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International Human Resource Management is a rare instance of a textbook that has developed alongside the
field – helping to shape what it is today. The author team (based in Australia, the US and Europe) link International
Human Resource Management (IHRM) practices with developments in academic curriculum, making this a key
resource for intermediate and graduate IHRM students, as well as any business students wishing to further their
understanding of IHRM.

This new edition is updated to reflect the rise of the individual, the enabling technology and digitalization, the

RESOURCE MANAGEMENT
interconnected global economy, new market and global responsibilities, and a rise in entrepreneurship.

INTERNATIONAL HUMAN
ABOUT THE AUTHORS
Peter Dowling is Professor of International Management & Strategy at La Trobe University, Melbourne, Australia

Marion Festing is Professor of Human Resource Management and Intercultural Leadership at ESCP Europe and
Rector of the Berlin Campus of this business school, Germany

Allen Engle is Professor of Management in the College of Business and Technology at Eastern Kentucky
University, USA

PRAISE FOR THE NEW EDITION

“What a delight to read the 7th edition of International Human Resource Management by Dowling, Festing
and Engle! These three focus on IHRM in the MNE primarily but also now include smaller and family
owned firms. This book delves into cultural differences and articulates how and when these differences are
relevant. Throughout the book are highly readable “Action Cases”, current research and practical insights,
particularly on implications for IHRM of modes of international operations, cross border alliances, mergers
and acquisitions and international joint ventures. I highly recommend this for scholars, students and HR
practitioners who have international interests.”
Professor Mary Ann Von Glinow, Florida International University, USA: Former Academy of International
Business President; Former Academy of Management President and Knight Ridder Eminent Scholar Chair
in International Management , Florida International University.

ALLEN D. ENGLE, SR
MARION FESTING
PETER J. DOWLING
“As the ecosystem of work becomes increasingly global, boundaryless and interconnected, more
organizations are multinational, and must engage a workforce that spans nations, cultures and regions.
In the 7th edition of International Human Resource Management, Dowling, Festing and Engle offer an
evidence-based and practical framework to guide current and future organizational leaders. With 25
years of history, the book is solidly grounded in research, history and practical experience.”
Dr. John W. Boudreau, Professor and Research Director, University of Southern California Professor John
Boudreau, Southern California University, USA.

“The 7th edition of International Human Resource Management represents a valuable update of our
knowledge of the field in all its global dimensions. The co-authors clearly ‘know their stuff’ in the IJHRM arena.
This work will continue to enlighten academics, students and practitioners across the world for many years to
come. The text is now deepened and extended, thereby bringing us new insights and understandings.”
Professor Malcolm Warner, Wolfson College and Cambridge Judge Business School,
University of Cambridge, UK.

SEVENTH EDITION
“This outstanding book continues to set the standard in the field of international human resource
management. Its international author team does a superb job of combining what we know from theory and
research with current examples and cases to provide the perfect opportunity for students to engage with key

INTERNATIONAL PETER J. DOWLING

decisions and challenges and apply what they have learned. In addition to revisions and updates throughout,
the 7th edition adds a focus on global talent management, internationalizing the small and medium sized firm
MARION FESTING
HUMAN
and a new, extensive case on career issues and managerial succession in the MNE.”
Professor Barry Gerhart, Bruce R. Ellig Distinguished Chair in Pay & Organizational Effectiveness,
Department of Management and Human Resources, Wisconsin School of Business,
ALLEN D. ENGLE, SR

RESOURCE
University of Wisconsin-Madison, USA.

MANAGEMENT
SEVENTH EDITION

To learn more about Cengage Learning, visit www.cengage.com

Purchase any of our products at your local college store or at our
preferred online store www.cengagebrain.com
 Contents vii

Summary266
Discussion Questions 267
Further Reading 267
Notes and References 267

Chapter 10 Ihrm Trends and Future Challenges 274

Chapter Objectives 274
Introduction275
External Factors 275
Organizational Factors 278
Safety and Security 280
Summary and Concluding Remarks 283
Discussion Questions 285
Further Reading 285
Notes and References 285

Case 1 Spanning the Globe 290

Case 2 Quality Compliance at the Hawthorn Arms 293
Case 3 Wolfgang’s Balancing Act: Rewarding Healthcare Executives
in a Dispersed yet Integrated Firm 295
Case 4 Strategic Forecasts and Staffing ­Formulation: Executive and Managerial
Planning for Bosch-Kazakhstan 304
Case 5 Local and International? Managing Complex Employment Expectations 311
Case 6 Expatriate Compensation at Robert Bosch Gmbh: Coping with Modern
Mobility Challenges 318
Case 7 Balancing Values: An Indian Perspective on Corporate Values from Scandinavia 325
Case 8 Just Another Move to China? The Impact of International Assignments
on Expatriate Families 334
Case 9 Finding the Right View: Developing Local Talent in Local Markets  340

