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.     

MNC's competitive strategies,experiences, and staffing policies for foreign affiliates

This study investigates the relationship between the strategic role of a multinational corporation's (MNC) foreign affiliates and its international staffing policy. Specifically, this study examines how an MNC's decision on expatriation is affected by strategic roles assigned to foreign affiliates: global integration of activities versus local market seeking. An empirical study is conducted using a sample of 808 foreign affiliates of Japanese firms. The research findings suggest that strategic roles of foreign affiliates alone may not adequately explain the international staffing policies of Japanese MNCs. Rather, we found a significant moderating effect of international as well as host country experience on staffing practices for foreign affiliates. While the staffing policies of MNCs striving for improving global efficiency of their operation are moderated by both international and host country experience, those seeking a specific local market position are influenced only by host country experience.     

Coping with an emerging market competition through strategy-human resource alignment: case study evidence from five leading Japanese manufacturers in the People's Republic of China

This paper documents how PRC-based Japanese affiliates can align their human resource management (HRM) policies and practices with their business strategies based on in-depth interview surveys of the five leading Japanese manufacturers in China. In particular, using a multiple-informant research design to interview both top and human resource managers in each site, the study has attempted to clarify the strategic fit between the business strategies pursued and HRM practices adopted in China. Our interviews with top management for each affiliate revealed three types of business strategies that the PRC-based affiliates adopt to gain competitiveness in the Chinese market. Separate interviews with HR managers further clarified that affiliates' HRM efforts are aligned with the strategy each affiliate is pursuing. The findings are used to suggest several hypothesized relationships between the particular strategies pursued and the HRM practices adopted in China. Furthermore, this study has provided some important insights as to how the choice of affiliate-level business strategies in China affects the ‘hybridization’ processes of the HRM policies and practices used in the cross-national business environment.     

Sources of support and expatriation: a multiple stakeholder perspective of expatriate adjustment and performance in Malaysia

This research tests the role of perceived support from multinational corporations and host-country nationals for the adjustment of expatriates and their spouses while on international assignments. The investigation is carried out with matched data from 134 expatriates and their spouses based in foreign multinationals in Malaysia. The results highlight the different reliance on support providers that expatriates and their accompanying spouses found beneficial for acclimatizing to the host-country environment. Improved adjustment in turn was found to have positive effects on expatriates' performance. The research findings have implications for both international human resource management researchers and practitioners.     

Expatriate staffing in foreign subsidiaries of Japanese multinational corporations in the PRC and the United States

This study examines expatriate staffing in foreign wholly-owned subsidiaries and joint ventures of Japanese firms located in the People's Republic of China and the United States. Expatriates are conceptualized as performing two primary functions. The first is a control function in which the expatriate works to align the operations of the subsidiary with that of the Japanese parent. The second function is a knowledge role. In this role, either the expatriate acts to transfer the Japanese parent's knowledge to the subsidiary or the expatriate is an agent for the acquisition of host-country knowledge. We tested for these two functions using subsidiary-level data on Japanese firms' operations in China and the US. Our results indicate that the control function was more prominent in joint ventures in China than in the US. The results also indicate that expatriates played a more significant knowledge-transfer function role in technology and marketing-intensive industries in China than in the US. A lack of MNC experience in China was found to be associated with limited use of expatriates. Finally, expatriate employment was negatively related to the number of subsidiaries of the parent company worldwide.     

Technology integration through international acquisitions: the case of foreign manufacturing TNCs in Sweden

Using unique firm-level data from almost the entire stock of acquired foreign-owned manufacturing affiliates in Sweden in 1993, we analyse the extent to which TNCs are able to tap into foreign sources of technological competence. Far from all TNCs appear to be involved in the coordination and integration of their acquired affiliates’ technology, or to be engaged in the kind of “dynamic technological integration”, that combines firm-specific and country-specific competencies generated by acquired affiliates with technological linkages to local firms, and to TNC units. A logistic regression analysis showed that coordination and integration of technology in TNCs is positively correlated with the length of time the affiliates have been a part of the parent corporation, while dynamic technological integration was positively correlated with affiliates operating in competitive Swedish industry clusters. Case studies suggest that the coordination and integration of technology is developed under external pressure in combination with an “organic” growth of internally gained experience through cross-border learning processes.     

