An International Perspective on

HRM
One would tend to think that Human Resource management in one country would be much like it

is in another country. There are similarities in the human resource function from
one country to another however; due to cultural differences the human resource
function can also be quite different. We must first define the Field of Human
Resource Management. According to Peter Dowling in International Human
Resource Management, Human resource management is those activities
undertaken by an organization to utilize its human resources effectively. These
activities include but are not limited to, human resource planning, staffing,
performance management, training and education, compensation and benefits,
and labor relations. We must consider what, if any, changes to the above
definition occur when a company goes international or global. When the human
resource activities are spread across different countries therefore, different types
of employees must be considered. Employees from the parent company or
Parent Company Nationals (PCNs), this is the expatriate manager or technical
professional assigned to a different country. The next type of employee is the
Host Country National (HCNs), this is an employee of the company form the
country which hosts the subsidiary. The last type of employee is a Third Country
National (TCNs), these employees are from a country that is neither the host nor
the parent country. This expatriate also may be from another subsidiary owned
by the parent company. These multi-country nationals lead to issues generally
not associated with Human Resource Management (HRM), such as international
taxation, international relocation, administrative services for expatriates, and
government relations. For example D.L. Pinney discusses tax reimbursement for
expatriates because expatriates are subject to international tax and often have
domestic tax liabilities; it is therefore incumbent on a company to provide tax
equalization. If there is no tax equalization much of the incentive and motivation
for the overseas assignments would be lost. I know from my own experience on
expatriate assignments how well or how poorly some of these other functions are
performed will determine whether the expatriate will have positive or negative
feelings about a particular assignment. My last assignment in particular, was one
in which these functions were not provided for or very well thought out. Most of
the research into requirements and services was done by me prior and during my
assignment.
The Organizational Context
Human Resource management approaches vary from company to company
depending on their individual stage of internationalization. Peter Dowling
describes these as ethnocentric which is key decisions are made at
Headquarters and few foreign subsidiaries have any autonomy. Polycentric this
is, the individual subsidiaries have autonomy over themselves. This occurred
most when there were substantial barriers to trade. Geocentric is the company
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takes a global and strategic view and a worldwide approach. Regiocentric is

similar to geocentric however, the perspective and decision making is handled by
a regional headquarters. These above stated degrees of internationalization are
also the degrees by which the HRM is measured. When a company is in very
early stages of internationalization such as exporting the HRM functions can be
handled without any additional burden to the HR department. However, when a
company reaches the next stage of internationalization the sales subsidiary,
some degree of the above mentioned requirements will need to be considered.
These considerations are due to the assignment of an expatriate sales manager
or the hiring of a local sales manager in the host country, or possibly a
combination of the two. In most western countries this would not be too much of
a concern as there are usually firms that may be contracted for these functions in
the United States one such firm is Administaff, please see their web site, listed in
the bibliography, for more details on their services. In the next stag of
internationalization, the international division, the IHRM functions and planning
must be considered, according to Stopford and Wells, in the 1960s most U.S.
manufacturing firms stumbled into manufacturing abroad without much design.
These investments today would not be successful because the competitive
market in the world has changed substantially since then. After World War II the
United States and Canada were the only countries in the world whose
manufacturing capabilities were not destroyed, from then until the early 1970s,
North America was in a position to exploit most of the worlds markets.
Subsequently, this has been changing as we can see from the Japanese and
German automobile manufacturing worldwide. Mercedes, BMW, Toyota and
Nissan all have manufacturing plants in the United States as well as other
countries in addition to their local manufacturing in their parent countries.
International Human Resource Management: Sustaining International Business
Operations
International Human Resource Managements main function is to sustain
business operations. Human Resources are a firms main asset. In order to
remain competitive a company must retain, educate and train its personnel.
International Human Resource Management must be provided the ability to
attract the right candidate. This is not and has not always been the view of
companies, as recently as the 1980s employees were seen as an expense to be
cut and not an asset to be nurtured. A large number of people would argue that
this is still the view of many companies. If we look at a company like HewlettPackard, we can see this is the view of the present CEO, Carly Fiorina. Ms.
Fiorina has cut about 25% of its global work force, most of these cuts were from
the parent companys domestic staff, while maintaining record profits, up 30%
sequentially from the year before, and maintaining Ms, Fiorinas substantial
compensation package of roughly $13M/annum.
Some of the different
perspectives of the global or multi-national enterprises pertaining to international
transfers of personnel are aligned with the corporate view of the company as
discussed above. In the ethnocentric view the senior management and
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technology experts would all be parent country nationals. By utilizing PCNs the
subsidiary maintains links with the parent company. There is not much room for
a host country national to be promoted to corporate headquarters. With a
polycentric staffing approach the host country nationals occupy management
roles in their host country. Again, there is not much room for a host country
national to be promoted to corporate headquarters. The geocentric approach
assigns the most qualified candidate to the most appropriate position. There is
room for advancement by parent country nationals, host country nationals and
third county nationals. Employees from all subsidiaries and the parent have an
equal chance for advancement. Finally, the regiocentric approach would allow
host country nationals to be assigned to a regional headquarters however; there
would be little chance of an assignment to corporate headquarters. Rosenzweig
explains that this approach may allow a multinational enterprise to gradually shift
from a ethnocentric or polycentric approach to a geocentric approach.
Issues exist in staff selection, while it may be acceptable for a country to accept
staff from a parent country for an expatriate assignment; often they are reluctant
to allow a third country national a work permit. The preference would be for the
position to be filled by a host country national. However, for the purposes here
we will discuss the selection criteria. Firstly, the technical ability which is, does
the candidate possess the requisite skills and managerial capabilities required to
fill this position. For example Hixon, found that selection was based on technical
ability and a wiliness to reside abroad. Another factor is cross-cultural suitability,
will the candidate be able to function in the new environment, how adaptable is a
person, does he have the requisite language ability, a positive attitude and
emotional stability. There also may be family considerations, such as do the
spouse and children see this assignment as positive experience. Another family
consideration is whether or not the spouse is working; the chances are quite high
that the spouse will not be able to obtain a work permit in the assigned host
country.
Another function not related to expatriate assignment is the staffing of a local
subsidiary in a host country. It is advisable to hire local Human Resource
Management to staff a local subsidiary in that the local HR professional will be
more familiar with the legal requirements and hiring practices. However, the local
HR professional must be managed by the parent companies IHRM to ensure that
fair practices are adhered to, for example it would not be very good practice if the
local HRM hired his or her entire family it may even be illegal.
Many western countries also have issues with Equal Employment Opportunity
(EEO). The legal definition and coverage of these laws vary. In the United
States Title VII of the Civil Rights Act of 1964, covers many of the EEO issues. In
EEOC v Arabian American Oil Co, The Supreme Court has held that this act
does not apply outside the territorial borders of the United States. This law would
not apply to a U.S. citizen expatriate in any other country but the United States or
its territories.

