Chapter 17 Managing Global Human Resources 1) Geert Hofstede called the extent to which less powerful members of institutions accept and expect an unequal power distribution ________. A) masculinity B) individualism C) power distance D) tolerance for ambiguity Answer: C Explanation: C) A study by Professor Geert Hofstede identified international cultural differences. For example, Hofstede says societies differ in power distance, which is the extent to which the less powerful members of institutions accept and expect an unequal distribution of power. 2) According to research, which of the following is a primary concern of Chinese managers? A) getting tasks accomplished efficiently B) keeping a distance from subordinates C) enforcing a firm's policies and regulations D) maintaining a peaceful work environment Answer: D Explanation: D) In a study of about 330 managers from Hong Kong, Mainland China, and the United States, the U.S. managers tended to be most concerned with getting the job done. Chinese managers were most concerned with maintaining a harmonious environment. Hong Kong managers fell between these extremes. 3) In which country do individuals have a high acceptance of unequal power distribution between managers and subordinates? A) Mexico B) Hong Kong C) Sweden D) United States Answer: A Explanation: A) Power distance represents the extent to which the less powerful members of institutions accept and expect an unequal distribution of power. Studies show that acceptance of such inequality is higher in some countries (such as Mexico) than in others (such as Sweden). Mexican workers expect managers to keep their distance rather than to be close, and to be formal rather than informal. 4) Of the countries listed below, in which one do production workers receive the lowest hourly wage? A) United States B) Mexico C) Germany D) Taiwan Answer: B Explanation: B) Differences in labor costs are also substantial. Hourly compensation costs for production workers range from $2.92 in Mexico, to $6.58 in Taiwan, $24.59 in the U.S., and $37.66 in Germany. 5) ________ are formal, employee-elected groups of worker representatives that meet monthly with managers to discuss topics affecting the employees. A) Bargaining units B) Work councils C) Mediation groups D) Employee boards Answer: B Explanation: B) In many European countries, work councils replace the worker–management mediations typical in U.S. firms. Work councils are formal, employee-elected groups of worker representatives that meet monthly with managers to discuss topics ranging from no-smoking policies to layoffs. 6) In many European countries, ________ replace the union-based worker-management mediations typical in the U.S. A) HR managers B) corporate attorneys C) work councils D) bargaining units Answer: C Explanation: C) In many European countries, work councils replace the worker–management mediations typical in U.S. firms. Work councils are formal, employee-elected groups of worker representatives that meet monthly with managers to discuss topics ranging from no-smoking policies to layoffs. 7) In Germany, employees have the legal right to a voice in setting company policies. This is called ________. A) codetermination B) employment at will C) internal coordination D) gainsharing Answer: A Explanation: A) Codetermination is the rule in Germany and several other countries. Codetermination means employees have the legal right to a voice in setting company policies. 8) Which of the following terms refers to governmental actions that may adversely affect the long-term value of a firm? A) cultural dynamics B) political risks C) power distance D) codetermination Answer: B Explanation: B) Political risks are the governmental actions or politically motivated events that affect the long run profitability or value of the firm. Codetermination means employees have the legal right to a voice in setting company policies. 9) In regards to ethics, which of the following is recommended for international firms? A) requiring employee-at-will contracts B) establishing codes of conducts for each country C) developing and distributing a global code of conduct D) translating the U.S. employee handbook into different languages Answer: C Explanation: C) Instead of exporting the employee handbook, firms are advised to create and distribute a global code of conduct. The employer's main concern here may be establishing global standards for adhering to U.S. laws that have cross-border impacts like discrimination, harassment, and bribery. 10) The European Union is best described as a ________. A) system of global standards, policies, and legislation B) common market for goods, services, capital, and labor C) political agreement that standardizes human resource laws D) political system for equalizing wages, benefits, and taxation Answer: B Explanation: B) The separate countries of the former European Community unified into a common market for goods, services, capital, and even labor called the European Union (EU). Tariffs for goods moving across borders from one EU country to another generally disappeared, and employees now move freely between jobs in EU countries. 11) Which of the following is a true statement regarding the European Union? A) EU employers must provide employees with written terms of their employment. B) EU employers must provide two weeks' notice when dismissing employees. C) Each EU country pays workers the same minimum hourly wage. D) Workers in the EU must live and work in their home country. Answer: A Explanation: A) The EU directive on confirmation of employment requires employers to provide employees with written terms and conditions of their employment. Each country determines the amount of notice to give employees, working hours, and wage rate. Workers may move freely between jobs in EU countries. 12) Why is recruiting, hiring, and retaining good employees difficult in China? A) economic difficulties B) unmotivated workers C) government restrictions D) training requirements Answer: C Explanation: C) China's new labor contract law adds numerous new employment protections for employees, and makes it correspondingly more expensive for employers in China to implement personnel actions such as layoffs. 13) In China, qualified job candidates are most likely to be interested in a firm that offers ________. A) signing bonuses B) performance-based pay C) job expansion opportunities D) training and development programs Answer: D Explanation: D) Employees are highly career oriented and gravitate toward employers that provide the best career advancement training and opportunities. Group harmony is important in China, so incentive pay is not advisable. 14) Daniel is a manager for Siemens China, and it is time to conduct performance appraisals. During the appraisals, it would be most effective for Daniel to ________. A) link performance with employee bonuses B) make personal comments to the employee C) focus on quantifiable, objective results D) post appraisal results for each team Answer: C Explanation: C) Employee appraisal is particularly sensitive to the cultural realities in China. The appraisal therefore needs to follow the formalities of saving face and avoiding confrontational, tension-producing situations. In general, it's best to talk in terms of objective work data (as opposed to personal comments like "you're too slow"). 15) ________ are citizens of the countries where they are working. A) Home-country nationals B) Multi-nationals C) Expatriates D) Locals Answer: D Explanation: D) Locals are citizens of the countries where they are working. Expatriates are non-citizens of the countries in which they are working. Home-country nationals are citizens of the country in which the multinational company has its headquarters. 