Which of the following terms refers to the human resource management concepts and techniques employers used to manage the challenges of their international operations?

Q: Which one of the following terms refers to citizens of the country in which the multinational company has its headquarters?

For the MNCs, home-country nationals is the term used for the countrys citizens in which they have headquarters.

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Copyright 2017 Pearson Education, Inc.
Human Resource Management, 15e (Dessler)
Chapter 17 Managing Global Human Resources
1) Which of the following terms refers to the human resource management concepts and
techniques employers use to manage the challenges of their international operations?
A) work councils
B) international human resource management
C) power distance
D) codetermination
Answer: B
Explanation: B) International human resource management is the human resource management
concepts and techniques employers use to manage the human resource challenges of their
international operations.
Difficulty: Moderate
Chapter: 17
Objective: 1
AACSB: Analytical Thinking
Learning Outcome: 17.1 List the HR challenges of international business.
2) International human resource management (IHRM) focuses on three main topics. Which of
the following is NOT one of them?
A) comparing human resource management practices
B) managing human resources in global companies
C) domestic company partnerships
D) managing expatriate employees
Answer: C
Explanation: C) Comparing human resource management practices, managing human resources
in global companies, and managing expatriate employees are the main topics of IHRM.
Difficulty: Hard
Chapter: 17
Objective: 1
AACSB: Analytical Thinking
Learning Outcome: 17.1 List the HR challenges of international business.
3) The most significant HR challenge faced by international firms is the language barrier.
Answer: FALSE
Explanation: Vast distances increase the challenges for an international firm. However, language
is not necessarily the biggest issue. Cultural, political, legal, and economic differences among
countries create challenges for global firms.
Difficulty: Easy
Chapter: 17
Objective: 1

AACSB: Analytical Thinking
Learning Outcome: 17.1 List the HR challenges of international business.
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Copyright 2017 Pearson Education, Inc.
4) International human resource management (IHRM) is the human resource management
concepts and techniques employers use to manage the human resource challenges of their
international operations.
Answer: TRUE
Explanation: International human resource management (IHRM) is the human resource
management concepts and techniques employers use to manage the human resource challenges
of their international operations.
Difficulty: Easy
Chapter: 17
Objective: 1
AACSB: Analytical Thinking
Learning Outcome: 17.1 List the HR challenges of international business.
5) Geert Hofstede called the extent to which less powerful members of institutions accept and
expect an unequal power distribution ________.
A) masculinity
B) individualism
C) power distance
D) tolerance for ambiguity
Answer: C
Explanation: C) A study by Professor Geert Hofstede identified international cultural
differences. For example, Hofstede says societies differ in power distance, which is the extent to
which the less powerful members of institutions accept and expect an unequal distribution of
power.
Difficulty: Easy
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
6) According to research, which of the following is a greater concern to Chinese managers than
United States managers?
A) getting tasks accomplished efficiently
B) keeping a distance from subordinates
C) enforcing a firm's policies and regulations
D) maintaining a harmonious work environment
Answer: D
Explanation: D) Although many managers endorse performance-based pay in China, other
employers, to preserve group harmony, make incentive pay a small part of the pay package. And,
as in other parts of Asia, team incentives are advisable.
Difficulty: Moderate
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
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Copyright 2017 Pearson Education, Inc.
7) In which country do individuals have a high acceptance of unequal power distribution
between managers and subordinates?
A) Mexico
B) Hong Kong
C) Sweden
D) United States
Answer: A
Explanation: A) Power distance represents the extent to which the less powerful members of
institutions accept and expect an unequal distribution of power. Studies show that acceptance of
such inequality is higher in some countries (such as Mexico) than in others (such as Sweden).
Mexican workers expect managers to keep their distance rather than to be close, and to be formal
rather than informal.
Difficulty: Moderate
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
8) Of the countries listed below, in which one do production workers receive the lowest hourly
wage?
A) United States
B) Philippines
C) Germany
D) Taiwan
Answer: B
Explanation: B) Hourly compensation costs (in U.S. dollars) for production workers range from
$2.01 in the Philippines to $9.34 in Taiwan, $35.53 in the United States, $47.38 in Germany, to
$64.15 in Norway.
Difficulty: Moderate
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
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Copyright 2017 Pearson Education, Inc.
9) ________ are formal, employee-elected groups of worker representatives that meet monthly
with managers to discuss topics affecting the employees.
A) Bargaining units
B) Work councils
C) Mediation groups
D) Employee boards
Answer: B
Explanation: B) In many European countries, work councils replace the worker-management
mediations typical in U.S. firms. Work councils are formal, employee-elected groups of worker
representatives that meet monthly with managers to discuss topics ranging from no-smoking
policies to layoffs.
Difficulty: Easy
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
10) In many European countries, ________ replace the union-based worker-management
mediations typical in the U.S.
A) HR managers
B) corporate attorneys
C) work councils
D) bargaining units
Answer: C

