The inpatriate experience in multinational corporations: an exploratory case study in Germany

Despite inpatriates' growing importance for the scope of international business, research on this specific group of international assignees transferred to the corporate headquarters (HQ) of multinational corporations (MNCs) still remains in its infancy. Due to this research gap, a qualitative approach to the analysis of inpatriates' experiences was selected to uncover directions for subsequent research and derive factors that are relevant in the context of these cross-cultural assignments. This paper reports the results of exploratory interviews with 13 inpatriates assigned to the HQ of three German MNCs. The interviews explored the purpose of inpatriate assignments in MNCs and focused on identifying critical dimensions to assess their success. In addition, the relevance of individuals' cultural background and other factors that may impact on assignment outcomes were examined. The empirical results are instrumental in deriving two major research questions that may guide future research in the field of inpatriate assignments.     

The Bridging Role of Expatriates and Inpatriates in Knowledge Transfer in Multinational Corporations

Drawing on the knowledge‐based view of the firm, this article provides the first empirical study that explicitly investigates the relationship between different categories of international assignees and knowledge transfer in multinational corporations (MNCs). Specifically, we examine (1) the extent to which expatriate presence in different functional areas is related to knowledge transfer from and to headquarters in these functions and (2) the extent to which different categories of international assignees (expatriates vs. inpatriates) contribute to knowledge transfer from and to headquarters. We base our investigation on a large‐scale survey, encompassing data from more than 800 subsidiaries of MNCs in 13 countries. By disaggregating the role of knowledge transfer across management functions, directions of knowledge transfer, and type of international assignees, we find that (1) expatriate presence generally increases function‐specific knowledge transfer from and, to a lesser extent, to headquarters; and that (2) the relevance of expatriates and former inpatriates varies for knowledge flows between headquarters and subsidiaries. Additionally, we discuss implications for research and practice, in particular regarding different management functions and different forms of international assignments, and provide suggestions for future research. © 2015 Wiley Periodicals, Inc.     

Global talent management and inpatriate social capital building: a status inconsistency perspective

Distinct to expatriate managers at the subsidiary-level, inpatriate managers' influence at the headquarter (HQ)-level is controlled by the extent to which an inpatriate manager is able to ‘win’ status from HQ personnel. The primary goal of the paper is to conceptualize how organizational support, in the form of global talent management (GTM) practices, can alleviate inpatriates' difficulties in building social capital at HQ. Building social capital at HQ is vital for inpatriates to attain status in order to build the inter-unit social capital that enables them to pursue their boundary-spanning role across HQs and subsidiaries. Status inconsistency theory is put forward to recognize the personal, professional and structural incongruence of events and activities at HQ carried out with respect to inpatriates. We argue that inpatriate managers become empowered at HQ only when social capital is accumulated whereby social capital is driven by an acknowledgment of inpatriates as a legitimate staffing option. The relationship between GTM practices and social capital building needs to be managed properly by inpatriates themselves as well as by the organization. A future research agenda helping to build social capital of inpatriates through GTM infrastructure is discussed and propositions are offered throughout.     

Hybridization: striking a balance between adoption and adaptation of human resource management practices in French multinational corporations and their Tunisian subsidiaries

International management research has tended to approach the transfer of human resource management (HRM) practices by examining the one-way transfer from parent companies to their subsidiaries, their adaptation to the subsidiaries’ local context and, more recently, the reverse transfer of HRM practices from subsidiaries to their headquarters. This article aims to analyse the transfer of HRM practices from headquarters to their foreign subsidiaries through the process of hybridization. Although numerous studies focus on the transfer of HRM practices between economically developed countries or from these countries to transitional economies, few have considered French multinational corporations (MNCs) operating in ex-colonized countries. This paper addresses the ways in which the HRM hybridization process is implemented in two French subsidiaries operating in Tunisia. It focuses on the dual perspectives of managerial staff at headquarters and subsidiaries as well as shop floor employees in the subsidiaries. A range of HRM practices (recruitment and selection, compensation, performance appraisal and career management) is analysed from their transfer to their reinterpretation. The results show the importance of the concept of hybridization on HRM practice transfer through a multi-level analysis of the strategies used by various stakeholders during the hybridization process. The paper also provides useful insights into the factors of hybridization that may foster or inhibit the transfer and adoption of HRM practices by foreign subsidiaries. These include the relational context, the type of practices transferred, the interests of different professional categories and their social interactions. Based on these factors, several hybridizations are identified. The study points out the specificity of the Tunisian context and shows that institutional factors have less influence on the transfer of HRM practices in ex-colonized countries than cultural factors that have a transversal influence on different HRM practices. Key cultural factors constraining the transfer include emotional relationships and interpersonal trust. Moreover, the international transfer of HRM practices from MNCs to ex-colonized transitional countries requires taking into account the post-colonialism and fascination effects.     

