Question

Mystique Cosmetics is a privately held(non-Union) giant in the beauty and fragrance retail industry. Headquartered in New York, Mystique also owns more than 60 stores throughout the United States. The company operates under its slogan, “Bringing out the Beauty in Everyone We Touch”. Mystique Cosmetics is a family owned business that caters to different clientele, but mostly high-end customers. Business has been exceptional with revenues exceeding $2 Billion for last 5 years. To establish itself as an important brand, Mystique has worked hard to represent quality skin care products and accessories. They accomplish this by using high quality manufacturing and research, a creative marketing program, and a comprehensive distribution network with their retail outlets, internet presence, and consumer catalogue.After 25 years of being a family owned business, the Dunne Family has decided to expand its operations into Germany or Japan. The company is 100% owned by Ray and Barbara Dunne, the founders. The Board of Directors consists of their children: Robert and Victoria; Mr. R.G. Dunne, brother to Ray Dunne; three outside directors appointed by Ray Dunne; and two representatives appointed by their major investor(s). Together, Mr. and Mrs. Dunne have 50 years’ worth of combined experience in the retail industry. Both of them have held senior management positions with major cosmetics companies. Their 10 year plan is to own 100 retail stores throughout Europe and/or Japan. They believe they have a talent management plan that shows a controlled and conservative ramp up of personnel.

The Situation: After much deliberation, the decision was made for Mystique Cosmetics to expand globally. They would like to move a percentage of production to either Germany or Japan. In speaking with their key employees, here is what we know thus far: ·A majority of their existing managers said they would like a chance to work abroad · None of their existing managers speak Japanese or German. · They expect to recruit a large number of staff for the new retail outlets. · They will require their managers to be flexible and move between countries if problems arise The company has decided to create a new position entitled Global Director of Operations (for either Germany or Japan). The position was conveyed to the management team. Thirty managers applied by writing a letter to the CEO conveying why they are interested and qualified for the role. The resumes of the top 5 candidates have been included. All 5 currently work for Mystique. You need to recommend which one you would hire. Nathan Dixon is the only outspoken person who believes expanding globally is too risky for a Cosmetic company, particularly Mystique given the fact that they are family owned. Being outspoken in Board of Director meetings, Nathan drafted and sent an email to the other executives voicing his concern. This email angered the CEO and created concern amongst the employees at Mystique Cosmetics. It was agreed that Patricia Healey would remain VP of Human Resources in the U.S. but there is a true need to hire a Global Director of HR. YOUR ASSIGNMENT You have been hired as the new Global Director of HR for Mystique Cosmetics.

Question:The Board of Directors is looking for a proposal from you to cover the questions below. Please review the question and write a proposal to Mr. Dunne, the President and CEO.

1. What are the advantages and disadvantages of using an Expatriate for management role(s) at each facility?

Answer 1

The fundamental advantages of hiring Expatriates for an international assignment are as follows:

• The Expatriate has an experience of working in the company’s business model. It helps the expatriate in setting the business tone in the international assignment
• The company will be able to have better control on the internal assignment with the help of the expatriate
• Expatriates are subject knowledge experts. hence they will be able to handle any kind of problems quite effectively in the international assignment
• Expatriates are motivated to give their best while representing their company. Hence they would strive hard to perform their best

The disadvantages associated with hiring expatriates for international assignments are:

• Expatriates may tend to get cultural shock in the international assignment. This can prove to be quite detrimental for the company
• Expatriates may not have an effective bond with the local staff in the international office. This may increase the probability of conflicts
• Training and sending expatriates for the international assignment can be quite costly affair for the company