“Andreas Weber’s Reward for Success
in an International Assignment; Case A”
MGMT 360; International Management
1. Should Andreas go back to the position offered?
2. If Andreas accepts the job, what should his career plan be?
3. If he does not accept the job, what should he do instead?
4. Who is to blame for the current situation? What specific factors contributed to Andreas’ reentry
problems?
5. What can an organization do to avoid the kinds of problems illustrated in this case?
6. From an HR perspective describe what would be a more systematic approach to repatriation
planning and international career development?
7. Cite a minimum of 6 course concepts and ideas that are relevant in this case?
For the exclusive use of A. Aljuwaybir, 2018.
INS712
Andreas Weber’s Reward for
Success in an International
Assignment (A):
A Return to an Uncertain Future
08/2014-5080
This case was prepared by Günter K. Stahl, Assistant Professor of Asian Business at INSEAD and Mark E. Mendenhall,
J. Burton Frierson Professor of Leadership at the University of Tennessee. It is intended to be used as a basis for class
discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
Additional material about INSEAD case studies (e.g., videos, spreadsheets, links) can be accessed at
cases.insead.edu.
Copyright © 2003 INSEAD
COPIES MAY NOT BE MADE WITHOUT PERMISSION. NO PART OF THIS PUBLICATION MAY BE COPIED,
IN ANY FORM OR MEDIUM WHATSOEVER WITHOUT THE PERMISSION OF THE COPYRIGHT OWNER.
STORED, TRANSMITTED, REPRODUCED OR DISTRIBUTED
This document is authorized for use only by Aeshah Aljuwaybir in International Mgmt;Fall '18-1 taught by MOLLY BURKE, Dominican University - Illinois from Aug 2018 to Feb 2019.
For the exclusive use of A. Aljuwaybir, 2018.
Andreas Weber’s mind would not stop racing. Normally, an intense run in the evening had the
effect of dissipating his worries, but tonight this did not work. The further he jogged along his
standard route on the banks of the Hudson River, the more he could not get out of his mind
the letter he knew he must write tomorrow. “How had it all come to this?” he wondered. This
thought triggered his memory back seven years, to the initial event that had set in motion the
process that led to his current trouble.
Andreas’ Decision to Pursue an International Career
Andreas remembered the occasion clearly; Herr Görner, the Managing Director, had walked
into his office at the Frankfurt headquarters of his bank, and offered him the chance to
participate in a company-wide international leadership development program. Herr Görner
explained that the program involved an international assignment with the intention of
fostering the professional development of young, aspiring managers. After their overseas
assignments, the trainees would constitute a pool of internationally experienced young
managers with the potential for senior management positions at corporate headquarters.
Andreas accepted the offer on the spot, with pride. He had worked very hard since joining the
bank and felt that his efforts had finally paid off.
The program started with a one-week seminar at a leading business school in the United
States. The CEO had flown in from Frankfurt, demonstrating the commitment of top
management to this program. In his speech to the participants, the CEO stressed that the
major challenge and “number one” priority for the bank in the future was globalization. He
made it clear that international experience was a key value and a prerequisite for promotion
into the ranks of senior management. Andreas felt confident that he had made the right
decision in accepting the offer and in pursuing an international career.
Shortly after the program started, an unexpected vacancy opened up in the bank’s New York
branch and Andreas was asked if he was interested. He discussed the prospect of a three-year
assignment to New York with his wife, Lina. The offer looked very attractive from all angles,
and they quickly agreed that Andreas should accept it. Two months later, he was transferred
to New York.
Assignment New York: The First Year
Andreas remembered the day of his arrival as if it were yesterday. He arrived at JFK Airport
early in the afternoon. Since his only contact point about the job assignment was corporate
HR in Frankfurt, he assumed that they had made all the necessary arrangements with the New
York office for his arrival. However, no one came to the airport to pick him up. He took a taxi
and went directly to the New York branch of the bank. When he arrived, he was not sure
where he should go. He had not been informed about whom he should contact after his
arrival, so he went straight to the office of the head of the corporate finance department where
he was supposed to work. When he entered the office and told the secretary that he was the
new manager from Germany, she looked at her notebook, shook her head, and told him that
they were not expecting anybody. Confused, Andreas rushed to the HR department and soon
found that several misunderstandings had occurred. First, it was not the corporate finance
department but the credit department that had requested his transfer. Second, contrary to what
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For the exclusive use of A. Aljuwaybir, 2018.
he was told in Frankfurt, there was only a non-management position vacant. They were
looking for a credit analyst, basically the same job that he had done in Germany.
