Criteria For Selecting Staff For International Assignments Management Essay

Criteria For Selecting Staff For International Assignments Management Essay Business newer-days are recognized to be international and there is a universal belief that this will prolong in the future. This is why organisations now have the need for international managers, as the organisation spread worldwide, so must the employees. Human resource management (HRM) has grown to be one of the most accepted topics in international management. The employee that is send abroad is known as an expatriate. Expatriates are employees/managers who move from the home country to an overseas location. (Tanner 2009, 360) A successful expatriate usually entail a vast amount of time and money, however, a botched expatriate can be even more expensive for an organisation. International business is all the business transactions involving private companies or governments of two or more countries. (Daniels 2009, 864) International human resource management is an imperative aspect of MNEs international strategies and the difficulty of managing international operations. The determin ation of this study is to gain a better understanding of how multinational enterprises (MNE) select their expatriate managers. It is important to note that the selection process is a discrete process and need to function successfully in the organisations. 1. Multinational Enterprise. 1.1.1 Definition of Multinational Enterprise. The multinational  enterprise  (MNE) can be measured as the most powerful organisation in the world today. Globalization is the  development  that has a significant impact on how the world operates today and is  mostly  driven by the expansion of MNEs. Internationalisation has lined the  technique  for the eradication of boundaries between countries and now multinational enterprises (MNEs) can be distributed across the world in  exploration  of new markets, opportunities and wherewithal. A multinational enterprise (MNE) takes a worldwide view of markets and production. (Daniels 2009, 63) In simple terms, a Multinational  enterprise  (MNE) will  produce  and  market  their products anywhere in the world. Operations can also take place in  multiple  countries, for example, in the wholesale trade Nestle is an  excellent  example of an MNE. Nestle has marketing and production facilities in almost every country, in the world; Nestle Switzerland operational plants must be managed to use the same set of  management  styles as their international counterpart Nestle SA. A multinational enterprise (MNE) is an organisation that holds a  hefty  equity share; usually fifty percent or more of another organisation, functioning in an overseas country. The multinational  enterprise  (MNE) can be formed when an organisation in one country makes an impartiality investment in an organisation, in another country.  Foreign direct investment (FDI) is an investment in an overseas organisation where the overseas  financier  holds at least ten percent of the average shares, accepted with the  objective  of proven a lasting interest overseas, a  durable  bond and  momentous  influence  on the management of the organisation. International markets and foreign direct investment (FDI) have amplified penetratingly in the precedent decades. Escalating internationalization has had a  remarkable  influence on the competitive  spot  of  numerous  countries. 1.1.2 Role of (MNE) in staffing approaches. Operating internationally, a Multinational Enterprise (MNE) has many  vital  decisions to make, how to, best structure the organisation in order to  manage  business  effectively. According to (Schuler et al.1992,419-459), The most influential factor that determines the success of the organisation, is the way in which the Multinational Enterprise differentiates its operating units internationally and, at the same time, assimilates, control and coordinate its activities. Important factor is to  balance  the need for diversity, to  coordinate  and manage to  produce  an organisation that is internationally,  flexible  and competitive. Diversity branch as the need to operate in a rejoinder manner in an  array  of environments occurs internationally  arise. Multinational  enterprises (MNEs) can  supply  resources to host countries that other organisations cannot. The host country can  persuade  them to  transmit  their compensations in  sui table  forms. The compensation that a host country can  acquire  from foreign direct investment (FDI) is as follow: 1) Capital, 2) Technology, 3) Skills and Management and 4) Access to markets. 1.1.2.1 Capitals. Foreign direct investment (FDI) brings to  hand  financial resources in the form of  capital  for countries who can not afford the  required  capital. The capital inflows received from the FDI are  more  constant, and it is much easier to  service  than trade  debt  or portfolio investment. In  dissimilarity  to other suppliers of capital, MNEs  mostly  invest in  long-standing  assignments  compelling  risks and repatriating of profits only when the  assignment  yield returns. 1.1.2.2. Technology. Embryonic countries tend to  insulate  in the use of technology, even the technology in developed countries can be outdated. The MNEs can bring  modern  technologies and increase the effectiveness with which technologies can be used. They  modify  technologies to local environments,  depiction  on their  knowledge  in other  embryonic  countries.  The MNE can  improve  technologies as modernization materialize and spending patterns change, they can also  rouse  technical competencies in  local  organisations both suppliers and competitors, by giving support, acting as role models and increasing competition. 1.1.2.3. Skills and Management The need for training, is regularly not recognised by local organisations, the MNEs is  mostly  in  possession  of advanced skills and can  transfer  the resources to the host countries. They  bring  to  hand  experts, setup training facilities and have some of the best management techniques that  offer  the host country a  gargantuan  competitive advantage. Where  association  can be integrated into MNEs networks, they can  cultivate  capabilities to  service  the regional or international  system  in tasks, products or markets. 