Expatriation or Discrimination? One issue faced by companieswith international operations is determi

Expatriation or Discrimination? One issue faced by companieswith international operations is determining the right time tobring expatriate managers home, or “repatriate” them. Promotinghost-country personnel into key managerial positions can boostmorale and provide a sense of equal opportunity. Also, localmanagers often have keen insights into local business conditionsand, therefore, a potential advantage when it comes to decisionmaking. Moreover, by bringing expatriate managers home, firms canoften save considerable amounts of money. In China, for example,compensation for an expatriate can cost between $200,000 and$300,000 per year; the total package includes both cost-of-livingand hardship allowances of 15 to 20 percent each. By comparison,total compensation for a top-notch Chinese manager would be onlyabout $50,000 per year.
Despite the benefits to be gained from turning over control tolocal managers, some industry experts warn that “localizing” tooquickly can be a mistake. For example, one expatriate manager inChina said doing business the Chinese way is much lesswell-documented and can be dangerous when you surrender financialcontrol. Another problem is the fact that many expatriate managersare evaluated according to operating results rather than accordingto their efforts to train local managers.
The issue of expatriate assignments is not limited to emergingmarkets such as China. In developed countries, laying off employeesor replacing local managers with persons from the home country canbe controversial moves. For example, Japanese-owned RicohCorporation (www.ricoh.com) replaced a US manager with a Japanesemanager in charge of optical computer disc sales at its CaliforniaFile Products Division (FPD). After being laid off as a result ofthe move, Chet Mackentire sued his former employer fordiscrimination under Title VII of the Civil Rights Act of 1964. ButRicoh argued that Mackentire was laid off for business reasons, notbecause he was a Caucasian-American.
Mackentire lost his case. The court said that it found no evidenceto support Mackentire’s theory that the layoff was discriminatory,and ruled that there was evidence to the contrary that it was donefor business reasons. Mackentire appealed the ruling but lostagain. The appellate court said that Ricoh offered affidavitsstating that FPD was losing money, running into the millions ofdollars annually. It also offered evidence that it reorganized thedivision to de-emphasize the product for which Mackentire was mostresponsible. 16-12. In addition to those mentioned in the case, what are someother advantages associated with the hiring of local managers inemerging markets? 16-13. What steps should a company take to ensure that, if takento court, it can demonstrate that staffing cuts have not beendiscriminatory? No copy and paste from this site or other sites, and nohandwriting, please. Attached

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