16) Of the types of international workers that multinational companies can employ, locals are best described as ________. A) citizens of the countries where they are working B) noncitizens of the countries in which they are working C) citizens of the country in which the multinational company has its headquarters D) noncitizens of the country in which the multinational company has its headquarters Answer: A Explanation: A) Locals are citizens of the countries where they are working. Expatriates are non-citizens of the countries in which they are working. Home-country nationals are citizens of the country in which the multinational company has its headquarters. 17) Marie is an Italian executive working in a manufacturing plant in Siena, Italy that is owned by a parent company based in Singapore. Marie is a ________. A) local B) expatriate C) third-country national D) home-country national Answer: A Explanation: A) Locals are citizens of the countries where they are working. Expatriates are non-citizens of the countries in which they are working. Home-country nationals are citizens of the country in which the multinational company has its headquarters. 18) Jason is a British freelance journalist working in Paris, so he is most likely classified as a(n) ________. A) local B) expatriate C) third-country national D) home-country national Answer: B Explanation: B) Expatriates are non-citizens of the countries in which they are working. Locals are citizens of the countries where they are working. Home-country nationals are citizens of the country in which the multinational company has its headquarters. Third-country nationals are citizens of a country other than the parent or the host country. 19) ________ are noncitizens of the countries in which they are working. A) Home-country nationals B) Third-country nationals C) Expatriates D) Locals Answer: C Explanation: C) Expatriates are non-citizens of the countries in which they are working. Locals are citizens of the countries where they are working. Home-country nationals are citizens of the country in which the multinational company has its headquarters. 20) In January 2009, Wal-Mart acquired a controlling interest in Chile's leading food retailer. Since then, Wal-Mart has opened the first environmentally friendly supermarket in Chile that uses energy efficient technology throughout the store. Wal-Mart is planning to open additional stores in Chile over the next five years. Wal-Mart's top executives are considering the idea of transferring U.S. managers to Chile to oversee the construction and establishment of the new stores. Which of the following questions is LEAST relevant to the decision to fill management positions in Chile with expatriates? A) What will be the relocation and compensation costs to Wal-Mart of using expatriates? B) What level of corporate control is needed for opening the new Wal-Mart stores? C) What is the planned Wal-Mart marketing strategy for the new stores in Chile? D) What is the typical attrition rate for expatriate employees at Wal-Mart? Answer: C Explanation: C) Marketing strategy is irrelevant to a staffing decision. Costs, corporate control, and attrition rates are important aspects to consider when debating between filling management positions with locals or expatriates. 21) Which of the following terms refers to citizens of a country other than the parent or the host country? A) third-country national B) home-country national C) multi-national D) local Answer: A Explanation: A) Third-country nationals are citizens of a country other than the parent or the host country. Home-country nationals are citizens of the country in which the multinational company has its headquarters. 22) Peter is a German citizen working as a manager for Siemens in Freiberg, Germany. Siemens has facilities all over the world but its headquarters is in Germany. Peter is best categorized as a(n) ________. A) expatriate B) third-country national C) home-country national D) host-country national Answer: C Explanation: C) Home-country nationals are citizens of the country in which the multinational company has its headquarters. Third-country nationals are citizens of a country other than the parent or the host country. 23) Which of the following terms refers to citizens of the country in which the multinational company has its headquarters? A) expatriates B) third-country nationals C) home-country nationals D) locals Answer: C Explanation: C) Home-country nationals are citizens of the country in which the multinational company has its headquarters. Third-country nationals are citizens of a country other than the parent or the host country. 24) Roberta is an Italian citizen who spent a great deal of time during her childhood in England. She now works in Brazil as an HR manager for a British company. Roberta is best described as a(n) ________. A) expatriate B) third-country national C) home-country national D) host-country national Answer: B Explanation: B) Third-country nationals are citizens of a country other than the parent or the host country. Home-country nationals are citizens of the country in which the multinational company has its headquarters. 25) In January 2009, Wal-Mart acquired a controlling interest in Chile's leading food retailer. Since then, Wal-Mart has opened the first environmentally friendly supermarket in Chile that uses energy efficient technology throughout the store. Wal-Mart is planning to open additional stores in Chile over the next five years. Wal-Mart's top executives are considering the idea of transferring U.S. managers to Chile to oversee the construction and establishment of the new stores. Which of the following, if true, supports the argument that locals should be hired to fill management positions in Chile? A) Chile has a high percentage of younger workers with college degrees. B) Managers in Chile are expected to keep their distance from subordinates. C) Chile has had an increase in foreign direct investment over the last five years. D) Chileans expect managers and subordinates to interact in a highly informal manner. Answer: A Explanation: A) A high number of skilled and educated locals suggests that Wal-Mart would be able to find competent managers in Chile. The interaction between managers and subordinates does not necessarily explain why locals should be hired as managers instead of expatriates. 26) Which of the following is the primary disadvantage of using expatriates to fill foreign subsidiary management positions? A) high costs associated with relocation B) time and effort required for training C) inability to create short-term results D) security concerns Answer: A Explanation: A) The cost of posting someone abroad is very high due to travel, relocation, housing, and salary. Expatriates tend to focus on short-term instead of long-term results. Although security is an issue, it is less significant than the overall costs of using expatriates. 27) All of the following are reasons that firms rely heavily on locals to fill foreign subsidiary management positions EXCEPT ________. A) pressure from local government B) lower costs than using expatriates C) improved public relations in community D) high level of skills and technical qualifications Answer: D Explanation: D) The cost of using expatriates is a key reason that firms use locals. Local governments often pressure firms to use locals, and doing so improves the firm's PR in the community. The drawback of locals is that they likely do not have the necessary technical qualifications and require extensive training. 