Lecture 3 - International Staffing | Human Resource Management - Business Basics PDF Download

 Page 1


 
Institute of Lifelong Learning, university of Delhi                                               1 
 
 
 
 
 
 
 
 
 
 
 
 
 
NME-COMMERCE 
Human Resource Management 
Lesson: International Staffing 
Lesson Developer: Dr. Shachi Yadav 
College/Dept: Ramjas College 
University of Delhi 
 
 
 
 
 
 
 
 
 
 
 
 
Page 2


 
Institute of Lifelong Learning, university of Delhi                                               1 
 
 
 
 
 
 
 
 
 
 
 
 
 
NME-COMMERCE 
Human Resource Management 
Lesson: International Staffing 
Lesson Developer: Dr. Shachi Yadav 
College/Dept: Ramjas College 
University of Delhi 
 
 
 
 
 
 
 
 
 
 
 
 
 
Institute of Lifelong Learning, university of Delhi                                               2 
 
Lesson: International Staffing: Ethnocentric, Geocentric, 
Polycentric Approaches  
Table of Contents: 
1: Learning Outcomes 
2: Introduction 
3: International Staffing 
4: Staffing Orientation 
4.1. Host Country Nationals (HCNs) 
4.2. Parent Country Nationals (PCNs) 
4.3. Third Country Nationals (TCNs) 
5: Approaches of International Staffing 
5.1. Ethnocentric Approach 
5.2. Polycentric Approach 
5.3. Geocentric Approach 
6: Cultural Aspects of International Staffing 
7: Challenges of International Staffing 
8: Legal Aspects of International Hiring 
9: What makes a Manager Successful in International Assignments? 
 Summary 
Glossary 
Exercises 
References 
 
 
1. Learning Outcomes: 
 
After reading this lesson, you should be able to: 
 
? comprehend the theoretical framework, behind the concept of international 
staffing; 
? demonstrate an understand the differences between national and international 
staffing; 
? analyse the different staffing orientations of the firms; 
? critically evaluate the different approaches to international staffing; 
? recognize and demonstrate the variety of factors that influence international 
staffing, in the context of culture; 
? examine the challenges, faced by HR managers, in staffing multinational 
organizations; 
? analyse the important legal aspects of international staffing; 
? exhibit an understand the key considerations, for staffing the international 
organization; 
? appreciate the competencies, required by the manager, to be successful in an 
international assignment. 
Page 3


 
Institute of Lifelong Learning, university of Delhi                                               1 
 
 
 
 
 
 
 
 
 
 
 
 
 
NME-COMMERCE 
Human Resource Management 
Lesson: International Staffing 
Lesson Developer: Dr. Shachi Yadav 
College/Dept: Ramjas College 
University of Delhi 
 
 
 
 
 
 
 
 
 
 
 
 
 
Institute of Lifelong Learning, university of Delhi                                               2 
 
Lesson: International Staffing: Ethnocentric, Geocentric, 
Polycentric Approaches  
Table of Contents: 
1: Learning Outcomes 
2: Introduction 
3: International Staffing 
4: Staffing Orientation 
4.1. Host Country Nationals (HCNs) 
4.2. Parent Country Nationals (PCNs) 
4.3. Third Country Nationals (TCNs) 
5: Approaches of International Staffing 
5.1. Ethnocentric Approach 
5.2. Polycentric Approach 
5.3. Geocentric Approach 
6: Cultural Aspects of International Staffing 
7: Challenges of International Staffing 
8: Legal Aspects of International Hiring 
9: What makes a Manager Successful in International Assignments? 
 Summary 
Glossary 
Exercises 
References 
 
 
1. Learning Outcomes: 
 
After reading this lesson, you should be able to: 
 
? comprehend the theoretical framework, behind the concept of international 
staffing; 
? demonstrate an understand the differences between national and international 
staffing; 
? analyse the different staffing orientations of the firms; 
? critically evaluate the different approaches to international staffing; 
? recognize and demonstrate the variety of factors that influence international 
staffing, in the context of culture; 
? examine the challenges, faced by HR managers, in staffing multinational 
organizations; 
? analyse the important legal aspects of international staffing; 
? exhibit an understand the key considerations, for staffing the international 
organization; 
? appreciate the competencies, required by the manager, to be successful in an 
international assignment. 
 
Institute of Lifelong Learning, university of Delhi                                               3 
 
 
 
2. Introduction: 
     
          
 
 
 
Organizations, in the backdrop of globalization, have realized that they must seek 
sustainable competitive advantage, not only from new products and technology, but also 
from the effective management of human resources. 
 
