for example the country like Saudi Arabia has got the culture according to which women have to cover their heads and cover them properly so it will be a bit hard for the family of western expatriate to adjust in that culture.
Or this can be vice versa as well. Weather is another important factor for the countries and it is a bit hard for the expatriates to adjust themselves in the different weather from their host country. Black and Mandenhall (1990) argued about the cross cultural adjustment cross cultural adjustment that it can be facilitated if the expatriates have awareness of the norms and behaviors of the host country.
2.7.9 MNE Requirements:
Multinational may consider the proportion of expatriates to local staff when making selection decisions mainly as an outcome of its staffing philosophy. However the requirements of the different MNE’s is different or they may be require to use PCNs and TCNs, obviously this will react to the selection decision for the multinational organisations. Other situational factors are as follows
The mode of operation involved: Selecting staff to work in an international joint venture may involve major input from the local partner, and be constrained by the negotiated agreement on selection processes.
Duration of assignment: Family members tend to accompany an expatriate when the assignment is only for three to six month’s duration, so family requirements may not be a strong factor in the selection decision.
Recruitment and selection
International training & development
Figure: 2.3 Source: (Dowling, Welch, Schuler, 1999)
In above figure 2.3 the whole process of expatriation is shown it starts from the recruitment and selection, once the right person is chosen for the right job then the most important step of training starts which is directly related to the pre departure step for expatriation then the process of development of the process starts which ends up in making of an international team when an expatriate is fully trained then they are told about the nature of assignment.
Language is another important aspect when adjusting away from home country. This ability is often linked with the cross cultural ability. For an expatriate it is necessary to learn a bit of language of the country where he is going to accomplish its assignment. According to Tung knowledge of host country’s language is important for functional head and operative jobs. According to victor (1992) difference in languages is the major barrier for the international assignments. But according o some studies and researches in the past the language sometimes is not very much important for expatriates completing their international assignments.
In terms of other selection criteria the factor of language is placed lower down when looking into the factors for the expatriate selection process. As done by the price water house research 1998 they placed language at third place while determining the factors for the expatriate selection. Basically language is not any problem for the selection of expatriate where the host country speaks the same language so the problem occurs when the expatriate has to be select for the non English speaking language. But now a day the English has now become an international language and it is necessary for an international manger to learn the English language to communicate even in the non English speaking countries.
2.8 Strategic choices in expatriate selection:
As we have seen above the factors which need to be kept under consideration while selecting expatriates for international assignment. The process of selection is basically used to fill the international positions of the organisation. The organisation faces several strategic choices during selection process. The strategic choices are mentioned as follows.
Internal recruitment versus external recruitment.
Individuals versus teams.
Technical qualifications versus other selection criteria.
Extrinsic rewards versus intrinsic rewards.
The above mentioned strategic represent two opposite extremes on a continuum. The majority of the decisions fall in between the two extreme strategies.
2.8.1 Internal versus external recruitment
Interesting findings by the recent study on expatriate selection is that there is shortage of international managers, due to growing concern of international mobility (Scullion, 1994). The shortage of international managers creates problems in expatriate selection. From an organisation’s point of view the selection decision is made under circumstances where the organisation has a lot of applications looking for the job of international managers. Brewster and Scullion 1997 suggested that availability of the international managers seems to be the critical variable in acceptance of international assignment
The above discussion tells us that it is not always necessary that the required managers or expatriates are always available within the organisation to overcome this shortage of the managers the organisation then find some external sources to fill up the position. According to the study by Torbion 1982 and Scullion 1994 most of the organisations mostly rely on the internal sources of the organisation to fill up this position.
On the other hand Boyacigiller 1990 suggested that the external market is always full of required talented managers who can work as an international manager. Here comes a very interesting question that why the most of the researcher emphasis mostly on internal selection of the international managers?
The answer which click in mind is that internal selection makes the task easy for the selectors and HR managers while selecting the expatriates because as a member of organisation most of the selectors know their performance and abilities of the individuals working within an organisation. So this can give them benefit to select the expatriate with the required abilities. The internal selection of international managers becomes reliable when strategic purpose of the assignment is co-ordination and control of operations. This point was discussed by Black, et al 1992 by saying that for the good co-ordination for an expatriate in global market requires assignments of the people with broad experience in the firm including a lot of contacts within the firm.