Adjustment of business expatriates in Greater China: a strategic perspective

Research has found that due to similarities, firms that have gained business experience elsewhere in Greater China may exhibit relatively better performance in mainland China. Hence, the experience of business expatriates could be of strategic importance for the expansion path of their firms. Based on data collected by a survey, this study compares how business expatriates adjust to life and work in different locations in Greater China. Results show that expatriates assigned to Singapore had a higher degree of general adjustment and interaction adjustment than their counterparts elsewhere in Greater China, while expatriates both in Hong Kong and Singapore were better adjusted to work than those in mainland China. Regarding time to proficiency, defined as the period it takes the expatriates to reach an acceptable performance level at their new foreign assignment, findings indicate that it takes longer both in Hong Kong and mainland China than in Singapore. Implications of these results for business firms contemplating to enter Greater China and specifically mainland China are discussed in detail.     

Not all expatriates are the same: non-traditional South Korean expatriates in China

Non-traditional expatriates, those expatriates whose assignments tend to be shorter, involve specialist work and often do not involve families relocating, have not been the subject of sustained research. What we do know about this group of expatriates has been mainly derived from research on Western multinational enterprises (MNEs). The current study explores the trend towards, and the management of, these non-traditional expatriates in South Korean MNEs operating in China. Using a qualitative case study approach involving in-depth, semi-structured interviews with expatriates and local managers, this study reveals that the use of non-traditional expatriates has been on rise in the sample MNEs and that they undertake similar roles to the long-term expatriates including control, problem-solving, management development and knowledge transfer. This shift towards non-traditional expatriation has been brought about by the decreased need for long-term assignments and the desire to gain more organizational flexibility. We conclude that such changes represent a strategic response to the longer term issues surrounding traditional expatriates such as family, career and expatriate failure. Such a shift is not without problems as the research found that there was a lack of formal recruitment and selection processes and that training for non-traditional expatriates was limited.     

Expatriate reduction and strategic control in American multinational corporations

The significant reduction in the use of home country expatriates abroad by American multinationals is generally taken positively, reflecting internationalization, the environmental competence of host country nationals, equity, and the cost of maintaining Americans abroad. In this article I dissent, arguing that the phase-out of expatriates has gone too far, much further in fact than European or Japanese competition and that the dominant reason for the cutback is the difficulty Americans have in adapting to overseas assignments and the high failure rate they have experienced. I conclude that expatriate reduction has significant consequences for the strategic management of multinational corporations: reduced identification with the worldwide organization and its objectives, difficulty exercising control through personnel, and a lack of opportunities for Americans to gain international expertise through assignments abroad. Although I do not advocate returning to the ineffective and inequitable over-reliance on home country nationals, I argue that a corps of expatriates performs a function valuable to the MNC and that a means must be found to develop a group of managers who identify with the organization as a whole and provide overseas experience to home country managers.     

A risk management model for research on expatriates in hostile work environments

Abstract

Although much has been written about the causes of expatriate adjustment, more research is needed on managing the fear and anxiety experienced when expatriates work in hostile environments. The perceived risks of terrorism, kidnapping, crime, and civil unrest can have negative effects on the performance of expatriates and the organizations that employ them. While research has begun to examine expatriates’ stress in hostile environments, there is comparatively little research on the effectiveness of management practices that can reduce such stress. We integrate the expatriate adjustment, psychological contract, and risk management literature to develop a model that can guide efforts to reduce environmental stress and its negative effect on expatriate adjustment. Specifically, we build on recent work by Bader and colleagues to develop propositions to guide future research with the aim of improving the conditions of expatriates working in hostile environments.     