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Managing and Supporting International Assignments

Recruiting and Selecting Staff for International Assignments
Much has been written on the subject of selecting staff for International
Assignments. Phillippe Lasserre discusses some of the selection criteria as
Tolerance of ambiguity, the ability to function in a foreign environment.
Behavioral flexibility is being able to vary ones behavior according to
requirements. Sociability and interest in other people, and goal orientation,
achieving ones goal despite barriers are other factors in staff selection.

As stated above family also may impact on the selection of expatriate personnel.
Particularly, as more and more spouses are working and children may not wish to
leave friends and other family behind. Anne Harzing explains there are some
companies that include spouses in the selection process, although people in the
United States see this as a barrier to personal freedoms, to have the company so
involved with the personal affairs of a given family. It may prove that preparing
the family as well as the expatriate employee will reduce expatriate failure.
Expatriate Failure is the early recall of an expatriate from an assignment. For
example if the expatriate was initial assigned to a subsidiary in France for three
years however, due to his familys inability to adapt to the new living situation the
employees work started to suffer he or she may be recalled after only one year.
Expatriate performance management is another consideration of a multinational
enterprise. As with most employees an expatriate must be evaluated on his or
her performance. This issue becomes more complicated in that the expatriate
may now be reporting to someone in the Host Country subsidiary. The expatriate
may feel he is better served by an evaluation of his performance by someone in
the parent company. The reasoning being, is that the expatriate will return to the
parent company upon completion of the assignment. Additionally, the out of
sight, out of mind, axiom may be a concern; the expatriate does not want to be
forgotten while on an assignment. Other issues of concern to either the
expatriate or the companys HR department is whether or not to use a standard
or a customized employee appraisal form, the frequency of the evaluation and
performance feedback.
Performance appraisal of Host Country Nationals is another concern of IHRM.
The cultural differences of the parent and host countries may make the use of the
standard appraisal system unworkable. J. V. Kiovisto explains a likely appraisal
of a French employee by a Japanese manager; the Japanese manager can not
directly criticize an employees work. He may start by discussing all the good
work the employee is doing on a general level. He may then explain the
consequences of a mistake of the type made by an employee, without directly
stating that the employee made such a mistake. The employee is then supposed
to understand his mistake and how to correct it. This example is only one in a
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great many cross cultural issues that may exist in appraisal system in place
within an organization. The IHRM department must exercise caution and
understand the cultural environment in place within the subsidiary company. It
may be preferable to set forth general guidelines for the appraisal system and
allow the HRM department within the subsidiary company to develop or modify
existing systems to comply with the general guidelines.
Training and Development of Expatriate Employees