Glossary345
Index353
PREFACE

In writing the Preface for the 7th Edition of International Human Resource Management two important
published documents illustrate the context for HRM in International Business in the first quarter of the 21st
Century. One is the Internet document Decent Work and the 2030 Agenda for Sustainable D ­ evelopment
published by the International Labour Organization (ILO) which states that “over 600 ­million new jobs
need to be created by 2030, just to keep pace with the growth of the working-age population. That is
around 40 million per year. We also need to improve conditions for the 780 million women and men who
are working but not earning enough to lift themselves and their families out of US$2-a-day poverty”.
In addition, we observe the demographic challenges of low birth rates in many industrialized countries and
a lack of qualified talent.
A second document is the Special Report on Companies published by The Economist (17 Sept. 2016)
titled The rise of the superstars. This report notes that “a small group of giant companies (some old, some
new) are once again dominating the global economy” and asks the question “Is that a good or a bad
thing?”. There is also a chart which lists the world’s ten largest listed companies by market capitalization
in billions of US dollars in 2006 and 2016. The 2016 companies are Apple, Alphabet, Microsoft, Berkshire
Hathaway, Exxon Mobil, Amazon, Facebook, Johnson & Johnson, General Electric and China Mobile.
Of this list only Microsoft, Exxon Mobil and General Electric were on the 2006 list, indicating the extent
of change in what The Economist describes as “a virtually new world” (page 5).
We also acknowledge the so-called megatrends highlighted by many authors, mainly from consulting
firms. An important issue they address is the complex and ongoing effect of demographic shifts on global
business practices. In part, many countries are characterized by higher life expectancies and lower birth
rates. This is not only a challenge for the social welfare systems1 but also for companies and their human
resource management.
According to this and other studies other challenges include the rise of the individual, the enabling
technology and digitalization, the interconnected global economy, new market and global responsibilities
as well as a rise in entrepreneurship2. In preparing the 7th E­ dition the authors have attempted to pay con-
siderable care and attention to this new world of international business.
The world of global business is very different than it was in 1990 when the first edition of this text was
introduced. Our task remains to capture key human issues, those complexities, challenges, and choices faced by
individuals and organizations engaged in global business and exchange. This world remains as compelling and
critical as it was some 27 years ago.
The more significant changes to the Seventh Edition include the following:
Several of the IHRM in Action cases embedded throughout the chapters have been significantly updated.
These changes will help students grasp the principles and models in the chapter and better apply these
ideas to a range of settings or contexts.
A new case, written particularly for this edition, has been added in the area of career development and
repatriation. The nine in-depth cases at the end of the text have been written by the co-authors or solicited
from global experts to provide a range of in-depth applications for all of the major functional areas of
IHRM. Extensive teaching notes are provided for adopters of the text. Long time users of the text will find
a more systematic and extensive set of cases, but hopefully our loyal adopters will still find some of their

viii
 Preface ix

favorite cases remain as well. Our feedback on these end-of-text cases was outstandingly positive in the
6th edition and we feel this new edition builds on that strength.
As in previous editions, the challenge of this Seventh Edition has been to organize the complexities
particular to HRM activities in MNEs in such a way that provides teachers (of both undergraduate and
graduate students) real choice as to how they will present the material. We have tried to find a balance that
is meaningful and appropriate to the varying cultures represented by potential adopters and readers, and
across educational traditions, institutions, and forms, while accurately capturing the compelling realities
facing HRM professionals in MNEs. As always, we welcome your comments and suggestions for improve-
ment in this task.
The author team remains an excellent example of collaborative work (across a significant number
of time zones) in the 21st century with tri-continental representation from the Asia Pacific, Europe, and
North America.

endnotes
1. www.kpmg.com/Global/en/IssuesAndInsights/­ 2. see also www.rolandberger.com/gallery/
ArticlesPublications/future-state-government/Documents/ trend-­compendium/tc2030/content/assets/­
future-state-2030-v3.pdf trendcompendium2030.pdf; www.ey.com/Publication/
vwLUAssets/ey-megatrends-report-2015/$FILE/ey-­
megatrends-report-2015.pdf
ACKNOWLEDGMENTS

First we would like to thank the scores of academics and practitioners who have come up to us at con-
ferences and workshops, as well as communicated by emails sent over the last four years, sharing with
us their comments and suggestions. Many of the improvements to this new edition of the book outlined
above are the direct result of these conversations. The tricky task of balancing the need for continuity and
meeting expectations for an enduring and highly successful title with the need to update and revise mate-
rials in what is still a very young and dynamic academic area of study is made easier by the support of our
peers and colleagues around the world. We thank you for your patience, ongoing interest in and commit-
ment to our book.
As with previous editions, we have received a great deal of assistance from numerous colleagues in
various educational institutions and organizations across the globe. Particular thanks go to the following
colleagues for their assistance with this edition of the book:

Ruth Alas; Estonian Business School

John Boudreau; University of Southern California

Helen De Cieri; Monash University

Barry Gerhart; University of Wisconsin-Madison

Wolfgang Mayrhofer; Vienna University of Economics and Business

Mark Mendenhall; University of Tennessee-Chattanooga

Molly Pepper; Gonzaga University

József Poór; Szent István University Gödöllö, Hungary

Susanne Royer; University of Flensburg

Hugh Scullion; National University of Ireland, Galway

Günter Stahl; Vienna University of Economics and Business

Shuming Zhao; Nanjing University

Cherrie Zhu; Monash University

Particular thanks go to Maike Andresen, Claudia Fischer, Manfred Froehlecke, Martine Cardel Gertsen,
Yvonne McNulty, Ihar Sahakiants, and Mette Zølner for their case contributions.

x
 ACKNOWLEDGMENTS xi

We also gratefully acknowledge the support of the following institutions:

LA TROBE UNIVERSITY
Peter Dowling thanks Tim Majoribanks, Associate Head of the School of Business and his HRM and
­International Business colleagues for providing a supportive academic environment.

ESCP EUROPE, BERLIN CAMPUS

Marion Festing thanks the Dean of ESCP Europe, Professor Frank Bournois and her colleagues for
­providing a supportive environment for writing and research. Special thanks go to the team of the Chair of
Human Resource Management and Intercultural Leadership for outstanding support.

