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Incoterms 2010 and International Business - Wild - Chapter 16 - QUIZ

incoterms 2010

MBA Incoterms 2010 & International Business

Incoterms 2010 and International Business - 101

Incoterms 2010 and International Business - Wild - Chapter 16 - QUIZ

Incoterms 2010 and International Business - 101

International Business: The Challenges of Globalization, 8th Edition, Wild & Wild

Incoterms 2010 and International Business - Wild - Chapter 16 - QUIZ

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International Business, 8e (Wild/Wild)

Chapter 16   Hiring and Managing Employees

 

1) The customary means by which a company fills up vacancies in its offices is called ________.

  1. A) a staffing policy
  2. B) an employment policy
  3. C) onboarding
  4. D) outsourcing

Answer:  A

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

 

2) Which of the following is an appropriate and widely-used method for staffing international business operations?

  1. A) collective narcissism
  2. B) cronyism
  3. C) nepotism
  4. D) geocentric approach

Answer:  D

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

 

3) Individuals from the home country manage operations outside the home country in ________ staffing.

  1. A) ethnocentric
  2. B) polycentric
  3. C) regiocentric
  4. D) geocentric

Answer:  A

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

 

4) Which of the following statements is true of ethnocentric staffing?

  1. A) Ethnocentric staffing appeals to companies that maintain lose control over decision-making in branch offices abroad.
  2. B) Companies that use ethnocentric staffing formulate policies designed to work in every country in which they operate.
  3. C) Ethnocentric staffing is generally used to fill positions at all levels of an organization.
  4. D) In ethnocentric staffing, individuals from the host country manage the operations abroad.

Answer:  B

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

5) A(n) ________ policy can be pursued to hire employees at all levels in an organization.

  1. A) ethnocentric staffing
  2. B) polycentric staffing
  3. C) vertical integration
  4. D) horizontal integration

Answer:  B

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

 

6) Which of the following statements regarding ethnocentric staffing is true?

  1. A) It can facilitate the transfer of special know-how.
  2. B) It is a relatively inexpensive policy to implement.
  3. C) It allows a company to "blend in" with the local market.
  4. D) It is a poor choice for companies operating in highly nationalistic markets.

Answer:  A

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

 

7) Which of the following is a major drawback of ethnocentric staffing?

  1. A) high costs of relocating managers
  2. B) loss of control over host-country operations
  3. C) loss of control over home-country operations
  4. D) difficulty in the transfer of special know-how between branches

 

Answer:  A

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

 

8) In ________, operations outside the home country are managed by individuals from the host country.

  1. A) vertical integration
  2. B) horizontal integration
  3. C) ethnocentric staffing
  4. D) polycentric staffing

Answer:  D

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

 

 

9) A(n)________ policy would give the foreign units of a company a degree of autonomy in decision-making.

  1. A) centralized production
  2. B) vertical integration
  3. C) mass customization
  4. D) polycentric staffing

Answer:  D

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

10) An important advantage of polycentric staffing is that it ________.

  1. A) re-creates local operations in the image of home-country operations
  2. B) eliminates the high cost of relocating expatriate managers and their families
  3. C) helps a company develop global managers who can adjust easily to any business environment
  4. D) employs managers from home who will look out for the company's interests

Answer:  B

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

 

11) The major drawback of polycentric staffing is the potential to ________.

  1. A) lose control of host-country operations
  2. B) experience a high incidence of expatriate failure
  3. C) create barriers for the host-country office
  4. D) create legal problems for the home-country office

Answer:  A

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

 

12) A company that hires the best-qualified individuals, regardless of nationality, to manage foreign operations is utilizing a ________ approach.

  1. A) horizontal integration
  2. B) geocentric staffing
  3. C) ethnocentric staffing
  4. D) vertical integration

Answer:  B

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

 

 

13) Which of the following statements is true of geocentric staffing?

  1. A) It reduces the high cost of relocating expatriate managers and their families.
  2. B) It employs managers exclusively from the home country to look out for the company's interests.
  3. C) It helps develop global managers who can adjust to any business environment.
  4. D) It emphasizes on re-creating local operations in the image of home-country operations.

Answer:  C

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

14) A geocentric staffing policy is generally reserved for ________.

  1. A) top-level managers
  2. B) mid-level managers
  3. C) nonmanagerial employees
  4. D) lower-level staff

Answer:  A

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

 

15) The major disadvantage of a geocentric staffing policy is its potential for ________.

  1. A) creating barriers for the host-country office
  2. B) being costly due to high salaries and moving costs of managers
  3. C) creating legal problems for the home-country office
  4. D) losing control of host-country operations

Answer:  B

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

 

 

Scenario: Swingset International

Jerome Johnston, the human resource manager at the U.S.-based Swingset International, is developing an international staffing policy for the company. Jerome personally believes Swingset should send managers from the United States to manage each subsidiary. But the CEO of the company, Valerie Vermont, believes subsidiary operations ought to be managed by individuals from the host country.

 

16) The approach recommended by Jerome is called ________.

  1. A) vertical integration
  2. B) ethnocentric staffing
  3. C) horizontal integration
  4. D) geocentric staffing

Answer:  B

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.1: Explain the three types of staffing policies that companies use.

 

17) The approach recommended by Valerie is called ________.

  1. A) polycentric staffing
  2. B) ethnocentric staffing
  3. C) vertical integration
  4. D) horizontal integration

Answer:  A

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.1: Explain the three types of staffing policies that companies use.

18) Which staffing policy should Swingset consider if it wants its foreign operations to be managed by the best-qualified individuals regardless of nationality?

  1. A) nepotism
  2. B) ethnocentric staffing
  3. C) geocentric staffing
  4. D) employee referrals

Answer:  C

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.1: Explain the three types of staffing policies that companies use.

