Chapter 21 – Human Resource Management


Multiple Choice Questions




1.      All of the following are examples of factors that make international human resource management different from domestic management EXCEPT:

a.      national governmental subsidies (moderate, page 632)

b.      international worker mobility problems

c.       national management styles and practices

d.      national work orientations


2.      A factor that makes management of international human resources different from management at the domestic level is:

a.       that managers in other countries want to achieve global objectives for the company, whereas home-country managers put national objectives first.

b.      the greater difficulty of motivating workers internationally than domestically. (difficult, page 632)

c.       the greater similarity among foreign subsidiaries than among domestic subsidiaries in terms of dependence on headquarters for resources.

d.      the greater similarity among labor markets in foreign countries than among labor markets in different domestic regions.


3.      Which of the following statements is FALSE regarding the factors that make international human resource management different from domestic human resource management?

a.       Country operations differ in cross-national integration, dependence on headquarters for resources, and need for national responsiveness.

b.      The experience of working with different national practices gives companies opportunities to transfer successful practices from one country to another.

c.       Employee’s workplace attitudes toward different management styles are universal. (difficult, page 632)

d.      Although a company’s goals may include attaining global efficiencies and competitiveness, its personnel may emphasize national rather than global interests.




4.      Where there is a need for cross-border integration, _______________ are apt to be more effective than _______________.

a.       thinking-type managers; feeling-type managers

b.      authoritarian management styles; participatory management styles

c.       ethnocentric managers; polycentric managers

d.      feeling-type managers; thinking-type managers (moderate, page 635)


5.      _______________ are those concerned with processing information analytically and impersonally.

a.      Thinking-type managers (easy, page 635)

b.      Feeling-type managers

c.       Bureaucratic managers

d.      Participative managers


6.      In which of the following strategies would the company attempt to transfer its home-country policies and practices to its foreign units because it feels that such policies are generalized outside the parent country?

a.       multidomestic strategy

b.      global strategy (moderate, page 635)

c.       transnational strategy

d.      international strategy


7.      The foreign subsidiary manager is likely to:

a.       spend less time on the job than other managers.

b.      have a large support staff.

c.       be a generalist rather than a specialist. (moderate, page 635)

d.      be an expatriate.




8.      Expatriates are:

a.       naturalized citizens.

b.      either third-country nationals or locals.

c.       locals from the country of the foreign subsidiary.

d.      people that work outside their home country. (moderate, page 637)


9.      All of the following are examples of a local EXCEPT:

a.      a Swiss manager working for a Swiss firm in the United States (moderate, page 637)

b.      a U.S. manager working for a Swiss firm in the United States

c.       a Swiss manager working for a U.S. firm in Switzerland

d.      a U.S. manager working for a U.S. firm in the United States


10.    An example of a third-country national is:

a.       a dual citizen (for example, holding Canadian and U.S. citizenship) working for a Mexican company in Mexico.

b.      a Canadian citizen working for a U.S. company in Mexico. (moderate, page 637)

c.       a U.S. citizen working for a U.S. company in Canada.

d.      a Canadian citizen working for a U.S. company in Canada.




11.    The most common reason some people are reluctant to accept foreign managerial slots is because:

a.       they believe that locals should fill local positions.

b.      they would have to become citizens of the foreign country.

c.       of a perceived negative effect on family lifestyle. (moderate, page 640)

d.      they usually earn lower salaries abroad than at home.


12.    Staffing with which of the following types of workers is considered the least costly choice?

a.       expatriates

b.      home-country nationals

c.       third-country nationals

d.      locals (moderate, page 640)



13.    Unless an assignment is specifically intended to train an expatriate, the most important criterion in selecting individuals for transfer typically is:

a.      the technical knowledge of the tasks to be done. (moderate, page 640)

b.      cognitive skills for understanding what is happening in the host society.

c.       skills necessary for stress reduction and self-confidence.

d.      flexibility and tolerance.


14.    All of the following are examples of how employees can help themselves adjust to foreign locations EXCEPT:

a.       learn the language

b.      seek information from people who have disparaging memories of their work time in the locale (difficult, page 640)

c.       associate with support groups abroad

d.      seek information from people who have worked in the locale and who have positive memories of it




15.    A problem often faced in repatriation from foreign assignments is that:

a.       the firm must increase compensation substantially.

b.      there may not a good replacement in the foreign facility.

c.       the returning expatriate has less social status and autonomy than when abroad. (moderate, page 642)

d.      different departments compete excessively to hire the repatriated manager.