Once an expatriate is selected, pre-departure training will make the expatriate

more successful or perhaps, not a failure. Part of this training is cultural
awareness, a well designed cultural training program can be extremely helpful as
it seeks to foster an appreciation of the host countries culture so the expatriates
behave accordingly, Peter Dowling goes on to cite an example of the Middle
East, in this region emphasis is placed on personal relationships, trust and
respect; couple this with an emphasis on religion that permeates every aspect of
life. Another example of a Middle Eastern cultural difference, it is considered
impolite in the Middle East to show the bottom of your shoe or foot therefore,
crossing ones legs in the Middle East is impolite as your host or guest would see
the bottom of your shoe or foot. There are other examples of course, we have all
heard of the ugly American, who when told a price in local currency has
responded by asking how much is that in real money. Needless to say, the
local currency IS real money. Another example is, the French have a beautiful
language and would prefer to use their national language particularly in France.
If an expatriate is assigned to France, French language lessons would probably
make him or her more successful. These language lessons should also be
provided to the expatriates family, at no cost to the expatriate.
Another useful tool in expatriate pre-departure training is a preliminary visit to the
assigned country. These visits often allow the expatriate and his family to
become familiar with the environment in which they will be living. The preliminary
visit should be sufficiently long so that people may assess the suitability of the
environment. Of course an expatriate may reject the assignment based on the
preliminary visit. Price Waterhouse Coopers survey of 1997-8 indicated that 53%
of companies provided such visits by their employees and spouses, of those 13%
rejected the assignment. However, when the costs for an expatriate failure are
so high it is beneficial to know of the rejection prior to the actual assignment
Compensation for Expatriates
Developing international compensation policies requires that it be consistent with
overall corporate strategy, structure of a global corporation. The policy must be
competitive and take into account incentives for Foreign Service, tax equalization
and reimbursement of expenses. Other factors that determine whether or not the
compensation package will be acceptable to the potential expatriate are social
security, health and medical benefits, and cost of living factors in the foreign
location.
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The main components of an international compensation plan are base salary,

Foreign Service inducement, allowances and benefits. The base salary in
domestic terms is the cash compensation, bonus and benefits are in addition to
this amount. For an expatriate the base salary is a primary component of the
compensation package, of which Foreign Service inducement, cost of living
allowance and other costs may be a percentage of this amount. Foreign Service
inducement can vary from country to country. U.S. Department of State has
published hardship post differential guidelines to determine level of payment.
While the hardship guidelines may dictate a high differential cost the Cost of
Living Allowance (COLA) may tend to pull this figure down. It is difficult to
determine the actual cost of living in a particular country. One method to
determine cost of living is according to Philippe Lasserre, Purchasing Power
Parity (PPP) which is for example, a cup of coffee that cost $5.00 in New York
City may cost 6.00 in France due to spot exchange rates these would be
identical in cost however, the housing in Paris may be more than in New York
City. To determination this can be quite extensive, housing costs must be
considered, as must the cost of entertainment and food. Another cost that should
be considered is education costs for children. The spouse may also decide to
attend school at the foreign location to fill in any gap in the employment record
she may be encountering due to her husbands foreign posting. Care should be
exercised in the selection of schools both for the children and the spouse as the
accreditation of the foreign school may not be acceptable in the home country.
Most international schools in Europe have an acceptable accreditation in the
United States. At the university level the American University, in London has a
Untied States accreditation, please see their web site listed in the bibliography for
more information.
Another complexity is benefits; the payment into 401K accounts can have tax
ramifications in the host country. It is also not possible to defer these payments
because this creates an excess contribution and becomes a taxable event, for
more information on 401k accounts please see the Internal Revenue Service
web site listed in the bibliography. Another issue is the health and medical
benefits and continuation of these benefits upon repatriation into the expatriates
home country. Socialized medicine in many of the Western European countries
has made this a non-issue while the expatriate is on assignment in these
countries, or if an expatriate is returning to Europe after an assignment in another
country. An assignment to the United States for example, the expatriate and his
family would require medical insurance. There are several methods for
determining the international compensation plan. The first is the going rate
approach which in effect, excluding allowances and benefits discussed above,
would make compensation similar to the host country nationals. This method of
compensation could make things difficult for the expatriate when returning to is
home country. If the going rate is considerably higher in the host country, the
may be some adjustment upon his return home in there will be a perceived pay
cut. The preferred method of compensation is the balance sheet method as
defined by C. Reynolds as, foreign assignees should not suffer a material loss
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due to their transfer, and this is accomplished via the balance sheet method of
international compensation. Taxation is also a concern to expatriate personnel.
Some form of tax equalization should be provided to the expatriate employee.
While on assignment for Ericsson the tax equalization was provided by
withholding taxes for the parent country and paying the taxes in the host country.
Centillium provided no such relief however, due to an existent tax treat between
the United Kingdom and the United States my tax burden was not doubled. For
further information on taxes and treaties it may benefit employers and employee
to discuss their individual situations with a global accounting firm such as Ernst &
Young.
Re-entry and Career Issues

The repatriation process is the most overlooked in the whole of the expatriation
assignment. Often a company has not prepared well and in advance for the
eventual return of their employees. While it may seem a trivial matter to some,
there are many issues for the returning employee and his family. A well thought
out plan for repatriation should be at least as well thought out as the departure
plan for the expatriate. There should be a physical relocation plan, a transition
plan for the employee and an allowance for readjustment. Just as their may
have been culture shock in the transition to the expatriate assignment there may
likely exist reverse cultural shock on the repatriate and his family. This reverse
culture shock should not be dismissed as unimportant. There are also job related
factors that concern the repatriated employee. One of these is a clear signal
from upper management that career advancement is contingent on successful
completion of a foreign assignment. This should be honored upon the
employees return. Another concern by returning employees is the perceived
lack of a suitable position for the returning employee. This can create quite a lot
of anxiety for returning employees. It should not be left until the last minute.
Ericsson had a policy of explaining the repatriation process and assignment
midway through the expatriate assignment. My return to the United States was
very well planned. I returned from my Centillium assignment with little planning
and no job. There has also been a trend lately to devalue the foreign
assignment. People often take foreign assignments to accelerate their careers, if
upon return the message that was given by upper management prior to the
assignment has not been taken into account; the returning employee may be
placed in a lateral or lower position. This will not be perceived well by the
returning employee. There may also be a loss of pay or status. As Welch states
Over there, you are the big fish in the small pond. Back home, you return to
being the small fish in a big pond. If there were stated reasons for an overseas
assignment these should be stated, and adhered to. In summary for the whole of
the Expatriate/Repatriate process. It would be in the best interests of both the
company and the employee to enter into this process contractually. The contract
can mean the difference between a successful assignment which helps both
parties, and a failure which does not help either party. The returning employee