Repatriates and reverse knowledge transfer in MNCs

There is widely held assumption that knowledge is one of the most important drivers of firm’s performance. Multinational companies (MNCs) have the potential advantage of acquiring and utilizing knowledge across borders. But for this potential advantage to become real, the knowledge generated in any of their units around the world should be transferred to their other units. This paper adopts an innovative approach for the study of intra-MNC knowledge transfer by focusing on the role of repatriates as transferors of knowledge from foreign subsidiaries to the headquearters, which is an under-researched topic. In particular, the paper studies the impact of repatriates’ abilities and motivation to share knowledge (disseminative capacity) on the transfer of knowledge from subsidiaries to headquarters (reverse knowledge transfer). In addition, the paper examines the determinants of repatriates’ disseminative capacity. After reviewing the relevant literature and proposing the hypotheses, this paper presents an empirical research with a sample of Spanish MNCs. The findings provide evidence that repatriates’ disseminative capacity is positively associated with reverse knowledge transfer. The paper also identifies some drivers of this: the knowledge the repatriates acquired during the expatriation and the firm’s international assignments policy.     

Linking HRM and knowledge transfer via individual‐level mechanisms

In response to recent calls for more research on micro‐foundations, we seek to link human resource management (HRM) and knowledge transfer through individual‐level mechanisms, arguing that individual‐level conditions of action influence the extent to which employees engage in knowledge exchange. We examine four such conditions empirically using data from 811 employees in three Danish multinational corporations (MNCs). Our findings suggest that individual‐level perceptions of organizational commitment to knowledge sharing, and extrinsic motivation, directly influence the extent to which employees engage in firm‐internal knowledge exchange. We also find that intrinsic motivation and engagement in social interaction significantly mediate the relationship between perceived organizational commitment and knowledge exchange. Given that HRM can influence such conditions through an overall signaling effect and various practices, an understanding of these micro‐foundations will shed light on how organizations can effectively enhance knowledge transfer through HRM. © 2012 Wiley Periodicals, Inc.     

Learning remotely: R&D satellites,intra‐firm linkages,and knowledge sourcing

Firms venture abroad not only to access resources and markets but also to learn. Yet there remains limited empirical evidence that headquarters can access geographically remote knowledge by establishing a presence in the remote location. Using U.S. patent data, I show that firm headquarters disproportionately source knowledge from third parties in remote locations where they have an R&D satellite. This “satellite effect” on knowledge flow is economically significant, representing up to 60% of the knowledge‐flow premium associated with collocation. Furthermore, the effect seems to be stronger for recent knowledge, as well as in areas of satellite technological specialization, suggesting that firms can target cutting‐edge knowledge in specific sectors. In addition, the results show that firms with stronger internal linkages between headquarters and satellites, and those that staff satellites with inventors that previously patented while at other local firms, experience a larger satellite effect on knowledge acquisition.     

Headquarter Reliance on Accounting Performance Measures in a Multinational Context

Headquarter (HQ) reliance on accounting performance measures (APMs) is studied in a European multinational organization. European MNCs typically manage their foreign operations as a portfolio of relatively independent national businesses (Bartlett and Goshal, 1989). In line with previous work on APMs in a limited country setting (Govindarajan, 1984; Brownell, 1987), the HQ relies less on APMs in monitoring domestic units that face environmental instability. However, in the case of geographically dispersed foreign subsidiaries, the HQ emphasizes APMs more when dynamism increases. The financial control pattern towards foreign subsidiaries is similar to Egelhof s (1988) findings in a broad sample of MNCs. This contrasting result is consistent with the greater cost and difficulty of using information-intensive alternatives to APMs for units that are geographically and culturally distant from the HQ. There is no indication that tight APM-based management would have a negative impact on work conditions of managers facing instability, but foreign managers find it more difficult to accept the evaluative framework if high reliance is placed on APMs when their environment is dynamic.     

An Empirical Investigation on the Transfer of Expatriates Within MNCs from a Knowledge Perspective

We study the use of expatriates in transferring knowledge within a multinational corporation (MNC). We argue that MNCs use expatriates to allocate knowledge between headquarters and its foreign affiliates. With data from MNCs headquartered in South Korea, we trace unobservable knowledge using observable labour mobility. Our empirical analysis shows that the use of expatriates increases as communication between South Korea and the host country becomes more costly. However, the extent to which the use of expatriates relates with communication costs decreases in the sectoral complexity.     

