15 Chapter - Managing Human Resources Globally
Chapter 15
Managing Human Resources Globally
True / False Questions
1. Currently, exports account for 11 percent of the gross domestic product in the United
States, and they have been growing at a rate of 12 percent a year since 1987.
True False
2. All NAFTA, EEC, and GATT member countries share a common currency, the euro.
True False
3. The General Agreement on Tariffs and Trade is an international framework of rules for
reducing trade barriers around the world.
True False
4. NAFTA, the EEC and GATT all exemplify events that are reducing competition among
companies worldwide.
True False
5. The culture of the country in which the facility is located most influences the company's
international HRM practices.
True False
6. Uncertainty avoidance is concerned with how a culture deals with hierarchical power
relationships.
True False
7. The United States has a high power distance, individualistic culture.
True False
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Chapter 15 - Managing Human Resources Globally
8. Power distance describes the division of roles between the sexes within a society.
True False
9. Cultures with weak uncertainty avoidance tend to be rather easygoing and flexible
regarding different views.
True False
10. Cultures with small power distance stress putting relationships before money, helping
others, and preserving the environment.
True False
11. Japan's culture is considered to be quite feminine according to Hofstede's
masculinity/femininity dimension.
True False
12. Hofstede found that culture has a profound impact on a country's economic health by
promoting certain values that either aid or inhibit economic growth.
True False
13. Cultures differ strongly on such things as how subordinates expect leaders to lead, how
decisions are handled within the hierarchy, and what motivates individuals.
True False
14. Collectivist cultures, as well as those with less of an authoritarian orientation, value group
decision making and participative management practices more highly than do individualistic
cultures.
True False
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Chapter 15 - Managing Human Resources Globally
15. Human capital refers to the productive capabilities of individuals.
True False
16. Countries with high human capital are attractive sites for direct foreign investment that
creates high-skill jobs.
True False
17. In the United States, employees have a legal right to codetermination, which means that a
firm's employees have direct influence on the important decisions that affect them, such as
large investments or new strategies.
True False
18. A country's economic system is completely unrelated to its level of human capital.
True False
19. Third-country nationals are employees born in a country other than the parent country or
host country, but who work in the host country.
True False
20. Domestic companies do not face problems with cultural diversity.
True False
21. Companies become international in scope when they build facilities in a number of
different countries, attempting to capitalize on lower production and distribution costs in
different locations.
True False
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Chapter 15 - Managing Human Resources Globally
22. The HRM problems multinational companies face are completely different from those
faced by international companies.
True False
23. Multinational companies are increasingly employing inpatriates, increasing the need for
cross-cultural training.
True False
24. Transnational process refers to the extent to which the firm's planning and decisionmaking process includes representatives and ideas from a variety of cultures.
True False
25. Global participation does not necessarily ensure that each country is providing managers
to the company's ranks. This problem refers to transnational process.
True False
26. The perception dimension refers to the skills that enable a manager to maintain a positive
self-image and psychological well-being.
True False
27. Allowances are often offered to make the expatriate assignment more attractive.
True False
Multiple Choice Questions
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Chapter 15 - Managing Human Resources Globally
28. All of the following are trends that have led to global market expansion, except
A. the current geo-political climate fosters tourism and foreign investment.
B. expansion opens up new markets and larger numbers of potential customers.
C. many companies are building production facilities in other countries as a means of
capitalizing on lower labor costs.
D. there has been a rapid increase in telecommunications and information technology.
29. Which one of the following is not true of the European Economic Community?
A. Most, but not all, of the European nations have agreed to engage in free trade with one
another.
B. Commerce is regulated by an overseeing body called the World Trade Organization.
C. Its overseeing body is the European Commission.
D. Members share a common currency, the euro.
30. Which one of the following countries is not a NAFTA member?
A. Canada
B. Chile
C. Mexico
D. United States
31. NAFTA has increased U.S. investment in Mexico because of Mexico's
A. lower labor costs for high-skilled employees.
B. lower labor costs for low-skilled employees.
C. high power distance.
D. high collectivism.
32. _____, with its population of over 1 billion and a trend toward opening its markets to
foreign investors, presents a tremendous potential market for goods.
A. Russia
B. Malaysia
C. Japan
D. China
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Chapter 15 - Managing Human Resources Globally
33. Which international organization currently consists of over 100 member nations?
A. European Economic Community
B. NAFTA
C. GATT
D. ASEAN
34. The most recent round of GATT negotiations resulted in an agreement of all of the
following except,
A. establishing rules for investing and trading in services.
B. cutting tariffs by 40 percent.
C. expand protection of intellectual property.
D. increasing government subsidies to businesses.
35. Which one of the following factors affecting HRM in global markets represents the set of
important assumptions (often unstated) that members of a community share in common about
the world, how it works, and what things are important?
A. Human capital
B. Culture
C. Foreign competition
D. Codetermination
36. Which of the following is least likely to be a factor affecting HRM in global markets?
A. Culture
B. Technical capital
C. Political-legal system
D. Economic system
37. Which of the following county has the highest masculinity?
A. Netherlands
B. Russia
C. Japan
D. France
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Chapter 15 - Managing Human Resources Globally
38. Which of the following countries is not very high in individualism?
A. United States
B. Great Britain
C. The Netherlands
D. Taiwan
39. According to Hofstede's cultural dimensions, a culture where people are expected to look
after their own interests and the interests of their immediate families is one high in
A. power distance.
B. masculinity.
C. individualism.
D. uncertainty avoidance.
40. Which of the following HR practices would least likely be found in collective cultures?
A. Employee assistance programs
B. Participative management practices
C. Job-based evaluations and incentives
D. Project-based organizational structures
41. Assume that you are visiting Mexico for a business meeting and you call your host by his
first name rather than his title. He seems offended. Your offense most likely stemmed from a
difference between the U.S. culture and Mexico's culture on which dimension?
A. Individualism/collectivism
B. Uncertainty avoidance
C. Power distance
D. Long-term/short-term orientation
42. Values such as success, performance, assertiveness, and competition are associated with
A. short-term oriented cultures.
B. masculine cultures.
C. high power distance cultures.
D. low uncertainty avoidance.
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Chapter 15 - Managing Human Resources Globally
43. Which one of the following countries has the most masculine culture according to
Hofstede's masculinity/femininity dimension?
A. Japan
B. Russia
C. Sweden
D. Norway
44. According to Hofstede's cultural dimensions, a culture that is characterized by easygoing
and flexible people regarding different views and taking each day as it comes is one that is
A. low in uncertainty avoidance.
B. high in femininity.
C. low in power distance.
D. high in long-term orientation.
45. The Hofstede's dimension that deals with the degree to which a culture prefers structured
over unstructured conditions is
A. power distance.
B. individualism.
C. risk aversion.
D. uncertainty avoidance.
46. The Japanese criticism of management practices in the United States illustrates the
differences in
A. uncertainty avoidance.
B. power distance.
C. long-/short-term orientation.
D. masculinity-femininity values.
47. According to Hofstede's research, a country's economic health is most positively
correlated with a high
A. masculinity.
B. uncertainty avoidance.
C. power distance.
D. individualism.
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Chapter 15 - Managing Human Resources Globally
48. Individualistic cultures often exhibit
A. increased use of profit-sharing plans.
B. greater differences between the highest- and lowest-paid individuals in the organization.
C. flatter salary structures.
D. smaller differences between the highest- and lowest-paid individuals in the organization.
49. Countries with which kind of cultural dimension tend to have the flattest salary
structures?