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could also benefit in that he could be guaranteed a position upon return or a

salary guarantee for a specified period, which would tend to reduce anxiety.
Management science (MS), is an interdisciplinary branch of applied
mathematics, engineering and sciences that uses various scientific researchbased principles, strategies, and analytical methods including mathematical
modeling, statistics and algorithms to improve an organization's ability to enact
rational and meaningful management decisions by arriving at optimal or near
optimal solutions to complex business problems. The discipline is typically
concerned with determining the maxima (of profit, assembly line performance,
crop yield, bandwidth, etc) or minima (of loss, risk, etc.) of some objective
function. In short, management sciences help businesses to achieve goals using
various scientific methods.

Scientific management also had a significant impact on the study of job

satisfaction. Frederick Winslow Taylors 1911 book, Principles of Scientific
Management, argued that there was a single best way to perform any given work
task. This book contributed to a change in industrial production philosophies,
causing a shift from skilled labor and piecework towards the more modern
approach of assembly lines and hourly wages. The initial use of scientific
management by industries greatly increased productivity because workers were
forced to work at a faster pace. However, workers became exhausted and
dissatisfied, thus leaving researchers with new questions to answer regarding job
satisfaction. It should also be noted that the work of W.L. Bryan, Walter Dill Scott,
and Hugo Munsterberg set the tone for Taylors work.
Some argue that Maslows hierarchy of needs theory, a motivation theory, laid the
foundation for job satisfaction theory. This theory explains that people seek to
satisfy five specific needs in life physiological needs, safety needs, social
needs, self-esteem needs, and self-actualization. This model served as a good
basis from which early researchers could develop job satisfaction theories.
Models of job satisfaction
Affect Theory
Edwin A. Lockes Range of Affect Theory is arguably the most famous job
satisfaction model. The main premise of this theory is that satisfaction is
determined by a discrepancy between what one wants in a job and what one has
in a job. Further, the theory states that how much one values a given facet of
work (e.g. the degree of autonomy in a position) moderates how
satisfied/dissatisfied one becomes when expectations are/arent met. When a
person values a particular facet of a job, his satisfaction is more greatly impacted
both positively (when expectations are met) and negatively (when expectations
are not met), compared to one who doesnt value that facet. To illustrate, if
Employee A values autonomy in the workplace and Employee B is indifferent
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about autonomy, then Employee A would be more satisfied in a position that

offers a high degree of autonomy and less satisfied in a position with little or no
autonomy compared to Employee B. This theory also states that too much of a
particular facet will produce stronger feelings of dissatisfaction the more a worker
values that facet.
Dispositional Theory
Another well-known job satisfaction theory is the Dispositional Theory It is a very
general theory that suggests that people have innate dispositions that cause
them to have tendencies toward a certain level of satisfaction, regardless of
ones job. This approach became a notable explanation of job satisfaction in light
of evidence that job satisfaction tends to be stable over time and across careers
and jobs. Research also indicates that identical twins have similar levels of job
satisfaction.

A significant model that narrowed the scope of the Dispositional Theory was the
Core Self-evaluations Model, proposed by Timothy A. Judge in 1998. Judge
argued that there are four Core Self-evaluations that determine ones disposition
towards job satisfaction: self-esteem, general self-efficacy, locus of control, and
neuroticism. This model states that higher levels of self-esteem (the value one
places on his/her self) and general self-efficacy (the belief in ones own
competence) lead to higher work satisfaction. Having an internal locus of control
(believing one has control over her\his own life, as opposed to outside forces
having control) leads to higher job satisfaction. Finally, lower levels of neuroticism
lead to higher job satisfaction
Two-Factor Theory (Motivator-Hygiene Theory)
Frederick Herzbergs Two factor theory (also known as Motivator Hygiene
Theory) attempts to explain satisfaction and motivation in the workplaceThis
theory states that satisfaction and dissatisfaction are driven by different factors
motivation and hygiene factors, respectively. An employees motivation to work is
continually related to job satisfaction of a subordinate. Motivation can be seen as
an inner force that drives individuals to attain personal and organization goals.
Motivating factors are those aspects of the job that make people want to perform,
and provide people with satisfaction, for example achievement in work,
recognition, promotion opportunities. These motivating factors are considered to
be intrinsic to the job, or the work carried out. Hygiene factors include aspects of
the working environment such as pay, company policies, supervisory practices,
and other working conditions.
While Hertzberg's model has stimulated much research, researchers have been
unable to reliably empirically prove the model, with Hackman & Oldham
suggesting that Hertzberg's original formulation of the model may have been a
methodological artifact. Furthermore, the theory does not consider individual
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differences, conversely predicting all employees will react in an identical manner