 

 

19) The process of staffing a company and ensuring employees are as productive as possible is called human resource management.

Answer:  TRUE

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

 

20) Citizens who are working and living in their home country are called expatriates.

Answer:  FALSE

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

 

21) Companies use polycentric staffing to re-create local operations in the image of home-country operations.

Answer:  FALSE

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

 

22) An ethnocentric staffing strategy can facilitate the transfer of special know-how to branch operations.

Answer:  TRUE

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

 

23) In ethnocentric staffing, operations outside the home country are managed by individuals from the host country.

Answer:  FALSE

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

 

24) Polycentric staffing places managerial responsibility in the hands of people intimately familiar with the local business environment.

Answer:  TRUE

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

25) The major drawback of polycentric staffing is the potential for losing control of the host-country operation.

Answer:  TRUE

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

 

26) In geocentric staffing, operations outside the home country are managed by the best-qualified individuals, regardless of their nationality.

Answer:  TRUE

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

 

27) An ethnocentric policy toward staffing is typically reserved for top-level managers.

Answer:  FALSE

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

 

28) A major drawback of geocentric staffing is that it is expensive.

Answer:  TRUE

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

 

29) The first phase of human resource planning is estimating the company's future HR needs.

Answer:  FALSE

Skill:  Concept

Difficulty:  Easy

LO:  16.1: Explain the three types of staffing policies that companies use.

 

 

30) Differentiate between the three types of staffing policies used by international companies. What are the advantages of each?

Answer:  Ethnocentric staffing-In ethnocentric staffing, individuals from the home country manage operations abroad. This policy tends to appeal to companies that want to maintain tight control over decision making in branch offices abroad. Accordingly, those companies work to formulate policies designed to work in every country in which they operate. But firms generally pursue this policy in their international operations for top managerial posts–implementing it at lower levels is often impractical.

Advantages-Firms pursue this policy for several reasons. First, locally qualified people are not always available. In developing and newly industrialized countries, there is often a shortage of qualified personnel that creates a highly competitive local labor market. Second, companies use ethnocentric staffing to re-create local operations in the image of home-country operations. Especially if they have climbed the corporate ladder in the home office, expatriate managers tend to infuse branch offices with the corporate culture. This policy is important for companies that need a strong set of shared values among the people in each international office–such as firms implementing global strategies. A system of shared values is important when a company's international units are highly interdependent. Finally, some companies feel that managers sent from the home country will look out for the company's interests more earnestly than will host-country natives.

Polycentric staffing-In polycentric staffing, individuals from the host country manage operations abroad. Companies can implement a polycentric approach for top and mid-level managers, for lower-level staff, or for nonmanagerial workers. It is well suited to companies who want to give national units a degree of autonomy in decision making. This policy does not mean that host-country managers are left to run operations in any way they see fit. Large international companies usually conduct extensive training programs in which host-country managers visit home offices for extended periods. This exposes them to the company's culture and specific business practices. Small and medium-sized companies can find this policy expensive, but being able to depend on local managers who fully understand what is expected of them can far outweigh any costs.

Advantages-Polycentric staffing places managerial responsibility in the hands of people intimately familiar with the local business environment. Managers with deep cultural understanding of the local market can be an enormous advantage. They are familiar with local business practices and can read the subtle cues of both verbal and nonverbal language. They need not overcome any cultural barriers created by an image of being an outsider, and they tend to have a better feel for the needs of employees, customers, and suppliers.

Another important advantage of polycentric staffing is elimination of the high cost of relocating expatriate managers and families. This benefit can be extremely helpful for small and medium-sized businesses that cannot afford the expenses associated with expatriate employees.

Geocentric Staffing-In geocentric staffing, the best-qualified individuals, regardless of nationality, manage operations abroad. The local operation may choose managers from the host country, from the home country, or from a third country. The choice depends on the operation's specific needs. This policy is typically reserved for top-level managers.

 

Advantages-Geocentric staffing helps a company develop global managers who can adjust easily to any business environment–particularly to cultural differences. This advantage is especially useful for global companies trying to break down nationalistic barriers, whether between managers in a single office or between different offices. One hope of companies using this policy is that a global perspective among its managers will help them seize opportunities that may otherwise be overlooked.

AACSB:  Application of knowledge

Skill:  Concept

Difficulty:  Moderate

LO:  16.1: Explain the three types of staffing policies that companies use.

 

 

31) Discuss the disadvantages of an ethnocentric staffing policy. How do bonuses, tax incentives, and employee expectations contribute to high personnel costs?

Answer:  Despite its advantages, ethnocentric staffing has its negative aspects. First, relocating managers from the home country is expensive. The bonuses that managers often receive for relocating plus relocation expenses for entire families can increase the cost of a manager several times over. Likewise, the pressure of cultural differences and long periods away from relatives and friends can contribute to the failure of managers on international assignments.

Second, an ethnocentric policy can create barriers for the host-country office. The presence of home-country managers in the host country might encourage a "foreign" image of the business. Lower-level employees might feel that managers do not really understand their needs because they come from another culture. Occasionally they are right: Expatriate managers sometimes fail to integrate themselves into the local culture. And if they fail to overcome cultural barriers, they typically fail to understand the needs of their local employees and those of their local customers.

Bonuses, tax incentives and cultural and social expectations can contribute to high personnel costs. Companies commonly offer managers inducements to accept international postings. The most common is a financial bonus. This bonus can be in the form of a one-time payment or an add-on to regular pay–generally 15 to 20 percent. Bonuses for managers who are asked to go into a particularly unstable country or one with a very low standard of living often receive hardship pay.

Managers can also be attracted by another income-related factor. For example, the U.S. government permits citizens working abroad to exclude $82,000 of "foreign-earned income" from their taxable income in the United States–even if it was earned in a country with no income tax. But earnings over that amount are subject to income tax, as are employee benefits such as free housing.

