Due to the globalization of business operations, management teams have become very serious in retaining and promoting the right person for overseas positions. You have just been told to hire a new manager for your companyâ€™s Scandinavian division. Describe in detail the most important skills and qualifications considered essential for overseas assignments, particularly in these countries.
Also explain in detail some of the challenging issues and prospects of doing business abroad. Hypothesize the most important information you would be sure to communicate to HR managers as well as the senior leadership team. Provide specific examples where possible to detail your plan for this initial hiring for the Scandinavian division.
Support your paper with a minimum of five (5) resources, which may include your required text. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.
Length: 10-12 pages not including title and reference pages
Your paper should demonstrate thoughtful consideration of the ideas and concepts presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.
Analysis of Personnel Needs to Support Globalization Efforts
In recent years, international commerce has grown to become increasingly accessible with the presence of overnight delivery, the internet, and advanced telecommunications. These factors have even enabled small organizations to engage in business operations with foreign consumers as well as foreign suppliers. Nevertheless, despite executing business abroad being easier, it is associated with immense risks, which when not managed properly, can lead to the collapse of the business. According to Bonache & Brewster (2001), organizations with foreign branches, joint ventures, or subsidiaries often encounter issues such as unstable local politics, geographical issues, vastly different legal systems, and language barriers, thereby making the process of managing business operations, particularly hiring and recruiting employees, enormously complicated. Understanding the social, political, economic situations of the nations to which to send expatriates offers a suitable platform on which employees with appropriate skills and qualifications can be selected and hired. Different countries have different cultural, economic, and political backgrounds. As such, not all employees can fit in all countries in terms of skills and qualifications. Scandinavian countries are known for. When selecting and hiring an employee to work in Scandinavian nations some it is vital to take into consideration certain skills and qualifications, which are in line with the political, social, and economic backgrounds of such nations. Besides, the challenges and prospects associated with the execution of business operations in such countries should also be considered. Such an approach is significant in ensuring the success of a business.
Important Skills and Qualifications that are Essential for Overseas Assignment
Higher Social Skills
According to Harvey (2012), inadequate adaptation to the new culture is an essential cause of high rates of expatriate failure as well as low work performance. Examples of factors influencing the rate of adjustment to new culture are pre-departure training, non-worker factors, and previous overseas experience. Lee (2010) argues that expatriate work requires different skills, personality, and ability from those required for domestic work due to the need to adjust to differences in culture. In the selection of expatriates for overseas assignments, social skills should be emphasized because they enable an expatriate manager to successfully adjust to the local settings. These skills also enhance a positive relationship between the expatriate and HCNs. Considering the significance of social relationship development and interaction for cross-cultural adaptation, an expatriate manager should possess higher social skills.
Higher Perceptual Skills
According to Davies & Ibeh (2009), perception dimension involves skills related to the appropriate interpretation/attribution of behaviors of host nationals. Complications may emerge when expatriates interact with host country nationals (HCNs) who possess diverse culturally based beliefs and behaviors. Since expatriates’ attributions of behaviors of HCNs are founded on their own cultural beliefs, they are likely to make inappropriate attributions of such behaviors. Moreover, to minimize uncertainty in international associations within an intercultural context, an expatriate should possess appropriate perceptual skills that can enable him or her properly interpret behaviors of HCNs. Harvey (2012) argues that sensitivity to cultural differences has a significant relationship with job performance. Lee (2010) adds that perceptual traits of an expatriate manager may influence his or her adaption to a new environment.
Perceptual skill is a primary skill that helps an individual to better comprehend and interpret HCNs’ cultural differences and behavior. It is vital to note that perceptual skills only provide a suitable platform on which an expatriate worker can learn cultural differences, while in an international setting (Bonache & Brewster, 2001). As such, an expatriate employee requires perceptual skills to appropriately interpret behavior of HCNs, which in turn ensures that the employee minimizes uncertainty in interpersonal relationships, perform his or her job effectively, and associate efficiently with HCNs. Therefore, an expatriate manager should possess higher perceptual skills because of the culturally different settings of international work.
