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Advantages of hiring expatriates
Importance of multinationals
Impact of multinational corporations on their home country
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Recommended: Advantages of hiring expatriates
tell that expatriates has become an important strategy of international human resource management. But the high rate of failure of the work assignment is unavoidable issue for managers as well as researchers. The research theory of Expatriate failure and work assignments analysis study in the field of management provide theoretical and practical references and solid support for multinational corporations to win in the fierce global competition to provide support.
Expatriates are actually the contact bridges between the multinational companies and subsidiaries, is seen as a key strategic objective to complete the multinational performance (Selmer & Lauring, 2012). Meanwhile, with the increasingly fierce global competition, whether expatriate
Expatriates' incapability to handle adjustment to the new environment or personal relationships with co-workers from other cultures are other causes of premature return (Medich, 1995). Failure rate of expatriates who are assigned to work in developed countries is 25 to 40 percent, while the expatriate failure rate in developing countries is still 70 percent. Costs associated with failure are high, it is also depending on the place of working assignment. Direct costs of early return of expatriate is estimated between $ 250.00 and $ 100 million US dollars. It doesn’t include the loss of failed overseas market development and missed revenue opportunities as the indirect costs (Farner & Luthans,
Expatriates who had to return to the home country company before the international assignment is completed might be facing emotional consequences such as loss of self-esteem and self-confidence and these consequences will more likely lead to more problems for the parent company by decline in productivity as well as being a reluctance for other employees to accept international assignments (Medich, 1995). Selmer & Lauring, (2012) believes that more attention should be focused on a clear direction about expatriates work assignments and developed training programs for expatriate and his / her family when addressing expatriate failure. Cultural training and adjustment is very important expatriate and his / her family should be helped on these problems both from home country companies prior to departure and from subsidiaries during the assignment period (Selmer & Lauring,
Osland, Joyce Sautters. "Working abroad: a hero's adventure." Training & Development Nov. 1995: 47+. Academic OneFile. Web. 26 Nov. 2013.
While there are many various global issues that affect the International Human Resource Management to run efficiently, there are two key concepts that play a major role in understanding how to approach them with cohesive and a well coherent strategy; they are the International Human Recourse Management Strategy and Understanding the Cultural Environment. In the International Resource Management strategy, many companies will do their research in finding companies that offer the following:
Slaughter said it’s a common perception that hiring overseas means fewer jobs in the United States. Not so, he said. While job losses are certainly true for some companies, statistics have shown that, generally, increased hires abroad also have complementary increases here.” (Kibbe, 2004)
International businesses are also finding new ways of increasing diversity abroad. Instead of using expatriate employees as management, they are starting to hire locals. Companies that operate abroad are realizing that using expatriate employees is not a permanent solution. They are often expensive, and are not capable of translating their skills into the new environment. In a company that operates globally, it is important that the company knows how to relate to the local markets, and a great way to do this is by hiring local talent. Hiring locally is cheaper, there is not a language barrier, and they are accustomed to the business environment in the area(5). They can also help the business by providing a new perspective into international markets, and offer ways that the company can improve their diversity abroa...
The case study of the Expatriate Management of the AstraZeneca organization appears to have many topics the organization has done well to include how to treat these types of employees when their work requirements take them to another country for an uncertain amount of time. There is always possible lessons learned that may not be so much for the organization but rather the employee and their quality of life when they become an expatriate. The requirements for this task may be difficult, but the organization can help with what is required along the way from the very beginning to the end of the assignment. The article does not talk about family relations which could be something done better.
A major challenge of doing business internationally is to adapt effectively to different culture. Such adaptation requires an understanding of cultural diversity, perceptions, stereotypes, and values (Hodgett &Luthans, 2005). Doing business overseas has its challenges as well as it rewards.
High turnover rate of expatriate: expatriate managers are frustrated with the performance and practices of local employees. And they do not have enough international experience and cross-cultural communication and sensitivity training.
In this paper we have chosen to explore Procter and Gamble (P&G), a multinational corporation which has lead the way in creating one of the best human resource management systems to date. By using P&G, we are seeking to provide an example of how current multinational companies make decisions to manage their human resources (HR) activities, in search of effective management of their HR costs and in search of professional HR management.
