Complex Employment Management Assignment

Introduction

Akiko Nishimura is upset and exhausted. She prepares a fresh juice and wants to relax a bit. It is three o'clock in the afternoon and she just came back to her apartment situated in a suburb of New Delhi.  Today she had an appointment with her HR manager, Mrs. Puja Malik that lasted three hours. Akiko is more than upset about the offer the HR manager made and does not understand the world any more. Akiko is 40 years old and was born in Tokyo. After her studies in management at the University of Tokyo and Wharton Business School in the USA she started her career with a German multinational manufacturing company in Tokyo in the controlling department. Two years ago her boss offered her to go on an expatriate assignment to New Delhi, India, in order to gain international experience and develop her talent further. Her husband Hiroshi and two daughters, at that time 12 and 10 years old, immediately agreed to change locations and followed her. Hiroshi interrupted his career as a broker in a multinational bank. After two years in New Delhi, Hiroshi still could not find an adequate job. Although the whole family enjoyed living in India and Akiko liked her job, Hiroshi became impatient and coup)d not stand his inactivity any more. Through a former client he got to know about a challenging job opportunity in Singapore and successfully applied for the position.

Akiko shared Hiroshi's happiness and felt that she wanted to follow him to Singapore. So she contacted her HR manager, Puja Malik, a few weeks ago and started to talk to various people within the organization in her personal network, to find out what the options would be and let people know that she is looking. Yesterday, Puja Malik called her and asked for an appointment. They met today in order to talk about several opportunities and the conditions.  Here as the positions were very appealing to Akiko, the conditions were absolutely unreasonable in her perspective. After two hours Akiko became angry, but her HR manager defended the offer with the restructuring of the company and new policies that came up. 'As you know, Akiko, the company started up as a technology venture about 120 years ago with its production located in Germany. Ln order to be profitable their production and sales needed to increase. Due to limitations in the home market, they expanded internationally in the '1920s standing with France and quickly followed by several other countries in each of the five continents. in the 1970s the company employed 300000 people, with more than two-thirds of these outside Germany. Due to this extensive expansion worldwide as well as an increasingly diverse product line, the idea of controlling the entire organization from the German headquarters was seen as an impossible task. There was a need to organize into smaller, more flexible and more manageable units. Hence, the decision was made to set up a "national organization" in every country where there were active enterprises. These national organizations were supported by the international business organization at headquarters. In the course of the last 20 years these national organizations grew to be very independent. The executive board saw the need to start focusing on a more user-oriented policy of globalization. ln this reorganization process the product admissions gained a more prominent role in the structure. Today, you still see a clear role of both the product divisions but also the country organizations in the corporate structure,' Puja Malik points a finger at the annual report and outlines the organizational chart. (See Figure 1.)

                                                                         

                                                                                                                 

Puja Malik continues: 'Although the company wants to act as one company, it always has to focus on the challenge to work with three quite independent sectors. Today, the company is situated in around 60 Countries worldwide with more than 116000 employees, The HR department are currently involved in a change process, moving toward offering more services from shared service centers. One reason for this is the request to be more effective and efficient in the Process especially with the vision to be "one company".' Up to current time, when people have been moving across countries through the company, the standard has been that people mostly moved on a home-based expatriate contract, this rule also applied to Akko when she expatriated to New Delhi. However, her HR

Manager recently informed her that there are new rules and that according to this new policy her expatriate contract would not be renewed when going to Singapore. Pula Malik argues: 'l thinks in terms of transfer, until a few years, we were quite generous with our expat policy. So when there was a need to, let's say, shift talent - just like you, Akiko -, or people with scarce knowledge around the globe we just gave them an expat package. But I think people in general are more open for moving around the globe, instead of going a few years and then wanting to come back. I can see that more people are looking for a career across borders, and this may not be in the form of full expat packages in our company.' Puja Malik obviously sees the need to give a father explanation. She adds that after a long upturn period, the company also has to face the problems of the current economic crisis. This tendency is now forcing the company to rethink their strategy in regards to what they are providing for their employees who are going abroad in order to manage the costs involved. Until recently handling international assignments mostly with expatriates seemed the right way of doing things. But the company is facing a new population, those who stay broad for a longer term or even permanently. 'You need to know, Akiko', Puja Malik goes on; 'we have employees that have been in the same country for eight years on an expat package. But they are not expats anymore! And then you have the globetrotter, those who have had three or four different expat assignments. So they have left their country for more than ten years and we don't know when and if they are coming back. What do you do with them?' Puja emphasizes that this change was placing the company in a position where they were forced to go through and analyze their current policies in regards to international mobility. The intention was to create a cost effective alternative for this new emerging population,

What is this new Local international Policy about?

Puja Malik expands on the new policy: 'The local international policy analysis came about last year as a response to an emerging need especially in Asia. We saw that owing to globalization there were many foreigners coming here on an expatriate assignment, and many of these foreigners also had a wish to stay. This resulted in a need for using a locally based contract, but that would still attract foreigners to travel. As a pure local contract would not be able to attract these employees, we decided to provide some extra enefits to these local international hires. The local international contract fits between an expatriate and a local package. Even though these transfers are paddy employee initiated, we provide a slow landing into the new country. This means that the hose country provides some kind of support.' (see Figure 2.)

The Local international Policy Costs to be coverall by the company:

• Individual host country based salary and incentives according to local scheme.
• Settling-in allowance (ion cover the incidental miscellaneous expenses of a move. e.g. temporary accommodation and meals on arrival, school uniforms and books for school-age children).
• Medical checkup.
• Visa and permits (based on country standards).
• Travel costs (outward journey; one home trip during first year).
• Optional: Allowance for housing and scl-rool (-509o after year '1, 0ozo after year 2).
• Optional: Retention bonus.
• Optional: Allowances according to local needs.

Assignments

• Describe the content of a 'traditional' expatriate package, and the reasons of the company to provide such benefits what limitations do you see in this contract when it comes to handling the company's emerging needs?
• Make a SWOT analysis of the Local international policy using information from the case study.
• Compare the employers' and employees' needs regarding international mobility on a local international contract. What elements would have to be included in a package if they were to answer to these needs?
• To what extent do you believe the distinction between the three groups of assignment packages (expatriate contract {or expatriates, local international contract for local international hires and local contract for external international new recruits) to be fair? To this end (a) refer to equity theory and determine the referent person in each of the three cases and (b) discuss the role of procedural justice What can the company do to provoke positive behavioral intentions in reaction to the packages?
• What does the company need to take into consideration in order to make the Local international policy for this new international employee population be applicable on a global basis? Formalize your arguments and propose a suggestion of a policy framework