Andreas shook his head in reaction to the memory: “There I stood, in what was supposed to
be my new office, with three pieces of luggage on the desk, and wondering whether I should
stay or take the next plane home!”
Why he decided to stay in New York, he could never quite figure out. In retrospect it was
probably just a split second decision to make the best of the situation. The whirl of images of
the next two months flashed across his memory: rushed days and nights trying to learn the
ropes of a new office with new procedures, looking for a place to live, meeting new people,
and exploring new places. Then a clear memory intervened the collage of memories of those
first two months – Lina’s arrival. Lina, his wife, and their three-year-old daughter, AnneMarie, followed Andreas to New York two months after his arrival. They moved into a small
house in the outskirts of New York. Lina knew New York pretty well, as she had worked
there for a couple of months as an intern at a reinsurance company. She arrived excited to rediscover her favorite restaurants, art galleries and museums.
Except for occasional attacks of homesickness, Lina was satisfied with her new life. The week
after they had moved into their new house, they received a dinner invitation from a young
married couple next door. To their surprise, their American neighbors quickly embraced the
Webers. Since Lina was not able to get a work permit, she joined her new acquaintance in
doing volunteer work at a local art museum. Anne-Marie spent every second afternoon at a
local kindergarten, which gave Lina plenty of time to pursue her own interests. At the end of
their first year in the United States, a second daughter, Elena, was born. By then, the Weber’s
had already made several more new friends, both Americans and other expatriates. When the
Webers stepped off the plane at JFK after their first home leave to Germany, it felt more like
they were coming home than returning to a temporary assignment.
Andreas’ Fast-Track Career as an Expatriate
Professionally, things had gone extremely well during this time period. The New York branch
of the bank had been right at the start of a boom-phase that lasted for several years.
Throughout the boom, the bank’s staff increased significantly. After eight months of working
in the back office, Andreas was promoted to supervisor of a group of credit analysts. Then,
one year after his first promotion, a position opened up at the senior management level. The
deputy head of the rapidly expanding corporate finance department – a German expatriate –
had unexpectedly left for a job at one of their American competitors, and the bank had to fill
his position with a manager who spoke fluent German, was familiar with the finance
departments of a number of German and other European companies, and was instantly
available. Andreas was asked if he was willing to extend his foreign service contract for
another three years and accept the position as deputy head of the corporate finance
department. After discussing it with Lina, Andreas accepted.
In the fifth year of his assignment, Andreas made another step upward in his career. His boss
retired, and Andreas was promoted to head of the corporate finance department. He was now
one of five managing directors in the branch. When Andreas signed his new contract, it was
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For the exclusive use of A. Aljuwaybir, 2018.
agreed that he would stay with the New York branch of the bank for another three years and
would then return to the bank’s German headquarters.
These were warm memories, memories that somewhat buffered the intensity of Andreas’
frustration and anger over his current situation. But as he continued running, the warmth of
the past dissipated into the turmoil of the present.
“It all started with that promotion,” he muttered to himself. As head of the corporate finance
department, Andreas’ professional and private lives had unexpectedly changed. He was now
responsible for a huge area – his business activities no longer concentrated on North
American subsidiaries of foreign-based companies, but included their headquarters in Europe
and East Asia. In the first six months of his new job, Andreas had traveled almost 100,000
miles, mainly on business flights to Europe. His extensive traveling was hard on Lina. She felt
alone, and was concerned about their children’s education. Their eldest daughter, Anne-Marie
was now nine years old and had spent most of her life outside of Germany. Lina was also
concerned about her missing out on a German high school education. Anne-Marie’s German
language skills had gradually deteriorated over the last two years, and that troubled Lina as
well. Their second daughter, Elena, was attending kindergarten, and except for the yearly
home leave, she had no contact with other German children. Elena’s German was quite poor.
