ch18

ch18Student: ___________________________________________________________________________

1. Equal employment legislation is strongly pursued in all countries. True False

2. An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries.

True False

3. A company that is successful at a localization strategy will realize experience curve and location

economies. True False

4. An organization's norms and value systems are known as its corporate culture.

True False

5. The most attractive staffing policy is the ethnocentric approach.

True False

6. A firm with an ethnocentric staffing policy will fill all key management positions with parent-country

nationals. True False

7. A firm following a polycentric approach to staffing believes that the host country lacks qualified

individuals to fill senior management positions. True False

8. A firm that adopts a polycentric approach to staffing is likely to suffer from cultural myopia.

True False

9. In the case of an ethnocentric approach, it is possible that managers may make decisions that are ethically

suspect because they do not understand the culture in which they are managing. True False

10. Firms may choose an ethnocentric approach to staffing as opposed to a polycentric approach because of the

cost savings it promotes. True False

11. A geocentric staffing policy seeks the best people for key jobs throughout the organization, regardless of

nationality. True False

12. Many firms adopt a geocentric policy toward staffing because it is a relatively inexpensive staffing policy. True False

13. A geocentric approach tends to reduce local responsiveness.

True False

14. A citizen of Japan who moves to the United States to work at Microsoft would be classified as an

inpatriate. True False

15. Research into expatriate failure revealed that consistently one of the reasons for the premature return of

employees for U.S. multinationals was the inability of the spouse to adjust. True False

16. For European firms, the top reason for expatriate failure was the inability of the manager to cope with

larger overseas responsibilities. True False

17. An executive who performs well in a domestic setting will be able to adapt to managing in a different

cultural setting. True False

18. An expatriate needs to have language fluency to show willingness to communicate.

True False

19. The ability to understand why people of other countries behave the way they do is perceptual ability.

True False

20. According to Mendenhall and Oddou, poorly-adjusted expatriates tend to be nonjudgmental and

nonevaluative in interpreting the behavior of host-country nationals. True False

21. Cultural toughness can be assessed by comparing cultures.

True False

22. A manager might be sent on several foreign postings over a number of years to build his /her cross-cultural

sensitivity and experience as part of a management development program. True False

23. Historically, most international businesses have been more concerned with management development than

with training. True False

24. It is not possible to conduct business nearly all over the world using only English. True False

25. In many cases, firms fail to plan for an expatriate's repatriation.

True False

26. Where an expatriate community exists, firms often devote lesser effort to ensuring that the new expatriate

family is quickly integrated into that group. True False

27. Bringing managers together in one location for extended periods and rotating them through different jobs in

several countries helps the firm build a formal management network. True False

28. Many expatriate managers believe that headquarters management evaluates them unfairly and does not

fully appreciate the value of their skills and experience. True False

29. Most expatriates believe that more weight should be given to an on-site manager's appraisal than to an off-

site manager's appraisal. True False

30. In ethnocentric firms, the lack of managers' mobility among national operations implies that pay can and

should be kept country-specific. True False

31. If a firm is serious about building an international cadre, it may have to pay its international executives the

same basic salary irrespective of their country of origin or assignment. True False

32. Base pay in most firms is set with regard to global market conditions.

True False

33. An expatriate's base salary normally varies from the base salary for a similar position in the home country.

True False

34. A foreign service premium is offered as an inducement to accept foreign postings.

True False

35. When a reciprocal tax treaty is in force, the firm typically pays the expatriate's income tax in the host

country. True False

36. Most benefits that are tax deductible for the firm in the home country are deductible out of the country. True False

37. From a strategic perspective, the key issue in international labor relations is the degree to which organized

labor can limit the choices of an international business. True False

38. Labor unions generally prefer it if an international business keeps highly skilled tasks in its home country

and farms out only low-skilled tasks to foreign plants. True False

39. There is now a trend toward greater decentralized control.

True False

40. The international trade secretariats have had tremendous success.

True False

41. _____ refers to the activities an organization carries out to utilize its human resources effectively.

A. Organizational behaviorB. Strategic managementC. Human resource managementD. Labor relations

42. _____ is/are the linchpin of a firm's organization architecture.

A. PeopleB. StrategyC. Business processesD. Organizational structure

43. Firms should build a strong corporate culture and an informal management network for transmitting

information and knowledge within the organization if they are pursuing a(n): A. transnational strategy.B. localization strategy.C. global standardization strategy.D. international strategy.

44. Which of the following is mainly concerned with the selection of employees for particular jobs?

A. Retention policyB. Staffing policyC. Incentive policyD. Appraisal policy

45. Many Japanese firms prefer expatriate Japanese managers to head their foreign operations because these managers have been socialized into the firm's culture while employed in Japan. This implies that: A. the firm may believe that such managers cannot progress beyond senior positions in their parent

company.B. the firm may see an ethnocentric staffing policy as the best way to maintain a unified corporate culture.C. the firm is trying to create value by transferring core competencies to a foreign operation.D. the firm requires host-country nationals to be recruited to manage subsidiaries.

46. A polycentric approach to staffing is one in which:

A. all key management positions are filled by parent company nationals.B.

host-country nationals are recruited to manage subsidiaries while parent-company nationals occupy key positions at corporate headquarters.

C. the best people, regardless of nationality, are recruited to fill key positions throughout the organization.D. parent-company nationals are recruited to manage subsidiaries while host-country nationals occupy key

positions. 47. Which of the following is a drawback of the polycentric approach to staffing?

A. Firms are likely to suffer from cultural myopia.B. Host-country nationals are vulnerable to cultural misunderstandings.C. This approach increases the cost of value creation.D. Host-country nationals have limited opportunities for advancement beyond senior positions in their

subsidiary. 48. Cultural myopia refers to a firm's failure to:

A. adapt to certain ethnocentric cultures through the expatriate.B. permanently implement parent-company culture in the host country.C. understand host-country cultural differences that require different approaches to marketing and

management.D. identify countries which are much tougher postings than others because their cultures are more

unfamiliar and uncomfortable. 49. If a company recruits host-country nationals to manage subsidiaries while parent-country nationals occupy

key positions at corporate headquarters, the firm is following a(n): A. ethnocentric staffing policy.B. regiocentric staffing policy.C. polycentric staffing policy.D. geocentric staffing policy.

