Ihrm Test Bank Chapters

BUS 325 Global Human Resource Management
International Human Resource Management by Dowling, Festing, & Engle Test

Bank
CHAPTER 1: Introduction
TRUE/FALSE
1. An inpatriate is an employee transferred out of the home base into the firm’s
international organization.
ANS: F PTS: 1 TOP: Defining International HRM
2. The HR department is the major user of language translation services.
ANS: T PTS: 1
TOP: Differences between Domestic and International HRM
3. The IHR department does not get involved in the employee’s personal lives such as
marital status and children when considered for assignments.
ANS: F PTS: 1
4. Less developed countries tend to have cheaper labor but more government
regulations.
ANS: F PTS: 1
5. Culture shock is a phenomenon experiences by people who move across cultures.
ANS: T PTS: 1 TOP: The Cultural Environment
6. A domestic HRM is involved with employees within one national boundary.
ANS: T PTS: 1 TOP: Defining International HRM
7. Compensation and benefit programs are not an activity of internal human resource
management.
8. Awareness of cultural differences is not essential for the HR manager at corporate

headquarters. It is only important for expatriate employees as well as those at the host
location.
ANS: F PTS: 1 TOP: The Cultural Environment
9. Multidomestic industries is one in which competition in each country is essentially

independent of competition in other countries.
ANS: T PTS: 1 TOP: Industry Type
10. Multinational organizations need to strive for consistency in the ways of managing
people on a worldwide basis in order to build, maintain and develop their corporate
identity.
11. Cultural awareness is reflected by knowing that local employees feel an obligation to
employ extended family even if they are unqualified for the position.
ANS: T PTS: 1 TOP: The Cultural Environment
12. If a firm is in a multidomestic industry, the role of HR department will most likely be
more domestic in structure and orientation.
13. A large home market is one of the key drivers for seeking a new international market.
ANS: F PTS: 1
TOP: Extent of Reliance of the Multinational on its Home-Country Domestic Market
14. Local HR activities, such as human resource planning and staffing, changes as a
foreign subsidiary matures.
ANS: T PTS: 1
15. The nationality of an employee is not a major factor in determining the person
“category” in an international firm.
16. Human considerations are as important as financial and marketing criteria in making
decisions about multinational ventures.
ANS: T PTS: 1 TOP: The Changing Context of IHRM
17. Global mindset is necessary for the success of an international company.
ANS: T PTS: 1
TOP: Attitudes of Senior Management to International Operations
18. The US had 8 companies in the top 30 multinationals ranked by the transnational
index.
ANS: F PTS: 1
19. Cross- culture management is examining human behavior within organizations from
an international perspective.
ANS: T PTS: 1 TOP: Scope of the Book
20. The way diversity is managed within a single national context should transfer to a
multinational context without modification.
21. It is a correct assumption that culture is usually used as a synonym for nation or
national difference represents culture differences.
ANS: F PTS: 1 TOP: The Cultural Environment
MULTIPLE CHOICE
1. An expatriate:
a. Is an employee transferred out of their
home base to the firm’s international
operation
b. Is an employee transferred into a parents
organization
c. Is an employee who understands
international business operations
d. Is an employee who has works in more
than one country
ANS: A PTS: 1 TOP: Defining International HRM
2. Which of the following is not a category of an employee in an international firm?

a. Third –country c. Parent-country
national national
b. Host-country d. Multi-country
national national
ANS: D PTS: 1 TOP: Defining International HRM
3. Which department of an organization is the major user of language translation

services?
a. Tax c. Human resources
b. Shipping d. Operations
ANS: C PTS: 1
4. Tax equalization policies concerning expatriates are designed to :

a. Ensure no tax incentives are associated
with any particular international
assignment
b. Ensure taxes are paid
c. Ensure employees are aware of tax
responsibilities
d. Keeps records up to date
ANS: A PTS: 1
5. The direct costs of international assignment failures can be as high as ___times the
costs of those for similar failure in a domestic assignment:
a. Five c. Ten
b. Three d. Eight
ANS: B PTS: 1
6. One major difference between domestic and international HRM is:

a. Staff training c. housing relocation
b. Tax equalization d. risk
ANS: B PTS: 1
7. Which of the following is not a function of internal resource management?

a. Staffing c. Government
regulations
b. Training and d. Compensation
development
ANS: C PTS: 1 TOP: Defining International HRM
8. Which of the following is not a major external factor that influences IHRM?
a. The state of the economy
b. Type of government
c. Generally accepted practices of doing
business
d. Regulatory requirements
ANS: D PTS: 1
9. Cultural difference is not necessarily equivalent to:

a. Social Factors
b. Values and beliefs
c. National Differences
d. Shared and recognized ways of looking at
the world
ANS: C PTS: 1 TOP: The Cultural Environment
10. A multidomestic industry is:

a. One in which competition in each country
is essentially independent of other
countries
b. One in which a firm competitive position
in one’s country is significantly influenced
by its position in other countries.
c. One in which domestic products are not
sole
d. One in which many products are sold
ANS: A PTS: 1 TOP: Industry Type
11. Examples of a global industry include all of the following except:

a. Commercial air c. Copiers
craft
b. Semi-conductors d. Insurance
ANS: D PTS: 1 TOP: Industry Type

12. Series of linked domestic industries in which rivals compete against each other on a
worldwide basis is:
a. Multidomestic c. Conglometric
industry industry
b. Global industry d. Automobile
industry
ANS: B PTS: 1 TOP: Industry Type
13. Emnic refers to which kind of specific aspect of concepts or behaviors?

a. Language c. Country
b. Culture d. History
ANS: B PTS: 1 TOP: The Cultural Environment
14. What is a key driver for firms seeking international markets?

a. A small home c. Large home
market markets
b. Tax regulations d. Managerial
incompetence
ANS: A PTS: 1
15. Which ratio is not part of” index of transnationality”?

a. Foreign assets to c. Foreign debt to total
total assets debt
b. Foreign sales to d. Foreign
total sales employment to total
employment
ANS: C PTS: 1
16. Which of the following is a global mindset?

a. Focus on domestic issues
b. Minimize differences between
international and domestic environments
c. Transferability between domestic and
international HRM practices
d. To formulate and implement HR policies
that develop globally oriented staff
ANS: D PTS: 1
17. An asymmetric event is:

a. Terrorist attack on c. HR activities
9/11
b. London 2012 d. Weekly staff
Olympics training
ANS: A PTS: 1 TOP: Applying a Strategic View of IHRM
18. All of the following is a difference between international and domestic HR except:
a. Risk exposure c. More HR activities
b. More external d. Less involvement in
influences employee lives
ANS: D PTS: 1
19. What activity in international human resource would not be required in a domestic
environment?
a. Staff orientation c. Terrorism
considerations
b. Tax equalization d. Relocation
assistance
ANS: B PTS: 1
20. As foreign subsidiaries matures the local HR activities:

a. Have broadening responsibilities
b. Revert to the home office
c. decrease as government relations are
understood
d. Stay largely the same
ANS: A PTS: 1
21. Which three dimensions are presented in Morgan’s model of IHRM?

a. Types of employees, countries and
industries
b. Types of employees, countries and human
resource activities
c. Types of products, industries and human
resource activity
d. Types of employees, labor problems and
human resource activity
ANS: B PTS: 1 TOP: Defining International HRM
22. Differences between domestic and international HRM include:

a. The cultural environment, the extent of
reliance of the multinational on its home
country or domestic market and the
attitudes of senior management
b. The industry, the technology employed
and communication capabilities
c. The cultural environment, the industry and
the technology employed
d. The cultural environment, the attitudes of
senior management and the organizations
authority structure
ANS: A PTS: 1
TOP: Variables that Moderate Differences Between Domestic and International HRM
23. Senior managers with little international experience:

a. Are very successful in multinational
operations
b. Assume that there is no transferability
between domestic and international
HARM practices
c. Assume that there is a great deal of
transferability between domestic and
international HRM practices
d. Are usually very eager to take on
international responsibilities
ANS: C PTS: 1
24. Successful internationalizing the HR function require all except:

a. International mindset of senior
management
b. Right people to manage
c. Global mindset
d. International taxation procedures
ANS: C PTS: 1
TOP: Attitudes of Senior Management to International Operations | Applying a
Strategic View of IHRM
25. In Porter’s value-chain model:

a. HRM is described as a primary activity
b. HRM is described as a support activity
c. HRM is not mentioned as an activity
d. HRM is described as an incidental activity
ANS: B PTS: 1 TOP: Industry Type
26. HRM in the multinational context contains an overlap between elements of:
a. Cross-cultural management and leadership
b. Cross-cultural management and strategic
management
c. Strategic management, comparable human
resource and industrial relations systems
d. Cross-cultural management, comparable
human resource and industrial relations
systems
ANS: D PTS: 1 TOP: Scope of the Book
27. A Japanese citizen working in Hong Kong for a Japanese multinational would be
classified as:
a. A host country c. A parent country
national (HCN) national (PCN)
b. A third country d. A related country
national (TCH) national (RCN)
28. Human Resource Management (HRM) activities include all of the below EXCEPT:
a. Human resource c. Personal family
planning planning
b. Performance d. Training and
management development
29. International HRM is reflected in:

a. The need for a c. The need for a
narrower judgmental
perspective perspective
b. The need for a short d. The need for a
term perspective broader perspective
ANS: D PTS: 1
30. As a foreign subsidiary matures:

a. The local HR unit’s responsibilities for
planning, training and compensation
would broaden
b. The responsibilities of planning, training
and compensation would narrow
c. The local HR unit’s responsibilities for
would stay the same
d. The local HR unit’s responsibility for
would end
ANS: A PTS: 1
SHORT ANSWER
1. What are the 3 broad approaches for international human resource management and
how do they relate to each other?
ANS:
Cross cultural management, comparative industrial relations and multinational
context.
PTS: 1 TOP: Scope of the Book
2. What are the 3 categories of employees in an international firm?
ANS:
Host –country nationals (HCN), parent country national (PCN) and third country
national (TCN)
PTS: 1 TOP: Defining International HRM
3. What are at least 2 types of risk exposure that international companies incur that
domestic companies are not as liable to incur?
ANS:
Human and financial consequences of failure are more severe due to under-
performance and high cost.
Terrorism impacts planning meetings and assignments and the cost of terrorism
protection. Emergency evacuations procedures for volatile assignments locations.
PTS: 1 TOP: Differences between Domestic and International HRM
4. Why is an awareness of cultural differences important in an international company?
ANS:
It facilitates work performance for the employee in a different cultural context. It
helps the worker’s family adjust and enjoy the international assignment and hence the
likelihood that the employee will stay in the assignment for the duration is enhanced.
PTS: 1 TOP: The Cultural Environment
5. What is the difference between a multidomestic industry and a global industry?
ANS:
A multidomestic industry is one in which competition is in each country is
independent of the competition in other countries. A global industry is one in which
competition in one country is linked or dependent on the position of the firm in other
countries.
PTS: 1 TOP: Industry Type
CHAPTER 2: The Cultural Context of IHRM
TRUE/FALSE
1. The first contributions to cross-cultural management research were made in the late
1930s.
ANS: F PTS: 1 TOP: Introduction
2. Unforeseen conflicts and lower performance in many foreign business enterprises

created doubts about how easily concepts and management research from the English
speaking world could be transferred to other cultures.
ANS: T PTS: 1 TOP: Introduction
3. One of the advantages of cross cultural studies is that there is one, widely accepted
definition of the meaning of culture.
4. Hansen emphasizes culture as the standardization – the consistency of collective

behavior.
5. Hofstede the Dutch researcher, famously likens or company’s culture to the “software
of the mind”.
6. Schein considers “artefacts” as the invisible and unconscious conventions and

perceptions deeply held by members on a culture.
7. There may be large similarities of the artefact level within the European Union, but
values and assumptions held by members of various nations in the EU may differ
significantly.
8. Cross cultural management studies aim to describe and compare the working behavior
in various cultures.
9. Hofstede finally distinguished three cultural dimensions: power distance, femininity

vs. masculinity and individualism vs. collectivism.
10. Power Distance refers to the extent to which the members feel threatened by
uncertainty, ambiguous or unstructured situations.

11. According to Hofstede a feminine orientation comprises the pursuit of financial
success and a strong performance management approach.
12. Countries with weaker uncertainty avoidance are more likely to bring about
fundamental innovations in weak processes as they have a greater tolerance for
deviant thinking.
13. Collectivist society companies have more informal relationships between supervisors
and employees.
14. The Mediterranean culture (France, Italy, Belgium and Spain) are characterized by
small power distance and high collectivism.
15. The German speaking countries such as Germany, Austria and Switzerland are
characterized by a strong tendency of uncertainty avoidance and relatively low power
distance.
16. A criticism of Hofstede’s research is that he equates culture to national borders.
17. The Globe study distinguishes between practices (what should be) and values (what
is).
18. The participation of 17 scholars from around the world helps to avoid a one-sided,
Western focus to the research project.
19. The Trompenaars and Hampden-Turner study presents three aspects to culture:
relationships between people, concept of time and the concept of nature.
20. Cultural convergence relates to assuming a long-term stability in cultural differences.
ANS: F PTS: 1 TOP: The Development of Cultures

MULTIPLE CHOICE
1. Cross-cultural management research is based on the assumption that:

a. There are no real differences in
management practices in various countries
and the respective environments do not
matter.
b. There are differences in management
practices in various countries but the
respective environments do not explain
these differences.
c. There are differences in management
practices in various countries and the
respective environment explains these
differences.
d. There are differences in management
practices in various countries and these
differences are explained by company
strategy alone.
ANS: C PTS: 1 TOP: Introduction
2. A major criticism of cross-cultural management studies is:

a. The construct of “culture” is undefined or
inadequately defined and/or
operationalized at the start of the study.
b. The construct of “culture” is defined too
specifically for use across nations.
c. Research is done almost exclusively from
a North American perspective.
d. There have been too few cross cultural
research studies completed to assess the
research.
ANS: A PTS: 1 TOP: Introduction
3. Schein’s concept of culture consists of:

a. Ways of thinking, feeling and reacting
b. Customs, practices and standardization
c. Research containing dense infinitive
descriptions
d. Artefacts, values and assumptions
ANS: D PTS: 1 TOP: Introduction
4. Hofstede’s cultural dimensions are:

a. Universality, uncertainty avoidance,
individualism vs. collectivism, aspiration
vs. resignation and referentism.
b. Power distance, uncertainty avoidance,
femininity vs. masculinity, individualism
vs. collectivism dynamics.
c. Power distance, uncertainty avoidance,
individualism vs. collectivism and
contextualism vs. universalism.
d. Universalism vs. contextualism Confucian
dynamics, individualism vs. collectivism
and consumerism vs. theft
ANS: B PTS: 1 TOP: Introduction
5. Individualism vs. collectivism refers to:

a. How government agencies act towards
citizens
b. The extent to which individual initiative
and responsibility to close family is
valued in society as contrasted to group
initiative and responsibility to an extended
definition of family as socially valued
c. The extent to which individuals relate to
the government as opposed to individuals
being alienated from their government
d. The extent to which individual
achievements are socially recognized and
rewarded as opposed to recognition of
wider social collectives – groups,
organizations, etc.
6. Under Confucianism dynamics, orientations can be either:

a. Long-term or short- c. Adaptable or
term subordinate
b. Paternal or d. Political or
individualistic idealistic
7. According to the results of the Hofstede study:

a. U.S. culture is characterized more by
collectivity behavior, unlike Anglo Saxon
countries such as Australia or the United
Kingdom
b. U.S. culture is characterized more by
collectivity behavior, like Anglo Saxon
countries such Australia or the United
Kingdom
c. U.S. culture is characterized more by
individualist behavior, unlike Anglo
Saxon countries such as Australia or the
United Kingdom.
d. U.S. culture is characterized more by
individualist behavior, like Anglo Saxon
countries such as Australia or the United
Kingdom.
8. According to Hofstede, some Asian cultures such as Singapore and Hong Kong:
a. Score low on uncertainty avoidance and
low on power distance
b. Score low on uncertainty avoidance and
high on power distance
c. Score high on uncertainty avoidance and
d. Score high on uncertainty avoidance and
9. The cultural context impacts HRM practices:

a. Not at all
b. Only in the HR practice areas of
Compensational Task Distribution
c. In the HR practice areas of Recruitment,
Selection, Training and Development,
Compensation and Task Distribution
d. Only in the HR practice areas of Training
and Development and Task Distribution
10. Hofstede identifies a strong tendency or masculinity with a high tendency for
uncertainty avoidance in:
a. The Scandinavian c. The German
cluster speaking cluster
b. The Asian Tigers d. The Gallic cluster
clusters
11. Hofstede’s approach to cross cultural management research:

a. Has been the subject of ongoing debate
and criticism.
b. Has been largely ignored by other
researches
c. Has been almost universally accepted
d. Has not been integrated into a wide range
of alternative cross cultural research
projects
12. Hofstede’s study is classified or based on:

a. Cultures c. Countries
b. Ethnic subgroup d. Common cultural
regions
13. The GLOBE research tries to study the complex relationships between:
a. Culture, leadership behavior,
organizational effectiveness, social co-
habitation conditions and the economic
success of societies.
b. Culture, leadership behavior, political
institutions, social legislations, corporate
strategies and the economic success of
societies.
c. Culture, economic development, social
progress, and multinational dynamism.
d. Culture, leadership behavior,
organizational effectiveness, employee
commitments and satisfaction, social
dynamics and the economic success of
societies.
14. The GLOBE study survey contains:

a. Contains exactly the same dimensions as
Hofstede’s surveys
b. Contains far fewer dimensions than the
Hofstede surveys
c. Distinguish between practices (as is) and
values (should be).
d. Contains only questions on values (should
be).
15. Results from the GLOBE study were used to distinguish ______”cultural regions.”
a. Five c. Ten
b. Seven d. Twelve
16. One criticism of the GLOBE study is:

a. That the research team is too much
weighted to North American researchers
b. The dimensions are less refined and
detailed than Hofstede’s dimensions of
culture
c. The research focuses too much on very
small firms
d. The focus of the study is only in three
industries – finance, food and
telecommunications
17. The GLOBE study:

a. Distinguishes between organizational
cultures and national cultures.
b. Does not distinguish between
organizational cultures and national
cultures
c. Never distinguishes between subcultures
in some nations for which data was
collected
d. Distinguishes between subcultures in all
62 nations for which data was collected
18. The Trompenaars and Hamplen-Turner study distinguishes three overarching aspects
of culture, namely:
a. Artefacts, values and assumptions
b. Relationships between people, the concept
of time and the concept of nature
c. Reality, time and space
d. Descriptive values, aspirational values and
critical values
19. Trompenaars and Hampden-Turner’s cultural dimensions is Ascription vs. :

a. Description c. Achievements
b. Conscription d. Acclimation
20. According to Trompenaars and Hampden-Turner, societies that attempt to control

nature to a very high degree are described as having:
a. External control c. Distinct control
b. Internal control d. General control