1.1.2.4. Market Access. The MNEs can provide access to export markets, both for existing activities and  new  activities. In order to attract MNEs, a host country must make sure that its policies and regulations are beneficial, while at the same time protecting the  state  from opportunistic entities. The process of internationalization and multinational corporations  influence  the  political  area of a host country, a host country that intends to attract more MNEs and investors need to  generate  an image of  stability  and reliability. This can be done by implementing policies and regulations that the international community endorse and that make MNE  entry  more  advantageous  for both parties. The main channel for the transfer of human resource management (HRM) across international boundaries and  various  cultures is the MNE. Not only are MNEs main  cast  lists in international business, but they are also crucial cast lists in the  practice  of human resourc e management (HRM) internationally. The  procedure  of human resource management (HRM) in other countries is often culturally  specific, and human resource (HR) professionals need to  take  this into consideration. The main focus of an organisations human resources  programme  right through all of its  progression  and actions should be the  optimum  support  and  reinforcement  of the organisations strategy, in attempts and actions involving both  strategy  formulation and implementation. The staffing approach has a significant impact on strategic management, including  selection  of  key  MNE managers who have a significant  influence  in formulating the MNEs strategy, and the  selection  of managers throughout the MNE. Staffing should  shape  and strengthen the  direction  and  main  concern of the MNE, such as being  steady  with its ethnocentric, polycentric, region-centric, and geocentric staffing approaches in operating  international  organisations. An organisations approach to international  endowment  (staffing) must support the  way  of doing business. Discussion on the orientations toward staffing in MNE can be traced to the work of Howard Perlmutter, and his work represents the seminal theoretical contribution to the field. He introduced a  classification  of multinationals which differentiated between firms based on their attitude toward geographic sourcing of their management teams. According to Perlmutter, 1969. There are three  primary  ways in which international organisations can be staffed; a fourth staffing  approach  was  added later. The connotations for the staffing functions, mainly for  superior  levels of management, held by regi on-centric, geocentric, ethnocentric and polycentric strategic approaches can be discussed. 2. International Staffing Approaches. Organisations involved in international  business  can be divided into four types international strategies, 1) Global, 2) Multi-domestic, 3) Transnational and 4) International strategy. When a MNE has identified their strategy they look to international markets for  potential  growth strategies. Management beliefs are a serious matter, because it decides how an  organisation  views itself in relation to it wants and needs to manage human resources in different countries. Employees who  mix  with the organisations culture and have the ability to engage in the working environment, is  extremely  useful, for an  international  human resource manager in the selection process. Nestle, for example, is hiring employees who have the necessary skills required to perform actual tasks and whose  style, beliefs, and  value  system needs to be the same as the organisation. Factors such as  local  values and international trade theories need to be taken into consi deration when managers  create  a strategy for international markets. Ethnocentric, polycentric, geocentric and region-centric is perspectives that managers themselves  present  and characterise into question. 2.1 International strategies. 2.1.1 Global Strategy. This strategy describes the most mature international strategy, with highly coordinated activities dispersed geographically around the world. (Johnson 2008, 306) This strategy offers a standardised product across a number of national markets, with little or no  adjustment  to local needs or expectations. An example of a company that make use of this strategy can be Sony, as they compete in every country, in the world, and they  regulate  their products for all markets in different countries. 2.1.2 Multi- Domestic Strategy. This strategy is similarly loosely coordinated internationally, but involves dispersion overseas of various activities, including manufacturing and sometimes product development. (Johnson 2008, 305) This strategy also aims at adapting a product for use in  national  markets responding to changes in the local  market  environment. Local adaption can make the  overall  organisational portfolio increasingly diversified. This strategy is most  desirable  in professional services, where local relationships are extremely  valuable. 2.1.3 Transnational Strategy. Transnational companies operate in many countries and delegate many decisions to local managers. (Boddy 2005, 106)This strategy strives to optimise the trade-offs associated with  productivity, local adaptation and learning. 2.1.4 International Strategy. This strategy can be based on the dissemination and adaptation of a companys knowledge and expertise to foreign markets. 2.2 Staffing approaches. Once the organisation has chosen their  international  strategy, they can now  choose  and  apply  one of four staffing approaches in order to  manage  their staff in an efficient manner in the organisation. 