50. A polycentric approach may be effective for firms pursuing a(n):

A. international strategy.B. localization strategy.C. transnational strategy.D. global standardization strategy.

51. Food and detergents giant Unilever had foreign subsidiaries that had evolved into quasi-autonomous operations, each with its own strong national identity. They objected strenuously to corporate headquarters' attempts to limit their autonomy. Thus, Unilever found it very difficult to shift from a strategic posture that emphasized localization to a transnational posture because of: A. difficulty in achieving the coordination required to pursue experience curve and location economies.B. the difficulty in achieving coordination required to transfer core competencies.C. the federation that resulted from a polycentric approach.D. expensive implementation and increased costs of value creation.

52. What is the most important advantage of using a geocentric staffing policy?

A. It enables the firm to build a cadre of international executives who feel at home working in a number of

cultures.B. It may be less expensive to implement than other policies, reducing the costs of value creation.C. The higher pay managers on an international fast track enjoy is a source of inspiration within a firm.D. It involves no costs of training and relocation when transferring managers from country to country.

53. Which of the following is a problem that limits a firm's ability to pursue a geocentric policy?

A.

The lack of management transfers from home to host countries, and vice versa, can lead to a lack of integration between corporate headquarters and foreign subsidiaries.

B. The higher pay managers on an international fast track enjoy may be a source of resentment within a firm.

C. The firm fails to understand host-country cultural differences that require different approaches to marketing and management.

D. It limits advancement opportunities for host-country nationals. 54. An ethnocentric approach to staffing is appropriate for firms that are pursuing a(n):

A. international strategy.B. localization strategy.C. global standardization strategy.D. transnational strategy.

55. What is the advantage of using an ethnocentric staffing approach?

A. Uses human resources efficientlyB. Alleviates cultural myopiaC. Inexpensive to implementD. Helps transfer core competencies

56. A citizen of France who moves to Germany to work at BMW is a(n):

A. host-country national.B. local.C. inpatriate.D. acquired citizen.

57. The premature return of an expatriate manager to his/her home country is known as: A. repatriation.B. expatriate failure.C. inpatriate failure.D. foreign manager failure.

58. For American multinationals, the biggest impediment to expatriate success is:

A. the inability of the spouse to adjust.B. the manager's inability to adjust.C. the manager's inability to cope with larger overseas responsibilities.D. the manager's personal or emotional maturity.

59. According to research, American companies experience an expatriate failure rate that is:

A. similar to that of Japanese firms.B. similar to that of European companies.C. higher than both European and Japanese enterprises.D. lower than both European and Japanese multinationals.

60. Mendenhall and Oddou's "others-orientation" dimension, in their study on what predicts success in foreign

jobs postings, refers to: A. the expatriate's self-esteem, self-confidence, and mental well-being.B. the expatriate's ability to interact effectively with host-country nationals.C. the expatriate's ability to understand why people of other countries behave the way they do.D. the relationship between the country of the assignment and how well an expatriate adjusts to a particular

posting. 61. Which dimension of Mendenhall and Oddou's study suggests that an expatriate with high self-esteem, self-

confidence, and mental well-being is likely to succeed in a foreign job posing? A. Self-orientationB. Others-orientationC. Cultural toughnessD. Perceptual ability

62. Expatriate managers who lack this dimension of predicting success in a foreign posting tend to treat foreign

nationals as if they were home-country nationals. A. Others-orientationB. Self-orientationC. Perceptual abilityD. Cultural toughness

63. Mendenhall and Oddou identified cultural toughness as one of the dimensions in their study on dimensions

that predict success in foreign jobs postings. This dimension refers to: A. the expatriate's self-esteem, self-confidence, and mental well-being.B. the expatriate's ability to interact effectively with host-country nationals.C. the expatriate's ability to understand why people of other countries behave the way they do.D. the relationship between the country of the assignment and how well an expatriate adjusts to a particular

posting.

64. According to some researchers, which of the following is a fundamental attribute of a global manager and is characterized by cognitive complexity and a cosmopolitan outlook? A. A global mind-setB. Cultural toughnessC. High self-esteemD. Perceptual ability

65. Steve is a manager at a multinational technology firm and is being sent to Japan to head the company's

operations there. As a part of training, a familiarization trip to Japan has been planned for him before his formal transfer. What type of training is Steve receiving? A. Language trainingB. Cultural trainingC. Practical trainingD. Transfer training

66. Which of the following statements is true regarding practical training?

A. Practical training is provided to foster an appreciation for the host country's culture.B. The local community is a significant source of support in helping an expatriate family adapt to a foreign

culture.C.

Expatriates should delay the process of establishing a routine as it increases the likelihood of premature return on account of monotony.

D.

Where an expatriate community exists, firms often devote considerable effort to ensuring that the new expatriate family is quickly integrated into that group.

67. Which among the following is seen as the final link in an integrated, circular process that connects good

selection and cross-cultural training of expatriate managers with completion of their term abroad and reintegration into their national organization? A. ResidencyB. VisitationC. RepatriationD. Homecoming

68. Which of the following statements is true regarding management development?

A. Management development programs attempt to increase skill levels by focusing mainly on providing

management education.B.

Management development programs help build a unifying corporate culture by socializing new managers into the norms and value systems of the firm.

C.

Rotating managers through different jobs in several countries as a part of management development programs leads to adaptation problems.

D. Management development programs can be used to foster esprit de corps but is rarely used for developing technical competencies.

69. _____ makes it difficult to evaluate the performance of expatriate managers objectively.

A. FeedbackB. Hard dataC. KnowledgeD. Bias

70. When evaluating expatriates, home-country managers usually rely on: A. the manager's ability to develop cross-cultural awareness.B. hard data such as market share.C. the ability of the expatriate to work with local managers.D. their own international experience.

71. Which among the following should be done in order to reduce bias in the performance appraisal process for

expatriates? A. More weight should be given to an off-site manager's appraisal than to an on-site manager's appraisal.B. The on-site manager should be of a different nationality as the expatriate manager.C.

When the policy is for foreign on-site managers to write performance evaluations, home-office managers should be consulted before an on-site manager completes a formal termination evaluation.

D. A former expatriates who served in the same location as a current expatriate should not be allowed to participate in the appraisal.

72. Which of the following is the most common approach to expatriate pay?

A. Balance sheet approachB. Net-to-net approachC. Host-country approachD. Higher of host or home

73. Which component of a typical expatriate compensation package compensates the expatriate for having to

live in an unfamiliar country isolated from family and friends, deal with a new culture and language, and adapt to new work habits and practices? A. BenefitB. Cost-of-living allowanceC. Base salaryD. Foreign service premium

74. Which among the following allowances is paid when the expatriate is sent to a location where basic

amenities such as health care, schools, and retail stores are grossly deficient by the standards of the expatriate's home country? A. HousingB. HardshipC. Cost-of-livingD. Education

75. Labor unions generally try to get better pay, greater job security, and better working conditions for their

members through _____ with management. A. collective bargainingB. arbitrationC. conciliationD. expert determination

76. Unions' bargaining power is derived largely from their: A. ability to threaten to disrupt production.B. ability to change the organizational culture.C. willingness to adapt to new employment practices.D. ability to show restraint in negotiations.