Culture also plays an important role in the compensation of expatriate managers. Some nations offer more paid holidays than others. Many offer free medical care to everyone living and working there. Granted, the quality of locally available medical care is not always good. Many companies, therefore, have plans to take seriously ill expatriates and family members home or to nearby countries where medical care is equal to that available in the home country.

Companies that hire managers in the local market might encounter additional costs engendered by social attitudes. For instance, in some countries employers are expected to provide free or subsidized housing. In others the government obliges employers to provide paid maternity leaves of up to one and a half years. Government-mandated maternity leaves vary significantly across European countries. Although not all such costs need to be absorbed by companies, they do tend to raise a country's cost of doing business.

AACSB:  Application of knowledge

Skill:  Synthesis

Difficulty:  Hard

LO:  16.1: Explain the three types of staffing policies that companies use.

 

 

32) Citizens of one country who are living and working in another are called ________.

  1. A) local employees
  2. B) domicile residents
  3. C) repatriates
  4. D) expatriates

Answer:  D

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

33) Alec is an American working for a software company in Texas. He has been assigned to work on a project in China for a year. He would be considered as a(n) ________ in China.

  1. A) domicile resident
  2. B) expatriate
  3. C) host-country national
  4. D) third-country national

Answer:  B

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.2: Describe the key human resource recruitment and selection issues.

34) The process of forecasting both a company's human resource needs and its supply is called ________.

  1. A) human resource planning
  2. B) human resource accounting
  3. C) recruitment
  4. D) selection

Answer:  A

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

35) Which of the following is the first phase of human resource planning?

  1. A) developing a plan to recruit and select people to fill vacant and anticipated new positions
  2. B) estimating the company's future human resource needs
  3. C) taking an inventory of the company's current human resources
  4. D) promoting employees to positions of greater responsibility

Answer:  C

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

 

36) Which of the following phases of human resource planning involves decruitment?

  1. A) developing a plan to recruit and select people to fill vacant and anticipated new positions
  2. B) estimating the company's future human resource needs
  3. C) taking an inventory of the company's current human resources
  4. D) promoting employees to positions of greater responsibility

Answer:  A

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

37) Planning for decruitment normally occurs when a company ________.

  1. A) discontinues manufacturing or selling in a market
  2. B) finds that current HR levels are lesser than anticipated needs
  3. C) plans to establish multiple foreign subsidiaries
  4. D) hires new executive leadership to implement a growth strategy

Answer:  A

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

38) Which of the following terms is defined as the process of identifying and attracting a qualified pool of applicants for vacant positions?

  1. A) orientation
  2. B) outsourcing
  3. C) recruitment
  4. D) selection

Answer:  C

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

39) To help speed up the process of getting approvals for local operations, a firm would most likely benefit from hiring ________.

  1. A) home-country managers from the company's headquarters
  2. B) managerial talent from the host country
  3. C) recent college graduates trained in the home country
  4. D) third-country expatriates with extensive experience in the field

Answer:  B

Skill:  Concept

Difficulty:  Moderate

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

 

40) ________ would most likely be recruited for nonmanagerial positions at foreign subsidiaries that do not require specialized skills.

  1. A) Recent graduates from colleges in the home country
  2. B) Home-country specialists
  3. C) Workers from the local host-country market
  4. D) Current employees from the company headquarters

Answer:  C

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

41) Companies typically recruit ________ to train individuals placed in more demanding nonmanagerial positions at foreign branches.

  1. A) workers from the local market
  2. B) recent college graduates from the host country
  3. C) qualified third-party nationals
  4. D) specialists from the home country

Answer:  D

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

42) The process of screening and hiring the best-qualified applicants with the greatest performance potential is called ________.

  1. A) performance appraisal
  2. B) orientation
  3. C) recruitment
  4. D) selection

Answer:  D

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

43) The early return by an employee from an international assignment because of inadequate job performance is called ________.

  1. A) culture shock
  2. B) decruitment
  3. C) reverse culture shock
  4. D) expatriate failure

Answer:  D

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

 

44) Which of the following is a psychological process affecting employees living abroad and is characterized by homesickness, irritability, confusion, aggravation, and depression?

  1. A) social loafing
  2. B) groupthink
  3. C) culture shock
  4. D) halo effect

Answer:  C

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

45) The psychological process of readapting to one's home culture after working in a host-country culture is called ________.

  1. A) social loafing
  2. B) assimilation effect
  3. C) reverse culture shock
  4. D) expatriate failure

Answer:  C

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

46) An expatriate manager who returns after a few years from an overseas assignment to find that there is no position for him in his home country office experiences a(n) ________.

  1. A) reverse culture shock
  2. B) expatriate failure
  3. C) cognitive dissonance
  4. D) assimilation effect

Answer:  A

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.2: Describe the key human resource recruitment and selection issues.

47) Which of the following is a reason why there are only a few managers who are ready and willing to go to foreign branches on short notice?

  1. A) expatriate failure
  2. B) decruitment
  3. C) culture shock
  4. D) social loafing

Answer:  C

AACSB:  Analytical thinking; Diverse and multicultural work environments

Skill:  Application

Difficulty:  Hard

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

48) Which of the following is most likely to occur in the honeymoon stage of culture shock?

  1. A) new arrivals are fascinated by aspects of the new culture
  2. B) individuals become annoyed by unpredictable quirks of the new culture
  3. C) emotions hit rock bottom for visitors
  4. D) visitors better understand and appreciate local customs and behavior

Answer:  A

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

Scenario: You're Hired!

Erica Els has just been promoted as vice president of human resources for Hudson Foods, a U.S.-based international frozen food corporation. Erica's first task is to staff the company's European subsidiary.