EASTERN KENTUCKY UNIVERSITY

Allen Engle thanks the EKU Foundation Board, Harold Glenn Campbell as well as Lana Carnes, Chair
of the Department of Management, Marketing and International Business in the College of Business and
Technology for their ongoing financial support of research and travel. He would also like to acknowledge
the longstanding technical and creative help of Ron Yoder and Florencia Tosiani.
The assistance from staff at Cengage Learning UK has been greatly appreciated. In particular, we thank
our Publisher, Annabel Ainscow, for her ongoing assistance and advice with this edition and J­ enny Grene
for all of her work on the production of the book.
The Publisher would like to thank the following academics who supplied feedback on this and the pre-
vious edition:

Mark Williams; University of Surrey

Rachel Williams; Cardiff University

Elaine Farndale; Penn State University

Rosmini Omar; University Teknologi Malaysia

Nancy Long; San Jose State University

Peter Mclean; University of Wollongong NSW

Jay Leighton; Curtin University of Technology

Anne-Marie Francesco; Hong Kong Baptist University

Alan Burton-Jones; Bond University

Finally, our personal thanks to the following individuals for their understanding, support, and encourage-
ment throughout the process of completing this Seventh Edition:

Fiona Dowling

Christian Daubenspeck, Janik and Annika

Elizabeth Hoffman Engle, Kathryn, Caroline and Allen Engle

Peter J. Dowling,
Melbourne
Marion Festing,
Berlin
Allen D. Engle, Sr.,
Richmond, Kentucky
ABOUT THE AUTHORS

PETER J. DOWLING (PhD,

Flinders University) is Professor of Inter-
national Management and Strategy at La
Trobe University, Melbourne, Australia.
­P revious academic appointments include
the ­U niversity of Melbourne, Monash
­University, the University of Tasmania and
­Victoria U ­ niversity of Wellington. He has
also held visiting appointments in the USA
at Cornell University and Michigan State
­University and in Germany at the University
of ­Paderborn and the University of Bayreuth.
He has co-­a uthored a number of books
including ­Strategic Management: Competi-
tiveness and Globalization (Pacific Rim, 3rd ed.) and Human Resource Management in Australia (2nd
ed.) and written or co-authored over 70 journal articles and book chapters. He was Founding Editor of
Asia Pacific Journal of Human Resources (1987–1996); one of three Editors-in-Chief of the International
Journal of Human Resource Management (2012–2015); and serves on the editorial boards of Asia Pacific
Journal of Human Resources; International Studies of Management & Organization; Management Inter-
national Review; Thunderbird International; and ZfP-German Journal of Human Resource Research.
Peter is currently President of the Australia and New Zealand International Business Academy, a Life
Fellow of the Australian Human Resources Institute and a Life Fellow of the Australian and New ­Zealand
Academy of Management. Former roles include past President of the Australian and New Zealand
­Academy of Management and past President of the International Federation of Scholarly Associations of
Management.

MARION FESTING (PhD, University of Paderborn) is Professor of Human Resource M

­ anagement
and Intercultural Leadership at ESCP Europe, and Rector of the Berlin Campus as well as the former
­European Dean of Research of this business school. Previous appointments include the University of Pad-
erborn, Germany. Marion has gained educational, research and work experience in France, Australia,
Tunisia, Taiwan and the USA. She has co-authored and edited a number of books, including a monograph
on Strategic International Human Resource Management (Strategisches Internationales Personalmanage-
ment, 2nd ed.) and a co-authored text on International Human Resource Management (Internationales
Personalmanagement, 3rd ed.). Marion has also written or co-authored over 100 book chapters and jour-
nal articles and published in international journals such as Academy of Management Perspectives, Human
Resource Management, Human Resource Management Review, International Journal of Human Resource
Management, Journal of World Business, Thunderbird International Business Review, Economic and
Industrial Demography, European Management Journal, European Journal of International Management,

xii
 ABOUT THE AUTHORS xiii

Journal for East European Management Studies and International Journal of Globalization and Small
Business. Recently, together with her colleagues she was awarded a best paper award at the Academy of
Management Conference in Vancouver (2015) for her work on the impact of international business educa-
tion on career success.
Marion is the Co-Editor of the German Journal of Human Resource Management and serves on various
editorial boards. She is also the German ambassador of the HR-Division of the Academy of M ­ anagement
and is involved in many academic organizations. In 2012 she was the co-track chair (HRM) of the IFSAM
conference in Limerick/Ireland in 2012. In 2013 she organized the 11th EIASM Workshop on ­International
Strategy and Cross-Cultural Management at the Berlin Campus of ESCP Europe. In 2014 she organized
the 3rd EIASM workshop on Talent Management, also at the Berlin Campus of ESCP Europe in the con-
text of her responsibilities as the Academic Director of the ESCP Europe Talent Management Institute.
Her current research interests focus on transnational HRM strategies, global performance management,
global careers, global talent management and global rewards and diversity and inclusion.

ALLEN D. ENGLE, SR. (DBA, University of Kentucky) is a Professor of Management in the

College of Business and Technology and Foundation Professor at Eastern Kentucky University, where he
holds the Harold Glenn Campbell Endowed Chair in International Business. He is a national and regional
professional member of World at Work (formerly the American Compensation Association) and of the
Society for Human Resource Management, and a long-time member of the US Academy of M ­ anagement
and the Academy of International Business. While at Eastern, he has taught courses in management
­(undergraduate and graduate), a number of areas within human resource administration, organizational
behavior, organizational theory and international management (undergraduate and graduate). For nine
years he held an appointment as Visiting Professor at ESCP Europe in Berlin. He has been Visiting Lecturer
at the FHS Hochschule Für Technik, Wirtschaft und Soziale Arbeit, St Gallen in Switzerland and Visiting
Professor of International Management at the University of Pécs in Hungary. Allen is a founding member
of the Central and Eastern European International Research Team (CEEIRT).
His research interests are in the topic areas of compensation theory and practices, global performance
management, leadership and organizational change, job analysis, managerial competencies and organiza-
tional design, particularly as they impact on multinational firms. He has published in regional, national and
international academic journals, presenting academic papers on many of the topic areas presented above
at conferences in the USA, Australia, Canada, the Czech Republic, Estonia, France, Germany, H ­ ungary,
­Ireland, Italy, Japan, Poland, Slovenia, Spain and the UK. Allen has consulted for regional firms and pre-
sented professional seminars in the areas of performance-appraisal systems, executive team building, stra-
tegically responsive compensation systems, intercultural management issues and organizational change.
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CHAPTER 1
INTRODUCTION
Chapter Objectives
In this introductory chapter, we establish the scope of the book. We:

●● define key terms in international human resource management (IHRM) and consider several
definitions of IHRM

●● introduce the historically significant issue of expatriate assignment management and review the
evolution of these assignments to reflect the increasing diversity with regard to what constitutes
international work and the type and length of international assignments

●● outline the differences between domestic and international human resource management (HRM)
and detail a model that summarizes the variables that moderate these differences, and

●● present the complexity of IHRM; the increasing potential for challenges to existing IHRM practices
and current models; and the increasing awareness of a wide number of choices within IHRM prac-
tices due to increased transparency and faster and more detailed diffusion of these practices across
organizational units and firms.

