Human Resource Management, 12e (Dessler)

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) time framework
C) individualism
D) power distance
E) tolerance for ambiguity
Answer: D
Explanation: 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.
Diff: 1 Page Ref: 632
Chapter: 17
Objective: 2
Skill: Concept

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) encouraging individual creativity
D) enforcing a firm's policies and regulations
E) maintaining a peaceful work environment
Answer: E
Explanation: 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.
Diff: 2 Page Ref: 632
AACSB: Multicultural and Diversity
Chapter: 17
Objective: 2
Skill: Concept

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3) In ________, managers are expected to maintain formal, distant relationships with
subordinates.
A) Mexico
B) Hong Kong
C) Ireland
D) Canada
E) United States
Answer: A
Explanation: Compared to U.S. employees, "Mexican workers expect managers to keep their
distance rather than to be close, and to be formal rather than informal."
Diff: 2 Page Ref: 633
Chapter: 17
Objective: 2
Skill: Concept

4) Of the countries listed below, in which one do production workers receive the lowest hourly
wage?
A) United Kingdom
B) United States
C) Mexico
D) Germany
E) Taiwan
Answer: C
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.
Diff: 2 Page Ref: 633
Chapter: 17
Objective: 2
Skill: Concept

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
E) Advisory boards
Answer: B
Explanation: 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.
Diff: 1 Page Ref: 633
Chapter: 17
Objective: 2
Skill: Concept

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6) In many European countries, ________ replace the union-based worker-management
mediations typical in the U.S.
A) executive coaches
B) HR managers
C) corporate attorneys
D) work councils
E) bargaining units
Answer: D
Explanation: 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.
Diff: 1 Page Ref: 633
Chapter: 17
Objective: 2
Skill: Concept

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) grievance procedures
E) gainsharing
Answer: A
Explanation: Codetermination is the rule in Germany and several other countries.
Codetermination means employees have the legal right to a voice in setting company policies.
Diff: 1 Page Ref: 633
Chapter: 17
Objective: 2
Skill: Concept

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) legislative ideals
E) codetermination
Answer: B
Explanation: 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.
Diff: 2 Page Ref: 634
Chapter: 17
Objective: 2, 3
Skill: Concept
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9) In regards to ethics, which of the following is recommended for international firms?
A) requiring employee-at-will contracts
B) enforcing U.S. laws on overseas workers
C) establishing codes of conducts for each country
D) developing and distributing a global code of conduct
E) translating the U.S. employee handbook into different languages
Answer: D
Explanation: 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.
Diff: 3 Page Ref: 634
Chapter: 17
Objective: 2
Skill: Concept

10) The European Union is best described as a ________.

A) legal system for taxing imports and exports
B) system of global standards, policies, and legislation
C) common market for goods, services, capital, and labor
D) political agreement that standardizes human resource laws
E) political system for equalizing wages, benefits, and taxation
Answer: C
Explanation: 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.
Diff: 2 Page Ref: 634
Chapter: 17
Objective: 2
Skill: Concept

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) The EU workweek is 40 hours, but most EU countries set 30 hour work weeks.
D) Each EU country pays workers the same minimum hourly wage.
E) Workers in the EU must live and work in their home country.
Answer: A
Explanation: 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.
Diff: 3 Page Ref: 634
Chapter: 17
Objective: 2
Skill: Concept

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12) Why is recruiting, hiring, and retaining good employees difficult in China?
A) economic difficulties
B) unmotivated workers
C) limited education
D) government restrictions
E) training requirements
Answer: D
Explanation: Because of governmental constraints on migration and other legal constraints, it is
relatively difficult to recruit, hire, and retain good employees. China's new Employment Contract
Law requires that employers report the names, sexes, identification numbers, and contract terms
for all employees they hire.
Diff: 2 Page Ref: 635
Chapter: 17
Objective: 2
Skill: Concept

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
E) heavily structured tasks and responsibilities
Answer: D
Explanation: 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.
Diff: 2 Page Ref: 635
AACSB: Multicultural and Diversity
Chapter: 17
Objective: 2
Skill: Concept