2.8.2 Case study
Barclaycard International (centralized control and recruitment primarily for overseas labour markets.)
“Barclays introduced its first credit card in the United Kingdom named as Barclaycard and now Barclays has one of the major global credit card businesses which have speedy growth approach. Outside the UK, it operates in the United States, Germany, Greece, Italy, Sweden, Norway Portugal, Ireland, France, Asia Pacific, and across Africa. Barclays is currently looking to have alliances with Standard Bank of South Africa, acquisition of Juniper Financial Corporation and a series of in-country launches.
Barclays employed 3000 staff, and it had 15 per cent based in the UK. To enable development, Barclaycard International recruited a group of people management process to bring firmness, management and good organization of people. Challenges were different in the different cultures depending upon the country, culture and business market of the country. The basic and first agenda items for the HR team of Barclays in 2006 were international resourcing, international mobility, talent achievement and development of global policies.
There was a need of recruitment of good employees to transfer the business in other countries and also the building of networks in other countries at the start up of new business at international level, and all this depends upon the local labour resources. Intranets exchange available vacancy information between Hamburg, Zaragoza and Dublin. A new international business partner helped the Barclay’s HR managers to recruit more better staff at international level, the new staff was globally experienced and they recruited this staff through negotiation of global preferred supplier for head hunters and research institutions, and this development of new employees internationally advice on global versus local process sources of appropriate geographical diversity in the use of international talent.
Barclaycard’s call centre in Dublin was a central platform and they recruited new staff from there for future international expansion. In 1997-2006 it grew up from 10 to 360 employees. Initially it was supporting only non-UK operations then it grew up and started serving eight countries including Ireland, Italy, Spain, France, Germany, Portugal, Greece, and Botswana. Dublin was chosen because it was considered as the hub of experienced employees and labour market. The recruited employees were well qualified, with intentions to stay in country for around 12 to 18 months. Employee spoke their mother tongue in the markets they served, but principles of cross cultural management were applied in the market.
The gaining of Banco Zaeagozano enabled Barclays to build a new contact centre in Spain. Thirty-five employees moved from Dublin to Spain to help transfer the different organizational practices. HR business partners dealt with setting up legal entity to transfer employees; deciding the best available options of local recruitment; best use of local job centres; assessing funding support and understanding the implications of local employment law and agreements. New country operations oversaw other operations.
Considerable insight into country capability resided at HR partner level. A system for the growth of organization named as ‘framework for growth’ was established to reproduce in-country operations and transfer learning. Many aspects of recruitment and selection could be cut and pasted across operations while others had to be dealt with flexibility for example criteria-based interviewing and diversity practices. Dublin acted as a first step of providing people to make easy international expansion.
Source: (International Journal of Human Resource “Globalisation of HR at function level: four UK-based case studies of the international recruitment and selection process”)
2.8.3 Team versus Individual assignments:
In this context Brewster and Harris, 1999 suggested that the expatriates mostly do the individual assignment when they go abroad. As expatriate is the only representative of the head office in the host country who is in coordination with the head office and gives them feedback of the work. Similarly assignments to learning units for management development purposes can be performed by a single individual.
But on the other hand if we speak about the transfer of knowledge then this cannot be only individual but it also can be on collective basis. Knowledge can be individual or collective. According to Grant 1996 if the knowledge to be transferred is implicit individual knowledge like for example the knowledge of a stockholder which normally is transferred individually. On the other hand collective knowledge is the product of co-ordinated efforts of different individuals. For example the launching of a new product needs team effort which involved different specialist individuals
2.8.4 Technical qualification versus other selection criteria
One of the most studied areas in the selection of the expatriate is the criteria of selection of expatriate for the international assignments.
Despite the emphasis on technical qualifications and domestic performance, there is abundant evidence that other factors also play a critical role in success of expatriates. In recent studies the factors which lead to the success of expatriate in the selection process are as follows.
Arthur and Bennet 1995 classified them into following five categories:
Job knowledge and motivation
The above mentioned factors are the ones which if kept in view while selecting the expatriate for international assignments can help the selectors and HR manager to select the right person for the required job
2.8.5 Extrinsic versus intrinsic rewards
This refers to the type of incentive approach which an organisation offers to the expatriates. These incentives can be intrinsic or extrinsic. Extrinsic rewards or incentives refer to the tangible rewards and intrinsic rewards refer to the intangible rewards for the expatriates for example opportunity for professional development, security or recognition.