28) In January 2009, Wal-Mart acquired a controlling interest in Chile's leading food retailer. Since then, Wal-Mart has opened the first environmentally friendly supermarket in Chile that uses energy efficient technology throughout the store. Wal-Mart is planning to open additional stores in Chile over the next five years. Wal-Mart's top executives are considering the idea of transferring U.S. managers to Chile to oversee the construction and establishment of the new stores. Which of the following, if true, best supports the argument of using expatriates to establish the new Wal-Mart stores in Chile? A) Local candidates with the necessary managerial experience are difficult to find in Chile. B) Wal-Mart uses an online recruiting system to facilitate human resources activities. C) The State Department has issued travel alerts for Americans traveling in Chile. D) Wal-Mart wants to develop good relationships with the local community. Answer: A Explanation: A) The primary reason to use expatriates instead of locals is when qualified local candidates cannot be found. Hiring locals instead of expatriates would most likely help improve community relations. 29) Sara, who is originally from India, works in Texas for Dell as an IT manager. Dell, which has a localization policy, recently announced that management positions are available in its Bangalore, India facility. If Sara, who wants to return to India, is offered the Bangalore position, she would most likely be categorized as a ________. A) commuter employee B) independent contractor C) third-country national D) permanent transferee Answer: D Explanation: D) About 78% of employers have some form of "localization" policy. This is a policy of transferring a home-country national employee to a foreign subsidiary as a "permanent transferee." In this case, Sara is a U.S. Dell employee originally from India. If she moves back she would be a permanent transferee. 30) Which of the following terms refers to having local employees abroad do jobs that the firm's domestic employees previously did in-house? A) adapting B) offshoring C) enlarging D) diversifying Answer: B Explanation: B) Offshoring means having local employees abroad do jobs that the firm's domestic employees previously did in-house. Offshoring is an increasingly popular staffing option. 31) Call centers that service customers for firms like software and computer hardware companies are increasingly using employees in India to staff the telephones. This is an example of ________. A) outsourcing B) offshoring C) downsizing D) international staffing Answer: B Explanation: B) Offshoring means having local employees abroad do jobs that the firm's domestic employees previously did in-house. Offshoring is a popular staffing option, especially for call centers. 32) Which of the following corporate divisions plays the greatest role in offshoring? A) marketing B) accounting C) manufacturing D) human resources Answer: D Explanation: D) When developing foreign markets or opening new manufacturing facilities, marketing, sales, and production executives play the pivotal roles. Offshoring mostly involves HR management as firms seek to gain cost advantages. Firms look to their HR managers to help identify high-quality, low-cost talent abroad, and to provide the necessary information on skills, foreign wage rates, and working conditions. 33) Which of the following terms refers to the belief that home country attitudes, management style, knowledge, evaluation criteria, and managers are superior to anything the host country has to offer? A) polycentric B) ethnocentric C) geocentric D) monocentric Answer: B Explanation: B) An ethnocentric corporation believes that home-country attitudes, management style, knowledge, evaluation criteria, and managers are superior to anything the host country might have to offer. A polycentric-oriented firm would staff its foreign subsidiaries with host-country nationals, and its home office with parent-country nationals. A geocentric staffing policy seeks the best people for key jobs regardless of nationality. 34) A corporation that believes that only host country managers can ever really understand the culture and behavior of the host country market would be referred to as ________. A) polycentric B) ethnocentric C) geocentric D) monocentric Answer: A Explanation: A) A polycentric-oriented firm would staff its foreign subsidiaries with host-country nationals, and its home office with parent-country nationals. An ethnocentric corporation believes that home-country attitudes, management style, knowledge, evaluation criteria, and managers are superior to anything the host country might have to offer. A geocentric staffing policy seeks the best people for key jobs regardless of nationality. 35) Samsung tends to follow an ethnocentric staffing model. From which group will it most likely hire for upper-level management positions at its Texas facility? A) home country nationals B) host country nationals C) third country nationals D) local citizens Answer: A Explanation: A) With an ethnocentric staffing policy, Samsung fills key management jobs with home-country nationals. Managers would be citizens of South Korea where Samsung has its headquarters. 36) Which of the following is the LEAST likely reason that a firm would choose an ethnocentric staffing policy? A) lack of qualified host-country upper-management candidates B) goal of reducing misunderstandings with locals C) need to transfer core competencies effectively D) desire to maintain a unified corporate culture Answer: B Explanation: B) Reasons given for ethnocentric staffing policies include lack of qualified host-country senior management talent, a desire to maintain a unified corporate culture and tighter control, and the desire to transfer the parent firm's core competencies to a foreign subsidiary more expeditiously. A polycentric-oriented firm would likely reduce the local cultural misunderstandings that might occur with ethnocentric staffing. 37) Mercedes sent a team of executives from Germany to oversee the start-up of its U.S. operations. Which of the following terms best describes the values of Mercedes' top executives? A) polycentric B) monocentric C) ethnocentric D) geocentric Answer: C Explanation: C) With an ethnocentric staffing policy, the firm fills key management jobs with parent-country nationals. Mercedes sent German executives to manage an American facility, so its executives have ethnocentric values. 38) What value classification refers to a belief that the best manager for a specific position could be in any of the countries in which the firm operates? A) polycentric B) ethnocentric C) geocentric D) monocentric Answer: C Explanation: C) A geocentric staffing policy seeks the best people for key jobs throughout the firm, regardless of nationality. This can let the global firm use its human resources more efficiently by transferring the best person to the open job, wherever he or she may be. 39) With a geocentric staffing policy, a firm is most likely able to ________. A) provide effective training B) recruit recent college graduates C) use its human resources efficiently D) strengthen its image within a local community Answer: C Explanation: C) A geocentric staffing policy fills positions with the best people from within the organization, regardless of nationality. This can let the global firm use its human resources more efficiently by transferring the best person to the open job, wherever he or she may be. 40) In January 2009, Wal-Mart acquired a controlling interest in Chile's leading food retailer. Since then, Wal-Mart has opened the first environmentally friendly supermarket in Chile that uses energy efficient technology throughout the store. Wal-Mart is planning to open additional stores in Chile over the next five years. Wal-Mart's top executives are considering the idea of transferring U.S. managers to Chile to oversee the construction and establishment of the new stores. Which of the following, if true, supports the assertion that Wal-Mart is an ethnocentrically oriented corporation? A) Wal-Mart usually succeeds on an international level because the firm actively works to support local charities. B) Wal-Mart rarely experiences cultural misunderstandings because of its tendency to hire locals to fill management positions. C) Wal-Mart aims to maintain a unified organizational culture by filling foreign management positions with Americans. D) Adaptability screening eliminates problems associated with transferring Wal-Mart managers and their families abroad. Answer: C Explanation: C) An ethnocentric company fills key management positions with home-country nationals to maintain a unified culture and tight control. A tendency to hire locals for management positions suggests a polycentric policy. 