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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) focus on building manager-employee relationships
B) link performance with employee bonuses
C) make personal comments to the employee
D) focus on quantifiable, objective results
E) post appraisal results for each team
Answer: D
Explanation: 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").
Diff: 3 Page Ref: 635
AACSB: Multicultural and Diversity
Chapter: 17
Objective: 2
Skill: Application

15) ________ are citizens of the countries where they are working.
A) Expatriates
B) Third-country nationals
C) Home-country nationals
D) Multi-nationals
E) Locals
Answer: E
Explanation: 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.
Diff: 1 Page Ref: 635
Chapter: 17
Objective: 3
Skill: Concept

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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 a country other than the parent or the host country
D) citizens of the country in which the multinational company has its headquarters
E) noncitizens of the country in which the multinational company has its headquarters
Answer: A
Explanation: 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.
Diff: 1 Page Ref: 635
Chapter: 17
Objective: 3
Skill: Concept

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
E) host-country national
Answer: A
Explanation: 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.
Diff: 2 Page Ref: 635
Chapter: 17
Objective: 3
Skill: Application

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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
E) host-country national
Answer: B
Explanation: 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.
Diff: 2 Page Ref: 635
Chapter: 17
Objective: 3
Skill: Application

19) ________ are noncitizens of the countries in which they are working.
A) Expatriates
B) Third-country nationals
C) Home-country nationals
D) Locals
E) Multi-nationals
Answer: A
Explanation: 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.
Diff: 1 Page Ref: 635
Chapter: 17
Objective: 3
Skill: Concept

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Copyright © 2011 Pearson Education, Inc.
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 did Wal-Mart's adaptability screening tests reveal about the potential candidates?
C) What level of corporate control is needed for opening the new Wal-Mart stores?
D) What is the planned Wal-Mart marketing strategy for the new stores in Chile?
E) What is the typical attrition rate for expatriate employees at Wal-Mart?
Answer: D
Explanation: Marketing strategy is irrelevant to a staffing decision. Costs, adaptability screening
test results, corporate control, and attrition rates are important aspects to consider when debating
between filling management positions with locals or expatriates.
Diff: 3 Page Ref: 635-636, 638-642
AACSB: Reflective Thinking
Chapter: 17
Objective: 3
Skill: Critical Thinking

21) Which of the following terms refers to citizens of a country other than the parent or the host
country?
A) expatriate
B) third-country national
C) home-country national
D) multi-national
E) local
Answer: B
Explanation: 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.
Diff: 1 Page Ref: 635-636
Chapter: 17
Objective: 3
Skill: Concept

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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) patron
B) expatriate
C) third-country national
D) home-country national
E) host-country national
Answer: D
Explanation: 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.
Diff: 2 Page Ref: 635-636
Chapter: 17
Objective: 3
Skill: Application

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
E) multi-nationals
Answer: C
Explanation: 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.
Diff: 1 Page Ref: 635-636
Chapter: 17
Objective: 3
Skill: Concept

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Copyright © 2011 Pearson Education, Inc.
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) local
B) expatriate
C) third-country national
D) home-country national
E) host-country national
Answer: C
Explanation: 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.
Diff: 2 Page Ref: 635-636
Chapter: 17
Objective: 3
Skill: Application

25) Which type of international manager is most prevalent in both headquarters and foreign
subsidiary operations?
A) locals
B) expatriates
C) third-country nationals
D) home-country nationals
E) host-country nationals
Answer: A
Explanation: Locals fill most positions. Expatriates represent a minority of multinationals'
managers.
Diff: 2 Page Ref: 636
Chapter: 17
Objective: 3
Skill: Concept

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Copyright © 2011 Pearson Education, Inc.
26) 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) People from Chile accept the idea that power is unequally distributed in society.
B) Chile has a high percentage of younger workers with college degrees.
C) Managers in Chile are expected to keep their distance from subordinates.
D) Chile has experienced an increase in foreign direct investment over the last five years.
E) Chileans expect managers and subordinates to interact in a formal manner.
Answer: B
Explanation: A high number of skilled and educated locals suggests that Wal-Mart would be able
to find competent managers in Chile. Choice A refers to power distance, which is not particularly
relevant. Choices C and E relate to working as a manager in Chile, but not necessarily why locals
should be hired as managers instead of expatriates.
Diff: 3 Page Ref: 636
AACSB: Reflective Thinking
Chapter: 17
Objective: 3
Skill: Critical Thinking

