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Multinational Corporations and Expatriates

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Question 1: The attrition rate for expatriates is about double that of non-expatriates. How do MNCs increase expatriate retention? What are the three reasons for poor expatriate retention?

Question 2: What are the forces for global convergence in a labor system? What are the forces for a labor system to maintain divergence or establish a divergent system?

Question 3: How do MNCs compensate expatriates? In order to fairly compensate the expatriates, what four components of a compensation package must be considered?

Question 4: The inability of the spouse to adjust to the new environment is cited as the most likely reason for expatriate failure. What should companies do to lessen the impact of family unhappiness?

Course Text Book: Deresky, H. (2011). International management: Managing across borders and cultures (7th ed.). Upper Saddle River, NJ: Prentice Hall

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Solution Summary

This detailed solution discusses how MNC's can increase expatriate retention, and the three reasons for expatriate retention. It also discusses the forces for global convergence in a labor system and the forces needed for a labor system to maintain divergence or establish a divergent system. It explains how MNC's compensate expatriates, and the four components that must be considered. It tells how companies can reduce the chances of an unhappy spouse when an employee is relocated overseas. Includes APA formatted references.

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Question 1

The attrition rate for expatriates is about double that of non-expatriates. How do MNCs increase expatriate retention? What are the three reasons for poor expatriate retention?

The attrition rate for expatriates is considerably higher than that of non-expatriates. MNCs can increase expatriate retention by realizing common problems. First, selection of employees must be thoroughly considered based upon the employee's ability to handle an overseas assignment, as well as their family situation.
Expatriates may be unable to adjust to work and life at host country locations, and thus become more stressed out. Families of the employee face a key role as well, and should they be dissatisfied, it is likely the international assignment will fail. Expatriates may also be insufficiently compensated and feel a lack of support from the home office, including career support and repatriation. In order to increase expatriate retention, it is important to have a definite and deliberate pre-departure training program for both the employee and his or her family. This helps the employee understand the work environment, as well as anticipate difference in the new location. An effective program should include a cultural awareness program and language training, as well as advance visits so that the employee and his or her family understands the culture and situation ahead of time. In addition, it is important to have ongoing performance management that includes goal setting, performance appraisal and feedback. In this way the employee is more likely to feel connected to the company. The company must also ensure that expatriate's are fairly compensated with sufficient allowances and benefits to be fair to the employee. The company's repartition process must be handled in a way that serves to attract and retain future expatriates. Three reasons for poor expatriate retention are: expatriates are highly marketable and may receive more attractive offers from other employers. Expatriates may find their overseas compensation packages to be more generous than those at home so they go from one company to another to take advantage of these packages. In addition, expatriates may feel unappreciated during the assignment and afterwards, so they leave the company.

Chew, J. (2004). Expatriates ...

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