A. Long-term oriented
B. Short-term oriented
C. Individualistic
D. Collectivist
50. The trend for U.S. companies to relocate their currently unionized low-skill-high-wage
manufacturing and assembly jobs to Mexico is explained in part by Mexico's
A. strong political-legal system.
B. low level of human capital.
C. strong economic system.
D. low power distance culture.
51. Which of the following countries has the greatest commitment to equal employment
opportunities for women and minorities as characterized by their political/legal system?
A. Germany
B. Japan
C. United States
D. China
52. Differences in international economic systems generally impact all but one of the
following. Name the exception.
A. Incentives for individuals to increase human capital
B. Promotion systems, particularly among domestic companies
C. Compensation systems, particularly among global companies
D. The appropriateness of various HR practices
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Chapter 15 - Managing Human Resources Globally
53. In _____ systems, there is less opportunity to develop human capital as compared to
_____ systems, but there is greater incentive for such investment through higher monetary
rewards.
A. socialist; capitalist
B. capitalist; socialist
C. individualistic; collectivist
D. collectivist; individualistic
54. A country that serves as the home for a corporation's headquarters is referred to as the
A. host country.
B. parent country.
C. first country.
D. third country.
55. An individual who was born in the United States and is currently working in Spain for a
company headquartered in Germany would be considered
A. parent-country national.
B. host-country national.
C. third-country national.
D. home-country national.
56. An individual who was born in Mexico and is currently working for an American
company's facility in Mexico is referred to as a
A. parent-country national.
B. host-country national.
C. third-country national.
D. home-country national.
57. John, who works for a U.S.-based company, is on assignment for his company in Japan.
He is known as
A. an expatriate.
B. a parent-country national.
C. a host-country national.
D. a third-country national.
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Chapter 15 - Managing Human Resources Globally
58. Which of the following multinational corporations tends to have policies and practices
that are most ethnocentric?
A. United States multinationals
B. German multinationals
C. Japanese multinationals
D. British multinationals
59. The use of ethnocentric HRM practices generally
A. increases the number of company impatriates.
B. decreases the number of HRM-related problems and issues.
C. decreases the number of company expatriates.
D. increases the number of HRM-related problems and issues.
60. A firm that is currently exporting goods to another country is at what level of global
participation?
A. Domestic
B. International
C. Multinational
D. Global
61. A firm that is currently locating facilities in a large number of other countries in order to
capitalize on lower production and distribution costs is at what level of global participation?
A. Domestic
B. International
C. Multinational
D. Global
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Chapter 15 - Managing Human Resources Globally
62. A major U.S automaker has plants all over the world. It continues to shift its production
from the United States, where labor unions have gained high wages for their members, to
facilities in Mexico and China, where the wages are substantially lower. The company
minimizes distribution and labor costs by locating facilities in central and eastern European
countries such as Poland and Hungary for manufacturing and assembling automobiles to sell
in the European market. This company is an example of
A. an international company.
B. a multinational company.
C. a global company.
D. a transnational company.
63. Inpatriates are
A. managers from countries other than the parent country placed in facilities of other
countries.
B. managers from different countries who become part of the corporate headquarters staff.
C. managers from one state being moved to another part of the country.
D. managers from one division of the company being moved to another division.
64. Which one of the following is not true of global organizations?
A. They compete on state-of-the-art, top-quality products and services with lowest costs
possible
B. They increasingly emphasize flexibility and mass customization of products to meet the
needs of particular clients
C. They are usually driven to locate facilities in a country as a means of reaching that
country's market or lowering production costs and must deal with the differences across the
countries
D. They attempt to create synergy through cultural differences
65. Which attribute of a transnational HR system refers to making HR decisions from a global
rather than a national or regional perspective?
A. Transnational scope
B. Transnational participation
C. Transnational representation
D. Transnational process
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Chapter 15 - Managing Human Resources Globally
66. Which attribute of a transnational HR system refers to the multinational composition of a
company's managers?
A. Transnational scope
B. Transnational participation
C. Transnational representation
D. Transnational process
67. Which attribute of a transnational HR system refers to the extent to which planning and
decision making include managers from different cultures?
A. Transnational scope
B. Transnational participation
C. Transnational representation
D. Transnational process
68. Research on transnational HR systems within Canadian and American companies reveals
that firms' HR systems are far
A. less transnational than their strategic planning systems.
B. more transnational than their organizational structures.
C. less transnational than their accounting systems.
D. more transnational than their accounting systems.
69. According to estimates, what percentage of American employees sent on expatriate
assignments overseas return early?
A. Less than 15 percent
B. 15 to 40 percent
C. 40 to 50 percent
D. Over 50 percent
70. Among American companies, which set of skills tends to be the most frequently used in
expatriate selection?
A. Interpersonal skills
B. Foreign language skills
C. Communication skills
D. Technical skills
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Chapter 15 - Managing Human Resources Globally
71. Which of the following dimensions that have been shown to be necessary for successful
expatriates is most closely related to the individual's psychological well-being?
A. The culture dimension
B. The self dimension
C. The relationship dimension
D. The perception dimension
72. Which one of the following dimensions is not an adaptive skill for expatriate success?
A. The financial dimension
B. The self dimension
C. The relationship dimension
D. The perception dimension
73. According to one study of international assignees, the most important selection criteria is
A. flexibility and adaptability.
B. job knowledge and motivation.
C. family situation.
D. relational skills.
74. Recent evidence concerning women expatriates suggests that
A. women still are not accepted as equals in most countries.
B. the novelty of their presence increases their credibility among locals.
C. women don't desire international assignments.
D. placement of women expatriates is on the decline.
75. Which of the following is not a major consideration for assessing managers' abilities to
adapt to a new cultural environment as expatriates?
A. Religion
B. Motivation
C. Language ability
D. Family considerations
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Chapter 15 - Managing Human Resources Globally
76. Identify the question that is helpful to get an insight on the "Resourcefulness and
initiative" of an expatriate candidate?
A. How is each member of the family reacting to this possible move?
B. Is the candidate independent; can he make and stand by his decisions and judgments?
C. Does the candidate understand his own culturally derived values?
D. Does the candidate consider the assignment anything other than a temporary overseas trip?
77. Focusing on an expatriate candidate's "basic attitude towards the company", and "any
history or indication of interpersonal problems with the company" is helpful in gaining an
insight on which of the following?
