dessler_14

institutions accept and expect an unequal power distribution ________. a. masculinity b. time framework c. individualism d. power distance

e. tolerance for ambiguity (d; easy; p. 693)

2. All of the following is true of France except ________. a. it is a capitalist society

b. workers typically receive three weeks of vacation time each year c. there is a legal limit to the number of hours employees can work each

week

d. employer’s are limited in the extent to which they can dismiss workers e. all of the above are true (b; moderate; p. 694)

3. Of the countries listed below, in which one do workers receive the largest

amount of vacation time? a. United States b. Korea c. Italy d. France e. Germany

(c; moderate; p. 694)

4. Of the countries listed below, in which one do workers receive the least

amount of vacation time? a. United States b. United Kingdom c. Italy d. France e. Germany

(a; moderate; p. 694)

341

5.

6.

7.

8.

9.

Of the countries listed below, in which one do production workers receive the lowest hourly wage? a. Mexico

b. United Kingdom c. United States d. Germany e. Taiwan

(a; moderate; p. 694)

________ are formal, employee-elected groups of worker representatives that meet monthly with managers to discuss topics affecting the employees. a. Unions

b. Work councils c. Mediation groups d. Employee boards e. Advisory boards (b; easy; p. 694)

In many European countries, ________ replace the union-based worker-management mediations typical in the U.S. a. unions

b. work councils c. mediation groups d. employee boards e. advisory boards (b; easy; p. 694)

In Germany, employees have the legal right to a voice in setting company policies. This is called ________. a. co-determination b. employment at will c. employee participation d. work council leadership e. internal coordination (a; easy; p. 694)

All of the following are work-related policies that vary from country to country within the EU except ________. a. minimum wages

b. work week hours permitted c. employment contracts d. number of annual holidays e. codetermination (e; moderate; p. 694)

342

10.

11.

12.

All of the following are characteristics of small Chinese firms except ________.

a. job descriptions are current

b. employees stick to assigned job duties c. jobs are broadly defined

d. job descriptions accurately cover all job duties e. work is heavily structured

(c; moderate; p. 697; AACSB: multicultural and diversity)

How do performance appraisals in China differ from those in the United States?

a. performance appraisals in China focus on the process b. employees in China are less likely to receive incentives c. appraisals in China focus on developing the employee d. appraisals in China focus on quantifiable, objective results e. appraisals in China are “softer” than those in the US (d; difficult; p. 697; AACSB: multicultural and diversity)

Which of the following is true of actual pay practices in China? a. heavy emphasis on incentives b. unlikely to include bonuses

c. pay is based on a guaranteed income plan

d. much variation in pay from employee to employee e. no relationship between pay and seniority (a; difficult; p. 697)

________ are citizens of the countries where they are working. a. Expatriates

b. Third-country nationals c. Home-country nationals d. Locals

e. Multi-nationals (d; easy; p. 699)

Of the types of international managers that multinational companies can employ, locals are ________.

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 (a; easy; p. 699)

13.

14.

343

15.

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 (a; moderate; p. 699)

Jason is a British executive working in the Tokyo branch of a

multinational bank based in the United Kingdom. Jason is classified as a ________. a. local b. expatriate

c. third-country national d. home-country national e. host-country national (b; moderate; p. 699)

________ 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 (a; easy; p. 699)

Of the types of international managers that multinational companies can employ, expatriates are ________.

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 (b; easy; p. 699)

16.

17.

18.

344

19.

________ are citizens of a country other than the parent or the host country.

a. Expatriates

b. Third-country nationals c. Home-country nationals d. Locals

e. Multi-nationals (b; easy; p. 699)

Of the types of international managers that multinational companies can employ, home-country nationals are ________. 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 (d; easy; p. 699)

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 a(n) ________. a. local b. expatriate

c. third-country national d. home-country national e. host-country national (d; moderate; p. 699)

________ are 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 (c; easy; p. 699)

20.

21.

22.

345

23.

Of the types of international managers that multinational companies can employ, third-country nationals are ________.

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 (c; easy; p. 699)

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 a(n) ________. a. local b. expatriate

c. third-country national d. home-country national e. host-country national (c; moderate; p. 699)

From what group can international firms hire? a. parent country nationals b. host country nationals c. third country nationals d. both a and b e. all of the above (e; easy; p. 699)

Which group tends to earn the highest total compensation from the parent company?

a. parent country nationals b. host country nationals c. third country nationals d. both a and b e. all of the above (a; moderate; p. 699)

24.

