1. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 20 International Personal Selling and Personnel Management Dana-Nicoleta Lascu Chapter 15

2. Copyright Atomic Dog Publishing, 2008 Chapter Objectives Examine companies' expatriate management strategies. Describe the different types of employees suited for international operations. Address issues related to expatriate management, such as motivating international employees and ensuring successful assignment performance and repatriation.

3. Copyright Atomic Dog Publishing, 2008 International Personnel Issues Hiring decisions are a function of the company’s involvement in the market. Market presence, entry mode and commitment to market determine:  Size of the sales team.  Types of sales representatives. Companies using home-country intermediaries, such as trading companies or an export management companies, rely on the sales force of the intermediary for international sales and limit sales activity to the domestic market. Personal selling becomes a very important component in international marketing communications for companies using host-country intermediaries and those companies directly involved in the international target market.

4. Copyright Atomic Dog Publishing, 2008 Types of International Personnel: Order Taker Order taker Individual who processes routine orders from the customer. Likely to be a local employee who is familiar with the local customs and culture. Order taker selling Dutch semi-prepared food. The order taker is knowledgeable and makes informed recommendations regarding product preparation.

5. Copyright Atomic Dog Publishing, 2008 Types of International Personnel: Order Getter Order getter Individual who actively generates potential leads. Persuades customers to purchase the firm’s products. Can be local or international staff. Highly skilled technically, as well as trained in conducting negotiations. In international marketing, most order getters work in the business-to-business area as field salespeople, going to customers to solicit business. Order getters selling to other businesses would go to their clients’ places of business. Order getters selling to consumers directly would go to consumers’ homes.

6. Copyright Atomic Dog Publishing, 2008

7. Issues: Infrastructure issues: In high-income countries, telemarketing is often used in selling products. For telemarketing to be successful, companies need access to a reliable telephone system, which may not be available in low-income countries. Technology issues: Companies often rely on electronic data interchange (EDI), whereby buying and selling firms are able to share important data on production, inventory, shipping, and purchasing. EDI relationships are possible primarily if the firms have the appropriate resources and trust their local partner with the information.

8. Copyright Atomic Dog Publishing, 2008 Issues (contd.) Legal issues: After a sale is closed, companies sign contracts that address the terms of the transaction, costs involved, and the term of the relationship. In many countries, a written contract does not mean much: Sellers and buyers can readily choose to ignore the agreement without any penalty. The legal systems may endorse contracts but not defend them. In many cultures, a contract may have little value, while someone’s word or a handshake may be fully reliable.

9. Copyright Atomic Dog Publishing, 2008 Employees of the International Firm The foreign sales force of the multinational corporation is composed of: Expatriates Employees working in a foreign country. Types: Home-country nationals Third-country nationals Local employees.

10. Copyright Atomic Dog Publishing, 2008 Expatriates: Home Country Nationals They are the traditional expatriate (expat). Employees from the home country of the international company, with experience working for the company, and who are assigned by that company to work overseas. Preferred by companies whose selling function relies on highly-specialized information. However, these employees… Are expensive Tend to have difficulty adapting to new international environments.  Experience high cultural barriers  Lack local personal connections.  Difficulty finding employees willing to take on international assignments

11. Copyright Atomic Dog Publishing, 2008 Expatriates: Third-Country Nationals Employees working temporarily in the assignment country who are NOT nationals of that country OR of country in which headquarters is located. Speak numerous languages. Familiar with customs and business practices in different environments. Have learned, through experience, to adapt optimally for international assignments. Cost less than home-country nationals.

12. Copyright Atomic Dog Publishing, 2008 Host-Country Nationals (Locals) Local salespeople who work in the home country for an international corporation. Understand the business environment and business practices in the company’s home country and have established relationships in the local business and government community. Well trained technically. Willing to return to home country to work for the multinational firm.

13. Copyright Atomic Dog Publishing, 2008 Long Distance International Selling Selling via the Internet or mail is likely an important venue used in approaching new international customers. Costs of distance selling are lower, allowing for greater market coverage. However: The selling infrastructure (mail, Internet accessibility) lags behind in low-income countries and emerging markets. It is difficult to coordinate internationally due to cultural differences.

14. Copyright Atomic Dog Publishing, 2008 Managing International Employees Companies that attempt to transplant personnel policies proven successful in the home country will run against obstacles in different international environments. Issues related to culture come into play.