Explanation: C) In many European countries, work councils replace the worker-management
mediations typical in U.S. firms. Work councils are formal, employee-elected groups of worker
representatives that meet monthly with managers to discuss topics ranging from no-smoking
policies to layoffs.
Difficulty: Easy
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
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Copyright 2017 Pearson Education, Inc.
11) In Germany, employees have the legal right to a voice in setting company policies. This is
called ________.
A) codetermination
B) employment at will
C) internal coordination
D) gainsharing
Answer: A
Explanation: A) Codetermination is the rule in Germany and several other countries.
Codetermination means employees have the legal right to a voice in setting company policies.
Difficulty: Easy
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
12) The European Union is best described as a ________.
A) system of global standards, policies, and legislation
B) common market for goods, services, capital, and labor
C) political agreement that standardizes human resource laws
D) political system for equalizing wages, benefits, and taxation
Answer: B
Explanation: B) The separate countries of the former European Community unified into a
common market for goods, services, capital, and even labor called the European Union (EU).
Tariffs for goods moving across borders from one EU country to another generally disappeared,
and employees now move freely between jobs in EU countries.
Difficulty: Moderate
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
13) Which of the following is a true statement regarding the European Union?
A) EU employers must provide employees with written terms of their employment.
B) EU employers must provide two weeks' notice when dismissing employees.
C) Each EU country pays workers the same minimum hourly wage.
D) Workers in the EU must live and work in their home country.
Answer: A
Explanation: A) The EU directive on confirmation of employment requires employers to
provide employees with written terms and conditions of their employment. Each country
determines the amount of notice to give employees, working hours, and wage rate. Workers may
move freely between jobs in EU countries.
Difficulty: Hard
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
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Copyright 2017 Pearson Education, Inc.
14) Why is recruiting, hiring, and retaining good employees difficult in China?
A) economic difficulties
B) unmotivated workers
C) government restrictions
D) training requirements
Answer: C
Explanation: C) China's new labor contract law adds numerous new employment protections for
employees, and makes it correspondingly more expensive for employers in China to implement
personnel actions such as layoffs.
Difficulty: Moderate
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
15) In China, qualified job candidates are most likely to be interested in a firm that offers
________.
A) signing bonuses
B) performance-based pay
C) job expansion opportunities
D) training and development programs
Answer: D
Explanation: D) Employees are highly career oriented and gravitate toward employers that
provide the best career advancement training and opportunities. Group harmony is important in
China, so incentive pay is not advisable.
Difficulty: Moderate
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
16) Daniel is a manager for Siemens China, and it is time to conduct performance appraisals.
During the appraisals, it would be most effective for Daniel to ________.
A) link performance with employee bonuses
B) make personal comments to the employee
C) focus on quantifiable, objective results
D) post appraisal results for each team
Answer: C
Explanation: C) Employee appraisal is particularly sensitive to the cultural realities in China.
The appraisal therefore needs to follow the formalities of saving face and avoiding
confrontational, tension-producing situations. In general, it's best to talk in terms of objective
work data (as opposed to personal comments like "you're too slow").
Difficulty: Hard
Chapter: 17
Objective: 2
AACSB: Application of Knowledge
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
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Copyright 2017 Pearson Education, Inc.
17) A major challenge for international businesses is the need to adapt personnel policies and
procedures to the differences among countries.
Answer: TRUE
Explanation: Taking the company global triggers various management challenges, including
how to adapt personnel policies and procedures to various cultures and countries. Human
resource management must also consider its systems for recruiting, selecting, training, and
appraising and compensating its workers abroad.
Difficulty: Easy
Chapter: 17

Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
18) Codetermination means that employees have a legal right to voice opinions and preferences
in setting company policies.
Answer: TRUE
Explanation: Codetermination means employees have the legal right to a voice in setting
company policies. Workers elect their own representatives to the supervisory board of the
employer.
Difficulty: Easy
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
19) Hourly wages for production workers in the United States are higher than those in Germany.
Answer: FALSE
Explanation: Differences in labor costs are substantial. For example, hourly compensation costs
for production workers range from $2.01 in the Philippines, to $9.34 in Taiwan, $35.53 in the
United States, $47.38 in Germany, to $64.15 in Norway.
Difficulty: Easy
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
20) The official length of a work week in the European Union is 40 hours.
Answer: FALSE
Explanation: The EU sets the workweek at 48 hours, but most EU countries set it at 40 hours a
week.
Difficulty: Easy

Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
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Copyright 2017 Pearson Education, Inc.
21) In China, a structured interview process is the typical method for selecting employees.
Answer: TRUE
Explanation: The dominant employee selection method in China involves analyzing the
applicant's rsum and then interviewing him or her. The ideal way to do this is to institute a
structured interview process, as many of the foreign firms in China have done.
Difficulty: Easy
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
22) In a planned economy, such as China, some industries are under the direct control of the
government while other industries are free to make pricing and production decisions based on
market demand.
Answer: FALSE
Explanation: In planned economies (such as North Korea), the government decides and plans
what to produce and sell, at what price. In mixed economies (such as China), many industries are
still under direct government control, while others make pricing and production decisions based
on market demand.
Difficulty: Moderate
Chapter: 17
Objective: 2
AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
23) In a brief essay, discuss the economic and labor relations factors that are unique to Europe.
Answer: Differences in economic systems also translate into differences in human resource
management policies. For instance, some countries in the Euro zone tend to put more restrictions
on the number of hours an employee can legally work each week. Differences in labor costs are
also substantial. Hourly compensation costs for production workers vary as well. Several
European countries, including the United Kingdom and Germany, require substantial severance
pay to departing employees. The U.S. practice of employment at will does not exist in Europe,
where firing or laying off workers is usually expensive. And in many European countries, work
councils replace the worker-management mediations typical in U.S. firms. Codetermination is
the rule in Germany and several other countries. Unions in Europe are influential, and labor-
management bargaining and relations reflect this fact. In general, four issues characterize
European labor relations: centralization, employer organization, union recognition, and content
and scope of bargaining.
Difficulty: Hard
Chapter: 17
Objective: 2

AACSB: Analytical Thinking
Learning Outcome: 17.2 Illustrate with examples how intercountry differences affect HRM.
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24) ________ are citizens of the countries where they are working.
A) Home-country nationals
B) Multi-nationals
C) Expatriates
D) Locals
Answer: D
Explanation: D) Locals are citizens of the countries where they are working. Expatriates are
non-citizens of the countries in which they are working. Home-country nationals are citizens of
the country in which the multinational company has its headquarters.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
25) Of the types of international workers that multinational companies can employ, locals are
best described as ________.
A) citizens of the countries where they are working
B) noncitizens of the countries in which they are working
C) citizens of the country in which the multinational company has its headquarters
D) noncitizens of the country in which the multinational company has its headquarters
Answer: A
Explanation: A) Locals are citizens of the countries where they are working. Expatriates are
non-citizens of the countries in which they are working. Home-country nationals are citizens of
the country in which the multinational company has its headquarters.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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26) Marie is an Italian executive working in a manufacturing plant in Siena, Italy that is owned
by a parent company based in Singapore. Marie is a(n) ________.
A) local
B) expatriate
C) third-country national
D) home-country national
Answer: A