A. Motivation
B. Resourcefulness
C. Adaptability
D. Career planning
78. Which of the following is not generally emphasized in cross-cultural training programs?
A. How host country employees view their own culture
B. Relevant aspects of the host country's culture
C. Relevant aspects of the host country's human capital system
D. How to communicate accurately in the new culture
79. John is undergoing a cross-cultural training to learn more about the country he is about to
visit. During the training, he learns that in this country, if a man takes another's hand on the
street, it's a sign of mutual respect. Which country is John visiting?
A. Russia
B. Japan
C. Saudi Arabia
D. Mexico
15-15
Chapter 15 - Managing Human Resources Globally
80. In which county do individuals perform a bizarre handshake whereby, after pressing
together the palms, they will slide their hands upward to grasp each other's thumbs?
A. France
B. Germany
C. Hong Kong
D. Mexico
81. The total compensation plan that equalizes the purchasing power of the expatriate
manager with that of employees in similar positions in the home country and provides
incentives to offset the inconvenience incurred in the location is known as
A. the home-country approach.
B. the balance-sheet approach.
C. the equalization approach.
D. the host-country approach.
82. In addition to base salary, total expatriate pay packages generally include all but one of
the following components. Name the exception.
A. Competency-based pay adjustments
B. Benefits
C. Tax equalization allowances
D. Allowances
83. Approximately what percent of workers want to leave the company after returning from
an overseas assignment?
A. 10 percent
B. 15 percent
C. 20 percent
D. 30 percent
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Chapter 15 - Managing Human Resources Globally
84. The extent to which expatriates receive recognition from peers and bosses following their
expatriate assignment refers to
A. validation.
B. communication.
C. adjustment.
D. expectation.
85. According to recent research, managers whose job expectations and nonwork expectations
were more closely fulfilled during their expatriate assignment generally exhibited which of
the following upon their return?
A. Higher job performance and job satisfaction
B. Higher repatriate adjustment and job satisfaction
C. Higher repatriate adjustment and job performance
D. Higher job performance and turnover
Essay Questions
86. What led to formation of the European Economic Community (EEC)? Describe how the
EEC has affected the global economy.
87. Name and discuss the four factors that affect HRM in global markets. Which of them do
you think is the most important factor and why?
15-17
Chapter 15 - Managing Human Resources Globally
88. Define Hofstede's cultural dimensions and discuss their importance for HRM.
89. Global participates have three sources when staffing their operations. Name and define
these sources.
90. What are the different levels of global participation? Describe the activities/structure of
companies existing at each level?
91. Describe each of the three attributes of the transnational HRM system.
15-18
Chapter 15 - Managing Human Resources Globally
92. How effective are most U.S. companies in managing their expatriates? What types of
things can be done in selecting expatriate managers that might increase the percentage of
successful assignments?
93. Discuss some of the areas and questions that should be included in an interview worksheet
for international candidates to assess their ability to adapt to an expatriate assignment.
94. Discuss some of the areas in which expatriates can be trained to communicate more
effectively when language barriers exist.
95. What is the purpose of the balance-sheet approach to expatriate compensation, and what
are its four major components and their respective purposes?
15-19
Chapter 15 - Managing Human Resources Globally
96. How effective are U.S. companies in their repatriation of employees? Cite evidence in
support of your position. What can companies do to increase repatriation adjustment rates?
15-20
Chapter 15 - Managing Human Resources Globally
Chapter 15 Managing Human Resources Globally Answer Key
True / False Questions
1. (p. 680-681) Currently, exports account for 11 percent of the gross domestic product in the
United States, and they have been growing at a rate of 12 percent a year since 1987.
TRUE
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Hard
Learning Objective: 15-1
Topic: Introduction
2. (p. 681-683) All NAFTA, EEC, and GATT member countries share a common currency, the
euro.
FALSE
AACSB: Reflective Thinking Skills, Financial Theories, Analysis, Reporting, and Markets, Domestic and Global Economic Environments of
Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-1
Topic: European Economic Community
3. (p. 682) The General Agreement on Tariffs and Trade is an international framework of rules
for reducing trade barriers around the world.
TRUE
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-1
Topic: General Agreement on Tariffs and Trade
15-21
Chapter 15 - Managing Human Resources Globally
4. (p. 683) NAFTA, the EEC and GATT all exemplify events that are reducing competition
among companies worldwide.
FALSE
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-1
Topic: General Agreement on Tariffs and Trade
5. (p. 683) The culture of the country in which the facility is located most influences the
company's international HRM practices.
TRUE
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-2
Topic: Culture
6. (p. 685) Uncertainty avoidance is concerned with how a culture deals with hierarchical power
relationships.
FALSE
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
7. (p. 685) The United States has a high power distance, individualistic culture.
FALSE
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
15-22
Chapter 15 - Managing Human Resources Globally
8. (p. 685) Power distance describes the division of roles between the sexes within a society.
FALSE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
9. (p. 685) Cultures with weak uncertainty avoidance tend to be rather easygoing and flexible
regarding different views.
TRUE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
10. (p. 685) Cultures with small power distance stress putting relationships before money,
helping others, and preserving the environment.
FALSE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
11. (p. 685) Japan's culture is considered to be quite feminine according to Hofstede's
masculinity/femininity dimension.
FALSE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
15-23
Chapter 15 - Managing Human Resources Globally
12. (p. 686) Hofstede found that culture has a profound impact on a country's economic health
by promoting certain values that either aid or inhibit economic growth.
TRUE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills, Domestic and Global Economic Environments of
Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-2
Topic: Implications of Culture for HRM
13. (p. 686) Cultures differ strongly on such things as how subordinates expect leaders to lead,
how decisions are handled within the hierarchy, and what motivates individuals.
TRUE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Implications of Culture for HRM
14. (p. 686) Collectivist cultures, as well as those with less of an authoritarian orientation, value
group decision making and participative management practices more highly than do
individualistic cultures.
TRUE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-2
Topic: Implications of Culture for HRM
15. (p. 688) Human capital refers to the productive capabilities of individuals.
TRUE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-2
Topic: Education-Human Capital
15-24
Chapter 15 - Managing Human Resources Globally
16. (p. 689) Countries with high human capital are attractive sites for direct foreign investment
that creates high-skill jobs.
TRUE
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-2
Topic: Education-Human Capital
17. (p. 689) In the United States, employees have a legal right to codetermination, which means
that a firm's employees have direct influence on the important decisions that affect them, such
as large investments or new strategies.
FALSE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Political-Legal System
18. (p. 690) A country's economic system is completely unrelated to its level of human capital.
FALSE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-2
Topic: Economic System
19. (p. 692-693) Third-country nationals are employees born in a country other than the parent
country or host country, but who work in the host country.
TRUE
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-3
Topic: Types of International Employees
15-25
Chapter 15 - Managing Human Resources Globally
20. (p. 694) Domestic companies do not face problems with cultural diversity.
FALSE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-4
Topic: Levels of Global Participation
21. (p. 695) Companies become international in scope when they build facilities in a number of
different countries, attempting to capitalize on lower production and distribution costs in
different locations.
FALSE
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-4
Topic: Levels of Global Participation
22. (p. 695) The HRM problems multinational companies face are completely different from
those faced by international companies.
