Business Management and Entrepreneurship (BUSI118)
Summary
Summary Key Theories and Points for International Management
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Course
Business Management and Entrepreneurship (BUSI118)
Institution
Nottingham Trent University (NTU)
A deep assessment of key theories and study points for the management of international employees. Perfect exam preparation for international business students.
Business Management and Entrepreneurship (BUSI118)
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Key Theories
Definition - “Cross -cultural management has been defined as global management which
takes account of differences in peoples’ behaviour in organisations and trains their staff to
work with other staff in organisations worldwide, catering for the needs of clients from
other cultures” (Burke 1993)
Definition - Expatriates are employees of MNCs and TNCs who accept
international work assignments (Greer & Stiles 2016)
Standardisation/localisation paradox – “Internationally operating
organisations may want to standardise practices wherever possible. But in many
areas of management, and particularly HRM, they also have to be aware of and
respond to or even utilise national differences” (Brewster 2016)
Orientations to international staffing
3 Primary orientations for international staffing policies based on (Perlmutter 1969):
Key product
Function
Geographic decisions
4 Main approaches to Strategic International Human
Resource Management (Perlmutter & Heenan 1979)
Ethnocentric- strategic decisions are made at headquarters (centralised).
Subsidiaries are managed by expatriates from the parent country (Brewster et al
2016)
Polycentric – foreign subsidiaries are treated as a distinct national entity with some
decision making autonomy. Subsidiaries are usually managed by host country
nationals (Brewster et al 2016)
Regiocentric – reflects the geographic strategy and structure of the MNC. Personell
may move between countries but only within a particular region (Europe or Asia-
Pacific) (Brewster et al 2016)
Geocentric – recognising that each part of the MNC makes a unique contribution.
Ability is favoured over nationality. ‘Worldwide stance’ PCNs, HCNs and TCNs can be
found anywhere in the business. (Brewster et al 2016)
Global Assignment cycle (Brewster et al 2016)
“Expatriate failure in the usually defined sense – the premature return home of an
expatriate manager – is rare” (Harzing 1995).
Expatriate failure may be higher in US and lower in European MNCs (Suutari and Brewster
1998)
Ways for minmising Expatriate poor performance (Brewster et al 2016):
Planning
Selection
Preparation
Adjustment
Rewards
, Performance measurement
Repatriation – sending someone back to their own country.
U-Curve of Cross-Cultural Adjustment (Lysgaard 1955)
Adjusting to a culture in closer proximity to one’s own can reduce stress arising from
psychological uncertainty engendered by a new learning situation (Black et al., 1991).
Learning is facilitated if an experienced person can guide a neophyte in the new environment (Mendenhall &
Oddou, 1985),
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