27) 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) cultural difficulties
E) security concerns
Answer: A
Explanation: 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 they
require less training. Although security is an issue, it is less significant than the overall costs of
using expatriates.
Diff: 2 Page Ref: 636
Chapter: 17
Objective: 3
Skill: Concept

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28) 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) greater likelihood of long-term employment
E) high level of skills and technical qualifications
Answer: E
Explanation: The cost of using expatriates and the usual short-term nature of their employment
are reasons 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.
Diff: 3 Page Ref: 636
AACSB: Multicultural and Diversity
Chapter: 17
Objective: 3
Skill: Concept

29) 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) Repatriated Wal-Mart employees usually resign within one year of their return.
E) Wal-Mart wants to develop good relationships with the local community.
Answer: A
Explanation: The primary reason to use expatriates instead of locals is when qualified local
candidates cannot be found. Choices D and E undermine the decision to use expatriates and
support a decision to use locals.
Diff: 3 Page Ref: 636
AACSB: Reflective Thinking
Chapter: 17
Objective: 3
Skill: Critical Thinking

13
Copyright © 2011 Pearson Education, Inc.
30) 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
E) freelancer
Answer: D
Explanation: 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.
Diff: 2 Page Ref: 636-637
Chapter: 17
Objective: 3
Skill: Application

31) 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) downsizing
E) diversifying
Answer: B
Explanation: 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.
Diff: 1 Page Ref: 637
Chapter: 17
Objective: 3
Skill: Concept

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32) 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) deportment
D) downsizing
E) international staffing
Answer: B
Explanation: 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.
Diff: 2 Page Ref: 637
Chapter: 17
Objective: 3
Skill: Application

33) Which of the following corporate divisions plays the greatest role in offshoring?
A) sales
B) marketing
C) accounting
D) manufacturing
E) human resources
Answer: E
Explanation: 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.
Diff: 2 Page Ref: 637
Chapter: 17
Objective: 3
Skill: Application

34) Which of the following countries would offer a firm the highest percentage of 20-35 year old
workers with college degrees?
A) South Korea
B) Indonesia
C) Mexico
D) Poland
E) India
Answer: A
Explanation: The percentage of younger workers with postsecondary educations ranges from 5%
or 10% in Indonesia up to 60% or more in South Korea and Singapore.
Diff: 2 Page Ref: 637
Chapter: 17
Objective: 3
Skill: Concept
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35) 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
E) francocentric
Answer: B
Explanation: 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.
Diff: 1 Page Ref: 638
AACSB: Multicultural and Diversity
Chapter: 17
Objective: 3
Skill: Concept

36) 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
E) francocentric
Answer: A
Explanation: 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.
Diff: 1 Page Ref: 638
AACSB: Multicultural and Diversity
Chapter: 17
Objective: 3
Skill: Concept

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37) 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) permanent transferees
E) local citizens
Answer: A
Explanation: 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.
Diff: 2 Page Ref: 638
Chapter: 17
Objective: 3
Skill: Application

38) 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
E) interest in maintaining tight control
Answer: B
Explanation: 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.
Diff: 3 Page Ref: 638
Chapter: 17
Objective: 3
Skill: Concept

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39) 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) francocentric
E) geocentric
Answer: C
Explanation: 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.
Diff: 2 Page Ref: 638
Chapter: 17
Objective: 3
Skill: Application

40) 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
E) francocentric
Answer: C
Explanation: 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.
Diff: 1 Page Ref: 638
AACSB: Multicultural and Diversity
Chapter: 17
Objective: 3
Skill: Concept

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41) With a geocentric staffing policy, a firm is most likely able to ________.
A) provide effective training
B) comply with EU guidelines
C) recruit recent college graduates
D) use its human resources efficiently
E) strengthen its image within a local community
Answer: D
Explanation: 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.
Diff: 3 Page Ref: 638
AACSB: Multicultural and Diversity
Chapter: 17
Objective: 3
Skill: Concept