1
2 CHAPTER 1 INTRODUCTION

SCOPE OF THE BOOK

The field of IHRM has been characterized by three broad approaches.1 The first approach2
emphasizes cross-cultural management: examining human behavior within organizations from
an international perspective. A second approach developed from the comparative industrial
relations and HRM literature3 and seeks to describe, compare, and analyze HRM systems in
various countries. A third approach seeks to focus on aspects of HRM in multinational firms.4
These approaches are depicted in Figure 1.1. In this book, we take the third approach. Our
objective is to explore the implications that the process of internationalization has for the activ-
ities and policies of HRM. In particular, we are interested in how HRM is practiced in multina-
tional enterprises.

FIGURE 1.1 Interrelationships between approaches to the field

IHRM in the Comparative

Cross-cultural
a multinational b HR and IR
management
context systems

As Figure 1.1 demonstrates, there is an inevitable overlap between the three approaches
when one is attempting to provide an accurate view of the global realities of operating in the
international business environment. Obviously, cross-cultural management issues are impor-
tant when dealing with the cultural aspects of foreign operations. Some of these aspects will
be taken up in Chapter 2, where we deal with the cultural context of HRM in the host country
context – ­indicated by (a) in Figure 1.1. Chapter 9 deals with international industrial relations
and the global institutional context and draws on literature from the comparative industrial
relations field – (b) in the above figure. While the focus of much of this book is on the established
MNE – a firm which owns or controls business activities in more than one foreign country –
we recognize that small, internationalizing firms which are yet to reach multinational firm
status, and family-owned firms, also face IHRM issues and many of these issues are addressed
in Chapter 4.

DEFINING IHRM
Before we can offer a definition of IHRM, we should first define the general field of HRM.
Typically, HRM refers to those activities undertaken by an organization to effectively utilize its
human resources (HR). These activities would include at least the following:

●● HR planning
●● staffing (recruitment, selection, placement)
●● performance management
●● training and development
●● compensation (remuneration) and benefits
●● industrial relations.
 CHAPTER 1 INTRODUCTION 3

The question is, of course, which activities change when HRM goes international? An excellent
early model developed by Morgan5 is very helpful in terms of answering this question. Morgan
presents IHRM in three dimensions:

1 The broad HR activities of procurement, allocation, and utilization. (These three broad activities
can be easily expanded into the six HR activities listed above.)
2 The national or country categories involved in IHRM activities:
●● the host-country where a subsidiary may be located
●● the parent-country where the firm is headquartered, and
●● ‘other’ countries that may be the source of labor, finance, and other inputs.
3 The three categories of employees of an international firm:
●● host-country nationals (HCNs)
●● parent-country nationals (PCNs), and
●● third-country nationals (TCNs).

Thus, for example, the US multinational IBM employs British citizens in its British operations
(HCNs), often sends US citizens (PCNs) to Asia-Pacific countries on assignment, and may send
some of its Singaporean employees on an assignment to its Chinese operations (as TCNs). The
nationality of the employee is a major factor in determining the person’s ‘category’, which in
turn is frequently a major driver of the employee’s compensation and employment contract.
Morgan defines IHRM as the interplay among the three dimensions of human resource
activities, countries of operation, and type of employees. We can see that in broad terms IHRM
involves the same activities as domestic HRM (e.g. procurement refers to HR planning and
staffing). However, domestic HRM is involved with employees within only one national bound-
ary. Increasingly, domestic HRM is taking on some of the flavor of IHRM as it deals more and
more with a multicultural workforce. Thus, some of the current focus of domestic HRM on
issues of managing workforce diversity may prove to be beneficial to the practice of IHRM.
However, it must be remembered that the way in which diversity is managed within a single
national, legal, and cultural context may not necessarily transfer to a m ­ ultinational c­ ontext
without some modification.

What is an expatriate?
One obvious difference between domestic and IHRM is that staff are moved across national
boundaries into various roles within the international firm’s foreign operations – these employ-
ees have traditionally been called ‘expatriates’. An expatriate is an employee who is working
and temporarily residing in a foreign country. Many firms prefer to call such employees ‘inter-
national assignees’. While it is clear in the literature that PCNs are always expatriates, it is
often overlooked that TCNs are also expatriates, as are HCNs who are transferred into par-
ent-country operations outside their own home country.6 Figure 1.2 illustrates how all three
categories may become expatriates.
The term ‘inpatriate’ has come into vogue to signify the transfer of subsidiary staff into the
parent-country (headquarters) operations.7 For many managers this term has added a level of
confusion surrounding the definition of an expatriate. The (US) Society for Human Resource
Management defines an inpatriate as a ‘foreign manager in the US’. Thus, an inpatriate is also
defined as an expatriate. A further indication of the confusion created by the use of the term
‘inpatriate’ is that some writers in international management define all HCN employees as
4 CHAPTER 1 INTRODUCTION

inpatriates. HCNs only become inpatriates when they are transferred into the parent-country
operations as expatriates, as illustrated in Figure 1.2.
Given the substantial amount of jargon in IHRM, it is questionable as to whether the term
‘inpatriate’ adds enough value to justify its use. However, some firms now use the term ‘inpatri-
ate’ for all staff transferred into a country. For clarity, we will use the term ‘expatriate’ through-
out this text to refer to employees who are transferred out of their home base/parent country
into some other area of the firm’s international operations. In doing so, we recognize that there
is increasing diversity with regard to what constitutes international work, the type and length
of international assignments, and the increasingly strategic role of the HR function in many
organizations, which in turn influences the nature of some expatriate roles.