2.9 Importance of selection process for expatriates:
After discussing the selection process and its different methods in detail, the importance of the selection process is very necessary. Although international process of selection of expatriate is little bit different from the domestic selection process. This point was discussed by Heller (1980) by saying that most of the companies use the selection process which varies a little from the domestic selection. The reason is that there are some factors which differs from domestic selection process for example cross cultural adaptability, family factor etc these are the factors which usually are not considered in the domestic selection process.
As the selection process is the first step for an expatriate. That is the reason why it is considered to be an important step for the process of expatriation. According to the survey done by Stone (2002) the basic factors of failure are manager’s inability to adapt cultural differences and his settlement. He also found out another factor of expatriate failure which is inadaptability of the spouse in another culture so the selectors should consider all these possibilities while selecting an expatriate.
2.10 Other Factors which makes the selection successful:
Another survey which was done by Tung (1982) showed some interesting results regarding the success of an expatriate selection process. It is obvious that the firms know the importance of the managers which they are selecting as an expatriate. These factors are given below.
Desire to serve overseas
Previous overseas experience
2.10.1 Desire to serve overseas
The desire of an individual to serve overseas is an important factor which helps the organisation to select such person who is really interested to go abroad and explore the world. Most of these individuals are ambitious and work hard and show good results for the organisation.
2.10.2 Academic Qualifications:
Another important factor which helps to select for an expatriate selection is basic academic qualification of an expatriate. The theory which is applied in practical life always helps a lot to the individuals working in practical life. Theory makes the work ore systematic and the end result is always helpful and positive. So the related academic education should also be seen while selection an expatriate.
2.10.3 Previous Overseas experience
Previous overseas experience is again another factor which helps the HR managers to select such an individual who can use his/her previous experience about the cultural differences and other differences involved in moving from one country to another country.
2.11 Convergence of core competencies required for expatriate
With the global world is forming different strategic alliances among entities from disparate corners of the world with different mindsets, the competency of individual ability has increased. Tung (2001) argued on this by saying that there will be growing convergence of core competencies for the domestic and international managers. So while selecting an expatriate for the international assignment one should keep in view these individual abilities within an expatriate. According to a survey by Bennet (1989) which is done the selection of international CEO the consensus of opinion was that the person must have a multi-environment, multi-country, multi-functional, may be even multi-company and multi-industry experience. So this trend of convergence within an individual plays an important role for the selection of an expatriate for international managers or expatriates.
2.12 Contingency approach to the selection process
Although there are few universal factors which should be kept in view by a HR manager while selecting the expatriate and most of the skills and factors are discussed above in detail but there are few positions which needs some extra abilities such as higher managers and CEOs of the organisations. Tung (1981) studied particularly about this and found out that along with technical competencies and cultural intercultural interaction expatriate going abroad for the higher post and top management jobs needs some extra abilities such as ability to interact effectively with the host country nationals.
This is particularly important for the countries which are characterised by large cultural differences the companies which adopt contingency approach to their selection and training program for the expatriates experience high rate of success in their international assignments. This proposition essentially holds true with the following added provisions.
Corporate culture: Tung (2001) argued about the role of corporate culture. According to Lorsch, (1986) corporate culture refers to the norms and shared beliefs of top managers within an organisation and how they run the business. If we talk about the global alliances then the corporate culture will almost be the same but some time some formalities are different between one company and other. For example if an expatriate goes abroad as a top manager and he/she want to implement same method of performance appraisal which was used in his own country and that method might not be applicable in the host country where he/she been just appointed.
So during selection process it is necessary for the HR managers and selectors to keep in view these factors as well. A strong corporate culture can have same effect between the different national companies as the alliances are being made globally so most of the companies in other countries will be partners of each other’s so in futures the expatriates send abroad will be sent to their partner company where the corporate culture will be different.
2.13 Job Novelty:
On the basis of the research done by Tung (1981), Black and Mendenhall (1991) presented another theory for the cross cultural training which is more refined. This was called “job novelty”. This refers to the difference between the requirements of international assignment and the previous record of the expatriate to be selected. Different corporate and professional cultures contribute to the level of job novelty encountered in an international assignment. According to Baker and Ivancevich, 1971 another important practices of HR managers is the use of “domestic equals’ overseas performance” equation. The assumption behind this formula is that managing company is a scientific art. The executive performing task in New York can well perform in Hong Kong.