21. As applied research, the Trompenaars and Hampden-Turner study:
a. Is backed up by extensive duplicate
studies in a variety of countries and
industries
b. Has repeatedly demonstrated validity and
reliability
c. Has not demonstrated validity nor
reliability
d. Provides an explicit rationale for the
origins and operationalization of the seven
cultures/dimensions
22. According to Trompenaars and Hampden-Turner, members of specified cultures:

a. See business relationship more personally
b. Take subjective and contextual variables
into consideration when making a decision
c. Demand precise, unobjective analysis of
circumstances and presentation of results
d. Emphasize intentions and emotions in
making a decision
23. Hall and Hall’s research emphasizes four cultural dimensions:

a. Context of communications, spatial
orientation, the concept of time and
information speed
b. Context of communications, precision of
communications, objectivity in
communication and information speed
c. Context of communication, privacy of
communication, the concept of time and
information speed
d. Context of communications, spatial
orientation, distribution of communication
and feedback mechanisms
24. Hall and Hall’s research:

a. Focuses on the relationship between
geography and culture
b. Focuses on the relationship between
regional resource bases on culture
c. Focuses on the relationship between
communication and culture
d. Focuses on the relationship between faith
and culture
25. Hall and Hall, Trompenaars and Hampden-Turner all:

a. Provide academically valid, rigorous and
reliable research bases for their models
b. Largely agree on the underlying
dimensions of culture
c. Have large, geographically diverse data
sets to draw on to support their models
d. Focus on offering a practical template
allowing individuals to perceive and
handle cultural differences
26. According to researchers like Barry Gerhart:

a. Cross-cultural research or emphasizes the
influence of culture and business practices
b. Cross-cultural research actually
understates the influences of culture on
business practices
c. Cross cultural research as yet to show any
influence of culture on business practices
d. Cross cultural research is insufficient in
quantity or quality of findings to make any
judgment of how culture may or may not
influence business practices
27. Cultures develop over time:

a. So quickly and so unpredictable that
studies become almost immediately
obsolete
b. In a very slow and predictable manner
c. Such that surface level artefacts may
change relatively quickly, but deeper
behaviors and assumptions may take much
longer to change
d. Inevitably toward a convergent, single
“superculture”
ANS: C PTS: 1 TOP: The Development of Cultures
28. One study by Child, reviewing research on the development of cultures concluded:
a. Studies on the macro level (organizations
structure) found evidence for divergence
or growing differences in cultures
b. Studies on the micro level (behaviors by
employees) found enhance for
convergence or the lessening of
differences in cultures
c. Studies on the macro level (organizational
structure) found evidence for
convergence, or the lessening of
differences in cultures
d. Studies on both the macro and micro level
found evidence for convergence or the
lessening of differences in cultures
ANS: C PTS: 1 TOP: The Development of Cultures
29. Due to growing interdependence and a high flow of migration:

a. Culture is not confined to a territorially
limited area
b. Culture is still largely confined to a
territorially limited area
c. Cross-cultural issues are not nearly as
important as they were on the past
d. HR will largely be unaffected
ANS: A PTS: 1 TOP: The Development of Cultures
30. Generational changes in world societies:

a. Create no real changes in the demand for
professional relationship and employee
retention
b. Result in potential employees who have
been brought up with computers and are
fast self-organized learners as in
Generation Y
c. Result in potential employees who have
been brought up with computers and who
are therefore inflexible as to work routine
and multitasking as in Generation Y
d. Result in potential employees who are
willing to sacrifice their personal lives for
their careers as in Generation Y.
ANS: B PTS: 1 TOP: The Development of Cultures
SHORT ANSWER
1. Present the general definition of the concept of culture as presented in the text.
ANS:
Schein considers various levels of culture: artefacts or creations, values and
underlying assumptions. Artefacts are described as visible organization structures and
processes. They can be analyzed using conventional methods of empirical social
research, but their meaning is often hard to decipher. The middle level comprises
values of a company or society. They are found in the intermediate level of
consciousness; in other words, they are partly conscious and partly unconscious. The
third level is described as underlying assumptions, which are often presumed to be
self-evident. They include convictions, perceptions, thoughts and feelings, which are
usually invisible and unconscious. Nevertheless, they are the sources of values and the
actions based on them. Schein emphasizes that relationships that lead from artefacts
through values to underlying assumptions are much weaker than those leading in the
contrary direction, because the influence of underlying assumptions on values and
artefacts is stronger than vice versa.
PTS: 1 TOP: Introduction
2. Discuss the five cultural dimensions as presented in Hofstede’s cross-culture

management study.
ANS:
In his original study, Hofstede identified four cultural dimensions based on
preliminary theoretical considerations and statistical analyses, which can be used to
describe cultural differences between countries. These dimensions together explained
49 per cent of the variance. Hofstede named them power distance, uncertainty
avoidance, femininity vs. masculinity, and individualism vs. collectivism. A later
study involving participants from the Asian Pacific region included a fifth dimension,
Confucianism or long-term orientation.
3. Outline and discuss the ways in which cultural context can impact HRM policies of
recruitment and selection, training and development, compensation and task
distribution.
ANS:
Recruitment and selection:

 In societies low on ‘in-group collectivism’ individual achievements
represent important selection criteria.
 In societies high on ‘in-group collectivism’ the emphasis in the
recruiting process is more on team-related skills than on individual
competencies.
Training and development:
 In societies high on gender egalitarianism women have the same
chances for vertical career advancement as men.
 In societies low on gender egalitarianism female managers are rare.
Compensation:
 In societies high on uncertainty avoidance employees tend to be rather
risk averse and prefer fixed compensation packages or seniority-based
pay.
 In societies low on uncertainty avoidance employees tend to be rather
risk-taking and accept high income variability through performance-
based pay.
Task distribution:
 Societies high on collectivism tend to emphasize group work.
 Societies high on individualism rather attribute individual
responsibilities in the work system.
4. In what significant ways is the GLOBE study (a) similar to Hofstede’s research, (b)
different from Hofstede’s research?
ANS:
The study is to some extent based on Hofstede’s dimensions: uncertainty avoidance
and power distance. However, the dimensions are modified and expanded, leading to
some confusion when Hofstede and GLOBE results are assessed and compared.
Authors of the GLOBE study are purposefully trying to overcome the earlier critiques
of the Hofstede study, namely that the borders between values and practices are
blurred in his study and cannot be distinguished.
5. What does the discussion on “the development of cultures” lead you to conclude
about the issues of convergence and divergence?
ANS:
This discussion is closely related to the issue of whether organizations and their
management practices are similar due to increasing international interconnectedness
and the coordination of the global economy (convergence) or still exhibit specific
cultural characteristics. For example, culture convergence between European
countries is often imputed given the development of the European Union, and
attendant harmonization of laws and regulations. Thus, increasing convergence of the
cultures of individual countries within the EU is assumed. As a result, the meaning of
cultural differences may be safely given little consideration. If the opposite is true and
we assume a long term stability in cultural differences (cultural divergence), their
investigation may be a decisive success factor in international business activities for
the foreseeable future. In terms of activity within the European Community, this
would mean that pan-European standardization of management practices would not be
easily achieved and adaptation of practices to underlying local conditions would be
required.
PTS: 1 TOP: The Development of Cultures
CHAPTER 3: The Organizational Context
TRUE/FALSE
1. An export manager is typically the first international HR position in a new

international company.
ANS: T PTS: 1 TOP: The Path to Global Status
2. Purchasing an international company automatically creates a separate international

division of a company.
ANS: F PTS: 1 TOP: The Path to Global Status
3. The Inpatriate manager performs a major role in identifying employees who can direct
operations in a foreign subsidiary.
4. International division acting as an independent separate unit cannot be tolerated as the

firm’s international activities become strategically more important.
5. The matrix structure area managers are responsible for the performances of all
products within the various countries that comprise their regions.
6. Less human resources planning and management development are in the matrix
structure of operations than traditional organization.
7. Mixed structures are more complex and harder to explain and implement/control than
a matrix structure.
8. Intra-organizational networks comprise the organization’s headquarters and the

numerous subsidiaries.
9. The metanational form is described as a global tournament.
10. Centralized HR companies are operated within a matrix structure.
11. Training, performance, appraisals and staff movements are not impacted by the HR
structural form.
12. Europeans tend to take a different structural path than the US.
13. Chinese firms have many international operations.
14. European multinational firms are mainly from Germany.
15. Japanese based multinational firms are the only firms to successfully balance
operations in all the regional blocks.
16. Formal structure controls are an international firm’s primary source of control.
ANS: F PTS: 1 TOP: Control Mechanisms
17. Training and development, program reward systems and promotion are activities that
reinforce company value systems.
ANS: T PTS: 1 TOP: Control Mechanisms
18. Half of the US firms reported that HR functions were unrelated to the nature of the
firm’s international operations.
ANS: T PTS: 1 TOP: Summary
19. HR departments are emerged in policies and procedures in the early international or
export stage.
20. Centralized HR companies are characterized by devolving the HR responsibilities to a

small group who reports to corporate headquarters.
MULTIPLE CHOICE
1. “Born globals” are:

a. Company formed with the international
market in mind
b. International firm formed by acquisition
c. Company grown into an international
company by market demands
d. Company owned by people of different
nationalities
ANS: A PTS: 1 TOP: The Path to Global Status
2. Typically the initial stage of a firm entering international operations is:

a. Export c. Investment
b. Licensing d. Employment
3. Which category of employee is typically used in key sales subsidiary position in a

new developing international company:
a. Parent Country c. Third Country
National National
b. Host Country d. Multi Country
National National
4. The second stage of a new international company typically involves which

department:
a. Sales c. Employment
b. Export d. Human resources
5. Which stage of international operations tend to create a separate international division

in a company:
a. Foreign c. Physical location
production/service
operations
b. Exporting d. Sales
6. “Miniature replicas” are:

a. Subsidiaries structured to mirror that of
domestic organizations
b. Small scale reproduction of each firm to
show at office meetings
c. Company created to make miniature
building
d. Foreign company purchased to create a
multinational company
7. Many companies in the developmental stage of internationalization will maintain

control by:
a. Placing PCN in all key positions
b. Placing a human resource division on
location
c. Going to governmental sources for
support
d. Hiring locals in all aspects of the
organization
8. The “think global, act local” paradox:

a. Purchase vegetables at farmers markets
grown in another country
b. Push for local responsiveness toward
global integration
c. Results in a foreign subsidiary hiring local
employees
d. Reflects the hierarchy of needs for a
multinational company
ANS: B PTS: 1 TOP: The Path to Global Status
9. A matrix structure:
a. Keeps profit centers but adds worldwide
product managers
b. Integrated its operations across more than
one dimension
c. Relies heavily on social networking
d. Creates a worldwide product division
10. One advantage of a matrix structure is:

a. Allows all departments to network
efficient
b. Brings conflicts of interest out into the
open
c. Provides the company with uniform
corporate values
d. Allows each locations to have its own
self-contained division
11. A major contributing factor of an unmanageable matrix structure is:

a. Confused human c. Clear
resource responsibilities
department
b. Standard reporting d. Dual reporting
procedures requirements
ANS: D PTS: 1 TOP: The Path to Global Status
12. The complex network of interrelated activities in a MNE can be described in the
following structure:
a. Functional c. Heterarchy
b. Product division d. Bureaucratic
ANS: C PTS: 1 TOP: The Path to Global Status
13. Transnational strategies of globalization are characterized by:

a. Ability of the multinational to formulate
and implement the required human
resource element
b. A company doing business in more than
one country
c. Organization form that is characterized by
an interdependence of resources and
responsibilities across all business units
d. Network of independent companies in
different countries
14. A common theme between heterarchy, matrix and transnational is:

a. Networks of communication is imperative
b. Staff transfers play a critical role in
integrations and coordination
c. Legal forms are very different
d. The reduced role of communications
requirements
15. The management of a multi-centered networked organization is:

a. Simple c. Organized
b. Inconsequential d. Complex
16. The following types of units are regarded in a metanational firm EXCEPT:
a. Sensing unit, financial unit and
performing unit
b. Magnet unit and entrepreneurial unit
c. Sensing unit, magnet unit and marketing
unit
d. Marketing unit, magnet unit, financial unit
17. HR functions are described in the following structural forms EXCEPT for:
a. Centralized HR c. Matrix HR
b. Decentralized HR d. Transition HR
18. The European path approach to a global matrix tends to emphases:

a. Worldwide product c. Functional
division approach approach
b. Area/geographic d. Corporate
division approach subsidiary approach
19. Korean conglomerates have a strong preference for:

a. Greenfield building c. Grow within
approach approach
b. Bamboo d. Growth-through-
network/family acquisition
approach approach
20. Clan control is defined as:

a. Hiring family relations to maintain control
b. Hiring people from similar backgrounds to
ease cooperation
c. Social control to supplement or replace
traditional structures
d. Control by personal influence
ANS: C PTS: 1 TOP: Control Mechanisms
21. Multinational firms are divided into the following regional block EXCEPT:
a. North America c. Europe
b. Asia d. Australia
22. An important forum for the development of personal networks is:

a. Relocating staff on c. Training programs
a regular basis held in regional
centers
b. Luncheon meeting d. Weekly department
meetings
ANS: C PTS: 1 TOP: Control Mechanisms
23. Social Capital emphasizes the need for:

a. Recycling facilities for community
b. A customer list in an organization
c. Employees with poor social skills
d. Contacts and ties that facilitate knowledge
sharing
ANS: D PTS: 1 TOP: Control Mechanisms
24. The process of socializing people so that they come to share a common set of values
and beliefs that shapes their behavior is:
a. Networking c. Matrix structure
b. Corporate culture d. Social investment
ANS: B PTS: 1 TOP: Control Mechanisms
25. Transition companies are characterized by:

a. Large well-resourced HR departments
b. Devolving HR responsibilities to a small
group
c. HR relocations to a subsidiary company
d. Medium sized corporate HR department
26. The matrix structure:

a. Is rather simple to control
b. Is characterized by a manager who
belongs to two units at the same time
c. Is one of the first structures used by
newly-formed international firms
d. Is difficult to set up, but once in place it is
easy to maintain
27. Matrix structures:

a. Can be managed by anyone with basic
skills
b. Requires a manager with some
experience, but who insist on no
ambiguities
c. Requires managers who know the
business in general, who has good
interpersonal skills and who can deal with
ambiguities in responsibilities
d. Requires a manager who has worked at
least five years in a previous matrix
organization
28. Network multinational structures:

a. Are the most popular form of
multinational organization
b. Are tightly coupled bureaucracies, linked
by formal explicit policies
c. Are culturally homogeneous and
hierarchically controlled
d. Are loosely coupled political systems
29. The host-country effect:

a. Implies that multinationals are shaped by
institutions existing in their country
origins
b. Refers to the extent to which HRM
practice in subsidiaries are impacted by
the host country context
c. Refers to the transfer of practices from
foreign locations to the headquarters
d. Relies heavily on knowledge from the
parent or peer subsidiaries
ANS: B PTS: 1 TOP: Factors Driving Localization
30. The subsidiary as an integrated player:

a. Develops HRM policies and practice
which are transferred to overseas affiliates
b. Creates knowledge but at the same time is
recipient of knowledge flows
c. Engages in the creation of country/region
specific knowledge in all key functional
areas
d. Moves managers in a way to break down
barriers and produces corporate
champions of information
ANS: B PTS: 1 TOP: Factors Driving Localization
SHORT ANSWER
1. What are the advantages and disadvantages of the global matrix structure?
ANS:
Advantages: Conflicts of interest are brought out into the open, both sides of any issue
are championed and complex business decisions are thoroughly discussed
Disadvantages: Expensive, requires careful implementation and a high degree of top
level management attention to ensure a balanced perspective.
PTS: 1 TOP: The Path to Global Status