42) 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 offers top managers mobility premiums because it frequently transfers them from
one country to another.
B) Wal-Mart usually succeeds on an international level because the firm actively works to
support local charities.
C) Wal-Mart rarely experiences cultural misunderstandings because of its tendency to hire locals
to fill management positions.
D) Wal-Mart aims to maintain a unified organizational culture by filling foreign management
positions with Americans.
E) Adaptability screening eliminates problems associated with transferring Wal-Mart managers
and their families abroad.
Answer: D
Explanation: An ethnocentric company fills key management positions with home-country
nationals to maintain a unified culture and tight control. Choice A suggests a geocentric staffing
policy, while Choice C suggests a polycentric policy.
Diff: 3 Page Ref: 638
AACSB: Reflective Thinking
Chapter: 17
Objective: 3
Skill: Critical Thinking

19
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43) The most common reason that an expatriate fails at an international assignment is ________.
A) expense
B) incompetence
C) technical demands
D) family pressures
E) language difficulties
Answer: D
Explanation: 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. Choices A, B, C, and E are less
significant issues.
Diff: 2 Page Ref: 638-639, 642
Chapter: 17
Objective: 3
Skill: Concept

44) 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
E) alertness
Answer: D
Explanation: 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.
Diff: 2 Page Ref: 638-639
Chapter: 17
Objective: 3
Skill: Concept

45) When Colgate uses adaptability screening to assess an employee's probable success in
handling a foreign transfer, the best predictor of future success is ________.
A) job competence and knowledge
B) overseas travel history
C) level of education
D) dependability
E) age
Answer: B
Explanation: Travel experience is often the best predictor of future success on international
assignments. Companies like Colgate-Palmolive look for overseas candidates whose
work and nonwork experience, education, and language skills already demonstrate
a commitment to and facility for living and working with different cultures.
Diff: 2 Page Ref: 639
Chapter: 17
Objective: 3
Skill: Concept
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46) Which of the following terms refers to the process of assessing an employee's probable
success in handling a foreign transfer?
A) competency assessment
B) skills placement testing
C) adaptability screening
D) management assessment
E) performance appraisal
Answer: C
Explanation: Adaptability screening attempts to assess the assignees' and his or her spouse's
probable success in handling a foreign transfer.
Diff: 1 Page Ref: 639
Chapter: 17
Objective: 3
Skill: Concept

47) Which of the following is NOT one of the factors thought to be important in predicting an
international assignee's success?
A) motivation
B) education level
C) relational skills
D) adaptability
E) family situation
Answer: B
Explanation: Motivation/job knowledge, relational skills, family situation, adaptability, and
extracurricular openness are the five factors important to international success. Education level is
not a specific factor, although it is likely relevant to job knowledge.
Diff: 2 Page Ref: 639
Chapter: 17
Objective: 3
Skill: Concept

21
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48) 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.
E) Security issues have not been an issue for other Wal-Mart executives who have traveled to
Chile.
Answer: C
Explanation: 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.
Diff: 3 Page Ref: 639-640
AACSB: Reflective Thinking
Chapter: 17
Objective: 3
Skill: Critical Thinking

49) Which of the following best explains why female managers receive fewer foreign
assignments than male managers?
A) cultural prejudices against women
B) misperceptions by supervisors
C) lack of interest in overseas work
D) spousal and family reluctance
E) safety concerns
Answer: B
Explanation: Surveys indicate that supervisors assume women will face cultural prejudice and
safety problems, but neither is an issue. Supervisors also assume that women are not interested in
leaving the U.S. and that their spouses will be reluctant to do so. Therefore, it is the
misperceptions of supervisors that have led to a small percentage of female managers being sent
abroad.
Diff: 3 Page Ref: 640
Chapter: 17
Objective: 3
Skill: Concept

22
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50) For most firms, which of the following is the most important selection criteria when selecting
employees for international assignments?
A) adaptability
B) personality
C) technical competence
D) spousal willingness
E) language capabilities
Answer: C
Explanation: Most employers still tend to select expatriates almost entirely based on technical
competence. However, studies indicate that family situation and adaptability are better qualities
for determining an employee's success overseas.
Diff: 2 Page Ref: 642
Chapter: 17
Objective: 3
Skill: Concept

