Part 1: Introduction

1.1 Overview

One of the outcomes of economic globalization is the development of multi-national corporations. Under the situation of economic crisis, the tendency of multi-national corporations to invest in China still keeps raising. As an irreplaceable, important, creative resource in modern corporations, human resource has been paid attention by business industry which includes multinational corporations. Human resource is one of the most valuable treasures for organizations, especially for multi-national corporations, and it has been attaching great importance for a long time. Expatriates are irreplaceable special resources for MNCs such as FedEx Corporation, even the number of expatriates only be a small part of local MNCs. As the compensation and benefit management is well recognized important part of human resource management, many organizations include FedEx Corporation have adopted strategic attention to its obvious effect on the attraction, inspiring, and retention of employee. Thus, this report will study the effectiveness of compensation and benefit management in FedEx Corporation based on expatriates.

1.2 Aim and Objectives

The study aim of this report it try to explore the effectiveness of expatriate remuneration in FedEx, and the study objective is FedEx. Literature review will be showed in the second part of this report which will study the direct investment theories of multi-national corporations, HRM theories of multi-national corporations, and payment management theories of multi-national corporations. After the theories study, the methodology will be introduced in the third part of this report. More details of the research and research methodology will be introduced in the third part of this report. Lastly, it will be further discussed the prevalent management practice and potentially future development, and make expectation on the tendency of expatriate management.

Part 2: Literature Review

2.1 Foreign Direct Investment(FDI) Theories of Multinational Corporations

Multinational corporation(MNC) is also name transnational corporation(TNC), or international company(INC). Based on different standards, the definition of Multinational Corporation is different. The United Nations (U.N.) defines the multinational corporations as “an enterprise with activities in two or more countries with an ability to influence others…TNCs produce a vast range of goods and services for international trade, and often for the domestic markets where they operate. MNCs operate across national boundaries in a context of nation states”.

In 1995, United Nations Trade and Development Board have made descriptive determination of multinational corporation in World Investment Report that multinational corporations are the joint-equity companies or non-joint-stock companies that constituted by their parent company and foreign affiliates. The parent company or home company can be defined as one that controls assets of another entity or entities in a country or countries other than its home country, usually by owning a capital stake.

Generally, the definition of MNTs defined by the U.N. is comprehensive and scientific. To be briefly, the MNCs contain four aspects:

(1) To set up the headquarters in one country, and through foreign direct investment in two or more countries to build up legislative branches or subsidiaries;

(2) Have a global business strategy;

(3) The production and competition scale is based on the global market, and the form of the organization is adapted to the modern production conditions of high-tech and networking;

(4) Forms of ownership is more broad, which can be state-owned, private or mixed ownership.

Depends on the development history of foreign direct investment of multinational corporations, it can be divided into three stages, which are:

1960s’ Monopolistic Advantage Theory (S. Hymer, 1960s) and Product Life Cycle Theory (R. Vernon, 1966);

1970s’ The Theory of Comparative Advantage to Investment (K. Kojima, 1978) and Internalization Theory (Peter J. Buckley & Mark C. Casson, 1976);

1970s-1980s’ The Eclectic Theory of International Production (John H. Duning, 1977).

Based on the above theories, many deeper studies for FDI have been developed. Such as the theory of core assets, product differentiation, oligopolistic reaction, cost variations and Hirsch Model, currency differences, economic of scale, and Adachi Peter Model, ect, all of these theories are developed based on the Monopolistic Advantage Theory and Location Advantage Theory. In addition, some new theories and principles from different point of view have been also proposed, such as the theory of maximization of utility and Michael E. Porter’s Competition Advantage Theory for managerial class.

2.2 HRM Theories of Multinational Corporations

According to Shuming Zhao, Peter J. Dowling, and Dennis E. Welch (2001), there are three ways to study international human resource management in the academic field. First one is the cross cultural management method, and focus on the international view to inspect the members’ behaviour from inside of organizations. Second one is the comparison study based on the industrial relationship and human resource management theories, it trys to describe, compare, and analyse the human resource management systems of different countries. The last one is to focus on the human resource management of multinational corporations. In this report, it is paid more attention to the last study method, and will target on the issues and efficiency of multinational corporations’ human resource management.

Generally, human resource management is aim to benefit every performance by utilize human resource, it normally include human resource plan, employee recruitment, performance management, training and development, and salary welfare management, and other some aspects. The complexity and difficulty of human resource management will be rapidly increased if it be placed under the interna