The world of today?s business is evidenced by the diminished trade barriers and regional 
economic alliances. For some organizations, it may mean a minimal physical presence in 
a foreign country, while for others it may involve setting up of foreign operations to 
exceed the size of domestic operations. The strategic opportunities, in the global 
marketplace, are resulting in global expansion of the organizations.  
A multinational organization is characterized by geographical dispersion. Multinational 
organizations, not withstanding their size or structural form, are operating in several 
countries at the same time. A multinational organization is a type of multi- unit business 
organization which usually has a corporate centre in the home country and its business 
units in various host countries. 
With the increase in global revenues, the need of multinational companies for 
international staffing shows little signs of slowing down. The slow growth of workforces, 
in all the developed nations, fuels the need to look international staffing as a crucial 
activity. 
 
It is evident, from the above discussion that a divisional or the multi-unit structure adds 
to the complications for the management of human resources of a multinational 
company. The management of a Multinational company, theoretically speaking, can 
decide to run the organization somewhere on a continuum between two distinct choices 
of centralized or a decentralized approach.  
In centralized approach, the managers are given the responsibility of several sites, based 
at head office. This centralized approach gives recognition to the needs of the 
corporation as a whole and operates with a cost effective and standardized human 
resourcing, based on the policies and culture at the centre. 
While in decentralized approach, the human resourcing function operates at the business 
unit level. This may lead to some inconsistency in the way employees are managed 
Page 4


 
Institute of Lifelong Learning, university of Delhi                                               1 
 
 
 
 
 
 
 
 
 
 
 
 
 
NME-COMMERCE 
Human Resource Management 
Lesson: International Staffing 
Lesson Developer: Dr. Shachi Yadav 
College/Dept: Ramjas College 
University of Delhi 
 
 
 
 
 
 
 
 
 
 
 
 
 
Institute of Lifelong Learning, university of Delhi                                               2 
 
Lesson: International Staffing: Ethnocentric, Geocentric, 
Polycentric Approaches  
Table of Contents: 
1: Learning Outcomes 
2: Introduction 
3: International Staffing 
4: Staffing Orientation 
4.1. Host Country Nationals (HCNs) 
4.2. Parent Country Nationals (PCNs) 
4.3. Third Country Nationals (TCNs) 
5: Approaches of International Staffing 
5.1. Ethnocentric Approach 
5.2. Polycentric Approach 
5.3. Geocentric Approach 
6: Cultural Aspects of International Staffing 
7: Challenges of International Staffing 
8: Legal Aspects of International Hiring 
9: What makes a Manager Successful in International Assignments? 
 Summary 
Glossary 
Exercises 
References 
 
 
1. Learning Outcomes: 
 
After reading this lesson, you should be able to: 
 
? comprehend the theoretical framework, behind the concept of international 
staffing; 
? demonstrate an understand the differences between national and international 
staffing; 
? analyse the different staffing orientations of the firms; 
? critically evaluate the different approaches to international staffing; 
? recognize and demonstrate the variety of factors that influence international 
staffing, in the context of culture; 
? examine the challenges, faced by HR managers, in staffing multinational 
organizations; 
? analyse the important legal aspects of international staffing; 
? exhibit an understand the key considerations, for staffing the international 
organization; 
? appreciate the competencies, required by the manager, to be successful in an 
international assignment. 
 
Institute of Lifelong Learning, university of Delhi                                               3 
 
 
 
2. Introduction: 
     
          
 
 
 
Organizations, in the backdrop of globalization, have realized that they must seek 
sustainable competitive advantage, not only from new products and technology, but also 
from the effective management of human resources. 
 
The world of today?s business is evidenced by the diminished trade barriers and regional 
economic alliances. For some organizations, it may mean a minimal physical presence in 
a foreign country, while for others it may involve setting up of foreign operations to 
exceed the size of domestic operations. The strategic opportunities, in the global 
marketplace, are resulting in global expansion of the organizations.  
A multinational organization is characterized by geographical dispersion. Multinational 
organizations, not withstanding their size or structural form, are operating in several 
countries at the same time. A multinational organization is a type of multi- unit business 
organization which usually has a corporate centre in the home country and its business 
units in various host countries. 
With the increase in global revenues, the need of multinational companies for 
international staffing shows little signs of slowing down. The slow growth of workforces, 
in all the developed nations, fuels the need to look international staffing as a crucial 
activity. 
 
