Selection of international business managers in UK and USA

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INTRODUCTION

Brian J. Hurn tries to give the readers a realistic picture of the international assignments & the current trend that came into picture because of globalisation. He follows a clear line of argument by focussing on selection process, which until now, lacks in depth investigation. In the article validity of Psychological tests is questioned & the author states that such tests are culturally biased. He states the importance of Overseas Assignment Inventory in checking the adjustment capability of future international managers. The methodology used is qualitative analysis which depends on comparing Myers-Briggs type indicator & Mendenhall and Oddou's four dimensional approaches to predict future performance. He also uses surveys done by Ashridge MR in 1998-1990, Henley's, Heller's, Phillips researches & competencies mentioned in the handbook of HR Management practices to compare the desired competencies in international managers as a secondary research tool. The author does a great job by identifying the loopholes in the management education system with the help of survey done by London Business School in 2005. The limited usage of Assessment centres is also mentioned by the author. Because of the author's personal experience as an interviewer in a multinational a great deal of information about candidates fear & expectation is described in the article. In the end he defines the need to train international managers to remove selection errors.

Definition of International Business Manager: A cosmopolitan, multinational, multifaceted executive who works & operates across national borders (Schneider & Barsoux, 2003).

CRITICAL ANALYSIS:

The title of the article should have been " The selection of international business managers in UK & U.S.A: part 1", as the author even after emphasizing on the need & importance of availability of global talent across international borders, biased his own study & research in this regard to the USA & Western Europe. There is no description of selection trends followed in other parts of the globe where getting international managers is a major concern like in South East Asia, china & Japan (The Economist, 2007). The author described different selection methods like Psychological tests, Overseas Assignment Inventory along with different traits & competencies considered important for the success of international assignments. After describing the key competencies he came back to describe Assessment centres as a selection method, so the sync in the flow of ideas, presentation & layout cannot be justified. The author should have discussed Assessment centres while discussing other selection methods that are used. Similarly, Table 1 comparing traditional expatriate manager with international managers should have been placed after the author stated the need for international managers & the changing requirements & not in between selection methods. On top of that the Overseas Assignment Inventory screening method, which as per the author is a quite valid method, has not been explained to a satisfactory level. In the list of required competencies defined by Henley, Ashridge & others, importance of family support is either ignored or ranked very low in the queue; however, as per Brown (2008) family support is considered to be the most important factor contributing to expatriate success or failure. A lot of information in the article is a part of secondary research based on predictions & views of different researchers. The author does not use any set methodology including charts or diagrams to correlate his findings about traits & competencies required for successful performance to actual performance. As per Andreason (2008) realistic job preview is very important for the success of international managers, however, the author states that it is important for recruiters to highlight the positive aspects of international assignments so that more people get attracted towards it, doing so, can overshadow the possible challenges that the international managers might face abroad. It can also raise their expectations & incidents like culture shock, stress, disappointment & early return might happen if the challenges that the managers can face abroad are not explained while selecting them. The author could have exploited his experience of working in multinationals a bit more, by not just asking young candidates about their concerns, but also asking them about their expectations & suggestions that could help in proper selection of international managers & also the success of international assignments. In the concluding paragraph the author says that importance should be given to the training aspect so that errors in selection can be removed, but giving training to eradicate errors made in selection process is no solution to the problem, it can act just like a veil to cover the poor selection methods & techniques used.

CONCLUSION:

The article recognizes & addresses the fact that because of globalisation & changing trends there is a high need for the selection of good & efficient international managers. Throughout the article a lot of desired competencies in international managers are highlighted & some major selection methods are defined in brief. However, the article fails to focus on the question that what are the other factors that impact fair & correct selection of international managers globally? After reading this article the readers will just get a vague idea of the competencies & traits that are desirable in an international manager, however such vague idea will not help in successful selection of international managers. In order to minimize the error rates made in selection a more methodological research that takes into consideration other factors influencing selection is desirable. There is a lot of scope of further validated research performed globally including countries like china, Japan, India & other European countries on the ways to improve the selection process of international managers.