51) According to research, all of the following will most likely help spouses of expatriates adjust
to living in foreign countries EXCEPT ________.
A) assistance with finding a job abroad
B) close family relationships
C) pre-school age children
D) scheduled vacations
E) language training
Answer: D
Explanation: Language fluency helps spouses adjust as do preschool-age children. A strong bond
of closeness between spouse and expat partner and help finding a job are both helpful as well.
Diff: 2 Page Ref: 643
Chapter: 17
Objective: 3
Skill: Concept

52) Before departing for an overseas assignment, an employee would most likely benefit from
________ training.
A) technical
B) financial
C) interpersonal
D) cross-cultural
E) career development
Answer: D
Explanation: 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.
Diff: 1 Page Ref: 643
Chapter: 17
Objective: 4
Skill: Concept

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53) All of the following are the primary benefits of providing ongoing training to employees on
overseas assignments EXCEPT ________.
A) developing professional skills
B) offering educational opportunities
C) developing relationships with co-workers
D) cultivating corporate values and standards
E) providing spousal networking opportunities
Answer: E
Explanation: 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.
Diff: 2 Page Ref: 644
Chapter: 17
Objective: 4
Skill: Concept

54) Most North American companies use the ________ approach to formulating expatriate pay.
A) balance sheet
B) equitable wage rate
C) performance
D) host country
E) total package
Answer: A
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.
Diff: 1 Page Ref: 646
Chapter: 17
Objective: 4
Skill: Concept

24
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55) Which approach to formulating expatriate pay involves estimating the employee's expenses
in the home country and the host country?
A) income sheet
B) balance sheet
C) mobility allowance
D) performance pay
E) hardship method
Answer: B
Explanation: 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.
Diff: 1 Page Ref: 645
Chapter: 17
Objective: 4
Skill: Concept

56) 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
E) tax equalization
Answer: B
Explanation: 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.
Diff: 1 Page Ref: 645
Chapter: 17
Objective: 4
Skill: Concept

57) 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) goods and services
D) disposable income
E) discretionary expenses
Answer: D
Explanation: 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.
Diff: 1 Page Ref: 645
Chapter: 17
Objective: 4
Skill: Concept

25
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58) ________ are financial payments over and above regular base pay.
A) Foreign service premiums
B) Hardship allowances
C) Balance sheet payments
D) Cultural adjustments
E) Mobility premiums
Answer: A
Explanation: 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.
Diff: 1 Page Ref: 645-646
Chapter: 17
Objective: 4
Skill: Concept

59) 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) foreign service premium
E) mobility premium
Answer: C
Explanation: 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.
Diff: 2 Page Ref: 646
Chapter: 17
Objective: 4
Skill: Application

26
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60) 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) cultural adjustment premium
E) mobility premium
Answer: E
Explanation: 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.
Diff: 1 Page Ref: 646
Chapter: 17
Objective: 4
Skill: Concept

61) 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 Turkey 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) team incentive
E) mobility premium
Answer: E
Explanation: 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.
Diff: 2 Page Ref: 646
Chapter: 17
Objective: 4
Skill: Application

27
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62) All of the following characterize European labor relations EXCEPT ________.
A) limited number of bargaining units
B) brevity of labor-management agreements
C) informal recognition of labor unions
D) bargaining through employer associations
E) industry-wide collective bargaining
Answer: A
Explanation: 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. European agreements tend to be brief and to leave individual employers free to institute
more generous terms.
Diff: 3 Page Ref: 648
Chapter: 17
Objective: 4
Skill: Concept

63) Which of the following is most likely NOT covered by kidnapping and ransom insurance
policies?
A) abductions
B) ransoms
C) crisis teams
D) weapons
E) legal expenses
Answer: D
Explanation: 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.
Diff: 2 Page Ref: 648
Chapter: 17
Objective: 4
Skill: Concept