to changes in motivating/hygiene factors Finally, the model has been criticised in
that it does not specify how motivating/hygiene factors are to be measured.
Job Characteristics Model
Hackman & Oldham proposed the Job Characteristics Model, which is widely
used as a framework to study how particular job characteristics impact on job
outcomes, including job satisfaction. The model states that there are five core job
characteristics (skill variety, task identity, task significance, autonomy, and
feedback) which impact three critical psychological states (experienced
meaningfulness, experienced responsibility for outcomes, and knowledge of the
actual results), in turn influencing work outcomes (job satisfaction, absenteeism,
work motivation, etc.). The five core job characteristics can be combined to form
a motivating potential score (MPS) for a job, which can be used as an index of
how likely a job is to affect an employee's attitudes and behaviors----. A metaanalysis of studies that assess the framework of the model provides some
support for the validity of the JCM.

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Function of Management:
These are the main functions of the management.
1.
Planning.
2.
Organizing
3.
Commanding
4.
Coordinating
5.
Controlling.
Now we discuss these elements in detail.
1.
Planning
This involves setting objectives and also the strategies, policies, programs and
procedures for achieving them. Planning might be done by line managers who
will be responsible for performance. However, advice on planning may also come
from staff management who might have expertise in that area, even if they have
no line authority. For example, a production manager may carry out human
resource planning in the production department, but use the skills of the
personnel manager in planning recruitment for vacancies that may arise.
2.
Organizing:
Managers set tasks which need to be performed if the business is to achieve its
objectives. Jobs need to be organized within sections or departments and
authority need to be delegated so that jobs are carried out. For example, the
goal of a manufacturing company may be to produce quality goods that will be
delivered to customers on time. The tasks, such as manufacturing, packaging ,
administration, etc. that are part of producing and distributing the goods, need to
be organized to achieve this goal
.
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11

3.
Commanding:
This involves giving instructions to subordinate to carry out tasks. The manager
has the authority to make decisions and the responsibility to see tasks are
carried out.
4.
Co-ordinating:
This is the bringing together of the activities of people within the business.
Individuals and groups will have their own goals, which may be different to those
of the business and each other. Management must make sure that there is a
common approach, so that the companys goals are achieved.
5.
Controlling:
Managers measure and correct the activities of individuals and groups, to make
sure that their performance fits in with plans.
Management
Management is more art than science. Managing is working through and other
people to accomplish the objectives of both the organization and its member.
Today, we are living in a chaotic transition period to a new age defined by global
competition, rampant change, faster flow of information and communication,
increasing business complexity, and pervasive globalization. The pace of change
has become so rapid that it took a different type of firms to be dominated and
marked entirely new era of business. This new environment is also characterized
by more far-reaching technological advances, and a consumer who has
adjusted to this quicker pace and whose fickle preferences are revised with the
speed of a television commercial.
Management science is concerned with a number of different areas of study
1)developing and applying models and concepts that may prove useful in helping
to illuminate management issues and solve managerial problems. The models
used can often be represented mathematically, but sometimes computer-based,
visual or verbal representations are used as well or instead2)designing and
developing new and better models of organizational excellence. A leading
influence in this area is the work of Dr. Mark Draper which combines insights
from the fields of knowledge management, cognitive psychology, leadership
training, learning theory, and modern behavioral psychology. Dr. Jim Collins's
work at Stanford presents the important scientific facts about how to turn a good
organization into a great one. Management science research can be done on
three levels:

The fundamental level lies in three mathematical disciplines: Probability,

Optimization, and Dynamical systems theory.
The modeling level is about building models, analyzing them
mathematically, gathering and analyzing data, implementing models on
computers, solving them, playing with them - all this is part of
Management Science research on the modeling level.
The application level, just as any other engineering discipline, has strong
aspirations to make a practical impact and be a driver for change in the
real world.

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The management scientist's mandate is to use rational, systematic, sciencebased techniques to inform and improve decisions of all kinds. Of course, the
techniques of management science are not restricted to business applications
but may be applied to military, medical, public administration, charitable groups,
political groups or community groups.... Its origins can be traced to operations
research, which made its debut during when the Allied forces recruited scientists
of various disciplines to assist with military operations. In these early
applications, the scientists utilized simple mathematical models to make efficient
use of limited technologies and resources. The application of these models within
the corporate sector became known as Management science
Applications
Applications of management science are abundant in industry as airlines,
manufacturing companies, service organizations, military branches, and in
government. The range of problems and issues to which management science
has contributed insights and solutions is vast. It includes

12

scheduling airlines, both planes and crew,

deciding the appropriate place to site new facilities such as a warehouse
or factory,
managing the flow of water from reservoirs,
identifying possible future development paths for parts of the
telecommunications industry,
establishing the information needs and appropriate systems to supply
them within the health service, and
identifying and understanding the strategies adopted by companies for
their information systems