FALSE
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-4
Topic: Levels of Global Participation
23. (p. 695) Multinational companies are increasingly employing inpatriates, increasing the need
for cross-cultural training.
TRUE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills, Domestic and Global Economic Environments of
Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-4
Topic: Levels of Global Participation
15-26
Chapter 15 - Managing Human Resources Globally
24. (p. 696) Transnational process refers to the extent to which the firm's planning and decisionmaking process includes representatives and ideas from a variety of cultures.
TRUE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-4
Topic: Levels of Global Participation
25. (p. 696) Global participation does not necessarily ensure that each country is providing
managers to the company's ranks. This problem refers to transnational process.
FALSE
AACSB: Multicultural and Diversity Understanding, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-4
Topic: Levels of Global Participation
26. (p. 698) The perception dimension refers to the skills that enable a manager to maintain a
positive self-image and psychological well-being.
FALSE
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-5
Topic: Managing Expatriates in Global Markets
27. (p. 705) Allowances are often offered to make the expatriate assignment more attractive.
TRUE
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-5
Topic: Compensation of Expatriates
Multiple Choice Questions
15-27
Chapter 15 - Managing Human Resources Globally
28. (p. 681) All of the following are trends that have led to global market expansion, except
A. the current geo-political climate fosters tourism and foreign investment.
B. expansion opens up new markets and larger numbers of potential customers.
C. many companies are building production facilities in other countries as a means of
capitalizing on lower labor costs.
D. there has been a rapid increase in telecommunications and information technology.
Companies are attempting to gain a competitive advantage, which can be provided by
international expansion in a number of ways. First, these countries are new markets with large
numbers of potential customers. Second, many companies are building production facilities in
other countries as a means of capitalizing on those countries' lower labor costs for relatively
unskilled jobs. Third, the rapid increase in telecommunications and information technology
enables work to be done more rapidly, efficiently, and effectively around the globe.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-1
Topic: Introduction
29. (p. 682) Which one of the following is not true of the European Economic Community?
A. Most, but not all, of the European nations have agreed to engage in free trade with one
another.
B. Commerce is regulated by an overseeing body called the World Trade Organization.
C. Its overseeing body is the European Commission.
D. Members share a common currency, the euro.
Commerce is regulated by an overseeing body called the European Commission (EC).
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-1
Topic: European Economic Community
15-28
Chapter 15 - Managing Human Resources Globally
30. (p. 682) Which one of the following countries is not a NAFTA member?
A. Canada
B. Chile
C. Mexico
D. United States
The North American Free Trade Agreement is an agreement among Canada, the United
States, and Mexico.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-1
Topic: North American Free Trade Agreement
31. (p. 682) NAFTA has increased U.S. investment in Mexico because of Mexico's
A. lower labor costs for high-skilled employees.
B. lower labor costs for low-skilled employees.
C. high power distance.
D. high collectivism.
NAFTA has increased U.S. investment in Mexico because of Mexico's substantially lower
labor costs for low-skilled employees.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-1
Topic: North American Free Trade Agreement
15-29
Chapter 15 - Managing Human Resources Globally
32. (p. 682) _____, with its population of over 1 billion and a trend toward opening its markets
to foreign investors, presents a tremendous potential market for goods.
A. Russia
B. Malaysia
C. Japan
D. China
China, with its population of more than 1 billion and trend toward opening its markets to
foreign investors, presents a tremendous potential market for goods.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-1
Topic: The Growth of Asia
33. (p. 682) Which international organization currently consists of over 100 member nations?
A. European Economic Community
B. NAFTA
C. GATT
D. ASEAN
The General Agreement on Tariffs and Trade (GATT) currently consists of more than 100
member-nations.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-1
Topic: General Agreement on Tariffs and Trade
15-30
Chapter 15 - Managing Human Resources Globally
34. (p. 682-683) The most recent round of GATT negotiations resulted in an agreement of all of
the following except,
A. establishing rules for investing and trading in services.
B. cutting tariffs by 40 percent.
C. expand protection of intellectual property.
D. increasing government subsidies to businesses.
The most recent round of GATT negotiations resulted in an agreement to cut tariffs by 40
percent, reduce government subsidies to businesses, expand protection of intellectual property
such as copyrights and patents, and establish rules for investing and trading in services.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-1
Topic: General Agreement on Tariffs and Trade
35. (p. 683-684) Which one of the following factors affecting HRM in global markets represents
the set of important assumptions (often unstated) that members of a community share in
common about the world, how it works, and what things are important?
A. Human capital
B. Culture
C. Foreign competition
D. Codetermination
Culture is defined as "the set of important assumptions (often unstated) that members of a
community share." These assumptions consist of beliefs about the world and how it works
and the ideals that are worth striving for.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-2
Topic: Culture
15-31
Chapter 15 - Managing Human Resources Globally
36. (p. 683) Which of the following is least likely to be a factor affecting HRM in global
markets?
A. Culture
B. Technical capital
C. Political-legal system
D. Economic system
Researchers in international management have identified a number of factors that can affect
HRM in global markets: culture, education-human capital, the political-legal system, and the
economic system.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills, Domestic and Global Economic Environments of
Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-2
Topic: Factors Affecting HRM in Global Markets
37. (p. 684 (Table 15.2)) Which of the following county has the highest masculinity?
A. Netherlands
B. Russia
C. Japan
D. France
According to the Table 15.2, Japan has the highest masculinity.
AACSB: Multicultural and Diversity Understanding, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Hard
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
15-32
Chapter 15 - Managing Human Resources Globally
38. (p. 685) Which of the following countries is not very high in individualism?
A. United States
B. Great Britain
C. The Netherlands
D. Taiwan
In collectivist cultures, such as Colombia, Pakistan, and Taiwan, people are expected to look
after the interest of the larger community, which is expected to protect people when they are
in trouble.
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
39. (p. 684-685) According to Hofstede's cultural dimensions, a culture where people are expected
to look after their own interests and the interests of their immediate families is one high in
A. power distance.
B. masculinity.
C. individualism.
D. uncertainty avoidance.
In individualist cultures, such as the United States, Great Britain, and the Netherlands, people
are expected to look after their own interests and the interests of their immediate families.
AACSB: Multicultural and Diversity Understanding, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Easy
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
15-33
Chapter 15 - Managing Human Resources Globally
40. (p. 684-685) Which of the following HR practices would least likely be found in collective
cultures?
A. Employee assistance programs
B. Participative management practices
C. Job-based evaluations and incentives
D. Project-based organizational structures
Job-based evaluations and incentives are focused more on individualistic performance rather
than group or team performance.
AACSB: Reflective Thinking Skills
BT: Comprehension
Difficulty: Hard
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
41. (p. 685) Assume that you are visiting Mexico for a business meeting and you call your host
by his first name rather than his title. He seems offended. Your offense most likely stemmed
from a difference between the U.S. culture and Mexico's culture on which dimension?