25.

26.

346

27.

Mercedes sent a team of executives from Germany to oversee the start-up of its U.S. operations. Mercedes chose ________ to manage this operation. a. parent country nationals b. host country nationals c. third country nationals d. all of the above e. none of the above (a; easy; p. 699)

Which group of employees may also be known as expatriates? a. parent country nationals b. host country nationals c. third country nationals d. both a and b e. both a and c

(e; moderate; p. 699)

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 (a; moderate; p. 699)

A disadvantage of using expatriates to fill foreign subsidiary management positions is that expatriates ________.

a. are more expensive than using local managers

b. spend too much time sightseeing in the foreign country c. focus unnecessarily on long-term projects

d. bring a sense of diversity to the foreign facility e. all of the above (a; moderate; p. 700)

Locals are often times a better choice than expatriates for filling foreign subsidiary management positions because they are ________. a. cheaper

b. more knowledgeable regarding local customs c. more comfortable with the language

d. an effective means of illustrating a multinational’s commitment to a

country

e. all of the above

(e; easy; p. 700; AACSB: multicultural and diversity)

28.

29.

30.

31.

347

32.

33.

An advantage of using expatriates to fill foreign subsidiary management positions is that ________.

a. they are more likely to implement the instructions from headquarters b. they are more expensive than local managers c. they may not speak the local language d. they may not understand local customs e. all of the above

(a; moderate; p. 700; AACSB: multicultural and diversity)

Samsung tends to follow an ethnocentric staffing model. From which group will it tend to hire for upper-level management positions? a. parent country nationals b. host country nationals c. third country nationals d. both a and b e. both a and c

(a; moderate; p. 702)

Microsoft tends to follow a geocentric staffing model. From which group will it tend to hire?

a. parent country nationals b. host country nationals c. third country nationals d. both a and b e. all of the above (e; moderate; p. 703)

Having local employees abroad to jobs that the firm’s domestic employees previously did in-house is called ________. a. outsourcing b. offshoring c. deportment d. downsizing

e. international staffing (b; easy; p. 701)

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 (b; easy; p. 701)

34.

35.

36.

348

37.

38.

39.

What value classification refers to a prevailing attitude that the 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 (b; moderate; p. 702)

When the values of a firm’s top executives are classified as ethnocentric, it means that there is a ________.

a. conscious belief that only host country managers can ever really

understand the culture and behavior of the host country market b. the foreign subsidiary should be managed by local people

c. prevailing attitude that the home country attitudes, management style,

knowledge, evaluation criteria, and managers are superior to anything the host country has to offer

d. belief that the best manager for a specific position may be anywhere in

the world

e. the best managers are multi-lingual

(c; moderate; p. 702; AACSB: multicultural and diversity)

What value classification refers to a conscious belief that only host

country managers can ever really understand the culture and behavior of the host country market? a. polycentric b. ethnocentric c. geocentric d. monocentric e. francocentric

(a; moderate; p. 702; AACSB: multicultural and diversity)

349

40.

When the values of a firm’s top executives are classified as polycentric, it means that there is a ________.

a. conscious belief that only host country managers can ever really

understand the culture and behavior of the host country market b. the foreign subsidiary should be managed by expatriates

c. prevailing attitude that the home country attitudes, management style,

knowledge, evaluation criteria, and managers are superior to anything the host country has to offer

d. belief that the best manager for a specific position may be anywhere in

the world

e. the best managers are multi-lingual

(a; moderate; p. 702; AACSB: multicultural and diversity)

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

(c; moderate; p. 703; AACSB: multicultural and diversity)

When the values of a firm’s top executives are classified as geocentric, it means that there is a ________.

a. conscious belief that only host country managers can ever really

understand the culture and behavior of the host country market b. the foreign subsidiary should be managed by locals

c. prevailing attitude that the home country attitudes, management style,

knowledge, evaluation criteria, and managers are superior to anything the host country has to offer

d. belief that the best manager for a specific position may be anywhere in

the world

e. the best managers are multi-lingual

(d; moderate; p. 703; AACSB: multicultural and diversity)

If a firm chooses to fill key management jobs in foreign subsidiaries with employees who are parent-country nationals, the firm is following a(n) ________ staffing policy. a. polycentric b. ethnocentric c. geocentric d. monocentric e. francocentric (b; moderate; p. 702)

41.

