CH-15 Managing Human Resources Globally – Human Resource Management : Book Guide

Chapter 15 - Managing Human Resources Globally Please click here to access the new HRM Failures case associated with this chapter. HRM Failures features real-life situations in which an HR conflict ended up in court. Each case includes a discussion questions and possible answers for easy use in the classroom. HRM Failures are not included in the text so that you can provide your students with additional real-life content that helps engrain chapter concepts. Chapter Summary The chapter opens with a discussion of the recent forces that have increased expansion of firms into international markets. The chapter then discusses the role of HRM in different cultural contexts and the dimensions along which cultures may differ. Categories of international employees and levels of international involvement are defined. Finally, the chapter presents issues regarding the management of international employees. Learning Objectives After studying this chapter, the student should be able to: 1. Identify the recent changes that have caused companies to expand into international markets. 2. Discuss the four factors that most strongly influence HRM in international markets. 3. List the different categories of international employees. 4. Identify the four levels of global participation and the HRM issues faced within each level. 5. Discuss the ways companies attempt to select, train, compensate, and reintegrate expatriate managers. Extended Chapter Outline Note: Key terms appear in boldface and are listed in the "Chapter Vocabulary" section. Opening Vignette: Smithfield Goes to China This vignette, which talks about the acquisition of Virginia based Smithfield Food, the world’s largest pork producer, by Chinese meat producer Shaunghui Group, illustrates how pervasive globalization is in business today. The Luter family, who founded the company, commented about how even a business that was family founded and operated is worth more in an organization with an international vision that remaining a stand-alone company. Discussion Question 1. Even for a well-known and highly admired domestic food production company, what are the implications for the fact that acquisition of a domestic company by an international firm is becoming increasingly more about access to markets and supply chain opportunities and less about “staying local/domestic”? Answer: The implications of Smithfield’s acquisition signaling the decreasing emphasis on keeping business domestic are the rationale for such, including the fact that it portends the need for companies to become increasingly sophisticated about doing business globally if they wish to not be acquired by firms that do. This means that HR professionals will need to become more knowledgeable about international issues of HRM, including expatriate selection, training and repatriation. HR professionals will need to become educated about issues of culture, language, and local customs and laws. They will need to understand how to manage a workforce that is global, and they will need to attend to issues of recruiting, selecting, training, compensating, developing, selecting and administering benefits, and appraising a global workforce. I. Introduction—Organizations now function in a global economy. U.S. businesses are entering international markets, and at the same time, foreign companies are entering the U.S. market A. International expansion can provide a competitive advantage. l. Entering different countries may provide large numbers of potential customers. 2. Building production facilities in countries with low cost labor may prove cost efficient. Maquiladora plants (foreign owned plants located in Mexico that employ Mexican laborers) provide low skilled labor below the cost in the United States. 3. The rapid increase in telecommunications and information technology enables work to be done more rapidly, efficiently, and effectively around the globe. B. A number of key factors must be addressed in order to strategically manage HR in an international context. II. Current Global Changes—Recent social and political changes have accelerated the movement towards international competition. A. European Economic Community—The EEC is a confederation of most of the European nations that agree to engage in free trade with one another, with commerce regulated by the European Commission (EC). B. North American Free Trade Agreement (NAFTA)—This agreement is between Canada, the United States, and Mexico provides an even larger free market than the EEC. Given Mexico's low wage rates, this agreement has attracted many U.S. low skill jobs. However, it has also increased the employment opportunities for Americans with higher-level skills. C. The Growth of Asia—Asia provides a growth market for many firms. Japan, China, Singapore, Hong Kong, and Malaysia are significant economic forces. China presents a tremendous potential market for goods. D. General Agreement on Tariffs and Trade (GATT)—GATT is an international framework of rules and principles for reducing trade barriers across countries around the world. It consists of over 100 member nations. III. Factors Affecting HRM in Global Markets—Companies that enter global markets must recognize that these markets are not simply mirror images of their home country. These differences may have a particularly strong impact on the HRM function (see Text Figure 15.1). A. Culture—The most important factor influencing international HRM. It is defined as the set of important assumptions (often unstated) that members of a community share. 1. Culture is important to HRM for two reasons: a. It often determines laws, education, and economic systems affecting HRM in global markets. b. It often determines the effectiveness of various HRM practices. 2. Hofstede's Cultural Dimensions—In research studies, five dimensions of culture were identified (see Table 15.2 in the text for scores of various countries and Figure 15.2). a. Individualism/collectivism is the strength of the relation between an individual and other individuals in the society, that is, the degree to which people act as individuals rather than as members of a group. Example: In the United States, people are expected to look after their own and their families' interests (individualist culture). In collectivist cultures like Japan, people are expected to put the good of the larger community first. b. Power distance describes how a culture deals with hierarchical power relationships. Example: Cultures with small power difference, such as Denmark or Isreal, attempt to limit inequalities in power. c. Uncertainty avoidance describes how cultures seek to deal with the fact that the future is not perfectly predictable, and the degree to which people in a culture prefer structured over unstructured situations. Example: Some cultures such as Greece socialize their people to seek security through technology, law, and religion. d. Masculinity femininity describes the division of roles between the sexes within a society. Example: Feminine cultures such as Sweden or Norway promote values that have traditionally been regarded as feminine, such as valuing relationships, helping, nurturing, and caring for the environment. e. Long term/short term orientation is the tendency of a culture to focus on long term benefit or short term outcomes. Example: Many Far Eastern countries with very long histories have a long term orientation. The United States has a short term orientation, in which planning looks at the near future— in business, for instance, on a quarterly or yearly basis. 3. Implications of Culture for HRM—Cultural characteristics influence the ways managers behave in relation to subordinates as well as the perceptions of the appropriateness of various HRM practices. a. Cultures differ strongly on such things as how subordinates expect leaders to lead, how decisions are handled, and what motivates people. b. Cultures strongly influence the appropriateness of HRM practices. c. Cultures may influence compensation systems. d. Cultural differences can affect the communication and coordination processes in organizations. Integrity in Action: If It Quacks like an Ethical Leader. . . This case speaks about how Dan Amos, CEO of Aflac Insurance, and his company model integrity. Amos has been cited as “Best CEOs in America” by Institutional Investor magazine five times and Aflac named one of the “100 Best Companies to Work For” for 14 straight years. All of this while concurrently growing to a $9 billion company from a $2.7 billion company over 10 short years (nearly quadrupling in size). Amos claims he is guided by his business version of the “Golden Rule” – that is, “Give your employees everything they need to succeed, and they will give everything they can to help the business succeed.” He also encourages risk taking concurrent with offering job security. He also walks the walk when it comes to integrity giving up his $13 million golden parachute and $2.8 million bonus in 2008 during the financial crisis. Discussion Question 1. How does Dan Amos’ attitude about pay fit with the culture that exists in the U.S.? Answer: Student responses can vary, but Amos has illustrated a bigger concern for the company and for living up to the values he places as expectations on his employees than he does about lining his