Explanation: A) Locals are citizens of the countries where they are working. Expatriates are
non-citizens of the countries in which they are working. Home-country nationals are citizens of
the country in which the multinational company has its headquarters.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
27) Jason is a British freelance journalist working in Paris, so he is most likely classified as a(n)
________.
A) local
B) expatriate
C) third-country national
D) home-country national
Answer: B
Explanation: B) Expatriates are non-citizens of the countries in which they are working. Locals
are citizens of the countries where they are working. Home-country nationals are citizens of the
country in which the multinational company has its headquarters. Third-country nationals are
citizens of a country other than the parent or the host country.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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28) ________ are noncitizens of the countries in which they are working.
A) Home-country nationals
B) Third-country nationals
C) Expatriates
D) Locals
Answer: C
Explanation: C) Expatriates are non-citizens of the countries in which they are working. Locals
are citizens of the countries where they are working. Home-country nationals are citizens of the
country in which the multinational company has its headquarters.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
29) In January 2009, Walmart acquired a controlling interest in Chile's leading food retailer.
Since then, Walmart has opened the first environmentally friendly supermarket in Chile that uses
energy efficient technology throughout the store. Walmart is planning to open additional stores
in Chile over the next seven years. Walmart's top executives are considering the idea of
transferring U.S. managers to Chile to oversee the construction and establishment of the new
stores.
Which of the following questions is LEAST relevant to the decision to fill management positions
in Chile with expatriates?
A) What will be the relocation and compensation costs to Walmart of using expatriates?
B) What level of corporate control is needed for opening the new Walmart stores?
C) What is the planned Walmart marketing strategy for the new stores in Chile?
D) What is the typical attrition rate for expatriate employees at Walmart?
Answer: C
Explanation: C) Marketing strategy is irrelevant to a staffing decision. Costs, corporate control,
and attrition rates are important aspects to consider when debating between filling management
positions with locals or expatriates.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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30) Which of the following terms refers to citizens of a country other than the parent or the host
country?
A) third-country national
B) home-country national
C) multi-national
D) local
Answer: A
Explanation: A) Third-country nationals are citizens of a country other than the parent or the
host country. Home-country nationals are citizens of the country in which the multinational
company has its headquarters.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
31) Peter is a German citizen working as a manager for Siemens in Freiberg, Germany. Siemens
has facilities all over the world but its headquarters is in Germany. Peter is best categorized as

a(n) ________.
A) expatriate
B) third-country national
C) home-country national
D) host-country national
Answer: C
Explanation: C) Home-country nationals are citizens of the country in which the multinational
company has its headquarters.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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Copyright 2017 Pearson Education, Inc.
32) Which of the following terms refers to citizens of the country in which the multinational
company has its headquarters?
A) expatriates
B) third-country nationals
C) home-country nationals
D) locals
Answer: C
Explanation: C) Home-country nationals are citizens of the country in which the multinational
company has its headquarters.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
33) Roberta is an Italian citizen who spent a great deal of time during her childhood in England.
She now works in Brazil as an HR manager for a British company. Roberta is best described as
a(n) ________.
A) expatriate
B) third-country national
C) home-country national
D) host-country national
Answer: B
Explanation: B) Third-country nationals are citizens of a country other than the parent or the
host country.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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Copyright 2017 Pearson Education, Inc.
34) In January 2009, Walmart acquired a controlling interest in Chile's leading food retailer.
Since then, Walmart has opened the first environmentally friendly supermarket in Chile that uses
energy efficient technology throughout the store. Walmart is planning to open additional stores
in Chile over the next seven years. Walmart's top executives are considering the idea of
transferring U.S. managers to Chile to oversee the construction and establishment of the new
stores.
Which of the following, if true, supports the argument that locals should be hired to fill
management positions in Chile?
A) Chile has a high percentage of younger workers with college degrees.
B) Managers in Chile are expected to keep their distance from subordinates.
C) Chile has had an increase in foreign direct investment over the last five years.
D) Chileans expect managers and subordinates to interact in a highly informal manner.
Answer: A
Explanation: A) A high number of skilled and educated locals suggests that Walmart would be
able to find competent managers in Chile. The interaction between managers and subordinates
does not necessarily explain why locals should be hired as managers instead of expatriates.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
35) Which of the following is the primary disadvantage of using expatriates to fill foreign
subsidiary management positions?
A) high costs associated with relocation
B) time and effort required for training
C) inability to create short-term results
D) security concerns
Answer: A
Explanation: A) The cost of posting someone abroad is very high due to travel, relocation,
housing, and salary.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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36) All of the following are reasons that firms rely heavily on locals to fill foreign subsidiary
management positions EXCEPT ________.
A) pressure from local government
B) lower costs than using expatriates
C) improved public relations in community
D) high level of skills and technical qualifications
Answer: D
Explanation: D) The cost of using expatriates is a key reason that firms use locals. Local
governments often pressure firms to use locals, and doing so improves the firm's PR in the
community. The drawback of locals is that they likely do not have the necessary technical
qualifications and require extensive training.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
37) In January 2009, Walmart acquired a controlling interest in Chile's leading food retailer.
Since then, Walmart has opened the first environmentally friendly supermarket in Chile that uses
energy efficient technology throughout the store. Walmart is planning to open additional stores
in Chile over the next seven years. Walmart's top executives are considering the idea of
transferring U.S. managers to Chile to oversee the construction and establishment of the new
stores.
Which of the following, if true, best supports the argument of using expatriates to establish the
new Walmart stores in Chile?
A) Local candidates with the necessary managerial experience are difficult to find in Chile.
B) Walmart uses an online recruiting system to facilitate human resources activities.
C) The State Department has issued travel alerts for Americans traveling in Chile.
D) Walmart wants to develop good relationships with the local community.
Answer: A
Explanation: A) The primary reason to use expatriates instead of locals is when qualified local
candidates cannot be found. Hiring locals instead of expatriates would most likely help improve
community relations.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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38) Sara, who is originally from India, works in Texas for Dell as an IT manager. Dell, which
has a localization policy, recently announced that management positions are available in its
Bangalore, India facility. If Sara, who wants to return to India, is offered the Bangalore position,
she would most likely be categorized as a(n) ________.
A) commuter employee
B) independent contractor
C) third-country national
D) permanent transferee
Answer: D
Explanation: D) About 78% of employers have some form of "localization" policy. This is a
policy of transferring a home-country national employee to a foreign subsidiary as a "permanent
transferee." In this case, Sara is a U.S. Dell employee originally from India. If she moves back
she would be a permanent transferee.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
39) Which of the following terms refers to having local employees abroad do jobs that the firm's
domestic employees previously did in-house?
A) adapting
B) offshoring
C) enlarging
D) diversifying
Answer: B
Explanation: B) Offshoring means having local employees abroad do jobs that the firm's
domestic employees previously did in-house. Offshoring is an increasingly popular staffing
option.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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40) Call centers that service customers for firms like software and computer hardware companies
are increasingly using employees in India to staff the telephones. This is an example of
________.
A) outsourcing
B) offshoring
C) downsizing
D) international staffing
Answer: B
Explanation: B) Offshoring means having local employees abroad do jobs that the firm's
domestic employees previously did in-house. Offshoring is a popular staffing option, especially
for call centers.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
41) Which of the following corporate divisions plays the greatest role in offshoring?
A) marketing
B) accounting
C) manufacturing
D) human resources
Answer: D
Explanation: D) When developing foreign markets or opening new manufacturing facilities,
marketing, sales, and production executives play the pivotal roles. Offshoring mostly involves
HR management as firms seek to gain cost advantages. Firms look to their HR managers to help
identify high-quality, low-cost talent abroad, and to provide the necessary information on skills,
foreign wage rates, and working conditions.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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42) Which of the following terms refers to the belief that home country attitudes, management
style, knowledge, evaluation criteria, and managers are superior to anything the host country has
to offer?