Higher Reasoning Ability
According to Bonache & Brewster, (2001), self-dimension involves traits related to tolerance of stress and self-confidence. These traits have a close relationship with a person’s personality and ability. An expatriate manager should have confidence in his or her ability to effectively handle foreigners, new setting as well as resistance to stress, which results from anxiety and uncertainty about unfamiliar circumstances. According to Lee (2010), there exists a positive association between stress vulnerability and cognitive failure. Besides, an individual’s ability to solve problem is negatively related to levels of stress. Harvey (2012) argues that uncertainty can arise from a person’s inability to inadequately categorize or structure information. As a result, perceived uncertainty can lead intolerance of incongruities and anomalies. As such, an expatriate manager should have higher reasoning ability to help him or her avoid excessive stress.
Greater Adaptation and Achievement Orientation Personality Requirements
Considering the aspect of personality, Kim & Tung (2013) established that agreeableness, extroversion, and extroversion have a negative relationship with the desire of the expatriate to end their assignments. According Lee (2010), conscientiousness happens to be the most significant personality factor for the success of an expatriate. Moreover, expatriates who are high in self-monitoring and self-efficacy demonstrate a greater adaptation. An expatriate should also be flexible and highly motivated. According to Bonache & Brewster (2001), successful expatriate managers should be well adjusted as well as highly motivated persons. Harvey (2012) adds that commitment and willingness enhances the ability of an expatriate to adjust to a novel setting.
Granted the higher levels of uncertainty and stress associated with working abroad/internationally, expatriate work requires greater adaptation-related personality needs than domestic work (Lee, 2010). As such, when selecting such personnel, aspects of self-control, flexibility, and stress tolerance should be taken into consideration. Furthermore, overcoming the temptation of abandoning expatriate duty early due to the complexities arising from working in a stressful and unfamiliar setting requires that expatriates have higher accomplishment-orientation personality requirements. Lack of such traits and skills can make expatriates abandon duties when face with a tough working environment.
Relationship-Oriented Behaviors and Skills
Harvey (2012) argues that apart from differences in ability, personality, and skill requirements, expatriate task is also associated with behavioral requirements since cultural values significantly influence the suitability of different behaviors of work. Workforces from various nations have different views of behaviors negatively and positively affecting performance of work.
Mechanisms through which cultural values influence expatriate employees can be illustrated from the perspectives of belief/value theory of culture and social learning theory. The value theory of culture argues that cultural values influence individual values, and behaviors of individuals depend on the cultural norms or values to which individuals is exposed. To fit in and effectively performing their tasks, expatriates should act in manners that are in line with the prevailing cultural values of their host countries. According to Kim & Tung (2013), such a skill is significant because expatriates typically operate with many HCNs, and working appropriately with these HCNs is always essential to the success of an expatriate’s job. Social learning theory argues that people often learn from experience, and future actions are influence by the consequences of past actions/manners. According to Davies & Ibeh (2009), expatriates can learn culturally suitable and unsuitable manners by observing the culturally successful behaviors of HCNs. Granted the often times-extensive association between HCNs and expatriates, this approach happens to be a significant influence on mannerism/behavior. This experience contributes largely to the shaping of behavior over time, thereby transforming behavior of work in a manner that is congruent with the existing cultural values.