77. Which among the following is a concern of organized labor regarding multinational firms?

A. A company can counter a union's bargaining power with the power to move production to another

country.B. An international business will keep low-skilled tasks in its home country and farm out only highly skilled

tasks to foreign plants.C. An international business can attempt to export employment practices and contractual agreements to its

home country.D. A multinational company is more likely to receive government support in the case of hostile labor

relations. 78. What is the long-term goal of international trade secretariats (ITSs)?

A. To reduce the competition between national unions.B. To be able to bargain transnationally with multinational firms.C. To reduce the ideological gap between union leaders in different countries.D. To get national and international bodies to regulate multinationals.

79. International trade secretariats (ITSs) have not enjoyed much success for all of the following reasons

except: A. national unions compete with each other to attract investment from international businesses.B. the structure and ideology of unions tend to vary significantly from country to country.C. organized labor has had only limited success in its efforts to get national and international bodies to

regulate multinationals.D.

the codes of conduct developed by International Labor Organization and the Organization for Economic Cooperation and Development prevented the ITSs from exercising absolute power.

80. What is the main difference in the way international businesses approach international labor relations?

A. The degree to which organized labor can limit the choices of an international businessB. The way work is organized within a plantC. The degree to which labor relations activities are centralized or decentralizedD. The way staffing, management development, and compensation activities are organized

81. Discuss the complexities of human resource management in an international firm. What are the key issues

facing firms in this area?

82. What are the four strategies pursued by international companies, and what is the role of HRM in these?

83. What is the relationship between a firm's staffing policy and its corporate culture?

84. What are the three types of staffing policies in international business? Briefly describe each one. Which is

the most attractive approach and why?

85. Why should a firm pursue an ethnocentric approach to staffing? What are the disadvantages of this

approach?

86. You are the vice-president of human resources for your firm. Your boss has asked you to research the

advantages and disadvantages of a polycentric approach to staffing. What will you tell your boss?

87. What is expatriate failure? How prevalent is the problem? What is the cost to a firm of a failed assignment?

88. Discuss the reasons why expatriate managers fail to complete their foreign assignment. Do the reasons for

expatriate failure differ by nationality?

89. Failure of the spouse to adjust was the top reason given for expatriate failure in American firms, the only

reason given for expatriate failure in European firms, and the number five reason given by Japanese firms. Discuss the reasons behind the difficulties a spouse faces in adapting to a new country.

90. Discuss Mendenhall and Oddou's assertion that an executive who performs well in a domestic setting may

not adapt to a different cultural setting.

91. What are the three types of training for expatriate managers? Why is this type of training so important to managers and their families?

92. Discuss why the repatriation process is so difficult for so many expatriates. How could the difficulties

associated with repatriation be alleviated?

93. Describe the notion of management development programs as a tool for increasing the overall skill levels

of managers. What is the goal of this type of program?

94. Discuss the issue of how to evaluate performance of expatriate managers. What problems arise for

companies as they make such evaluations?

95. How can firms reduce the bias in performance appraisals of expatriate managers?

96. Should a firm pay executives in different countries according to the prevailing standards in each country, or

should it equalize pay on a global basis?

97. What is the most common approach to expatriate pay? Explain what comprises this form of compensation.

What is the advantage of this approach?

98. Consider the allowance component of a typical expatriate compensation package. What types of allowance

are included in this component?

99. Discuss the concerns of organized labor.

100.What are the three actions taken by organized labor to respond to the increased bargaining power of multinationals? How successful have these efforts been?

ch18 Key

1.(p. 604)

Equal employment legislation is strongly pursued in all countries. FALSE

AACSB: Ethical/Legal Responsibilities

Bloom's: ComprehensionDifficulty: Easy

Hill - Chapter 18 #1Learning Objective: 18-01

2.(p. 604)

An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries. TRUE

AACSB: Analytic Skills

Bloom's: KnowledgeDifficulty: Easy


3.(p. 605)

A company that is successful at a localization strategy will realize experience curve and location economies. FALSE


Bloom's: ComprehensionDifficulty: Medium


4.(p. 606)

An organization's norms and value systems are known as its corporate culture. TRUE




5.(p. 606)

The most attractive staffing policy is the ethnocentric approach. FALSE


Bloom's: KnowledgeDifficulty: Medium


6.(p. 606)

A firm with an ethnocentric staffing policy will fill all key management positions with parent-country nationals. TRUE




7.(p. 606)

A firm following a polycentric approach to staffing believes that the host country lacks qualified individuals to fill senior management positions. FALSE




8.(p. 607)

A firm that adopts a polycentric approach to staffing is likely to suffer from cultural myopia. FALSE




9.(p. 607)

In the case of an ethnocentric approach, it is possible that managers may make decisions that are ethically suspect because they do not understand the culture in which they are managing. TRUE




10.(p. 607)

Firms may choose an ethnocentric approach to staffing as opposed to a polycentric approach because of the cost savings it promotes. FALSE




11.(p. 608)

A geocentric staffing policy seeks the best people for key jobs throughout the organization, regardless of nationality. TRUE




12.(p. 608)

Many firms adopt a geocentric policy toward staffing because it is a relatively inexpensive staffing policy. FALSE




13.(p. 608)

A geocentric approach tends to reduce local responsiveness. FALSE




14.(p. 609)

A citizen of Japan who moves to the United States to work at Microsoft would be classified as an inpatriate. TRUE




15.(p. 610)

Research into expatriate failure revealed that consistently one of the reasons for the premature return of employees for U.S. multinationals was the inability of the spouse to adjust. TRUE




16.(p. 610)

For European firms, the top reason for expatriate failure was the inability of the manager to cope with larger overseas responsibilities. FALSE




17.(p. 611)

An executive who performs well in a domestic setting will be able to adapt to managing in a different cultural setting. FALSE




18.(p. 611)

An expatriate needs to have language fluency to show willingness to communicate. FALSE

AACSB: Reflective Thinking Skills



19.(p. 612)

The ability to understand why people of other countries behave the way they do is perceptual ability. TRUE




20.(p. 612)