Factors Impacting Selection of International Managers

Student Id: 1002919 MSc. In HR & Employee Relations Brunel Business School

Word Count:

1/23/2011

TABLE OF CONTENTS

Executive Summary ................................................................ pg1-1

Introduction ................................................................pg 1-2

Literature Review .................................................................pg 2-3

Methodology

Research Design .................................................................pg3-3

Sample of the Study .................................................................pg3-3

Procedure .................................................................pg 3-4

Measures .................................................................pg 4-4

Case Study Coca -Cola ..................................................................pg 4-5

Findings

Findings/Results .................................................................pg 5-7

Critical Analysis ................................................................pg 7-8

Conclusion

Limitations & Recommendations ................................................................pg 8-8

Appendix .................................................................pg 9-11

References ................................................................pg11-14

Factors Influencing Selection of International Managers

Executive Summary

The purpose of this research is to find out the most important factor other than competencies & personal characteristics that impacts the selection of international managers & results produced by selection in terms of efficiency of those managers. The approach adopted started with a brief description about globalization & cost involved in an international assignment that increases the need to select efficient international business managers. With the help of literature review we found that a lot of importance was given to competencies & personal characteristics in selection process & other factors impacting selection process were ignored, hence the research question was formulated so that selection could be improved. The case study of Coca-Cola was taken to show the impact of bad selection on profits & goodwill of the multinational. A primary research was done with the help of questionnaires & personal interviews to validate the research question. It was found that realistic job preview was the most important factor impacting selection. Hence the study recommends multinationals to be realistic about their own expectations as well as forming right expectations in the minds of international managers so that failure of international assignments can be minimized & the multinationals gain competitive advantage in terms of profit & goodwill.

INTRODUCTION

Definition of International Business Manager: A cosmopolitan, multinational, multifaceted executive who works & operates across national borders (Schneider & Barsoux, 2003).

Globalization & growth of international markets has lead to an increased need for international assignments. It is estimated that each international assignments costs in between $300,000 to $1 million annually (Black & Gregersen, 1999), considering the huge amount of capital involved, it becomes imperative to have the right people in such assignments who perform effectively as international managers. The selection process is the only way to get the right people with the right skills that ensure the successful implementation of international & global strategies (Porter, 1990). Philip (2004) found major problems in planning and methodology used by multinationals in developing countries with international managers. As published in British Newspaper Online, Laursen (2009) states that finding and recruiting the best staff is a challenge for a multinational organization. It is estimated that up to 50 percent of managers selected & sent abroad return prematurely from their overseas assignment, resulting in great losses to multinational firms (Tung, 1981). Scholars have identified that one of the major reasons put forward for a purported high failure rate among international business managers is the 'inadequate' selection criteria used by many MNCs (Adler,1986; Black and Mendenhall, 1990). In most multinationals, selection for international assignments 'is an irrational process', which is generally out of the control of HR (Mendenhall & Macomber, 1997). For the success of international assignments, there is a high need to rationalize the selection process & get competent international business managers. The study hence, aims to find a way to rationalize the selection process by finding the most important factor affecting selection of international business managers.

Literature Review

A lot of studies have been done on the selection criteria for international assignments (Lanier, 1979; Tung, 1981, 1982; Zeira and Banai, 1984). If we consider the literature, we find that the previous researchers saw selection as a formal & rational process despite the presence of numerous criterions that were to be considered. Earlier, technical competence or prior experience was considered the most important criterion for international assignments (Harris & Brewster, 1999). Later on, other researchers came up with long lists of other criterion for e.g. Heller (1980) stated that while selecting international managers it was important to look for a flexible personality, broad intellectual horizons, cultural empathy, friendly attitude, patience, prudence, excellent educational and professional credentials- all of this accompanied with good health, creative resourcefulness, and respect for fellow colleagues. These criterions however, had very less impact on the selection process. Such studies just helped in increasing the number of competencies that were assumed to increase success in international assignments (Guthrie and Zektick, 1967; Stein, 1966; Hare, 1966; Harris, 1972). As per Andersson et. al (2005) a lot has been written about essential abilities, skills & competencies, however very little has been done in terms of identifying the right person with the right competencies. The lack of agreement on selection criterion in the past has delayed the improvement of selection process (Furnham, 1990; Hiltrop and Janssens, 1990). Terpstra & Rozell (1993) state that there is a substantial gap between what the academic literature recommends for selection & what the multinationals actually do in selection. Brewster (1991) states that despite the presence of an extensive list of theoretical criterion mentioned relating to effective international managers, selection process had several flaws.