Considering the potential impact that culture has on the behavior of expatriates, it is vital to outline how work behavior is affected by specific values. A focus on the aspect of individualism-collectivism is vital in revealing how cultural values impact expatriate behavior. Peiperl, Levy & Sorell (2014) define individualism-collectivism as the magnitude at which people consider themselves as members of groups or individuals. Individualistic societies assume the significance of family and personal life and the insignificance of good working relations and cooperative colleagues. As such, culture embracing individualism often prioritize calculative engagement with firms, self-orientation, loose ties between coworkers, individuals initiative, autonomy, and achievement. Therefore, individualistic societies will value more self-oriented actions. On the other hand, societies embracing collectivism such as Scandinavian nations emphasize group embeddedness, interdependence, personalized relationships, and in-group harmony. As such, collectivist societies emphasize interpersonal relationship. Expatriate managers to be sent to Scandinavian nations, which embrace a collectivist culture, should have skills in relationship development, and should manage to demonstrate more relationship-oriented mannerisms like coordinating team member, motivating and establishing mutual respect, trust, and cooperation among team members as well as coaching and developing other employees.
Low Administrative-related Behaviors
As a cultural dimension, power distance has a robust relation to expatriate behavioral requirement. According to Peiperl, Levy & Sorell (2014), power distance refers to the level at which the less powerful societal, organizational, or institutional members embrace and expect unequal distribution of power. Harvey (2012) argues that power inequality is more appreciated in nations, which are high in power distance than in countries low in power distance. In addition, close supervision is more acknowledged in nations, which are high in power distance than in countries low in power distance. As such, HCNs within cultures/societies high in power distance would expect better administrative activities as well as monitoring and regulating resources.
Scandinavian countries are associated with low power distance, thereby eliminating the needs for expatriates that higher in administrative skills. These cultures are characterized by equal rights, being independent, hierarchy for convenience, coaching leader, facilitative and empowering management, and accessibility of superiors (Harvey, 2012). In these nations, power is decentralized and leaders count on their team members’ experience. Employees expect their leaders to consult them. The aspect of control is disliked, employees have an informal attitude towards managers. Communication is also participative and direct. As such, the expatriate manager to be sent to these countries should demonstrate low administrative behaviors, and be willing to cooperate with employees as well as involve them in the decision-making process.
High in Interaction-Related Behaviors
Masculinity-femininity is also a significant factor that should be taken into considering when selecting expatriate managers to be sent to Scandinavian countries. While masculinity supposes that the dominant values within a society are acquisition, assertiveness, recognition, advancement, and less caring for other people, femininity emphasizes social relationships and affiliation as well as concern for quality of life and other people’s interests. As such, the dominant values of a masculine society are material success, performance, and assertiveness, while dominant values of a feminine society are interpersonal relationships, quality of environment, and concern for other people. Scandinavian countries are feminine societies (Davies & Ibeh, 2009). Therefore, a suitable expatriate manager to be sent to these countries would be an individual that prioritizes interpersonal relationships, concern for others, and quality of environment. Since individuals in high-femininity societies are inclined towards caring for coworkers and working environments, the expatriate manager to be selected for the Scandinavian division should have the ability to engage more interactions and communication with others as well as perform more interaction-oriented activities.
Challenging Issues and Prospect of Doing Business Abroad
Challenges of Doing Business Overseas
Despite being a lucrative career option, doing business overseas is associated with many challenges. Joining and excelling in the global market is more complicated than selling services and product within the domestic market. As opposed to the past business scenario that involved a mere selling of products and services, the current business scenario requires an individual or organization to take an additional leap (Peiperl, Levy & Sorell, 2014). The present international commerce has grown to be more complicated than it was previously, and only the fittest can survive, particularly those who can manage to effectively address the challenges they encounter within this market. Doing business abroad has the following challenges:
Following numerous cases of terrorism, which have been reported in the past, issues of political drama have been noted between many international countries. Such situations have impacted directly and indirectly on trade relations of various nations. Doing business overseas exposes a business to terrorism. According to Davies & Ibeh (2009), an organization is more likely to be a victim of terrorism attack when operating in a foreign country than individuals or organizations that are involved with the federal administrations of the host country.