According to Mendenhall and Oddou, poorly-adjusted expatriates tend to be nonjudgmental and nonevaluative in interpreting the behavior of host-country nationals. FALSE




21.(p. 613)

Cultural toughness can be assessed by comparing cultures. TRUE




22.(p. 613)

A manager might be sent on several foreign postings over a number of years to build his /her cross-cultural sensitivity and experience as part of a management development program. TRUE




23.(p. 614)

Historically, most international businesses have been more concerned with management development than with training. FALSE




24.(p. 614)

It is not possible to conduct business nearly all over the world using only English. FALSE




25.(p. 615)

In many cases, firms fail to plan for an expatriate's repatriation. TRUE




26.(p. 615)

Where an expatriate community exists, firms often devote lesser effort to ensuring that the new expatriate family is quickly integrated into that group. FALSE




27.(p. 616)

Bringing managers together in one location for extended periods and rotating them through different jobs in several countries helps the firm build a formal management network. FALSE




28.(p. 617)

Many expatriate managers believe that headquarters management evaluates them unfairly and does not fully appreciate the value of their skills and experience. TRUE




29.(p. 617)

Most expatriates believe that more weight should be given to an on-site manager's appraisal than to an off-site manager's appraisal. TRUE




30.(p. 618)

In ethnocentric firms, the lack of managers' mobility among national operations implies that pay can and should be kept country-specific. FALSE




31.(p. 618)

If a firm is serious about building an international cadre, it may have to pay its international executives the same basic salary irrespective of their country of origin or assignment. TRUE




32.(p. 619)

Base pay in most firms is set with regard to global market conditions. FALSE




33.(p. 620)

An expatriate's base salary normally varies from the base salary for a similar position in the home country. FALSE




34.(p. 620)

A foreign service premium is offered as an inducement to accept foreign postings. TRUE




35.(p. 621)

When a reciprocal tax treaty is in force, the firm typically pays the expatriate's income tax in the host country. FALSE




36.(p. 621)

Most benefits that are tax deductible for the firm in the home country are deductible out of the country. FALSE




37.(p. 622)

From a strategic perspective, the key issue in international labor relations is the degree to which organized labor can limit the choices of an international business. TRUE




38.(p. 622)

Labor unions generally prefer it if an international business keeps highly skilled tasks in its home country and farms out only low-skilled tasks to foreign plants. FALSE




39.(p. 623)

There is now a trend toward greater decentralized control. FALSE




40.(p. 623)

The international trade secretariats have had tremendous success. FALSE




41.(p. 604)

_____ refers to the activities an organization carries out to utilize its human resources effectively. A. Organizational behaviorB. Strategic managementC. Human resource managementD. Labor relations

Human resource activities include determining the firm's human resource strategy, staffing, performance evaluation, management development, compensation, and labor relations.




42.(p. 605)

_____ is/are the linchpin of a firm's organization architecture. A. PeopleB. StrategyC. Business processesD. Organizational structure

A firm must have the right people in the right postings in order to outperform rivals in the global market place. The right architecture and the right strategy can help the organization achieve superior performance.




43.(p. 605)

Firms should build a strong corporate culture and an informal management network for transmitting information and knowledge within the organization if they are pursuing a(n): A. transnational strategy.B. localization strategy.C. global standardization strategy.D. international strategy.

Transnational firms try to create value by emphasizing local responsiveness, transferring products and competencies overseas, and realizing experience curve and location economies simultaneously.




44.(p. 606)

Which of the following is mainly concerned with the selection of employees for particular jobs? A. Retention policyB. Staffing policyC. Incentive policyD. Appraisal policy

Staffing involves selecting individuals who have the skills required to do particular jobs.




45.(p. 606)

Many Japanese firms prefer expatriate Japanese managers to head their foreign operations because these managers have been socialized into the firm's culture while employed in Japan. This implies that: A. the firm may believe that such managers cannot progress beyond senior positions in their parent

company.B. the firm may see an ethnocentric staffing policy as the best way to maintain a unified corporate

culture.C. the firm is trying to create value by transferring core competencies to a foreign operation.D. the firm requires host-country nationals to be recruited to manage subsidiaries.

Firms that place high value on maintaining a unified corporate culture may view the ethnocentric staffing policy as the most suitable way to do so.


Bloom's: ComprehensionDifficulty: Hard


46.(p. 607)

A polycentric approach to staffing is one in which: A. all key management positions are filled by parent company nationals.B. host-country nationals are recruited to manage subsidiaries while parent-company nationals occupy

key positions at corporate headquarters.C. the best people, regardless of nationality, are recruited to fill key positions throughout the

organization.D. parent-company nationals are recruited to manage subsidiaries while host-country nationals occupy

key positions.

Host-country managers are unlikely to make the mistakes arising from cultural misunderstandings to which expatriate managers are vulnerable.




47.(p. 607)

Which of the following is a drawback of the polycentric approach to staffing? A. Firms are likely to suffer from cultural myopia.B. Host-country nationals are vulnerable to cultural misunderstandings.C. This approach increases the cost of value creation.D. Host-country nationals have limited opportunities for advancement beyond senior positions in their

subsidiary.

A firm with a polycentric approach to staffing is less likely to suffer from cultural myopia. Moreover, host-country national are less susceptible to mistakes arising out of cultural differences. This approach is less expensive to implement, thereby reducing the cost of value creation.




48.(p. 607)

Cultural myopia refers to a firm's failure to: A. adapt to certain ethnocentric cultures through the expatriate.B. permanently implement parent-company culture in the host country.C. understand host-country cultural differences that require different approaches to marketing and

management.D. identify countries which are much tougher postings than others because their cultures are more

unfamiliar and uncomfortable.

Cultural myopia is most likely to occur when firms adopt an ethnocentric staffing policy.

AACSB: Multicultural/Diversity Understanding



49.(p. 607)

If a company recruits host-country nationals to manage subsidiaries while parent-country nationals occupy key positions at corporate headquarters, the firm is following a(n): A. ethnocentric staffing policy.B. regiocentric staffing policy.C. polycentric staffing policy.D. geocentric staffing policy.

A polycentric approach is effective for firms pursuing a localization strategy.




50.(p. 607-608)

A polycentric approach may be effective for firms pursuing a(n): A. international strategy.B. localization strategy.C. transnational strategy.D. global standardization strategy.

A polycentric staffing policy requires host-country nationals to be recruited to manage subsidiaries, while parent-country nationals occupy key positions at corporate headquarters.