In fact, both Anne-Marie and Elena considered themselves Americans.
Lina also started to be more and more discontented with her life as a housewife. Obtaining a
work permit in the United States remained impossible, and it was not easy for her to find new
volunteer activities to quench her interests. To make things worse, Lina’s father fell ill and
died in that same year, leaving her mother alone. Andreas remembered the long conversations
he had had with Lina during this period of time, many of which were by telephone from hotel
rooms in far away places. When he was home, they spoke often in the quiet of their living
room, and on long walks – Andreas lost count of the multitude of times they had talked as
they walked through the same park he was now running through.
Andreas’ Dilemma: Staying in New York or Returning Home to an
Uncertain Future
“It was an extremely difficult situation,” Andreas remembered, “not so much for the children,
but for Lina and I. … From a professional standpoint, my assignment to New York was the
best thing that could ever happen to me: I worked in the financial center of the world; I loved
my job, the freedom of being away from the bureaucracy at corporate headquarters, the
opportunities to travel; I became a member of the senior management team at a very young
age – impossible if I stayed in Germany. Personally, we were also happy: our children felt at
home in New York; we were quickly embraced by our neighbors and the expatriate
community; we had many friends… The question we continually wrestled with was: ‘Does it
make sense to give all these up for a return to an uncertain future in Germany?’ In principle,
the answer would clearly have been: ‘No’. But on a long-term basis, moving back to Germany
appeared to be the best solution for our children. After all, we felt responsible for their
future.”
After several weeks of consideration and discussion, Lina and Andreas decided to move back
to Germany. This was about a year ago. Immediately after the decision was made, Andreas
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For the exclusive use of A. Aljuwaybir, 2018.
contacted the bank’s corporate headquarters and informed the human resource executive in
charge of international assignments about his decision. Three weeks later, Andreas received a
short letter from him, stating that there were currently no positions available in Germany at
his level. Part of the problem, Andreas was told, was due to the current economic downturn in
Europe, but since several new branches were due to be opened in the Eastern part of Germany
over the course of the next year, he was told that chances were good that the company would
be able to find him a suitable return assignment within the next six months. Since then,
Andreas had had several meetings with executives at corporate headquarters, as well as with
managers of domestic branches of the bank, but he still had not been offered any reentry
position.
Lina gradually became discouraged. She had told her mother that they were coming home
immediately after they made their decision to return to Germany, but 8 months had passed,
and her mother kept asking when they were coming. Andreas’ parents were persistent in their
queries as well. Finally, last week, Andreas received a telephone call from the corporate HR
department, in which he was informed that they had found what they called a “challenging”
return assignment. They offered him the position of deputy head of a medium-sized branch of
the bank in the Eastern part of Germany. Andreas was told that a letter explaining the details
of the position offer had already been sent.
The Offer
The memory of opening that letter and reading it, and the resulting emotions of anger,
betrayal, disbelief, and frustration all came back to him. He stopped running, and sat down on
a park bench alongside the jogging trail. “Not only will I earn little more than half the salary
that I currently make in New York, I will not be able to use the skills and experiences that I
gained during my overseas assignment, I will be out of touch with all the important decisions
being made at headquarters, and on top of that, I will be posted to this God-forsaken place!”
he thought, bitterly.
With all the frustrations and anger welling up in his chest, Andreas thought, cynically, “The
bank’s promotion policy – if there ever was any rational policy – is to punish those who are
really committed to the organization. They assign you to one of those programs for high-fliers
and send you abroad, but there is no career planning whatsoever. If there just happens to be a
job vacant when you return, you are lucky. If not, they let you wait and wait and wait, until
you finally accept the most ridiculous job offer. ... Their slogan that international experience is
a key value and a prerequisite for promotion into the ranks of senior management is garbage!