 

49) One challenge facing Hudson Foods as it expands into Europe is getting through all the bureaucratic and legal regulations surrounding the food industry. Erica plans to hire a manager to ensure that this challenge is overcome. Who among the following will Erica most likely recruit for this position?

  1. A) a local manager with strong government contacts
  2. B) an experienced manager from the Hudson Foods U.S. headquarters
  3. C) a native of the target market who is a recent U.S. college graduate
  4. D) a candidate from the U.S. with extensive management experience in the frozen food industry

Answer:  A

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.2: Describe the key human resource recruitment and selection issues.

50) The new subsidiary's production facilities will employ approximately 100 full-time nonmanagerial workers. Who among the following will Erica most likely recruit to fill these positions?

  1. A) highly productive workers relocated from developing nations
  2. B) bilingual U.S. citizens who speak the language of the host country
  3. C) qualified workers from the local market
  4. D) workers from the American headquarters who are interested in gaining international experience

Answer:  C

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

 

51) The process of reducing the size of an organization's workforce is called decruitment.

Answer:  TRUE

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

52) The process of recruitment involves screening and hiring the best-qualified applicants with the greatest performance potential.

Answer:  FALSE

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

53) To speed up the process of getting government approval for local operations, companies must hire home country nationals.

Answer:  FALSE

Skill:  Concept

Difficulty:  Moderate

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

54) Companies typically recruit locally for nonmanagerial positions.

Answer:  TRUE

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

55) The process of identifying and attracting a qualified pool of applicants for vacant positions is called selection.

Answer:  FALSE

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

56) Reverse culture shock is the trouble expatriates face while adjusting to a new environment in which they find themselves.

Answer:  FALSE

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

57) Expatriate failure refers to an employee's early return from an international assignment because of inadequate job performance.

Answer:  TRUE

Skill:  Concept

Difficulty:  Easy

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

58) The psychological process of readapting to one's home culture is seldom difficult for expatriates who have successfully adapted to new cultures.

Answer:  FALSE

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Moderate

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

59) Reverse culture shock is much milder than the initial culture shock an expatriate faces.

Answer:  FALSE

Skill:  Concept

Difficulty:  Moderate

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

 

60) Describe the differences between human resource management in a domestic setting and an international setting, and explain the three phases of human resources planning.

Answer:  Human resource management (HRM) is the process of staffing a company and ensuring that employees are as productive as possible. It requires managers to be effective in recruiting, selecting, training, developing, evaluating, and compensating employees and in forming good relationships with them.

International HRM differs considerably from HRM in a domestic setting because of differences in national business environments. There are concerns over the employment of expatriates–citizens of one country who are living and working in another. Companies must deal with many issues when they have expatriate employees on job assignments that could last several years. Some of these issues are related to the inconvenience and stress of living in an unfamiliar culture.

Training and development programs must often be tailored to local practices. Some countries, such as Germany and Japan, have extensive vocational-training schools that turn out graduates ready to perform their jobs proficiently. Finding well-qualified nonmanagerial workers in those markets is relatively easy. By contrast, developing a production facility in many emerging markets requires far more basic training of workers. For example, workers in China work hard and tend to be well educated. But because China lacks an advanced vocational training system like those in Germany and Japan, Chinese workers tend to require more intensive on-the-job training. Recruitment and selection practices must also be adapted to the host nation's hiring laws. Hiring practices regarding nondiscrimination among job candidates must be carefully monitored so that the company does not violate such laws. And companies that go abroad to lower labor expenses then adjust pay scales and advancement criteria to suit local customs.

Recruiting and selecting managers and workers requires human resource planning–the process of forecasting a company's human resource needs and its supply. The first phase of HR planning involves taking an inventory of a company's current human resources–that is, collecting data on every employee, including educational background, special job skills, previous jobs, language skills, and experience living abroad.

The second phase of HR planning is estimating the company's future HR needs. For example, consider a firm that plans to sell its products directly to buyers in a new market abroad. Likewise, manufacturing or assembling products in an international market requires factory workers. A company must decide whether to hire these people itself or to subcontract production to other producers–thus eliminating the need for it to hire factory workers.

In the third phase of HR planning, managers develop a plan for recruiting and selecting people to fill vacant and anticipated new positions, both managerial and nonmanagerial. Sometimes, a firm must also make plans for reducing its workforce–a process called decruitment–when current HR levels are greater than anticipated needs. Planning for decruitment normally occurs when a company decides to discontinue manufacturing or selling in a market. Unfortunately, the decision by global companies to shift the location of manufacturing from one country to another can also result in lost jobs.

AACSB:  Application of knowledge

Skill:  Synthesis

Difficulty:  Hard

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

61) Explain why a person's ability to bridge cultural differences must be considered during "selection" for international assignments. How can eTraining help in bridging cultural differences?

Answer:  The process of screening and hiring the best-qualified applicants with the greatest performance potential is called selection. The process for international assignments includes measuring a person's ability to bridge cultural differences. Expatriate managers must be able to adapt to a new way of life in the host country. Conversely, native host-country managers must be able to work effectively with superiors who have different cultural backgrounds.

In the case of expatriate managers, cultural differences between home country and host country are important factors in their potential success. Culturally sensitive managers increase the likelihood that a company will achieve its international business goals. Recruiters can assess cultural sensitivity by asking candidates questions about their receptiveness to new ways of doing things and questions about racial and ethnic issues. They can also use global aptitude tests.

It is also important to examine the cultural sensitivity of each family member who will be going to the host country. The ability of a family member to adapt to a new culture can be a key factor in the success or failure of an expatriate manager.

Some of the many costs of relocating an employee for a long-term international assignment include moving expenses and ongoing costs for things such as housing, education, and cost-of-living adjustments. That is why many companies realize the need for in-depth training and development programs if they are to get the maximum productivity from managers posted abroad.