Management science is also concerned with so-called soft-operational analysis,

which concerns methods for strategic planning, strategic decision support, and
Problem Structuring Methods (PSM). At this level of abstraction, mathematical
modeling and simulation will not suffice. Therefore, during the past 30 years, a
number of non-quantified modelling methods have been developed. These
include morphological analysis and various forms of influence diagrams
What is Management Science?
Management Science is a field of study characterized by the use of mathematical
and computer models for decision making. Its origins can be traced to Operations
Research, which made its debut during World War II when the Allied forces
recruited scientists of various disciplines to assist with military operations. In
these early applications, the scientists utilized simple mathematical models to
make efficient use of limited technologies and resources. The application of these
models within the corporate sector became known as Management Science.
Together with the technological advances of the computer age, the refinement of
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Management Science techniques enabled larger and more complex problems to

be modeled and solved. In today's marketplace, Management Science
techniques offer a competitive edge in the quest for efficiency.
Who uses Management Science?
Applications of Management Science are abundant in industry and government.
Airlines and overnight mail systems use mathematical models to create efficient,
dependable flight schedules. Manufacturing companies use quantitative
techniques in virtually all strategic and operational areas such as choosing a new
plant location, controlling production, or implementing statistical quality control.
Service organizations such as banks, hospitals and investment firms all rely on
Management Science to ensure their operations combine customer satisfaction
with a high degree of efficiency. The military branches of the government depend
on computer-based quantitative models for logistical planning and mobilization.
The process of obtaining information about jobs, including the tasks to be done
on the jobs as well as the personal characteristics necessary to do the tasks.

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CASE STUDY
World Call Telecommunications Group
Corporate Profile--World call Telecommunications Group began life in
1995 when First Capital Securities Corporation Ltd started incubating
World call Payphones, now World call Communications Limited. The next
few years were spent in expanding payphone network across Pakistan,
creating new businesses and drawing investor attention to the value of
World call businesses. And now, there are 141,000 payphones all over
the country and World call holds the largest share with 22 % of the
market. Today, they are number one, and pioneers in franchised
payphones In 1998 Prepaid Calling Cards were launched by World call
14

phone cards under the brand name "Hello". In the private sector HELLO
is number one and again the first.
In the following year the group established dial-up internet services
through World call Dot Com. In 1999 World call Telecom Lanka
established

the

groups

first

overseas

presence

when

payphone

operations were established in Sri Lanka. Today, they operate over 1200
payphones in Sri Lanka. In 2000 World call Broadband established a
Hybrid Fiber Coaxial (HFC) network in Lahore by the name of "Magic",
thus becoming the first Multi service operator in the country, providing
cable television and cable internet. In Cable Television in Lahore, World
call was the last entrant and by far the largest. In 2003 they launched a
state of the art HFC network operation in Karachi branded World call
Broadband Limited. Phase 1 of the project, covering Defense and Clifton
is complete and over the next eighteen months the project envisions a

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fiber network all over Karachi.

Future Expansion and Initiatives--World call plans an aggressive
expansion in all its existing businesses. Internationally World call is
evaluating other opportunities in infant regional markets with similar
profiles like Bangladesh, Sri Lanka etc. as well as international markets
that have become telecom hubs for these regions like UK, US, Hong
Kong, Australia & Singapore. New Licenses / Businesses World calls
strategy is to position itself in advance to gain a first mover advantage in
various

communications

businesses.

Pakistan

Telecommunications

Authority (PTA) issued licenses for LDI and LL to World call on the 14th
and 16th of July, 2004. New Licenses - Local Loop (LL) World call was
awarded this license on 16th July, 2004 and was the first new entrant in
15

this segment. It will offer voice services utilizing its HFC network to
ensure access to the last mile. World call then plans to expand this
business using alternate technologies as well.

LL (telephony) service

providers will offer telephone connections either by laying cable or

through wireless technology. World call will provide customers with
additional telephony choices, better quality of service, attractive pricing
plans and a new set of features such as conference calling, call-waiting,
call forwarding, free-phone (0800 service), and the like. World call will
launch

telephony

services

using

the

following:

World call will be the first to launch telephony to its Cable customers in
Lahore and Karachi in addition to Cable TV and Broadband Internet
services

as

true

multi-service

offering;

Telephony & Broadband Internet over copper (Multi Service Access

Nodes

MSAN);

Wireless home telephony with limited mobility

15 | P a g e

New Licenses - Long

Distance & International (LDI)

Under the deregulation process, the PTA

has issued Long Distance and International (LDI) licenses. World call,
already a leading player in the telecom market is a natural contender for
this license and has become one of the first companies to acquire the
said license. World call was awarded the license on 14th July 2004 and
services has started in November 2004. World call has selected state of
the art-technology to offer next generation services and will be the first
operator to deploy a full Next Generation Network (NGN). Contracts for
equipment supply and network deployment have been finalized with
leading international telecom vendors including Siemens, Cisco and
Nuera. World call LDI network will cater to the needs of different market
segments by offering competitive voice and value added services tailored
16

to their individual requirements. With the World call LDI network in

place, the end customer will be able to get better quality of service and
care. World call is investing in scalable & flexible NGN solutions providing
cost effective and future proof investments. This means lower fixed and
capital

expenditure

and

more

efficient

structures

creating

lower

operating expenditure, better quality of service, more competitive

products, quick-to-market and new revenue rich services. New Licenses
Wireless Local Loop (WLL) World call has completed all preliminary work
for successfully launching the services across Pakistan at very attractive
pricing and quality of service after grant of license by PTA. World call
plans on deploying a Third Generation capable Network CDMA 2000 1X
and will be offering Fixed Telephony, Limited Mobility Telephony and all
the latest value added services like; SMS, MMS, GPRS, Push-to-talk,
EMS, etc.