2.2.1 Ethnocentric approach. An ethnocentric attitude is the parochialistic  belief that the best work approaches and practices  are those of the home country. (Stephen 2007, 92) An organisation with a  parent  country strategy succeeds with this approach. The headquarter from the  parent  country makes the key decisions, most employees from the  parent  country  have significant work, and the contributory support the  parent  country, resource management procedures. The organisation procedure and culture values of the  parent  country  are  predominant  when MNE follow the ethnocentric approach. A managing and staffing approach can be developed by headquarters and is steadily applied throughout the world.  Organisations following this approach assume that the  parent  country  management system is better, and that staff members from other counterparts of the world should follow these styles. 2.2.1.1 Advantages of using Ethnocentric approach. 2.2.1.1.1 Transmitting core competencies. Employees that can be transferred to engage in an  international  strategy  are more likely to be au fait with and protect the organisations core competencies. Organisations intend to continue with the success of the organisation, when expanding and operating in international markets. They  perpetuate  the  success  by controlling and regulating the use of the organisations core competencies. 2.2.1.1.2 Countering cognitive dissonance. Organisations make use of the ethnocentric staffing  approach, to minimise the  level  of cognitive dissonance, as there are  various  challenges operating in foreign markets; to help them overcome these challenges, the organisation makes use of  reliable  and  competent  employees to engage in proven working methods, in the foreign market,  .  An ethnocentric staffing  approach  is from time almost impossible. The development and employing of local workers can be alerted by the hosting government, the preferences of foreign contributory to hire locals. The MNE is often pushed through immigration laws and workplace set of laws to do so. 2.1.1.2 Disadvantage of using ethnocentric approach. 2.1.1.2.1 De-motivate staff. The ethnocentric staffing approach can de-motivate local managers and employees. All smart and  competent  employees live near headquarters, this sends out a message, to lower-level employees that the organisation do not  appreciate  them which lead to less motivated staff. 2.1.1.2.2 Narrow interpretation of foreign operations. Expatriate managers may struggle to  oblige  styles which are acceptable in the organisations headquarters, but which may be considered inappropriate in the host country. 2.2.2 Polycentric approach. A  polycentric staffing policy uses host-country nationals to  manage  local subsidiaries. (Daniels 2009, 823) A  local  employee heads a contributory because headquarters managers are not measured to have sufficient local knowledge. Contributory continually cultivates human resource management procedures locally. A polycentric  staffing  approach  analyse the effectiveness of the organisations procedures of the host country operations as equivalent to those of the parent country. 2.2.2.1 Advantages of using Polycentric approach. 2.2.2.1.1 Maintain motivation and organisational  image. Making use of the host country managers, to engage in a multi-domestic strategy, they can assist and encourage local initiative and  commitment, and to perk up the organisations local  image. 2.2.2.1.2 Continuity of  management  improves. It abolishes language barriers, elude adjustment problems of expatriate managers and their families, and eliminate the need for costly cultural consciousness training courses. Bestow potential for profit proliferation through  elasticity  because local managers can respond  immediately  to market needs in the vicinity of pricing, production, product life cycle, and political  bustle; deficiency of problems linked with expatriate managers together with cultural short-sightedness. 2.2.2.2 Disadvantages of using Polycentric approach. 2.2.2.2.1 Gap between local and  global  operations. With a polycentric  approach, it is more  trouble  to bridge the gap (policies, communication, coordination,  control  and culture etc.) between the host  country  component and the organisations  parent  headquarters. 2.2.2.2.2 Lead to corporate lethargy. The organisation confines understanding of host nationals to their own country. Organisations headquarters may become isolated from  national  component  and lead to lack of incorporation, this, in turn, may lead to corporate lethargy. 2.2.3 Geocentric approach. A geocentric approach can be defined as A world-oriented view that focuses on using  the best approaches and people  around the globe. (Stephen 2007, 93) When organisations engage in a geocentric  approach  they seek the ideal candidate for prime positions throughout the organisation, despite their origin.  Managers that make use of this staffing approach believe that it is extremely  valuable  to have an  international  perspective, both at the organisations headquarters in the  parent  country  as well as in the foreign host country. 2.2.3.1 Advantages of using Geocentric approach. 2.2.3.1.1 Endorse  international  learning. A geocentric staffing approach enables firms pursuing a global or transnational strategy to establish the necessary framework of international management, who can  support  global learning by moving between countries and cultures without forfeiting their success. This approach also allows the organisation to make best use of its human resources and makes employees feel at ease working in any culture. 2.2.3.2 Disadvantages of using Geocentric approach. 2.2.3.2.1 Hard to develop and costly to maintain. The issues that make the geocentric staffing approach hard to develop and costly to maintain can be issues such as, economic aspects, decision-making and legal contingencies. 