pockets. Also, by giving up the golden parachute benefit, Amos is showing he is willing to take the chance on being able to perform rather than relying on a contractual protection for his personal financial success. Dan Amos' attitude about pay, particularly his decision to forgo significant compensation during the financial crisis, reflects a commitment to ethical leadership and a sense of responsibility that contrasts with some prevailing trends in U.S. corporate culture. In the broader U.S. corporate environment, executive compensation has often been a contentious issue, with many CEOs receiving substantial salaries, bonuses, and benefits packages, sometimes even when company performance or economic conditions do not justify such payouts. This has led to widespread criticism of income inequality and concerns about the alignment of executive pay with the long-term interests of companies, employees, and shareholders. Amos' approach, however, stands out as an example of values-based leadership, where the well-being of employees and the long-term success of the company are prioritized over personal financial gain. His actions, such as giving up his golden parachute and bonus, signal a commitment to shared sacrifice during tough times, which can foster trust, loyalty, and morale among employees. This approach aligns with the "Golden Rule" he follows: treating employees well and fairly, which in turn motivates them to contribute to the company's success. This type of leadership may be less common in the broader U.S. corporate culture, where short-term financial performance and shareholder returns often take precedence. However, Amos' success demonstrates that a focus on integrity, fairness, and long-term thinking can lead to significant business growth and sustained success, challenging the notion that high executive pay is the primary driver of business performance. In summary, while Amos' attitude about pay may not be the norm in U.S. corporate culture, it exemplifies a leadership style that values ethical principles and employee well-being, contributing to a strong, positive organizational culture and long-term business success. Evidence-Based HR National culture is important, but there are significant differences in cultures within nations as well. Recent research has reexamined Hofstede’s work, and the results of that work suggest that while one cannot ignore national culture, one must not think that certain HR practices may not be effective simply based on a regard for national culture. People tend to be drawn to organizations whose cultures match their individual, as opposed to national, value systems. Exercise Break the class into sub-groups, and have each sub-group select a country from Geert Hofstede’s website, which is http://www.geert-hofstede.com. Have each sub-group study the characteristics and culture of their chosen country, and prepare and present a report on that culture. Facilitate as a class a large group discussion on how class members view their own individual assessments of themselves along the Hofstede dimensions of culture (uncertainty avoidance, power distance, masculinity/femininity, and collectivism/individualism). B. Education/Human Capital—A company's potential for finding and maintaining a qualified work force is a critical element of any decision to expand internationally. 1. A country's human capital is determined by a number of variables, primarily, educational opportunity. 2. Countries with low human capital attract facilities that require low skills and low wage levels. Example: U.S. companies have located low skill, low wage jobs in Mexican maquiladoras. 3. Countries with high human capital are attractive sites for direct foreign investment that creates high skill jobs. Example: Ireland's economy does not provide enough jobs for its highly educated labor force. U.S. companies are locating there to take advantage of high skills. The Met Life Insurance Company set up a facility for Irish workers to analyze medical insurance claims. Competing Through Technology: Brazil Becomes the Social Media Capital This case discusses the rising popularity of social media such as Facebook, YouTube and Twitter in Brazil. Facebook has 65 million users registered in Brazil – 2nd only to the U.S. – and also is the second biggest market for unique visitors for YouTube. These statistics, coupled with the fact that while average time spent on Facebook recently dropped by 2%, use in Brazil grew 208% making Brazil an important social media market. This has caught the attention of many companies who are working to increase their capacity in the country as well. Discussion Question 1. How has social media impacted education/human capital and economies around the globe? Answer: Of course, student responses may vary. Suggestions for the direction of the discussion however could be pointed towards issues like availability of information about employment opportunities, increase information about potential new-hires, and the options of providing training to employees in order to develop their human capital and overall skill-set available to the company. Social media has profoundly impacted education, human capital development, and economies around the globe in several ways: 1. Education: • Access to Information: Social media platforms provide unprecedented access to educational resources, online courses, tutorials, and academic communities. This democratization of information allows individuals from diverse backgrounds to learn new skills and knowledge, often for free or at a low cost. • Collaborative Learning: Social media facilitates collaborative learning by enabling students and educators to interact, share ideas, and work on projects together, regardless of geographical boundaries. Platforms like LinkedIn Learning, YouTube, and various MOOCs (Massive Open Online Courses) have expanded educational opportunities. • Professional Development: Teachers and educators use social media to connect with peers, share teaching strategies, and stay updated on the latest educational trends. This fosters continuous professional development and improves teaching methods globally. • Student Engagement: Social media can enhance student engagement by incorporating familiar platforms into the learning process. Tools like Twitter, Facebook groups, and Instagram can be used for educational discussions, assignments, and community building within the classroom. 2. Human Capital: • Skill Development: Social media platforms offer a wealth of resources for skill development, from coding and design tutorials to language learning apps. This has led to the rapid upskilling and reskilling of individuals, making them more competitive in the job market. • Networking and Employment: LinkedIn and similar platforms have revolutionized job searching and networking. Professionals can connect with industry leaders, join relevant groups, and find job opportunities worldwide. This has expanded career prospects and allowed individuals to leverage their social capital for career advancement. • Personal Branding: Social media enables individuals to build personal brands, showcasing their skills, achievements, and professional portfolios to a global audience. This can lead to job offers, freelance opportunities, and collaborations that would have been difficult to secure otherwise. 3. Economies: • Entrepreneurship and E-commerce: Social media has lowered the barriers to entry for entrepreneurs, allowing them to market and sell products or services online. Platforms like Instagram, Facebook, and TikTok are used for advertising, customer engagement, and direct sales, fueling the growth of small businesses and startups. • Globalization of Markets: Social media connects businesses to a global customer base, enabling even small companies to compete on an international scale. This has contributed to the globalization of markets and has allowed businesses to scale rapidly. • Economic Growth: By facilitating skill development, job creation, and entrepreneurship, social media contributes to economic growth. Countries with high social media penetration often see increased innovation, productivity, and economic dynamism. • Consumer Behavior: Social media influences consumer behavior through targeted advertising, influencer marketing, and social proof. This has reshaped industries, particularly retail, hospitality, and entertainment, where online presence and social media engagement are crucial for success. Challenges and Considerations: • Digital Divide: While social media has many benefits, the digital divide remains a significant issue. Individuals in regions with limited internet access or digital literacy may not fully benefit from these advancements, exacerbating existing inequalities. • Misinformation and Distraction: The spread of misinformation on social media can undermine educational efforts and lead to poor decision-making. Additionally, social media can be a source of distraction, potentially affecting productivity and learning outcomes. • Privacy and Security: The widespread use of social media raises concerns about data privacy and security. Educational institutions and businesses must navigate these issues carefully to protect users' information. Overall, social media has transformed education, human capital, and economies globally by providing new opportunities for learning, skill development, and