Transferring HR practices within multinational corporations

There is extensive evidence that planned transfers of management practices by the headquarters of multinational corporations (MNCs) to foreign subsidiaries are not always successful. In this article, we outline a model of factors influencing the transfer of HR practices to MNC units abroad. The article has two main contributions. First, we develop a more holistic understanding of the outcome of HR practice transfer as encompassing three dimensions: implementation, internalisation and integration. Second, we expand current explanations of transfers of practices to foreign units. We argue that transfer of HR practices is a social process where the governance mechanisms used by the MNC, characteristics of the subsidiary HR systems, the social relationship between the subsidiary and MNC headquarters, and the transfer approach taken by headquarters management will influence the outcome of the process.     

Strategic imperatives,power and subsidiary performance: the transfer of human resource management practices in multinational companies operating in Poland's post‐socialist banking industry

We examine the extent to which institutional influences account for the transfer of performance management systems in two foreign‐owned banks, one German the other Irish, in Poland. While we find they were important, more important were the joint effects arising from the subsidiaries' times‐of‐acquisition, their pre‐acquisition economic health, the international experience of the MNCs' management, headquarters‐generated strategic imperatives and the political dynamics that ensued between corporate and local management.     

Hablas vielleicht un peu la mia language? A comprehensive overview of the role of language differences in headquarters–subsidiary communication

The management of human resources in headquarters (HQ)–subsidiary relationships requires intensive communication, but effective communication often depends on having a shared language. Hence, language differences can be a serious threat to the successful management of human resources in multinational corporations. In this large-scale quantitative study, encompassing data from more than 800 subsidiaries in 13 countries, we investigated four related issues. First, in terms of the importance of language differences, we found that HQ–subsidiary relationships are clearly affected by language differences and that the latter form a distance category of their own, which should not be subsumed under the related, but separate concept of cultural differences. Second, regarding the consequences of language differences for communication outcomes, we found that a lack of a shared language is associated with misunderstanding, conflict and parallel information networks, which could harm HQ–subsidiary interactions. Third, with regard to the impact of language differences on communication methods, we found that a lack of a shared language is associated with a significantly lower level of oral (face-to-face and phone) communication, but not written communication. Fourth, and finally, in terms of a potential solution to communication problems caused by language differences, we found that expatriates can facilitate both communication and knowledge transfer between HQ and subsidiaries.     

Expatriates in their own home: A new twist in the human resource management strategies of japanese mncs

Liaison positions in an overseas subsidiary represent a vital link to the parent company. Staffing this position constitutes a critical HRM decision. Based on exploratory interviews conducted with personnel managers and foreign employees, we examine an emerging approach to meeting this staffing need which entails hiring non-Japanese as employees of the parent company, retaining them at headquarters in Japan for three to four years, then assigning them back to their own countries as expatriates. We discuss this approach's underlying rationale, its advantages and disadvantages, and its potential implications for future IHRM developments within Japanese MNCs.     

Examining the overseas staffing options utilized by Australian headquartered multinational corporations

MNCs need to use a range of options to manage their international operations. The aim of this study was to enhance understanding of how MNCs staff international management positions using a sample of top Australian MNCs across a range of industries. The rationales executives gave for their MNCs' staffing of international management supported selecting managers with higher competency levels for complex overseas assignments. Staffing options were chosen to reduce risks from cultural friction, divergent goals, and asymmetry in knowledge between the parent company and the host operation, chiefly through staffing by parent country nationals (i.e. long-term expatriates, Australians or Westerners already living in the host country or abroad, domestic international managers). Host country managers were used to reduce risks that arose from not being responsive to the host environment and to avoid costs, and when they were least risky to the firm. By contrast, the staffing options also served practical purposes, including deploying expatriate managers to provide skills (competencies) and, less frequently, to develop managers for future management positions in the organization.     

Emissions permit allocation and strategic firm behavior: Evidence from the oil sector in the European Union emissions trading scheme

With the growing urgency of climate change, governments around the world are increasingly implementing new regulations for greenhouse gases. This trend elevates the importance of examining how firms engage in strategic efforts to influence regulations before they are in place and how they respond once they are in effect (i.e., their ex‐ante and ex‐post strategic behavior). This paper examines the outcomes of such strategic efforts by multinational and domestic oil companies within the European Union emissions trading scheme. An analysis of a panel dataset of oil firms (2008–2012) shows that on average the outcome of ex‐ante strategies did not differ significantly between multinational companies (MNCs) and domestic firms. However, the findings indicate that among those firms that received positive net benefits from the new climate policy, domestic firms were able to maximize these benefits better than MNCs through their ex‐post strategies. In contrast, among the firms that faced net costs due to the policy, MNCs were able to minimize these costs better than domestic firms, ex‐post. This paper advances our understanding of whether and to what extent MNCs differ from domestic firms in their economic outcomes stemming from strategic behavior related to emissions trading. This question is especially pertinent for regulations related to climate change, which is one of humanity's grand challenges and has important consequences for our economic, social, and political systems.     