After reviewing the literature we find that a lot of importance has been given to competencies & other factors impacting selection like improper selection methods, candidate's apprehensions, role played by HR in Selection

, Gender biases, realistic job preview, motivation and training

have been overlooked. This gives us an opportunity for further research to get the viewpoint of the potential international business managers & international business managers about the most important factors other than competencies that must be considered in the selection process to make it a success. By this research we aim to draw the attention of multinationals on certain important aspects affecting selection, doing this would help in improving the selection process & help multinationals save the losses they incur in unsuccessful assignments due to misfits.

Research Question: What is the most important factor (other than competencies) that affects the selection of an international business manager?

Methodology:

The quantitative method will be used for the research question using e-mail & web surveys (consisting mainly close-ended questions), to find the most important factor affecting selection. Quantitative research is a research that uses sampling techniques & the results of such research findings can be expressed numerically (Business Dictionary, 2010).

Research Design:

We fill follow a deductive approach which starts with a base of strong theory (Hyde, 2000) & whose aim is to test that theoretical knowledge (Johnson, 1996) which has been developed prior to conducting the empirical research (Kova´cs & Spens, 2005). The multivariative study will involve seven independent variables and a single dependent variable i.e. Selection of international managers. The measurement of the dependent and independent variables will be taken at a single point in time with the help of the survey instrument.

Sample of the Study:

The sampling population for this research will be multinationals from India & U.K & the design used will be convenience sampling. The sampling frame comprised of hr managers, international business managers & other employees of multinationals working in India & UK.

Procedure:

Questionnaires were sent to 150 people constituting the sample of the study. The questions asked were about the most important factors affecting selection of international managers &were derived after doing a thorough literature review. The data collected was ordinal in nature.Questionnaires were used as they are less time consuming & could be used to administer a large number of respondents (Zeira, 1984).

Measures:

Dependent variable: Selection of International managers

Independent variables: Role played by HR in Selection

, Gender biases, Well Structured Selection, Realistic Job Preview, Apprehensions, Motivation, and Training.

The independent variables were ranked on a five point scale depending on the level of agreeableness.

We will use case study of Coca Cola as a secondary research (qualitative) tool. As per Hartley (2004) case study method is applied to do researches that require a good understanding of the social or organizational processes.

CASE STUDY COCA COLA:

http://www.hot.ee/allen/chart2.gif

The Coca-Cola Company (http://www.hot.ee/allen/international.htm [05 Jan 2010])

When Roberto Goizueta, Coke's famous leader in Estonia, was dying of cancer, the board selected his "fair-haired boy", Douglas Ivester, to succeed him as directors wanted to consider the dying man's wishes (The Economist, 2001). After the death of Goizueta in 1997, coke's profit dropped by one-third. The reason was that Douglas Ivester's (who became the CEO) analytical approach relied heavily on numbers & neglected the employees. After his tenure Doug Daft was selected, who was a former head of Coke Japan, a good salesman, but not much of a "people" person. Both Daft and Ivester as leaders relied on quantitative management & failed to consider approaches that focus on behavior, employee selection & management. Under their leadership many capable managers and employees left Coke. Both CEOs replaced capable international leaders by selecting others who were less capable but more loyal to them, this wrong selection method & ignoring people resulted in a loss of talent, experience & capital at Coke (Williams, 2010). This case study shows a clear evidence of loss of profit & reputation if selection of international managers is done in haste or is done based on biases.