economic participation. However, it also presents challenges that need to be addressed to ensure equitable and secure access to its benefits. Competing Through Globalization: Apple Returns to the U.S. This case discusses the recent changes in focus on production locations by Apple. Throughout the 1990’s, Apple began shifting production to Asia due to the lure of lower wages, resulting in plant closures in the U.S., but continually increasing wages in China has other supply chain issues in the region have caused Apple to begin to revisit their decisions. Recent announcements by Apple to invest upwards of $100 million in production facilities in the U.S. may signal better times ahead for U.S. based manufacturing, but other issues such as shortages of specific skills among US workers (such as tool and die makers) continues to be an impediment. Discussion Question 1. How has the economic system and education/human capital impacted Apple’s decision to restart some manufacturing in the U.S.? Answer: According to the evidence outlined in the vignette, although world economic conditions are beginning to shift interest back to the U.S. for investments in production, other issues such as a lack of skilled trades-workers may continue to be problematic. C. Political/Legal System—This system often dictates the requirements of certain HRM practices, such as training, compensation, hiring, firing, and layoffs. The legal system is an outgrowth of the culture, reflecting societal norms. 1. The United States has led the world in eliminating discrimina¬tion in the workplace. Additionally, federal regulations control the process of labor management negotiations. 2. Germany has provided employees with a legal right to "codetermination" in the workplace. At the plant level, work councils influence HRM policies on issues such as working hours, pay methods, and hiring. 3. The EEC's Community Charter of December 9, 1989, provides for the fundamental social rights of workers: freedom of movement, freedom to choose one's occupation and be fairly compensated, and so forth. D. Economic System—A country's culture is integrally tied to its economic system, which provides many of the incentives for developing its human capital. 1. Under socialist economies, there is little economic incentive to develop human capital, but ample opportunity because education is free. 2. In capitalist systems, the opposite situation exists, with higher tuitions at state universities but with economic incentives through individual salary differences (see Figure 15.2). IV. Managing Employees in a Global Context A. Types of International Employees 1. A parent country is the country in which the company's corporate headquarters is located. 2. A host country is the country in which the parent country organization seeks to locate (or has already located) a facility. 3. A third country is a country other than the host country or parent country. 4. An expatriate is an employee sent by a company in one country to manage operations in a different country. 5. Parent country nationals (PCNs) are employees who were born and live in a parent country. Host country nationals (HCNs) are those employees who were born and raised in the host country, as opposed to the parent country. 6. Third country nationals (TCNs) are employees born in a country other than the parent country or host country but who work in the host country. B. Levels of Global Participation (see text Figure 15.3). 1. Domestic - Most companies begin by operating within a domestic marketplace. These companies face an environment with very similar cultural, human capital, political/legal systems, and economic systems, although some variation might be observed across states and geographic areas. Competing Through Sustainability: The Potential for Electric Cars This vignette explains the dilemma faced by electric car producer Fisker Automotive. Although clean vehicle development has been high on the list for the Obama administration, problems with development, production, and supply chain issues continue to hinder full-scale success of projects like electric cars. Discussion Question 1. How could expanding globally impact Fisker’s ability to succeed? Answer: As explained in the vignette, Fisker’s primary issue at this time is sourcing batteries for their vehicles and sticker price of their car. Global expansion may open up opportunities to decrease production costs, increase R&D capabilities, and provide Fisker with other potential suppliers for critical components, such as betteries! 2. International - International participation occurs as companies seek new markets for their products through exporting and ultimately by building production facilities in other countries. 3. Multinational - Whereas international companies build one or a few facilities in another country, they become multinational when they build facilities in a number of different countries, attempting to capitalize on lower production and distribution costs in different locations. HRM problems are complex, given the many different cultures and sets of legal and economic systems. 4. Global – Global organizations compete on state of the art, top quality products and services with the lowest possible costs. Global companies increasingly emphasize flexibility and mass customization of products to meet the needs of particular clients. HRM systems must encourage flexible production and must be responsive to the many systems that they operate. a. Transnational scope refers to the fact that HR decisions must be made from a global rather than a national or regional perspec¬tive. b. Transnational representation reflects the multinational composition of a company's managers. c. Transnational process refers to the extent to which the company's planning and decision making processes include representatives and ideas from a variety of cultures. These three characteristics are necessary for cultural synergy. C. Managing Expatriates in Global Markets—As companies interna¬tionalize, the use of expatriates becomes more frequent. Issues of selection, training, compensating, and reacculturation of expatriates are discussed in this section. 1. Selection of Expatriate Managers – Successful expatriates have the following skills or abilities: a. Technical competence b. Ability to adjust to, and be sensitive to, a new culture (see Table 15.3 in the text for selection criteria). Three dimensions include: - the self dimension - the relationship dimension - the perception dimension c. Use of women in expatriate assignments has proven beneficial for companies; recent evidence disproves the notion that women are not successful managers in foreign countries. 2. Training and Development of Expatriates—Expatriates must understand their own culture and how it is perceived by others. Particular aspects of culture in the new work environment must be learned (see text Table 15.4 for international body language). Expatriates must learn to communicate accurately in the new culture/language (see Table 15.5 in the text for tips on communicating across language barriers). 3. Compensation of Expatriates—Careful balancing must occur to assure that expatriates are rewarded in an equitable manner. Allowances for housing, taxes, moving costs, and children's schooling are part of the package. A typical balance sheet is shown in Figure 15.4. Table 15.6 provides an idea of how much add-ons can cost for an expatriate. Total pay packages have four components: a. Base Salary—Annual salary, unadjusted. b. Tax Equalization allowances—Payments for higher tax rates of other countries. c. Benefits—Continuation of, or substitute for, home benefits package. d. Allowances—Cost of living, housing, education, and relo¬cation payments to make the assignment more attractive (Table 15.7 shows the differences in the cost of living among larger international cities and Figure 15.6 shows a typical summary sheet for an expatriate manager’s compensation package). 4. Reacculturation of Expatriates—Reentry to the home organization may result in culture shock. Transition process necessitates communication of corporate changes while the expatriate is overseas and validation of the importance of the expatriate's international work (Table 15.7). A Look Back Having discussed the various differences in cultures, economic systems, human capital and political-legal systems, one would not expect Smithfield Foods takeover by Shuanghui to be an easy transition. A company built in an individualistic culture with free market capitalism and the rule of law may find difficulties in being managed by leaders from a collectivist culture functioning in a relatively controlled economy and a political system characterized as not the rule of law, but the law of rulers. Certainly the merging of these two food giants makes sense from a supply chain standpoint, but executing the merger strategy may not be easy. Questions 1. What do you think will be the biggest areas of conflict between the U.S. and Chinese operations? Answer: Student answers may vary, but one definitive area of potential conflict will revolve around food safety/quality. Some people perceive Chinese production to be of lower quality and to have sub-standard safety standards. That is one thing if you are buying a cell phone case or a set of headphones, but will likely be a very different story when it comes to the