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World call Multimedia Ltd--World call Multimedia Limited (WML) is

the first-ever broadband infrastructure deployed in Pakistan to provide
interactive multimedia services through hybrid fiber coaxial (HFC)
network in the city of Lahore. This is a 65,000 house pass project that
began offering 80+ crisp TV channels to its customers in December 2001
and high-speed Internet-over-Cable service has recently started as well.
WML is currently servicing around 36,000 Cable TV & over 4,000
Internet-over-Cable subscribers. Other value added services such as VoIP
/ telephony, pay-per-view, video-on-demand, distance learning, security
and data network services will be added gradually subject to relevant
approvals. Their brand name World of Magic is reflective of the
companys commitment to fill their customers world with the magic of
17

infotainment. Their service gives the subscribers the opportunity to be

entertained by a wide range of engaging channels in English, Urdu and
Punjabi: Movies, sports, news, documentaries, music, children programs
and other entertainment and information content. Other value added
services include Software downloads, MP3 streaming, Online Multiplayer
Gaming, Internet Radio & Video Streaming through their website
www.magic.net.pk.
Sponsors

of

World

call

Multimedia

included

FCSC,

World

call

Communications & Cairn wood Global Technology Fund. After a major

restructuring to bring local operational telecom companies in the group
under one umbrella, WCL now holds 99.9 % shares of WML. World call
Communications is in the process of acquiring the balance shares of
WML after which WML shall become a wholly owned subsidiary of WCL.
Vision
World call Multimedia Limited is committed to achieving the highest
17 | P a g e

quality in all that it does. Our endeavor is to consistently satisfy our

customers, shareholders, fellow employees, and communities by giving
them the best possible services. Being the pioneers of providing Broad
Band services and Cable TV on fiber optic continue to strive for providing
state of the art technology in order to bring Pakistan at par with the most
advanced

Achieving

countries

Competitive

in

Advantage

the

world.

through

Information

Technology
Broadband is the term used to describe internet services that are much
faster and more powerful than home connections. Until now, these 'dialup' connections have been the most available and affordable forms of
18

internet access, but now there are broadband pitons in many areas so it
is worth knowing what is out there to decide when to make the switch.
New services using your existing telephone lines, for example, can allow
you to access the internet and make a telephone call at the same time,
meaning your friends don't have to get an engaged tone when they try to
ring you any more just because someone in the house is always on the
internet!
1. How fast is fast?--OK, so we all know broadband internet means fast
internet. But how fast is fast? Is it just as good simply to buy a whizzy
new modem and carry on dialing up, for example? While there is no
single precise definition of broadband or broadband speeds, there are
some generally accepted features. First, however, you need to understand
how internet speed is measured. A standard home computer modem
these days operates at a maximum speed of 56k (precise speeds can vary
due to congestion on the internet and other factors, but that is what it is
18 | P a g e

capable of in perfect conditions). 56k (sometimes seen as 56Kbps) means

56 'kilobits per second'. What's a kilobit? Just over 1,000 bits. What's a
bit? It's the simplest element of digitized data - a 1 or a zero, which are
the building blocks of all computer data. So, a modem can send around
56,000 bits of data every second down the line. This might sound like a
lot, but as users of dial-up modems know, it can seem awfully slow as
one waits for the 50th photograph on a page crammed with images to
download just as someone else in the house is waiting to use the
telephone. And this is just the maximum speed - sometimes modems
seem to freeze up altogether or you have problems connecting to your ISP.
So how fast must a connection be before it is called broadband? Some
say 128Kbps, others 512Kbps. Certainly 512Kbps is fast enough that
19

accessing websites seems instantaneous. But all agree that even higher
speeds of at least 2Mbps - Megabits per second, or just over a million bits
- will be needed before services involving live video beamed over the
internet will become practical.
2. Speed isn't everything. --Broadband is not just about higher speeds,
though. There are other things to recommend it. Most types of
broadband internet service are 'always on' - in other words, you don't
have to keep connecting and disconnecting, you can just sit at your
computer and start surfing the web whenever you like. As we have
already mentioned, they also usually allow you to make phone calls at
the same time as using the internet, sometimes with several phone lines
as well - a real godsend in households where some people love the
internet and others love the phone! Finally, faster speeds mean not only
that you can retrieve web pages faster, but that you can start to use the
internet in new ways which are simply not worth trying with a slow
19 | P a g e

connection. You can listen to TV and radio over the web; watch 'web
casts' of your favorite pop group; and send holiday snaps to friends and
family with ease. Small businesses can also find it's much easier to work
both inside their offices and with external customers and partners with
broadband connections.
DEPARTMENTS
1. Administration & Security--This department is responsible for
housekeeping, controlling logistics, security of offices & network and
liaison to authorities like WAPDA. The basic problem encountered by the
department

is

the

security

of

the

scattered

network.