A. Individualism/collectivism
B. Uncertainty avoidance
C. Power distance
D. Long-term/short-term orientation
Power distance, concerns how a culture deals with hierarchical power relationships
particularly the unequal distribution of power.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills, Domestic and Global Economic Environments of
Organizations
BT: Application
Difficulty: Medium
Learning Objective: 15-2
Topic: Cultural Hofstede's Dimensions
15-34
Chapter 15 - Managing Human Resources Globally
42. (p. 685) Values such as success, performance, assertiveness, and competition are associated
with
A. short-term oriented cultures.
B. masculine cultures.
C. high power distance cultures.
D. low uncertainty avoidance.
Masculine societies stress assertiveness, performance, success, and competition.
AACSB: Multicultural and Diversity Understanding, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
43. (p. 685) Which one of the following countries has the most masculine culture according to
Hofstede's masculinity/femininity dimension?
A. Japan
B. Russia
C. Sweden
D. Norway
In "masculine" cultures, such as those of Germany and Japan, what are considered
traditionally masculine valuesshowing off, achieving something visible, and making money
permeate the society. "Feminine" cultures, such as those of Sweden and Norway, promote
values that have been traditionally regarded as feminine, such as putting relationships before
money, helping others, and preserving the environment.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills, Domestic and Global Economic Environments of
Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
15-35
Chapter 15 - Managing Human Resources Globally
44. (p. 685) According to Hofstede's cultural dimensions, a culture that is characterized by
easygoing and flexible people regarding different views and taking each day as it comes is
one that is
A. low in uncertainty avoidance.
B. high in femininity.
C. low in power distance.
D. high in long-term orientation.
People from cultures with weak uncertainty avoidance tend to be rather easygoing and
flexible regarding different views.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
45. (p. 685) The Hofstede's dimension that deals with the degree to which a culture prefers
structured over unstructured conditions is
A. power distance.
B. individualism.
C. risk aversion.
D. uncertainty avoidance.
Uncertainty avoidance is defined as the degree to which people in a culture prefer structured
over unstructured situations.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
15-36
Chapter 15 - Managing Human Resources Globally
46. (p. 685) The Japanese criticism of management practices in the United States illustrates the
differences in
A. uncertainty avoidance.
B. power distance.
C. long-/short-term orientation.
D. masculinity-femininity values.
The current Japanese criticism of management practices in the United States illustrates the
differences in long-term-short-term orientation.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
47. (p. 686) According to Hofstede's research, a country's economic health is most positively
correlated with a high
A. masculinity.
B. uncertainty avoidance.
C. power distance.
D. individualism.
Hofstede found that countries with individualist cultures were more wealthy.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
15-37
Chapter 15 - Managing Human Resources Globally
48. (p. 686) Individualistic cultures often exhibit
A. increased use of profit-sharing plans.
B. greater differences between the highest- and lowest-paid individuals in the organization.
C. flatter salary structures.
D. smaller differences between the highest- and lowest-paid individuals in the organization.
Individualistic cultures such as those found in the United States often exhibit great differences
between the highest- and lowest-paid individuals in an organization, with the highest-paid
individual often receiving 200 times the salary of the lowest.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Implications of Culture for HRM
49. (p. 686) Countries with which kind of cultural dimension tend to have the flattest salary
structures?
A. Long-term oriented
B. Short-term oriented
C. Individualistic
D. Collectivist
Collectivist cultures tend to have much flatter salary structures, with the top-paid individual
receiving only about 20 times the overall pay of the lowest-paid one.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Implications of Culture for HRM
15-38
Chapter 15 - Managing Human Resources Globally
50. (p. 688) The trend for U.S. companies to relocate their currently unionized low-skill-highwage manufacturing and assembly jobs to Mexico is explained in part by Mexico's
A. strong political-legal system.
B. low level of human capital.
C. strong economic system.
D. low power distance culture.
Countries with low human capital attract facilities that require low skills and low wage levels.
This explains why U.S. companies desire to move their currently unionized low-skill-highwage manufacturing and assembly jobs to Mexico, where they can obtain low-skilled workers
for substantially lower wages.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-2
Topic: Education-Human Capital
51. (p. 689) Which of the following countries has the greatest commitment to equal employment
opportunities for women and minorities as characterized by their political/legal system?
A. Germany
B. Japan
C. United States
D. China
The United States has led the world in eliminating discrimination in the workplace. Because
of the importance this has in our culture, we also have legal safeguards such as equal
employment opportunity laws that strongly affect the hiring and firing practices of firms.
AACSB: Reflective Thinking Skills, Ethical/Legal Responsibilities in Organizations & Society, Domestic and Global Economic Environments
of Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-2
Topic: Political-Legal System
15-39
Chapter 15 - Managing Human Resources Globally
52. (p. 690) Differences in international economic systems generally impact all but one of the
following. Name the exception.
A. Incentives for individuals to increase human capital
B. Promotion systems, particularly among domestic companies
C. Compensation systems, particularly among global companies
D. The appropriateness of various HR practices
Differences in international economic systems do not impact promotion systems among
domestic companies.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-2
Topic: Economic System
53. (p. 690) In _____ systems, there is less opportunity to develop human capital as compared to
_____ systems, but there is greater incentive for such investment through higher monetary
rewards.
A. socialist; capitalist
B. capitalist; socialist
C. individualistic; collectivist
D. collectivist; individualistic
In capitalist systems, there is less opportunity to develop human capital without higher costs.
However, those who do invest in their individual human capital, particularly through
education, are more able to reap monetary rewards, thus providing more incentive for such
investment.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-2
Topic: Economic System
15-40
Chapter 15 - Managing Human Resources Globally
54. (p. 691) A country that serves as the home for a corporation's headquarters is referred to as
the
A. host country.
B. parent country.
C. first country.
D. third country.
A parent country is the country in which the company's corporate headquarters are located.
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-3
Topic: Types of International Employees
55. (p. 692-693) An individual who was born in the United States and is currently working in
Spain for a company headquartered in Germany would be considered
A. parent-country national.
B. host-country national.
C. third-country national.
D. home-country national.
Third-country nationals (TCNs) are employees born in a country other than the parent country
and host country but who work in the host country.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-3
Topic: Types of International Employees
15-41
Chapter 15 - Managing Human Resources Globally
56. (p. 692) An individual who was born in Mexico and is currently working for an American
company's facility in Mexico is referred to as a
A. parent-country national.
B. host-country national.
C. third-country national.
D. home-country national.
Host-country nationals (HCNs) are those employees who were born and raised in the host
country.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-3
Topic: Types of International Employees
57. (p. 692) John, who works for a U.S.-based company, is on assignment for his company in
Japan. He is known as
A. an expatriate.
B. a parent-country national.
C. a host-country national.
D. a third-country national.
Expatriate is the term generally used for employees sent by a company in one country to
manage operations in a different country.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Application
Difficulty: Medium
Learning Objective: 15-3
Topic: Types of International Employees
15-42
Chapter 15 - Managing Human Resources Globally
58. (p. 693) Which of the following multinational corporations tends to have policies and
practices that are most ethnocentric?