2. What are the characteristics of a centralized decentralized and transition HR
company?
ANS:
Centralized: large, well-resourced HR departments responsible for a wide variety of
functions. Focus on control of divisional and subsidiary managers so as to ensure a
central message.
Decentralized: smaller group of HR employees who focus on corporate HQ
operations.
Transition: medium-sized corporate HR departments, small group at corporate HQ
PTS: 1 TOP: The Path to Global Status
3. Discuss a formal, structural form of control utilized by traditional multinational firms.
ANS:
Strategic intent is articulated and formalized structures, functional, product or
national, regional or matrix structures are set up to describe jobs and authority
relationships within these structures. Formal job descriptions delimit responsibilities.
HR acts to implement existing structural system of control and ensure the people
work to job requirement.
PTS: 1 TOP: Control Mechanisms
4. What would be considered an informal control mechanism?
ANS:
Cultural control, the process of socializing people so that they come to share a
common set of values and beliefs that then shape their behavior and perspectives at
work. HR can incorporate a cultural agenda into recruitment and selection, training
and development and assignment placement activities and processes.
5. How can a social relationship be considered a control?
ANS:
By setting up and reinforcing informal lateral relationships to disseminate knowledge
and information, personal contacts can create very strong personal bonds, informal
norms and values. These informal values can act to control the behavior of employees
and overcome the cultural, functional and business differences associated with a
diverse and extended employee base. Personal interdependence and social capital can
act to unify employees and standardize their responses to novel and unpredictable
decision situations.
CHAPTER 4: IHRM in Cross-Border Mergers & Acquisitions, International Alliances

and SMEs
TRUE/FALSE
1. A merger of two companies can be depicted by Company A and Company B form

Company C.
ANS: T PTS: 1 TOP: Cross-Border Mergers and

Acquisitions
2. In an acquisition a new company is formed with a new identity and operation.
ANS: F PTS: 1 TOP: Cross-Border Mergers and

Acquisitions
3. During most merger and acquisition processes top management retention is very high
due to benefits of operating a foreign company.

Acquisitions
4. Identifying and assessing culture issues in an HR activity is the due diligence phase of
merger and acquisition.

Acquisitions
5. The strongest HR involvement takes place in the first two phases of the merger and
acquisition phases.

Acquisitions
6. Company relationships are not considered a resource in an HR function in a merger

and acquisition strategy.

Acquisitions
7. A tangible asset is money and people.

Acquisitions
8. The command of the partners’ language is mainly a requirement for Eastern managers.

Acquisitions
9. Performance related pay is more popular in Germany than the USA.

Acquisitions
10. An exchange rate advantage is not a factor in considering a merger and acquisition
strategy in a given country.

Acquisitions
11. Parent companies in an international joint venture do not have a separate legal
identity.
ANS: F PTS: 1 TOP: International Equity Joint Ventures
12. Gaining knowledge of both local business conditions and the research and
development capabilities of the potential joint venture partner is a reason to enter into
an international joint venture.
ANS: T PTS: 1 TOP: International Equity Joint Ventures
13. SMEs constitute the backbone of the Asia Pacific region.
ANS: T PTS: 1 TOP: International SMEs
14. Values shape employee’s priorities and decision making.

Acquisitions
15. In the USA more than 80 per cent of total employment is with organizations with less
than 20 employees.
16. Less qualified employees are employed by small to medium enterprises because they
do not meet recruitment requirements of large organizations.
17. Financial participation programs are offered to small to medium enterprises to

increase the manager identification with the firm.
18. In small to medium enterprises cross cultural training for expatriates is usually
conducted as in-house training seminars.
ANS: F PTS: 1 TOP: International SMEs

19. HR activities can become a significant drain on managerial time and resources in an
international small to medium enterprise.
20. Small to medium firms have as much experience operating in a variety of different
countries as large organizations.
ANS: F PTS: 1 TOP: International SMEs
MULTIPLE CHOICE
1. Cross-border alliances are:

a. Cooperative agreements between two or
more firms from a different national
background
b. Investment in which profits and other
responsibilities are assigned
c. Agreement between 2 companies to join
their operations
d. Multinational attempting to integrate its
operations across more than one
dimension
ANS: A PTS: 1 TOP: Cross-Border Alliances
2. A characteristic of a non-equity cross border alliance is:

a. One which establishes subsidiaries thru
Greenfield investments or acquisitions
b. The purchase of shares of an enterprise in
a country other than its own
c. No other party has to provide financial
contribution
d. Each party cooperates as a separate legal
entity and bears its own liabilities
ANS: D PTS: 1 TOP: Cross-Border Alliances
3. Equity modes of foreign operations car be best described as:

a. Selling stock to a foreign country
b. Involving a foreign direct investor
purchase of shares of an enterprise in a
country other than its own
c. Each part contributes non-financial
resources to the operation
d. Shares are listed on both countries stock
exchange
ANS: B PTS: 1 TOP: Cross-Border Alliances
4. A major reason to engage in a merger or acquisition is to:

a. Facilitate the rapid entry into a new
market
b. Acquire capital
c. Build prestige
d. Learn new technology
ANS: A PTS: 1 TOP: Cross-Border Mergers and

Acquisitions
5. Typical HR problems arising in cross border M&A involve all of the following
EXCEPT:
a. Lose up to 20% of its executives
b. Personnel issues are neglected
c. Failure due to not producing intended
results
d. Insufficient capital
ANS: D PTS: 1 TOP: Cross-Border Mergers and

Acquisitions
6. The due diligence phase of a M&A is:

a. Putting all the planning into action
b. An in depth analysis of the benefits on the
mergers
c. The plan to carry out the merger
d. Designing key talent retention programs
ANS: B PTS: 1 TOP: Cross-Border Mergers and

Acquisitions
7. Integration planning phase of M&A are all of the following except:

a. Planning and leading integration efforts
b. Helping the organization cope with
change
c. Defining and organizational blueprint and
staffing plan
d. Advising management on dealing with
people issues

Acquisitions
8. Advising management on dealing with people issues normally occur in which M&A
phase?
a. Pre M&A c. Integrations
planning phase
b. Due diligence phase d. Implementation and
assessment phase

Acquisitions
9. One of the largest merges in history was between:

a. IBM and Wang c. Ford and Jaguar
b. Chrysler and d. Lincoln and Ford
Daimler Benz

Acquisitions
10. What is defined as a factor which shapes employees priorities and decisions made?
a. Management c. Location
b. Values d. Financial

Acquisitions
11. Which of the following would not be considers a resource?

a. Money c. Brand
b. People d. Regulations
Acquisitions
12. Which expatriate role or characteristic is found to be most important for a successful
integration in a M&A activity?
a. Prior work c. A manager’s
experience with a industry experience
country
b. Language skills d. Creative analytical
skill
ANS: C PTS: 1 TOP: Cross-Border Mergers and

Acquisitions
13. Performance-related pay is more popular in which country?

a. Germany c. France
b. USA d. Japan

Acquisitions
14. Which country tends to have the longest recruitment period?

a. USA c. Japan
b. Germany d. UK

Acquisitions
15. A perceived “ unaffordable luxury” in SMEs is:

a. Training c. Environmental
upgrades
b. Research d. Change facilitator
ANS: A PTS: 1 TOP: International SMEs
16. An International joint venture is defined as:

a. One international company buys another
company and combines the operations into
a different company
b. One international company purchases
another company and integrates
operations into its company
c. Separate international companies in which
the headquarters or controlling parent is
outside of the country of operations
d. Two companies purchasing a third
company in order to operate in another
country
ANS: C PTS: 1 TOP: International Equity Joint Ventures
17. Shortage of working capital to finance exports is a top barrier to access international
markets in:
a. EEA c. SMEs
b. IJV d. HR
ANS: C PTS: 1 TOP: International SMEs
18. M&A conceptual tool which converts resources into valuable goods and services is:
a. Values c. resources
b. Processes d. experience

Acquisitions
19. The HR managers role as an innovator in a IJV means:

a. Create a win-win situation by sharing
rather than competing between entities
b. Taking all stake holders needs into
account
c. Conceptualize and implement new
strategies
d. Identify talent for executing IJV strategies
and adapt to changes
ANS: D PTS: 1 TOP: International Equity Joint Ventures
20. IJV positions called “functional gatekeepers” :

a. Provide a governmental regulation
function
b. Control the public relations aspects of an
IJV
c. Allow functional resources to be
inventoried freely
d. Protect their firms assets in specific
functional areas
ANS: D PTS: 1 TOP: International Equity Joint Ventures
21. Which companies have a difficult challenge to enter foreign markets?

a. Conglomerate c. Partnerships
b. Small to medium d. Chinese based firms
companies
ANS: B PTS: 1 TOP: International SMEs
22. Internationalization process theory suggest which person has the most impact on
internationalization process of a small to medium enterprise (SME):
a. Owner/Founder c. Investors
b. Exporters d. HR manager
23. All of the following are characteristic of a SME human resource development
EXCEPT:
a. Training and development are short term
oriented
b. Tacit knowledge related to the specific
context of the firm
c. Informal learning approach
d. No motivation to report and share
information
ANS: D PTS: 1 TOP: International SMEs
24. An option for SMEs to improve Human Resource related issues rapidly is to:
a. Outsource the HR department
b. Rely less on the resources
c. Send managers to external training
institutions
d. Fire the weaker employees
25. A major difference between merger , acquisition and international joint venture is:
a. Licensing a product c. Ownership
identification
b. Government d. The nations
regulations involved

Acquisitions
26. Learning in small to medium (SME) international firms is characterized by:

a. Reliance on local and national agencies
b. The use of family contacts exclusively
c. The use of formal and informal business
networks
d. An overreliance on formal networks
ANS: C PTS: 1 TOP: International SMEs
27. In their “partnership role” supporting an International Joint Venture, HR managers

must:
a. Conceptualize and implement new
strategies involving communication and
cooperation with new partners
b. Identify talent sources for executing
International Joint Venture strategy
c. Take all stakeholders’ needs into account
and show a thorough understanding of the
business and the markets
d. Take the properties of the parent company
almost exclusively
28. The European Commission’s definition of SME is which of the following?

a. Small company with less than 50
employees
b. Medium company with less than 500
employees
c. Small balance sheet with less than 25
million in assets
d. Medium balance sheet with less than 75
million in assets
29. Many international joint ventures (IJV ) fail in the long-term due to:
a. Changing market conditions
b. Inadequate attention to market synergies
c. Lack of interest in the human resource
management and cross-cultural
management aspects of IJV
d. The failure to restructure the IJV
appropriately
30. The best way to address intercultural conflicts is to:

a. Ignore the conflicts as they will diminish
with time
b. Have local country experts to interpret
these conflicts
c. Take explicit measures to build and
maintain the identity of the IJV
organization
d. Let the two sides battle it out and the
stronger of the two will prevail
SHORT ANSWER
1. What are the two equity based forms of cross-border alliances? Describe each
function.
ANS:
Form one: The establishment of a subsidiary in a country (via a Greenfield site or
acquisition).
Form two: Joint ventures or mergers
PTS: 1 TOP: Cross-Border Alliances
2. What is the difference between merger and acquisition?
ANS:
Merger: the result of an agreement between two companies to join their operations
together, often so their control is equal.
Acquisition: the result of an agreement in which one firm buys out the other with the
intent of the first firm controlling the activities of the combined operation.
PTS: 1 TOP: Cross-Border Mergers and Acquisitions
3. What are the four phases of M&A and what happens at each phase?
ANS:
Premerger phase: screening alternative partner options, based on an analysis of their
strengths and weaknesses
Due diligence phase: an in depth analysis of the potential benefits of the merger with a
potential partner firm. Product-market combinations, tax implications and cultural and
HR system compatibilities are assessed.
Integration phase: planning for the creation of the new company is carried out.
Implementation phase: plans are put into action and new or revised technical,
financial and people processes and systems are put into place.
4. There are three conceptual tools between business strategy and HR strategy. What are
these tools?
ANS:
Resources: tangible assets (money and people), intangible assets (brands and
relationships with customer, suppliers, etc.)
Processes: activities that firms use to convert resources into valuable goods and
services.
Values: the way in which employees think about what they do and why they do it,
values shape priorities and decision making processes.
5. Why would a company enter into an international joint venture?
ANS:
An international joint venture provides an excellent learning opportunity for a firm.
One can learn each other’s skills; know how, process knowledge in specific functional
areas. A firm can also learn how to interact with a diverse firm and understand cultural
and national or regional issues, building a more general capability to interact in a
different contextual environment.
PTS: 1 TOP: International Equity Joint Ventures

CHAPTER 5: Sourcing Human Resources for Global Markets – Staffing, Recruitment
and Selection
TRUE/FALSE
1. “Assignments as control” is a characteristic of an ethnocentric staffing approach.
ANS: T PTS: 1 TOP: Approaches to Staffing
2. Upon comparing the compensation packages of PCN and HCN employees, given an
ethnocentric approach of staffing, there are little to no differences found in the pay for
the two groups.
ANS: F PTS: 1 TOP: Approaches to Staffing
3. A disadvantage of a geocentric policy is it can be expensive to implement because of

increased training and relocation.
4. Regional managers may not be promoted to HQ positions in a regiocentric approach

to staffing.
5. Study of Chinese MNEs has confirmed that Western models of staffing policies are
not applicable to Chinese MNEs.
ANS: F PTS: 1 TOP: Approaches to Staffing
6. A short term international assignment is defined as anything up to 1 year.
ANS: F PTS: 1
TOP: Transferring Staff for International Business Activities
7. Frequent trips to the host country are necessary in a virtual non-standard assignment.
ANS: T PTS: 1
8. The duration of an expatriate assignment will not necessarily have an impact on the
person’s ability to develop networks.
ANS: F PTS: 1
9. A key driver in recruiting an inpatriate is the desire to create a global core competency
thus increasing the organizations capability to “think global and act local”.
ANS: T PTS: 1 TOP: The Roles of an Inpatriate
10. Non-expatriates experience fewer stressors than expatriates as they are not responsible
for duties at the home office while on international assignments.
ANS: F PTS: 1 TOP: The Roles of a Non-Expatriate
11. Traditional assignments for expatriates usually range from 3 months to 1 year in a
location.
ANS: F PTS: 1 TOP: The Roles of an Expatriate
12. Virtual assignments rely on communication technologies and such assignees will
never visit the host country.
ANS: F PTS: 1
13. The U-curve is based on psychological reactions to a cultural adjustment of an

international assignment.
ANS: T PTS: 1 TOP: Selection Criteria
14. The term expatriate failure has been defined as the premature return of an expatriate
before the period of assignment is completed.
15. Many developed countries are changing their legislation to facilitate employment
related immigration which will make international transfer easier.
16. Lack of fluency in the corporate language is rarely a factor in the selection process in
a MNE.
ANS: F PTS: 1 TOP: Selection Criteria
17. The “coffee machine” system is a common form of selection process in the UK.
ANS: T PTS: 1 TOP: Expatriate Selection Processes in

Practice
18. Job hunting assistance is provided to spouses to find a job in host countries as a means
of making an international assignment more family-friendly.
ANS: T PTS: 1 TOP: Dual Career Couples
19. “Trailers” are the spouses of expatriates.