food we consume. Biggest Areas of Conflict between U.S. and Chinese Operations: The acquisition of Smithfield Foods by a Chinese company is likely to bring several areas of conflict due to differences in business practices, culture, and regulatory environments: • Cultural Differences: The most significant area of conflict could arise from cultural differences between U.S. and Chinese management styles. Chinese companies often emphasize hierarchical structures, respect for authority, and collective decision-making, whereas U.S. companies may prioritize individualism, innovation, and a more collaborative approach. These differences could lead to misunderstandings and friction in daily operations. • Regulatory Compliance: U.S. operations must comply with American labor laws, environmental regulations, and food safety standards, which may differ significantly from Chinese practices. The challenge will be aligning the operations to meet both U.S. and Chinese regulatory requirements without compromising standards or incurring additional costs. • Communication Barriers: Language differences and communication styles can create barriers in effective collaboration. Miscommunication or misunderstandings can lead to conflicts in executing strategies, meeting targets, or addressing operational issues. • Workplace Norms and Practices: Differences in workplace norms, such as expectations for working hours, holiday observances, and employee benefits, could also create tension. For instance, if the Chinese parent company tries to impose practices common in China, such as longer working hours or fewer holidays, it could lead to dissatisfaction among U.S. employees. • Strategic Priorities: The strategic goals of the Chinese parent company may differ from those of Smithfield's previous management. For example, the Chinese company might focus on expanding into the Chinese market or sourcing more products for export to China, which could conflict with existing priorities or lead to shifts in production focus that might not align with U.S. market demands. 2. Do you think the people at Smithfield will be managed differently once they are employed by a Chinese company even though they are still working in the United States? Why or why not? Answer: Again student responses will likely vary, but it is important to bring up the discussion about differences in the views of the employment relationship among managers from different cultures. Yes, it is likely that there will be some changes in management practices, though the extent will depend on how much autonomy the Chinese parent company allows the U.S. operations to retain: • Management Practices: The Chinese company might introduce new management practices, such as different performance metrics, reporting structures, or decision-making processes. These changes could reflect the parent company’s emphasis on efficiency, cost control, or a particular strategic direction that aligns with its global objectives. • Cultural Integration: Even though Smithfield employees are still working in the United States, they may experience a shift in company culture as the Chinese ownership seeks to integrate its values and business philosophy into the U.S. operations. This could include changes in leadership style, communication patterns, or expectations regarding loyalty and work ethic. • Operational Changes: The Chinese company might implement changes in operations to align Smithfield's practices with its global supply chain or to optimize production for the Chinese market. This could lead to different approaches to quality control, inventory management, or supplier relationships. • Job Security and Career Advancement: Employees might experience changes in job security or opportunities for career advancement. For instance, the new ownership might prioritize different skill sets or competencies, leading to shifts in hiring, promotion, and training practices. However, it's also possible that Smithfield’s management will remain relatively stable if the Chinese parent company adopts a hands-off approach, allowing the U.S. operations to continue functioning as they have been. In this case, the differences might be minimal, limited to strategic adjustments rather than day-to-day management changes. The extent of change will depend on the degree of integration the Chinese company seeks to achieve and how well they manage cross-cultural differences. Chapter Vocabulary These terms are defined in "The Extended Chapter Outline" section. Individualism/Collectivism Power Distance Uncertainty Avoidance Masculinity Femininity Dimension Long Term/Short Term Orientation Parent Country Host Country Third Country Expatriate Parent Country Nationals (PCN) Host Country Nationals (HCN) Third Country Nationals (TCN) Transnational Scope Transnational Representation Transnational Process Discussion Questions 1. What current trends and/or events (besides those mentioned at the outset of the chapter) are responsible for the increased internationalization of the marketplace? Answer: As communication and transportation have become widely available and less expensive, the ability to take advantage of a larger, worldwide market has increased. Companies that gain economies of scale have expanded when their domestic markets have become saturated or when technology improvements in the domestic market reduce demand for current products. In this case, new markets that have not had access to the product in question may provide a continuing market. In addition to these basic issues, students may mention various events, such as the opening of China to trade, trade agreements with Japan, and the availability or scarcity of natural resources in specific countries (the Persian Gulf and oil, for example). 2. According to Hofstede (Table 15.2 in the text), the United States is low on power distance, high on individuality, high on masculinity, low on uncertainty avoidance, and low on long term orientation. Russia, on the other hand, is high on power distance, moderate on individuality, low on masculinity, high on uncertainty avoidance, and low on long-¬term orientation. Many American managers are transplanting their own HRM practices into Russia while companies seek to develop operations there. How acceptable/effective do you think the following practices will be and why? (a) extensive assessments of individual abilities for selection, (b) individually based appraisal systems, (c) suggestion systems, (d) self managing work teams. Answer: Students may comment on any of the related cultural dimensions relative to these HRM practices. Examples are given below: (a) Selection Assessments: Many Russians may find the emphasis on individual skills and selection a change from government provided jobs, but may not reject the practice. Historically, there has only been a moderate emphasis on individuality, but with the high level of power distance, a practice such as this may be found acceptable. Uncertainty avoidance, however, may create some problems as individuals must take a risk in applying for a job that they may not be offered. (b) Individually Based Appraisal Systems: Again, once the newness of this practice wears off, it may gain acceptance. With a moderate level of emphasis on individuality, individual performance appraisal will most likely work, if and only if performance criteria are carefully spelled out in advance. (c) and (d) Suggestion systems and self managed work teams may have more difficulty in achieving effectiveness. The high power distance more than likely implies the acceptance of a hierarchical system in which limited participation (if any) is expected. Additionally, the high uncertainty avoidance will limit the amount of unstructured decision making that employees may find acceptable. Given Hofstede's dimensions: (a) Extensive Assessments: Likely less effective in Russia, as high power distance may favor decisions made by authority rather than individual assessments. (b) Individually-Based Appraisals: Might face resistance due to Russia’s higher power distance and preference for collective approaches over individual competition. (c) Suggestion Systems: May be less effective; high uncertainty avoidance in Russia suggests less openness to new ideas without clear structure. (d) Self-Managing Teams: Likely challenging; high power distance may conflict with the autonomy required for effective self-management. 3. The chapter notes that political/legal and economic systems can reflect a country's culture. The former Eastern Bloc countries seem to be changing their political/legal and economic systems. Is this change brought on by their cultures, or will culture have an impact on the ability to change these systems? Why? Answer: Students may express many different opinions on this question. However, it seems fairly clear that economic underdevelopment and a scarcity of products and employment opportunities are fueling the demand/need for change. Additionally, some of these countries were forcibly changed to communist/socialist regimes and are now able to make their own choices regarding economic and political systems. Certainly, the attributes of their cultures will have a strong impact on peoples' readiness for change and on their desire for changes, particularly regarding basic issues such as the adoption of a capitalistic system. The changes in political/legal and economic systems in former Eastern Bloc countries are influenced by both cultural factors and the need for adaptation to global standards. Cultural norms can impact the speed and nature of these changes, as societies with strong historical or traditional values may resist rapid shifts. However, the need to align with global market practices and economic demands often drives reform, which may, in turn, gradually alter cultural attitudes and practices. 