As companies increasingly reach out to the world to obtain services, they are turning to online training (eTraining) programs that teach skills immediately relevant to employees' jobs. These include administrative training, human resources training, compliance training, and frontline issues such as the consumer benefits of a new product. The appeal of eTraining to international companies is its consistency: eTraining delivers a consistent message in the same way to an infinite number of employees. By contrast, employees receiving other types of training in diverse settings worldwide can go away with many different perceptions or biases. Workplace eTraining is not perfect: it can be difficult to engage people online and to teach soft skills, such as appropriate facial expressions and tone of voice. But its ability to flexibly train large groups cost-effectively makes it a viable alternative to traditional training methods.

AACSB:  Application of knowledge

Skill:  Synthesis

Difficulty:  Hard

LO:  16.2: Describe the key human resource recruitment and selection issues.

 

62) Which of the following constitutes the most basic level of training to prepare managers for international assignments?

  1. A) environmental briefings
  2. B) language training
  3. C) cultural assimilation
  4. D) field experience

Answer:  A

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

63) A manager could most likely gain information on a local area's housing, health care, transportation, schools, and climate by participating in ________.

  1. A) language training
  2. B) environmental briefings
  3. C) field experience
  4. D) sensitivity training

Answer:  B

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

64) Which of the following offers insight into a host country's political, legal, economic, and social institutions as a way of enhancing environmental briefings?

  1. A) language training
  2. B) field experience
  3. C) sensitivity training
  4. D) cultural orientation

Answer:  D

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

65) Which of the following is the correct order of the different methods of cultural training from the least advanced to the most advanced?

  1. A) environmental briefings; language training; cultural orientations
  2. B) cultural orientations; field experience; language training
  3. C) cultural assimilation; language training; field experience
  4. D) sensitivity training; cultural orientations; field experience

Answer:  C

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

66) ________ teaches an expatriate a culture's values, attitudes, manners, and customs.

  1. A) Cultural assimilation
  2. B) Cultural orientation
  3. C) Language training
  4. D) Cultural environmentalism

Answer:  A

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

67) Which of the following methods of cultural training involves the use of guerilla linguistics?

  1. A) cultural orientation
  2. B) language training
  3. C) cultural assimilation
  4. D) cultural narcissism

Answer:  C

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

68) Which of the following trains managers to be considerate and understanding of other people's feelings and emotions?

  1. A) cultural orientation
  2. B) sensitivity training
  3. C) language training
  4. D) cultural narcissism

Answer:  B

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

69) Which of the following approaches to cultural training gets a trainee "under the skin" of the local people?

  1. A) language training
  2. B) cultural narcissism
  3. C) sensitivity training
  4. D) cultural orientation

Answer:  C

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

70) Which of the following training approaches involve employees visiting another culture, walking the streets of its cities and villages, and becoming absorbed by the culture for a short time?

  1. A) language training
  2. B) field experience
  3. C) sensitivity training
  4. D) cultural orientation

Answer:  B

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

71) Which of the following international assignment preparation methods involves a trainee feeling the stresses inherent in living in the culture?

  1. A) language training
  2. B) field experience
  3. C) sensitivity training
  4. D) cultural orientation

Answer:  B

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

Scenario: Gem Jewels

Gem Jewels recently established a number of subsidiaries in various foreign countries aiming to build high levels of international business involvement in the coming years. Cultural training has to be given by the company to home-country managers assigned to work in the new subsidiaries.

 

72) The most basic level of training that can be given to the managers is ________.

  1. A) language training
  2. B) field experience
  3. C) sensitivity training
  4. D) environmental briefings

Answer:  D

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

73) If Gem Jewels wants its employees to get "under the skin" of the local people, it should provide ________.

  1. A) language training
  2. B) sensitivity training
  3. C) cultural orientations
  4. D) field experience

Answer:  B

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

 

74) If Gem Jewels wants its employees to get "into the minds" of the local people, it should provide ________.

  1. A) language training
  2. B) sensitivity training
  3. C) cultural orientations
  4. D) environmental briefings

Answer:  A

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

75) To teach its employees the values, attitudes, manners, and customs of the host-country culture, Gem Jewels should offer ________.

  1. A) language training
  2. B) environmental briefings
  3. C) cultural assimilation
  4. D) field experience

Answer:  C

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

Scenario: Mr. Yoshimura goes to Tennessee

Mr. Yoshimura, vice president of quality control at Oshimura Yarn, has recently been assigned to a three-year project at the company's Tennessee plant. Mr. Yoshimura has brought his wife and his three daughters with him from Yokohama to Tennessee.

 

76) Mr. Yoshimura and his family were initially very excited to see Tennessee but soon started missing their home, relatives and friends in Japan. They are facing ________.

  1. A) culture shock
  2. B) reverse culture shock
  3. C) expatriate failure
  4. D) cultural cringe

Answer:  A

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.3: Summarize the main training and development programs that firms use.

 

 

77) Mr. Yoshimura's daughters are extremely unhappy and have been complaining every night about their lifestyle in the United States. They insist on returning to Japan. If Mr. Yoshimura gives in to his family members' pleas and decides to return home, which of the following will most likely be true about his experience?

  1. A) He and his family will experience reverse culture shock.
  2. B) He will leave his company within one year of returning home.
  3. C) His case will represent an instance of expatriate failure.
  4. D) He will be terminated from employment for failing to complete his assignment.

Answer:  C

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.3: Summarize the main training and development programs that firms use.

78) If the family finds it difficult to adjust on returning to Japan after three years, they will experience ________.

  1. A) social loafing
  2. B) reverse culture shock
  3. C) expatriate failure
  4. D) halo effect

Answer:  B

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.3: Summarize the main training and development programs that firms use.

 

Scenario: You're Hired!