41) The most common reason that an expatriate fails at an international assignment is ________. A) incompetence B) technical demands C) family pressures D) language difficulties Answer: C Explanation: C) Family support is the most significant factor in the success or failure of an expatriate. If the family of the executive cannot adapt or is negative about the international assignment, then the employee will most likely have difficulties. Incompetence, technical demands, and language difficulties are less significant issues. 42) Which of the following qualities is most closely linked to an employee's success on an international work assignment? A) technical skills B) responsibility C) intelligence D) flexibility Answer: D Explanation: D) Employees need to be intelligent, responsible, alert, and technically skilled for all jobs, but being flexible is key to success on foreign assignments. Some people adapt anywhere; others fail to adapt anywhere. 43) Which of the following terms refers to the process of assessing an employee's probable success in handling a foreign transfer? A) skills placement testing B) adaptability screening C) management assessment D) performance appraisal Answer: B Explanation: B) Adaptability screening attempts to assess the assignees' and his or her spouse's probable success in handling a foreign transfer. 44) In January 2009, Wal-Mart acquired a controlling interest in Chile's leading food retailer. Since then, Wal-Mart has opened the first environmentally friendly supermarket in Chile that uses energy efficient technology throughout the store. Wal-Mart is planning to open additional stores in Chile over the next five years. Wal-Mart's top executives are considering the idea of transferring U.S. managers to Chile to oversee the construction and establishment of the new stores. Which of the following, if true, undermines the argument of using expatriates to establish the new Wal-Mart stores in Chile? A) Adaptability screening tests indicate that three potential candidates are bilingual and travel overseas frequently. B) Wal-Mart offers overseas candidates extensive training on cultural differences and adaptation skills. C) The most qualified Wal-Mart managers have no foreign travel experience and do not speak Spanish. D) A balance sheet approach is used by Wal-Mart , but workers do not receive hardship allowances for moving to Chile. Answer: C Explanation: C) Foreign travel experience and language skills demonstrate an ability to live and work with other cultures. If the most qualified candidates lack that experience, then using expatriates is probably a bad idea. 45) According to research, all of the following will most likely help spouses of expatriates adjust to living in foreign countries EXCEPT ________. A) close family relationships B) pre-school age children C) scheduled vacations D) language training Answer: C Explanation: C) Language fluency helps spouses adjust as do preschool-age children. A strong bond of closeness between the spouse and the expat partner is also helpful. Scheduled vacations are less likely to improve the adjustment to life overseas. 46) Before departing for an overseas assignment, an employee would most likely benefit from ________ training. A) technical B) interpersonal C) cross-cultural D) career development Answer: C Explanation: C) Assignees benefit from training on the culture and language of the country in which they will be living. Such training helps them adapt and to work more effectively with locals. 47) All of the following are the primary benefits of providing ongoing training to employees on overseas assignments EXCEPT ________. A) offering educational opportunities B) developing relationships with co-workers C) cultivating corporate values and standards D) providing spousal networking opportunities Answer: D Explanation: D) Managers abroad continue to need traditional skills-oriented development to help them grow professionally, hone their skills, and have the same educational opportunities that stateside co-workers have. In addition, seminars help managers form bonds with colleagues around the world and cultivate corporate values. Providing spouses the chance to network is not a primary benefit. 48) Most North American companies use the ________ approach to formulating expatriate pay. A) equitable wage rate B) balance sheet C) performance D) total package Answer: B Explanation: B) The most common approach to formulating expatriate pay is to equalize purchasing power across countries, a technique known as the balance sheet approach. More than 85% of North American companies reportedly use this approach. 49) Which approach to formulating expatriate pay involves estimating the employee's expenses in the home country and the host country? A) balance sheet B) mobility allowance C) performance pay D) hardship method Answer: A Explanation: A) The balance sheet approach focuses on four groups of expenses—income taxes, housing, goods and services, and discretionary expenses. The employer estimates what each of these four expenses is in the expatriate's home country, and what each will be in the host country. The employer then pays any differences. 50) Which of the following terms refers to paying a portion of an expatriate's salary in home-country currency and a portion in local currency? A) balance sheet approach B) split pay approach C) hardship premium D) foreign-service premium Answer: B Explanation: B) When using the balance sheet approach, firms often help the expatriate manage his or her home and foreign financial obligations with the split pay approach. The employer pays part of a person's actual pay in home-country currency and part in the local currency. 51) Which of the following is NOT one of the primary expense groups used in the balance sheet approach to formulating expatriate pay? A) taxes B) housing C) disposable income D) discretionary expenses Answer: C Explanation: C) The balance sheet approach focuses on four groups of expenses—income taxes, housing, goods and services, and discretionary expenses. Disposable income is not a category. 52) ________ are financial payments over and above regular base pay. A) Foreign service premiums B) Hardship allowances C) Balance sheet payments D) Mobility premiums Answer: A Explanation: A) Foreign service premiums are financial payments over and above regular base pay, typically ranging between 10% and 30% of base pay. Hardship allowances compensate expatriates for hard living and working conditions at certain foreign locations. Mobility premiums are typically lump-sum payments to reward employees for moving from one assignment to another. 53) JJP Enterprises seeks to entice one of its star managers to move to Iraq to oversee a construction project. The firm will most likely offer a ________ because of the difficult living and working conditions in Iraq. A) cost-of-living allowance B) performance bonus C) hardship allowance D) mobility premium Answer: C Explanation: C) Hardship allowances compensate expatriates for hard living and working conditions at certain foreign locations. Mobility premiums are typically lump-sum payments to reward employees for moving from one assignment to another. 