A. United States multinationals
B. German multinationals
C. Japanese multinationals
D. British multinationals
A study revealed that Japanese multinational firms have more ethnocentric HRM policies and
practices than either European or U.S. firms.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills, Domestic and Global Economic Environments of
Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-3
Topic: Types of International Employees
59. (p. 693) The use of ethnocentric HRM practices generally
A. increases the number of company impatriates.
B. decreases the number of HRM-related problems and issues.
C. decreases the number of company expatriates.
D. increases the number of HRM-related problems and issues.
A study found that the use of ethnocentric HRM practices is associated with more HRM
problems.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Hard
Learning Objective: 15-3
Topic: Types of International Employees
15-43
Chapter 15 - Managing Human Resources Globally
60. (p. 694) A firm that is currently exporting goods to another country is at what level of global
participation?
A. Domestic
B. International
C. Multinational
D. Global
As more competitors enter the domestic market, companies face the possibility of losing
market share; thus they often seek other markets for their products. This usually requires
entering international markets, initially by exporting products but ultimately by building
production facilities in other countries.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-4
Topic: Levels of Global Participation
61. (p. 695) A firm that is currently locating facilities in a large number of other countries in
order to capitalize on lower production and distribution costs is at what level of global
participation?
A. Domestic
B. International
C. Multinational
D. Global
International companies become multinational when they build facilities in a number of
different countries, attempting to capitalize on lower production and distribution costs in
different locations.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-4
Topic: Levels of Global Participation
15-44
Chapter 15 - Managing Human Resources Globally
62. (p. 695) A major U.S automaker has plants all over the world. It continues to shift its
production from the United States, where labor unions have gained high wages for their
members, to facilities in Mexico and China, where the wages are substantially lower. The
company minimizes distribution and labor costs by locating facilities in central and eastern
European countries such as Poland and Hungary for manufacturing and assembling
automobiles to sell in the European market. This company is an example of
A. an international company.
B. a multinational company.
C. a global company.
D. a transnational company.
International companies become multinational when they build facilities in a number of
different countries, attempting to capitalize on lower production and distribution costs in
different locations.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-4
Topic: Levels of Global Participation
63. (p. 695) Inpatriates are
A. managers from countries other than the parent country placed in facilities of other
countries.
B. managers from different countries who become part of the corporate headquarters staff.
C. managers from one state being moved to another part of the country.
D. managers from one division of the company being moved to another division.
Inpatriates are managers from different countries who become part of the corporate
headquarters staff.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-4
Topic: Levels of Global Participation
15-45
Chapter 15 - Managing Human Resources Globally
64. (p. 695) Which one of the following is not true of global organizations?
A. They compete on state-of-the-art, top-quality products and services with lowest costs
possible
B. They increasingly emphasize flexibility and mass customization of products to meet the
needs of particular clients
C. They are usually driven to locate facilities in a country as a means of reaching that
country's market or lowering production costs and must deal with the differences across the
countries
D. They attempt to create synergy through cultural differences
Multinational companies are usually driven to locate facilities in a country as a means of
reaching that country's market or lowering production costs, and the company must deal with
the differences across the countries.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-4
Topic: Levels of Global Participation
65. (p. 674) Which attribute of a transnational HR system refers to making HR decisions from a
global rather than a national or regional perspective?
A. Transnational scope
B. Transnational participation
C. Transnational representation
D. Transnational process
Transnational scope refers to the fact that HRM decisions must be made from a global rather
than a national or regional perspective.
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-4
Topic: Levels of Global Participation
15-46
Chapter 15 - Managing Human Resources Globally
66. (p. 696) Which attribute of a transnational HR system refers to the multinational composition
of a company's managers?
A. Transnational scope
B. Transnational participation
C. Transnational representation
D. Transnational process
Transnational representation reflects the multinational composition of a company's managers.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-4
Topic: Levels of Global Participation
67. (p. 696) Which attribute of a transnational HR system refers to the extent to which planning
and decision making include managers from different cultures?
A. Transnational scope
B. Transnational participation
C. Transnational representation
D. Transnational process
Transnational process refers to the extent to which the company's planning and decisionmaking processes include representatives and ideas from a variety of cultures.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-4
Topic: Levels of Global Participation
15-47
Chapter 15 - Managing Human Resources Globally
68. (p. 696-697) Research on transnational HR systems within Canadian and American companies
reveals that firms' HR systems are far
A. less transnational than their strategic planning systems.
B. more transnational than their organizational structures.
C. less transnational than their accounting systems.
D. more transnational than their accounting systems.
A survey of 50 companies in the United States and Canada found that global companies'
HRM systems are far less transnational in scope, representation, and process than the
companies' strategic planning systems and organizational structures.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Hard
Learning Objective: 15-4
Topic: Levels of Global Participation
69. (p. 697) According to estimates, what percentage of American employees sent on expatriate
assignments overseas return early?
A. Less than 15 percent
B. 15 to 40 percent
C. 40 to 50 percent
D. Over 50 percent
The failure rate for expatriate assignments among U.S. firms had been estimated at between
15 and 40 percent.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-5
Topic: Managing Expatriates in Global Markets
15-48
Chapter 15 - Managing Human Resources Globally
70. (p. 697) Among American companies, which set of skills tends to be the most frequently
used in expatriate selection?
A. Interpersonal skills
B. Foreign language skills
C. Communication skills
D. Technical skills
Technical competence has been almost the sole variable used in deciding whom to send on
overseas assignments, despite the fact that multiple skills are necessary for successful
performance in these assignments.
AACSB: Reflective Thinking Skills, Group/Individual Dynamics in Organizations, Domestic and Global Economic Environments of
Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-5
Topic: Selection of Expatriate Managers
71. (p. 698) Which of the following dimensions that have been shown to be necessary for
successful expatriates is most closely related to the individual's psychological well-being?
A. The culture dimension
B. The self dimension
C. The relationship dimension
D. The perception dimension
The self dimension are skills that enable a manager to maintain a positive self-image and
psychological well-being.
AACSB: Reflective Thinking Skills, Group/Individual Dynamics in Organizations, Domestic and Global Economic Environments of
Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-5
Topic: Managing Expatriates in Global Markets
15-49
Chapter 15 - Managing Human Resources Globally
72. (p. 698) Which one of the following dimensions is not an adaptive skill for expatriate
success?
A. The financial dimension
B. The self dimension
C. The relationship dimension
D. The perception dimension
Adaptive skills have been categorized into three dimensions: the self dimension, the
relationship dimension, and the perception dimension.
AACSB: Reflective Thinking Skills, Group/Individual Dynamics in Organizations, Domestic and Global Economic Environments of
Organizations
BT: Comprehension
Difficulty: Hard
Learning Objective: 15-5
Topic: Managing Expatriates in Global Markets
73. (p. 698) According to one study of international assignees, the most important selection
criteria is
A. flexibility and adaptability.
B. job knowledge and motivation.
C. family situation.
D. relational skills.
One study of international assignees found that they considered the following five factors to
be important in descending order of importance: family situation, flexibility and adaptability,
job knowledge and motivation, relational skills, and extracultural openness.