51.(p. 608)

Food and detergents giant Unilever had foreign subsidiaries that had evolved into quasi-autonomous operations, each with its own strong national identity. They objected strenuously to corporate headquarters' attempts to limit their autonomy. Thus, Unilever found it very difficult to shift from a strategic posture that emphasized localization to a transnational posture because of: A. difficulty in achieving the coordination required to pursue experience curve and location economies.B. the difficulty in achieving coordination required to transfer core competencies.C. the federation that resulted from a polycentric approach.D. expensive implementation and increased costs of value creation.

A polycentric approach to staffing can prevent integration between corporate headquarters and foreign subsidiaries. The resulting "federation" of largely independent national units can act as a force for inertia within the firm.

AACSB: Reflective Thinking Skills

Bloom's: ApplicationDifficulty: Hard


52.(p. 608)

What is the most important advantage of using a geocentric staffing policy? A. It enables the firm to build a cadre of international executives who feel at home working in a number

of cultures.B. It may be less expensive to implement than other policies, reducing the costs of value creation.C. The higher pay managers on an international fast track enjoy is a source of inspiration within a firm.D. It involves no costs of training and relocation when transferring managers from country to country.

A geocentric staffing policy seeks the best people for key jobs throughout the organization, regardless of nationality.




53.(p. 608)

Which of the following is a problem that limits a firm's ability to pursue a geocentric policy? A.

The lack of management transfers from home to host countries, and vice versa, can lead to a lack of integration between corporate headquarters and foreign subsidiaries.

B. The higher pay managers on an international fast track enjoy may be a source of resentment within a firm.

C. The firm fails to understand host-country cultural differences that require different approaches to marketing and management.

D. It limits advancement opportunities for host-country nationals.

A company which adopts a geocentric staffing policy may need a compensation structure with a standardized international base pay level higher than national levels in many countries.




54.(p. 609 - Table 18.1 Comparison of Staffing Approaches)

An ethnocentric approach to staffing is appropriate for firms that are pursuing a(n): A. international strategy.B. localization strategy.C. global standardization strategy.D. transnational strategy.

International firms attempt to create value by transferring products and competencies overseas. Firms with ethnocentric approaches to staffing may believe that the best way to do this is to transfer parent-country nationals who have knowledge of that competency to the foreign operation.




55.(p. 609 - Table 18.1 Comparison of Staffing Approaches)

What is the advantage of using an ethnocentric staffing approach? A. Uses human resources efficientlyB. Alleviates cultural myopiaC. Inexpensive to implementD. Helps transfer core competencies

The ethnocentric staffing approach focuses on transferring core competencies by transferring parent-country nationals who have knowledge of that competency to foreign operations.




56.(p. 609)

A citizen of France who moves to Germany to work at BMW is a(n): A. host-country national.B. local.C. inpatriate.D. acquired citizen.

The term inpatriates is used to identify a subset of expatriates who are citizens of a foreign country working in the home country of their multinational employer.


Bloom's: ApplicationDifficulty: Easy


57.(p. 609)

The premature return of an expatriate manager to his/her home country is known as: A. repatriation.B. expatriate failure.C. inpatriate failure.D. foreign manager failure.

Expatriate failure represents a failure of a firm's selection policies to identify individuals who will not thrive abroad.




58.(p. 610)

For American multinationals, the biggest impediment to expatriate success is: A. the inability of the spouse to adjust.B. the manager's inability to adjust.C. the manager's inability to cope with larger overseas responsibilities.D. the manager's personal or emotional maturity.

The failure of spouses to adjust to a foreign posting seems to be related to a number of factors such as the absence of a familiar network of friends and family, language barriers, and immigration rules prohibiting employment.




59.(p. 610)

According to research, American companies experience an expatriate failure rate that is: A. similar to that of Japanese firms.B. similar to that of European companies.C. higher than both European and Japanese enterprises.D. lower than both European and Japanese multinationals.

According to a study by R.L. Tung, 76 percent of U.S. multinationals experienced expatriate failure rates of 10 percent or more, and 7 percent experienced a failure rate of more than 20 percent.




60.(p. 611)

Mendenhall and Oddou's "others-orientation" dimension, in their study on what predicts success in foreign jobs postings, refers to: A. the expatriate's self-esteem, self-confidence, and mental well-being.B. the expatriate's ability to interact effectively with host-country nationals.C. the expatriate's ability to understand why people of other countries behave the way they do.D. the relationship between the country of the assignment and how well an expatriate adjusts to a

particular posting.

The more effectively an expatriate interacts with host-country nationals, the more likely he or she is to succeed.




61.(p. 611)

Which dimension of Mendenhall and Oddou's study suggests that an expatriate with high self-esteem, self-confidence, and mental well-being is likely to succeed in a foreign job posing? A. Self-orientationB. Others-orientationC. Cultural toughnessD. Perceptual ability

Mendenhall and Oddou concluded that expatriates with healthy self-esteem, self-confidence, and mental well-being were able to adapt their interests in food, sport, and music; had interests outside of work that could be pursued and were technically competent.




62.(p. 612)

Expatriate managers who lack this dimension of predicting success in a foreign posting tend to treat foreign nationals as if they were home-country nationals. A. Others-orientationB. Self-orientationC. Perceptual abilityD. Cultural toughness

Perceptual ability is the ability to understand why people of other countries behave the way they do; that is, the ability to empathize.




63.(p. 613)

Mendenhall and Oddou identified cultural toughness as one of the dimensions in their study on dimensions that predict success in foreign jobs postings. This dimension refers to: A. the expatriate's self-esteem, self-confidence, and mental well-being.B. the expatriate's ability to interact effectively with host-country nationals.C. the expatriate's ability to understand why people of other countries behave the way they do.D. the relationship between the country of the assignment and how well an expatriate adjusts to a

particular posting.

Certain countries are much tougher postings than others because their cultures are more unfamiliar and uncomfortable.




64.(p. 613)

According to some researchers, which of the following is a fundamental attribute of a global manager and is characterized by cognitive complexity and a cosmopolitan outlook? A. A global mind-setB. Cultural toughnessC. High self-esteemD. Perceptual ability

According to some researchers, managers with a global mind-set can deal with high levels of complexity and ambiguity and are open to the world.




65.(p. 614)

Steve is a manager at a multinational technology firm and is being sent to Japan to head the company's operations there. As a part of training, a familiarization trip to Japan has been planned for him before his formal transfer. What type of training is Steve receiving? A. Language trainingB. Cultural trainingC. Practical trainingD. Transfer training

A familiarization trip is a part of cultural training and is provided to ease culture shock.