An Eastern and SME version of expatriate management: an empirical study of small and medium enterprises in Taiwan

This study, different from previous ‘individual level’ research, explored ‘company-level’ expatriate training, expatriation policies and the perceived willingness on the part of expatriates to take on an enhanced role in organizational performance. Based on data from 254 Taiwanese SMEs with foreign investments, an Eastern and SME version of expatriate management is presented. The most significant predictors of expatriate premature return and company sales are the ‘number of expatriates’ and ‘ratio of expatriates with managerial positions’. Companies that have a greater percentage of expatriates with spousal accompaniment experience more premature return while insufficient training explains lower company sales. Insights regarding regional expatriate differences and methodological implications are also elaborated.     

Multinational Firm Knowledge,Use of Expatriates,and Foreign Subsidiary Performance

The impact of knowledge transfer on foreign subsidiary performance has been a major focus of research on knowledge management in multinational enterprises (MNEs). By integrating the knowledge‐based view and the expatriation literature, this study examines the relationship between a multinational firm's knowledge (i.e. marketing and technological knowledge), its use of expatriates, and the performance of its foreign subsidiaries. We conceptualize that expatriates play a contingent role in facilitating the transfer and redeployment of a parent firm's knowledge to its subsidiary, depending on the location specificity of the organizational knowledge being transferred and the time of transfer. Our analysis of 1660 foreign subsidiaries of Japanese firms over a 15‐year period indicates that the number of expatriates relative to the total number of subsidiary employees (1) strengthened the effect of a parent firm's technological knowledge (with low location specificity) on subsidiary performance in the short term, but (2) weakened the impact of the parent firm's marketing knowledge (with high location specificity) on subsidiary performance in the long term. We also found that the expatriates' influence on knowledge transfer eventually disappeared. The implications for knowledge transfer research and the expatriate management literature are discussed.     

Human factors in the transfer of the ‘Japanese best practice’ manufacturing system to Singapore

A detailed examination of the practices reported by managers in thirty-one affiliates of Japanese companies engaged in manufacturing in Singapore revealed a high degree of conformity with the Japanese best practice (also known as ‘lean production’) model in the way work is organized and in the shop-floor level manufacturing practices, but greater conformity to host country norms in the HRM practices applied to the local work-force. This is consistent with the patterns reported in the existing literature regarding Japanese transplants in other countries, including the US and the UK. Strong statistical relationships were found in the Singapore study among the work organization cluster, the manufacturing practices cluster, and the performance outcomes. No significant relationships were found between the HRM cluster and any of the ‘downstream’ variables (work organization, manufacturing practices or performance outcomes), but relatively heavy reliance on expatriates was found to be highly related to work organization, manufacturing practices and performance outcomes. These findings suggest that heavy reliance on expatriates may function as an alternative to Japanese-style HRM practices in situations where it would be unduly difficult or costly to extend the whole package of Japanese-style HRM practices to the local work-force.     

Employee commitment in MNCs: Impacts of organizational culture,HRM and top management orientations

This article tests a model of organizational commitment in multinational corporations (MNCs). According to the model, organizational culture and human resource management (HRM) affect employee commitment directly as well as indirectly through top management team orientations. Szpecifically, we examined the effect of top management team global orientation and geocentric orientation, which are seen as contributing uniquely to employee commitment in MNCs. The model was tested on a sample of 1664 core employees working in 39 affiliates of 10 MNCs. We found strong overall support for the model. In particular, organizational culture characterized by high adaptability and a HRM system characterized by high performance work practices were found to have a significant and direct effect on employee commitment. In addition, we found that the effect of these traditional elements of the human organization is partially mediated through top management orientations, specific to international firms. The validity and generalizability of these results are reinforced by the control of a set of demographic variables as well as nationality of parent company.     