If you look at the actual promotion and career development practices in this organization, it
becomes clear it’s only lip service…and lies! … In this bank, the better you perform overseas,
the more you get screwed when you come back”.
He began to wonder if he should accept the offer. Perhaps they should just stay in New York
and make their home here. But then, images of Lina, Lina’s mother, Anne-Marie, Elena, and
his parents, and all of their combined needs enveloped him.
Leaning back on the park bench, he blankly stared down the path that would lead out of the
park and into the street, and then home.
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Ninth
Edition
5-1
Copyright ©2017 Pearson Education, Inc.
Chapter Learning Goals
To become familiar with the role of
negotiation in implementing a firm’s
strategy, and the various stakeholders who
must be considered
2. To learn the stages of the negotiation
process and how to prepare for crosscultural business negotiations
3. To gain insight into the various types of
negotiating styles around the world
1.
5-2
Copyright ©2017 Pearson Education, Inc.
Chapter Learning Goals
To recognize that managing negotiation
requires learning about the culturally
based behavioral differences, values, and
agendas of the negotiating parties and how
to build trust for successful negotiations
5. To learn the complexities of negotiating
with the Chinese
6. To appreciate the variables in the decisionmaking process and understand the
influence of culture on decision making
4.
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Opening Profile: Facebook’s Continued
Negotiations in China
• Facebook has more than 1.4 billion active users as
•
•
•
•
5-4
of 2015; if it were a country, it would be the
world’s third most populous country
However, Facebook is banned in China for six
years as of 2015, although many go around the
restrictions
China has substantial legal and regulatory
complexities that have prevented entry
If Facebook fails to manage global operations
successfully, business may suffer
Facebook is profiting by advertising for Chinese
businesses in spite of the blockage of its primary
activity
Copyright ©2017 Pearson Education, Inc.
Chapter Learning Goals
To become familiar with the role
of negotiation in implementing a
firm’s strategy, and the various
stakeholders who must be
considered
5-5
Copyright ©2017 Pearson Education, Inc.
Negotiations by Global Managers
Specific plans for strategies and for
continuing operations
May also be faced with negotiating with
government-owned companies
Managers must prepare; operational
details must be negotiated: staffing, raw
materials, repatriating profits, etc
Decision-making processes are key
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Negotiation
The process of discussion by which
two or more parties aim for
mutually acceptable agreement
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Important Differences
1. Amount and type of preparation
2. Tasks vs. interpersonal relationships
3. General principles vs. specific issues
4. Number of people present and their
influence
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Stakeholders in
Cross-Cultural Negotiation
5-9
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Chapter Learning Goals
To learn the stages of the
negotiation process and how to
prepare for cross-cultural
business negotiations
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The Negotiation Process
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Stage One: Preparation
•Develop profile of
counterparts.
•Find out likely demands,
team composition, and
counterpart authority.
•Choose a negotiation site.
•British/French
Chunnel
negotiations
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Stage Two: Relationship Building
•Getting to know one’s contacts
and building mutual trust
•Non-task sounding
•Use an intermediary.
•“I have come as a mediator…”
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Stage Three: Exchanging
Task-Related Information
•
•
Cultural differences remain an
issue.
The French enjoy debate and
conflict.
• Mexicans can be suspicious and
indirect.
• The Chinese ask many
questions,
but provide ambiguous
information in return
•
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Show understanding of the
other viewpoint
Stage Four: Persuasion
•Dirty tricks are in the
eye of the beholder
•False information
•Ambiguous
authority
•Non-verbal
messages
•Individualism vs.
Collectivism
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Stage Five: Concessions
and Agreement
• Russians and Chinese start
with extreme positions
•Swedes start with what
they will accept
•Starting with extremes may
be most effective
•Linear vs. holistic
•Importance of contracts
5-16
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Chapter Learning Goals
To learn the complexities of
negotiating with the Chinese.
