Expatriate Failure
Question 1
The staffing from parent country nationals, host country nationals and third country nationals, illustrating advantages and disadvantages of each selection method.
Parent-country Nations
Advantages:
1 Organizational control and combination is maintained and facilitated.
The need to maintain good communication, coordination and control links with corporate headquarters. Especially for the firms at starting stage of internationalization, an ethnocentric approach can reduce the perceived risk. Example: when the MNCs open a new foreign market, the trust person from parent country can reduce concerns and risks from foreign activities.
2 Promising managers are given international experience
The selected manager who is qualified in specific field, obtains work experience from expatriating assignment.
3 PCNs may be the best people for the job because of special skills and experiences.
4 There is assurance that subsidiary will comply with company objectives, policies, etc.
Disadvantages:
1 The promotional opportunities of HCNs are limited
This ethnocentric approach limits HCNs’s promotion opportunities, which may lead to HCNs demotivation, reduction in productivity and high turnover rate among that group.
2 Adaptation to host country take a long time
PCNs will experience cultural shock at early stage, during which PCNs often make mistakes and poor decisions.
3 PCNs may impose an inappropriate HQ style
It is difficult for PCNs to remove cultural barrier, when implementing management style. The headquarter-way is inappropriate for subsidiaries.
4 Compensation for PCNs and HCNs may differ
When PCN and HCN compensation package is compared, the income gap in favor of PCNs is often viewed
Host-country Nationals
Advantages:
1 Language and other barriers are eliminated
This approach removes the need for expensive cultural awareness training program. The adjusting problems of expatriate managers are also avoided.
2 Hiring costs are reduced and no
The staffing from parent country nationals, host country nationals and third country nationals, illustrating advantages and disadvantages of each selection method.
Parent-country Nations
Advantages:
1 Organizational control and combination is maintained and facilitated.
The need to maintain good communication, coordination and control links with corporate headquarters. Especially for the firms at starting stage of internationalization, an ethnocentric approach can reduce the perceived risk. Example: when the MNCs open a new foreign market, the trust person from parent country can reduce concerns and risks from foreign activities.
2 Promising managers are given international experience
The selected manager who is qualified in specific field, obtains work experience from expatriating assignment.
3 PCNs may be the best people for the job because of special skills and experiences.
4 There is assurance that subsidiary will comply with company objectives, policies, etc.
Disadvantages:
1 The promotional opportunities of HCNs are limited
This ethnocentric approach limits HCNs’s promotion opportunities, which may lead to HCNs demotivation, reduction in productivity and high turnover rate among that group.
2 Adaptation to host country take a long time
PCNs will experience cultural shock at early stage, during which PCNs often make mistakes and poor decisions.
3 PCNs may impose an inappropriate HQ style
It is difficult for PCNs to remove cultural barrier, when implementing management style. The headquarter-way is inappropriate for subsidiaries.
4 Compensation for PCNs and HCNs may differ
When PCN and HCN compensation package is compared, the income gap in favor of PCNs is often viewed
Host-country Nationals
Advantages:
1 Language and other barriers are eliminated
This approach removes the need for expensive cultural awareness training program. The adjusting problems of expatriate managers are also avoided.
2 Hiring costs are reduced and no