When do high‐level managers believe they can influence the stock price? Antecedents of stock price expectancy cognitions

Stock based rewards are often used to motivate high‐level managers to take actions to increase the stock price of the firm. However, numerous constraints may weaken the perceived link between individual effort and stock price appreciation for many recipients. This study introduces a new construct, stock price expectancy, which we define as individuals' perceptions of influence over their firm's stock price. We examined its antecedents in a sample of 349 high‐level U.S. managers and found that employment at corporate headquarters, firm size, hierarchical level, and contact with investment analysts predicted stock price expectancy perceptions. © 2010 Wiley Periodicals, Inc.     

Boundary‐spanning search and firms' green innovation: The moderating role of resource orchestration capability

Building on resource‐based theory and resource orchestration theory, we investigate the impact of two characteristics of boundary‐spanning search, search breadth and search depth, on firms' exploitative and exploratory green innovations. We also examine the moderating role of resource orchestration capability. The results of data analysis from 186 manufacturing firms in China show that both search breadth and search depth have inverted U‐shaped relationships with exploitative and exploratory green innovations. Furthermore, resource orchestration capability is found to moderate the inverted U‐shaped relationship between boundary‐spanning search and green innovation. Specifically, with high resource orchestration capability, the inverted U‐shaped relationships of search breadth with exploitative and exploratory green innovations are flattened, whereas the relationships of search depth with exploitative and exploratory green innovations are almost linear. Our research contributes to the literature on green innovation by uncovering the complex effects of boundary‐spanning search on exploitative and exploratory green innovations.     

Collaborative Knowing: The Adaptive Nature of Cross‐Boundary Spanning

This article elaborates how experts employ boundary objects to perform collaborative work in situ across boundaries. Our study takes a practice lens to examine the adaptive nature of cross‐boundary spanning. We conduct a field study and analyse engineers' troubleshooting tasks in maintaining sophisticated wafer‐fabrication machines. Our findings report three organizing practices: identifying problem boundaries, orchestrating collective responsibilities, and developing a systemic understanding. This mode of organizing explains how experts draw lessons from boundary objects to facilitate adaptive learning and collaboration for solving complicated problems in interactive systems. Our analysis contributes to theories of cross‐boundary spanning, adaptive learning, and problem‐solving, and suggests practical lessons in managing cross‐boundary work.     

Examining the link between skill shortages,training composition and productivity levels in the construction industry: evidence from Northern Ireland1

One of the key questions in international research addresses the tensions arising from international co-ordination and local adaptation of multinational companies' (MNCs) policies and practices. The German business system encourages MNCs to have a long-term, high-investment orientation, to practise intensive management-labour cooperation and to pursue developmental human resource management (HRM). This study analyses six major German MNCs operating in both Britain and Spain and outlines their reasons for the international co-ordination of HRM. It addresses the issue of central control versus local adaptation by looking at the transfer of German HR policies and practices. The cases show that the MNCs were able to preserve substantial ‘German-ness’ abroad. However, the results of the transfer of German HRM were not always positive due to a variety of endogenous and exogenous causes. Barriers to transfer from institutionally strong to weak environments are discussed and possible internal HR approaches are suggested to counterbalance the national business system effect. Their success will depend on head office-foreign affiliate relations shaped by factors such as cross-border communication, trust and power distribution.     

Der Markteintritt multinationaler Unternehmungen in Märkte an der Basis der Einkommenspyramide

It has been widely accepted that poverty alleviation can’t be achieved without including the private sector. Especially, foreign multinational companies (MNCs) are highlighted in this context and are considered as a key to unlock the economic potential of low-income markets by linking them with more developed markets and facilitating the transfer of financial and technological resources. The international business literature, however, lacks of theoretical insights and systematic empirical evidence of MNCs entering low-income markets. Therefore, this study sheds light on the questions why MNCs enter low-income markets, how MNCs operate and how they gain knowledge in these markets. Using a multiple case study approach, we analyze MNCs with business activities in low-income markets by taking recourse to the internationalization process model of Johanson and Vahlne. The results reveal that companies develop knowledge by enlarging their mode of market commitment to a new level that exceeds investments of foreign manufacturing and production facilities.