A) polycentric
B) ethnocentric
C) geocentric
D) monocentric
Answer: B
Explanation: B) An ethnocentric corporation believes that home-country attitudes, management
style, knowledge, evaluation criteria, and managers are superior to anything the host country
might have to offer.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
43) A corporation that believes that only host country managers can ever really understand the
culture and behavior of the host country market would be referred to as ________.
A) polycentric
B) ethnocentric
C) geocentric
D) monocentric
Answer: A
Explanation: A) A polycentric-oriented firm would staff its foreign subsidiaries with host-
country nationals, and its home office with parent-country nationals.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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44) Samsung tends to follow an ethnocentric staffing model. From which group will it most
likely hire for upper-level management positions at its Texas facility?
A) home-country nationals
B) host-country nationals
C) third-country nationals
D) local citizens
Answer: A
Explanation: A) With an ethnocentric staffing policy, Samsung fills key management jobs with
home-country nationals. Managers would be citizens of South Korea where Samsung has its
headquarters.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
45) Which of the following is the LEAST likely reason that a firm would choose an ethnocentric
staffing policy?
A) lack of qualified host-country upper-management candidates
B) goal of reducing misunderstandings with locals
C) need to transfer core competencies effectively
D) desire to maintain a unified corporate culture
Answer: B
Explanation: B) Reasons given for ethnocentric staffing policies include lack of qualified host-
country senior management talent, a desire to maintain a unified corporate culture and tighter
control, and the desire to transfer the parent firm's core competencies to a foreign subsidiary
more expeditiously. A polycentric-oriented firm would likely reduce the local cultural
misunderstandings that might occur with ethnocentric staffing.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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46) Mercedes sent a team of executives from Germany to oversee the start-up of its U.S.
operations. Which of the following terms best describes the values of Mercedes' top executives?
A) polycentric
B) monocentric
C) ethnocentric
D) geocentric
Answer: C
Explanation: C) With an ethnocentric staffing policy, the firm fills key management jobs with
parent-country nationals. Mercedes sent German executives to manage an American facility, so
its executives have ethnocentric values.
Difficulty: Moderate
Chapter: 17

Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
47) What value classification refers to a belief that the best manager for a specific position could
be in any of the countries in which the firm operates?
A) polycentric
B) ethnocentric
C) geocentric
D) monocentric
Answer: C
Explanation: C) A geocentric staffing policy seeks the best people for key jobs throughout the
firm, regardless of nationality. This can let the global firm use its human resources more
efficiently by transferring the best person to the open job, wherever he or she may be.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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48) With a geocentric staffing policy, a firm is most likely able to ________.
A) provide effective training
B) recruit recent college graduates
C) use its human resources efficiently
D) strengthen its image within a local community
Answer: C
Explanation: C) A geocentric staffing policy fills positions with the best people from within the
organization, regardless of nationality. This can let the global firm use its human resources more
efficiently by transferring the best person to the open job, wherever he or she may be.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
49) In January 2009, Walmart acquired a controlling interest in Chile's leading food retailer.
Since then, Walmart has opened the first environmentally friendly supermarket in Chile that uses
energy efficient technology throughout the store. Walmart is planning to open additional stores
in Chile over the next seven years. Walmart's top executives are considering the idea of
transferring U.S. managers to Chile to oversee the construction and establishment of the new
stores.
Which of the following, if true, supports the assertion that Walmart is an ethnocentrically
oriented corporation?
A) Walmart usually succeeds on an international level because the firm actively works to support
local charities.
B) Walmart rarely experiences cultural misunderstandings because of its tendency to hire locals
to fill management positions.
C) Walmart aims to maintain a unified organizational culture by filling foreign management
positions with Americans.
D) Adaptability screening eliminates problems associated with transferring Walmart managers
and their families abroad.
Answer: C
Explanation: C) An ethnocentric company fills key management positions with home-country
nationals to maintain a unified culture and tight control.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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50) The most common reason that an expatriate fails at an international assignment is ________.

A) incompetence
B) technical demands
C) inability of spouse to adjust
D) language difficulties
Answer: C
Explanation: C) In one study, U.S. managers listed, in descending order of importance, reasons
for expatriates leaving early: inability of spouse to adjust, managers' inability to adjust, other
family problems, managers' personal or emotional immaturity, and inability to cope with larger
overseas responsibility.
Difficulty: Moderate

Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
51) Which of the following qualities is most closely linked to an employee's success on an
international work assignment?
A) technical skills
B) responsibility
C) intelligence
D) flexibility
Answer: D
Explanation: D) Flexibility and adaptability are crucial to expatriate success.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
52) Which of the following terms refers to the process of assessing an employee's probable
success in handling a foreign transfer?
A) skills placement testing
B) adaptability screening
C) management assessment
D) performance appraisal
Answer: B
Explanation: B) Adaptability screening attempts to assess the assignee's and his or her spouse's
probable success in handling a foreign transfer.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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53) In January 2009, Walmart acquired a controlling interest in Chile's leading food retailer.
Since then, Walmart has opened the first environmentally friendly supermarket in Chile that uses
energy efficient technology throughout the store. Walmart is planning to open additional stores
in Chile over the next five years. Walmart's top executives are considering the idea of
transferring U.S. managers to Chile to oversee the construction and establishment of the new
stores.
Which of the following, if true, undermines the argument of using expatriates to establish the
new Walmart stores in Chile?
A) Adaptability screening tests indicate that three potential candidates are bilingual and travel
overseas frequently.
B) Walmart offers overseas candidates extensive training on cultural differences and adaptation
skills.
C) The most qualified Walmart managers have no foreign travel experience and do not speak
Spanish.
D) A balance sheet approach is used by Walmart, but workers do not receive hardship
allowances for moving to Chile.
Answer: C
Explanation: C) Foreign travel experience and language skills demonstrate an ability to live and
work with other cultures. If the most qualified candidates lack that experience, then using
expatriates is probably a bad idea.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Application of Knowledge
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
54) According to research, all of the following will most likely help spouses of expatriates adjust
to living in foreign countries EXCEPT ________.
A) close family relationships
B) pre-school age children
C) scheduled vacations
D) language training
Answer: C
Explanation: C) Language fluency helps spouses adjust as do preschool-age children. A strong
bond of closeness between the spouse and the expat partner is also helpful. Scheduled vacations
are less likely to improve the adjustment to life overseas.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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55) Which term refers to a group of geographically dispersed co-workers that uses a desktop
videoconferencing system to communicate and accomplish tasks for the firm?
A) virtual team
B) telecommuter group
C) permanent transferee
D) short-term international team
Answer: A
Explanation: A) Virtual teams are groups of geographically dispersed co-workers who interact
using a combination of telecommunications and information technologies to accomplish an
organizational task. With desktop videoconferencing systems often the heart of such systems,
communication among team members can embrace the body language and nuances of face-to-
face communications.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
56) What is the primary problem associated with virtual teams at international firms?
A) scheduling meetings
B) agreeing on important issues
C) facilitating group communication
D) building trust among team members
Answer: D
Explanation: D) The main challenges that virtual teams face are people-related. These include
building trust, cohesion, team identity, and overcoming the isolation among team members.
Desktop videoconferencing systems enable team members to communicate with each other and
enable members to see the body language and nuances of face-to-face communications.
Difficulty: Moderate
Chapter: 17

Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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57) U.S. employers have most likely experienced an increase in successful expatriate
assignments in the last two decades because they have ________.
A) focused on job performance as the main selection criteria
B) increased the number of selection criteria for global assignees
C) provided global assignees with local managers to serve as mentors
D) allowed HR managers to have more control of the global hiring process
Answer: B
Explanation: B) Traditional expatriate selection focused on job performance in the home
country. However, in recent decades, U.S. firms have increased the number of selection criteria
used to choose global assignees. Employers now regularly use selection criteria such as
technical/professional skills, expatriates' willingness to go, experience in the country, personality
factors (including flexibility), leadership skills, the ability to work with teams, and previous
performance appraisals in the selection process.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
58) The majority of multinational corporation management positions are filled by expatriates.
Answer: FALSE
Explanation: Expatriates still represent a minority of multinationals' managers. Locals fill most
positions.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
59) Third-country nationals hold citizenship in three countries.
Answer: FALSE
Explanation: Third-country nationals are citizens of a country other than the parent or the host
countryfor example, a British executive working in the Tokyo branch of a U.S. multinational
bank.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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60) One negative of expatriates is that they can focus too much on short-term results.
Answer: TRUE
Explanation: Some expatriates overemphasize short-term results (knowing they will soon move
on).
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
61) The least expensive way to fill managerial positions in foreign subsidiaries is with local
people.
Answer: TRUE
Explanation: Expatriates are costly due to relocation expenses and housing costs. Filling
positions with locals is much more cost effective.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
62) Virtual teams consist of geographically dispersed coworkers who interact using a

combination of telecommunications and information technologies to accomplish organizational
tasks.
Answer: TRUE
Explanation: Virtual teams are groups of geographically dispersed coworkers who interact using
a combination of telecommunications and information technologies to accomplish an
organizational task.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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63) Offshoring involves moving business processes such as manufacturing or call-center
operations abroad.
Answer: TRUE
Explanation: Offshoring means having local employees abroad do jobs that the firm's domestic
employees previously did in-house. Employers look to their HR managers to help identify high-
quality, low-cost talent abroad, and to provide information on things like literacy, foreign wage
rates, and working conditions.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
64) In a polycentric corporation, the prevailing belief is that home country attitudes, management
style, knowledge, and managers are superior to anything the host country might offer.
Answer: FALSE
Explanation: Ethnocentric is the notion that home-country attitudes, management style,
knowledge, evaluation criteria, and managers are superior to anything the host country has to
offer. Polycentric is the conscious belief that only the host-country managers can ever really
understand the culture and behavior of the host-country market.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
65) Firms using a geocentric staffing model will seek the best people for key jobs throughout the
organization, regardless of nationality.
Answer: TRUE
Explanation: A geocentric staffing policy "seeks the best people for key jobs throughout the
organization, regardless of nationality." This can let the global firm use its human resources
more efficiently by transferring the best person to the open job, wherever he or she may be.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
28
Copyright 2017 Pearson Education, Inc.
66) The most expensive approach to staffing is the polycentric staffing model.
Answer: FALSE
Explanation: A polycentric-oriented firm would staff its foreign subsidiaries with host-country
nationals, and its home office with parent-country nationals. It is the least expensive staffing
method.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
67) Adaptability screening is a commonly used process to assess the likelihood that an expatriate
can reintegrate into his or her home country's culture following a foreign assignment.
Answer: FALSE
Explanation: Adaptability screening aims to assess the assignees' (and spouses') probable
success in handling the foreign transfer, and to alert them to issues (such as the impact on
children) the move may involve.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global