Bloom's: ApplicationDifficulty: Medium


66.(p. 615)

Which of the following statements is true regarding practical training? A. Practical training is provided to foster an appreciation for the host country's culture.B. The local community is a significant source of support in helping an expatriate family adapt to a

foreign culture.C. Expatriates should delay the process of establishing a routine as it increases the likelihood of

premature return on account of monotony.D.

Where an expatriate community exists, firms often devote considerable effort to ensuring that the new expatriate family is quickly integrated into that group.

Practical training helps the expatriate manager and family ease themselves into day-to-day life in the host country. The sooner a routine is established, the better are the prospects of successful adaptation. The expatriate community can be a useful source of support and information and can be invaluable in helping the family adapt to a foreign culture.




67.(p. 615)

Which among the following is seen as the final link in an integrated, circular process that connects good selection and cross-cultural training of expatriate managers with completion of their term abroad and reintegration into their national organization? A. ResidencyB. VisitationC. RepatriationD. Homecoming

A largely overlooked but critically important issue in the training and development of expatriate managers is to prepare them for reentry into their home-country organization.




68.(p. 615-616)

Which of the following statements is true regarding management development? A. Management development programs attempt to increase skill levels by focusing mainly on providing

management education.B.

Management development programs help build a unifying corporate culture by socializing new managers into the norms and value systems of the firm.

C. Rotating managers through different jobs in several countries as a part of management development programs leads to adaptation problems.

D. Management development programs can be used to foster esprit de corps but is rarely used for developing technical competencies.

Management development programs provide a mix of management education and rotations of managers through a number of jobs within the firm. They can be used for developing technical competencies. Rotating managers through different jobs in several countries helps the firm build an informal management network.




69.(p. 617)

_____ makes it difficult to evaluate the performance of expatriate managers objectively. A. FeedbackB. Hard dataC. KnowledgeD. Bias

Two groups evaluate the performance of expatriate managers—host-nation managers and home-office managers—and both are subject to bias.




70.(p. 617)

When evaluating expatriates, home-country managers usually rely on: A. the manager's ability to develop cross-cultural awareness.B. hard data such as market share.C. the ability of the expatriate to work with local managers.D. their own international experience.

Home-office managers are often not aware of what is going on in a foreign operation. Accordingly, they tend to rely on hard data in evaluating an expatriate's performance which may be outside the expatriate manager's control.




71.(p. 617-618)

Which among the following should be done in order to reduce bias in the performance appraisal process for expatriates? A. More weight should be given to an off-site manager's appraisal than to an on-site manager's

appraisal.B. The on-site manager should be of a different nationality as the expatriate manager.C.

When the policy is for foreign on-site managers to write performance evaluations, home-office managers should be consulted before an on-site manager completes a formal termination evaluation.

D. A former expatriates who served in the same location as a current expatriate should not be allowed to participate in the appraisal.

When the policy is for foreign on-site managers to write performance evaluations, home-office managers should be consulted before an on-site manager completes a formal termination evaluation as it gives the home-office manager the opportunity to balance what could be a hostile evaluation based on a cultural misunderstanding.




72.(p. 619)

Which of the following is the most common approach to expatriate pay? A. Balance sheet approachB. Net-to-net approachC. Host-country approachD. Higher of host or home

According to Organizational Resources Consulting, some 80 percent of the 781 companies it surveyed used the balance sheet approach.




73.(p. 620-621)

Which component of a typical expatriate compensation package compensates the expatriate for having to live in an unfamiliar country isolated from family and friends, deal with a new culture and language, and adapt to new work habits and practices? A. BenefitB. Cost-of-living allowanceC. Base salaryD. Foreign service premium

A foreign service premium is offered as an inducement to accept foreign postings.




74.(p. 621)

Which among the following allowances is paid when the expatriate is sent to a location where basic amenities such as health care, schools, and retail stores are grossly deficient by the standards of the expatriate's home country? A. HousingB. HardshipC. Cost-of-livingD. Education

A hardship allowance is paid when an expatriate is being sent to a difficult location.




75.(p. 622)

Labor unions generally try to get better pay, greater job security, and better working conditions for their members through _____ with management. A. collective bargainingB. arbitrationC. conciliationD. expert determination

Unions' bargaining power is derived largely from their ability to threaten to disrupt production, either by a strike or some other form of work protest.




76.(p. 622)

Unions' bargaining power is derived largely from their: A. ability to threaten to disrupt production.B. ability to change the organizational culture.C. willingness to adapt to new employment practices.D. ability to show restraint in negotiations.

Threats are credible only insofar as management has no alternative but to employ union labor.




77.(p. 622)

Which among the following is a concern of organized labor regarding multinational firms? A. A company can counter a union's bargaining power with the power to move production to another

country.B. An international business will keep low-skilled tasks in its home country and farm out only highly

skilled tasks to foreign plants.C. An international business can attempt to export employment practices and contractual agreements to

its home country.D. A multinational company is more likely to receive government support in the case of hostile labor

relations.

Concern of domestic unions about multinational firms are that the company can counter its bargaining power with the power to move production to another country, will keep highly skilled tasks in its home country and farm out only low-skilled tasks to foreign plants, and can reduce the power of the union by importing employment practices and contractual agreements from its home country.




78.(p. 623)

What is the long-term goal of international trade secretariats (ITSs)? A. To reduce the competition between national unions.B. To be able to bargain transnationally with multinational firms.C. To reduce the ideological gap between union leaders in different countries.D. To get national and international bodies to regulate multinationals.

Organized labor believed that by coordinating union action across countries through an ITS, it could counter the power of a multinational corporation by threatening to disrupt production on an international scale.




79.(p. 623)

International trade secretariats (ITSs) have not enjoyed much success for all of the following reasons except: A. national unions compete with each other to attract investment from international businesses.B. the structure and ideology of unions tend to vary significantly from country to country.C. organized labor has had only limited success in its efforts to get national and international bodies to

regulate multinationals.D.

the codes of conduct developed by International Labor Organization and the Organization for Economic Cooperation and Development prevented the ITSs from exercising absolute power.

Although national unions may want to cooperate, they also compete with each other to attract investment from international businesses, and hence jobs for their members. There is also a wide variation in union structures across countries. The codes of conduct of international organizations have had only limited effectiveness.




80.(p. 623)

What is the main difference in the way international businesses approach international labor relations? A. The degree to which organized labor can limit the choices of an international businessB. The way work is organized within a plantC. The degree to which labor relations activities are centralized or decentralizedD. The way staffing, management development, and compensation activities are organized

Historically, most international businesses decentralized international labor relations activities to their foreign subsidiaries; however, there is now a trend toward greater centralized control.