Difficulties Assessing Potential
Businesses need to evaluate the potential of future operations as well as the sizes of their earnings or revenues. It is unfortunate that doing business abroad often presents companies with difficulties judging this equation due to the unfamiliarity associated with the international business environments and other parties involved in it. Lee (2010) argues that many organizations always conduct a wrong assessment of their market sizes as well as expected turnover of sales. According to Kim & Tung (2013), business can avoid such issues by conducting a thorough market research of previous market forecasts, market trends, financial cost patterns, and market forecasts.
Problems Comprehending the Local Business Environment
Davies & Ibeh (2009) argue that different countries have different standards or measures of quality. A novel business setting calls for a novel set of business etiquette, which needs to be learned with time. As such, many businesses always face problems understanding the local business environment in which they operate.
Challenges Associated with International Logistics
Performing business activities internationally usually face issues related to logistics, especially when these operations involve shipment of commodities across international borders. Davies & Ibeh (2009) argue that organizations can address these issues by enlisting services of logistics firms.
Getting Adapted/Adjusted to Cultural Differences
Every nation possesses diverse cultural etiquette. As such, being unaware of these elements, and violating them can negatively impact business operations. Lee (2010) argues that cultural differences are one of the major challenges of doing business abroad. It is vital to learn the cultural differences within international business since different nations have different cultural practices and beliefs.
Challenges Associated with Financial Costs and Foreign Exchange Fluctuations
Financial costs/expenses are a significant aspect of business success. According to Davies & Ibeh (2009), overcoming issues associated with foreign exchange fluctuations happens to be one of the problems associated with doing business overseas. Having adequate financial backings can help a business overcome such challenges.
Prospects of Doing Business Abroad
Taxation Benefits and Incentives
Expansion of business internationally may be accompanies by taxation benefits and incentives, particularly when an organization expand its activities to the global tax havens such as British Virgin Isles, Panama, and Barbados (Cullen & Parboteeah, 2009). As a result, the firm can manage to lower its prices without hurting its profit margins, which in turn translates into consumer attraction, and more sales.
Increasing Competition Potential
Expanding business operations abroad ensures that an organization accesses new consumers earlier than its rivals, and gathers talent from various regions of the world. In this manner, the organization gains a competitive advantage in terms of shutting down the market for other firms within the same industry (Lee, 2010). Besides, such an accomplishment enables a business to establish the tone for overseas matters related to the industry in which it executes its activities.
Growth in Share of Market
Cullen, B & Parboteeah (2009) argue that when businesses expand their operations globally they often witness a growth in market share. Diversifying business activities into other countries ensures that an organization attracts consumers within the new markets, thereby increasing its market share. When consumers flock a business premise there is often a increase in sales, which in turn leads to wider profits margins and business growth.
Acquisition of New Business Concepts
Performing business activities in other countries provides a suitable platform on which an organization can refresh its brand, not by altering its core but by integrating novel ideas in its advancement. According to Cullen & Parboteeah (2009), by establishing various marketing approaches to attract novel customers in a foreign country, an organization can potentially establish an entirely novel product to be adopted across the broad. As such, venturing into novel markets, particularly international ones, offers a business a robust opportunity to acquire novel ideas of business.
In conclusion, different nations have diverse economic, political and social factors, which may impact negatively or positively on business operations. As such, organizations should be cautious when executing their operations internally. Being that the current global market is highly dynamic, firm should ensure that they select appropriate expatriate abroad. Some of the skills and qualifications required for an expatriate manager to be sent to Scandinavian division are higher perceptual skills, higher reasoning ability, higher social skills, higher interaction-related behaviors, low administrative-related behaviors, and Greater Adaptation and Achievement Orientation Personality. Furthermore executing business abroad is associated with numerous challenges and benefits. Some of the challenges involved in doing business overseas are political wrangles, difficulties assessing potential, problems adapting to the cultural differences, problems comprehending the local environment, and foreign exchange fluctuations. Some of the benefits associated with doing business internationally are increase in competition potential, increase in market share, acquisition of new business concepts, and taxation benefits and incentives.
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