28
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64) 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) emphasize that he is an American
B) take the same route to and from work
C) arrive at the airport close to departure time
D) wait at the airport in a main traffic area
E) leave work at the same time each day
Answer: C
Explanation: Security experts suggest that business travelers not draw attention to the fact that
they're American. They should 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.
Diff: 3 Page Ref: 648
Chapter: 17
Objective: 4
Skill: Application

65) ________ refers to bringing a manager back home after a foreign assignment has been
completed.
A) expatriation
B) repatriation
C) culture shock
D) mediation
E) job rotation
Answer: B
Explanation: 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.
Diff: 1 Page Ref: 649
Chapter: 17
Objective: 4
Skill: Concept

29
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66) A formal repatriation program should do all of the following EXCEPT ________.
A) assist employees with relocation logistics
B) update employees about activities at the home office
C) seek compensation and benefits on behalf of employees
D) help employees update their resumes and make career plans
E) reassure employees of the company's concern for their welfare
Answer: C
Explanation: 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, keep them in the loop regarding the home
office, help them with career planning, and reassure them that the firm cares.
Diff: 3 Page Ref: 649
Chapter: 17
Objective: 4
Skill: Concept

67) 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.
E) Most expatriates change their residency status.
Answer: D
Explanation: 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.
Diff: 3 Page Ref: 649
Chapter: 17
Objective: 3
Skill: Concept

30
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68) Which of the following was determined by a study of six international firms that have
successfully established global HR systems?
A) Firms must rely on local managers to develop HR management systems that account for
cross-cultural differences.
B) Firms should focus on expatriation and repatriation programs to ease the transition period for
employees working abroad.
C) Firms should develop HR systems that are universally acceptable and that can be effectively
implemented in any location.
D) Firms rely more heavily on expatriates than locals in foreign subsidiaries, so it is unnecessary
to make changes to existing HR policies.
E) Firms with foreign subsidiaries should adhere to local customs regarding screening, hiring,
and training applicants.
Answer: C
Explanation: 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.
Diff: 3 Page Ref: 650
Chapter: 17
Objective: 5
Skill: Concept

69) 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
E) developing a single compensation and benefits package for new hires
Answer: A
Explanation: 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.
Diff: 3 Page Ref: 650-651
Chapter: 17
Objective: 5
Skill: Concept

31
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70) Which of the following is recommended to firms to ensure that local managers find a global
HR system acceptable?
A) provide online training
B) ignore cultural differences
C) establish a chain of command
D) develop a strong corporate culture
E) understand the laws of the home country
Answer: D
Explanation: 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. Understanding the laws of the firm's home country do not necessarily help
implement a global HR system.
Diff: 3 Page Ref: 651
Chapter: 17
Objective: 5
Skill: Concept

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.
Diff: 1 Page Ref: 632
AACSB: Multicultural and Diversity
Chapter: 17
Objective: 2
Skill: Concept

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.
Diff: 1 Page Ref: 632
Chapter: 17
Objective: 1
Skill: Concept

32
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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.
Diff: 1 Page Ref: 632
Chapter: 17
Objective: 2
Skill: Concept

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.
Diff: 1 Page Ref: 633
Chapter: 17
Objective: 2
Skill: Concept

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.
Diff: 1 Page Ref: 633
Chapter: 17
Objective: 2
Skill: Concept

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.
Diff: 1 Page Ref: 634
Chapter: 17
Objective: 2
Skill: Concept

33
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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.
Diff: 1 Page Ref: 635
Chapter: 17
Objective: 2
Skill: Concept

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.
Diff: 1 Page Ref: 636
Chapter: 17
Objective: 3
Skill: Concept

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.
Diff: 1 Page Ref: 636
Chapter: 17
Objective: 3
Skill: Concept

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 rules in effect since 2005, U.S. employers must now 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.
Diff: 2 Page Ref: 636
Chapter: 17
Objective: 3
Skill: Concept

34
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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.
Diff: 1 Page Ref: 636
Chapter: 17
Objective: 3
Skill: Concept

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.
Diff: 1 Page Ref: 636
AACSB: Use of IT
Chapter: 17
Objective: 3
Skill: Concept