5-17
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Management Focus: Negotiating with the
Chinese
5-18
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Comparative Management in Focus:
Negotiating with Chinese
Two problems:
Chinese desire for
details
Apparent
insincerity
Importance of
harmony
Guanxi
Guanxihu networks
Two stages of
Saving face:
Lien
Mien-tzu
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Chinese
negotiation
Technical
Commercial
Comparative Management in Focus:
Negotiating with Chinese
Some recommendations:
Practice patience
Accept prolonged stalemate
Refrain from exaggerated expectations
Establish a contact in China
Remember to save ‘face’ for everyone
5-20
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Chapter Learning Goals
To gain insight into the various
types of negotiating styles around
the world
5-21
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Comparison of Negotiation Styles
Japanese
North
American
Hide emotions Deal
impersonally
Subtle power Litigation, not
plays
conciliation
Step-by-step
Methodologic
approach
al organization
Group good is Profit is the
the aim
aim
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Latin American
Emotionally
passionate
Great power
plays
Impulsive,
spontaneous
Group/
individual good is
aim
Successful Negotiators: Americans
❑ Knows when to compromise, but stands firm at
❑
❑
❑
❑
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the beginning. Accept compromises only when
there is a deadlock
Refuses to make concessions beforehand and
keeps his/hers cards close to chest
Keeps a maximum of options open before
negotiation, operate in good faith
States his/her position as clearly as possible,
respects the “opponents”
Is fully briefed about the negotiated issues, has
a good sense of timing and is consistent
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Successful Negotiators: Indians
❑ Look for and say the truth, not afraid to speak up
❑ Exercise self-control
❑ Respect other party, look for solutions
acceptable to all parties
❑ Will change their minds, even at risk of seeming
inconsistent and unpredictable
❑ Humble and trusts the opponent
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Successful Negotiators: Arabs
❑ Protect honor, self-respect, dignity, and, thus, are
trusted and respected
❑ Avoid direct confrontation
❑ Come up with creative, honorable solutions.
❑ Are impartial and can resist pressure
❑ Can keep secrets
❑ Controls temper and emotions
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Successful Negotiators: Swedes
❑ Quiet, thoughtful, polite, straightforward
❑ Overcautious, but flexible
❑ Slow to react to new proposals, but eager to be
productive and efficient
❑ Able to hide emotions, afraid of confrontation
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Successful Negotiators: Italians
❑ Have a sense of drama, do not hide emotions
❑ Good at reading facial expressions and gestures
❑ Want to make a good impression and use flattery,
but are distrusting
❑ Handle confrontation with subtlety and tact
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Managing Negotiation
Avoid person-related
conflicts.
Examples
Low-context Americans
appear impatient, cold,
and blunt to Mexicans.
5-28
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Americans must approach
negotiations with Mexicans
with patience; refrain from
attacking ideas.
Cross-Cultural Negotiation Variables
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Successful Negotiators
5-30
Consider a wider range of options and pay greater
attention to areas of common ground
Tend to make twice as many comments regarding
long-term issues
More likely to set upper and lower limits
regarding specific points
Make fewer irritating comments: “We’re making
you a generous offer”
Make counter proposals less frequently and use
fewer reasons to back up arguments
Actively listen
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Using the Internet to
Support Negotiations
Negotiation Support
System (NSS)
Increase likelihood of
agreement
Decrease direct and
indirect costs
Maximize optimal
outcomes
5-31
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Web Application
Provide support for
phases and dimensions
such as:
Multiple-issue, multiple-
party business transactions
of a buy-sell nature
International dispute
resolution
Internal company
negotiations and
communications
E-Negotiations
Advantages
Speed
Less travel
Laying out much
objective information
over time
Disadvantages
Not being able to
build trust and
interpersonal
relationships
Nonverbal nuances are
lost
Video conferencing may
be a good compromise
5-32
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Managing the Conflict Resolution
5-33
InstrumentalOriented
Conflict
• To negotiate on the basis of
factual information and logical
analysis
ExpressiveOriented
Conflict
• To handle a situation indirectly
and implicitly, without clear
delineation of the situation by
the person handling it
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Negotiation Conflicts Between Low Context