However, repatriation is one aspect of international assignments that has been somehow overlooked. Most literature on international human resource management (IHRM) for the most part focuses on expatriate settlement in the host country of assignment. Not as much of the required concentration has been focused on preparing expatriates for homecoming, notwithstanding the facts regarding the complexity of settling back at home and reports that nearly all expatriates are unhappy with the repatriation process. In view of the fact that the world is becoming more integrated leading to more global deployment of employees, the repatriation process calls for added attention (Furuya et al 2007).
11. Satish P. Deshpande and Chockalingam Viswesvaran, "Is Cross-cultural Training of Expatriate Managers Effective: A Meta Analysis," International Journal of Intercultural Relations 16 (1992): 296.
Thomas, D. C., and Ravlin, E. C.,1995. Responses of employees to cultural adaptation by a foreign manager. Journal of Applied Psychology, 80(1),pp.133–146.
...e located and the human resource management to effectively manage the global workforce diversity. Furthermore, management practices across nations should be more focused in terms of enhancing expatriates’ experience with cross-cultural training. It is also highlighted that executives of international firms must efficiently devise the best strategies and plans to increase the business positive performance and for controlling resources of their foreign subsidiaries. As a consequence, global managers play a very important role in the development and success of multinational corporations in the current competitive international market since there are numerous issues that they have to deal with in the operating process. If the enterprises could overcome the management challenges, they would gain great opportunities in the global economy and achieve favorable outcomes.
These include the geographic location of the company, the level and position the expatriate will hold as well as the company offering the expatriate post. The benefits are intended to offer a comfortable stay in the host country as the expatriate conducts the assignment. We shall analyze the benefits the expatriates enjoy that are not enjoyed by local nationals. All relocation expenses to the host country are catered for. These include the visas, flight costs, work and residence permits, as well as pocket money. The employer caters for all the clearance and taxes in the host country. The local nationals, on the other hand, do not enjoy full relocation benefits. Transferring from one branch to another in the same country, they are only accorded a transfer allowance. The employer does not pay for their hotels or housing till they get permanent residence, as would be the case with expatriates. Expatriates enjoy an annual, monthly, or quarterly sum as their housing allowance (Aquinas, 2010). The allowance is adjusted to offer a home in a good safe environment at the cost of the employer. Local nationals do not enjoy housing allowance. They normally arrange for their work and residence permits. Most of them are skilled and semi-skilled workers and the employer may not even know where they live. Expatriates normally receive an education allowance to cater for school fees for their kids. The children may attend any school according to the expatriate’s preference. A maximum amount of a specific age is set per child. Local nationals do not enjoy this benefit at all. Through the salary they receive, they are supposed to make ends meets and use it to cater to their children's fees. Expatriates enjoy an automobile allowance. This includes a company lease vehicle, or an allowance to purchase a local car, insurance cover, and or a local driver. Local nationals may only enjoy this benefit if they hold high
Recently, UAE Government statistics show that expats make up over 88% of the UAE population while Emiratis proportion is relatively small about 11% of the population (Nissar Hoath, 2011). In fact, United Arab Emirates is considered as one of the countries that have a massive numbers of foreigners. Subsequently, it led to a huge imbalance in the demographic structure which eventually resulted other social and cultural concerns. UAE nationals are struggling every day with this imbalance as they feel they are under threat of losing their identity, values, customs, tradition and language. Furthermore, there are some challenges they face because of the way some foreigners behave and act. Therefore, the UAE government should act immediately to control
A relocation process is often accompanied with emotional and physical changes for the expatriate. At this state of time it is increasingly important for the managers to have their employees, e.g. the dual career couple, prepared for a cultural and environmental change beforehand in order to avoid misunderstandings. The different effects of relocation can cause satisfaction or dissatisfication. For example, for the husband the relocation could open up new opportunities and a higher salary, whereas for the wife it must not necessarily mean better working conditions (Eby et al., 2002). Therefore accompanying partners may experience losses of status, lower pay or having less opportunity to climb up a career ladder (Eby, 2001).