AACSB: Reflective Thinking Skills, Group/Individual Dynamics in Organizations, Domestic and Global Economic Environments of
Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-5
Topic: Selection of Expatriate Managers
15-50
Chapter 15 - Managing Human Resources Globally
74. (p. 698) Recent evidence concerning women expatriates suggests that
A. women still are not accepted as equals in most countries.
B. the novelty of their presence increases their credibility among locals.
C. women don't desire international assignments.
D. placement of women expatriates is on the decline.
Some women believe that the novelty of their presence among a group of men increases their
credibility with locals.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills, Domestic and Global Economic Environments of
Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-5
Topic: Selection of Expatriate Managers
75. (p. 699 (Table 15.3)) Which of the following is not a major consideration for assessing managers'
abilities to adapt to a new cultural environment as expatriates?
A. Religion
B. Motivation
C. Language ability
D. Family considerations
According to the table, religion is not considered a major consideration for assessing
managers' abilities to adapt to a new cultural environment.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-5
Topic: Selection of Expatriate Managers
15-51
Chapter 15 - Managing Human Resources Globally
76. (p. 699 (Table 15.3)) Identify the question that is helpful to get an insight on the
"Resourcefulness and initiative" of an expatriate candidate?
A. How is each member of the family reacting to this possible move?
B. Is the candidate independent; can he make and stand by his decisions and judgments?
C. Does the candidate understand his own culturally derived values?
D. Does the candidate consider the assignment anything other than a temporary overseas trip?
Refer to "Resourcefulness and initiative" in table 15.3.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Comprehension
Difficulty: Hard
Learning Objective: 15-5
Topic: Selection of Expatriate Managers
77. (p. 699-700 (Table 15.3)) Focusing on an expatriate candidate's "basic attitude towards the
company", and "any history or indication of interpersonal problems with the company" is
helpful in gaining an insight on which of the following?
A. Motivation
B. Resourcefulness
C. Adaptability
D. Career planning
Refer to "Career planning" in table 15.3.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Comprehension
Difficulty: Hard
Learning Objective: 15-5
Topic: Selection of Expatriate Managers
15-52
Chapter 15 - Managing Human Resources Globally
78. (p. 700) Which of the following is not generally emphasized in cross-cultural training
programs?
A. How host country employees view their own culture
B. Relevant aspects of the host country's culture
C. Relevant aspects of the host country's human capital system
D. How to communicate accurately in the new culture
Cross-cultural training programs emphasize on the expatriates own cultural background, the
particular aspects of culture in the new work environment, and to communicate accurately in
the new culture.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Hard
Learning Objective: 15-5
Topic: Training and Development of Expatriates
79. (p. 702 (Table 15.4)) John is undergoing a cross-cultural training to learn more about the country
he is about to visit. During the training, he learns that in this country, if a man takes another's
hand on the street, it's a sign of mutual respect. Which country is John visiting?
A. Russia
B. Japan
C. Saudi Arabia
D. Mexico
Refer to Saudi Arabia in table 15.4.
AACSB: Multicultural and Diversity Understanding
BT: Knowledge
Difficulty: Hard
Learning Objective: 15-5
Topic: Managing Expatriates in Global Markets
15-53
Chapter 15 - Managing Human Resources Globally
80. (p. 702 (Table 15.4)) In which county do individuals perform a bizarre handshake whereby, after
pressing together the palms, they will slide their hands upward to grasp each other's thumbs?
A. France
B. Germany
C. Hong Kong
D. Mexico
Refer to Mexico in table 15.4.
AACSB: Multicultural and Diversity Understanding
BT: Knowledge
Difficulty: Hard
Learning Objective: 15-5
Topic: Managing Expatriates in Global Markets
81. (p. 703) The total compensation plan that equalizes the purchasing power of the expatriate
manager with that of employees in similar positions in the home country and provides
incentives to offset the inconvenience incurred in the location is known as
A. the home-country approach.
B. the balance-sheet approach.
C. the equalization approach.
D. the host-country approach.
The balance sheet approach entails developing a total compensation package that equalizes
the purchasing power of the expatriate manager with that of employees in similar positions in
the home country and provides incentives to offset the inconveniences incurred in the
location.
AACSB: Reflective Thinking Skills
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-5
Topic: Compensation of Expatriates
15-54
Chapter 15 - Managing Human Resources Globally
82. (p. 705) In addition to base salary, total expatriate pay packages generally include all but one
of the following components. Name the exception.
A. Competency-based pay adjustments
B. Benefits
C. Tax equalization allowances
D. Allowances
Total pay packages have four components: the base salary, tax equalization allowances,
benefits, and allowances.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-5
Topic: Compensation of Expatriates
83. (p. 707) Approximately what percent of workers want to leave the company after returning
from an overseas assignment?
A. 10 percent
B. 15 percent
C. 20 percent
D. 30 percent
The most recent estimates are that 25 percent of expatriate managers leave the company
within one year of returning from their expatriate assignments.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-5
Topic: Reacculturation of Expatriates
15-55
Chapter 15 - Managing Human Resources Globally
84. (p. 707) The extent to which expatriates receive recognition from peers and bosses following
their expatriate assignment refers to
A. validation.
B. communication.
C. adjustment.
D. expectation.
Validation refers to the amount of recognition received by the expatriate upon return home.
AACSB: Reflective Thinking Skills, Group/Individual Dynamics in Organizations, Domestic and Global Economic Environments of
Organizations
BT: Knowledge
Difficulty: Medium
Learning Objective: 15-5
Topic: Reacculturation of Expatriates
85. (p. 707) According to recent research, managers whose job expectations and nonwork
expectations were more closely fulfilled during their expatriate assignment generally
exhibited which of the following upon their return?
A. Higher job performance and job satisfaction
B. Higher repatriate adjustment and job satisfaction
C. Higher repatriate adjustment and job performance
D. Higher job performance and turnover
One research study noted the role of an expatriate manager's expectations about the expatriate
assignment in determining repatriation adjustment and job performance.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Hard
Learning Objective: 15-5
Topic: Reacculturation of Expatriates
Essay Questions
15-56
Chapter 15 - Managing Human Resources Globally
86. (p. 681-682) What led to formation of the European Economic Community (EEC)? Describe
how the EEC has affected the global economy.
In response to a number of problems created by the close geographic proximity of European
nations and their divergent policies, most European countries agreed to participate in the EEC,
which began in 1992. EEC members agreed to engage in free trade with one another, with
commerce regulated by the European Commission. Under the EEC, legal regulation in the
participating countries has become more uniform. Because of this economic community,
Europe has become one of the largest free markets in the world. In addition, all members of
the EEC share a common currency, the euro. This ties the members' economic fates more
closely with one another. Many argue that formation of the EEC has enabled Europe to better
compete with another free trade area, formed under NAFTA.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-1
Topic: European Economic Community
87. (p. 683-690) Name and discuss the four factors that affect HRM in global markets. Which of
them do you think is the most important factor and why?