ANS: T PTS: 1 TOP: Dual Career Couples
20. Most expatriates are recruited externally.
ANS: F PTS: 1
TOP: Recruitment and Selection of International Managers
21. Indirect cost of the failure of an expatriate involving contact with key clients and host
government officials may result in the long term loss of market shares.
ANS: T PTS: 1 TOP: Expatriate Failure and Success
22. The recruitment process is defined as the process of searching for a sufficient number
of candidates to fill a position.
ANS: T PTS: 1
MULTIPLE CHOICE
1. Ethnocentric organizations are best characterized by:

a. Key personnel positions are held by
headquarter personnel.
b. Subsidiaries are managed by local
nationals (HCN)
c. A worldwide integrated business which
nationality is ignored in favor of ability
d. Staff may move outside their countries but
only within a particular geographic region.
ANS: A PTS: 1 TOP: Approaches to Staffing
2. All of the following is an approach to managing and staffing subsidiaries EXCEPT:

a. Ethnocentric c. Geocentric
b. Polycentric d. Multicentric
ANS: D PTS: 1 TOP: Approaches to Staffing
3. A sound business reason for pursing an ethnocentric staffing policy is:

a. Employment of HCNs is normally less
expensive
b. Perceived lack of qualified host nationals
(HCN)
c. It supports cooperation and resource
sharing across units
d. Reflects the goals of the owners
ANS: B PTS: 1 TOP: Approaches to Staffing
4. Polycentric approaches to international staffing:

a. Uses the “assignment as control” approach
to reduce perceived high risk
b. Uses HCNs to manage subsidiaries and
they are often promoted to headquarters
c. Can be expensive to implement
d. Has very few divisions in the HR staffing
department
5. A disadvantage of a polycentric policy is:

a. Employment of HCNs is less expensive
b. Host-country managers have limited
opportunities to gain experience outside of
their own country
c. It can produce federalism at a regional
rather than country basis
d. Has very few from divisions in the HR
staffing department
6. A MNE taking a global approach to its operations and recognizing that each HQ and
subsidiary makes a unique contribution with unique competence is described as:
a. Regiocentric c. Geocentric
b. Polycentric d. Multicentic
ANS: C PTS: 1 TOP: Approaches to Staffing
7. Hiring host country nationals for a multinational enterprise have the following
advantages EXCEPT:
a. Language and other barriers are
eliminated
b. Government policy may dictate hiring of
HCN
c. Hiring cost are reduced
d. Organizational control and coordination is
maintained and facilitated
ANS: D PTS: 1 TOP: Approaches to Staffing
8. The most common reason for an international assignment is:

a. Need for control c. To fill a skills gap
b. Less expensive HR d. Host government
cost pressures
ANS: C PTS: 1
9. Key organizational reasons for international staffing assignment include all of the
following EXCEPT:
a. Culture exchange c. Management
development
b. Position filling d. Organization
development
ANS: A PTS: 1
10. “Extended international assignments” are defined as assignments:

a. Up to 3 months c. 1 to 5 years
b. Up to 1 year d. Over 5 years
ANS: B PTS: 1
11. Employees on oil rigs would usually be classified as which non-standard assignment?
a. Contractual c. Rotational
assignment assignment
b. Commuter d. Virtual assignment
assignment
ANS: C PTS: 1
12. An example of an employee working on a contractual assignment of a non-standard is

a/an:
a. Part time loan of an employee for one
week to one month
b. Three years assignment to start up a
Greenfield site
c. Oil rig worker
d. R&D project team
ANS: D PTS: 1
13. Traditional expatriate assignments are referred to as a/an:

a. Long term c. Short term
b. Extended d. Contractual
ANS: A PTS: 1
14. “Bumble Bee” is a description of an expatriate role as:

a. Agent of direct c. Transferor of
control corporate values
b. Network builders d. Boundary spanners
ANS: C PTS: 1 TOP: The Roles of an Expatriate
15. Boundary spanning refers to activities that:

a. Expand ownership in a different country
b. Gather information that bridge internal
and external organizational contexts
c. Exporting information and technology
across country boundaries
d. Expatriates are seldom called on to
perform for the organization
ANS: B PTS: 1 TOP: The Roles of an Expatriate

16. All of the following describe a non-expatriate EXCEPT:
a. Person who c. Globetrotter
relocates to another
county
b. Road warrior d. Flexpatriate
ANS: A PTS: 1 TOP: The Roles of a Non-Expatriate
17. Third country nationals:

a. Provide no assurance the subsidiary will
comply with company objectives
b. Provide continuity of management as
TCHs stay longer in positions
c. May be better informed than Parent
Country Nationals about the host county
environment
d. May impose an inappropriate HQ style
18. Whether a firm chooses ethnocentric, polycentric, regiocentric or geocentric staffing

approach depends on:
a. Context specificities, local unit
specificities, technological specificities
and HR policies
b. Context specificities, competitive
specificities, company specificities and
IHRM practices
c. Context specificities, company
specificities, local unit specificities,
IHRM practices
d. Cultural specificities, regulatory
specificities, local unit specificities, and
IHRM practices
19. Three key organizational reasons for using the various forms of international
assignments are:
a. Position filling, crisis management and
organizational development
b. Responding to requests from local
employees, management development and
organizational development
c. Position filling, management development
and responding to requests by parent
company employees for international
assignments
d. Position filling, management development
and organizational development
ANS: D PTS: 1
20. Recruitment is defined as:

a. The process of gathering information for
the purpose of evaluating who should be
employed
b. Searching for and obtaining job
candidates
c. Promoting employees within the
organization to fill international
management positions
d. Transferring functional managers to
headquarters
ANS: B PTS: 1
21. How is “expatriate failure” usually defined?

a. Returning home before the period of
assignment is completed
b. Lower than expected market shares
c. A dissatisfaction by the assignee during or
after the assignment
d. Communication channels not utilized and
implemented as expected
ANS: A PTS: 1 TOP: Expatriate Failure and Success
22. An indirect cost of the failure of an expatriate would be:

a. Relocation c. Loss of market
expenses share
b. Exchange rate d. Their replacement
cost
ANS: C PTS: 1 TOP: Expatriate Failure and Success
23. The culture adjustment process in an international assignment can be characterized

by:
a. An “S” shaped c. Cultural shock
curve
b. A “U” shaped d. Matrix relationships
curve
ANS: B PTS: 1 TOP: Selection Criteria
24. The selection process of an expatriate places a heavy reliance on:

a. Relevant technical c. Marital status
skills
b. Past performances d. Desire to relocate
ANS: A PTS: 1 TOP: Selection Criteria
25. The European Union Social Charter allows for

a. Spousal work permits
b. Expatriate to apply for citizenship
c. Free movement of citizens of member
countries within the EU for work
d. Long term assignments
ANS: C PTS: 1 TOP: Selection Criteria
26. A group of multinationals have established an organization called “Permits

Foundation” which:
a. Promotes the improvement of work permit
regulations for spouses of expatriates
b. Allows multinationals to work foreigners
without a VISA
c. Advocates all managers to receive a
permit to work in any country
d. Acts as a clearinghouse for work permit
complaints
ANS: A PTS: 1 TOP: Selection Criteria
27. Which language is the common corporate language in the world?

a. French c. English
b. Spanish d. Mandarin Chinese
ANS: C PTS: 1 TOP: Selection Criteria
28. According to the text, common corporate language in MNEs is developed to :

a. Expand the use of English
b. Use language as a way of standardizing
reporting systems
c. Match the language of the home country
d. Provide an interpreter if managers are not
fluent in the common language
ANS: B PTS: 1 TOP: Selection Criteria
29. An emerging constraint on the available pool of candidates which is hindering the
recruitment and selection process of potential employees for international assignment
is:
a. The frequency of dual career couples
b. Personality and psychological tests
c. Equal employment opportunity law
d. The decline of management programs in
Universities
ANS: A PTS: 1 TOP: Dual Career Couples
30. A family friendly policy to encourage placement of an expatriate which is logical but
not always acceptable to multinationals is:
a. Inner-company c. Intra-company
network employment
b. Job hunting d. Post assignment
assistance career support
ANS: C PTS: 1 TOP: Dual Career Couples
31. “Independents” are defined in the text as:

a. Professional women who are self-selected
expatriates
b. Trailers
c. Minority foreign female
d. Neither a Democrat or Republican
expatriate
32. Female expatriates tend to be employed by companies:

a. That are small c. In the marketing
field
b. With over 1000 d. Going into the USA
employees
ANS: B PTS: 1 TOP: Dual Career Couples
33. A major barrier to the selection of female expatriates was found to be:
a. The attitudes of HR directors
b. The lack of qualified females
c. The attitudes of host country coworkers
d. A lack of support by the female
expatriates’ family
SHORT ANSWER
1. What are the four terms to describe MNE approaches to managing and staffing
subsidiaries?
ANS:
The four terms to describe MNE approaches to managing and staffing subsidiaries
are: ethnocentric, polycentric, geocentric and regiocentric.
PTS: 1 TOP: Approaches to Staffing
2. What are some advantages and disadvantages of the ethnocentric approach to staffing
the MNE?
ANS:
Advantages:
 A perceived lack of qualified host-country nationals (HCNs)
 The need to maintain good communication, coordination and control links
with corporate headquarters.
Disadvantages:
 It limits the promotion opportunities of HCNs, which may lead to reduced
productivity and increased turnover among that group.
 The adaptation of expatriate managers to host countries often takes a long
time, during which PCNs often make mistakes and poor decisions.
 When PCN and HCN compensation packages are compared, the often
considerable income gap in favor of PCNs may be viewed by HCNs as
unjustified.
 For many expatriates a key overseas position means new status, authority, and
an increase in standard of living. These changes may affect expatriates’
sensitivity to the needs and expectations of their host country subordinates
which may be quite different to the perceptions of the PCN manager.
PTS: 1 TOP: Approaches to Staffing
3. There are three key organizational reasons for international assignments. What are
these three reasons?
ANS:
The three key organizational reasons for international assignments are: position
filling, management development and organization development.
PTS: 1 TOP: Transferring Staff for International Business Activities
4. Discuss the six roles of an expatriate.
ANS:
The six roles of an expatriate are: as an agent of direct control; as an agent of
socialization; as network builders; as boundary spanners; as language nodes and the
transfer of competence and knowledge.
PTS: 1 TOP: The Roles of an Expatriate
5. Why are expatriates considered boundary spanners?
ANS:
Expatriates are considered boundary spanners because they can collect host country
information, act as representatives of their firms in the host country, and can influence
agents. For example, attending a social function at a foreign embassy can provide the
expatriate with an opportunity to network, gather market intelligence and promote the
firm’s profile at a high level.
PTS: 1 TOP: The Roles of an Expatriate
6. What are the five stressors impacting non-expatriates?
ANS:
 Home and family issues – such as missing important anniversaries and school
events. The more frequent the travel, the greater the potential for family and
marital relationships to be strained.
 Work arrangements – the ‘domestic’ side of the job still has to be attended to
even though the person is traveling internationally. Modern communications
allow work to accompany the business traveler who is often expected to
remain up to date with home-office issues while away from the office.
 Travel logistics – airline connections, hotel accommodation, and meeting
schedules.
 Health concerns – poor diet, lack of physical exercise, lack of sleep, coping
with jetlag, and exposure to viruses and other health problems (e.g. Deep Vein
Thrombosis from excessive air travel).
 Host culture issues – as international business is conducted in other cultural
settings, the person is still expected to be able to operate in unfamiliar
environments and handle cultural differences effectively. However, the limited
empirical and anecdotal evidence suggests that non-expatriates do not receive
the same level of cross-cultural training as expatriates – if any.
PTS: 1 TOP: The Roles of a Non-Expatriate
7. What are several factors in an expatriate selection process which are absent in the
selection of a regular, domestic management position?
ANS:
Several factors in an expatriate selection process: technical ability, cross-cultural
suitability, family requirements, country/ cultural requirements, language and MNE
requirements.
PTS: 1 TOP: Selection Criteria
8. Discuss the U-Curve phases in the process of adjustment to a foreign culture.
ANS:
Phase 1commences with reactions prior to the assignment – the expatriate may
experience a range of positive and negative emotions such as excitement, anxiety, fear
of the unknown or a sense of adventure. There can be an upswing of mood upon
arrival in the assignment country that produces what has been referred to as the
‘honeymoon’ or ‘tourist’ phase. Then, as the novelty wears off, realities of everyday
life in the foreign location begin to intrude, homesickness sets in, and a downswing
may commence – a feeling that ‘the party is over’ – which can create negative
appraisals of the situation and the location leading to a period of crisis – Phase 2. This
can be a critical time, and how the individual copes with the psychological adjustment
at this phase has an important impact in terms of success or failure. There is a
suggestion that ‘failure as an early recall’ may be triggered at this point. Once past
this crisis point, as the expatriate comes to terms with the demands of the new
environment, there is a pulling up – Phase 3 – as the person begins to adjust to the
new environment. This levels off over time to what has been described as healthy
recovery – Phase 4.
PTS: 1 TOP: Selection Criteria
9. What are the most common reasons for rejecting an international assignment? Do
different countries have different reasons for assignment rejection?
ANS:
The two most common reasons for rejecting an international assignment are: family
concerns and the partner’s career.
PTS: 1 TOP: Dual Career Couples
10. What are some alternative assignment arrangements applied to address the dual career
couple restraints on the selection process?
ANS:
Important support measures include language training, educational assistance,
employer-sponsored work permits, and assistance with career planning.
Other solutions to the challenge of dual career couples include the following:
 Inter-firm networking – Here the multinational attempts to place the
accompanying spouse or partner in a suitable job with another multinational –
sometimes in a reciprocal arrangement. Alternatively, a local supplier,
distributor, or joint venture partner may agree to employ the accompanying
spouse/partner.
 Job-hunting assistance – Here the MNE provides spouse/partner assistance
with the employment search in the host country. This may be done through
employment agency fees, career counseling, or simply work permit assistance.
Some may provide a fact-finding trip to the host location before the actual
assignment.
 Intra-firm employment – This is perhaps a logical but often a somewhat
difficult solution. It means sending the couple to the same foreign facility,
perhaps the same department. Not all multinationals (nor all couples) are
comfortable with the idea of having a husband and wife team in the same work
location and there can often be significant difficulties obtaining work visas for
such arrangements.
 On-assignment career support.
11. Discuss the externally and internally established barriers to females taking
international assignments.
ANS:
Varma and Valy-Durbin found that US and Canadian women are interested in and
likely to accept international assignments, though there are response variations
between those with children and those without. However, the women in this study
tended to believe that their firms were hesitant to ask them to accept an international
assignment, though supervisors (whether male or female) did not necessarily share
that belief.
Further, performance of female expatriates was found initially to be affected by host
country prejudice regarding the role of women in certain countries – considered as
culturally tough assignment locations.
Taking a different approach in her study of Austrian female expatriates, Fischlmayr
used the concepts of external and self-established barriers to explore why women are
underrepresented in international assignments. Through 21 interviews with HR
managers and female expatriates in Austrian multinationals from various industries
and positions, Fischlmayr found that attitudes of HR directors were a major barrier to
the selection of female expatriates, though self-established barriers were also very
strong. Females in Austrian companies often had to specifically request an
international assignment whereas their male colleagues were required to take
international assignments. Further, some women regarded their age as a factor in
terms of others’ perceptions and expectations about their behavior. The older the
woman, the easier it was to obtain a position overseas.
CHAPTER 6: International Performance Management
TRUE/FALSE
1. A multinational is a single entity that faces a global environment.
ANS: T PTS: 1 TOP: Multinational Performance

Management
2. Developments in sophisticated worldwide communications system provide an

acceptable substitute for “face to face” contacts between subsidiary managers and
corporate staff.
ANS: F PTS: 1 TOP: Multinational Performance

Management
3. The way we measure workers’ productivity is exactly the same in an international

setting, but the numbers come out differently because of that environmental
difference.
ANS: T PTS: 1 TOP: Multinational Performance

Management
4. If perceived financial benefits and career progression are not met during an
assignment, the level of motivation and commitment will decrease thus affecting
performance.
ANS: T PTS: 1
TOP: Performance Management of International Employees
5. American work methods may be more structured than their foreign counterparts and
that individuals have less discretion in how they approach tasks and problems.
ANS: F PTS: 1
6. Role expectations are likely to be less complex for the TCN than the PCN.
ANS: F PTS: 1
7. Often the country assigned to a TCN is perceived by headquarters to be culturally

close.
ANS: T PTS: 1
8. Expatriate performance should be placed within its international as well as

organizational context.
ANS: T PTS: 1
9. Performance management is a part of a multinational’s control system.
ANS: T PTS: 1 TOP: Control and Performance Management
10. The expatriate’s commitment to the parent and to the local operations was both
positively related to the intent to stay.
ANS: T PTS: 1
11. One key function of performance appraisal feedback is that it provides opportunities
to improve performance by identifying gaps that might be eliminated by training and
development.
ANS: T PTS: 1
12. The international business traveler can be described as an expatriate.
ANS: F PTS: 1
13. The two categories of international staff are expatriate and commuter.
ANS: F PTS: 1 TOP: Performance Appraisal of International

Employees
14. The nature of the international monetary system and local accounting differences may
preclude an accurate measurement of goal attainment results.
ANS: T PTS: 1 TOP: Performance Appraisal of International

Employees
15. A team of evaluators should be used for performance appraisal of an expatriate.