81.(p. 604)

Discuss the complexities of human resource management in an international firm. What are the key issues facing firms in this area? The activities an organization carries out to use its human resources effectively are referred to as human resource management. These activities include determining the firm's human resource strategy, staffing, performance evaluation, management development, compensation, and labor relations. The strategic role of HRM is more complex in an international business, where profound differences between countries in labor markets, culture, legal systems, economic systems, and the like complicate staffing, management development, performance evaluation, and compensation activities.




82.(p. 605)

What are the four strategies pursued by international companies, and what is the role of HRM in these? The four strategies pursued by international businesses are localization, where value is created by emphasizing local responsiveness; international, where value is created by transferring products and competencies overseas; global standardization, where value is created by realizing experience curve and location economies; and transnational, where value is created by doing all of these things simultaneously. HRM policies must be congruent with the firm's strategy.




83.(p. 606)

What is the relationship between a firm's staffing policy and its corporate culture? A firm's selection of employees for particular jobs is its staffing policy. A staffing policy not only involves the selection of individuals who have the skills required to do a particular job, it also can be a tool for developing and promoting the desired corporate culture, or norms and values systems, of the firm.




84.(p. 606-608)

What are the three types of staffing policies in international business? Briefly describe each one. Which is the most attractive approach and why? There are three types of staffing approaches in international business. First, the ethnocentric approach is one in which all key management positions are filled by parent-country nationals. Second, the polycentric approach involves recruiting host-country nationals to manage subsidiaries while parent-country nationals occupy key positions at corporate headquarters. Third, the geocentric policy seeks the best people for key jobs throughout the organization, regardless of nationality. This approach is probably the most attractive because it enables the firm to make the best use of its human resources, and it allows the firm to build a cadre of international executives who feel at home working in a number of cultures.




85.(p. 606-607)

Why should a firm pursue an ethnocentric approach to staffing? What are the disadvantages of this approach? Firms pursue an ethnocentric staffing policy for three reasons. First, the firm may believe there is a lack of qualified individuals in the host country to fill senior management positions. Second, the firm may see an ethnocentric staffing policy as the best way to maintain a unified corporate culture. Third, if the firm is trying to create value by transferring core competencies to a foreign operation, it may feel that the best way to do this is to transfer parent-country nationals who have knowledge of that competency to the foreign operation.The ethnocentric approach to staffing is on the wane for two reasons. First, the policy limits advancement opportunities for host-country nationals, which can lead to resentment, lower productivity, and increased turnover among that group. Second, the policy can lead to cultural myopia.




86.(p. 607)

You are the vice-president of human resources for your firm. Your boss has asked you to research the advantages and disadvantages of a polycentric approach to staffing. What will you tell your boss? A polycentric staffing policy requires host-country nationals to be recruited to manage subsidiaries, while parent-country nationals occupy key positions at corporate headquarters. One advantage of adopting a polycentric approach is that the firm is less likely to suffer from cultural myopia. Host-country managers are unlikely to make the mistakes arising from cultural misunderstandings that expatriate managers are subject to. Another advantage of the polycentric approach is that it may be less expensive than other approaches to implement. By hiring host-country personnel to fill management positions, the firm will not incur a significant amount of expatriate expense. However, because host-country nationals have limited opportunities for advancement, resentment may arise. Furthermore, a gap may form between host-country managers and parent-country managers leading to a lack of integration between corporate headquarters and foreign subsidiaries.




87.(p. 609-610)

What is expatriate failure? How prevalent is the problem? What is the cost to a firm of a failed assignment? Expatriate failure represents a failure of the firm's selection policies to identify individuals who will not thrive abroad. The consequences include premature return from a foreign posting and high resignation rates. For American firms, expatriate failure is particularly high among expatriates who are sent to developing countries. Almost 70 percent of such employees will return home early as compared to the 16 to 40 percent of employees sent to developed nations that return prior to the completion of their assignments. It has been estimated that the cost of each failure runs between $250,000 and $1 million. In addition, approximately 30 to 50 percent of American expatriates stay at their international assignments, but are considered ineffective or marginally effective by their firms.




88.(p. 610)

Discuss the reasons why expatriate managers fail to complete their foreign assignment. Do the reasons for expatriate failure differ by nationality? The question of why expatriates fail to complete their foreign assignments was studied by R. L. Tung who found that U.S. firms experienced a significantly higher failure rate than either European or Japanese firms. For American firms, the reasons for expatriate failure, in order of importance, were: (1) inability of spouse to adjust, (2) manager's inability to adjust, (3) other family problems, (4) the manager's personal or emotional maturity, and (5) inability to cope with larger overseas responsibilities. However, for Japanese firms the reasons for expatriate failure, in order of importance, were: (1) inability to cope with larger overseas responsibilities, (2) difficulties with new environment, (3) personal or emotional problems, (4) lack of technical competence, and (5) inability of spouse to adjust. Perhaps the most striking difference between these two lists is that the importance of the spouse was most important for U.S. expatriate managers but ranked only fifth for Japan. Tung comments that this difference is not surprising given the role and status to which Japanese society traditionally relegates the wife and the fact that most of the Japanese expatriate managers in the study were men. Finally, European firms gave only one reason to explain expatriate failure: the inability of a spouse to adapt. Tung's research has been confirmed by a number of subsequent studies of expatriate failure.




89.(p. 611)

Failure of the spouse to adjust was the top reason given for expatriate failure in American firms, the only reason given for expatriate failure in European firms, and the number five reason given by Japanese firms. Discuss the reasons behind the difficulties a spouse faces in adapting to a new country. The failure of spouse to adjust appears to be related to a several factors. Often spouses find themselves in a foreign country without the familiar network of family and friends. Language differences make it difficult for them to make new friends, making the spouse feel trapped at home. If immigration rules prohibit employment, the spouse may find it even more difficult to adapt. Research suggests that a main reason managers now turn down international assignments is concern over the impact the assignment might have on their spouse's career.




90.(p. 611-613)

Discuss Mendenhall and Oddou's assertion that an executive who performs well in a domestic setting may not adapt to a different cultural setting. According to Mendenhall and Oddou, many managers tend to equate domestic performance with overseas performance potential. However, the researchers suggest that success in a foreign job posting depends not on domestic performance, but instead on four dimensions. First, an expatriate's self-orientation will affect performance. Expatriates with high self-esteem, self-confidence, and mental well-being are more likely to succeed in foreign jobs. Second is others-orientation. The more effectively an expatriate interacts with host-country nationals, the more likely he/she is to succeed. Third, an expatriate's perceptual abilities are important to success. Managers need to be able to understand why people of other countries behave the way they do. Finally, cultural toughness is a measure of how well an expatriate adjusts to a particular situation, especially when the assignment involves a culture that is very different from the home-country culture.