42.

43.

350

44.

45.

When a firm follows an ethnocentric staffing policy, it fills key management jobs in foreign subsidiaries with ________. a. employees who are parent-country nationals b. employees who are host-country nationals

c. employees who are nationals of a country that is neither the host nor

home country

d. employees who are multi-lingual

e. employees who have traveled extensively (a; moderate; p. 702)

If a firm chooses to fill key management jobs in foreign subsidiaries with employees who are host country nationals and management jobs in the home office with parent-country nationals, the firm is following a(n) ________ staffing policy. a. polycentric b. ethnocentric c. geocentric d. monocentric e. francocentric (a; moderate; p. 702)

When a firm follows a polycentric staffing policy, it fills key management jobs in foreign subsidiaries with ________. a. employees who are parent-country nationals b. employees who are host-country nationals

c. employees who are nationals of a country that is neither the host nor

home country

d. employees who are multi-lingual

e. employees who have traveled extensively (b; moderate; p. 702)

If a firm chooses to fill key management jobs in foreign subsidiaries by seeking out the best people regardless of nationality, the firm is following a ________ staffing policy. a. polycentric b. ethnocentric c. geocentric d. monocentric e. francocentric (c; moderate; p. 703)

46.

47.

351

48.

When a firm follows a geocentric staffing policy, it fills key management jobs in foreign subsidiaries with ________. a. employees who are parent-country nationals b. employees who are host-country nationals

c. employees who are nationals of a country that is neither the host nor

home country

d. employees who are multi-lingual

e. employees who have traveled extensively (c; moderate; p. 703)

The most common reason that an expatriate fails at an international assignment is ________. a. incompetence

b. technical demands of the job c. expense

d. family pressures e. all of the above (d; easy; p. 703)

Which of the following personality characteristics are associated with ending international work assignments early? a. extraversion b. agreeableness c. emotionally stable d. neuroticism e. all of the above (d; moderate; p. 703)

________ is the early return of an expatriate manager to the home country because of an inability to perform in the overseas assignment. a. culture shock b. expatriate return c. expatriate failure

d. managerial incompetence e. repatriation

(c; moderate; p. 703)

49.

50.

51.

352

52.

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

b. past international travel c. language skills d. youthfulness e. extraversion (b; moderate; p. 704)

Which term below refers to the process of assessing the assignee’s (and spouse’s) probable success in handling a foreign transfer and alerting them tissues the move may involve? a. competency assessment

b. language skills placement testing c. adaptability screening

d. culture shock resistance scoring e. balance sheet assessment (c; moderate; p. 705)

Which of the following is not one of the five factors thought to be important in predicting an international assignee’s success? a. job knowledge b. college degree c. relational skills d. flexibility

e. extracultural openness f. family situation (b; moderate; p. 705)

Which level of training for international assignments involves training on the impact of cultural differences and on raising the trainees’ awareness of such differences and their impact on business outcomes? a. Level 1 b. Level 2 c. Level 3 d. Level 4 e. Level 5

(a; moderate; p. 707)

53.

54.

55.

353

56.

57.

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 (a; easy; p. 709)

The basis of the ________ approach to formulating expatriate pay is to estimate the employee’s expenses in the home country and what that standard of living will cost in the host country. a. income sheet b. balance sheet

c. equitable wage rate d. performance e. cash flow (b; easy; p. 709)

The idea that a manager who accepts a foreign assignment is entitled to the same standard of living the manager enjoyed at home is the basis for ________.

a. premium expatriate salaries b. balance sheet approach c. hardship premiums

d. foreign-service premiums e. tax equalization (b; moderate; p. 709)

Which of the following is not one of the main home-country groups of expenses featured in the balance sheet approach to formulating expatriate pay?

a. income taxes b. housing

c. goods and services d. disposable income e. discretionary expenses (d; difficult; p. 709)

58.

59.

354

60.

61.

________ are financial payments over and above regular base pay designed to encourage expatriates to accept and stay on international assignment.

a. Foreign service premiums b. Hardship allowances c. Balance sheet payments d. Cultural adjustments e. Mobility premium (a; easy; p. 710)

JJP Enterprises seeks to entice one of its star managers to move to Iraq to oversee its negotiations for Iraqi oil. The firm will likely need to offer a(n) ________ to a manager’s base salary. a. cost-of-living allowance b. bonus

c. hardship allowance

d. tax equalization adjustment e. all of the above (c; moderate; p. 710)

355

62.