Employees
16. The standardized performance forms in an organization are always reworked to reflect
differences in the expatriates’ situation in a foreign country.

Employees
17. Regular feedback is an important aspect in terms of meeting targets and revising goals
as well as assisting in motivation of work effort.

Employees
18. Virtual assignments rarely if ever have performance appraisals.

Employees
19. Formal performance appraisal is commonly on a biannual basis.

Employees
20. A Japanese manager cannot directly point out a work-related problem or error
committed by a subordinate.

Employees
MULTIPLE CHOICE
1. Performance management:
a. Is a process that enables the MNE to
evaluate and continuously improve
individual, subsidiary unit and corporate
performance against set goals and targets
b. Is the evaluation of an employee
performance and a vehicle to set
performance goals
c. Is the process of evaluating business
opportunities and planning for new
investments
d. Is the process of setting goals for future
performance by MHE employees
2. The turbulence of the global environment requires that long-term goals be

a. Inflexible to major environment events
b. Realistic and in line with corporate goals
c. Ambitious to meet the growing needs of
the organization
d. Flexible to respond to market
contingencies
ANS: D PTS: 1 TOP: Multinational Performance

Management
3. Market development in foreign subsidiaries is generally slower and more difficult to

achieve without:
a. Supporting c. Expatriates from
infrastructure of the the parent
parent organization
b. Formal control d. Cross-culture
mechanism training
ANS: A PTS: 1 TOP: Multinational Performance

Management
4. The impact of the following variables and their interrelationship needs to be

considered in determining the expatriate performance EXCEPT:
a. Compensation package
b. The nature of the task
c. Environment in which the performance
occurs
d. Interpersonal relationship with key official
ANS: D PTS: 1
5. The employee who oversees and directs the entire foreign operations is:
a. Expatriate c. HR manager
b. Structure d. Chief executive
reproducer officer
ANS: D PTS: 1 TOP: Performance Appraisal of International

Employees
6. An operative:
a. Is a subsidiary manager
b. Reproduces a foreign subsidiary structure
c. Is an individual sent to a subsidiary to
solve a particular problem
d. Is an individual whose assignment is to
perform functional job task
ANS: D PTS: 1 TOP: Performance Appraisal of International

Employees
7. What is a strategic international assignment?

a. A short-term knowledge transferor activity
b. High profile activities that focus on
developing a balanced global perspective
for the employee
c. Assignment that involves the two-way
transfer of existing processes and practices
d. Assignment that focuses on in-country
performances and the acquisition of local
understanding
ANS: B PTS: 1 TOP: Performance Appraisal of International

Employees
8. If the PCN is perceived to identify too closely with the host subsidiary concerns:
a. The employee is perceived to be “going
native”
b. The employee is sent on vacation
c. The employee is removed from the
subsidiary
d. The employee is considered to be doing
his or her job
ANS: A PTS: 1
9. Individuals are likely to blame lack of job discretion on the following:

a. The culture, role, and organization
b. The organization, the job and the location
c. The job, location and culture differences
d. Culture, the job and the Chief Executive
Officer
ANS: B PTS: 1
10. What can be described as the strongest stressors in expatriate “overseas” work
environment?
a. Uncertainty regarding culture differences
and language
b. Uncertainty regarding objectives, goals
and role requirements
c. Uncertainty regarding job retention
d. Uncertainty of who to report to and who is
in the line of command
ANS: B PTS: 1
11. A USA manager of German nationality working for a Dutch multinational company is
assigned to a position in Indonesia. Which country is considered the host country?
a. USA c. Germany
b. Dutch d. Indonesia
ANS: D PTS: 1
12. The transfer of the individual and accompanying family member into a foreign
environment outside of their normal cultural comfort zones is the definition of:
a. Domestic relocation c. Expatriate
assignment
b. International d. Commuter
traveler
ANS: C PTS: 1
13. What are the five major constraints in terms of multinational strategy and goal
setting?
a. Differing societal, legal, economic,
technical and physical demands
b. Differing societal, cultural, economic ,
technical and physical demands
c. Differing societal, legal, administrative,
economic and physical demands
d. Differing legal, strategic, administrative,
economic and physical demands
ANS: A PTS: 1
14. What are the five variables affecting expatriate performance?

a. Compensation package, task, HQ support,
host environment and culture adjustment
b. Legal, economic, culture adjustment,
physical and task
c. Technical, societal, compensations, HQ
support and host environment
d. Compensation, task, cultural environment,
HQ support and legal
ANS: A PTS: 1
15. All of the following are a constraint of goal attainment for the multinational enterprise
EXCEPT:
a. Volatility of global c. Separation of time
environment and distant
b. Cross-cultural d. Non-comparable
demands data
ANS: B PTS: 1 TOP: Multinational Performance

Management
16. Which country tends to have administrators with a high level of legal expertise?
a. Sweden c. France
b. Germany d. UK
ANS: C PTS: 1
17. Which country has a strong tradition of collective bargaining?

a. Danish c. Japan
b. USA d. Germany
ANS: D PTS: 1
18. Which country tends to focus on linking performance management result to long-term
training and development activities?
a. USA c. Germany
b. France d. Australia
ANS: C PTS: 1
19. Two countries in which it is common for employees to have input into job goal setting
is:
a. USA and Mexico c. Canada and
Australia
b. Germany and d. Japan and Sweden
Sweden

Employees
20. An appraisal system which builds upon the strengths while minimizing their
disadvantages uses all of the following criteria:
a. Hard , soft and contextual goals
b. Financial, corporate and cross-cultural
goals
c. Interpersonal , financial and cultural goals
d. Hard goals, cultural and corporate goals
ANS: A PTS: 1 TOP: Performance Appraisal of International

Employees
21. What tool assists an organization in collecting accurate performance data and allows
for cross-employee comparisons?
a. Local implicit c. Local performance
norms diaries
b. Standardized d. Standardized
appraisal forms performance goals

Employees
22. What is the normal frequency of formal performance appraisal for an expatriate?
a. 6 months c. 18 months
b. 1 year d. 2 years

Employees
23. In which country do managers find it difficult to directly point out a work-related
problem or error by a subordinate?
a. USA c. Japan
b. China d. Indonesia
ANS: C PTS: 1 TOP: Performance Appraisal of International

Employees
24. The dilemma of cultural adaptation of a performance evaluation could be overcome

by:
a. The host-country national assisting in
devising a suitable system for appraisal
b. Parent company not evaluating the
employees
c. TCN developing the performance
appraisal system
d. Offshoring the performance evaluation
ANS: A PTS: 1 TOP: Performance Appraisal of International

Employees
25. The term “whole verses part” refers to:

a. The idea that a global performance is too
complex to be captured by a single
performance management system
b. The idea that less than excellent
performance outcomes in a given local
unit may be acceptable if that unit’s
presence in a location contributes to the
greater strategic good
c. The idea that you can best capture
performance management by adding up
the sum of all the individual performance
outcomes in the various units or parts of
the MNE.
d. The idea that corporate headquarters’
executive can accurately assess the parts
(local units) of performance far more
accurately than the whole or overall firm
performance
ANS: B PTS: 1 TOP: Multinational Performance

Management
26. Web-based platforms of human resource information system that include performance
management modules:
a. Create more performance management
problems than they solve
b. May be seen as eliminating the
separations of time, distance and culture
experienced by multinational firms
c. May be seen as a response to the
separations of time, distance and culture
experienced by multinational firms
d. May be seen as increasing and making
more obvious the separations of time,
distance and culture experienced by
multinational firms
ANS: C PTS: 1 TOP: Multinational Performance

Management
27. Performance management systems contribute:

a. Only to formal control, through feedback
and appraisal aspects
b. Only to informal control through
contributing to shaping corporate culture
c. To both formal control, through feedback
and appraisal aspects as well as informal
control, through contributing to shaping
corporate culture
d. To standardized control and the
communication of the local units’
contribution to global standards
ANS: C PTS: 1 TOP: Control and Performance Management
28. According to Hays, the “trouble shooter” is:

a. The individual sent from a subsidiary back
to headquarters because they are a
performance problem
b. The individual in a local subsidiary who
holds his or her employees to an
impossibly high standard in performance
appraisal reports
c. The individual sent to a local subsidiary to
identify redundant employees and fires
them
d. The individual sent to a local subsidiary to
analyze and solve particular operational
problems
ANS: D PTS: 1
29. A major challenge to global performance management is:

a. How to determine performance criteria
and goals related to non-standard
assignments especially virtual assignees
b. How to provide performance management
forms to all employees
c. How to translate parent country forms into
local languages
d. How to determine who is actually filling
out the forms in local subsidiaries
ANS: A PTS: 1
30. One problem with an annual performance appraisal is:
a. Managers often miscommunicate how to
improve the expatriate’s job performance
in a timely manner.
b. Technological improvements have made
the evaluation obsolete.
c. Employees do not receive consistent
frequent feedback in order to improve
d. Email feedback has replaced the need for
a formal employee evaluation
ANS: C PTS: 1 TOP: Performance Appraisal of International

Employees
SHORT ANSWER
1. What are some constraints in evaluating a subsidiary’s performance against

expectations?
ANS:
Whole vs. part – that is that an individual subsidiary’s performance might be below
average, but it operates in a critical region, function or product line and its continuing
presence contributes to the overall good of the multinational firm.
Performance data are often hard to compare due to differing regulatory and economic
contexts.
The global environment is volatile, and performance goals set at one time may be
impossible to achieve given changes in exchange rates, unexpected legal and/or
regulatory reforms, etc.
Separation by time and distance make it difficult to coordinate processes and convey a
standard message on performance.
There are variable levels of maturity and the acceptance of firm norms and values in
the various employees groups around the world.
PTS: 1 TOP: Multinational Performance Management
2. MNEs control performance by what means?
ANS:
According to Figure 6-2 on page 159, formal and informal control activities combine
to focus the attention of the various actors in the MNE on standardized practices
(good performance) and socializing employees to accept, internalize and comply with
norms and values that relate to performance requirements. These practices and norms
result in a global mix of strategically linked outcomes and results which are fed back
to the subsidiary and the HQ.
PTS: 1 TOP: Control and Performance Management

3. Who conducts performance appraisals for expatiates and other international
employees?
ANS:
Optional assessors include:
The subsidiary’s CEO
The immediate host country supervisor
Parent country evaluators
Local or corporate HR staff.
These perspectives can be combined using multiple raters.
PTS: 1 TOP: Performance Appraisal of International Employees
4. What are the three general types of goals used as the basis for performance criteria?
ANS:
Hard goals – objective, quantitative and directly measurable.
Soft goals – relationship or trait based goals.
Contextual goals – situational-specific goals that take local conditions into account or
attempt to reduce or eliminate contextual difference so as to assist in comparing goal
achievement across diverse international units.
PTS: 1 TOP: Performance Appraisal of International Employees
5. How do performance management systems in Germany and France differ?
ANS:
German systems tend to be more consensual, explicit, ongoing and informational and
yet formalized under the codetermination system that characterizes German industrial
relations practices.
French systems may stress implicit qualities as well as employee development, and
the input of a degree in a prestigious university is always a factor to consider in
evaluation. Practices tend to vary significantly by industry and size of firm with larger
firms being more open to a wider variety of practices.
PTS: 1 TOP: Performance Management of International Employees
CHAPTER 7: International Training, Development and Careers
TRUE/FALSE
1. An international assignment, in itself, is an important training and development tool.
2. Presently, MNEs place little priority on providing pre-departure training for spouses
and family.

3. More multinationals are now expanding their pre-departure training programs to
include programs for the spouse and family.
4. Professor Tung revised her recommendations for cross culture training, so that now
she feels that there should be more emphasis in foreign language training.
ANS: T PTS: 1
TOP: Components of Effective Pre-Departure Training Programs
5. An immersion approach to cross culture training would include role playing and stress
reduction training.
ANS: F PTS: 1
6. A preliminary visit to a country is considered a necessary part of the selection process

of any type of expatriate assignment and by all countries.
ANS: F PTS: 1
7. Language problems are largely viewed as mechanical and manageable problems that
can be readily solved.
ANS: T PTS: 1 TOP: The Effectiveness of Pre-Departure

Training
8. Chinese nationals are unwilling to accept English as a business language.
ANS: F PTS: 1
9. Culture awareness training is the most common form of pre-departure training.
ANS: T PTS: 1
10. Most expatriates are hired internally.
ANS: T PTS: 1
11. Relocation specialist provides practical assistance to expatriates.
12. Expatriates are often used for training because of a lack of suitably trained staff in the
host locations.
ANS: T PTS: 1
13. HCNs may not be regarded as “genuine” expatriates as they are not trained in the
same manner.
ANS: T PTS: 1
14. Non-expatriates are given the same cross culture training as expatriates.
ANS: F PTS: 1
15. A byproduct of working in an international team is becoming culturally aware.
ANS: T PTS: 1 TOP: Trends in International Training and

Development
16. There is an increasing interest in all aspects of training and development with a focus
on practices in the economic super power China.
ANS: T PTS: 1 TOP: Re-entry and Career Issues
17. A repatriate may experience re-entry shock to the home country and may require
training.
ANS: T PTS: 1 TOP: Re-entry and Career Issues
18. It is a wise policy for MNEs to encourage expatriate to travel to exotic locations
during holidays.
ANS: F PTS: 1 TOP: The Repatriation Process
19. Work-related information exchanges are part of any expatriate assignment.
ANS: T PTS: 1 TOP: The Repatriation Process
20. Employees accepting international assignments can have cultural shock entering a
host country and a cultural shock returning to home organizations.
ANS: T PTS: 1 TOP: The Repatriation Process
21. Firms with career development planning have a higher rate of repatriate turnover.
ANS: F PTS: 1 TOP: Individual Reactions to Re-Entry
22. The repatriate’s new position usually devalues the overseas experiences.
ANS: T PTS: 1 TOP: Individual Reactions to Re-Entry
23. The returning repatriate will usually get a promotion upon reentry.
24. Repatriates working in a foreign location may have role conception and role behavior
conflicts which are influenced by the cultural differences when they return home.
ANS: T PTS: 1 TOP: Individual Reactions to Re-Entry
25. Children do not have a difficult re-entry problem when returning home.
26. A boundaryless careered person is committed to the multinational company and not
one’s own career.
ANS: F PTS: 1 TOP: Responses by the MNE
27. Multinationals are reinforcing the notion of a protean and boundaryless careers when
they do not guarantee repatriates positions upon re-entry.
ANS: T PTS: 1 TOP: Responses by the MNE
28. Cost reduction or containment is an important driver in international assignment

trends.
ANS: T PTS: 1 TOP: Responses by the MNE
MULTIPLE CHOICE
1. A multinational builds it stock of human resources or human capital by:

a. Training and c. Hiring from
development competitors
activities
b. Buying stock in d. Keeping up with
another company trends of hiring
2. An indication of how important training and development has become in

multinationals is reflected in that they have:
a. Established their own universities
b. Stolen employees from competitors
c. Required college degrees for all
employees
d. Increased their training budgets even
during periods of economic decline
3. A useful way for employees to gain a broader perspective of an MNE is:

a. Matrix structures c. Short-term
assignments
b. Job rotations d. Commuter
4. Components of pre-departure training programs include all of the following Except:

a. Cultural awareness c. Language
training instruction
b. Practical assistance d. Technical refresher
training
ANS: D PTS: 1
5. What is the most common form of pre-departure training?

a. Language c. Practical assistance
b. Culture awareness d. Exchange rate
ANS: B PTS: 1
6. If an expected level of interaction with local host country employees is low and
similarity between the parent and the host country is high, the length of cross culture
training would be:
a. Less than 1 week c. 4 weeks
b. 2 weeks d. 3 months
ANS: A PTS: 1
7. Preliminary visits to the host country:

a. Encourages more informed pre-
department preparations
b. Is a perk in the recruitment process
c. Is discouraged in European countries
d. Is too expensive to be considered
ANS: A PTS: 1
8. Which language is considered the language of World Business?

a. Mandarin Chinese c. English
b. Spanish d. French
ANS: C PTS: 1
9. Disregarding the importance of foreign language skills may reflect