FIGURE 1.2 International assignments create expatriates

Parent-country
HQ/operations

HCNs
HCNs National
border

PCNs
PCNs

Subsidiary TCNs Subsidiary

operations – operations –
country A country B

National
border

Stahl, Björkman, and Morris have recognized this expansion in the scope of the field of
IHRM in their Handbook of Research in International Human Resource Management, where
they define the field of IHRM as follows:

We define the field of IHRM broadly to cover all issues related to managing the global workforce and
its contribution to firm outcomes. Hence, our definition of IHRM covers a wide range of HR issues
facing MNEs in different parts of their organizations. Additionally we include comparative analyses of
HRM in different countries.8

We believe that this broad definition accurately captures the expanding scope of the IHRM
field and we will use this definition in this book.

DIFFERENCES BETWEEN DOMESTIC

AND INTERNATIONAL HRM
In our view, the complexity of operating in different countries and employing different national
categories of workers is a key variable that differentiates domestic and international HRM,
rather than any major differences between the HRM activities performed. Dowling9 argues that
the complexity of international HR can be attributed to six factors:

1 more HR activities
2 the need for a broader perspective
 CHAPTER 1 INTRODUCTION 5

3 more involvement in employees’ personal lives

4 changes in emphasis as the workforce mix of expatriates and locals varies
5 risk exposure
6 broader external influences.

Each of these factors is now discussed in detail to illustrate its characteristics.

More HR activities
To operate in an international environment, a HR department must engage in a number of
activities that would not be necessary in a domestic environment. Examples of required inter-
national activities are:

●● international taxation
●● international relocation and orientation
●● administrative services for expatriates
●● host-government relations
●● language translation services.

Expatriates are subject to international taxation, and often have both domestic (i.e. their
home-country) and host-country tax liabilities. Therefore, tax equalization policies must be
designed to ensure that there is no tax incentive or disincentive associated with any particu-
lar international assignment.10 The administration of tax equalization policies is complicated
by the wide variations in tax laws across host countries and by the possible time lag between
the completion of an expatriate assignment and the settlement of domestic and international
tax liabilities. In recognition of these difficulties, many MNEs retain the services of a major
accounting firm for international taxation advice.
International relocation and orientation involves the following activities:

●● arranging for pre-departure training

●● providing immigration and travel details
●● providing housing, shopping, medical care, recreation, and schooling information
●● finalizing compensation details such as delivery of salary overseas, determination of various over-
seas allowances and taxation treatment.

The issues involved when expatriates return to their home-country (‘repatriation’) are covered
in detail in Chapter 7. Many of these factors may be a source of anxiety for the expatriate and
require considerable time and attention to successfully resolve potential problems – certainly
much more time than would be involved in a domestic transfer/relocation such as London to
Manchester, Frankfurt to Munich, New York to Dallas, Sydney to Melbourne, or Beijing to
Shanghai.
An MNE also needs to provide administrative services for expatriates in the host countries in
which it operates.11 Providing these services can often be a time-consuming and complex activ-
ity because policies and procedures are not always clear-cut and may conflict with local condi-
tions. Ethical questions can arise when a practice that is legal and accepted in the host country
may be at best unethical and at worst illegal in the home country. For example, a situation may
arise in which a host country requires an AIDS test for a work permit for an employee whose
parent firm is headquartered in the USA, where employment-related AIDS testing remains a
controversial issue. How does the corporate HR manager deal with the potential expatriate
employee who refuses to meet this requirement for an AIDS test, and the overseas affiliate
6 CHAPTER 1 INTRODUCTION

which needs the services of a specialist expatriate from headquarters? These issues add to the
complexity of providing administrative services to expatriates.
Host-government relations represent an important activity for the HR department in a
MNE, particularly in developing countries where work permits and other important certif-
icates are often more easily obtained when a personal relationship exists between the rele-
vant government officials and multinational managers. Maintaining such relationships helps
resolve potential problems that can be caused by ambiguous eligibility and/or compliance
criteria for documentation such as work permits. US-based multinationals, however, must
be careful in how they deal with relevant government officials, as payment or payment-in-
kind, such as dinners and gifts, may violate the US Foreign Corrupt Practices Act (FCPA). 12
Provision of language translation services for internal and external correspondence is an
additional international activity for the HR department. Morgan 13 notes that if the HR
department is the major user of language translation services, the role of this translation
group is often expanded to provide translation services to all foreign operation departments
within the MNE.

The need for a broader perspective

HR managers working in a domestic environment generally administer programs for a single
national group of employees who are covered by a uniform compensation policy and taxed
by one national government. Because HR managers working in an international environment
face the problem of designing and administering programs for more than one national group
of employees (e.g. PCN, HCN, and TCN employees who may work together in Zurich at the
European regional headquarters of a US-based multinational), they need to take a broader
view of issues. For example, a broader, more international perspective on expatriate bene-
fits would endorse the view that all expatriate employees, regardless of nationality, should
receive a foreign service or expatriate premium when working in a foreign location. Yet some
MNEs that routinely pay such premiums to their PCN employees on overseas assignment
(even if the assignments are to desirable locations) are reluctant to pay premiums to for-
eign nationals assigned to the home country of the firm. Such a policy confirms the tradi-
tional perception of many HCN and TCN employees that PCN employees (particularly US
and European PCNs) are given preferential treatment.14 Complex equity issues arise when
employees of various nationalities work together and the resolution of these issues remains
one of the major challenges in the IHRM field. (Equity issues with regard to compensation
are discussed in Chapter 8.)