and High Context Cultures
Low Context Conflict
Area
• Explicit and direct,
linear presentation of
facts
• Individualistic, shortterm oriented
• Task-oriented, up-front,
impatient
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High Context Conflict
Area
• Implicit, circular logic
• Collective, decisions by
consensus; long-term
oriented
• “Face” and relationshiporiented; nonconfrontational, patient
The Influence of Culture on
Decision Making
5-35
Individualism
VS
Collectivism
Objective
VS
Subjective
Risk Tolerance
VS
Risk Avoidance
Uncertainty
VS
Familiarity
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Approaches to Decision Making
5-36
Utilitarianism
VS
Moral Idealism
Autocratic
VS
Participative
Slow Pace
VS
Fast Pace
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Chapter Learning Goals
To recognize that managing
negotiation requires learning
about the culturally based
behavioral differences, values, and
agendas of the negotiating parties
and how to build trust for
successful negotiations
5-37
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Cultural Variables in
Decision-Making Process
5-38
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Under the Lens: Negotiations and Decisions
to Save the Eurozone System
The negotiations in eurozone countries and the
International Monetary Fund centered on a rescue
for Greece, which was threatened with default
Austerity cuts were implemented in Greece in order
to receive bailout money to avert default
Cultural, historical, and lifestyle differences brought
out old prejudices that nearly derailed negotiations
Negotiations were undermined by a lack of trust
The extent to which decision making is influenced
by culture varies among countries
One variable is whether a people assume an
objective or a subjective approach
5-39
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Chapter Learning Goals
To appreciate the variables in the
decision-making process and
understand the influence of
culture on decision making
5-40
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Comparative Management in Focus:
Decision Making in Japanese Companies
Wa
Ringi
Amae
Shinyo
5-41
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Comparative Management in Focus:
Decision Making in Japanese Companies
5-42
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Conclusion
Managers need working knowledge of decision-
making processes and negotiating tactics used by
managers in different countries
It is important to understand the cultural
variables that influence negotiations and decision
making, and how they influence these activities
Managers should prepare for, and conduct
negotiations with cultural sensitivity
5-43
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retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright © 2017 Pearson Education, Inc.
9-1
Copyright ©2017 Pearson Education, Inc.
Ninth
Edition
Chapter Learning Goals
1. To understand the strategic
importance to the firm of the
IHRM function and its various
responsibilities
2. To learn about the major staffing
options for global operations and
the factors involved in those
choices
9-2
Copyright ©2017 Pearson Education, Inc.
Chapter Learning Goals
3. To emphasize the need for
managing the performance of
expatriates through careful
selection, training, and
compensation
4. To discuss the role of host country
managers and the need for their
training and appropriate
compensation packages
9-3
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Opening Profile: Staffing Company
Operations in Emerging Markets
9-4
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Need for up
to 75000
business
leaders, but
3000–5000
may be
available
BRIC
Have
outpaced the
supply of
mid and
upper-level
management
BRIC
BRIC
BRIC Countries
Many are
simply not at
the skill
level
required by
foreign
companies
Chapter Learning Goals
To understand the strategic
importance to the firm of the
IHRM function and its various
responsibilities
9-5
Copyright ©2017 Pearson Education, Inc.
9-6
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Deficit
starting at
the middle
level. Also,
dealing with
the “brain
drain”
China
Deficit at all
management
levels
India
Deficit at
upper-level
management
Russia
Brazil
Opening Profile: BRIC—The Shortage of
Mid/Upper-Level Managers
Severe
deficit at all
levels of
management
Opening Profile: What Attracts the
Potential Recruits in Emerging Markets?
• A global “name brand” known for its
Brand excellence
• A company that is breaking into new
Purpose
markets, with new models and strategy
Opportunity
• A company that provides a fast-track
training and career path
• An organizational culture of openness
and transparency
Culture
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Major Challenges in IHRM
1.
2.
3.
4.
5.
9-8
Enhancing global business strategy
Aligning HR issues with business strategy
Designing and leading change
Building global corporate cultures
Staffing organizations with global leaders
Copyright ©2017 Pearson Education, Inc.
