There are three main staffing strategies a company can implement when entering an overseas market, with each having its advantages and disadvantages. The first strategy is a home-country national strategy. This staffing strategy uses employees from the home country to live and work in the country. These individuals are called expatriates. The second staffing strategy is a host-country national strategy, which means to employ people who were born in the country in which the business is operating. Finally, a third-country national strategy means to employee people from an entirely different country from the home country and host country. Table 14.4 lists advantages and disadvantages of each type of staffing strategy. Whichever strategy is chosen, communication with the home office and strategic alignment with overseas operations need to occur for a successful venture.
Home-Country National |
Host-Country National |
Third-Country National |
|
Advantages |
Greater control of organization |
Language barrier is eliminated |
The third-country national may be better equipped to bring the international perspective to the business |
Managers gain experience in local markets |
Possible better understanding of local rules and laws |
Costs associated with hiring such as visas may be less expensive than with home-country nationals |
|
Possible greater understanding and implementation of business strategy |
Hiring costs such as visas are eliminated |
||
Cultural understanding |
|||
Morale builder for employees of host country |
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Disadvantages |
Adapting to foreign environment may be difficult for manager and family, and result in less productivity |
Host-country manager may not understand business objectives as well without proper training |
Must consider traditional national hostilities |
Expatriate may not have cultural sensitivity |
May create a perception of “us” versus “them” |
The host government and/or local business may resent hiring a third-country national |
|
Language barriers |
Can affect motivation of local workers |
||
Cost of visa and hiring factors |
Human Resource Recall
Compare and contrast a home-country versus a host-country staffing strategy.
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