1. CultureCulture is defended as "the set of important assumptions (often unstated) that
members of a community share." It is important to HRM for two reasons: (1) it often
determines the other three factors and (2) it often determines the effectiveness of various
HRM practices.
2. Human CapitalHuman capital refers to the productive capabilities of individualsthat is,
the knowledge, skills, and experience that have economic value. Countries differ in their
levels of human capital and influence a company's ability to find and maintain a qualified
workforce.
3. Economic SystemA country's economic system influences HRM in that it affects (1) the
development of human capital and (2) labor costs and taxes on compensation packages.
4. Political/Legal SystemThe political-legal systems often dictates the requirements of
certain HRM practices, such as training, compensation, hiring, firing, and layoffs.
Culture is generally thought to be the most important factor influencing international HRM.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Analysis
Difficulty: Easy
Learning Objective: 15-2
Topic: Factors Affecting HRM in Global Markets
15-57
Chapter 15 - Managing Human Resources Globally
88. (p. 684-685) Define Hofstede's cultural dimensions and discuss their importance for HRM.
1. Individualism/collectivismStrength of relationship between individual and society
2. Power distanceDegree of inequality among people that is considered normal
3. Uncertainty avoidanceDegree to which individuals prefer structured situations
4. Masculinity/femininityDivision of sex roles within a society
5. Long-term/short-term orientationDegree to which one focuses on the future rather than
the present
These can affect the appropriateness of HR practices, appropriateness of managerial styles,
and communication processes.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills
BT: Knowledge
Difficulty: Hard
Learning Objective: 15-2
Topic: Hofstede's Cultural Dimensions
89. (p. 692-693) Global participates have three sources when staffing their operations. Name and
define these sources.
1. Expatriates or home-country nationals are employees sent by a company in one country to
manage operations in a different country.
2. Parent-country nationals are employees who were born and live in the parent country.
3. Third-country nationals are employees born in a country other than the parent country and
host country but who work in the host country.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Knowledge
Difficulty: Easy
Learning Objective: 15-3
Topic: Types of International Employees
15-58
Chapter 15 - Managing Human Resources Globally
90. (p. 693-695) What are the different levels of global participation? Describe the
activities/structure of companies existing at each level?
1. DomesticOperations only in one country
2. InternationalExporting to or locating facilities in one or a few other countries
3. MultinationalLocating facilities and engaging in trade across a large number of countries
4. GlobalLocating facilities and engaging in trade across a large number of countries based
on the ability to effectively, efficiently, and flexibly produce a product or service and create
synergy through cultural differences
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-4
Topic: Levels of Global Participation
91. (p. 696) Describe each of the three attributes of the transnational HRM system.
1. Transnational scope refers to the fact that HRM decisions must be made from a global
rather than a national or regional perspective. This creates the need to make decisions that
balance the need for uniformity with the need for flexibility.
2. Transnational representation reflects the multinational composition of a company's
managers. Global participation does not necessarily ensure that each country is providing
managers to the company's ranks. This is a prerequisite if the company is to achieve the next
attribute.
3. Transnational process refers to the extent to which the company's planning and decisionmaking processes include representatives and ideas from a variety of cultures. This attribute
allows for diverse viewpoints and knowledge associated with different cultures, increasing the
quality of decision making.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-4
Topic: Levels of Global Participation
15-59
Chapter 15 - Managing Human Resources Globally
92. (p. 697-698) How effective are most U.S. companies in managing their expatriates? What
types of things can be done in selecting expatriate managers that might increase the
percentage of successful assignments?
Between 16 and 40 percent of all American employees sent on expatriate assignments
overseas return early; only 5 percent of firms administer tests to determine the degree to
which expatriate candidates possess cross-cultural skills; and only 35 percent of firms choose
expatriates from multiple candidates and then only on the basis of technical job-related
experience and skills.
The three dimensions of adaptive skills should be developed, including (1) the self-dimension,
(2) the relationship dimension, and (3) the perception dimension.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Analysis
Difficulty: Hard
Learning Objective: 15-5
Topic: Managing Expatriates in Global Markets
93. (p. 699-700 (Table 15.3)) Discuss some of the areas and questions that should be included in an
interview worksheet for international candidates to assess their ability to adapt to an expatriate
assignment.
Among the areas included are motivation, health, language ability, family considerations,
resourcefulness and initiative, adaptability, career planning, and financial. See Table 15.3 for
a list of questions.
AACSB: Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Hard
Learning Objective: 15-5
Topic: Managing Expatriates in Global Markets
15-60
Chapter 15 - Managing Human Resources Globally
94. (p. 702-703 (Table 15.4 & 15.5)) Discuss some of the areas in which expatriates can be trained to
communicate more effectively when language barriers exist.
These areas include verbal and nonverbal behavior, attribution, comprehension, design, and
motivation. See Table 15.4 and 15.5 for specific tips.
AACSB: Communication Abilities, Reflective Thinking Skills, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Hard
Learning Objective: 15-5
Topic: Managing Expatriates in Global Markets
95. (p. 701-705) What is the purpose of the balance-sheet approach to expatriate compensation,
and what are its four major components and their respective purposes?
1. The balance-sheet is designed to "keep the employee whole" by equalizing the purchasing
power of the expatriate manager with that of employees in similar positions in the home
country and providing incentives to offset the inconvenience incurred in the relocation.
2. The four components are (1) base salaryexpatriates are often offered a salary premium
beyond that of their present salary as an inducement to accept the expatriate assignment, (2)
tax equalization allowancesthey keep the employee whole by having the company withhold
the amount of tax to be paid in the home country and paying all of the taxes accrued in the
host country, (3) benefitsmost of the problems have to do with the transportability of the
benefits, and (4) allowancescost-of-living, housing, education, and relocation allowances
are offered to make the expatriate assignment less unattractive.
AACSB: Multicultural and Diversity Understanding, Domestic and Global Economic Environments of Organizations
BT: Comprehension
Difficulty: Medium
Learning Objective: 15-5
Topic: Managing Expatriates in Global Markets
15-61
Chapter 15 - Managing Human Resources Globally
96. (p. 707) How effective are U.S. companies in their repatriation of employees? Cite evidence
in support of your position. What can companies do to increase repatriation adjustment rates?
1. Overall, companies are not very effective in their repatriation efforts. According to one
source, 60 to 70 percent of expatriates did not know what their position would be upon their
return, and 46 percent ended up with jobs that gave them reduced autonomy and authority.
Twenty percent of workers want to leave the company when they return from an overseas
assignment, and most recent estimates are that 25 percent of expatriate managers leave the
company within one year of returning from their expatriate assignments.
2. Companies could take three actions: (1) improve communications with expatriates while
abroad, (2) validate their foreign work experience and their future potential contribution to the
company upon returning home, and (3) ensure that the expatriate has realistic job and
nonwork expectations regarding their assignment.
AACSB: Multicultural and Diversity Understanding, Reflective Thinking Skills, Domestic and Global Economic Environments of
Organizations
BT: Synthesis
Difficulty: Medium
Learning Objective: 15-5
Topic: Managing Expatriates in Global Markets
15-62