Understanding locals' compensation fairness vis-à-vis foreign expatriates: the role of perceived equity

We examined antecedents and consequences of compensation fairness vis-à-vis foreign expatriates as perceived by locals of multinationals in Kenya. We found that compensation disparity vis-à-vis expatriates negatively effected locals' perceived compensation fairness vis-à-vis expatriates but compensation advantage vis-à-vis other locals positively effected it. The effects of both disparity and advantage were mediated through perceived equity. Expatriate interpersonal sensitivity towards locals reduced the negative effect of disparity but enhanced the positive effect of advantage on compensation fairness vis-à-vis expatriates. Compensation fairness vis-à-vis expatriates was positively related to job satisfaction but negatively related to turnover intention. Theoretical and practical implications are discussed.     

International performance appraisal practices and approaches of South Korean MNEs in China

International performance appraisal of multinational enterprises (MNEs) in foreign subsidiaries has received inadequate research attention. The current study investigates the international performance appraisal practices, including procedures and methods, criteria and feedback, of South Korean MNEs in China and the extent to which these practices are localized or/and ethnocentric. Results of analyzing the in-depth interviews with local and expatriate managers show South Korean MNEs tend to adopt an ethnocentric approach to managing performance appraisals for expatriates and an integrative approach for host country-nationals by transferring their home appraisal practices to their Chinese subsidiaries. These approaches can be attributed to relative strength effects, i.e. the relative economic strengths and contextual differences between China and South Korea. This study adds to the knowledge base of how MNEs manage performance appraisals in their foreign subsidiaries.     

Expatriate compound living: an ethnographic field study

In certain countries, closed expatriate compounds have developed. They serve to provide resident expatriates and accompanying family members with a comfortable and safe environment. Unfortunately, not much is known about compound life since associated empirical research is scarce. Through ethnographic field-work methodology, including interviews and participant observation during a period of 3 months, this exploratory study investigated 16 Danish business expatriates of a large Danish corporation and their families living in the same compound in Saudi Arabia. They shared their spare time and the expatriates had the same working hours in the same subsidiary. Results show that a Danish national group was established and maintained. This in-group dominated life in the compound and at work it may have contributed to the perceptual bias and discriminatory behaviour demonstrated by the Danish expatriates in their management of the foreign national employees. Implications of these findings are discussed in detail.     

Does it really work? Re-assessing the impact of pre-departure cross-cultural training on expatriate adjustment

Cultural adjustment is considered to be a prerequisite for expatriate success abroad. One way to enhance adjustment is to provide employees with knowledge and awareness of appropriate norms and behaviours of the host country through cross-cultural training (CCT). This article analyses the impact of pre-departure CCT on expatriate adjustment and focuses on variations in participation, length and the comprehensiveness of training. Unlike previous research, the study focuses on the effectiveness of pre-departure CCT for non-US employees expatriated to a broad range of host country settings. Employing data from 339 expatriates from 20 German Multinational Corporations (MNCs) the study finds CCT has little if any effect on general, interactional or work-setting expatriate adjustment. However, a significant impact of foreign language competence was found for all three dimensions of expatriate adjustment. We used interviews with 20 expatriates to supplement our discussion and provide further implications for practice.     

‘Hidden’ expatriates: international mobility in the United Arab Emirates as a challenge to current understanding of expatriation

Expatriates are often assumed to have enhanced terms and conditions and, because that makes them expensive, to be in key managerial or technical specialist roles. Employees who come from abroad and are in more manual or even menial roles are usually referred to as ‘migrants’. However, there are millions of people around the world who are not migrants, their intended sojourn in a foreign country is seen by them and their employers as temporary, but their employment contracts are far from advantageous compared with those of locals. These ‘hidden’ expatriates are brought into focus in the emerging Arab Gulf States. In some of these countries, the population consists mainly of expatriates, with the local population a small minority: These expatriates include many in lower‐management or manual or menial jobs. We demarcate these expatriates from organisationally assigned expatriates, self‐initiated expatriates and migrants. We use qualitative data from such expatriates in the United Arab Emirates to explore the issues this raises for governments, employers and the expatriates – and for our understanding of the phenomenon of expatriation.     

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.