The trend of business on a global scale appears to be increasing, and with it, the number of persons employed by their organisations in countries other than their own. It is increasingly common for employees of international companies to spend several years working in other countries. It is also common for expatriates to work for several years in two or three different countries, during their careers with their employers.
Employees are sent to international assignments for one or more reasons:
1. to fill positions for which host country employees are judged to be unsuitable 2. for reasons of management development; and
3. for reasons of organisational development
Sometimes the first involves the intention of the organisation to maximise management control and coordination. The second is often cited in terms of giving the manager international experience before promotion within the firm in the home country. The third is more diffuse, involving a general internationalisation of the organisation and building of networks of relationships across countries and cultures.
Sending an employee to another country to manage an organisation’s operations has become a complicated process, typically requiring sophisticated understanding and complicated procedures. For the organisation, and for the individual manager, the stakes can be surprisingly high. Why this should be so, and what companies are reported as doing about it in the quest to optimise performance, warrants examination.
After studying this module, you should:
• be able to understand the dimensions of expatriate assignment success and failure, and their consequences for expatriate selection • be able to use this knowledge as a basis for understanding expatriate selection
Selecting the expatriate
On the whole, the replacement of expatriates with host country nationals (HCNs) has been seen as a positive trend ... In the short run it is easier to train and promote host and third country nationals than it is to select high potential candidates and expend the resources necessary to give them the attitudes and cultural skills they need to function effectively abroad (Kobrin 1988).
Research has recently suggested that the high failure rate of expatriates on international assignment, and the subsequent difficulties and financial expense of repatriating these managers, has made the alternative of employing host-country managers more attractive to multinational companies.
A 1983 survey by Kobrin (1988) reported that 80 percent of U.S. firms employed a local national as head of a majority of country operations (Kobrin 1988). The Asian currency crisis of 1998 accelerated the move by many companies employing expatriates to establish policies for the preferential hiring of host-country nationals over expatriates, wherever possible. For example, some Sheraton hotels in Asia (especially in Malaysia) have a notional limit of two expatriates per property. The reason given is that expatriates are too expensive to appoint.
A further argument cited by some host countries is that expatriates deny their own people the essential jobs and training they need, and some critics have suggested that ‘the expatriate’ is still seen in certain countries as a historical throw-back to the privileged and frequently racist elite of colonial times. If there is a strong feeling of nationalism in the host country, having home country nationals as managers can make the subsidiary seem very foreign indeed (Ball & McCulloch 1996).
In spite of all the reasons to the contrary, the evidence is that many companies still prefer to expatriate their own home-country managers to run their international operations, at least in the early stages of the operations.
One reason commonly given is that the parent company prefers to have someone in the job that it...