Erica Els has just been promoted as vice president of human resources for Hudson Foods, a U.S.-based international frozen food corporation. Erica's first task is to staff the company's European subsidiary.

 

79) One lower-level position Erica must fill requires the employee to be familiar with the new market and its customs, traditions, and language. Also, the new hire must be comfortable with Hudson Food's organizational culture and business traditions. Who among the following will Erica most likely recruit for this position?

  1. A) a local fresher with strong government contacts
  2. B) an existing Hudson Foods employee from the United States
  3. C) a native of the target market who has completed a one-year internship at Hudson Foods
  4. D) an individual from the U.S. who has experience in the frozen food industry

Answer:  C

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.3: Summarize the main training and development programs that firms use.

 

 

80) Guerrilla linguistics is often used in the cultural assimilation stage.

Answer:  TRUE

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

81) Sensitivity training constitutes the most basic level of cultural training for managers on international assignments.

Answer:  FALSE

Skill:  Concept

Difficulty:  Easy

LO:  16.3: Summarize the main training and development programs that firms use.

 

82) Training local workers on how to work on an assembly line is an example of cultural assimilation.

Answer:  FALSE

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Moderate

LO:  16.3: Summarize the main training and development programs that firms use.

 

83) Explain the advantages and disadvantages of a geocentric staffing policy, and discuss the effects of culture shock when assigning an employee to work in another country.

Answer:  In geocentric staffing, the best-qualified individuals, regardless of nationality, manage operations abroad. The local operation may choose managers from the host country, from the home country, or from a third country. The choice depends on the operation's specific needs. This policy is typically reserved for top-level managers.

Geocentric staffing helps a company develop global managers who can adjust easily to any business environment–particularly to cultural differences. This advantage is especially useful for global companies trying to break down nationalistic barriers, whether between managers in a single office or between different offices. One hope of companies using this policy is that a global perspective among its managers will help them seize opportunities that may otherwise be overlooked.

The downside of geocentric staffing is the expense. Understandably, top managers who are capable both of fitting into different cultures and being effective at their jobs are highly prized among international companies. The combination of high demand for their skills and their short supply inflates their salaries. Moreover, there is the expense of relocating managers and their families–sometimes every year or two.

Living in another culture can be a stressful experience. Selecting managers comfortable traveling to and living in unfamiliar cultures, therefore, is an extremely important factor when recruiting for international posts. Set down in the midst of new cultures, many expatriates experience culture shock–a psychological process affecting people living abroad that is characterized by homesickness, irritability, confusion, aggravation, and depression. In other words, they have trouble adjusting to the new environment in which they find themselves. Expatriate failure–the early return by an employee from an international assignment because of inadequate job performance–often results from cultural stress. The higher cost of expatriate failure is convincing many companies to invest in cultural-training programs for employees sent abroad.

AACSB:  Application of knowledge

Skill:  Synthesis

Difficulty:  Hard

LO:  16.3: Summarize the main training and development programs that firms use.

 

 

84) Differentiate between culture shock and reverse culture shock. How can companies help employees deal with such issues?

Answer:  Successful international managers typically do not mind, and often enjoy, living and working outside their native lands. In extreme cases, they might even be required to relocate every year or so. These individuals are capable of adapting quickly to local conditions and business practices. Such managers are becoming increasingly valuable with the emergence of markets in Asia, Central and Eastern Europe, and Latin America. They are also helping to create a global pool of managers who are ready and willing to go practically anywhere on short notice. The size of this pool, however, remains limited because of the difficulties that many people experience in relocating to unfamiliar cultures.

Living in another culture can be a stressful experience. Selecting managers comfortable traveling to and living in unfamiliar cultures, therefore, is an extremely important factor when recruiting for international posts. Set down in the midst of new cultures, many expatriates experience culture shock–a psychological process affecting people living abroad that is characterized by homesickness, irritability, confusion, aggravation, and depression. In other words, they have trouble adjusting to the new environment in which they find themselves. Expatriate failure–the early return by an employee from an international assignment because of inadequate job performance–often results from cultural stress. The higher cost of expatriate failure is convincing many companies to invest in cultural-training programs for employees sent abroad.

Ironically, expatriates who successfully adapt to new cultures often undergo an experience called reverse culture shock–the psychological process of readapting to one's home culture. Because values and behavior that once seemed so natural now seem so strange, reverse culture shock may be even more disturbing than culture shock. Returning managers often find that either no position or merely a "standby" position awaits them in the home office. Companies often do not know how to take full advantage of the cross-cultural abilities developed by managers who have spent several potentially valuable years abroad. It is not uncommon for expatriates to leave their companies within a year of returning home because of difficulties blending back into the company culture. Moreover, spouses and children often have difficulty leaving the adopted culture and returning home.

The effects of reverse culture shock can be reduced. Home-culture reorientation programs and career-counseling sessions for returning managers and their families can be highly effective. For example, the employer might bring the entire family home for a short stay several weeks before the official return. This kind of trip allows returnees to prepare for at least some of the reverse culture shock that may await them.

Good career development programs can help companies retain valuable managers. Ideally, the career development plan was worked out before the employee went abroad and revised before his or her return. Some companies work with employees before they go abroad to plan career paths of up to 20 years within the company. Mentors who have previously gone abroad and had to adjust on returning home can also be assigned to returning managers. The mentor becomes a confidant with whom the expatriate manager can discuss particular problems related to work, family, and readjusting to the home culture.

AACSB:  Application of knowledge

Skill:  Concept

Difficulty:  Moderate

LO:  16.3: Summarize the main training and development programs that firms use.

 

 

85) ________ is the process of staffing a company and ensuring that employees are as productive as possible.