16.    All of the following are examples of human resource practices for smoothing the repatriation of an expatriate EXCEPT:

a.       provide maximum information about their new jobs

b.      place the expatriate in a job that will build on their foreign experiences

c.       provide housing assistance

d.      provide a salary increase for returning to headquarters (moderate, page 642)


17.    Problems with repatriation arise in any of the following three general areas EXCEPT:

a.      readjustment to the host-country corporate culture (difficult, page 642)

b.      personal finances

c.       readjustment to the home-country corporate culture

d.      readjustment to life at home




18.    Cost-of-living adjustments in foreign assignments:

a.       are usually eliminated over time.

b.      are due partly to the difficulty of duplicating a way of living abroad. (moderate, page 643)

c.       usually involve a compensation reduction because of lower costs abroad.

d.      increase the longer the individual is overseas.



19.    When sending an expatriate on a foreign assignment, most companies raise salaries, sometimes called a _______________, to account for higher foreign-country costs.

a.       residual payment increase

b.      offshore differential

c.       goods-and-services differential (moderate, page 643)

d.      onshore differential


20.     The payment of extra compensation to an expatriate just for being posted in a foreign assignment is an example of a:

a.       hardship allowance.

b.      goods-and-services differential.

c.       job-status payment.

d.      foreign-service premium. (moderate, page 643)


21.    In very remote areas of the world, MNEs:

a.      may have to provide higher salaries and benefits to attract employees. (moderate, page 643)

b.      find greater ability to transfer women and minorities.

c.       must depend more on local personnel than they depend on in major cities in industrial countries.

d.      depend more on open-ended rather than fixed-term contracts for expatriates.




22.    Foreign personnel are not easily encompassed in an MNE’s centralized personnel record system because:

a.       the administrative cost is too high.

b.      the privacy concerns of joint venture partners. (difficult, page 647)

c.       job descriptions are incompatible from subsidiary to subsidiary.

d.      psychological tests are not easily translated across countries.


23.    A common method companies use to assess whether employees will be adaptable to working abroad is to:

a.       delegate the hiring decision to personnel in the foreign locale.

b.      send them abroad for a trial period to observe how they adjust.

c.       administer personality tests that give indications of adaptability. (moderate, page 647)

d.      rely on demographic variables that predict who will adapt and who will not.


24.    Which of the following statements regarding the ways that MNEs recruit, select, and train personnel for foreign assignments is FALSE?

a.       Companies are increasingly including spouses and children in tests and extensive interviews because a foreign assignment is usually more stressful for the family than for the transferred employee.

b.       Many companies have personnel record systems that include data on home- and foreign-country nationals.

c.       To the extent that companies have detailed personnel records, they can compare employees to gauge which ones may be best suited for positions with international responsibility.

d.       Companies typically know more about their employees’ adaptive capabilities than their technical ones.  (difficult, page 647)







25.    When MNEs hire expatriates from both home and third countries,:

a.      there is no consensus on how to establish their expatriate compensation packages. (difficult, page 649)

b.      they generally use each home-country capital city as a basis of calculating individual cost-of-living differentials.

c.       they generally put them both on local compensation programs.

d.      they generally put the third-country national on the home-country expatriate compensation package.


26.     All of the following are mentioned in the text as developmental needs necessary for international managers EXCEPT:

a.       top executives must have a global mind-set that is free from national prejudices

b.      top executives must have more knowledge of the domestic markets of the headquarter’s country of origin (moderate, page 649))

c.       managers with direct international responsibility must be able to effect a proper balance in well-being between corporate and national operations

d.      managers without direct international responsibility must understand the importance of international competition on the company’s well being


27.    The most common predeparture training for the expatriate is:

a.       role playing.

b.      in-depth cultural seminars.

c.       an informational briefing. (moderate, page 649))

d.      language training.




28.    Expatriate mangers who put their careers above either the parent company or the foreign operation where they are working are known as:

a.       heart-at-home.

b.      going native.

c.       dual citizen.

d.      free agent. (moderate, page 650)


29.    Which of the following best describes the expatriate manager who is overly ethnocentric and is usually eager to be repatriated?

a.      heart-at-home (moderate, page 650)

b.      free agent

c.       going native

d.      dual citizen


30.    The _______________ expatriate manager learns and accepts the local way of doing business and wants to stay in the foreign location and be left alone by headquarters.

a.       free agent

b.      going native (moderate, page 650)

c.       heart-at-home

d.      dual-citizen


31.    Which of the following best describes the type of expatriate manager who usually finds mechanisms by which to work out differences between headquarters and subsidiary and is overall the most effective type of expatriate manager?