4. Think of the different levels of global participation. What companies that you are familiar with exhibit the different levels of participation? Answer: Again, students should have a large number of possible examples here. Nike makes athletic shoes in China and distributes on a worldwide basis. Disney theme parks are now located in Japan and France as well as in the United States. Numerous small countries export through intermediaries who make the needed arrangements for them in new markets. IBM, Xerox, Ford Motor Company, and GM are all multinational firms. • International: McDonald's operates globally with localized menus to adapt to different cultural tastes. • Multinational: Unilever tailors its products and marketing strategies to local markets while maintaining a global brand presence. • Global: Apple manages a consistent global brand image and product line but adapts its marketing strategies to local cultures. • Transnational: Coca-Cola balances global branding with local adaptations in marketing and distribution to address regional preferences and regulations. 5. Think of a time when you had to function in another culture (e.g., on vacation, at your job, etc.). What were the major obstacles you faced, and how did you deal with them? Was this a stressful experience? Why? How can companies help expatriate employees deal with the stress? Answer: Various answers students might suggest include problems of not being understood in a foreign language, inability to get needed information, and a feeling of being isolated by other cultural aspects such as dress or attitudes. Dealing with these issues takes some creativity. People may buy clothes to "look like a native and fit in," and finding someone who speaks English to help with directions or other needs may help. Purchasing a foreign language phrase book may be all one needs in order to enable needed communication. In general, these difficulties are stressful, depending on the individual's attitudes. If a person is adventurous, solving these problems can be fun. However, for many people, these kinds of issues may be seen as obstacles to achieving what they want or need and are therefore quite stressful. Companies can help expatriates deal with this type of stress by providing intensive language and culture training prior to making the assignment. Also, having a contact person in the new culture who has already made a successful adjustment will be most helpful. When working or traveling in another culture, major obstacles often include language barriers, differing social norms, and unfamiliar business practices. Overcoming these involves learning about the local culture, seeking guidance from locals, and being adaptable. This can be stressful due to the uncertainty and need for constant adjustment. Companies can support expatriate employees by providing cultural training, language classes, and regular check-ins to help them navigate these challenges and reduce stress. 6. What types of skills do you need to be able to manage in today's global marketplace? Where do you expect to get those skills? What classes/experiences will you need? Answer: Any new experiences that build on our abilities to adjust and be flexible help in preparation for such management positions. Learning about various cultural differences and learning to see them as different, not bad or good, improve on our flexibility as well. Foreign language training can be obtained in high school and college, as well as in intensive private programs. An understanding of current events and historical events in various parts of the world helps us to see the reasons behind many of the cultural differences we may see. This promotes our ability to understand others and therefore work with them in more effective ways. Self-Assessment Exercise Refer to the self-assessment exercise in the text. Exercising Strategy: Terrorism and Global Human Resource Management This case discusses the new issues companies face when expanding globally such as terrorism. The issue here is not only the potential for hostile situations for expatriate workers, but also the divergent perceptions across the globe about terrorism and the U.S.’s recent military responses to acts of terrorism. Questions 1. How can a global company manage the inevitable conflicts that will arise among individuals from different religious, racial, ethnic, and national groups who must work together within firms? How can these conflicts be overcome to create a productive work environment? Answer: Answers will vary, but may include that global companies need HRM systems that encourage flexible production. When conflicts arise, the company needs to find out what the problem was about and have mediation for the employees to give them a chance to explain their own sides and come to a conclusion without the conflict. The companies also need to have an on-going cultural training to make all employees aware of, and knowledge of, the different cultures, religions, etc that will be interacting throughout the company. With understanding of these cultural differences, conflicts should be limited. To manage conflicts among diverse groups, global companies should implement comprehensive diversity and inclusion policies, offer intercultural training, and establish clear communication channels. Encouraging respect and understanding through cultural competency programs can help bridge gaps. Promoting a culture of inclusion and sensitivity, along with providing conflict resolution resources, will create a more cohesive and productive work environment. Regular team-building activities and an emphasis on shared goals can also mitigate misunderstandings and foster collaboration. 2. What will firms have to do differently in managing expatriates, particularly U.S. or British citizens who are asked to take assignments in predominatly Muslims countries? Answer: Students will have different responses, but may include that firms could offer paid housing in gated communities with 24-hour security, more frequent trips home, more training on the culture and what to do during a terrorist act, and maybe even an increase in pay. Firms will need to adapt their expatriate management practices to respect cultural and religious norms in predominantly Muslim countries. This includes providing cultural sensitivity training, understanding local customs and practices, and ensuring that expatriates are aware of and comply with local laws and regulations. Companies should offer support systems such as local mentors, access to community resources, and flexible accommodations for religious practices. Additionally, facilitating open communication and addressing any concerns about safety and security will help expatriates adjust and perform effectively in their new environments. Managing People The Toyota Way to No. 1 This vignette is an overview of responses to a discussion with Toyota’s top U.S. executive concerning how Toyota recently surpassed General Motors in worldwide sales globally. Questions 1. As you look at how Toyota has surpassed GM and the other U.S. automakers, in what ways do you think its workforce has provided a competitive advantage? Answer: Student answers will vary. The Toyota Way is about constant improvement. Toyota pulls people from every culture to work for them. The culture of the organization plays a large role in their successful workforce and one of the key elements is Kaizen: continuous improvement. Also, ingrained in their culture is teamwork. Toyota's workforce has provided a competitive advantage in several ways: • Lean Manufacturing and Continuous Improvement: Toyota’s commitment to lean manufacturing (Toyota Production System) and continuous improvement (Kaizen) involves empowering employees to identify inefficiencies and suggest improvements. This results in higher productivity, reduced waste, and enhanced quality. • Employee Engagement and Training: Toyota invests heavily in training and development, ensuring that employees are skilled, motivated, and aligned with the company’s goals. This investment leads to high levels of employee engagement and innovation. • Teamwork and Collaboration: The company fosters a collaborative work environment where team-based problem-solving and decision-making are encouraged. This approach enhances operational efficiency and innovation. • Strong Corporate Culture: Toyota’s emphasis on respect for people and its strong corporate culture contribute to high employee satisfaction and retention, which translates into a stable and experienced workforce. 