2.2.4 Region-centric approach. Staffing approaches may also occur in the process under an established region-centric strategic approach, where the organisations operations or  meticulous  functions can be controlled by  various  country  regions or  fundamental  economic regions. This staffing approach can be viewed as the host country has the  predominance  at a local contributory, however, with an increased activity of  superior  host country managers to  top  up operations in  various  countries of the fiscal region. In this case, it can be noted that headquarter employees  signify  at  regional  headquarters, which provide opportunities for cross-cultural dealings afar from what can be found in the polycentric staffing  approach. The previous host country managers and the international assignments also  acquire  useful  albeit less culturally remote international  career  experience; however, they are still limited to the regional level with a slight chance of upgrading to the top management strategic working  party  back at their company headquarters. 2.2.4.1 Advantages of using Region-centric approach. 2.2.4.1.1 Build Competencies. The region-centric staffing  approach  possibly will play a role, through this prolonged  level  of international assignments, to edifice competent international competencies, signifying an obliging conversion to an  ultimate  global strategy introducing a geocentric approach to staffing. 2.2.4.1.2 Encourage communication. It permits interaction flanked by managers of an organisations contributory that transmits to their organisations  local  headquarters, and managers from the organisations headquarters positioned in the regional headquarters. 2.2.4.2 Disadvantages of using Region-centric approach. 2.2.4.2.1 Career limited. When an  organisation  makes use of the region-centric staffing  approach, there is a rare occasion that they can be transferred between regions. This  strategy  shift employees within designated regions, rather than transferring internationally. The multinational enterprise can engage in one of numerous approaches to select international staff. It may even continue on an unplanned core, rather than analytically selecting one of the above four staffing approaches. The jeopardy with these approaches can be that the organisation will choose a staffing approach of making use of parent country nationals in international management positions by firm will choose for a policy of using parent-country nationals in foreign management positions by evasion, that is, simply as an routine expansion of domestic staffing approach, rather than consciously looking for best possible exploitation of management abilities. There are both advantages and disadvantages of making use of local nationals and expatriates in foreign contributories. The majority organisations make use of expatriates only for important positions as senior managers. Expatriates veer to be very costly, it makes little sense to hire expatriates for positions that can be profic iently filled by foreign nationals. Numerous countries compel that a evident percentage of the work force need to be local employees, with omissions frequently made for superior management. 3. Criteria for selecting expatriates. International human  resource  is a  decisive  factor of an  organisations  position  and is widely recognized as an influencing factor for failure and success of international business environments. International human  resource  involves developing human resource capabilities to meet the diverse needs multinationals organisations. Human resources and  competitive  international  economy are cannot be  easily  too duplicated, as factors of production and can, therefore,  provide  a competitive advantage for the organisation. When looking at international staffing criterias, operating and middle management employees can be selected locally. Upper management positions can be filled with  parent  country nationals (PNC), host country nationals (HCN) and third-country nationals (TCN). The choice of whom to hire is often influenced by the attitudes of top management teams and the overall staffing policies. The organisations strategic positions and  v ision  should take the  view  on international human resource management and how it can be integrated into the organisation. According to Dowling and Schuler, (1990) selection  is the  process of gathering information for the purpose of  evaluating and deciding who should be employed in a position. When high-technical capabilities and when new international organisations recognize that adherence to the organisations is in greater concern as to the  commitment  to host countries; expatriates are  usually  sending abroad. (Deresky 2003) Technical expertise can be seen as one of the most critical criteria when selecting employees for international assignments. Black et al, 1999, stated focusing on technical skills can result in an instant selection process, where potential candidates with cross-cultural skills and similar technical skills can be overlooked when decisions makers are trying to find suitable candidates within the organisation. For the human resource practitioner in charge, it can be challenging to determine what selection criteria to use when selecting employees for international assignments. The factors involved in the expatriation selection is, 1) Technical Ability 2) Cross-Cultural Suitability 3) Family Requirements 4) Organisation-Specific Requirements 5) Language and 6) MNE requirements. These factors are all related so they should not be revised  separately. Technical Ability, Cross-Cultural Suitability and Family Requirements, are the factors related to the individual, and the Organisation-Specific Requirements, Language and MNE requirements are  mostly  influenced by the working  situation  they need to  enter. 