15. Copyright Atomic Dog Publishing, 2008 Buyer-Seller Interactions Certain selling approaches work better than others  Hard sell is inappropriate in many countries in Asia.  Eye-to-eye contact may be seen as aggressive.  Business cards are handed with both hands and received with both hands in certain cultures to convey respect.  Negotiation differs depending on culture; in many environments, it is expected that a personal relationship is established before the negotiation.

16. Copyright Atomic Dog Publishing, 2008 Negotiation and Culture National character:  Individualism  Power Distance  Uncertainty Avoidance  Masculinity/Femininity Organizational culture Low context cultures use formal, direct communication that is verbally expressed. High context cultures use extensive nonverbal information to convey the message. Individual personality also comes into play.

17. Copyright Atomic Dog Publishing, 2008 Successfully Managing Expatriates Successful expatriate management requires: 1)Effective screening and recruitment. 2)Appropriate training and development strategies. 3)Motivating for peak performance. 4)Ensuring successful repatriation. 50% of expatriate assignments FAIL

18. Copyright Atomic Dog Publishing, 2008 Screening and Recruiting Expatriates The ideal expatriate has… A high cultural sensitivity and awareness. The ability to adapt behavior in cross-national settings. A high level of resiliency. Extensive international knowledge and willingness to gain it. A strong desire to work overseas.

19. Copyright Atomic Dog Publishing, 2008 Attenuating Culture Shock Western managers often face culture shock when they are assigned in Asia.

20. Copyright Atomic Dog Publishing, 2008 Attenuating Culture Shock Culture Shock is a pervasive feeling of anxiety resulting from one’s presence in an unfamiliar culture. Culture shock is lessened by adequately training the employees; this is done with: Short courses in cross-cultural communications. Cultural immersion. Culture shock is also lessened by creating appropriate expectations for the employees.  Employers should help them anticipate their physical and social environment.

21. Copyright Atomic Dog Publishing, 2008 Incentives for International Post Assignments In order for the international assignment to be successful, the employee must be highly motivated by both intrinsic aspects of motivation and by extrinsic factors. Some compensation incentives include: Cost of living/post adjustment: A compensation incentive whereby the company adjust expatriate salaries to reflect the costs of living in the new environment at standards in the expatriate’s home country. Housing allowance: A compensation incentive whereby the company covers part or the entire cost of housing for the expatriate employee while abroad. May include covering for the cost of household help and security.

22. Copyright Atomic Dog Publishing, 2008 Incentives for International Post Assignments (contd.) Education allowance A compensation incentive whereby the company agrees to cover the cost of children’s education at an international private school in the country of assignment. May include covering costs of attending a boarding school in the expatriate’s home country. Home-leave allowance A compensation incentive whereby the company pays for employee and family to vacation in the home country.

23. Copyright Atomic Dog Publishing, 2008 Incentives for International Post Assignments (contd.) Moving allowance A compensation incentive whereby the company pays for relocation expenses for moving the family household abroad and back to the home country. Repatriation allowance A large sum paid for the successful completion of the international assignment. Other Types of Allowances: There are many other types of allowances. Non- compensation incentives, such as guaranteed promotion upon return are also very important.

24. Copyright Atomic Dog Publishing, 2008 Expatriate Obstacles Factors such as restrictions imposed on interactions with foreigners in some countries impede expatriates' immersion in the local culture and acceptance of their new environment. Gravitating toward home-country expatriates and relying extensively on expatriate groups and forums (websites that unite expatriates in a region, newspapers, etc.) will also impede immersion in the local culture. Isolation Going Native

25. Copyright Atomic Dog Publishing, 2008 Repatriation Issues When expatriates return to the home country, they often experience reverse culture shock, or a feeling of anxiety attributed to: A longing for the international environment left behind. Difficulty readjusting to the home country. Difficulty readjusting to the corporate culture at one’s own firm. Culture shock is exacerbated by: Vast company changes in expatriate employee’s absence. Loss of status during absence. Lack of social circle at work and at home; relationships may have changed over time. Multinational corporations offer incentives upon repatriation in order to attenuate culture shock. Reverse culture shock can be avoided by maintaining connection to company headquarters.

26. Copyright Atomic Dog Publishing, 2008 Chapter Summary Addressed expatriate management strategies. Described the different types of employees hired for firms’ international operations. Addressed issues related to ensuring the success of international assignments.