2. Advertising Sales & Content --This department sells media and air
time to companies and ad agencies. Content editing is also performed by
20

the department. Restrictions imposed by the government on the content

are the barriers on the performance of the department.
3. Customer Care--This department is responsible to record customer
complaints, forwarding them to the specific department and giving
feedback to customers. Problems arise when there are more number of
calls

then

the

number,

call

center

can

handle.

4. Finance & Accounts--This department performs activities like

accounts keeping, financial analyses and forecasting, banks dealing,
procurement management, inventory recording, cash collection and cash
distribution. The basic problem faced by the department is field
inventory damage evaluation.
5. Human Resources--This department performs recruitment, training,
appraisal, salary and discipline of employees. Inappropriate attendance
system
20 | P a g e

creates

problems

for

the

department.

6. MIS-This department performs software development, Local Are

network

operations

&

maintenance

and

value

added

services

management. Problems are encountered when virus attacks happen.

7. Sales & Marketing--This department is concerned with sales
management & enhancement, collection & recovery of revenues,
distribution management, and brand promotion. Problems are faced
when government imposes restrictions on content relayed, which
lemmatize sales growth.
Distribution Strategy--World call Multimedia Limited has wisely made
use of its network by extending lines to areas where it cant operate
directly. Distributors have been appointed to provide CATV services.
Distributors install their own webs and maintain by themselves by
21

paying certain percentage to World call Multimedia Limited. World call

Multimedia Limited establishes its authorized sales outlets in the
existing offices distributors on following conditions;
Prime location of distributors office in the locality.
The signboard and other office fixtures to be provided by the World call
Multimedia Limited.
Distributor will display and sell World call products at its outlet like
PCO, calling cards, Dial-up cards, CATV and IOC sales booking forms,
Daily Times, Advertising for CATV etc.
Distributor is required to install at-least 2 phone lines for customer
care.
The customer care number in the distributor area to be publicized by
the distributor.
All the POS material for all products will be available with the
distributors.
21 | P a g e

 The addition of services will increase the business and potential to

increase revenue for distributors
Market Profile (Pakistan)
Internet usage has been gaining ground in the past few years in
Pakistan. Recently BBC reported that there are about 200,000 internet
users at the beginning of 2002. This number has been growing with the
increase in the number of cities that are now on the World Wide Web. On
last count the number of cities in Pakistan that had Internet access was
521.

Below

is

the

breakup

of

the

number

by

state:

Punjab 255
Sindh 103
N.W.F.P 94
22

Baluchistan 67
Gilgit 1
Federal (Not a state) 1
Segmentations
Worldcall Multimedia Ltd is working on the concept of Mass Marketing.
So under the given concept it is targeting every kind of customer. Key
Success Factors (KSE)
Technical Expertise
Hybrid Fiber Coaxial (HFC)
Entrepreneurship
Pricing

Strategy

Worldcall Multimedia Ltd has offered its Internet services on the

following

prices.

Sr. # Description Monthly Subscription (Rs.) Quarterly (Rs.) Half Yearly

(Rs.)
22 | P a g e

Yearly

(Rs.)

1 64 kbps 4500 4388 4275 4050

2 128 kbps 9000 8775 8550 8100
3 256 kbps 20000 19500 19000 18000
4 384 kbps 25000 22425 21850 20700
5 512 kbps 35000 34125 33250 31500
6 1024 kbps 70000 68250 66500 63000
Installation Charges
Cable Modem Price Rs. 4000
Installation Fee Rs. 3000.
Advertisement
Press advertisements (Print Media)
Posters/ brochures
23

Advertising on WML CATV.

In-house channel sponsorship
Scroll works mobile advertising
Lit pole signs
Block signs advertising
Magazines
Bill Boards
SWOT analysis
Strengths
Technical Expertise.
State of the art HFC Plant.
Skilled work force (Technical, Sales, Collection).
Value added services (V.A.S)
Advertising on cable by the leading brands.
In-house community channels.
23 | P a g e

Tools

 Computerized billing system.

24 hour customer care.
NOC by Govt. of Pakistan.
Weaknesses
Limited Urdu / Indian content.
Maintenance down time is high.
Centralized customers care.
Call Center inability to receive large number of calls.
Insufficient space to accommodate staff at various area offices.
Lack of coordination among departments and cross functional
coordination.
Opportunities
24

Unavailability of a state of the art CATV & IOC service in the market
place.
Established brand name World call.
Acquisition of distribution rights for various channels.
Advertisement potential, as companies are moving towards cable
advertising.
Unavailability of technical expertise in the market.
IOC packages for the new segments.
Better business solutions to corporate sector in IOC.
Promotion of World calls other products in the market.
New Housing schemes.
Increase in population
Global Events like Football World cup, terrorist attacks etc.
Threats
New entrants in the market.
24 | P a g e

 Poor technical back-up to distributors.

Small cable operators.
Poor Government control over the illegal cable operators.
Availability of other ISPs with cheaper hourly rates and better speed.
Emergence of ISDN & DSL with better business solutions.
DSL rates going down fast with time.
Product Life Cycle
World call -World call is at maturity level.
Informing the technical staff to give a connection of internet on the
address provided by the caller.
If there is any customer who wants to roll back (want to discontinue)
from our services. Writing it and informing the technical staff.
25
Reference-Internet --website www.magic.net.pk.

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