organizations.
68) The Overseas Assignment Inventory is a test that identifies the characteristics and attitudes
international assignment candidates should have based on norms.
Answer: TRUE
Explanation: Many firms also use tests such as the Overseas Assignment Inventory (OAI). This
identifies the characteristics and attitudes international assignment candidates should have. Its
publisher establishes local norms and conducts ongoing validation studies.
Difficulty: Easy
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
29
Copyright 2017 Pearson Education, Inc.
69) To help to ensure success for expatriates on international assignment, companies should
provide language training to their spouses.
Answer: TRUE
Explanation: Employers can help expatriate spouses adjust to living in a foreign country by
providing language training. Spouses are less likely to feel cut off from the foreign culture if they
are able to communicate with locals.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
70) Being childless makes it easier for spouses to adjust to living overseas because of less stress.
Answer: FALSE
Explanation: Having preschool-age children (rather than school-age children or no children)
seemed to make it easier for the spouse of an expatriate to adjust. "This suggests that younger
children, perhaps because of their increased dependency, help spouses retain that part of their
social identities: as parents, their responsibilities for these children remain the same."
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
71) Over the last decade, the majority of U.S. firms have been steadily increasing the size of their
expatriate workforces.
Answer: FALSE
Explanation: For the past ten years or so the trend has definitely been toward using locals or
toward other (non-expat) solutions. New expatriate postings are not only down, but many
employers are bringing them home early. Another survey found that about 47% of U.S.
multinationals are maintaining the size of their expat workforces; 18% were increasing it, and
35% were decreasing the number of expatriates.
Difficulty: Moderate
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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72) What staffing options do multinational firms have when filling positions in foreign
subsidiaries?
Answer: Multinational companies employ several types of international managers. They can
employ locals, home-country nationals, or third-country nationals. Home-country and third-
country-nationals are both types of expatriates. Locals are citizens of the countries where they
are working. Home-country nationals are citizens of the country in which the multinational firm
has its headquarters. Home-country nationals are also called parent-country nationals. Third-
country nationals are citizens of a country other than the parent or the host country.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
73) Describe what an expatriate is and factors that impact expatriate success.
Answer: Expatriates (expats) are noncitizens of the countries in which they are working.
Employers often can't find local candidates with the required qualifications. Multinationals also
view a successful stint abroad as a required step in developing top managers. Furthermore, the
assumption is that home-country managers are already steeped in the firm's policies and culture,
and thus more likely to apply headquarters' ways of doing things.
Posting expatriates abroad is expensive, security problems give potential expatriates' pause,
returning expatriates often leave for other employers within a year or two, and educational
facilities are turning out top-quality candidates abroad. Systematizing the entire expatriate
management process is one way to avoid such early returns. For example, employers should have
an expatriate policy covering matters such as compensation and travel costs. Include procedures,
for instance, requiring that the manager responsible for the expat's costs obtain all chain of
command approvals. Another step in avoiding early returns is to test and select people who have
the necessary traits and adaptability (as discussed earlier). And perhaps most importantly
consider the expat's family situation. In one study, U.S. managers listed, in descending order of
importance, reasons for expatriates leaving early: inability of spouse to adjust, managers'
inability to adjust, other family problems, managers' personal or emotional immaturity, and
inability to cope with larger overseas responsibility. Such findings underscore a truism about
selecting international assignees: The problem is usually not incompetence, but family and
personal problems.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
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74) What are the advantages and disadvantages of using expatriates for staffing foreign
subsidiaries?
Answer: Expatriates typically share a common culture and educational background with
corporate headquarters staff so they are able to facilitate communication and coordination with
corporate headquarters. They are also adept at introducing techniques from home to the host
country setting. However, expatriates typically lack the knowledge of the host country's laws,
culture, economic conditions, social structure, and political processes. These weaknesses can be
overcome with training but such training is expensive. Further, it is expensive to relocate
expatriates and maintain them in the host country.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
75) Explain the meaning of ethnocentrism, polycentrism, and geocentrism and how those values
might affect a multinational company's staffing policy.
Answer: Firms with an ethnocentric value system believe that the knowledge and methods used
in the home country are superior to those elsewhere. Consequently, these firms will prefer to
staff managerial positions in foreign subsidiaries with home-country nationals. Firms with a

polycentric view believe that only host-country nationals can really understand the local culture
and customs. These firms will choose locals for managerial positions in international locations.
Finally, firms with a geocentric view believe that the best managers could be anywhere. They
will likely use a mix of locals, home-country nationals, and third-country nationals.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
32
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76) Explain what a virtual team is. What are some challenges virtual teams face and how can
they be dealt with?
Answer: Virtual teams are groups of geographically dispersed coworkers who interact using a
combination of telecommunications and information technologies to accomplish an
organizational task.

The main challenges virtual teams face are often people related. Challenges include building
trust, cohesion, and team identity, and overcoming the isolation among team members.
Success therefore depends on human resource management actions. In particular, train virtual
team members in leadership, conflict management, and meetings management, and to respond
swiftly to virtual teammates. Be scrupulous about answering e-mails and being positive. Select
virtual team members using behavioral and situational interviews, where they describe how
they'd respond to illustrative virtual team situations. Use current virtual team members to help
recruit and select new team members.
Difficulty: Hard
Chapter: 17
Objective: 3
AACSB: Analytical Thinking
Learning Outcome: 17.3 List and briefly describe the main methods for staffing global
organizations.
77) Before departing for an overseas assignment, an employee would most likely benefit from
________ training.
A) technical
B) interpersonal
C) cross-cultural
D) career development
Answer: C
Explanation: C) Assignees benefit from training on the culture and language of the country in
which they will be living. Such training helps them adapt and to work more effectively with
locals.
Difficulty: Easy
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
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78) All of the following are the primary benefits of providing ongoing training to employees on
overseas assignments EXCEPT ________.
A) offering educational opportunities
B) developing relationships with co-workers
C) cultivating corporate values and standards
D) providing spousal networking opportunities
Answer: D
Explanation: D) Managers abroad continue to need traditional skills-oriented development to
help them grow professionally, hone their skills, and have the same educational opportunities
that stateside co-workers have. In addition, seminars help managers form bonds with colleagues
around the world and cultivate corporate values. Providing spouses the chance to network is not
a primary benefit.
Difficulty: Moderate
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
79) Most North American companies use the ________ approach to formulating expatriate pay.
A) equitable wage rate
B) balance sheet
C) performance
D) total package
Answer: B
Explanation: B) The most common approach to formulating expatriate pay is to equalize
purchasing power across countries, a technique known as the balance sheet approach. More than
85% of North American companies reportedly use this approach.
Difficulty: Easy
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
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80) Which approach to formulating expatriate pay involves estimating the employee's expenses
in the home country and the host country?
A) balance sheet
B) mobility allowance
C) performance pay
D) hardship method
Answer: A
Explanation: A) The balance sheet approach focuses on four groups of expensesincome taxes,
housing, goods and services, and discretionary expenses. The employer estimates what each of
these four expenses is in the expatriate's home country, and what each will be in the host country.
The employer then pays any differences.
Difficulty: Easy
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
81) Which of the following terms refers to paying a portion of an expatriate's salary in home-
country currency and a portion in local currency?