Findings/Results

After studying the literature, we selected seven factors (independent variables) other than competencies that could have an adverse impact on the selection process (dependent variable). The seven variables selected were:

Role of HR in selection procedure

SELECTION OF INTERNATIONAL BUSINESS MANAGERS

Gender biases Apprehensions.

Structured selection system Motivation

Realistic job preview Training to Selected Candidates

A total of 155 (N) questionnaires were distributed to the selected candidates working in multinationals like Cuts International India, American Express India, Tesco UK, Canadian High Commission India, Greenstone Carbon Management UK. Out of those 155 questionnaires, 31 (n) were returned back, making the response rate as 20%.

Response Rate= (Number of Usable Questionnaires/Total Sample)*100 (Al- Karaghouli, 2010)

Hence, Response Rate = (31/155)*100 = 20%

The response rate was quite good & this can be credited to the fact that reminder mails were sent to the candidates & some of them were contacted personally to respond to the self-completion questionnaires & express their views.

Table 1: List of Frequencies

Frequencies of Factors Impacting Selection Process (f)

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

Role played by HR in Selection

8

9

3

5

6

Gender biases

3

10

11

6

1

Well Structured Selection

3

777

5

13

3

Realistic Job Preview

0

1

1

8

21

Apprehensions

9

66

8

7

1

Motivation

2

7

7

9

6

Training

0

0

2

9

20

Total

25

40

37

57

58

Table 1 depicts that out of the 31 respondents, 21 strongly agreed to the fact that realistic job preview can improve performance. 9 people strongly disagreed to the point that employees had apprehensions about moving out. 10 respondents disagreed that there were gender biases done in selection process.

Table 2: List of Percentages

Factors Impacting Selection Process

Percentage of Frequencies (f)

Strongly Disagree

Disagree

Neutral

Agree

Role played by HR in Selection

25.80%

29.00%

9.70%

16.10%

Gender biases

9.70%

32.30%

35.50%

19.40%

Well Structured Selection

9.70%

22.60%

16.10%

41.90%

Realistic Job Preview

0.00%

3.20%

3.20%

25.80%

Apprehensions

29.00%

19.40%

25.80%

22.60%

Motivation

6.50%

22.60%

22.60%

29.00%

Training

0.00%

0.00%

6.50%

29.00%

Percentage = (Frequency (f)/Sample size (n))*100

Chart denoting Percentages of Factors Impacting Selection:

Based on our research we found that the most important factor influencing the selection of international business managers is realistic job previews.

The significance of this study is that it took into consideration the viewpoints of not only the hr managers, top officials or international business managers but also of those who work in multinationals. Studies like this are scanty in number

Critical analysis: (Critique of the Industry)

In this part of our research, we would discuss the scenario of different factors examined in selection of international business managers. It was found that HR despite playing an important role in every organization was often untrained in international selection (Haslberger & Stroh, 2006). Their role primarily remained administrative or risk managing (Mendenhall & Macomber, 1997). Another major factor that impacts proper selection is gender biases as women find it difficult to be selected for an international assignment (Linehan & Walsh, 1999). As per United States Department of Labor (2009), women contribute almost 51 percent of the management workforce, professional, and related occupations. However, women are still facing stunted development & political instability (UN News Centre, 2009). We also found that most multinationals had formal models of selection, but their usage in international selection was surprisingly very low across (Caligiuri & Colakoglu, 2007; Harris & Brewster, 1999). Most multinationals also make a mistake by not providing realistic job preview to their international managers, despite the fact that they can really help international managers & their families in adjustment (Richardson & Zikic, 2007). As per Hurn (2006) young graduates avoided international assignments as they had apprehensions about the nomadic lifestyle in international assignments & multinationals did not do much about it. Multinationals fail to understand that employees perceive international assignments as a personal choice rather than a forced decision & hence motivating them was important (Baruch and Altman, 2002). Many researchers like Baumgarten (1995) have stated the importance of training, still many international managers fail in their international assignments because of little or no preparatory training given to them (Dowling et al., 1999).