91.(p. 614-615)

What are the three types of training for expatriate managers? Why is this type of training so important to managers and their families? Training can help a manager and spouse cope with issues of adjusting to the foreign environment. Three types of training are important. Cultural training seeks to foster an appreciation for the host country's culture. The belief is that understanding a host country's culture will help the manager empathize with the culture, which will enhance his/her effectiveness in dealing with host-country nationals. Language training is vital to an expatriate's ability to interact with host-country nationals. Finally, practical training is aimed at helping the expatriate manager and family ease themselves into day-to-day life in the host country.




92.(p. 615)

Discuss why the repatriation process is so difficult for so many expatriates. How could the difficulties associated with repatriation be alleviated? Preparing expatriates for reentry into their home-country organization is generally overlooked, yet represents a huge challenge for firms. Often when expatriates return home after a stint abroad they face an organization that doesn't know what they have done for the last few years, doesn't know how to use their new knowledge, and doesn't particularly care. In the worst cases, reentering employees have to scrounge for jobs, or firms create standby positions that don't use the expatriate's skills and capabilities and fail to make the most of the business investment the firm has made in that individual.The key to solving this problem is good human resource planning. The HRM function needs to develop good programs for reintegrating expatriates back into work life within their home-country organization, for preparing them for changes in their physical and professional landscape, and for utilizing the knowledge they acquired while abroad.




93.(p. 615-617)

Describe the notion of management development programs as a tool for increasing the overall skill levels of managers. What is the goal of this type of program? Management development programs are designed to increase the overall skill levels of managers through a mix of ongoing management education and rotations of managers through a number of jobs within the firm to give them a broad range of experience. The goal of this type of program is to improve overall productivity and quality of the firm's management resources. As a strategic tool, management development programs can play an important role in international businesses. These programs can help a firm build a corporate culture that is sensitive to international business issues. Moreover, by rotating managers, firms can build informal management networks, networks that can then be used as a conduit for exchanging information within an organization.




94.(p. 617)

Discuss the issue of how to evaluate performance of expatriate managers. What problems arise for companies as they make such evaluations? It can be very difficult to evaluate the performance of expatriate managers objectively because of unintentional bias. A host-country manager may be biased by his/her own cultural frame of reference and expectations, while a home-country manager may be biased by distance and his/her own lack of experience working abroad. In fact, home-country managers tend to rely on hard data to evaluate an expatriate's performance, data that may reflect factors outside the expatriate's control. This reliance on hard data has led many expatriates to complain that because "soft" variables are also important to their success, they are not getting fair evaluations. Indeed, one study found that over half of the expatriates questioned believed that a foreign assignment was either detrimental or immaterial to their career.




95.(p. 617-618)

How can firms reduce the bias in performance appraisals of expatriate managers? Unintentional bias makes it difficult to evaluate the performance of expatriate managers objectively. This bias can be reduced in several ways. First, most expatriates believe that more weight should be given to an on-site manager's appraisal than to an off-site manager's appraisal. If the on-site manager is of the same nationality as the expatriate manager, cultural bias can also be reduced. Finally, when the policy is for foreign on-site managers to write performance evaluations, home-office managers, in an effort to avoid cultural misunderstandings, should be consulted before an on-site manager completes a formal termination evaluation.




96.(p. 618)

Should a firm pay executives in different countries according to the prevailing standards in each country, or should it equalize pay on a global basis? Substantial differences exist in the compensation of executives at the same level in various countries. These differences raise the question of whether a firm should pay its expatriate managers the prevailing wage rate in the country that they are working in, or whether the firm should pay all of its expatriate managers at the same level of responsibility a similar amount of pay For a U.S. firm, this could mean raising the compensation of foreign nationals to U.S. levels, a policy that could prove to be very expensive. Yet, if a firm does not equalize pay, it could cause considerable resentment among foreign nationals who work with U.S. managers.




97.(p. 619-620)

What is the most common approach to expatriate pay? Explain what comprises this form of compensation. What is the advantage of this approach? The most common approach to expatriate pay is the balance sheet approach. This approach has the advantage of equalizing purchasing power across countries so that employees can enjoy the same living standard in their foreign posting as they enjoyed at home. The approach provides financial incentives to offset qualitative differences between locations. The typical expatriate compensation package is comprised of a base salary, a foreign-service premium, allowances of various types, tax differentials, and benefits.




98.(p. 621)

Consider the allowance component of a typical expatriate compensation package. What types of allowance are included in this component? There are four types of allowances that are usually included in an expatriate's compensation package. A hardship allowance is paid when the expatriate is being sent to a location where basic amenities are grossly deficient as compared to the home country. A housing allowance may be included to ensure that the expatriate can afford the same quality of housing in the foreign country as in the home country. A cost-of-living allowance may be paid to ensure that the expatriate enjoys the same standard of living in the foreign location as at home. Finally, education allowances may be included to ensure that an expatriate's children receive adequate schooling.




99.(p. 622)

Discuss the concerns of organized labor. A principle concern of domestic unions about multinational firms is that a company can counter its bargaining power with the power to move production to another country. Another concern is that an international business will keep highly skilled tasks in its home country and farm out only low-skilled tasks to foreign plants. A final concern arises when an international business attempts to import employment practices and contractual agreements from its home country. When these practices are alien to the host country, organized labor fears the change will reduce its influence and power.




100.(p. 622)

What are the three actions taken by organized labor to respond to the increased bargaining power of multinationals? How successful have these efforts been? Organized labor has responded to the increased bargaining power of multinationals by taking three actions. First, organized labor is trying to establish international labor organizations. Second, labor is lobbying for national legislation to restrict multinationals. Finally, organized labor is trying to achieve international regulations on multinationals through organizations such as the UN. To date, success in these efforts has been limited.




ch18 Summary

Category # of Questions

AACSB: Analytic Skills 87

AACSB: Ethical/Legal Responsibilities 1

AACSB: Multicultural/Diversity Understanding 10

AACSB: Reflective Thinking Skills 2

Bloom's: Application 3

Bloom's: Comprehension 68

Bloom's: Knowledge 29

Difficulty: Easy 23

Difficulty: Hard 4

Difficulty: Medium 73

Hill - Chapter 18 100

Learning Objective: 18-01 8






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