A) balance sheet approach
B) split pay approach
C) hardship premium
D) foreign-service premium
Answer: B
Explanation: B) When using the balance sheet approach, firms often help the expatriate manage
his or her home and foreign financial obligations with the split pay approach. The employer pays
part of a person's actual pay in home-country currency and part in the local currency.
Difficulty: Easy
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
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82) Which of the following is NOT one of the primary expense groups used in the balance sheet
approach to formulating expatriate pay?
A) taxes
B) housing
C) disposable income
D) discretionary expenses
Answer: C
Explanation: C) The balance sheet approach focuses on four groups of expensesincome taxes,
housing, goods and services, and discretionary expenses. Disposable income is not a category.
Difficulty: Easy
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
83) ________ are financial payments over and above regular base pay.
A) Foreign service premiums
B) Hardship allowances
C) Balance sheet payments
D) Mobility premiums
Answer: A
Explanation: A) Foreign service premiums are financial payments over and above regular base

pay, typically ranging between 10% and 30% of base pay.
Difficulty: Easy
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
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84) JJP Enterprises seeks to entice one of its star managers to move to Iraq to oversee a
construction project. The firm will most likely offer a ________ because of the difficult living
and working conditions in Iraq.
A) cost-of-living allowance
B) performance bonus
C) hardship allowance
D) mobility premium
Answer: C
Explanation: C) Hardship allowances compensate expatriates for hard living and working
conditions at certain foreign locations.
Difficulty: Moderate
Chapter: 17
Objective: 4
AACSB: Application of Knowledge
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
85) Which of the following terms refers to a lump-sum payment given to employees as a reward
for moving from one assignment to another?
A) hardship allowance
B) foreign service premium
C) cost-of-living allowance
D) mobility premium
Answer: D
Explanation: D) Mobility premiums are typically lump-sum payments to reward employees for
moving from one assignment to another.
Difficulty: Easy
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
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86) Jim Simmons, an American, has worked for a U.S. firm's Italian operations for two years
with great success. Now, the company wants Jim to relocate to France to establish a new
division. The company will most likely offer Jim a ________ to reward him for moving from
one assignment to another.
A) hardship allowance
B) foreign service premium
C) cost-of-living increase
D) mobility premium
Answer: D
Explanation: D) Mobility premiums are typically lump-sum payments to reward employees for
moving from one assignment to another.
Difficulty: Moderate
Chapter: 17
Objective: 4
AACSB: Application of Knowledge
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
87) All of the following characterize European labor relations EXCEPT ________.
A) limited number of bargaining units
B) informal recognition of labor unions
C) bargaining through employer associations
D) industry-wide collective bargaining
Answer: A
Explanation: A) Unions in Europe are influential, and labor-management bargaining and
relations reflect this fact. Collective bargaining in Western Europe tends to be industry-wide,
which leads to bargaining through employer associations. Union recognition is less formal than
in the United States.
Difficulty: Hard
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
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88) Which of the following is most likely NOT covered by kidnapping and ransom insurance
policies?
A) abductions
B) ransoms
C) crisis teams
D) weapons
Answer: D
Explanation: D) K&R insurance typically covers several costs associated with kidnappings,
abductions, or extortion attempts. These costs might include, for instance, hiring a crisis team,
the actual cost of the ransom payment to the kidnappers or extortionists, insuring the ransom
money in transit, legal expenses, and employee death or dismemberment.
Difficulty: Moderate
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
89) Frank Williams is being sent to Saudi Arabia for two years to work for his company's Saudi
affiliate. Which of the following suggestions should Frank follow to minimize his chances of
being the victim of a kidnapping?
A) Take the same route to and from work.
B) Arrive at the airport close to departure time.
C) Wait at the airport in a main traffic area.
D) Leave work at the same time each day.
Answer: B
Explanation: B) Security experts suggest that business travelers arrive at airports as close to
departure time as possible and wait in areas away from the main flow of traffic where they're not
as noticeable. Employees should also vary their departure and arrival times and take different
routes to and from work.
Difficulty: Hard
Chapter: 17
Objective: 4
AACSB: Application of Knowledge
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
39
Copyright 2017 Pearson Education, Inc.
90) ________ refers to bringing a manager back home after a foreign assignment has been
completed.
A) Expatriation
B) Repatriation
C) Mediation
D) Job rotation
Answer: B
Explanation: B) Expatriation refers to sending a worker to work overseas, while repatriation is
the process of bringing the employee back to his or her home country. Repatriation programs
help employees and their families make smooth adjustments.
Difficulty: Easy
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
91) A formal repatriation program should do all of the following EXCEPT ________.
A) assist employees with relocation logistics
B) seek compensation and benefits on behalf of employees
C) help employees update their resumes and make career plans
D) reassure employees of the company's concern for their welfare
Answer: B
Explanation: B) Repatriation programs are supported by an employee's firm, so seeking
compensation and benefits is not part of the activities. However, repatriation programs should
help employees with the logistics of moving back, help them with career planning, and reassure
them that the firm cares.
Difficulty: Hard
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
40
Copyright 2017 Pearson Education, Inc.
92) Which of the following is a true statement regarding expatriates?
A) Most expatriates require at least one year of psychological help after returning home.
B) Most expatriates avoid traveling abroad after returning to their home country.
C) Most expatriates and their families prefer open-ended work assignments.
D) Most expatriates quit within three years of returning home.
Answer: D
Explanation: D) One of the most worrisome facts about sending employees abroad is that 40%
to 60% of them will probably quit within 3 years of returning home.
Difficulty: Hard
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
93) Employees preparing for overseas assignments benefit from training in cultural differences,
attitude formation and behavioral influence, factual country knowledge, and language skills.
Answer: TRUE
Explanation: Orienting and training employees prior to their departure helps them adjust and be
more successful. They should receive training in culture, language, and adaptation methods.
Difficulty: Easy
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
94) The most common approach to formulating expatriate pay is the balance sheet approach.
Answer: TRUE
Explanation: The most common approach to formulating expatriate pay is to equalize
purchasing power across countries, a technique known as the balance sheet approach.
Difficulty: Easy
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
41
Copyright 2017 Pearson Education, Inc.
95) Foreign service premiums compensate expatriates for exceptionally hard living and working
conditions at certain foreign locations.
Answer: FALSE
Explanation: Foreign service premiums are paid to encourage the employee to take the job
abroad. Hardship allowances compensate expatriates for hard living and working conditions at