Conclusion:

This study has addressed the question that what is the most important factor impacting selection of international business managers. It was found that out of all the factors realistic job preview impacts the selection process the most. If the candidates are given a realistic job preview, they will get prepared mentally hence incidents of cultural shock, problems in adjustment & numerous other problems that impact the performance of such managers will be minimized & the selection will be more efficient process. The results of this study do not suggest multinationals to ignore competencies in individuals, however it stresses on the point that selection is a very important step which should encompass various factors along with competencies.

Limitations & Recommendation:

The study was brief; it just focused only on the factors impacting selection. Moreover, only seven factors were evaluated in the quantitative research-hence the possibility that the other factors, if discussed would have exhibited different results remains. There are certain recommendations:

Another study must be done taking a larger population so that the findings of the study are more valid and can be generalized.

The study just identified the magnitude of effect the seven factors had on selection; however a further research must be done to devise ways of eradicating or working on factors impacting selection process.

Future research is recommended using other data collection methods like interviews; focus groups etc, so that the topic can be studied in depth.

Appendices

Link for the survey http://www.surveymonkey.com/MySurvey_EditorFull.aspx?sm=2MJCs8KU30HGtRBbH8ph8VBci15Fg4dGq6H6g15%2bRas%3d

Format of the survey:

Q1 Name of the Multinational:

Q2 The HR personnel in your organisation plays an important role in the selection of international managers.

http://www.surveymonkey.com/i/t.gifStrongly Disagree

http://www.surveymonkey.com/i/t.gif Disagree

http://www.surveymonkey.com/i/t.gifNeutral

http://www.surveymonkey.com/i/t.gif Agree

http://www.surveymonkey.com/i/t.gifStrongly Agree

Q3. The selection methods used for selection of international managers are gender biased.

http://www.surveymonkey.com/i/t.gifStrongly Disagree

http://www.surveymonkey.com/i/t.gif Disagree

http://www.surveymonkey.com/i/t.gifNeutral

http://www.surveymonkey.com/i/t.gifAgree

http://www.surveymonkey.com/i/t.gifStrongly Agree

Q4. The selection process in your organisation formal & well structured?

http://www.surveymonkey.com/i/t.gifStrongly Disagree

http://www.surveymonkey.com/i/t.gifDisagree

http://www.surveymonkey.com/i/t.gifNeutral

http://www.surveymonkey.com/i/t.gifAgree

http://www.surveymonkey.com/i/t.gifStrongly Agree

Q5. A realistic job preview can improve the success rate of international assignments.

http://www.surveymonkey.com/i/t.gifStrongly Disagree

http://www.surveymonkey.com/i/t.gifDisagree

http://www.surveymonkey.com/i/t.gifNeutral

http://www.surveymonkey.com/i/t.gifAgree

http://www.surveymonkey.com/i/t.gifStrongly Agree

Q6. I am scared of moving out from my country to some other country of operation.

http://www.surveymonkey.com/i/t.gifStrongly Disagree

http://www.surveymonkey.com/i/t.gifDisagree

http://www.surveymonkey.com/i/t.gifNeutral

http://www.surveymonkey.com/i/t.gifAgree

http://www.surveymonkey.com/i/t.gif Strongly Agree

Q7. I am motivated to take the initiative in determining my own career development.

http://www.surveymonkey.com/i/t.gifStrongly Disagree

http://www.surveymonkey.com/i/t.gifDisagree

http://www.surveymonkey.com/i/t.gifNeutral

http://www.surveymonkey.com/i/t.gifAgree

http://www.surveymonkey.com/i/t.gif Strongly Agree

Q8. Training given after the selection process can help in making international managers more competent.

http://www.surveymonkey.com/i/t.gifStrongly Disagree

http://www.surveymonkey.com/i/t.gifSomewhat Disagree

http://www.surveymonkey.com/i/t.gifNeutral

http://www.surveymonkey.com/i/t.gifAgree

http://www.surveymonkey.com/i/t.gifStrongly Agree

Q9. What is the major challenge faced by your organisation in selecting international business managers?

Q10. What can be done to improve the selection process of international business managers?

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