Answer to Question 1
a
Answer to Question 2
Spurred by cost pressures and unstable job markets, MNEs have begun reducing the range and extent of expatriate allowances. Foreign service premiums, for example, have been phased out by many companies. Globalization moves many employees to sustain their careers by working abroad, while more individuals see international assignments as a chance to develop business skills and leadership qualities. These folks are more willing to go abroad for less compensation; in fact, a recent survey found that 81 percent believe that broadening their horizons and gaining life experience, not financial gain, is the most important benefit of a foreign assignment. Cost-reduction techniques include dropping benefits and allowances and cutting hardship allowances for locales that are not as difficult as they once were, such as an assignment to Prague or Shanghai. Pressure to reduce pay and perquisites will continue, driven by cost control and skillful employees from developing countries eager to work worldwide.
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