  1. A) Business process reengineering
  2. B) Human resource management
  3. C) Organizational diagnostics
  4. D) Industrial relations

Answer:  B

Skill:  Concept

Difficulty:  Easy

LO:  16.4: Explain how companies compensate managers and workers.

 

86) The most common inducement that companies offer managers to accept international postings is ________.

  1. A) fringe benefits
  2. B) a financial bonus
  3. C) a vacation
  4. D) free housing

Answer:  B

Skill:  Concept

Difficulty:  Easy

LO:  16.4: Explain how companies compensate managers and workers.

87) Managers who are asked to go into a particularly unstable country or one with a very low standard of living often receive a bonus called ________.

  1. A) hardship pay
  2. B) performance-related pay
  3. C) stock options
  4. D) fringe benefits

Answer:  A

Skill:  Concept

Difficulty:  Easy

LO:  16.4: Explain how companies compensate managers and workers.

 

88) Which of the following is true of employee compensation in international companies?

  1. A) The most common inducement that companies offer managers to accept international postings is free accommodation.
  2. B) Companies need not cover the costs incurred by expatriate managers if the cost of living abroad is lower than that at home.
  3. C) The greater mobility of labor affects the wages of nonmanagerial workers today.
  4. D) Managers recruited from within the host country generally receive a much higher pay and lower perks than managers who work for local companies.

Answer:  C

Skill:  Concept

Difficulty:  Moderate

LO:  16.4: Explain how companies compensate managers and workers.

 

 

89) The compensation of nonmanagerial workers is strongly influenced by increased cross-border business investment.

Answer:  TRUE

AACSB:  Diverse and multicultural work environments

Skill:  Concept

Difficulty:  Moderate

LO:  16.4: Explain how companies compensate managers and workers.

 

90) Centralizing the decisions that directly impact workers' lives contribute to better labor–management relations.

Answer:  FALSE

Skill:  Concept

Difficulty:  Moderate

LO:  16.4: Explain how companies compensate managers and workers.

 

91) Codetermination allows labor representatives to participate in high-level company meetings.

Answer:  TRUE

Skill:  Concept

Difficulty:  Easy

LO:  16.4: Explain how companies compensate managers and workers.

 

92) Compare and contrast the methods of cultural training. Is any single method better than all the others?

Answer:  Environmental Briefings and Cultural Orientations-Environmental (area) briefings constitute the most basic level of training–often the starting point for studying other cultures. Briefings include information on local housing, health care, transportation, schools, and climate. Such knowledge is normally obtained from books, films, and lectures. Cultural orientations offer insight into social, political, legal, and economic institutions. Their purpose is to add depth and substance to environmental briefings.

Cultural Assimilation and Sensitivity Training-Cultural assimilation teaches the culture's values, attitudes, manners, and customs. So-called guerrilla linguistics, which involves learning some phrases in the local language, is often used at this stage. It also typically includes role-play exercises: the trainee responds to a specific situation to be evaluated by a team of judges. This method is often used when someone is given little notice of a short stay abroad and wishes to take a crash course in social and business etiquette and communication. Sensitivity training teaches people to be considerate and understanding of other people's feelings and emotions. It gets the trainee "under the skin" of the local people.

Language Training-The need for more thorough cultural preparedness leads to intensive language training. This level of training entails more than memorizing phrases for ordering dinner or asking directions. It gets a trainee "into the mind" of local people. The trainee learns more about why local people behave as they do. This is perhaps the most critical part of cultural training for long-term assignments.

Field Experience-Field experience means visiting the culture, walking the streets of its cities and villages, and becoming absorbed by it for a short time. The trainee gets to enjoy some of the unique cultural traits and feel some of the stresses inherent in living in the culture. An expatriate's spouse and children also need cultural training. Training for them is a good investment because the alternatives–an international "commuter marriage" or expatriate failure–are both psychologically and financially expensive options.

AACSB:  Application of knowledge

Skill:  Concept

Difficulty:  Moderate

LO:  16.4: Explain how companies compensate managers and workers.

 

 

93) Briefly explain how companies compensate managers in international markets.

Answer:  Compensation packages for managers differ from company to company and from country to country. Good packages are fairly complicated to design, for several reasons. If the effect of cost of living is considered, which includes factors such as the cost of groceries, dining out, clothing, housing, schooling, health care, transportation, and utilities, it can be assumed that it costs more to live in some countries than in others. Moreover, within a given country, the cost of living typically varies from large cities to rural towns and villages. Most companies add a certain amount to an expatriate manager's pay to cover greater cost-of-living expenses. On the other hand, managers who are relocating to lower cost-of-living countries are typically paid the same amount that they were receiving at the home office–otherwise, they would be financially penalized for accepting an international job assignment.

Companies must cover other costs incurred by expatriate managers even when the cost of living abroad is lower than at home. One important concern for relocating managers is the quality of local education. In many cases, children cannot immediately enter local classes because they do not speak the local language. In such instances, most companies pay for private-school education

Bonus and Tax incentives: Companies commonly offer managers inducements to accept international postings. The most common is a financial bonus. This bonus can be in the form of a one-time payment or an add-on to regular pay–generally 15 to 20 percent. Bonuses for managers who are asked to go into a particularly unstable country or one with a very low standard of living often receive hardship pay.

Managers can also be attracted by another income-related factor. For example, the U.S. government permits citizens working abroad to exclude $82,000 of "foreign-earned income" from their taxable income in the United States–even if it was earned in a country with no income tax. But earnings over that amount are subject to income tax, as are employee benefits such as free housing.

Cultural and Social Contributions to Cost-Culture also plays an important role in the compensation of expatriate managers. Some nations offer more paid holidays than others. Many offer free medical care to everyone living and working there. Granted, the quality of locally available medical care is not always good. Many companies, therefore, have plans to take seriously ill expatriates and family members home or to nearby countries where medical care is equal to that available in the home country.