Chapter Learning Goals
To learn about the major staffing
options for global operations and
the factors involved in those
choices
9-9
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Staffing for Global Operations
Ethnocentric Approach
Used at
internationalization
stage of strategic
expansion, with
centralized structure
Parent-country
nationals (PCNs)
9-10
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Polycentric Approach
Often used with
multinational strategy
Host-country nationals
(HCNs)
Staffing for Global Operations
Global Staffing Approach
Regiocentric Approach
Third country nationals Can produce a mix of
(TCNs)
Transpatriates
Inpatriates: managers
with global experience
who are transferred to
the organization’s
headquarters country
9-11
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PCNs, HCNs, and
TCNs
Maintaining a Globalization Momentum
9-12
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Strategic Mode, Organizational Variables,
and Staffing Orientation
Aspect of
enterprise
Ethnocentric
Strategic
orientation
International
Expatriates
Perpetuation used for key
positions
Evaluation
and control
Rewards
9-10
Home
standards
applied
High at
home; low in
subsidiaries
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Polycentric
Regiocentric
Global
Multidomestic Regional
Transnational
Locals used
for key
positions
locally
Regional
people used
regionally
Best people
used anywhere
Determined
locally
Determined
regionally
Globally
integrated
Wide
variation
Based on
contribution
to regional
objectives
Based on
contribution to
local and
worldwide
objectives
MNC Staffing
Most MNCs start from their own pool of managers
→ polycentric or regiocentric policy:
Increasing pressure from local governments to hire
locals
The greater cost of expatriate staffing
Improvement in managerial and technical
competence
“All things being equal, a local national who speaks
the language, understands the culture and the
political system, and is often a member of the local
elite should be more effective than an expatriate
alien”
9-14
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Global Mind-set Attributes for Successful
Expatriates
Intellectual capital
Psychological capital
Social capital
9-15
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Chapter Learning Goals
To emphasize the need for
managing the performance of
expatriates through careful
selection, training, and
compensation
9-16
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Managing Expatriates: Selection
Job
factors
Relational
dimensions
Motivational
state
Success
categories
Family
situation
Language
skills
9-17
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Managing Expatriates: Selection
High
tolerance
for stress
Less on domestic
experience,
gender, int’l
experience
Predictors
of success
Extraversion
9-18
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Expatriates Performance Management
Selection based on headquarters
criteria
Inadequate preparation, training,
orientation
Alienation or poor support from
headquarters
Inability to adapt to the local culture
9-19
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Expatriates Performance Management
Problems with spouse and children
Insufficient compensation and financial
support
Poor programs for career support and
repatriation
9-20
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Comparative Management in Focus: Expatriate
Performance Management Practices: Samples from
Five Countries
1. Goal setting
2. Performance Appraisal
3. Training and Development
4. Performance-related Pay
9-21
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Global Team Performance
Management
1. Expatriate performance on a team,
based on decisions made with team
members in various countries,
cultures, and time zones
2. Discussions conducted through
teleconferencing, Skyping, and social
media
3. Careful selection and training of
team members for insight, local
knowledge, and group creativity
9-22
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Expatriate Training and Development
China
• Eating duck tongue and pigeon head
Brazil
• Home phones don’t work
India
• Pervasive poverty
Indonesia
Japan
9-23
• Rent paid 2–3 years in advance
• Doctors reveal little to patients
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Expatriate Training and Development
Japanese
Expatriate
Planning
9-24
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• Selection based on longterm knowledge of
executives and their families
• Use of longer assignments
(e.g., 5 years)
• Extensive headquarters
support
Culture Shock
1. Honeymoon
2. Irritation and hostility
3. Gradual adjustment
4. Biculturalism
9-25
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IHRM Process to Maximize Effectiveness of
Expatriate Assignments
Evaluate
potential
problems.
Select
expatriates.
Develop
contracts.
Repatriate after
successful
assignment.
Evaluate
effectiveness and
problems.
Assess
development and
support needs.
Integrate valueadded to firm.
Debrief
expatriate and
family.