2. What do you think are the major HR issues that Toyota will face in the future? Answer: Student answers may vary. Toyota has always been the chaser, not being chased. Will they stay number one. Can Toyota maintain their number one status? Will their designs compete with American companies? • Global Workforce Integration: As Toyota continues to expand globally, managing a diverse workforce and integrating various cultural practices and expectations will be a challenge. • Talent Management and Development: Keeping up with the rapid pace of technological advancements and ensuring that employees have the skills required for future roles will be crucial. Toyota will need to invest in ongoing training and development. • Workforce Retention and Engagement: Maintaining high levels of employee engagement and satisfaction amidst global competition and evolving workplace expectations will be a key issue. Toyota will need to adapt its HR practices to retain top talent. • Labor Relations and Workforce Flexibility: Balancing labor relations with the need for flexibility in a rapidly changing market environment will be important. Toyota will need to navigate varying labor laws and practices in different countries. • Technological Disruption: The rise of automation and artificial intelligence will require Toyota to address the impact on employment, including retraining employees for new roles and managing changes in job structures. HR in Small Business: Is Translating a Global Business? This vignette discusses the recent increase in attention to translation services that runs concurrent with increases in global expansion. Questions 1. What kinds of challenges would be involved in recruiting and selecting people to translate documents from Spanish, Polish, and French into English? Answer: Student answers will vary. One big issue here that should be touched on would be the skill level of potential new hires. While often the translation services may be for routine or mundane reasons, many times a company that procures the services of a translation services firm requires those services for important legal issues. Additionally, the translation services required are not always just spoken language-based but can also include things like document translation, websites, and multimedia as well. • Language Proficiency: Finding translators with high proficiency in both the source language (Spanish, Polish, French) and the target language (English) is crucial. It requires individuals who are not only fluent but also have a deep understanding of cultural nuances and idiomatic expressions. • Specialization: Translators may need expertise in specific fields such as legal, medical, or technical translation. Ensuring candidates have relevant experience or qualifications for the type of documents to be translated is a challenge. • Quality Assurance: Ensuring consistent quality and accuracy in translations requires a rigorous selection process and possibly multiple rounds of testing to assess language skills, attention to detail, and cultural understanding. • Reliability and Deadlines: Translators must be reliable and able to meet deadlines. Assessing their work ethic and ability to handle potentially tight turnaround times is important. 2. Would those challenges be easier to meet by recruiting within the United States or by looking for talent overseas? Explain. Answer: Students will likely have differing views here as well. While some students may argue from an ethnocentric point of view for more hiring of U.S. translators, others may address the issues revolving around the benefits of hiring foreign translators who may know local language and dialects better than U.S. translators. • Within the U.S.: Recruiting within the U.S. might be easier for ensuring language proficiency and meeting legal and regulatory requirements. However, it could be more costly due to higher labor costs and might offer a more limited pool of specialized translators, particularly for less common language pairs. • Overseas: Recruiting overseas can provide access to a larger pool of native speakers and specialized translators at potentially lower costs. However, it may involve challenges such as different time zones, legal complexities related to international hiring, and potential difficulties in assessing qualifications remotely. 3. Suppose a small translation business asked you to advise the company on how to overcome cultural barriers among a staff drawn from three countries. Suggest a few ways the company could use training and performance management to achieve this goal. Answer: Again, students will discuss this question in different ways depending on their views of ethnocentrism, nationalism, and their level of acceptance of diverse workers. Overcoming Cultural Barriers Among Staff from Three Countries: • Cultural Sensitivity Training: Implement training programs focused on cultural awareness and sensitivity to help employees understand and respect each other’s backgrounds and communication styles. This can enhance collaboration and reduce misunderstandings. • Clear Communication Protocols: Establish clear guidelines for communication, including how to address conflicts and provide feedback. Encouraging open and respectful dialogue can help bridge cultural gaps. • Team Building Activities: Organize team-building exercises that promote interaction and cooperation among staff members from different countries. Activities that focus on collaboration can help build relationships and trust. • Performance Management: Implement a performance management system that takes into account cultural differences. Ensure that feedback and evaluation criteria are clear, fair, and adapted to the cultural context of each employee. • Mentoring and Support Systems: Pair employees from different cultural backgrounds in mentoring relationships or cross-cultural teams to facilitate knowledge sharing and mutual understanding. Providing support systems like counseling or conflict resolution resources can also help manage cultural issues effectively. Additional Activities Twitter Focus As barriers to global business continue to fall, more people are encountering language differences among the companies they work with, sell to, or buy from on a daily basis. One field that continues to grow globally is the business of providing translations. The case discusses three different companies that have capitalized on translating information into various languages and how this global approach has become important in the business environment. Discussion Question 1. Do you think it would make sense for a company to have in-house translators, or should it be outsourced? Explain. Answer: Whether a company should have in-house translators or outsource translation services depends on several factors: In-House Translators Advantages: 1. Consistency: In-house translators provide consistent quality and style, as they are more familiar with the company's terminology and standards. 2. Availability: Immediate access to translators for urgent or ongoing projects without needing to wait for external providers. 3. Integration: Better integration with internal teams and processes, leading to more cohesive communication and understanding of company-specific needs. Disadvantages: 1. Cost: Maintaining a full-time translation team can be expensive due to salaries, benefits, and training costs. 2. Scalability: It may be challenging to scale up quickly for large projects or handle peak workloads with a limited in-house team. 3. Specialization: In-house teams may not always have the expertise required for specialized translation needs, such as legal or technical documents. Outsourcing Translation Advantages: 1. Flexibility: Access to a wide range of expertise and resources as needed, allowing for scalability and handling of varying project sizes. 2. Cost-Effectiveness: Often more cost-effective for companies that only require translation services intermittently, as it avoids the overhead costs associated with full-time employees. 3. Expertise: External agencies or freelancers may offer specialized knowledge in specific fields, providing high-quality translations for technical or industry-specific documents. Disadvantages: 1. Consistency: Potential challenges in maintaining consistency and quality, especially if multiple translators or agencies are used. 2. Availability: Possible delays in project turnaround time if external providers are not readily available or responsive. 3. Confidentiality: Risk of data security issues if sensitive information is handled by external parties. Conclusion For companies with frequent and ongoing translation needs, or those requiring consistent and highly specialized translations, having in-house translators may be beneficial. However, for companies with less frequent needs or those seeking to manage costs and access specialized expertise, outsourcing translation services can be a more practical and flexible solution. Ultimately, the choice depends on the company’s specific needs, budget, and the volume of translation work. Manager’s Hot Seat Exercise: Cultural Differences: Let’s Break a Deal-Please refer to the Asset Gallery on the OLC for Hot Seat videos and notes. I. Introduction The internationalization of companies has created the need to become more aware of cultural differences in order to successfully conduct business. This scenario depicts a situation where individuals in a business relationship have incongruent cultural norms and values. Using this vignette as a springboard to discussing how to manage cultural differences in the global economy would be valuable for students of Management, Organizational Behavior, or Human Resources. II. Learning Objectives 1. To assess students’ understanding of different cultural values and their impact on business relationships. 