What is the term for a supplement used to induce individuals to accept an international assignment? a. hardship premium

b. foreign-service premium c. cost-of-living allowance d. cultural adjustment premium e. mobility premium (a; moderate; p. 710)

In addition to salary adjustments, expatriates also get adjustments in ________. a. housing

b. spousal job location assistance c. private schooling for children d. medical benefits e. all of the above (e; moderate; p. 709)

Jim Simmons has worked for his company’s Italian operations for two years now and has been very successful. Now, the company wants Jim to relocate to Turkey to work in a new division. The company will likely offer Jim a ________ premium to reward him for moving from one assignment to another. a. hardship

b. foreign-service c. cost-of-living

d. cultural adjustment e. mobility

(e; moderate; p. 710)

For which of the following events are insurance payments made for kidnapping and ransom insurance policies? a. kidnapping b. extortion c. detention

d. threats to property e. all of the above (e; moderate; p. 713)

63.

.

65.

356

66.

67.

68.

In the movie, Proof of Life, Russell Crowe heads up a “crisis team” sent in to negotiate the release of a kidnapped employee. In real life, who would pay the costs for a crisis team in a situation like this? a. The costs would be covered by the host country. b. The costs would be covered by the home country.

c. The costs would be covered by insurance if the firm holds a

kidnapping and ransom insurance policy. d. The costs would be covered by the employer.

e. The costs would be covered by the employee or employee’s family. (c; easy; p. 713)

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 each day c. equip car and home with adequate security systems d. wait at the airport in main traffic areas e. all of the above (c; difficult; p. 713)

________ refers to bringing a manager back home after a foreign assignment has been completed. a. expatriation b. repatriation c. culture shock d. expatriate failure e. acculturation (b; easy; p. 713)

As many as ________ of all repatriated employees leave their employer within three years after returning home. a. 10% b. 25% c. 50% d. 75% e. 90%

(c; moderate; p. 713)

69.

357

70.

A formal repatriation program should seek to ________.

a. reassure the employee and his or her family of the company’s concern

for their welfare

b. match the employee and his or her family with a specialist in

repatriation issues

c. maintain communication with the employee regarding activities and

progress at the home office

d. make the employee comfortable with his or her career development in

the company following the international assignment e. all of the above (e; easy; p. 713)

True/ False

71. A major challenge for international businesses is the need to adapt

personnel policies and procedures to the differences among countries. (T; easy; p. 692; AACSB: multicultural and diversity)

72. Most member countries in the European Union have a minimum wage

system in place. (T; easy; p. 694)

73. Codetermination means that employees have a legal right to voice

opinions and preferences in setting company policies. (T; moderate; p. 694)

74. The number of standard vacation days in France and in Germany exceeds

that of the United States. (T; easy; p. 694)

75. The official length of a work week in the European Union is 40 hours. (F;

moderate; p. 695)

76. Employers around the world tend to use similar methods for selecting

employees. (T; easy; p. 696)

77. In general, employers in China do not stress pay incentives as part of

employee pay packages. (F; moderate; p. 697)

78. A strong corporate culture helps override geographical differences. (T;

moderate; p. 698)

79. Third-country nationals hold citizenship in three countries. (F; easy; p.

699)

80. Most managerial positions in foreign subsidiaries are filled with

expatriates. (F; moderate; p. 700)

81. The least expensive way to fill managerial positions in foreign subsidiaries

is with local people. (T; easy; p. 700)

82. Off shoring refers to having local employees abroad do jobs that the firm’s

domestic employees previously did in-house. (T; easy; p. 701)

83. 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. (F; moderate; p. 702; AACSB: multicultural and diversity)

358

84.