54) Which of the following terms refers to a lump-sum payment given to employees as a reward for moving from one assignment to another? A) hardship allowance B) foreign service premium C) cost-of-living allowance D) mobility premium Answer: D Explanation: D) Mobility premiums are typically lump-sum payments to reward employees for moving from one assignment to another. Hardship allowances compensate expatriates for hard living and working conditions at certain foreign locations. 55) Jim Simmons, an American, has worked for a U.S. firm's Italian operations for two years with great success. Now, the company wants Jim to relocate to France to establish a new division. The company will most likely offer Jim a ________ to reward him for moving from one assignment to another. A) hardship allowance B) foreign service premium C) cost-of-living increase D) mobility premium Answer: D Explanation: D) Mobility premiums are typically lump-sum payments to reward employees for moving from one assignment to another. Hardship allowances compensate expatriates for hard living and working conditions at certain foreign locations. 56) All of the following characterize European labor relations EXCEPT ________. A) limited number of bargaining units B) informal recognition of labor unions C) bargaining through employer associations D) industry-wide collective bargaining Answer: A Explanation: A) Unions in Europe are influential and labor–management bargaining and relations reflect this fact. Collective bargaining in Western Europe tends to be industry-wide, which leads to bargaining through employer associations. Union recognition is less formal than in the United States. 57) Which of the following is most likely NOT covered by kidnapping and ransom insurance policies? A) abductions B) ransoms C) crisis teams D) weapons Answer: D Explanation: D) K&R insurance typically covers several costs associated with kidnappings, abductions, or extortion attempts. These costs might include, for instance, hiring a crisis team, the actual cost of the ransom payment to the kidnappers or extortionists, insuring the ransom money in transit, legal expenses, and employee death or dismemberment. 58) Frank Williams is being sent to Saudi Arabia for two years to work for his company's Saudi affiliate. Which of the following suggestions should Frank follow to minimize his chances of being the victim of a kidnapping? A) take the same route to and from work B) arrive at the airport close to departure time C) wait at the airport in a main traffic area D) leave work at the same time each day Answer: B Explanation: B) Security experts suggest that business travelers arrive at airports as close to departure time as possible and wait in areas away from the main flow of traffic where they're not as noticeable. Employees should also vary their departure and arrival times and take different routes to and from work. 59) ________ refers to bringing a manager back home after a foreign assignment has been completed. A) expatriation B) repatriation C) mediation D) job rotation Answer: B Explanation: B) Expatriation refers to sending a worker to work overseas, while repatriation is the process of bringing the employee back to his or her home country. Repatriation programs help employees and their families make smooth adjustments. 60) A formal repatriation program should do all of the following EXCEPT ________. A) assist employees with relocation logistics B) seek compensation and benefits on behalf of employees C) help employees update their resumes and make career plans D) reassure employees of the company's concern for their welfare Answer: B Explanation: B) Repatriation programs are supported by an employee's firm, so seeking compensation and benefits is not part of the activities. However, repatriation programs should help employees with the logistics of moving back, help them with career planning, and reassure them that the firm cares. 61) Which of the following is a true statement regarding expatriates? A) Most expatriates require at least one year of psychological help after returning home. B) Most expatriates avoid traveling abroad after returning to their home country. C) Most expatriates and their families prefer open-ended work assignments. D) Most expatriates quit within three years of returning home. Answer: D Explanation: D) One of the most worrisome facts about sending employees abroad is that 40% to 60% of them will probably quit within 3 years of returning home. Firms provide psychologists to expatriates when they return to ensure that they are adapting well, but they do not necessarily need long-term treatment. 62) Which of the following was determined by a study of six international firms that have successfully established global HR systems? A) Firms should focus on expatriation and repatriation programs to ease the transition period for employees working abroad. B) Firms should develop HR systems that are universally acceptable and that can be effectively implemented in any location. C) Firms rely more heavily on expatriates than locals in foreign subsidiaries, so it is unnecessary to make changes to existing HR policies. D) Firms with foreign subsidiaries should adhere to local customs regarding screening, hiring, and training applicants. Answer: B Explanation: B) The study's overall conclusion was that employers who successfully implement global HR systems do so by applying several best practices. This enables them to install uniform global human resource policies and practices around the world. The basic idea is to develop systems that are acceptable to employees in units around the world, and ones that the employers can implement more effectively. 63) Which of the following is a best practice used by firms that develop effective global HR systems? A) creating a global network of specialists to help create a new HR system B) standardizing the specific methods used to screen and evaluate applicants C) allowing HR managers to devise locally appropriate recruiting policies D) establishing HR policies at the firm's headquarters to avoid conflict Answer: A Explanation: A) To head off resistance, human resource managers around the world should feel that they are part of a greater whole by belonging to global teams to help develop the new human resources systems. It's more important to standardize ends and competencies, so certain details are left up to local HR managers based on customs and culture. 64) Which of the following is recommended to firms to ensure that local managers find a global HR system acceptable? A) ignore cultural differences B) establish a chain of command C) develop a strong corporate culture D) understand the laws of the home country Answer: C Explanation: C) Companies that create a strong corporate culture find it easier to obtain agreement among far-flung employees. Cultural differences should not be ignored, and firms should also understand local laws. 65) Which term refers to a group of geographically dispersed coworkers that uses a desktop videoconferencing system to communicate and accomplish tasks for the firm? A) virtual team B) telecommuter group C) permanent transferee D) short-term international team Answer: A Explanation: A) Virtual teams are groups of geographically dispersed coworkers who interact using a combination of telecommunications and information technologies to accomplish an organizational task. With desktop videoconferencing systems often the heart of such systems, communication among team members can embrace the body language and nuances of face-to-face communications. 66) What is the primary problem associated with virtual teams at international firms? A) scheduling meetings B) agreeing on important issues C) facilitating group communication D) building trust among team members Answer: D Explanation: D) The main challenges that virtual teams face are people-related. These include building trust, cohesion, team identity, and overcoming the isolation among team members. Desktop videoconferencing systems enable team members to communicate with each other and enable members to see the body language and nuances of face-to-face communications. 