2. To analyze and evaluate a cross-cultural business meeting. 3. To explore aspects of self-awareness using Johari’s Window as a model. III. Scenario Description: Overview: Michael Sokolow has just been tasked with handling international clients. He needs to close a deal with Norio Tokunaka from PopWear that has already been thoroughly worked out with Sokolow’s predecessor, Roger Small. Michael is unaware of the need to establish a relationship with Norio before he discusses business. Norio becomes disenchanted and refuses to sign the deal. Profile: •Michael Sokolow is the Director of Foreign Sales at Mustang Jeans. After working at Mustang as a real estate attorney for six years, acquiring property for retail and manufacturing, Sokolow moved into sales at an executive level. •Norio Tukunaka has worked at PopWear, a large retail clothing chain for his entire career. In his current position as Vice President of Merchandising, Norio is responsible for expanding the contemporary clothing line, which includes adding new suppliers and brands for PopWear’s 36 stores throughout Japan. References: The references included in the DVD are: •National Cultural Values (PPT 8-3) •Hofstede’s Model: Definitions (PPT 8-4) •The Johari Window (PPT 8-10) •The Johari Window: Definitions (PPT 8-11) Back History: Michael Sokolow has been a sales manager at Mustang Jeans for two years. He was “recruited” or “wooed away” from a competing company. He was given “an offer you can’t refuse”, an indication of his stellar reputation. Sokolow is very much a no-nonsense straight-ahead kind of guy. He is friendly, but not big on small talk. He fits the stereotypical American businessman in many ways – informal, a little loud, all about money, very direct and forthright. Michael’s career has focused in national sales – this is his first foray into international business. Mustang Jeans is reorganizing to increase efficiency – all managers are now assuming larger territories. Tokunaka has been with PopWear for his entire career. He has been working with American companies for many years, importing a variety of products. Most of these American companies are alliances that were formed by Tokunaka’s superiors, many years before. All of Tokunaka’s accounts are pre-existing accounts as opposed to newly created accounts. This year, PopWear is expanding their contemporary clothing line, which includes adding new suppliers and new brands. Tokunaka has been working on a deal with Michael’s associate for a very long time. Michael has just taken over this region. The prior associate’s report indicates that the Tokunaka account is a done deal, with only logistics and details remaining. Sokolow and Tokunaka are having their first meeting. Scene Set-up: Norio arrives at Michael’s office after arriving from Japan. Scene Location: Michael’s office at Mustang Jeans corporate headquarters The Meeting - Summary: Michael spends less than a minute building rapport with Norio. He then begins to talk about signing the deal that had been previously worked out with Small. Norio wants to continue to talk about good Japanese food and seems insulted that Michael doesn’t like eel. Michael continues to press for the deal but Norio is very evasive. Michael then gets interrupted by his assistant notifying him of his next appointment. He apologizes to Norio about the short amount of time that he has to spend with him. Norio says he’ll just leave and come back later in the week. 3 Days Later – Norio comes back and Michael apologizes for the prior meeting. When asked to sign the deal again, Norio suggests that he’s been talking to other companies in the past few days in New York. He doesn’t commit to the deal and says he’d enjoy hosting Michael in Japan and hopes they can maintain their relationship. He leaves before signing the deal to catch a plane. Afterthoughts – Summary: Michael notes his frustration with the interaction. He acknowledges that he should have waited for Norio to start talking about the deal first. He understands that the Japanese businesspeople place a high priority on the relationship but also points out that he didn’t have a long time to devote to small talk when it was unclear whether Norio was going to sign the deal or not. Dossier: The specific artifacts included in the DVD are: 1. Emails between Small and Sokolow after the 1st meeting 2. Small’s PopWear Account Notes 3. Voice message to Norio Tokunaka from Slo-Groove (competitor of Mustang Jeans) IV. Discussion Questions: The References and related Discussion Questions may be found in PowerPoint slides 8-1 to 8-11 on the instructor’s side of the text’s Website. Learning Objective #1: To assess students’ understanding of different cultural values and their impact on business relationships. 1. How did the differences between Japan’s and the United States’ national cultural values affect the interaction between Norio and Michael? Use the information on PPT 8-3 and 8-4 to support your answer. Answer: Long-term orientation differences seemed to have a major impact. While Norio is likely to value a long-term approach to developing and conducting business, Michael’s relatively shorter-term approach was insulting to Norio. However, Norio demonstrates less achievement orientation than Michael in this particular scenario which is somewhat contradictory to Hofstede’s research. You may ask students their opinions and alternative explanations for this. 2. Hofstede’s research on national cultural values has practical implications for business people. Assume you are Michael and you have to conduct a similar meeting with another client from Russia. How will you modify your behavior to effectively conduct business with this individual? Use the information on PPT 8-3 and 8-4 to support your answer. Answer: Student’s answers will vary. Students should incorporate the fact that Russians tend to have a short-term orientation, much like Americans, in their answer.  2. What is Michael’s strategy? A. Find problem B. Pressure Norio C. Show patience Michael says “let’s get the ball rolling’ indicating that he’s trying to pressure Norio into signing the agreement because it’s important to the company and he has other business to attend to.  3. How was this [initial] meeting? A. Successful B. A failure C. A good start Seems to be a failure, they neither established a firm relationship or accomplished Michael’s goal of signing the deal. To effectively conduct a meeting with a Russian client, Michael should: 1. Respect Hierarchy: Acknowledge and show deference to the client's authority, as Russia has high power distance. 2. Build Relationships: Focus on establishing personal trust and connections before discussing business. 3. Show Competence: Present proposals with confidence, emphasizing success and achievement, aligning with Russia’s moderate masculinity. 4. Provide Structure: Offer clear, detailed information to manage uncertainty, as Russia values structured environments. 5. Highlight Immediate Benefits: Emphasize short-term gains and practical results, given Russia's lower long-term orientation. Learning Objective #2: To analyze and evaluate a cross-cultural business meeting. 1. What information should Michael have possessed before his meeting with Norio? Answer: Michael should have been better prepared by Roger as to what to expect from Norio. He needed to know the history of the interactions and the best way to proceed and to explain the transition to Michael. 2. Why is Norio acting somewhat evasive with his responses? Answer: Even though the deal was almost done, Norio was expecting to now build a relationship with Michael. He seems to be offended that his contact has been reassigned and is unsure he wants to move forward.  1. What is Norio hinting [when he mentions Roger likes sushi]? A. Misses Roger B. He’s hungry C. Dislikes deal He misses Roger and that fact he knows Roger likes sushi indicates that they had a gotten to know each other. He expects to develop a relationship with his business associates and Michael wants to get right to business. 3. What could Michael have done better in the second meeting to continue the business relationship? Answer: Learn more about the cultural differences at play. He also could have tried to contact Norio earlier and ask him to a social event (like the competition did) to begin to build the relationship. He makes the same mistake in the second meeting by again insisting on signing the deal. His apology for the first meeting is appropriate and seems to be well-received but is not enough to woo back Norio.  4. Norio is indicating [when he says he’s been meeting with other people]: A. There’s competition B. He enjoyed trip C. Deal is off He’s suggesting that there is competition but Michael doesn’t seems to grasp that and makes a flippant comment that he expected Norio would have other meetings while in New York. Michael doesn’t take this opportunity to discuss his stay in New York, but instead tries even harder to have Norio sign the deal.  5. Michael’s concern [that they are having a communication problem] is: A. Accurate B. Off target C. Insulting It was probably insulting because it insinuated that Norio’s language ability may have been contributing to the problem. They were misunderstanding each other because there was a lack of sensitivity to each other’s cultural norms. 