certain foreign locations.
Difficulty: Easy
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
96) As in the U.S., collective bargaining in Western Europe typically occurs at the plant level
rather than at the industry level.
Answer: FALSE
Explanation: Collective bargaining in Western Europe tends to be industry-wide, whereas in the
United States it generally occurs at the enterprise or plant level.
Difficulty: Moderate
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
97) Varying departure and arrival times when working in a foreign country can minimize a
business traveler's chances of becoming a crime victim.
Answer: TRUE
Explanation: Experts advise business travelers to vary their departure and arrival times and to
take different routes to and from work to stay safe in a foreign country.
Difficulty: Moderate
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
42
Copyright 2017 Pearson Education, Inc.
98) What are some reasons for firms bringing expatriates home early? How can firms ease the
transition during repatriation?
Answer: New expatriate postings are not only down, but many employers are actually bringing
them home early for a number of reasons. Posting expatriates abroad is very expensive, security
problems increasingly give potential expatriates pause, educational facilities are turning out top-
quality candidates abroad, and the recent global recession made the cost of posting employees
abroad even more unattractive. As expatriates return home, employers can ease the transition
with a repatriation program. Firms need to make sure that the expatriate and his or her family
don't feel that the company has left them adrift. Firms often provide psychologists, mentors,
career planning services, and relocation assistance.
Difficulty: Hard
Chapter: 17
Objective: 3, 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
43
Copyright 2017 Pearson Education, Inc.
99) What are the major steps in establishing a global pay system?
Answer: Balancing global consistency in compensation with local considerations starts with
establishing a rewards program that makes sense in terms of the employer's strategic aims. Then
the employer turns to more micro issues, such as, is how we're paying our employees abroad
competitive? Steps to follow in creating a global pay system include these:
Step 1. Set strategy. First, formulate longer-term strategic goals, for instance, in terms of
improving productivity or boosting market share.
Step 2. Identify crucial executive behaviors. Next, list the actions you expect your executives
to exhibit in order to achieve these strategic goals.
Step 3. Global philosophy framework. Next, step back and ask how you want each pay
component (salary, bonus, incentives, and so forth) to contribute to prompting those executive
actions.
Step 4. Identify gaps. Next, ask, "To what extent do our pay plans around the world now support
these actions, and what changes if any are required?"
Step 5. Systematize pay systems. Next, create more consistent performance assessment
practices, and establish consistent job requirements and performance expectations for similar
jobs worldwide.
Step 6. Adapt pay policies. Finally, review your global pay policies (for setting salary levels,
incentives, and so forth). Conduct surveys and analyses to assess local pay practices. Then fine-
tune the firm's global pay policies so they make sense for each location.
Difficulty: Hard
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
100) Explain the balance sheet approach to formulating expatriate pay.
Answer: This method seeks to equalize purchasing power across countries. The basic method is
to take the expenses for an employee in his or her home country, including income taxes,
housing, goods and services, and discretionary income, and then to estimate how those expenses
will vary in the host country. The employer will pay the differences. The base salary will
normally be in the same range as the manager's home-country salary. Then, a foreign service
premium and/or hardship allowance might be added. There could also be allowances given for
housing and education.
Difficulty: Hard
Chapter: 17
Objective: 4
AACSB: Analytical Thinking
Learning Outcome: 17.4 Discuss some important issues to keep in mind in training, appraising,
and compensating international employees.
44
Copyright 2017 Pearson Education, Inc.
101) What are the top drivers of employee engagement around the globe?
A) career opportunities
B) recognition
C) company reputation
D) setting goals
Answer: A
Explanation: A) Career opportunities was the number-one key driver of employee engagement
in all regions of the world, underscoring the universal importance of providing such
opportunities.
Difficulty: Hard
Chapter: 17
Objective: 5
AACSB: Analytical Thinking
Learning Outcome: 17.5 Discuss similarities and differences in employee engagement around
the globe.
102) The current global average of employee engagement is:
A) 23%
B) 44%
C) 61%
D) 83%
Answer: C
Explanation: C) Recently, the trend was for employee engagement (highly and moderately
engaged) in all regions of the world to be converging around the current global average of about
61% of employees engaged. So, workers everywhere are becoming about equally engaged.
Difficulty: Hard
Chapter: 17
Objective: 5
AACSB: Analytical Thinking
Learning Outcome: 17.5 Discuss similarities and differences in employee engagement around
the globe.
103) The top driver of employee engagement around the globe is career opportunities.
Answer: TRUE
Explanation: Career opportunities was the number-one key driver of employee engagement in
all regions of the world.
Difficulty: Moderate
Chapter: 17
Objective: 5
AACSB: Analytical Thinking
Learning Outcome: 17.5 Discuss similarities and differences in employee engagement around
the globe.
45
Copyright 2017 Pearson Education, Inc.
104) Which of the following was determined by a study of six international firms that have
successfully established global HR systems?
A) Firms should focus on expatriation and repatriation programs to ease the transition period for
employees working abroad.
B) Firms should develop HR systems that are universally acceptable and that can be effectively
implemented in any location.
C) Firms rely more heavily on expatriates than locals in foreign subsidiaries, so it is unnecessary
to make changes to existing HR policies.
D) Firms with foreign subsidiaries should adhere to local customs regarding screening, hiring,
and training applicants.
Answer: B
Explanation: B) The study's overall conclusion was that employers who successfully implement
global HR systems do so by applying several best prac

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