More involvement in employees’ personal lives

A greater degree of involvement in employees’ personal lives is necessary for the selection,
training, and effective management of both PCN and TCN employees. The HR department or
HR professional needs to ensure that the expatriate employee understands housing arrange-
ments, health care, and all aspects of the compensation package provided for the assignment
(cost-of-living allowances, premiums, taxes, and so on). Many MNEs have an ‘International
HR Services’ section that co-ordinates administration of the above programs and provides
services for PCNs and TCNs, such as providing advice and information on matters relating
to banking, investments, home rental while on assignment, co-ordinating home visits and
final repatriation.
In the domestic setting, the HR department’s involvement with an employee’s family is rel-
atively limited and may not extend beyond providing employee benefits such as health insur-
ance coverage for eligible family members and some assistance in relocating the employee and
family members. In the international setting, however, the HR department must be much more
Another random document with
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 Käsitöillä on Islannissa tähän saakka ollut verraten vähän sijaa.
Ainoastaan pari prosenttia saaren väestöstä on käsityöläisiä. Mutta
ammatit ovat elpymään päin. Kotiteollisuus sitä vastoin on
entisestään surkuteltavassa määrin rappeutunut. Viime vuosisadan
alkupuolella islantilaiset melkein yksinomaan käyttivät kotikutoisia
kankaita, nykyisin sitä vastoin melkein kaikki villa viedään sinään
maasta pois ja käydään ostokankaissa. Viime aikoina on kuitenkin
perustettu pienempiä vesivoimalla käyviä villankehruutehtaita, joissa
rahvas halvalla hinnalla saa villansa langoiksi kehrätyksi. Altingin
avulla lienee jo saatu aikaan kutomokin, jota tämän vuosisadan
alussa ruvettiin puuhaamaan. Yleensä on halu teollisuuden
kehittämiseen Islannissa virkistymään päin. Vesivoimia sitä varten
olisikin tavattoman runsaasti. Ranskalaiset insinöörit ovat arvostelleet
Islannin vesivoiman 1,000 miljonaksi hevosvoimaksi. Englantilaiset
liikemiehet ovat ostaneet koskia kalsiumkarbiditehtaita varten.

Vuoriteollisuuden tuotteista on arvokkain kirkas kalkkisälpä, joka

omituisten valontaitto-ominaisuuksiensa vuoksi on erinomaisen
haluttua optillisiin koneisiin. Mutta tämä arvokas tuote, jota saadaan
kiteytyneenä laavakenttäin onkaloista, on vähenemään päin. Ennen
vanhaan Islannista vietiin ulkomaille paljon rikkiä, mutta
rikkiteollisuus on nykyisin seisauksissa. Viime aikoina on löydetty
kultaa. Islannin koko kauppavaihto on nykyisin noin 25 miljonaa
markkaa.

Kulkuneuvoja on koetettu monella tavalla parantaa. Niitten hyväksi

on sen jälkeen, kun maa sai itsehallinnon, työskennelty enemmän
kuin ennen tuhannen vuoden kuluessa. On rakennettu melkoiset
matkat rattailla ajettavia maanteitä, varsinkin etelämaahan, vaikka
kansa ei olekaan vielä oppinut teitä käyttämään. Jokien poikki on
rakennettu siltoja, osaksi puusta, osaksi raudasta. Teitten rakennusta
johtaa valtion palkkaama insinööri, jolla on apunaan joukko
rakennusmestareita. Mutta suurimmassa osassa saarta ovat polut
kuitenkin edelleenkin ainoat liikeväylät, ja kauan kuluu, ennenkun
Islannissa on kauttaaltaan kunnolliset ajettavat tiet. Rautatietä ei ole
alkuakaan. Kulkuneuvojen puutteellisuus on syynä siihen, että kaikki
tarpeet, varsinkin rakennusaineet, mitä satamista tuodaan,
kyläkunnissa kohoavat osaksi kahdenkertaiseen hintaan, ja toiselta
puolen se, että maalaiset tuotteistaan saavat suhteellisesti hyvin
huonot hinnat. Rannikolla ovat liikkeet paremmat, sillä höyrylaivat
kulkevat pitkin rannikkoa poiketen kaikkiin tärkeämpiin paikkoihin.

Kautta maan on järjestetty postiliike. Ulkomaiden posti saadaan

säännöllisesti joka toinen viikko ja kesällä joka viikko. Mutta talvella
on postilaitoksen hyvin vaikea ylläpitää yhteyttä toimistojensa ja
pysäkkiensä kanssa myrskyjen ja tuiskujen vuoksi. Usein silloin
tulvillaan olevat joet vievät postinkuljettajalta laukun, kun hän
hevosineen joen poikki yrittää. Telefoneja ei ole kuin joku.
Sähkölennätysyhteyteen mannermaan kanssa Islanti vihdoin on
päässyt. Sähkölennätysyhteydestä on paljon hyötyä varsinkin
ulkomaalaisille aluksille, jotka kalastavat Islannin vesillä. Islannista
saadaan myös erittäin arvokkaita ilmatieteellisiä sähkösanomia.

Islanti on viime aikoina uhrannut pienistä varoistaan vuosittain

noin 800,000 markkaa kulkuneuvojen parantamiseksi. Enin osa tästä
summasta käytetään teitten ja siltojen rakentamiseen.