It is evident, from the above discussion that a divisional or the multi-unit structure adds 
to the complications for the management of human resources of a multinational 
company. The management of a Multinational company, theoretically speaking, can 
decide to run the organization somewhere on a continuum between two distinct choices 
of centralized or a decentralized approach.  
In centralized approach, the managers are given the responsibility of several sites, based 
at head office. This centralized approach gives recognition to the needs of the 
corporation as a whole and operates with a cost effective and standardized human 
resourcing, based on the policies and culture at the centre. 
While in decentralized approach, the human resourcing function operates at the business 
unit level. This may lead to some inconsistency in the way employees are managed 
 
Institute of Lifelong Learning, university of Delhi                                               4 
 
across the business units. The philosophy of the organization, regarding the nationality 
of its international managers, has a key role to play in the extent of internationalization 
and also the degree of centralization or decentralization.  
The decision, regarding international staffing, has a strong bearing on a company?s 
success and is also of critical concern for the person who is engaged internationally. 
A crucial point, in this debate, is the often quoted edict of „think globally, act locally?. 
How might it be possible to think globally and yet act locally? No matter how appealingly 
simple it may sound in the first instance, the management of the human resource 
function, across the countries of a multinational enterprise, will always present 
difficulties. It becomes all the more important when the managers are faced with the 
challenges of pursuing local diversity and corporate integration simultaneously. 
In the opinion of Gamble, an MNC does not simply transmit capital, what it transfers 
along is management „know-how?. Managers play a great role in transferring practices 
and management styles of the MNCs to the affiliate countries. The home country national 
is supposed to be more familiar with home country expectations as well as company?s 
practices and procedures. At the same time, a manager, associated with the host 
country, will be more familiar with the local laws and customs. 
 
Such is the stuff of international staffing. Having said this, it is also true that the area of 
international staffing involves dimensions that are worthy of particular analysis.  
 
Value Addition :1 Discussion Forum 
Challenges of Internationalization 
Discuss the human resourcing activities from the perspective of internationalization 
characterized by geographical dispersion. Also discuss the new human resourcing 
challenges that a Multinational Company faces when it adopts a global business 
strategy. 
 
2.   International Staffing: 
 
 
 
Page 5


 
Institute of Lifelong Learning, university of Delhi                                               1 
 
 
 
 
 
 
 
 
 
 
 
 
 
NME-COMMERCE 
Human Resource Management 
Lesson: International Staffing 
Lesson Developer: Dr. Shachi Yadav 
College/Dept: Ramjas College 
University of Delhi 
 
 
 
 
 
 
 
 
 
 
 
 
 
Institute of Lifelong Learning, university of Delhi                                               2 
 
Lesson: International Staffing: Ethnocentric, Geocentric, 
Polycentric Approaches  
Table of Contents: 
1: Learning Outcomes 
2: Introduction 
3: International Staffing 
4: Staffing Orientation 
4.1. Host Country Nationals (HCNs) 
4.2. Parent Country Nationals (PCNs) 
4.3. Third Country Nationals (TCNs) 
5: Approaches of International Staffing 
5.1. Ethnocentric Approach 
5.2. Polycentric Approach 
5.3. Geocentric Approach 
6: Cultural Aspects of International Staffing 
7: Challenges of International Staffing 
8: Legal Aspects of International Hiring 
9: What makes a Manager Successful in International Assignments? 
 Summary 
Glossary 
Exercises 
References 
 
 
1. Learning Outcomes: 
 
After reading this lesson, you should be able to: 
 
? comprehend the theoretical framework, behind the concept of international 
staffing; 
? demonstrate an understand the differences between national and international 
staffing; 
? analyse the different staffing orientations of the firms; 
? critically evaluate the different approaches to international staffing; 
? recognize and demonstrate the variety of factors that influence international 
staffing, in the context of culture; 
? examine the challenges, faced by HR managers, in staffing multinational 
organizations; 
? analyse the important legal aspects of international staffing; 
? exhibit an understand the key considerations, for staffing the international 
organization; 
? appreciate the competencies, required by the manager, to be successful in an 
international assignment. 
 
Institute of Lifelong Learning, university of Delhi                                               3 
 
 
 
2. Introduction: 
     
          
 
 
 
Organizations, in the backdrop of globalization, have realized that they must seek 
sustainable competitive advantage, not only from new products and technology, but also 
from the effective management of human resources. 
 
The world of today?s business is evidenced by the diminished trade barriers and regional 
economic alliances. For some organizations, it may mean a minimal physical presence in 
a foreign country, while for others it may involve setting up of foreign operations to 
exceed the size of domestic operations. The strategic opportunities, in the global 
marketplace, are resulting in global expansion of the organizations.  
A multinational organization is characterized by geographical dispersion. Multinational 
organizations, not withstanding their size or structural form, are operating in several 
countries at the same time. A multinational organization is a type of multi- unit business 
organization which usually has a corporate centre in the home country and its business 
units in various host countries. 
With the increase in global revenues, the need of multinational companies for 
international staffing shows little signs of slowing down. The slow growth of workforces, 
in all the developed nations, fuels the need to look international staffing as a crucial 
activity. 
 