a.       free agent

b.      heart-at-home

c.       dual citizen (moderate, page 650)

d.      going native




32.    The most common form of cooperation among unions in different countries is:

a.       lobbying governments.

b.      simultaneous strikes.

c.       voting blocs at the ILO.

d.      information exchange. (moderate, page 654)


33.    Through which of the following does a company inform and consult with employees on such issues as its corporate strategies so they do not face global changes unexpectedly, leaving them with little time to react?

a.      European work councils (moderate, page 654)

b.      European union groups

c.       European regulatory councils

d.      European legal groups


34.    According to the text, unions’ initiatives to counter MNEs’ power have primarily taken place at the:

a.       local level.

b.      national level. (moderate, page 654)

c.       regional level.

d.      International level.


Essay Questions


35.    What factors make international human resource management different from domestic human resource management?



a.       Different labor markets—Each country has a different mix of available workers and a different mix of labor costs. MNEs may gain advantages by accessing these various human resource capabilities.

b.      International worker mobility problems—There are legal, economic, physical, and cultural barriers to overcome when moving workers to a foreign country. Yet, MNEs benefit from moving people, especially when there are shortages of people with needed skills in a particular country.

c.       National management styles and practices—Employees’ attitudes toward different management styles vary from country to country, and so do prevalent management practices and labor-management relations. These differences may strain relations between headquarters and subsidiary personnel or make a management less effective when working abroad than when working at home.

d.      National orientations—Although a company’s goals may include attaining global efficiencies and competitiveness, its personnel may emphasize national rather than global interests. Certain human resource practices can alleviate national orientations.

e.       Strategy and control—Companies find that some country operations are more important for global corporate success than others. Further, country operations differ in cross-national integration, dependence on headquarters for resources, and need for national responsiveness.

      (difficult, page 632)


36.       In a short essay, discuss the reasons for staffing with locals.



The most common reason managers reject a foreign assignment is their perception that the assignment will have a negative effect on their family’s lifestyle because of unacceptable living conditions, inadequate educational opportunities for their children, and the inability to be near aging parents. There are also legal impediments to staff with expatriates, such as licensing requirements that prevent companies from using expatriate accountants and lawyers. The greater the need for local adaptations, the more advantageous it is for companies to use local managers, as they presumably understand local conditions better than expatriates would. When the host country feels animosity toward foreign-controlled operations, local managers may be perceived locally as “better citizens” because they presumably put local interests ahead of the company’s global objectives. This local image may play a role in employee morale as well, because many subsidiary employees prefer to work for someone from their own country. Finally, a reason for staffing with locals is that they usually cost less. Companies must pay moving expenses for expatriates as well as salary adjustments for their move to foreign countries.

(difficult, page 637)


37.    In a short essay, discuss the reasons for using expatriates.



Although expatriate managers comprise a minority of total managers within MNEs, companies employ expatriates because of their competence to fill positions, their need to gain foreign experience, and their ability to control operations according to headquarters’ preferences. Companies use expatriate managers when they cannot find qualified local candidates. MNEs use home-country expatriates to control foreign operations because they are used to doing things the headquarters way.

         (easy, page 637)


38.    What individual characteristics and qualifications should a company consider when choosing managerial candidates for foreign assignments?



a.       Technical competence—Corporate decision makers, expatriate managers, and local managers concur that technical competence, usually indicated by past domestic or foreign job performance, is the largest determinant of success in foreign assignments.

b.      Adaptiveness—Although some companies rely only on technical competence to select expatriates, three types of adaptive characteristics are important for an expatriate’s success when entering a new culture:

1.            the need for self-maintenance, such as being self-confident and able to reduce stress

2.            those related to the development of satisfactory relationships with host nationals, such as flexibility and tolerance

3.            cognitive skills that help one to perceive correctly what is occurring with the host society


An expatriate who lacks any of these may be unable to function effectively. Unfortunately, companies cannot always assess these adaptability characteristics accurately. If the expatriate cannot adapt, he or she may leave the foreign assignment, either by choice or by company decision.


c.       Local acceptance—Expatriates may encounter some acceptance problems regardless of who they are. Local employees may feel that the best jobs go to overpaid foreigners, especially because companies sometimes send managers abroad to reward or find a place for them, rather than for what they can contribute effectively. Expatriates may have to make unpopular decisions to meet global objectives, or local management may have had experiences with expatriates who made short-term decisions and then left before dealing with the longer-term implications. If negative stereotypes are added to these attitudes, the expatriate may find it very difficult to succeed.