Suuri lievennys kansalle oli, kun vihdoin saatiin järjestetyksi

saarelle lääkärinhoitokin, sillä ilman sitä oli kauan täytynyt toimeen
tulla. Vaikka ilma onkin hyvin vapaata tauti-iduista, niin on saarella
kuitenkin omituiset tautinsa, jotka osaksi aiheutuvat yksipuolisesta ja
usein pilaantuneesta ravinnosta ja toiseksi ilmaston kosteudesta ja
koleudesta ja vaivalloisesta työstä myrskyissä ja pakkasissa. Maa on,
pienuudestaan huolimatta, jaettu moneen kymmeneen lääkäripiiriin
ja Reykjavikiin on perustettu oma lääkärikoulu. Sitä paitsi on eri
paikoissa koko joukko yksityisiäkin lääkäreitä. Islannissa siis on aina
paria tuhatta henkeä kohti piirilääkäri. Sairashuoneita sitä vastoin on
vain 6. Mutta sitkeässä asuu vielä kansassa luottamus kaikenlaisiin
puoskareihin. Seuraukset terveydenhoidon kehittämisestä ovat jo
ilmeiset; terveydentila Islannissa on huomattavassa määrässä
parantunut. Keskimääräinen ikä on viimeisen vuosisataneljänneksen
kuluessa kohonnut kokonaista 10 vuotta. Varsinkin lasten
kuolevaisuus on vähentynyt. Suurimpana syynä terveysolojen
parantumiseen on kuitenkin varallisuuden yleinen lisääntyminen.
Islannin pahimpia vitsauksia on eräs loistauti, johon likaiset astiat
ovat syynä, ja pitalitauti, jota varten on rakennettu erikoinen
sairashuone. Keuhkotauti, joka ennen oli melkein tuntematon, on
viime aikoina lisääntynyt kamalassa määrässä.

Islannista ei puutu yleisiä hyväntekeväisyyslaitoksiakaan. Niitten

tarkotus on auttaa semmoisia ihmisiä, jotka tavalla tai toisella ovat
menettäneet osan ruumiin tai sielun toimikyvystä.

Ikävakuutus on ratkaistu omituisella tavalla. Jokaiseen kuntaan

kautta saaren on perustettu rahasto heikkojen ja iäkkäitten
kansalaisten auttamiseksi. Jokainen, jolla on varoja, on velvollinen
vuosittain maksamaan jonkun pienen määrän näihin rahastoihin.
Niistä sitten jaetaan apurahoja semmoisille vanhuksille taikka
työkykynsä menettäneille, jotka eivät nauti vaivaisapua ja jotka ovat
aikanaan rahastoja maksuillaan kartuttaneet.

Uusin kultuurisaavutus on oma yliopisto. Se on Reykjavikissä

avattu ja alkanut toimensa. Mutta moni pudistaa päätään, että
lieneekö niin harvalukuisen väestön kesken sentään riittävää työalaa
niin vaativalle oppilaitokselle.

Suurta sitkeyttä ja itsetietoisuutta osottaa sekin, että näin pieni

kansa on voinut kautta aikain säilyttää omakielisen kirjallisuuden.
Huolimatta siitä, että Islannin väkiluku oli vähentynyt muutamaan
kymmeneen tuhanteen, huolimatta siitä, että saari joutui
sukulaiskansan ja -kielen vallan alaiseksi, — Norjan kirjakielen sama
vallanalaisuus muutti tanskalaiseksi, — säilytti Islanti omankielisen
kirjallisuutensa ja on kirjakieltään kehittänyt siihen määrään, että se
monessa suhteessa nykyisin on maanosamme kehittyneimpiä.

Ei kurjimpana rappioaikanaankaan Islanti kokonaan puuttunut

kirjallisuutta, vaikka kieli melkoisessa määrin ottikin itseensä
tanskalaisuutta ja vaikka vanhat runouden lajit aikain kuluessa
melkoisessa määrin rappeutuivat. Mutta vasta yhdeksännellätoista
vuosisadalla tapahtui saaren kirjallinen, samoin kuin valtiollinenkin
uudesta syntyminen.

Islannin uuden kirjallisuuden voimme sanoa syntyneen

uskonpuhdistuksen ajalla. Mutta kahtena sitä seuraavana
vuosisatana se kuitenkin vielä oli sangen yksitoikkoinen ja puuttui
alkuperäisyyttä. Runouden alalla viljeltiin varsinkin virsien tekoa.
Satuja, ritarijuttuja kirjotettiin runomuotoon. Kahdeksannentoista
vuosisadan loppupuoliskolla eli Jon Thorlaksson, pappi ammatiltaan,
joka oli Islannin huomattavin kääntäjä. Hän käänsi äidinkielelleen
paljon englantilaista, saksalaista ja tanskalaista runoutta, varsinkin
Miltonin »Kadotetun paratiisin», joka käännös on taiteentuntijain
arvostelun mukaan paras, mitä siitä on milläkään kielellä olemassa,
jopa monessa suhteessa alkuteostakin etevämpi. Tämä on sitä
huomattavampaa, kun Jon Thorlaksson'in täytyi suorittaa
käännöksensä tanskalaisesta käännöksestä. Koko elämänsä tämä
pappismies taisteli mitä suurinta köyhyyttä ja puutetta vastaan.
Hänen kirjallinen työnsä herätti niin suurta huomiota ulkomaillakin,
että eräs englantilainen seura hänelle myönsi melkoisen
runoilijaeläkkeen. Hän kuitenkin kuoli samana vuonna, kun sai ensi
kerran vastaanottaa tämän avustuksen. Tapaus osottaa, kuinka
suurella rakkaudella Englanninkin kirjallisissa piireissä vielä
muisteltiin sitä maata ja kansaa, joka säilytti Pohjoismaitten
suurenmoisen vanhan kansanrunouden.

