Expatriates and Corporate Level

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MD 45,3

Expatriates and corporate-level international strategy: governing with the knowledge contract
Brian Connelly and Michael A. Hitt
Texas A&M University, College Station, Texas, USA

564

Angelo S. DeNisi
Freeman School of Business, Tulane University, New Orleans, Louisiana, USA, and

R. Duane Ireland
Texas A&M University, College Station, Texas, USA
Abstract
Purpose – This paper proposes a methodology for governing expatriate assignments in the context of corporate-level objectives. Design/methodology/approach – The approach taken is to envisage expatriate managerial assignments within the theoretical framework of agency theory and the knowledge-based view of the firm. The paper begins with the view that knowledge acquisition and integration is a primary goal for most expatriate assignments. The relationship between expatriate managers and multinational corporation (MNC) headquarters from an agency perspective are considered and the notion of a “knowledge contract” as a means of governing that relationship is discussed. Four corporate-level international strategies available to MNCs (global, international, transnational, and multidomestic) are then examined and the extent of agency problems under each strategy is discussed. Findings – The paper makes specific predictions about the type of knowledge contract that is most likely to address agency problems for each corporate strategy. Originality/value – This research extends agency theory by introducing the knowledge contract as a means of managing agency concerns. This offers a broader range of contract alternatives, moving researchers beyond traditional agency theoretic prescriptions. The research also contributes to the literature on expatriate management by integrating assignment success with research on corporate-level international strategy. Few authors have recognized

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Corresponding author Brian Connelly can be contacted at: [e-mail] Governing with the knowledge contract 581 To purchase reprints of this article please e-mail: [e-mail] Or visit our web site for further details: www.emeraldinsight.com/reprints Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.