67) U.S. employers have most likely experienced an increase in successful expatriate assignments in the last two decades because they have ________. A) focused on job performance as the main selection criteria B) increased the number of selection criteria for global assignees C) provided global assignees with local managers to serve as mentors D) allowed HR managers to have more control of the global hiring process Answer: B Explanation: B) Traditional expatriate selection focused on job performance in the home country. However, in recent decades, U.S. firms have increased the number of selection criteria used to choose global assignees. Employers now regularly use selection criteria such as technical/professional skills, expatriates' willingness to go, experience in the country, personality factors (including flexibility), leadership skills, the ability to work with teams, and previous performance appraisals in the selection process. 68) Which of the following is NOT one of the main components of a global mind-set? A) psychological capital B) intellectual capital C) language capital D) social capital Answer: C Explanation: C) Research indicates that success abroad hinges on having a global mind-set, which has three components: psychological capital, intellectual capital, and social capital. Although languages skills are important, they are not a key component of a global mind-set. 69) An expatriate manager working in ________ would have the highest amount of disposable income. A) Brazil B) France C) Indonesia D) Saudi Arabia Answer: D Explanation: D) Average disposable income for managers ranges from about $72,000 in Indonesia to $98,000 in France; $105,000 in the United States; $124,000 in Brazil; $149,000 in the Ukraine; and $229,000 in Saudi Arabia. 70) What is the first step in establishing a global pay system? A) adapting pay policies B) developing strategic goals C) identifying crucial executive behaviors D) establishing a global philosophy framework Answer: B Explanation: B) The first step in establishing a global pay system is setting a strategy. Steps after this include identifying crucial executive behaviors, setting a global philosophy framework, identifying gaps, systemizing pay systems, and adapting pay policies. 71) A major challenge for international businesses is the need to adapt personnel policies and procedures to the differences among countries. Answer: True Explanation: Taking the company global triggers various management challenges, including how to adapt personnel policies and procedures to various cultures and countries. Human resource management must also consider its systems for recruiting, selecting, training, and appraising and compensating its workers abroad. 72) The most significant HR challenge faced by international firms is the language barrier. Answer: False Explanation: Vast distances increase the challenges for an international firm. However, language is not necessarily the biggest issue. Cultural, political, legal, and economic differences among countries create challenges for global firms. 73) Legally mandated holidays range from five weeks each year in Luxembourg to none in Great Britain. Answer: True Explanation: Minimum legally mandated holidays range from none in the United Kingdom to five weeks per year in Luxembourg. 74) Codetermination means that employees have a legal right to voice opinions and preferences in setting company policies. Answer: True Explanation: Codetermination means employees have the legal right to a voice in setting company policies. Workers elect their own representatives to the supervisory board of the employer. 75) Hourly wages for production workers in the United States are higher than those in Germany. Answer: False Explanation: Differences in labor costs are also substantial. Hourly compensation costs for production workers range from $2.75 in Mexico to $6.43 in Taiwan, $23.82 in the United States, $27.10 in the United Kingdom, and $34.21 in Germany. 76) The official length of a work week in the European Union is 40 hours. Answer: False Explanation: The EU sets the workweek at 48 hours, but most EU countries set it at 40 hours a week. 77) In China, a structured interview process is the typical method for selecting employees. Answer: True Explanation: The dominant employee selection method in China involves analyzing the applicant's résumé and then interviewing him or her. The ideal way to do this is to institute a structured interview process, as many of the foreign firms in China have done. 78) The majority of multinational corporation management positions are filled by expatriates. Answer: False Explanation: Expatriates still represent a minority of multinationals' managers. Locals fill most positions. 79) Third-country nationals hold citizenship in three countries. Answer: False Explanation: Third-country nationals are citizens of a country other than the parent or the host country—for example, a British executive working in the Tokyo branch of a U.S. multinational bank. 80) U.S. employers are required to attempt recruiting U.S. workers before filing requests to fill positions with foreign workers. Answer: True Explanation: Under current rules, U.S. employers must try to recruit U.S. workers before filing foreign labor certification requests with the Department of Labor. In particular, employers must now first post open positions in the Department of Labor's job bank and (at least) run two Sunday newspaper advertisements before filing such requests. 81) The least expensive way to fill managerial positions in foreign subsidiaries is with local people. Answer: True Explanation: Expatriates are costly due to relocation expenses and housing costs. Filling positions with locals is much more cost effective. 82) Less costly alternatives to expatriates include Internet video meetings and group decision-making software. Answer: True Explanation: Today, the choice is not just between expatriate versus local employees; there are other solutions. Some firms use Internet-based video technologies and group decision-making software to enable global virtual teams to do business without either travel or relocation. 83) Effective off shoring depends heavily on HR managers to identify high-quality, low-cost talent overseas and to assess a country's literacy rates and working conditions. Answer: True Explanation: Offshoring means having local employees abroad do jobs that the firm's domestic employees previously did in-house. Employers look to their HR managers to help identify high-quality, low-cost talent abroad, and to provide information on things like literacy, foreign wage rates, and working conditions. 84) In a polycentric corporation, the prevailing belief is that home country attitudes, management style, knowledge, and managers are superior to anything the host country might offer. Answer: False Explanation: Ethnocentric is the notion that home-country attitudes, management style, knowledge, evaluation criteria, and managers are superior to anything the host country has to offer. Polycentric is the conscious belief that only the host-country managers can ever really understand the culture and behavior of the host-country market. 85) Firms using a geocentric staffing model will seek the best people for key jobs throughout the organization, regardless of nationality. Answer: True Explanation: A geocentric staffing policy "seeks the best people for key jobs throughout the organization, regardless of nationality." This can let the global firm use its human resources more efficiently by transferring the best person to the open job, wherever he or she may be. 86) The most expensive approach to staffing is the polycentric staffing model. Answer: False Explanation: A polycentric-oriented firm would staff its foreign subsidiaries with host-country nationals, and its home office with parent-country nationals. It is the least expensive staffing method. 