83) Off shoring, which has declined in popularity over the last decade, refers to having local
employees abroad do jobs that the firm's domestic employees previously did in-house.
Answer: FALSE
Explanation: Offshoring means having local employees abroad do jobs that the firm's domestic
employees previously did in-house. Offshoring is increasingly popular.
Diff: 2 Page Ref: 637
Chapter: 17
Objective: 3
Skill: Concept

84) In a polycentric corporation, the prevailing attitude 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.
Diff: 2 Page Ref: 638
AACSB: Multicultural and Diversity
Chapter: 17
Objective: 3
Skill: Concept

35
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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.
Diff: 1 Page Ref: 638
Chapter: 17
Objective: 3
Skill: Concept

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.
Diff: 2 Page Ref: 638
Chapter: 17
Objective: 3
Skill: Concept

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.
Diff: 2 Page Ref: 639
Chapter: 17
Objective: 3
Skill: Concept

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.
Diff: 1 Page Ref: 640
Chapter: 17
Objective: 3
Skill: Concept

36
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89) Female managers represent only 21% of managers sent abroad because they do not want to
uproot their families, and their spouses are reluctant to move.
Answer: FALSE
Explanation: Women represent only 21% of managers sent abroad mostly due to
misperceptions. Surveys have found that women do want international assignments, they are not
less inclined to move their families, and that male spouses are not necessarily reluctant to move.
Diff: 2 Page Ref: 640
Chapter: 17
Objective: 3
Skill: Concept

90) 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.
Diff: 2 Page Ref: 643
AACSB: Communication
Chapter: 17
Objective: 3
Skill: Concept

91) 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.
Diff: 2 Page Ref: 643
Chapter: 17
Objective: 3
Skill: Concept

92) 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.
Diff: 1 Page Ref: 643
AACSB: Multicultural and Diversity
Chapter: 17
Objective: 4
Skill: Concept

37
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93) 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.
Diff: 1 Page Ref: 645
Chapter: 17
Objective: 4
Skill: Concept

94) 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.
Diff: 1 Page Ref: 645-646
Chapter: 17
Objective: 4
Skill: Concept

95) Performance-based incentives are used more often by multinational employers in Europe
than in other countries.
Answer: FALSE
Explanation: Employers use performance-based incentives less in Europe, although more
European firms are moving toward incentive pay.
Diff: 2 Page Ref: 646
Chapter: 17
Objective: 4
Skill: Concept

96) 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.
Diff: 2 Page Ref: 648
Chapter: 17
Objective: 4
Skill: Concept

38
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97) 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.
Diff: 2 Page Ref: 648
Chapter: 17
Objective: 4
Skill: Concept

98) 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.
Diff: 2 Page Ref: 652
Chapter: 17
Objective: 5
Skill: Concept

99) 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.
Diff: 2 Page Ref: 652
Chapter: 17
Objective: 5
Skill: Concept

100) 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.
Diff: 2 Page Ref: 652
Chapter: 17
Objective: 5
Skill: Concept

39
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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.
Diff: 3 Page Ref: 632, 650
Chapter: 17
Objective: 1, 5
Skill: Synthesis

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.
Diff: 3 Page Ref: 633, 647-648
Chapter: 17
Objective: 2, 4
Skill: Synthesis

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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.
Diff: 3 Page Ref: 635-636
Chapter: 17
Objective: 3
Skill: Application

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").
Diff: 3 Page Ref: 635, 647
Chapter: 17
Objective: 2, 4
Skill: Synthesis

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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.
Diff: 3 Page Ref: 636
Chapter: 17
Objective: 3
Skill: Application

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.
Diff: 3 Page Ref: 636, 649
Chapter: 17
Objective: 3, 4
Skill: Synthesis

107) Explain the meaning of ethnocentrism, polycentrism, and geocentrism 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.
Diff: 3 Page Ref: 638
Chapter: 17
Objective: 3
Skill: Application

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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.
Diff: 3 Page Ref: 643
Chapter: 17
Objective: 4
Skill: Application

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.
Diff: 3 Page Ref: 643-644
Chapter: 17
Objective: 3, 4
Skill: Synthesis

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.
Diff: 3 Page Ref: 645
Chapter: 17
Objective: 4
Skill: Application
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