Companies that hire managers in the local market might encounter additional costs engendered by social attitudes. For instance, in some countries employers are expected to provide free or subsidized housing. In others the government obliges employers to provide paid maternity leaves of up to one and a half years. Government-mandated maternity leaves vary significantly across European countries. Although not all such costs need to be absorbed by companies, they do tend to raise a country's cost of doing business.

Managers recruited from within the host country generally receive the same pay as managers who work for local companies. Yet they often receive perks not offered by local firms. And some managers are required to visit the home office at least several times per year. If time allows, many managers will make these into short vacations by taking along their families and adding a few extra days onto the length of the trip.

AACSB:  Application of knowledge

Skill:  Concept

Difficulty:  Moderate

LO:  16.4: Explain how companies compensate managers and workers.

94) What factors influence the wages of nonmanagerial workers?

Answer:  Two main factors influence the wages of nonmanagerial workers. First, their compensation is strongly influenced by increased cross-border business investment. Employers can relocate fairly easily to nations where wages are lower. In the home country, meanwhile, workers must often accept lower wages when an employer gives them a choice of accepting the reduction or watching their jobs move abroad. This situation is causing a trend toward greater equality in workers' pay around the world. This equalizing effect encourages economic development and improvement in workers' lives in some nations at the expense of workers in other nations. The freedom with which an employer can relocate differs from country to country, however. Although firms in some countries are allowed to move with little notice, in others they are highly restricted. Some countries force companies to compensate workers who lose their jobs because of relocation. This policy is common in European countries that have erected extensive social safety nets for unemployed workers.

Second, the greater mobility of labor today affects wages. Although labor laws in Europe are still more stringent than in the United States, the countries of the European Union are abolishing the requirement that workers from one EU nation must obtain visas to work in another. If workers in Spain cannot find work at home or if they feel that their current pay is inadequate, they are free to move to another EU country where unemployment is lower (say, Britain). A problem that plagues some European countries today is that they seem to be creating a group of people who are permanently unemployed.

AACSB:  Application of knowledge

Skill:  Concept

Difficulty:  Moderate

LO:  16.4: Explain how companies compensate managers and workers.

 

95) The positive or negative condition of relations between employers and their workers is referred to as ________.

  1. A) international relations
  2. B) labor-management relations
  3. C) corporatism
  4. D) organizational hierarchy

Answer:  B

Skill:  Concept

Difficulty:  Easy

LO:  16.5: Describe the importance of labor-management relations.

 

 

96) Large international companies tend to make high-level labor decisions at the home office because ________.

  1. A) it creates a sense of unity and solidarity between the labour unions and management members
  2. B) managers in the home office are better equipped than managers in the host-country office, to handle matters that affect workers personally
  3. C) it places decisions that have a direct impact on host-country workers' lives in the hands of the home-country experts
  4. D) it gives them greater control over their network of operations around the world

Answer:  D

Skill:  Concept

Difficulty:  Moderate

LO:  16.5: Describe the importance of labor-management relations.

97) ________ allows labor representatives in Germany to participate in high-level company meetings by actually voting on proposed actions.

  1. A) Centralization
  2. B) Codetermination
  3. C) Individualism
  4. D) Authoritarianism

Answer:  B

Skill:  Concept

Difficulty:  Easy

LO:  16.5: Describe the importance of labor-management relations.

 

Scenario: Swingset International

Jerome Johnston, the human resource manager at the U.S.-based Swingset International, is developing an international staffing policy for the company. Jerome personally believes Swingset should send managers from the United States to manage each subsidiary. But the CEO of the company, Valerie Vermont, believes subsidiary operations ought to be managed by individuals from the host country.

 

98) Which of the following is a drawback of Jerome's staffing approach?

  1. A) expense to relocate managers
  2. B) potential for losing control of the host-country operations
  3. C) potential for losing control of the home-country operations
  4. D) inability to re-create local operations in the image of the home-country operations

Answer:  A

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.5: Describe the importance of labor-management relations.

 

 

99) An important advantage of the staffing policy recommended by Valerie is that it ________.

  1. A) re-creates local operations in the image of home-country operations
  2. B) eliminates the high cost of relocating expatriate managers and families
  3. C) helps the company develop global managers who can adjust easily to any business environment
  4. D) sends managers from home to look out for the company's interests

Answer:  B

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.5: Describe the importance of labor-management relations.

 

100) A major drawback of the staffing policy recommended by Valerie is ________.

  1. A) the potential for losing control of the host-country operations
  2. B) the necessity of depending on managers who don't know the local culture
  3. C) the potential for creating legal barriers to host-country operations
  4. D) the high cost of training managers in the language of the host country

Answer:  A

AACSB:  Analytical thinking

Skill:  Application

Difficulty:  Hard

LO:  16.5: Describe the importance of labor-management relations.

101) What challenges do international labor unions face as they try to accomplish their objectives?

Answer:  The global activities of unions are making progress in areas such as improving the treatment of workers and reducing incidents involving child labor. But the efforts of separate national unions to increase their cooperation are somewhat less successful. Although unions in one nation might want to support their counterparts in another country, generating grassroots support is difficult for two reasons. First, events taking place in another country are difficult for many people to comprehend. Distance and cultural difference make it hard for people to understand others who live and work elsewhere.

Second, whether they realize it or not, workers in different countries sometimes compete against one another. For example, today firms can relocate internationally rather easily. Thus, labor unions in one country might offer concessions to attract the jobs that will be created by a new production facility. In this way, unions in different nations can wind up competing against one another. Some observers argue that this phenomenon creates downward pressure on both wages and union power worldwide.

AACSB:  Application of knowledge

Skill:  Concept

Difficulty:  Moderate

LO:  16.5: Describe the importance of labor-management relations.

 

 

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