___________assumptions.
a. Multicentric c. Regiocentric
b. Polycentric d. Ethnocentric
ANS: D PTS: 1
10. One technique useful in orienting any international employee is a/an:

a. Interview with a host national
b. Preliminary visit to the host country
c. Review of the country or region in the
news
d. Selection of readings about the history of
the host country
ANS: B PTS: 1
11. A major objective of intercultural training is:

a. To make the assignee an expert in the host
country
b. To help people cope with unexpected
events in a new culture
c. To create a concern on the part of the
assignee so they take the assignment
seriously
d. Get the assignee through the first week or
so of the assignment
12. Language skills are important in terms of:

a. Employee personal development
b. Travel and dining abilities
c. Recruitment and selection process
d. Task performance and cultural adjustment
ANS: D PTS: 1
13. The components of a pre-departure training referred to as “practical assistance” :

a. Provides information that assist in
relocation
b. Provides money for transportation
c. Consist solely of language training
d. Is seldom provided to expatriates
ANS: A PTS: 1
14. The employee who trains the HCN is usually:

a. A line manager c. An expatriate
b. At headquarters d. An inpatriate
ANS: C PTS: 1
15. This type of employee may comprise the largest contingent of employees in
international businesses
a. Expatriate c. Inpatriate
b. Non expatriate d. TCN
ANS: B PTS: 1
16. Expatriates appearing to have greater job satisfaction during and after their
international assignment had:
a. Preliminary visits c. Integrated cross-
cultural training
b. Language classes d. Higher
compensation
ANS: C PTS: 1 TOP: The Effectiveness of Pre-Departure

Training
17. International expertise is an outcome of

a. Cross-cultural c. Practical assistance
training
b. MNE sponsored d. International
universities assignments
ANS: D PTS: 1
TOP: Developing Staff Through International Assignments
18. Along with expected financial gains, the primary motive for accepting an international
assignment is
a. Knowledge c. Career
advancement
b. Travel d. Need
ANS: C PTS: 1
19. A sub-set form of an international team is a/an:

a. Expatriate c. Virtual team
b. TCN d. Commuter
ANS: C PTS: 1
20. There is a continuing pressure from developing countries for:

a. PCN transfers
b. Effective pre-departure training
c. Long term assignments
d. Localization of training and development
initiatives
ANS: D PTS: 1 TOP: Trends in International Training and

Development
21. The “affective approach” to training partially consists of:

a. Cultural briefings and area briefings
b. Field experiments and simulations
c. Role-playing and case studies
d. Survival level language training and
sensitivity training
ANS: C PTS: 1
22. Training and development is a critical component of an international assignee

because:
a. Expatriates are trainers, part of the transfer
of knowledge across units
b. Expatriates are not expected to ensure that
systems and processes are adopted
c. Expatriates do not rely on assignments for
developmental purposes
d. Expatriates are expected to return to the
host country and train parent company
employees
23. The benefits of international teams include:

a. Lower payroll cost and reducing turnover
b. Breaking down functional and national
boundaries, enlarging communication
flows
c. Standardizing inputs into decisions,
problem solving strategies and providing
uniform strategic assessments
d. Building formal control by way of policies
and procedures
ANS: B PTS: 1
24. Repatriation:
a. Is the activity of bringing the expatriate
back to the home country
b. Is one who works and temporally resides
in a foreign country
c. Is a business traveler who performs tasks
in a foreign country and then returns
d. Is a second expatriate assignment to the
same location
ANS: A PTS: 1 TOP: Re-entry and Career Issues
25. The final stage in the expatriation process is:

a. Inpatriate c. Transpatriation
b. Repatriation d. Counterpatriation
ANS: B PTS: 1 TOP: Re-entry and Career Issues
26. The repatriation process is accomplished by three phases, all which are included
below EXCEPT:
a. Pre-departure c. During the
assignment
b. Recruitment and d. Upon return
selection
ANS: B PTS: 1 TOP: Re-entry and Career Issues
27. Home leave and exotic vacations are included in the following phase of repatriation:
a. Pre departure phase c. During the
assignment phase
b. Recruitment and d. Upon return phase
selection phase
ANS: C PTS: 1 TOP: The Repatriation Process
28. Sponsor or Mentors:

a. Facilitate the smooth transition into a
foreign assignment
b. Are responsible for keeping the expatriate
in touch with the changing conditions at
home
c. Provide in-depth information on host
country conditions
d. Often travel with the expatriate
ANS: B PTS: 1 TOP: The Repatriation Process
29. Guarantee of a position at home upon completion of an overseas assignment were

only given in one country as reported in a survey by Tung-Arthur Anderson in 1997.
That country is:
a. USA c. Germany
b. Japan d. UK
ANS: C PTS: 1 TOP: Individual Reactions to Re-Entry
30. A repatriate can encounter the following career anxiety job related factors EXCEPT:
a. Loss of visibility an c. Culture shock
isolation
b. No post-assignment d. Workplace changes
guarantee
ANS: C PTS: 1 TOP: Individual Reactions to Re-Entry
31. If the multinational is in the process of a major restructuring, the aftermath of a

merger or acquisition or sale of a division can result in:
a. Job shedding c. New factory
building
b. Bankruptcy d. Matrix
ANS: A PTS: 1 TOP: Individual Reactions to Re-Entry
32. Organizations seem to have a lower rate of repatriate turnover when:

a. A firm is downsizing
b. Bonuses are given upon reentry
c. An employee is married
d. Firm provides career development
planning
ANS: D PTS: 1 TOP: Individual Reactions to Re-Entry
33. What kind of position can the repatriate most likely expect upon re-entry:
a. Promotion c. Same position
b. No position d. Lateral position
ANS: D PTS: 1 TOP: Individual Reactions to Re-Entry
34. Boundaryless careerists are:

a. Highly qualified c. Self-employed
mobile contract workers
professionals
b. Careers that consist d. Jobs generated by a
of a job for life multinational
ANS: A PTS: 1 TOP: Responses by the MNE
35. What is a main reason for multinationals to hire an “international itinerants?”

a. Higher control of c. Higher firm
activities knowledge
b. Elimination of d. Foreign country
repatriation knowledge of
activities customs
ANS: B PTS: 1 TOP: Responses by the MNE
36. Visible and concrete expression of the repatriate value to the firm can be
accomplished by all of the following EXCEPT:
a. Promotion c. Completion bonus
b. Public ceremonies d. Private
congratulations
ANS: D PTS: 1 TOP: Designing a Repatriation Program
37. It was calculated by Black and Gregersen that a US multinational will spend
________on each expatriate over the duration of the assignment:
a. No more than a c. Two million dollars
regular employee
b. $ 500,000 d. One million dollars
ANS: D PTS: 1 TOP: Responses by the MNE
SHORT ANSWER
1. What are the four components of pre-departure training programs that contribute to a
smooth transition to a foreign location? Discuss each in turn.
ANS:
 Cultural awareness training

 Preliminary visits
 Language instruction
 Assistance with practical day-to-day matters
 Security briefings
PTS: 1 TOP: Components of Effective Pre-Departure Training Programs
2. What are the benefits of using international teams?
ANS:
 A mechanism for fostering innovation, organizational learning and the transfer
of knowledge.
 A means of breaking down functional and national boundaries, enhancing
horizontal communication and information flows.
 A method for encouraging diverse inputs into decisions, problem solving and
strategic assessments.
 An opportunity for developing a global perspective.
 A technique for developing shared values, thus assisting in the use of informal,
normative control through socialization.
PTS: 1 TOP: Developing Staff Through International Assignments
3. Even though language usually falls in importance behind cross culture training, what
are some of the advantages of the expatriate being fluent in the host and parent
language?
ANS:
Knowledge of the host-country language can assist expatriates and family members
gain access to new social support structures outside of work and the expatriate
community. For example, McNulty found that learning the host country language was
rated by 71 per cent of spouses as an important adjustment activity during
international assignments, with one spouse suggesting that ‘language proficiency is
power’.
4. Discuss the components of the Mendenhall, Dunbar and Oddou cross cultural training
model. What are the components of the model and how does the training approach
relates to each component?
ANS:
 Training methods
 Levels of training rigor
 Duration of the training relative to degree of interaction and culture novelty
5. What is the purpose of preliminary visit to a host county and what are some of the
outcomes of such a visit?
ANS:
A well-planned visit for the candidate and spouse provides a preview that allows them
to assess their suitability for and interest in the assignment. Such a visit also serves to
introduce expatriate candidates to the business context in the host location and helps
encourage more informed pre-departure preparation.
6. When a repatriate returns to the home office what kind of challenges do they face?
What kind of position awaits the returning employee?
ANS:
The employment relationship may have changed; new supervisors and systems may
have developed in his/her absence leading to a sense of alienation and isolation.
Promised promotions may not materialize and the returnee may feel the international
assignment resulted in a career disadvantage compared to those peers who stayed at
home. They may feel that their international assignment is not valued.
PTS: 1 TOP: Re-entry and Career Issues
7. What are the three steps of the repatriate process?
ANS:
See the sub dimensions in Figure 7.4 on page 190. 1) Pre-departure, 2) During
assignment, 3) Upon return
PTS: 1 TOP: Re-entry and Career Issues
8. What are the three main reasons for the multination to have a well-designed
repatriation process?
ANS:
 Ensuring staff availability and fulfilling career expectations

 Enjoying a return on Investment form the expensive international
assignment
 Ensuring knowledge transfer
9. What skills and knowledge are acquired through a typical international assignment?
ANS:
 Market specific knowledge, local social systems, local language and local
customs
 Personal skills, intercultural knowledge, self-confidence, flexibility and
tolerance
 Job relevant management skills, communication, project management and
problem solving
 Network knowledge, relationships with clients, suppliers, subsidiary staff
and other expatriates
 General management capacity is enhanced, broader experiences,
responsibilities and an exposure to other units in the organization.
PTS: 1 TOP: Responses by the MNE
10. What should be covered in a formal repatriation program?
ANS:
 Preparation, physical relocation, transition information
 Financial and tax assistance provided
 Reentry position and career path assistance
 Reverse culture shock phenomenon
 Children’s adaptation and reintroduction into the school system
 Review of workplace changes during absence
 Stress management resources available
 Establish/reestablish networking opportunities
 Help forming new social contacts
PTS: 1 TOP: Designing a Repatriation Program
CHAPTER 8: International Compensation
TRUE/FALSE
1. Increased complexities in global pay include the decreased use of outsourced

activities and subsequent labor pricing needs.
2. The competing objectives of the international firm and the expatriate employee are
fundamentally different from that which exists in a domestic environment.

3. The term “base salary” acquires a somewhat different meaning when employees go
abroad.
ANS: T PTS: 1
TOP: Key Components of an International Compensation Program for Expatriates
4. Base salary must be paid in local country currency.
ANS: F PTS: 1
5. Foreign service inducements are usually made in the form of a percentage of salary
and usually amount to 30 to 60 percent of base pay.
ANS: F PTS: 1
6. The provision of a relocation allowance implies that employees should be entitled to

maintain their home country living standards.
ANS: F PTS: 1
7. Many employers cover the expense of one or more trips back to the home country
each year.
ANS: T PTS: 1
8. The provision of a cost-of-living allowance implies that the cost-of-living in the

foreign assignment is higher than at home.
ANS: F PTS: 1
9. PCNs and TCNs do not usually receive the same treatment concerning educational
expenses.
ANS: F PTS: 1
10. Pension plans are very easy to deal with from country-to-country, as national practices
are similar
ANS: F PTS: 1
11. The Going Rate Approach is based on local market rates.

ANS: T PTS: 1
TOP: Approaches to International Compensation of Expatriates
12. With the Going Rate Approach, if the location is in a low-pay country, the
multinational usually supplements base pay with additional benefits and payments.
ANS: T PTS: 1
13. The Balance Sheet Approach links the base salary for PCNs and TCN to the salary
structure of the relevant home country.
ANS: T PTS: 1
14. Generally the developed countries tend to rank as more expensive than developing
countries because their wage costs are higher.
ANS: T PTS: 1
15. It is a common practice for MNEs to use a home-country balance sheet approach for
TCNs except in the USA.
ANS: F PTS: 1
16. “Universal” pay systems may be preferred by corporate pay planners rather than
having to deal with myriad “Local” systems.
ANS: T PTS: 1
TOP: Tentative Conclusions: Patterns in Complexity, Challenges and Choices
17. Firms will never provide standardized “core” pay in the global firm.
ANS: F PTS: 1
18. Paying TCNs according to their home-country base salary can be less expensive than
paying all expatriates on a PCN scale.
ANS: T PTS: 1
19. MNEs using the Balance Sheet approach to international compensation are constantly
updating compensation packages for cost of living changes.
ANS: T PTS: 1
20. Obtaining up to date information on international living costs is a constant issue for
multinationals.
ANS: T PTS: 1
MULTIPLE CHOICE
1. Successfully managing compensation and benefits in a multinational context:

a. Requires knowledge of employment and
taxation law, customs, environment, and
employment practices of many foreign
countries
b. Requires the use of both the going rate
approach and the balance sheet approach
to international compensation
c. Does not require familiarity with currency
fluctuations
d. Does not require the use of any kind of
base salary
2. In a domestic context, base salary:

a. Is the primary component of a package of
allowances
b. Includes cost-of-living allowance
c. Denotes the amount of cash compensation
serving as a benchmark for other
compensation elements
d. Is determined by using the Going Rate
Approach
ANS: C PTS: 1
3. Which of the following is the foundation block for international compensation

whether the employee is a PCN or TCN?
a. Tax protection
b. Foreign service inducement/hardship
premium
c. Allowances
d. Base salary
ANS: D PTS: 1
4. Which of the following involves a payment to compensate for differences in

expenditures between the home country and the foreign country?
a. Home leave c. Cost-of-living
allowance allowance
b. Housing allowance d. Relocation
allowance
ANS: C PTS: 1
5. The provision of a housing allowance:

a. Is not often assessed on a case-by-case
basis
b. Does not ever include a fixed housing
allowance
c. Implies higher living standards
d. May include company-provided housing
ANS: D PTS: 1
6. The purpose of home leave allowances is to:

a. Compensate for differences in
expenditures between the home country
and the foreign country
b. Give expatriates the opportunity to renew
family and business ties, thereby helping
them to avoid adjustment problems when
they are repatriated
c. Cover moving, shipping and storage
charges, and temporary living expenses
d. Give employees a chance to leave their
homes to tour their potential foreign
assignment
ANS: B PTS: 1
7. Relocation allowances:
a. Do not usually cover temporary living
expenses
b. Usually cover temporary living expenses
c. Cover discretionary items
d. Do not usually cover moving
ANS: B PTS: 1
8. MNEs generally pay allowances in order to:

a. Change the living standards of employees
b. Encourage employees to take international
assignments
c. Avoid certain taxes
d. Discourage employees from taking
international assignments
ANS: B PTS: 1
9. Most US PCNs typically:

a. Remain under their home country benefit
plan
b. Adopt US benefit plans
c. Take advantage of both their home
countries’ and the US’s benefit plans
d. Do not receive benefits, only allowances
ANS: A PTS: 1
10. Firms need to address many issues when considering benefits, including:
a. Whether or not to maintain expatriates in
home-country programs
b. Whether or not to use the Going Rate
Approach
c. Whether or not to use the Balance Sheet
Approach
d. Whether or not expatriates should receive
any social security benefits
ANS: A PTS: 1
11. Benefits that may be provided to employees include:

a. Base pay c. Vacations and
special leave
b. Tax protection d. Cost-of-living
allowances
ANS: C PTS: 1
12. The base salary for an international transfer is linked to the salary structure in the host
country using:
a. Tax protection c. The Going Rate
Approach
b. Tax equalization d. The Balance Sheet
Approach
ANS: C PTS: 1
13. The Balance Sheet Approach:

a. Is the most widely used approach to
international compensation
b. Relies on survey comparisons
c. Creates potential re-entry problems
d. Creates variation between expatriates of
the same nationality in different countries
ANS: A PTS: 1
14. An advantage of the Going Rate Approach is that:

a. There is variation between assignments
for the same employee
b. There is equality in pay with local
nationals
c. There is equity between assignments
d. It results in fewer taxes
ANS: B PTS: 1
15. A disadvantage of the Balance Sheet Approach is that:

a. There can be variations between
assignments for the same employee
b. There can be variations between
expatriates of the same nationality in
different countries
c. There may be potential re-entry problems
d. It can result in great disparities between
expatriates of different nationalities and
between expatriates and local nationals
ANS: D PTS: 1
16. The four categories of outlay incurred by expatriates that are incorporated in the
Balance Sheet Approach are:
a. Goods and services, housing, income tax
and reserve
b. Housing, base pay, goods and services and
taxation
c. Taxation, housing, exchange rate and
goods and services
d. Reserve, housing, taxation and evaluation
cost
ANS: A PTS: 1
17. The most common taxation policy used by multinationals is:

a. Tax protection c. Tax equalization
b. Parent country d. No taxation
national taxation
ANS: C PTS: 1
18. “Globals” are:
a. Expatriates c. Commuters
b. Permanent d. International
international travelers
assignees
ANS: B PTS: 1
19. Many multinationals respond to complexity of tax issues across countries by:
a. Ignoring all tax issues except for the
Parent company
b. Retaining the services of international
accounting firms
c. Having an in-house tax division to prepare
all tax related forms and addresses all
country tax issues
d. Leaving all tax issues up to the employee
ANS: B PTS: 1
20. A firm-external theory of job worth is influenced by:

a. Behavioral theory c. Cultural and
institutional
perspectives
b. Level of d. Local market
internationalization conditions
ANS: C PTS: 1
21. Pay strategy may be defined in terms of a series of interlocking strategic choices on:
a. Basis of pay, units of aggregations,
patterns of variation in pay and job
evaluations
b. Industry/competition, size of organization,
organizational structure and job
evaluations
c. Employment relationships, corporate
culture, basis of pay and job evaluation
d. Local market conditions, laws, basis of
pay and job evaluations
ANS: A PTS: 1
22. An external, environmental norm in global pay strategy would be:

a. Traditional c. Resource-based
employment view of the firm
relationships
b. Labor unions and d. Institutional
educational systems economics
ANS: B PTS: 1
23. Performance verses seniority is a strategic choice of pay strategy considered in:
a. Job evaluation c. Internal equity
system
b. Units of d. Basis of pay
aggregation
ANS: A PTS: 1
24. In a recent cost of living survey, the most expensive city to live in is:
a. London c. Zurich
b. New York d. Tokyo
ANS: B PTS: 1
25. The Top Five highest taxation countries are:

a. Netherlands, Belgium, Germany, Australia
and Italy
b. USA, Netherlands, France, Germany and
China
c. China, Australia, Belgium, France and
Malaysia
d. Taiwan, France, Netherland, Belgium and
Australia
ANS: A PTS: 1
26. International compensation is characterized by:

a. Complexity, culture c. Complexity,
and corporation challenges and
choices
b. Complexity, d. Complexity,
cultural challenges cooperation and
competition
ANS: C PTS: 1
27. Global pay practices consist of firm level decisions about:

a. Pay mix, pay level and standardization
versus localization
b. Pay levels, pay mix and hierarchy versus
egalitarian basis
c. Pay levels, cultural norms and pay bases
d. Pay mix, pay culture and standardization
versus localization
ANS: A PTS: 1
28. International compensation is:

a. On a practical level, simpler than a
domestic pay system
b. Not considered critical for most
multinational enterprises
c. Still essentially equivalent to the topic of
expatriate pay practices in all
multinational enterprises
d. More complex than domestic pay due to
outsourcing and balancing centralizations
and decentralization of pay forms
ANS: D PTS: 1
29. National and regional differences in the meaning practice and tradition of pay:
a. Are rapidly diminishing
b. Have practically disappeared with global
cultural integration
c. Remain significant sources of variation in
the international firm
d. Are actually increasing due to national
and regional protectionist legislative
mandates
30. A seamless network of pay providing members, made up of global firms, their
specialist consultant and local and regional public and private interests are:
a. A reality
b. An impossibility
c. Not considered critical to MNEs
executives
d. A goal not yet a reality
ANS: D PTS: 1
31. The “Local Plus” approach to international compensation

a. Pays expatriates solely based on
prevailing local wage conditions
b. Provides nothing but benefits in
transportation assistance, housing and
dependent’s education
c. Combines some local pay practices with
some expatriate benefits
d. Always includes tax equalization policies
ANS: C PTS: 1
SHORT ANSWER
1. Present the general objectives of international compensation for a firm.
ANS:
 Consistent with the overall strategy, structure and business needs of the firm.
 Work to attract and retain staff in the areas where the multinational has the
greatest business needs and opportunities. In other words be competitive in the
appropriate labor market or markets.
 Policies should facilitate the transfer of international employees in the most
cost effective manner.
 Policy should give due consideration to perceptions of equity and fairness and
ease of administration.
2. List the objectives of international compensation for an employee.
ANS:
 Provide financial protection in terms of benefits and living costs

 Assignment should offer opportunities for financial advancement through
income and or savings.
 Issues such as housing, education of children and recreation will be addressed
in the policy
 General expectations for career advancement as the result of the assignment.
3. Discuss the key components of an international compensation program.
ANS:
 Base salary
 Foreign service inducements/hardship premium
 Allowances (cost of living, housing, home leave, educational allowance,
relocation allowance)
 Benefits (pension, vacation and home leave, recreational opportunities,
emergency provisions)
PTS: 1
4. Describe the advantages and disadvantages of the Going Rate Approach to

international compensation and the Balance Sheet Approach.
ANS:
 Going Rate: ADV – Equitable vis a vis local nationals, simple, identifies
expatriate with the locals, provides sense of fairness across different
nationalities in a country.
 DISADV – Creates variation between assignments for the same employee,
creates variation between expatriates of the same nationality working in
different countries, creates potential reentry problems upon completion of the
assignment.
 Balance Sheet: ADV – Contributes to a sense of equity between assignments
and between expatriates of the same nationality, facilitates expatriate reentry
into his/her home country, easy to communicate to employees.
 DISADV – Can result in disparities between expatriates of different
nationalities and between expatriates and local nationals, can be quite complex
to administer and track.
PTS: 1
5. What are the three vertical levels of global pay strategies?
ANS:
Level three: Artifacts, Level two: Norms and values, Level one: Basic assumptions
PTS: 1 TOP: Tentative Conclusions: Patterns in Complexity, Challenges

and Choices
6. Describe some categories of Basis-for-Pay of strategic pay systems.
ANS:
 Job vs. skill as basis for pay

 Performance vs. seniority
 Individual vs. group performance
 Short vs. long term orientation
 Risk aversion vs. risk taking
 Corporate vs. divisional performance
 Hierarchical vs. egalitarian pay structure
 Qualitative vs. quantitative performance measures
 Internal vs. external equity emphasis
PTS: 1 TOP: Tentative Conclusions: Patterns in Complexity, Challenges

and Choices
CHAPTER 9: International Industrial Relations and The Global Institutional Context
TRUE/FALSE
1. In the international industrial relations field, no industrial relations system can be

understood without an appreciation of its historical origin.
2. Industrial relations are a faithful expression of the society in which they operate, and
of the power relationships between different interest groups.

3. The difference in union structures has no influence on collective bargaining process in
Western countries.
4. Corporate headquarters will become involved or oversee labor agreements made by

foreign subsidiaries.
ANS: T PTS: 1 TOP: Key Issues in International Industrial

Relations
5. European firms have tended to deal with industrial unions at the firm level rather than
at industry level.
ANS: F PTS: 1 TOP: Key Issues in International Industrial

Relations
6. Subsidiaries formed by Greenfield tend to be given more autonomy over industrial

relations than firms acquired by acquisition.

Relations
7. A large home market is a strong incentive to adapt to host-country institutions and

norms.

Relations
8. The decline in union density in many countries can be explained by economic factors.
ANS: T PTS: 1
TOP: Trade Unions and International Industrial Relations
9. Multinationals subsidiaries experienced smaller and shorter strikes than local firms.
ANS: F PTS: 1
10. Multinational subsidiaries tend to have more frequency of strikes than indigenous
firms.
ANS: F PTS: 1
11. Treating labor relations as incidental and relegating them to the specialists in the
various countries are inappropriate.
ANS: T PTS: 1
12. Unlike the OECD, the Commission of the EU can translate guidelines into laws.
ANS: T PTS: 1
13. Labor unions interpreted the chapeau clause to mean “compliance with local law
supersedes the OECD guidelines.”
ANS: F PTS: 1 TOP: The Response of Trade Unions to

MNEs
14. The EU does not aim to establish minimum standards for social conditions that will
safeguard the fundamental rights of workers.
ANS: F PTS: 1 TOP: Regional Integration: The European

Union (EU)
15. The less one knows about how a structure came to develop in a distinctive way, the
more likely one is to understand it.
16. With the expansion of the EU in 2004 to include 10 new members that are relatively
low-income states, there has been an increased sensitivity to the problem of social
dumping.
ANS: T PTS: 1 TOP: Regional Integration: The European

Union (EU)
17. An “investment strike” is a concern of trade unions about multinationals refusing to

invest additional funds in the plant.
ANS: T PTS: 1 TOP: The Response of Trade Unions to

MNEs
18. The Social Accountability 8000 standards were drawn from the UN human rights
conventions.
ANS: T PTS: 1
TOP: Codes of Conduct – Monitoring HRM Practices around the World
19. Poaching of skilled employees never happens in Asian-Pacific countries.
ANS: F PTS: 1
TOP: Managing Human Resources in ‘Offshoring Countries’
20. Western multinational enterprises that are planning offshore activities in China should
not be concerned with guanxi.
ANS: F PTS: 1
MULTIPLE CHOICE
1. In Sweden and Germany the term “collective bargaining” means:

a. Negotiations between a local trade union
and management
b. Negotiations between an employers’
organization and a trade union at the
industry level
c. Bargaining process as a class struggle
between labor and capital
d. Bargaining at an open market for products
2. Conglomerate unions are:

a. Members employed in more than one
industry
b. Skilled occupational grouping across
industries
c. Open to all employees
d. Representatives of all grades of employees
in an industry
3. A lack of familiarity by multinational managers of local industrial and political

conditions has:
a. Worsened a conflict with a local firm that
could have been resolved
b. Conflicted with social norms
c. Encouraged the development of a union
d. Contributed to the failure of a MNE
4. McDonald’s company policy is to staff its restaurants with:

a. 90% nationals c. Bilingual managers
b. Only nationals d. Union employees
ANS: B PTS: 1 TOP: Key Issues in International Industrial

Relations
5. A multinational firm usually delegates the management of industrial relations to:

a. Their foreign c. An offshoring
subsidiaries division
b. The headquarters d. The marketing
industrial division division
ANS: A PTS: 1 TOP: Key Issues in International Industrial

Relations
6. Greater emphasis on formal management controls and close reporting systems tend to
be present in:
a. European firms c. Asian firms
b. USA firms d. Australian firms

Relations
7. Poor subsidiary performance tends to:

a. Be accompanied by decreased corporate
level involvement in local industrial
relations
b. Be accompanied by increased corporate
level involvement in industrial relations
c. Encourage the formation of labor unions
d. Be independent of corporate level
involvement in local industrial relations

Relations
8. Which country has the highest level of union membership?

a. USA c. Germany
b. Sweden d. Italy
ANS: B PTS: 1
9. Multinationals operating in Western Europe, Japan and Australia have a more serious
problem than wage level which is:
a. Restricted to c. The ability to vary
overtime provisions employment levels
b. Long term labor d. Unpredictable
contracts regulatory
environment
ANS: C PTS: 1
10. Recent evidence has shown that one of the priorities when making investment
location decisions is:
a. Presence of unions c. Equal opportunity
government
regulations
b. Capital resource d. The ability to
availability dismiss employees
ANS: D PTS: 1
11. International trade secretariats (ITS):

a. Are the acts of staging an investment
strikes by the multinational
b. Is a loose confederations to provide
worldwide links for the national unions in
a particular industry or trade
c. Is a lobbyist for restrictive national
legislation in the USA and Europe
d. Are clearing houses for information on
key labor provisions around the world
ANS: B PTS: 1 TOP: The Response of Trade Unions to

MNEs
12. The Chapeau Clause:

a. States that multinationals should adhere to
the guidelines within the framework of
law, regulations and labor relations and
employment practices in each country
they operate
b. Identifies a number of workplaces related
principles that should be respected by all
nations
c. Is a set of guidelines that cover disclosures
of information, competition, financing,
taxation and industrial relations
d. Is a key labor directive imposed by the EU
ANS: A PTS: 1 TOP: The Response of Trade Unions to

MNEs
13. The major objective of the implementation of the Single European Act was to:
a. Create a single coherent basis for action
by EU members
b. Establish the Single European Market
c. To create a social policy in regard to labor
laws and working conditions
d. Ensure labor uniformity across Europe
ANS: B PTS: 1 TOP: Regional Integration: The European

Union (EU)
14. Elements of International Trade Secretariats to achieve its long term goal of
transnational bargaining are all of the flowing EXCEPT:
a. Research and information
b. Call company conferences
c. Establishing company councils
d. Superior knowledge and expertise in
industrial relations
ANS: D PTS: 1 TOP: The Response of Trade Unions to

MNEs
15. Generally speaking, corporate headquarters:

a. Is seldom involved in labor agreements
made by foreign subsidiaries because
these agreements seldom effect
international plans nor create precedents
for negotiations in other countries
b. Is seldom involved in labor agreements
headquarters staff feel they do not
understand local regulatory and
institutional contexts
c. Is often involved in labor agreements
headquarters staff do not trust local labor
specialist to bargain effectively
d. Will become involved in labor agreements
these agreements may affect international
plans and/or create precedents for
negotiations in other countries
ANS: D PTS: 1 TOP: Key Issues in International Relations
16. A major problem applying the strategy of lobbying for restrictive national legislation
is:
a. The reality of conflicting national
economic interest particularly in times of
economic downturn
b. The reality of diffuse and uncoordinated
legislative processes
c. The reality of diverse interests by the
many and varied union representatives as
they seek to approach legislators
d. The reality of the complexity of labor
legislation and the inability of most
individual legislators to understand the
key issues involved

MNEs
17. Public uproar over working conditions of offshoring companies resulted in a universal
standard called:
a. ISO 9000 c. Childcare 2000
b. NGO watch d. Social
Accountability
8000
ANS: D PTS: 1
18. A major problem in the offshoring countries of India and China is:
a. Skill shortages c. Educational quality
b. Resource shortages d. Research and
development
ANS: A PTS: 1
19. Influencing wage levels to the extent that cost structures become uncompetitive is:
a. A byproduct of a c. A disadvantage of
successful trade unions
subsidiary
b. A result of d. A multinational
government problem
regulations
ANS: C PTS: 1
20. Labor unions response to multinationals are all of the following EXCEPT:
a. To agree to a major contractual request by
MNEs
b. To form international trade secretariats
c. To lobby for restrictive national legislation
d. To achieve regulations of MNEs by
international organizations

MNEs
21. Union influences can increase unit manufacturing cost in Europe by as much as:
a. 5% c. 15%
b. 20% d. 50%
ANS: C PTS: 1
22. Strike-proneness can be measured by

a. Frequency, size, c. Size, industry and
and duration duration
b. Duration, industry d. Frequency, industry
and size and size
ANS: A PTS: 1 TOP: Key Issues in International Industrial

Relations
23. Union decline can be linked to all of the following EXCEPT:

a. New form of work c. Changes in work
organization force structure
b. Globalization of d. Lessening of
production governmental
controls
ANS: D PTS: 1 TOP: Key Issues in International Industrial

Relations
24. A major management challenge for firms with global brands such as Nike has been:
a. The reaction of Western consumers to
allegations of unfair unemployment
practices used by subcontractors in
countries
b. Checking that performance and rewards
systems take into consideration codes of
conduct
c. Physical risk such as danger of staff being
taken hostage and of having property
damaged
d. Having national “managers” in various
countries with various structural forms for
coordination and accountability
ANS: A PTS: 1
25. The term “offshoring” is frequently used as a subcategory of:

a. MNE training c. Drilling
b. Outsourcing d. Internationalizing
ANS: B PTS: 1
26. International call-centers are an example of:

a. NGO c. Offshoring
activities
b. Social dumping d. Lobbying
ANS: C PTS: 1
27. Guanxi is:

a. A network connection based on dyadic,
personal relationships between people
b. A term used to describe skill shortages in
India and China
c. A flourishing business process
outsourcing industry
d. The world’s largest International call
center
ANS: A PTS: 1
28. Ex-host-country nationals ( EHCN) is

a. A person who was fired in a MNE and
wants to return to their home country
b. A person who studied abroad and returns
to their home country
c. A manager who is transferred from one
country to another and then returns to the
home country
d. An international traveler who is banned
from their home country
ANS: B PTS: 1
29. Common reasons for offshoring failure is all EXCEPT:

a. Unsatisfactory quality of products or
services
b. Problems of management control
c. Inadequate training
d. Rapid turnover of local staff
e. Language problems
ANS: C PTS: 1
30. Iron rice bowl refers to:

a. Additional iron supplement added in a
bowl of cereal
b. Guaranteed continuation of employment
c. Exclusive offshore activities in China
d. Stringent compensation differentials
ANS: B PTS: 1
SHORT ANSWER
1. What are some factors which may require multinational headquarters to be involved
in industrial relations?
ANS:
 A high degree of inter-subsidiary production integration, more

integration more involvement.
 The nationality of ownership of the subsidiary, US based firms tending
to assert more influence.
 A broad, international approach to human resource management in
general.
 Prior experience with industrial relations in the multinational.
 Subsidiary characteristics, acquisitions of mature companies get less
involvement, key subsidiaries get more involvement, and subsidiaries
getting more resources or performing poorly tend to get more attention.
 General management attitudes towards unions if a factor, as is the
tendency toward strikes in the country.
PTS: 1 TOP: Key Issues in International Industrial Relations
2. What are the three ways that a trade union may limit the strategic choices of
multinationals?
ANS:
 Influencing wage levels and related costs.