Chapter 3 Research Methodology
This chapter is about the methods and techniques which will be adapted for this study. Although general techniques will also be discussed but the techniques and methods used for this study will specifically be discussed in this chapter.
There has always been difference between practical and theory. There is no doubt in this that most of the practical work is backed up by the theory but it is fact that there is a big difference between the practical and theory. Research is one of the tools which help to minimize the difference between practical and theory. An interesting point made by the Gummesson (2000) about the difference between theory and practice is that all the managers and the professional workers are the set of knowledge. He argued that all the working people have good knowledge which they try to implement practically; all their practical steps are backed up by the good knowledge background.
There are a lot of definitions of research by many authors. The point of view of few of them about this topic is explained as follows.
According to Kumar (1996) there are different methods of finding out the answer of the questions and the research is one of those ways of finding out the answers of the required questions. The research takes place under the process which includes the following process
It is being done within the frame work of set philosophies.
Such procedures and methods used which are already tested for their validity and reliability.
Research is designed to do unbiased and objective.
According to Kothari (2005) research is a systematic and scientific way of searching the required information on a particular topic. He also called it an art of scientific investigation. So actually the systematic process of finding out the answer of required questions is actually called research. By doing the research it is easier to find out the actual reality which relates the theory with the practice. Grinnell, Williams and Unrau (2009) said that the word research comprises of two different words re and search which means to gain or find out about some new knowledge about the particular topic, and this process of finding out the new knowledge is obviously systematic procedure. He further added by saying that utilizes acceptable scientific methodology to solve the problems and create new knowledge which is applicable generally.
3.2 Purpose of the research:
According to Kothari (2005) the main purpose of conducting the research is to find out the answers of the particular questions. The main purpose of conducting research is to actually find out the truth which is hidden and not yet discovered by anyone else. Although each research study has its own specific objectives and purposes but the research objectives can fall into one of the following groups
To be familiar with the process or to achieve new discoveries
To fully show the characteristics of individual, situation or group.
To find out the frequency with which something occurs or with which it is associated with something else
To test hypothesis of a relationship between two variables.
The main purpose for conducting this research is found out the following factors for the selection of expatriates.
How the process of selection is important?
What different types of expatriate selections are in practice?
Does the use of proper selection method will help the expatriate to retain in the other country?
What problems an organization can face if the proper selection method is not used?
3.3 Types of research:
Collis and Hussey (2009) described the types of research as follows
Exploratory, descriptive, analytical, and predictive Research
Quantitative and Qualitative Research
Applied or basic Research
Deductive or inductive Research
3.3.1 Exploratory, Descriptive, Analytical, and Predictive Research:
If the research is classified according to its purpose then we can describe that research as exploratory, descriptive and analytical research. Exploratory research is the type in which interviews of certain population is taken and then the result are found out on the basis of that research and then descriptive research describes phenomena as they exist. It is used to explain and identify the information on characteristics of a particular problem. Analytical or explanatory research is the continuation of descriptive research. In this type the researchers goes ahead with the findings and analyze them in detail. Predictive research goes even further than explanatory research. This research aims to generalize from the analysis by predicting certain phenomena on the basis of hypothesized, general relationship.
3.3.2 Quantitative and Qualitative Research:
The researchers who use quantitative data use quantitative approach for the research and the researcher who uses the qualitative data to use qualitative approach for the research. According to Lancaster (2005) qualitative data is the data which is descriptive and classified by type and the quantitative data is the data which is expressed numerically and the figures are classified in numerical form. According to Collins and Hussey (2003) in Quantitative research the data and the available information is measured therefore it consist of collecting and analyzing the numerical data and on the other hand qualitative research is more of subjective and it involves examining and analyzing the different view points from different individuals in order to gain the different social and human activities.
The qualitative form of research is conducted for this study. There will the interviews of HR managers and HR consultants and they will be asked about the importance of expatriate selection. The reason of choosing the qualitative data in this study is that the nature of study directly relates to the HR managers because the process of selection is done by HR managers of the organization and in case if HR managers are not present under some circumstances then HR consultants can
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