Which of the following countries has the greatest flexibility of each company to determine wages? A) Argentina B) Germany C) Japan D) Australia
C) Japan
In \_\_\_\_\_\_\_\_\_, companies have the least flexibility in hiring and firing workers. A) Sweden B) United States C) Germany D) Denmark
A) Sweden
The Chinese computer company Lenovo has pay differentials of 30 to 1 and a flexible benefits plan.
A) TRUE
B) FALSE
A) TRUE
Social contract and culture are examples of \_\_\_\_\_ factors in international compensation. A) economic B) employee C) organizational D) institutional
D) institutional
Use of performance-based pay is increasing in Germany, Japan and China.
A) TRUE
B) FALSE
A) TRUE
The cost in minutes of working time to buy a Big Mac is most expensive in \_\_\_\_\_\_\_\_\_\_\_\_. A) Munich B) Miami C) Nairobi D) Tokyo
C) Nairobi
The national mind-set tends to ignore variation among organizations within each nation.
A) TRUE
B) FALSE
A) TRUE
The \_\_\_\_\_\_\_\_\_\_\_ model for business and compensation may be the business model of the 21st century. A) globalizer B) localizer C) exporter D) matrix
A) globalizer
Which of the following category of employees is generally most advantageous for a multinational corporation to utilize for a foreign location position? A) a third-country national B) an expatriate C) a business commuter D) a local-country national
D) a local-country national
The balance sheet approach to paying expatriates attempts to provide them the same spending power while on overseas assignment as they would have in their home country.
A) TRUE
B) FALSE
A) TRUE
How people get paid around the world depends on what 4 things?
- economic variations
- institutional variations
- organizational variations
- employee characteristics
What are relevant factors in international compensation?
- social contracts
- cultures
- trade unions
- ownership and financial markets
- managers’ autonomy
What are the “3 pillars” of traditional Japanese employment relationships?
- Lifetime security
- Seniority-based pay and promotion
- Enterprise unions (decentralized unions in single company
T/F German pay decisions are highly regulated?
T
What are 3 General international compensation strategies?
- Localizer= independent of corporate HQ- pay consistent with local conditions
- Exporter= HQ system exported to other countries
- Globalizer=common system between global locations to support consistency
What are PCNs?
Parent Country Nationals (expats native to home country of company)
What are TCNs?
Third Country Nationals (expats not native to home country of company or work country)
What are LCNs?
Local Country Nationals (citizen of country where company operates)
What are elements of Expatriate compensation?
- Salary
- Taxes
- Housing
- Allowances and Premiums
Why do companies pay expats allowances/
Because expats must:
- Work without supervision
- live/work in strange surroundings
- represent the employer in host country
What are the objectives of the Balanced Sheet Approach?
- Ensure mobility of people to global assignments
- Ensure expats don’t gain/lose financially
- Minimize adjustments for expats and families
T/F The United States is the only developed country that taxes its citizens for income earned in a foreign country
T
What are some alternatives to Balanced Sheet Approach?
- Negotiation- mutually agreeable package
2 Localization- use host country salary scales and provide allowances for taxes, housing, dependents, etc. - Modified Balance Sheet- ties salary to a region, instead of country
- Lump Sum/Cafeteria- Sets salaries at home country rates, gives lump sum allowance