 Restricting the ability of firms to vary employment levels (layoffs).
 Hindering or preventing global integration of operations by deferring
to union requests to maintain local units and employment processes.
PTS: 1 TOP: Trade Unions and International Industrial Relations
3. Trade unions share what seven concerns about dealing (negotiating) with a MNE?
ANS:
 MNEs have formidable financial resources and can withstand strikes, etc.
 MNEs have access to alternative sources of supplies
 MNEs can move production facilities to other countries.
 MNEs have a remote location for the final authority of the firm, being hard to
access and influence.
 MNEs operate production facilities in many different industries and operate
across industrial base.
 MNEs often have superior knowledge and expertise in industrial relations.
 MNEs can withhold resources for updating a plant and thereby hasten its
obsolescence, the so-called “investment strike”.
PTS: 1 TOP: The Response of Trade Unions to MNEs
4. What are some examples of social dumping?
ANS:
 Moving work from one geographic region of the world to another.
 The need for trade union solidarity to prevent workers in one region from
accepting pay cuts to attract investments.
PTS: 1 TOP: Regional Integration: The European Union (EU)
5. How have unions responded to multinationals as the bargaining power of the

multinationals has grown?
ANS:
 Created an International Trade Secretariat.
 Lobbied with local governments for restrictive national legislation.
 Organized for the regulation of multinationals by international organizations
such as the United Nations.
PTS: 1 TOP: The Response of Trade Unions to MNEs
6. What does the term offshoring mean? What are some of the weaknesses in the
business process outsourcing (BPO) industry?
ANS:
Offshoring is a subcategory of outsourcing often defined as transferring some of the
firm’s activities and decision processes to outside providers by way of contracting the
system or product. Offshoring can result in quality control problems or extra costs if
the contract is not well considered.
PTS: 1 TOP: Managing Human Resources in ‘Offshoring Countries’

7. What is guanxi?
ANS:
Guanxi is a Chinese term for informal social and business relationships that create a
set of role expectations and assurances.
8. What are some reasons that an offshoring activity can fail?
ANS:
The human resource management role in setting up these offshoring activities can be
very limited so that cross cultural people issues are not considered. This lack of
consideration to the personal side of the contractual relationship can lead to
miscommunications and unrealistic expectations on the part of both parties which
may result in quality control and production problems.
CHAPTER 10: IHRM Trends and Future Challenges
TRUE/FALSE
1. The existence of universal ethical principles can be seen in agreements that exist
among nations in the United Nations Declaration of Human Rights.
2. Bribery involves the payment to agents to motivate them to complete task they would
do in the normal course of their duties.
3. Bribery undermines equity, efficiency and integrity in the public service.
4. There has been an international movement to criminalize the practice of bribery.
5. The Foreign Corrupt Practice Act (FCPA) was enacted to prohibit German based
firms and nationals from making bribery payment.
6. HR professionals provide training in understanding the difference between corrupt

bribery payments, gifts and allowable facilitation payments.
7. In 1996 the United Nations adapted the Declaration Against Corruption and Bribery in
International Commercial Transactions.
8. MNE should not consider integrity as a basis for selecting an international assignee.
9. Expatriate can cut “ethical corners” to deliver good financial results as they are in a
foreign country.
10. By systematically analyzing people and processes, IHRM professionals may

contribute to “stabilizing risk through recommendations that “harden” processes in the
value chain.
11. The Berlin-based non-government lobby group, Transparency International (TI)

publishes an n annual Corruption Perceptions Index.
12. The three least corrupt countries in the world are New Zealand, Denmark and
Singapore.
13. Each member of the OECD must submit a peer review report listing all their
government officials bribed throughout the year.
14. There is no right or wrong in business.
15. Complexity of evaluating the overall performance of foreign subsidiaries and their
senior management team will remain a dominant issue in international business in the
twenty-first century.
16. Wal-Mart is an example of an NGO.

17. Greenpeace, an environmental group, has become internationalized and tend to have
National ‘managers’.
18. Traditionally many domestic and international human resource managers have never
been responsible for legal compliance and training issues related to safety in the
workplace.
19. Terrorism is perceived to be a significant threat by MNEs.
20. Cyber-terrorism is activities to secure internal communications, open records, and

maintenance of back-up system.
21. The field of IHRM has been criticized as being slow to develop as a rigorous body of
theory.
MULTIPLE CHOICE
1. The “general affairs” aspect of IHRM refers to:

a. The expectation that the human resource
function will be the first line of defense in
dealing with unpredictable and emergent
issues from varied environments.
b. The mass conglomeration of all the
different aspect of the IHRM.
c. The expectation that the human resource
function will be the resource of last resort
for unexpected issues and problems
d. The cross-cultural, coordinative aspect of
IHRM
2. For the ethical absolutist:

a. There are no universal or international
rights and wrongs
b. One should always do what one would do
at home
c. There are fundamental principles of rights
and wrongs
d. There are no rights and wrongs as far as
business is concerned
3. “When in Rome, do as the Romans do” is an example of:

a. Ethical absolutism c. Ethical relativism
b. Ethical d. Ethical religion
universalism
4. The need for international accords and corporate codes of conducts have :
a. Grown commensurately with the spread of
international business
b. Decreased considerably with the spread of
c. Remained the same with the spread of
d. Decreased due to the countries becoming
more socially attune
5. What are the two most frequent ethical problems encountered by international
managers?
a. Child labor and c. Bribery and
prostitution pornography
b. Bribery and d. Corruption and
corruption slavery
6. The Foreign Corrupt Practice Act (FCPA) was passed in

a. 1965 c. 1980
b. 1977 d. 1959
7. As of 2009 how many countries have adapted the Declaration Against Corrupt and
Bribery in International Commercial Transactions?
a. 30 c. 38
b. 15 d. 50
8. The countries perceived to be the least corrupt are:

a. USA, Chile and c. Guinea, Myanmar
Belgium and Haiti
b. Denmark, New d. Canada,
Zealand, Singapore Switzerland and
Sweden
9. Instruments in developing and maintaining ethical cultures by expatriates can be

reinforced by
a. Performance appraisal, compensation
programs and trips home
b. Money, money and money
c. Exotic vacations and bonuses
d. Performance appraisals, shorter hours and
trips home
10. To avoid the temptation to cut “ethical corners” expatriates should:

a. Be sent on vacations
b. Not be pressured to meet unreasonable
goals
c. Be given ethical and cultural training
d. Should have a compensate salary to
maintain an appropriate standard of living

11. Which country lobbied for many years to enact uniform domestic government
regulations concerning bribery and corruption in the MNE environment?
a. Germany c. USA
b. Finland d. Switzerland
12. Who adopted the Declaration Against Corruption and Bribery in International
Commercial Transactions?
a. The Geneva c. The USA
Convention
b. The EU d. The United Nations
13. A typical short-term assignment in IHRM is a:

a. Training position c. Expatriate position
b. Marketing position d. Virtual position
14. IHRMs have largely ignored the non-government organizations because:

a. They don’t have the same physical risk
b. Their management ethos are values-
driven, charitable and philanthropic ideals
c. Their management ethos are reflected by
effectiveness and efficiency
d. They do not have national managers
15. The macro level of terrorist threats is an attack:

a. At the level of the individual person
b. At the specific region or industry
c. Of the global environment
d. At the cyber or information system
environment

16. Activities to secure internal communications (emails, telephone) and employee
privacy regulations would fall under which risk assessment category?
a. Cyber-terrorism c. Emergency
preparedness
b. Industrial d. Pandemics
espionage, theft and
sabotage
17. Which of the following would be considered in the risk assessment category of in-
facility security?
a. Protocol for c. The sabotage of
evacuation software systems
b. Bomb threat d. Providing portable
procedures 5 minute air packs
18. What does stabilizing risk through “harden” processes in the value chain mean?
a. To recruit people with capabilities and
skills relevant to identified risk
assessments
b. Replacing people with machines to ensure
seniority protocols
c. Recruiting security specialist rather than
functional experts
d. Eliminating at-risk steps in the value chain
19. What would be considered a NGO?

a. Red Cross c. Audi
b. Wal-Mart d. NATO
20. It is generally agreed internationally that the one thing that can most readily
undermine equity, efficiency and integrity in the public service, undercut public
confidence in markets, add cost to products and effects the safety and well-being of
the general public is:
a. Bribery c. Sabotage
b. Facilitating d. Cyber-terrorism
payments
21. The field of international human resource management has been regarded as :
a. A long standing cornerstone of business
studies
b. Necessary in the MNE schools
c. A marginal academic area
d. Problematic
22. Multinational chief executives report terrorism:

a. Is not a significant threat to business
growth, nor a threat to other organizations
b. Is a significant threat to business growth,
but is not a threat to their organizations
c. Is not a significant threat to business
growth , but is a threat to their
organization
d. Is a significant threat to business growth
and a significant threat to their
organization
23. Research in the field of HRM:

a. Is relatively cheap and straightforward and
simple
b. Is relatively expensive, yet straight
forward and simple
c. Is relatively expensive and complicated
d. Is relatively cheap and uninteresting to
most researchers

24. A working set of corporate risk assessment categories – a starting point for a MNE
specific risk audit:
a. Do not yet exist
b. Consists of in value and out of value
elements and counter espionage
c. Disaster protocols, workplace violence &
industrial theft
d. Consists of in- facility emergency and
disaster preparedness, in facility security,
industrial espionage, cyber-terrorism and
out-of-facility fire and travel risks
25. Emerging risk categories are all EXCEPT:

a. Avian flu c. Pandemics
b. Political terrorist d. Bribery
groups
26. Bribery is:

a. Payments to agents to do things that are
inconsistent with the purpose of their
position to gain unfair advantage
b. Activities to secure internal
communications in order to gain an unfair
advantage
c. The act of hardening facilities in order to
gain an unfair advantage
d. Unethical pressure to deliver good
financial statements
27. What year was the International Journal of Human Resource Management
established?
a. 1970 c. 1990
b. 1980 d. 2000
28. Low risk firms in low risk environments:

a. Do not need to invest as heavily in
security systems and protocols
b. Should follow security strategies that
focus on hardening individual sites
c. Should invest in elaborate risk
management strategies
d. Should build redundant infrastructure
29. The three levels of terrorist threats are all EXCEPT:

a. Micro level c. Intra level
b. Primary level d. Macro level
30. Most executives:

a. Do not have a system to respond to critical
incidents such as kidnapping of an
executive
b. Are unwilling to discuss the protocols
processes systems and structures in
sensitive areas concerning critical
incidents
c. Outsource their security concerns
d. Are unwilling to negotiate with terrorist
SHORT ANSWER
1. What are five categories of external risk assessment which needs to be addressed by a
multinational enterprise?
ANS:
 In- facility emergency and disaster preparedness

 In-facility security
 Industrial espionage, theft and sabotage
 Cyber-terrorism
 Out-of-facility fire and travel risks
2. What are the three levels of international human resource management analysis of
potential risk from terrorist?
ANS:
 Primary-the level of the person and firm

 Micro-the level of specific industries, regions or international value
chains
 Macro- the level of the impact of a terrorist attack on the global
environment, the world’s economy, subsequent consumer demand
3. What are some non-government organizations and do they have the same international
human resource management issues?
ANS:
Examples of international NGOs in the text include the Red Cross/Red Crescent,
World Vision and Doctors Without Borders. Employees may be more internally
motivated and share norms and values to a very high degree, but the physical dangers
of work and need to recruit, train and reward these individuals is the same as the
private sector. Little research has been done on HR practices for this institutional
category.
4. What are some developments in the international sector concerning bribery and
corruption?
ANS:
In the US the Foreign Corrupt Practices Act makes it a crime to give bribes to
government officials abroad or their agents. The UNs Declaration Against Corruption
and Bribery in Commercial Transactions committed member states to criminalize
bribery and deny tax deductibility for bribes. The OECD Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions pledged
members to establish legislation criminalizing the bribing of officials on an
extraterritorial basis.
5. Security risk can be partitioned into two dimensions. What are the dimensions and
describe low and high risk per each dimension?
ANS:
Gillingham presents risk analysis in terms of partitioning security risk into an external
environmental dimension (geographic region of operation) and an internal firm
dimension (industry, firm media profile, national affiliation associated with the MNE).
Low-risk firms in low-risk environments do not need to invest as heavily in security
systems and protocols. High-risk firms in low-risk environments should follow
security strategies that focus on hardening individual sites. Low-risk firms in high-risk
environments can follow security strategies that disperse activities across the region
and build redundant infrastructure, so that value chain activities in the high-risk
region can be provided by out of region units. High-risk firms in high-risk
environments must invest much more in quite elaborate risk management strategies.

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BUS 325 Global Human Resource Management

International Human Resource Management by Dowling, Festing, & Engle Test

ANS: F PTS: 1 TOP: Defining International HRM

2. The HR department is the major user of language translation services.

5. Culture shock is a phenomenon experiences by people who move across cultures.

ANS: T PTS: 1 TOP: The Cultural Environment

6. A domestic HRM is involved with employees within one national boundary.

ANS: T PTS: 1 TOP: Defining International HRM

ANS: F PTS: 1 TOP: Defining International HRM

8. Awareness of cultural differences is not essential for the HR manager at corporate

9. Multidomestic industries is one in which competition in each country is essentially

ANS: T PTS: 1 TOP: Industry Type

ANS: T PTS: 1 TOP: Industry Type

ANS: T PTS: 1 TOP: The Cultural Environment

ANS: T PTS: 1 TOP: Industry Type

ANS: F PTS: 1 TOP: Defining International HRM

ANS: T PTS: 1 TOP: The Changing Context of IHRM

17. Global mindset is necessary for the success of an international company.

ANS: T PTS: 1 TOP: Scope of the Book

ANS: F PTS: 1 TOP: Defining International HRM

ANS: F PTS: 1 TOP: The Cultural Environment

ANS: A PTS: 1 TOP: Defining International HRM

2. Which of the following is not a category of an employee in an international firm?

ANS: D PTS: 1 TOP: Defining International HRM

3. Which department of an organization is the major user of language translation

4. Tax equalization policies concerning expatriates are designed to :

6. One major difference between domestic and international HRM is:

7. Which of the following is not a function of internal resource management?

9. Cultural difference is not necessarily equivalent to:

ANS: C PTS: 1 TOP: The Cultural Environment

10. A multidomestic industry is:

ANS: A PTS: 1 TOP: Industry Type

11. Examples of a global industry include all of the following except:

ANS: D PTS: 1 TOP: Industry Type

ANS: B PTS: 1 TOP: Industry Type

13. Emnic refers to which kind of specific aspect of concepts or behaviors?

ANS: B PTS: 1 TOP: The Cultural Environment

14. What is a key driver for firms seeking international markets?

15. Which ratio is not part of” index of transnationality”?

16. Which of the following is a global mindset?

17. An asymmetric event is:

ANS: A PTS: 1 TOP: Applying a Strategic View of IHRM

20. As foreign subsidiaries matures the local HR activities:

21. Which three dimensions are presented in Morgan’s model of IHRM?

ANS: B PTS: 1 TOP: Defining International HRM

22. Differences between domestic and international HRM include:

23. Senior managers with little international experience:

24. Successful internationalizing the HR function require all except:

25. In Porter’s value-chain model:

ANS: B PTS: 1 TOP: Industry Type

ANS: D PTS: 1 TOP: Scope of the Book

ANS: C PTS: 1 TOP: Defining International HRM

29. International HRM is reflected in:

30. As a foreign subsidiary matures:

PTS: 1 TOP: Scope of the Book

2. What are the 3 categories of employees in an international firm?

PTS: 1 TOP: Defining International HRM

PTS: 1 TOP: Differences between Domestic and International HRM

4. Why is an awareness of cultural differences important in an international company?

PTS: 1 TOP: The Cultural Environment

5. What is the difference between a multidomestic industry and a global industry?

PTS: 1 TOP: Industry Type

CHAPTER 2: The Cultural Context of IHRM