To improve IHRM process
9-26
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Cross-Cultural Training
Culture
Shock
Subculture
Shock
9-27
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• A state of disorientation and anxiety
about not knowing how to behave in
an unfamiliar culture
• The goal of training is to ease the
adjustment to the new environment
• When a manager is transferred to
another part of the country, where
there are cultural differences
• The “shock” comes from feeling like an
“immigrant” in one’s own country
Corporate Programs to Develop Global
Managers
ABB rotates managers to different countries to develop
transpatriots
PepsiCo has an orientation program for foreign managers
British Telecom uses informal mentoring techniques
Honda offers Japanese language and culture preparation
General Electric wants managers to have a global
perspective
9-28
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Integrating Training with
Global Orientation
Export Stage
Training need: low to
moderate
Content: interpersonal
skills, culture, customer
values, business behavior
HCNs: train to understand
parent-country products and
policies
9-29 Copyright ©2017 Pearson Education, Inc.
Multi-domestic Stage
Training need: moderate
to high
Content: interpersonal
skills, culture, technology
transfer, business practices
and laws
HCNs: familiarize with
production and service
procedures
Integrating Training with
Global Orientation
Multinational Stage
Training need: high
moderate to high
Content: interpersonal skills,
two-way technology transfer,
corporate value transfer,
strategy, stress management,
culture, business practices
HCNs: training in technical
areas, products and services,
corporate culture
9-30
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Global Stage
Training need: high
Content: global
corporate operations,
corporate culture
transfer, customers,
global competitors,
strategy
HCNs: training in
proficiency in production
and efficiency systems,
corporate culture,
business systems, global
conduct policies
Chapter Learning Goals
To discuss the role of host country
managers and the need for their
training and appropriate
compensation package.
9-31
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Factors that Influence the Integration of
Expatriates with Local Staff
Facilitates Integration
Forming close working
9-32
relationships
Learning local language
Transferring
technical/business knowledge
Cultural adaptability
Respect
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Hinders Integration
Not using team concept
Not learning local language
HQ mentality
Spouse/family adjustment
problems
Being autocratic
Limited time in assignment
Compensating Expatriates
DuPont’s Global Transfer
Center of Expertise creates
perceptions of equity and
goodwill
Companies are looking for
ways to cut the costs of
expatriate assignments
The need to reconcile parent-
and host-country practices
adds complexity
9-33
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The balance sheet
approach
Tax equalization
Components of the
compensation package:
salary, taxes, allowance,
benefits
Components of the Compensation Package
9-34
Salary
Taxes
Allowances
• Local salary
buying
power vs.
home
salary
• Equalize
any
differential
effects of
taxes
• Relocation
expenses,
housing,
trips
home…
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Benefits
• Health
insurance,
stock
options
Balance Sheet Approach
9-35
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Training Host Country Nationals
Facilitates indigenization
Links successful corporate culture and local
culture
Facilitates e-business adoption
9-36
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Management in Action: Success! Starbucks’ Java Style
Helps to Recruit, Train, and Retain Local Managers in
Beijing
Challenges: recruiting, motivating, and
retaining Beijing managers
Chinese recruits want training and
advancement opportunities more than
money
Recruits need trust and participation in
an environment where local nationals do
not exercise initiative or authority
9-37
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Management in Action: Success! Starbucks’ Java
Style Helps to Recruit, Train, and Retain Local
Managers in Beijing
Recruits are trained in management and
in Starbucks’ culture
Three months in Seattle
Make coffees in a real store
Casual atmosphere
Training, and resulting trust and
participation, also serve as motivators
9-38
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Compensating Host Country Nationals
Eastern Europeans require more
cash than Americans.
Compensation in Japan is
becoming more Westernized.
In Latin America an
employee’s pay and title are
associated with the type of
car received.
9-39
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Conclusion
Global HR management = vital component of
9-40
global strategy
Strategies = ethnocentric, polycentric, regiocentric, and global
Many causes of ex-pat failure: inadequate
preparation, inability to adapt, lack of HQ support
for repatriation, etc
Cultural training, language instruction, familiarity
with everyday matters → training is needed
Compensation must be carefully designed
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Copyright © 2017 Pearson Education, Inc.
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