4. Both individuals in this scenario were acting in alignment with their cultural norms and values. Who should have the primary responsibility for changing their interaction style? When is it “too much”, as Michael suggests in the Afterthoughts, and necessary to refuse to change one’s business style? Answer: This question should generate an interesting discussion among students. Some factors to consider may be who has more to gain (leverage) in the situation, whose values and norms are relatively stronger, etc. In cross-cultural interactions, both parties should share responsibility for adapting their communication styles to facilitate effective collaboration. Here’s a breakdown: 1. Primary Responsibility: While both individuals should make an effort to understand and adapt to each other's cultural norms, the primary responsibility often falls on the individual or party aiming to establish or maintain the business relationship. In this case, Michael, as the representative seeking to build the relationship, should be more proactive in adjusting his style to align with the client's cultural expectations. 2. When to Refuse to Change: It becomes “too much” when adapting one's style compromises core values or ethical standards. For instance, if changing the interaction style requires Michael to engage in practices that conflict with his company’s principles or legal standards, it would be necessary to maintain his original approach and seek a compromise. 3. Finding a Balance: Effective cross-cultural communication involves finding a balance where adaptations enhance mutual understanding without undermining fundamental personal or organizational values. It’s crucial to remain respectful and open to adjustments, but not at the expense of integrity or essential business principles. Learning Objective #3: To explore aspects of self-awareness using Johari’s Window as a model. 1. Apply the concepts of the Johari Window to this scenario (see PPT 8-10 and 8-11). How do these concepts help explain what happened in this scenario? Answer: As relationships progress, more information about oneself becomes known to others and to oneself. Disclosure and feedback flow more freely which enhances a relationship. In this scenario, Michael was not disclosing at all and did not seem to interpret subtle hints of feedback. This approach was not consistent with what Norio had come to expect from his interactions with Roger.  6. Michael should [when Norio says “I’m sure we’ll have a good relationship in the future”]: A. Be angry B. Be gracious C. Keep trying At this point, being angry or continuing to try would not result in positive outcomes. He needs to be gracious and then reevaluate his approach with Norio. Teaching Suggestions The following activities are suggested for use in the classroom in order to get students involved in the discussion of and application of material in this chapter. If several of your students are international or have international experience, then they may be able to share some perspectives on different cultures and adaptation. If your students tend to be fairly homogeneous in background, using videotape like the one suggested or inviting a speaker with international experience would be very useful. 1. A McKinsey & Co. study reported in The Wall Street Journal ("Study Sees U.S. Business Stumbling on the Road toward Globalization," March 22, 1993, Section B. p. 7) identifies a number of traits of the most internationally successful companies, after ranking the 43 surveyed concerns by their relative international growth in sales and profit within a specific industry. Among other things, they reported that more successful corporations: Tend to centralize their international decision making in every area except new product development. Have a worldwide management development program and more nondomestic individuals in senior management posts. Require international experience for advancement into top management. Link international managers with global electronic networks, such as videoconferencing and electronic mail. Integrate their international acquisitions in a superior way. Let subsidiaries' product managers report to a country general manager. After students have had a chance to reflect upon these findings, ask them to discuss each of them, commenting upon why they believe these elements would lead to greater success for the companies. 2. A useful outside speaker for this chapter would be a manager who has spent time on an international assignment. Alternatively, a manager who is an expatriate working in the United States would make a very effective speaker. These individuals could discuss culture shock, the difficulty of adjusting to managing in a new culture, and what they learned from the experience—how it affected their management style. 3. The "Going International" series of videos could be used effectively with this chapter. These are available from: Copeland Griggs Production, 3454 Sacramento Street, San Francisco, California 94118 (415 921 4410). Discussion guides are available with the various volumes. Top Case 15: Imported Labor: Safe to Hire? Employers that hire contract laborers who have come to the United States on work visas need to exercise proper caution. The U.S. Attorney’s Office in Missouri recently indicted operators of several labor leasing companies for violations dating back to January 2001. Charges included labor racketeering, forced labor trafficking, and falsifying H-2B work visas. (H-2B visas allow nonimmigrant temporary nonagricultural workers to work for U.S. employers that have peak workload, seasonal, or one-time needs.) The 45-count indictment alleges that several staffing companies contracted with hotel, casino, and construction businesses nationwide to supply hundreds of laborers, many of them foreign nationals from Jamaica, the Dominican Republic, and the Philippines. In turn, the staffing companies charged the workers fees as high as $3,000 to secure jobs for them. Kansas City–based Giant Labor Solutions, one of the staffing companies under federal indictment, provided workers throughout the Midwest and beyond but failed to pay employment taxes or overtime. The indictment charges that Giant reportedly forced workers to pay their own transportation costs and to rent substandard, company-owned lodging. If the workers attempted to return to their native country, the staffing companies allegedly threatened them with huge fines. The indictment involves illegal aliens employed in several industries in 14 U.S. states. Question Suppose your organization needs to hire several laborers at entry-level pay. As an employer, how can you avoid the problem of workers with improper documentation or unethical staffing services? Possible answers •Create and implement a process by which all new hires must present documents that verify they are permitted to work in the United States. •Consult your labor attorney for advice on how to document a new hire that presents a work visa. •If you plan to use a staffing company to engage a group of workers, do some background and reference checking before contracting with the staffing company. How long has the company been in business? Can it furnish references from other clients? Follow up on the references provided. •Check with the Better Business Bureau in your community or the Office of the Attorney General in your state to confirm that no complaints have been lodged against the company. To avoid problems with workers having improper documentation or dealing with unethical staffing services, consider the following steps: 1. Verify Documentation: Ensure that all employees have proper work authorization by using the E-Verify system, which confirms the eligibility of employees to work in the U.S. Verify work visas and ensure they are valid and not fraudulent. 2. Work with Reputable Staffing Agencies: Choose staffing agencies with a solid reputation and transparent practices. Conduct thorough due diligence, including checking references and reviewing their compliance with labor laws and visa regulations. 3. Implement Compliance Checks: Regularly audit your staffing practices and contractors to ensure compliance with labor laws and visa requirements. Set up internal controls to monitor adherence to employment regulations. 4. Provide Training: Educate HR personnel and managers about legal requirements for hiring and working with contract laborers. This includes understanding visa categories, labor rights, and ethical practices. 5. Foster Transparency: Establish clear, written agreements with staffing agencies that outline responsibilities, including compliance with legal requirements and fair treatment of workers. Ensure that these agreements include clauses for handling unethical practices and legal violations. By following these steps, your organization can mitigate the risk of engaging with workers or agencies involved in unethical practices and ensure legal and ethical hiring practices. Sources: “Staffing Firm Indicted for Labor Trafficking, Immigration,” Workforce Management, May 28, 2009, http://www.workforce.com/ and U.S. Immigration and Customs Enforcement Website press release, “Eight Arrested in RICO for Visa Fraud, Human Trafficking Conspiracy,” May 27, 2009, http://www.ice.gov. Solution Manual for Human Resource Management Raymond Noe, John Hollenbeck, Barry Gerhart, Patrick Wright 9780077164126