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Cultural differences that exist for international companies

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When a company makes the decision to go international, they will need to transfer some of their employees to the new location. Transferring an employee overseas is a huge step for both the employee and the employer, and with that comes several things for both parties to consider. First is the issue of the geographic differences in the cost of living in a new country. "The employee usually gets allowances including cost-of-living, relocation, housing, education and hardship allowances" (Dessler, 2013). A company cannot just expect an employee to pick up and move their family overseas without having solid numbers to depend on, and they cannot be expected to foot the bill on their own.

Second are the compensable factors, or "factors that establish how the jobs compare to one another, and that determines the pay for each job" (Dessler, 2013). Moving your company overseas means that the company will need to hire people in the new country as well. The new company will need to be sure that the employees native to the new country have the same qualifications and abilities as the employees in the home country.

Third is evaluating the employees overseas as you would in the home country. The company needs to evaluate the employees that were transferred overseas to determine if they are performing as well as or better than they were performing in the home country, and make the decision to either keep them overseas or send them home. They also need to evaluate the native employees to ensure that they are on par with the employees in the home country.

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This solution discusses cultural factors when developing compensation packages for international businesses

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In addition to the excellent points made in the student's post, I would also add that when a company goes international, they must also gain an understanding of the cultural differences that exist between the new country and their own culture. Cultural differences impact how employees work within ...

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