Firms using a geocentric staffing model will seek the best people for key jobs throughout the organization, regardless of nationality. (T; moderate; p. 703)

85. The most expensive approach to staffing is the polycentric staffing model.

(F; moderate; p. 702)

86. Family pressures are a primary cause of expatriate failure. (T; easy; p.

703)

87. To help to ensure success for expatriates on international assignment,

companies should provide language training to their spouses. (T; moderate; p. 704; AACSB: communication)

88. 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. (F; moderate; p. 705)

. The Overseas Assignment Inventory is a test that identifies the

characteristics and attitudes international assignment candidates should have. (T; easy; p. 705)

90. Women are less inclined than male managers to move their families

abroad. (F; moderate; p. 706)

91. Employees preparing for overseas assignments should be trained in

cultural differences, attitude formation and behavioral influence, factual country knowledge, and language skills. (T; easy; p. 707; AACSB: multicultural and diversity)

92. More than 85% of North American companies use the balance sheet

approach to formulating expatriate pay. (T; easy; p. 709)

93. Foreign service premiums usually range between 10% and 30% of base

pay. (T; easy; p. 710)

94. Foreign service premiums compensate expatriates for exceptionally hard

living and working conditions at certain foreign locations. (F; moderate; p. 710)

95. Unions tend to have more autonomy and decision-making power in the

European Union than in the United States. (F; easy; p. 673)

96. Foreign employers that operate in the United States or its territories are

subject to EEO laws to the same extent as U.S. employers. (T; moderate; p. 712)

97. EEO laws do not apply to non-U.S. citizens working outside the United

States or its territories regardless of whether or not the firm for which they work is based in the United States. (T; difficult; p. 712)

98. If equal employment opportunity laws conflict with the laws of the

country in which the U.S. employer is operating, the laws of the U.S. generally take precedence. (F; difficult; p. 712)

99. Employers with many employees abroad buy kidnapping and ransom

insurance. (T; moderate; p. 713)

100. Transferring one employee to an overseas assignment with a base salary of

about $100,000 may cost the employer $1 million once extra living costs, transportation, and family benefits are included. (T; moderate; p. 713)

359

Essay/ Short Answer

101. What were the three key global pressures affecting human resource

management practices named by international HR managers? Briefly explain each pressure. (moderate; p. 692)

Answer: The three pressures named were 1) deployment, 2) knowledge and innovation dissemination, and 3) identifying and developing talent on a global basis. Deployment refers to the need to get the right skills to the right place despite geographic distance. Similarly, HR managers must spread knowledge and innovative practices throughout the organization despite geographic distances. Finally, international HR managers must be able to identify who can function effectively in a global organization and to develop the abilities of those people.

102. Explain the meaning of the term codetermination and how it works in

German companies. (moderate; p. 694)

Answer: Codetermination means that employees have the legal right to a voice in setting company policies. Workers elect their own representatives to the supervisory board of the employer and there is a vice president for labor at the top-management level. Codetermination laws largely determine the nature of HR policies in many German firms.

103. When preparing a training program that will prepare employees for an

international assignment, what four-step approach is recommended? Describe each level in the four level system. (moderate; p. 707)

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.

360

104. What options do multinational firms have in staffing positions in foreign

subsidiaries? (moderate; p. 699)

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.

105. What are the advantages and disadvantages of using home country

nationals in international assignments? (moderate; p. 700)

Home-country nationals 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, home-country nationals 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 home-country nationals and maintain them in the host country.

106. Explain the meaning of ethnocentrism, polycentrism, and geocentrism and

how those values might affect a multinational company staffing policy. (moderate; p. 702-703)

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.

361

107. Explain what things seem to make it easier for spouses to adjust to living

in a foreign country. (moderate; p. 704)

Answer: Language fluency is important for helping all family members to adjust. Spouses should be offered language training. The family situation also affects how easy it is for spouses to adjust. When children are not in school yet, this seems to make it easier for the spouse to adjust. Also, couples without children seem to adjust well. If the employee and the spouse have a close bond based on strong emotional support, this is also helpful.

108. What are the five factors associated with success in international

assignments? Is one more important than the others? Explain. (moderate; p. 705)

Answer: Job knowledge and motivation, relationship skills, flexibility/ adaptability, extra-cultural openness, and family situation. Family

situation is the most important factor. Family situation includes a spouse with a positive attitude toward the situation, and the willingness of the spouse to live abroad.

109. Describe the four levels of training recommended for managers preparing

for an international assignment. (moderate; p. 707)

Answer: Level 1 training focuses on the impact of cultural differences and on raising the trainees’ awareness of such differences and their impact on business situations. Level 2 focuses on getting participants to understand how attitudes are formed and how they influence behavior. Level 3 training provides factual knowledge about the target country. Level 4 provides skill building in areas like language and adjustment and adaptation skills.

110. Explain the balance sheet approach to formulating expatriate pay.

(moderate, p. 709)

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 ten 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.

362