It is evident, from the above discussion that a divisional or the multi-unit structure adds 
to the complications for the management of human resources of a multinational 
company. The management of a Multinational company, theoretically speaking, can 
decide to run the organization somewhere on a continuum between two distinct choices 
of centralized or a decentralized approach.  
In centralized approach, the managers are given the responsibility of several sites, based 
at head office. This centralized approach gives recognition to the needs of the 
corporation as a whole and operates with a cost effective and standardized human 
resourcing, based on the policies and culture at the centre. 
While in decentralized approach, the human resourcing function operates at the business 
unit level. This may lead to some inconsistency in the way employees are managed 
 
Institute of Lifelong Learning, university of Delhi                                               4 
 
across the business units. The philosophy of the organization, regarding the nationality 
of its international managers, has a key role to play in the extent of internationalization 
and also the degree of centralization or decentralization.  
The decision, regarding international staffing, has a strong bearing on a company?s 
success and is also of critical concern for the person who is engaged internationally. 
A crucial point, in this debate, is the often quoted edict of „think globally, act locally?. 
How might it be possible to think globally and yet act locally? No matter how appealingly 
simple it may sound in the first instance, the management of the human resource 
function, across the countries of a multinational enterprise, will always present 
difficulties. It becomes all the more important when the managers are faced with the 
challenges of pursuing local diversity and corporate integration simultaneously. 
In the opinion of Gamble, an MNC does not simply transmit capital, what it transfers 
along is management „know-how?. Managers play a great role in transferring practices 
and management styles of the MNCs to the affiliate countries. The home country national 
is supposed to be more familiar with home country expectations as well as company?s 
practices and procedures. At the same time, a manager, associated with the host 
country, will be more familiar with the local laws and customs. 
 
Such is the stuff of international staffing. Having said this, it is also true that the area of 
international staffing involves dimensions that are worthy of particular analysis.  
 
Value Addition :1 Discussion Forum 
Challenges of Internationalization 
Discuss the human resourcing activities from the perspective of internationalization 
characterized by geographical dispersion. Also discuss the new human resourcing 
challenges that a Multinational Company faces when it adopts a global business 
strategy. 
 
2.   International Staffing: 
 
 
 
 
Institute of Lifelong Learning, university of Delhi                                               5 
 
Planning and staffing organizations abroad is a critical activity of international human 
resource management. The alternatives and the environment, associated with 
international staffing, might be very different from those confronted by domestic-only 
organizations. Effective staffing of an organization is an important step towards 
achieving organization?s long term success. The path of international staffing is laced 
with an increased range and complexity of political, economic, cultural issues, 
employment legislations, and labour market conditions, present in foreign countries, as 
against domestic environment. 
An organization?s success greatly relies on the skills, knowledge and efforts of its 
employees. International staffing depicts how managers attend to the problem of 
sourcing these human resources to enable the organizations to continue in the long run.   
Staffing policy is concerned with selection of employees for particular jobs. The 
Multinational organizations need to identify potential applicants for positions in the home 
country and overseas to begin their evaluation for future employment. In international 
staffing, one of the great challenges is to use the human resource processes in order to 
increase the likelihood of hiring individuals who possess the right skills and abilities to be 
successful in their jobs. 
In the views of E.H.Schein, at one level, international staffing is concerned with selection 
of skilled employees, to do a particular job, at another level, it can be seen as a tool to 
develop and promote the corporate culture.  
Organization planning, for sustained growth and existence, mandatorily has to develop 
an international perspective as far as staffing is concerned. The success of international 
organizations greatly depends upon the efforts to hire the right candidate for the right 
job at the right time. 
It should be noted that managers would make human resourcing decisions, based on 
their interpretation of societal and organizational factors. The managers entrusted with 
the task of international staffing may view it as a complex task and therefore there is a 
need to address this complexity by conducting investigations, taking expert advice, 
hiring a consultant, and so on. 
Taking forward the debate of „Think Globally and Act Locally?, it should be well 
understood that international staffing, in particular, would have far reaching implications 
for the organizations. It is therefore essential for multinational concerns to achieve a 
dynamic balance between the pressures for central control and the pressures for local 
responsiveness, across the countries they are operating. 
As stated earlier, at one level, staffing involves selection of individuals, having the 
required skills to perform their jobs and on the other hand, it is also concerned with 
developing and promoting corporate culture. It is thus evident that while staffing, the 
managers are required to give due attention to the fact that the selected individuals not 
only have required skills to perform jobs they are selected for but also „fit? for the 
prevailing culture of the organization. 
The problems, regarding international staffing, can be reduced by careful selection and 
training. Much of the international staffing literature is focused on the expatriate 
selection. Expatriate refers to an employee who works and resides in a foreign country. 
In general, the terms international managers and expatriate managers are considered 
synonymous in the global business context. The international staff can be pooled in 
variety of ways. The managers working in multinational organizations can be parent 
country nationals, host country nationals or third country nationals. The staffing policy 
mirrors the general dilemma of central versus local i.e. whether to transfer dominant 
norms of MNC?s national culture or utilize intellect and make use of those of the local 
culture.