3.1.1 Technical Ability. For the selected  candidate  to perform a task, technical and the needed managerial skills is  necessary. The assessment of the  potential  candidate is usually based on their  previous  working experience, where statements and  evaluation  records from the candidates superiors is available. When the candidate needs to solve a problem in a new international business environment, it must be noted that  experience  is not that serious. Technical abilities are fundamentally the knowledge required to carry out a task; technical abilities is associated to the working of tools. An example of technical abilities can be that financial managers need to make use of business appraisal tools to assess and set up financial statements like the income statement and balance sheet.   3.1.2 Cross-culture suitability. According to Dowling and Welch, (2004) important Things to consider when assessing the candidates cross-culture suitability, is language skills, culture empathy, the attitude toward new cultures and the level of personnel and emotional stability. In practice, it is not easy to evaluate the cross-culture suitability of a candidate as it is  hard  precisely  know what factors should be included. The multinational enterprise (MNE) emphasizes the importance of expatriates abilities to  create  and maintain a  natural  relationship, but means to measure such abilities is not always accurate enough. Efficient relationships for example, an analysis of the hypothesis that culture with evident male dominance is more belligerent and it can be perplexed, because the mock-up of cultures is not autonomous. 3.1.3 Family Requirements. The success, of the expatriate  abroad  can be influenced by spouse/family, MNEs sometimes focuses too little on the impact that  family  may have on the expatriate.  Families find it difficult to  adjust  as they can suffer from segregation due to the subjection to  integrate  into new environments. A higher level of organisational assistance in the primitive phases of expatriation  usually  links with a higher level of  adjustment  by the spouse. 3.1.4 Organisation-Specific Requirements. The human resource practitioner needs to consider the organisations requirements before selecting a candidate, host country governments can stop the transfer of expatriates. The host government, is the ones that issue the working permits and visas to the expatriates, therefore, the  parent  country need to prove that there is no  available  host  national  country. Legislations and changes of the employee must be addressed; assignments abroad means that the expatriate must  move  to another country with  family  to  remote  or war-torn environments, where living conditions can be  challenging.  Some host countries do not issue work permits to females, this can  make  it difficult, for the spouse to  adapt. An organisation-specific requirement is implemented during the formation of an independent relationship flanked by computer resources, which includes the evaluation of the comparative precedence between default recommendation and alternative recomm endation; and using the highest precedence recommendations to set up a link among the computer resources. 3.1.5 Language skills. Language skill is a significant factor, knowledge of the host countrys  language  can be considered  essential  for many top level management positions, along with the  aptitude  to communicate successfully. Knowledge of the host countrys foreign language helps the expatriates and their families/spouse feel more contented in the new environment.  When adopting a corporate language, which is different from what the, expatriate local, language, is a  fundamental  that  language  skills need to be viewed as selection criteria. 3.1.6 Multinational enterprise (MNE) requirements. The MNEs requirements have an  enormous  impact on the decisions and which selection criteria to use. Training skills are  very  important, so that expatriates can  train  locals and emphasize negotiating skills in new international business environments. The period of the assignment is another factor influencing family/spouse. According to Harris and Brewster, (1999) they suggested that international managers has many similar characteristics as those managers working in less complex environments, but are in need of additional skills regarding to  handle  the problems that may arise internationally. Technical abilities is an important factor in the case of selecting international staff, it provides the employee with the basic understanding of what is included in their tasks and what they believe they are capable of doing. The multinational enterprise (MNE) view the experience of expatriate as very important, prolong experience is needed to have the appropriate knowledge to develop a successful organisation. Conclusion When considering the roles of expatriates it can be noted that it does not have one single intended role. By evaluating all those who are interested the multi national enterprise (MNE) will select the candidate that is more suitable and has the knowledge and experience needed to successfully engage in the international organisation. When looking at the selection criteria of expatriates, establishing basic criteria for selection can be beneficial to the international business environment. The purpose of this study was to gain a better understanding and knowledge of the selection criteria when selecting international staff for international assignments. The criteria for selecting expatriates have been discussed, and it was noted that it does not differ much from the regular employee selection process. In order for an international organisation to operate successfully in a foreign country they first need to selected an international strategy to enter the international market/environment. Once the organisation as entered the market they need to know what staffing approach is best suitable to the strategy they are following. If the organisation has determined there strategy and approach, they then have to take in consideration what criteria they are going to make use of to select the best expatriate manager for the international assignment. International organisations have to take in consideration every aspect of selecting the appropriate candidate, as the failure of expa triation can be extremely expensive.