87) Adaptability screening is a commonly used process to assess the likelihood that an expatriate can reintegrate into his or her home country' culture following a foreign assignment. Answer: False Explanation: Adaptability screening aims to assess the assignees' (and spouses') probable success in handling the foreign transfer, and to alert them to issues (such as the impact on children) the move may involve. 88) The Overseas Assignment Inventory is a test that identifies the characteristics and attitudes international assignment candidates should have based on norms. Answer: True Explanation: Many firms also use tests such as the Overseas Assignment Inventory (OAI). This identifies the characteristics and attitudes international assignment candidates should have. Its publisher establishes local norms and conducts ongoing validation studies. 89) To help to ensure success for expatriates on international assignment, companies should provide language training to their spouses. Answer: True Explanation: Employers can help expatriate spouses adjust to living in a foreign country by providing language training. Spouses are less likely to feel cut off from the foreign culture if they are able to communicate with locals. 90) Being childless makes it easier for spouses to adjust to living overseas because of less stress. Answer: False Explanation: Having preschool-age children (rather than school-age children or no children) seemed to make it easier for the spouse of an expatriate to adjust. "This suggests that younger children, perhaps because of their increased dependency, help spouses retain that part of their social identities: as parents, their responsibilities for these children remain the same. 91) Employees preparing for overseas assignments benefit from training in cultural differences, attitude formation and behavioral influence, factual country knowledge, and language skills. Answer: True Explanation: Orienting and training employees prior to their departure helps them adjust and be more successful. They should receive training in culture, language, and adaptation methods. 92) More than 85% of North American companies use the balance sheet approach to formulate expatriate pay. Answer: True Explanation: The most common approach to formulating expatriate pay is to equalize purchasing power across countries, a technique known as the balance sheet approach. More than 85% of North American companies reportedly use this approach. 93) Foreign service premiums compensate expatriates for exceptionally hard living and working conditions at certain foreign locations. Answer: False Explanation: Foreign service premiums are paid to encourage the employee to take the job abroad. Hardship allowances compensate expatriates for hard living and working conditions at certain foreign locations. 94) As in the U.S., collective bargaining in Western Europe typically occurs at the plant level rather than at the industry level. Answer: False Explanation: Collective bargaining in Western Europe tends to be industry-wide, whereas in the United States it generally occurs at the enterprise or plant level. 95) Varying departure and arrival times when working in a foreign country can minimize a business traveler's chances of becoming a crime victim. Answer: True Explanation: Experts advise business travelers to vary their departure and arrival times and to take different routes to and from work to stay safe in a foreign country. 96) A global HR system should integrate global tools, such as online recruitment systems, with local methods. Answer: True Explanation: Effective global HR systems combine the firm's global tools like online recruiting or online benefits management with local methods. 97) The most effective global HR systems implement identical strategies, practices, and methods in every location to ensure consistency throughout the organization. Answer: False Explanation: Effective global HR systems have certain general standards, but the methods of implementation vary from location to location to account for cultural differences. 98) Treating locals as equal partners when developing a global HR system will minimize resistance. Answer: True Explanation: Using a global team to develop a global HR system will minimize resistance and increase support. 99) In a planned economy, such as China, some industries are under the direct control of the government while other industries are free to make pricing and production decisions based on market demand. Answer: False Explanation: In planned economies (such as North Korea), the government decides and plans what to produce and sell, at what price. In mixed economies (such as China), many industries are still under direct government control, while others make pricing and production decisions based on market demand. 100) Over the last decade, the majority of U.S. firms have been steadily increasing the size of their expatriate workforces because of the economic recession in America. Answer: False Explanation: For the past 10 years or so the trend has definitely been toward using locals or toward other (non-expat) solutions. New expatriate postings are not only down, but many employers are bringing them home early. Another survey found that about 47% of U.S. multinationals is maintaining the size of their expat workforces; 18% were increasing it, and 35% were decreasing the number of expatriates. 101) What are the HR challenges of conducting business on a global scale? How can firms effectively implement global HR management programs? Answer: Managing human resources internationally creates unique challenges. For example, "Should we staff the local offices abroad with local or U.S. managers?" "How should we appraise and pay our local employees?" "How should we deal with the unions in our offices abroad?" "How do we identify and get the right talent and skills to where we need them?" and "How do we spread state-of-the-art knowledge to our operations abroad?" Challenges like these don't just come from the vast distances involved. The bigger issue is coping with the cultural, political, legal, and economic differences among countries. The study's overall conclusion was that employers who successfully implement global HR systems do so by applying several best practices. This enables them to install uniform global human resource policies and practices around the world. The basic idea is to develop systems that are acceptable to employees in units around the world, and ones that the employers can implement more effectively. We'll look at each of these three requirements' best practices. 102) In a brief essay, discuss the economic and labor relations factors that are unique to Europe. Answer: Differences in economic systems also translate into differences in human resource management policies. For instance, some countries in the Euro zone tend to put more restrictions on the number of hours an employee can legally work each week. Differences in labor costs are also substantial. Hourly compensation costs for production workers vary as well. Several European countries, including the United Kingdom and Germany, require substantial severance pay to departing employees, usually equal to at least 1 years' service in Germany. Workers in France can expect two and a half days of paid holiday per full month of service per year, and Germans get about 18 vacation days per year. The U.S. practice of employment at will does not exist in Europe, where firing or laying off workers is usually expensive. And in many European countries, work councils replace the worker–management mediations typical in U.S. firms. Codetermination is the rule in Germany and several other countries. Unions in Europe are influential and labor–management bargaining and relations reflect this fact. In general, four issues characterize European labor relations: centralization, employer organization, union recognition, and content and scope of bargaining. 