   (difficult, page 640)


39.    What problems do managers commonly encounter when repatriated from foreign assignments?  How can companies deal with these problems?



Up to a third of returning expatriates leave their companies within one year of repatriation. Problems with repatriation arise in three general areas: personal finances, readjustment to home-country corporate structure, and readjustment to life at home. Companies give expatriates many financial benefits to encourage them to accept a foreign assignment. Returning expatriates often find that many of their peers were promoted above them while they were abroad, that they now have less autonomy in the job, and that they now have less in common with their friends than before the foreign assignments. Some human resource practices for smoothing reentry include providing expatriates with ample advance notice of when they will return, maximum information about their new jobs, placement in jobs that will build on their foreign experiences, housing assistance, and a reorientation program, as well as requiring frequent visits to headquarters and using a formal headquarters mentor to look after their interests while they are abroad.

         (moderate, page 642)


40.    In a short essay, discuss the three international development needs.


a.       Top executives must have a global mind-set that is free of national prejudices. They must also know the global environment so they can exert the leadership necessary to attain a global mission.

b.      Managers with direct international responsibility must be able to affect a proper balance in well being between corporate and national operations.

c.       Managers without direct international responsibility must understand the importance of international competition on the company’s well being.

               (easy, page 649)


41.    Contrast the four types of expatriate managers (free agent, going native, heart-at-home, and dual citizen).



Free agent—There are two types of “free agent.” The first includes people who put their careers above either the parent company or the foreign operation where they are working. They often are highly effective, but they will move with little warning from one company to another in foreign assignments, may serve their own short-term interests at the expense of the company’s long-term ones, and do not want to return to their home country. The second type of “free agent” includes people whose careers have reached a plateau at home and who take a foreign assignment only for the paycheck. The “heart-at-home” type is overly ethnocentric and is usually eager to be repatriated. When the company wants strong headquarters control, this type of person may be very effective. The “going native” type learns and accepts the local way of doing business and wants to stay in the foreign location and be left alone by headquarters. This type of person may be very appropriate for situations in which the company follows multidomestic practices. The “dual-citizen” type has a clear understanding of global needs, why he or she is needed at the foreign subsidiary, and local realities that may necessitate national responsiveness. This person usually finds mechanisms by which to work out differences between headquarters and the subsidiary and is overall the most effective type of expatriate manager.

         (moderate, page 650)


42.    Explain the different attitudes held by workers in different nations about unions, collective bargaining, and expectations.



The amount of compensation companies pay depends on workers’ contributions to the business, supply of and demand for particular skills in the area, cost of living, government legislation, and collective-bargaining ability. Companies’ methods of payment depend on customs, feelings of security, taxes, and governmental requirements. Both the amount and method of payment are affected by a country’s culture. MNEs usually pay slightly better than their local counterparts in lower-wage countries, although they still pay less than what they do in higher-wage countries. They pay more because of their management philosophies and structures. An MNE’s typical management philosophy, particularly in contrast to that of a local, family-run company, is often to attract high-level workers by offering higher relative wages. In addition, its product and process technologies may allow it to compensate employees more than local companies do. Further, when a company first comes into a country, experienced workers may demand higher compensation because they have doubts about whether the new operation will succeed.

         (moderate, page 654)


43.    What are the International Labor Organization and its functions?



The International Labor Organization dates back to 1919. Its premise is that the failure of any country to adopt humane labor conditions is an obstacle to other countries that want to improve their conditions. Several associations of unions from different countries also support similar ideals. These associations include various international trade secretariats representing workers in specific industries, for example, the International Confederation of Free Trade Unions, the World Federation of Trade Unions, and the World Confederation of Labour. Through these organizations’ activities and the general enhancement of communications globally, people increasingly are aware of differences in labor conditions among countries.

         (easy, page 657)


44.    How have labor group sought to counter the advantages the MNEs might have over labor?



a.       Information sharing—The most common international cooperation among unions is exchanging information, which helps them refute company claims as well as cite precedents from other countries on bargaining issues.

b.      Assistance to foreign bargaining units—Labor groups in one country may support their counterparts in other countries by refusing to work overtime to supply a market normally served by striking workers’ production, sending financial aid to workers in other countries, and disrupting work in their own countries.

c.       Simultaneous actions—There have been a few examples of simultaneous negotiations and strikes. But labor’s cooperation across borders is a problem because of national differences in union structures and what workers want.

               (moderate, page 657)