Islannin kirjallinen uudistus tapahtui kuitenkin oikeastaan vasta

yhdeksännellätoista vuosisadalla, jolloin kolme etevää islantilaista
perusti »Fjöinir» nimisen aikakauslehden. Tämä kirjallinen
uudestasyntyminen, joka kävi käsi kädessä valtiollisen vapausliikkeen
kanssa, sai Europan mannermaalla tapahtuneen heinäkuun
vallankumouksen kautta virikettä. Kielen puhdistamisessa ja
jalostamisessa saivat islantilaiset tanskalaisen kielimiehen Rasmus
Raskin etevää ja uutteraa apua. Lyyrillisinä runoilijoina olivat Bjarni
Thorarenesen ja Jonas Hallgrimsson muita etevämmät. Edellisellä oli
aatteen syvyys ja tunteen voima, jälkimäinen taas hallitsi muodon ja
kehitti kielen runollista sanontaa. Edellistä on sanottu Islannin
Götheksi, jälkimäistä sen Schilleriksi. Näitten jälkiä ovat sitten
kulkeneet monet muut, ja niinpä Islannilla on arvokas uudenaikainen
kaunokirjallisuus, joka kunnialla pitää puoliaan muitten
pohjoismaitten kirjallisuuden rinnalla ja jatkaa saaren vanhoja
traditsioneja. Nuorin polvi on saanut vaikutuksia varsinkin Georg
Brandesin kautta Köpenhaminan yliopistossa, jossa saaren nuoriso
on viimeiseen saakka käynyt opiskelemassa.
 Kielen uudistamisessa ovat islantilaiset koettaneet mikäli
mahdollista välttää muukalaisten sanojen lainaamista. He ovat
muodostaneet sangen paljon uusia sanoja, jonka vuoksi islantilaisen
kirjan lukeminen tuottaa vaikeuksia sillekin, joka on kansankieleen
perehtynyt.

Muut taiteet sitävastoin ovat Islannissa heikolla pohjalla, jota ei

olekaan ihmettelemistä, sillä ne aina tarvitsevat varakkaampaa
ympäristöä ja suurempia oloja menestyäkseen. Vanhoina aikoina oli
taidekäsityö saarella kuitenkin korkealla kannalla, taidekutominen,
koruompelu, hienompi metalliteollisuus ja puunleikkaus. Vanhain
islantilaisten kodeissa olivat pihtipielet, ovet, patsaat ja orret
koristellut kaikenlaisilla kuvanveistoilla, etenkin jumalankuvilla, ja
seinät verhottiin taidokkailla kuvakankailla, joihin usein oli kuvattu
pitkiä juttuja ja sankaritapauksia. Koko joukon muistoja on säilynyt
tämän muinaisen teollisuuden ajoilta. Taiteelliset käsityöt eivät
kuitenkaan ole vieläkään aivan lopen hävinneet.

Mutta varsinaisia kuvaavia taiteilijoita Islannilla tuskin on muuta

kuin nimeksi, lukuun ottamatta Thorvaldsenia, joka kokonaan eli
Tanskassa. Paremmalla menestyksellä on sävellystä harjotettu,
vaikkei Islanti olekaan synnyttänyt semmoista säveltäjää, jonka
maine olisi levinnyt saaren ulkopuolelle. Näytelmätaide on vielä
kokonaan seuranäytäntöjen pohjalla.

Islannin valtio koettaa varainsa mukaan edistää saaren taiteellista

ja kirjallista elämää. Muun muassa se maksaa vuotuisia avustuksia
viidelle runoilijalle, vaikkeivät nämä avustukset luonnollisestikaan ole
suuria.
 Islanti on synnyttänyt useita huomattavia tiedemiehiä ja tutkijoita,
joista kuitenkin useat ovat suurimman osan elämäänsä vaikuttaneet
joko Tanskassa taikka muitten ulkomaitten yliopistoissa, koska
saaren omat varat eivät ole riittäneet varsinaisen tutkimuksen
kustantamiseen. Kuuluin Islannin nykyään elävistä tiedemiehistä on
Thorvaldur Thoroddsen, jonka teokset Islannin maantieteestä ja
maantieteen historiasta, sen geologisesta rakenteesta ovat
perustavaa laatua ja ovat tulleet useille sivistyskielille käännetyiksi.

Näin olemme tutustuneet tuohon syrjäiseen omituiseen maahan

Atlanninmeren ja Jäämeren välillä. Olemme tutustuneet sen
sankariaikaan ja vanhaan runouteen, jonka vuoksi sillä kaikkien
germanisten kansain kesken on niin vakaantunut maine ja suuri
mielenkiinto, olemme tutustuneet sen voimalliseen luontoon ja
valtaviin luonnonilmiöihin, joitten puolesta se voittaa kaikki, mitä
maanosassamme on nähtävää, ja olemme nähneet, kuinka tämän
saaren pieni kansa vähitellen ulkonaisesta holhouksesta
vapauduttuaan on alkanut kehittää elinkeinojaan ja aineellista ja
henkistä viljelystään vakaalla aikomuksella edelleenkin pysyä
kansana, lisääntyä ja vaurastua kaikilla kultuurin aloilla. Islannin
esimerkki on kieltämättä rohkaiseva muillekin pienille kansoille, jotka
epäedullisissa oloissa koettavat olemuksensa säilyttää. Arvokkaana
apuna olemassa olon taistelussa ja edistysriennoissa Islannilla
kieltämättä on se yleinen myötätunto, jota se varsinkin
germanilaisten kansain kesken nauttii. Ne suosivat sitä
muinaisuutensa säilyttäjänä ja tuntevat sitä kohtaan
sankarimuistojen heimohellyyttä. Sen vuoksi Islannin pyrkimykset ja
saavutukset herättävät suurempaakin huomiota kuin muutoin olisi
asian laita.

*****
 Tätä teosta varten on mukaillen käytetty seuraavia lähteitä:

C. Rosenberg: Traek af Livet paa Island i Fristaats-Tiden.

Köpenhamina, 1871,

J. C. Poestion: Island, das Land und seine Bewohner. Wien, 1885.

Th. Thoroddsen: Vulkaner og Jordskjaelv paa Island.

Köpenhamina, 1897.

Valtyr Gudmundsson: Islands Kultur ved Aarhundredskiftet 1900.

Köpenhamina, 1902.

Paul Herrmann: Island in Vergangenheit und Gegenwart, Leipzig,

1907—1910.
 *** END OF THE PROJECT GUTENBERG EBOOK ISLANTI ***

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