103) What staffing options do multinational firms have when filling positions in foreign subsidiaries? Answer: Multinational companies employ several types of international managers. They can employ locals, home-country nationals, or third-country nationals. Home-country and third-country-nationals are both types of expatriates. Locals are citizens of the countries where they are working. Home-country nationals are citizens of the country in which the multinational firm has its headquarters. Home-country nationals are also called parent-country nationals. Third-country nationals are citizens of a country other than the parent or the host country. 104) What considerations need to be made when appraising an expatriate's performance? What cultural considerations need to be made when appraising a local employee's performance? Answer: Several things complicate the task of appraising an expatriate's performance. For one thing, the question of who actually appraises the expatriate is crucial. Obviously, local management must have some input, but cultural differences here may distort the appraisals. Thus, host-country bosses might evaluate a U.S. expatriate manager in India somewhat negatively if they find his or her use of participative decision making culturally inappropriate. On the other hand, home-office managers may be so out of touch that they can't provide valid appraisals. Similarly, the procedure may be to measure the expatriate by objective criteria such as profits and market share. However, local events (such as political instability) may affect the manager's performance while remaining "invisible" to home-office staff. Some suggestions for improving expatriate appraisals follow. 1. Stipulate the assignment's difficulty level, and adapt the performance criteria to the situation. 2. Weigh the evaluation more toward the on-site manager's appraisal than toward the home-site manager's appraisal. 3. If the home-office manager does the actual written appraisal, have him or her use a former expatriate from the same overseas location for advice. Employee appraisals of local employees need to keep cultural differences in mind. For example, appraisals in China should follow the formalities of saving face and avoiding confrontational, tension-producing situations. In general, it's best to talk in terms of objective work data (as opposed to personal comments like "you're too slow"). 105) What are the advantages and disadvantages of using expatriates for staffing foreign subsidiaries? Answer: Expatriates typically share a common culture and educational background with corporate headquarters staff so they are able to facilitate communication and coordination with corporate headquarters. They are also adept at introducing techniques from home to the host country setting. However, expatriates typically lack the knowledge of the host country's laws, culture, economic conditions, social structure, and political processes. These weaknesses can be overcome with training but such training is expensive. Further, it is expensive to relocate expatriates and maintain them in the host country. 106) What are some reasons for firms bringing expatriates home early? How can firms ease the transition during repatriation? Answer: New expatriate postings are not only down, but many employers are actually bringing them home early for a number of reasons. Posting expatriates abroad is very expensive, security problems increasingly give potential expatriates' pause, educational facilities are turning out top-quality candidates abroad, and the recent global recession made the cost of posting employees abroad even more unattractive. As expatriates return home, employers can ease the transition with a repatriation program. Firms need to make sure that the expatriate and his or her family don't feel that the company has left them adrift. Firms often provide psychologists, mentors, career planning services, and relocation assistance. 107) Explain the meaning of ethnocentrism, polycentrism, and geo-centrism and how those values might affect a multinational company's staffing policy. Answer: Firms with an ethnocentric value system believe that the knowledge and methods used in the home country are superior to those elsewhere. Consequently, these firms will prefer to staff managerial positions in foreign subsidiaries with home-country nationals. Firms with a polycentric view believe that only host-country nationals can really understand the local culture and customs. These firms will choose locals for managerial positions in international locations. Finally, firms with a geocentric view believe that the best managers could be anywhere. They will likely use a mix of locals, home-country nationals, and third-country nationals. 108) What type of special training is recommended for employees as they prepare for international assignments? Answer: The four-step training approach recommended in the text begins with training on the impact of cultural differences and on raising trainees' awareness of such differences and their impact on business outcomes. In Level 2, participants are encouraged to understand how attitudes are formed and how they influence behavior. In Level 3, the training provides factual knowledge about the target country, and in Level 4, skill building in areas like language and adjustment and adaptation skills are the focus. More employers use software and the Internet for such cross-cultural training. 109) How can employers improve the chances of success for an expatriate? What are the benefits of providing training and development opportunities to expatriates during overseas assignments? Answer: Employers can do several things to boost the odds that assignments abroad will go smoothly. Providing realistic previews of what to expect, carefully screening expat and spouse, improved orientation, and improved benefits packages are obvious solutions. Another is simply to shorten the length of the assignment. Person–job match is also important, insofar as expatriates who are more satisfied with their jobs are more likely to adapt to the foreign assignment. Helping spouses get jobs abroad and providing more support to the expat and his or her family are also important. Some employers set up "global buddy" programs. Here local managers mentor new expatriates. Beyond such predeparture training, more firms are providing continuing, in-country cross-cultural training during the early stages of an overseas assignment. In addition to honing these managers' skills, international development activities hopefully have other, less tangible benefits. For example, rotating assignments can help managers form bonds with colleagues around the world. These can help the managers make cross-border decisions more expeditiously. Bringing together managers from their global subsidiaries for seminars can also help employers cultivate a unifying set of values, standards, and corporate culture. 110) Explain the balance sheet approach to formulating expatriate pay. Answer: This method seeks to equalize purchasing power across countries. The basic method is to take the expenses for an employee in his or her home country, including income taxes, housing, goods and services, and discretionary income, and then to estimate how those expenses will vary in the host country. The employer will pay the differences. The base salary will normally be in the same range as the manager's home-country salary. Then, a foreign service premium and/or hardship allowance might be added. There could also be allowances given for housing and education. Test Bank for Human Resource Management Gary Dessler 9780132668217, 9789353942205, 9780135226803, 9780136089964, 9780134235455, 9780130141248
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