9. International Assignments - PRINT_watermark.pdf

# Understanding expatriates and their roles This section defines expatriates, outlines the diverse objectives for international assignments, and categorizes the roles expatriates play within foreign subsidiaries, such as formal control and informal communication. ### 1.1 Defining expatriates An expatriate is generally defined as an individual working for a business organization who is sent overseas on a temporary basis to complete a time-based task or accomplish an organizational goal. Alternatively, they can be described as someone sent by a company to work for a period of time in a foreign subsidiary [2](#page=2). ### 1.2 Objectives for international assignments Companies send expatriates on assignments for a variety of strategic reasons, aiming to address specific needs and foster global capabilities within the organization. These objectives include [3](#page=3): * **Filling vacant positions:** Expatriates are often sent to subsidiaries to fill management or technical skill gaps where local talent is insufficient. For instance, 38% of international assignments are driven by the need to fill such gaps [3](#page=3). * **Controlling subsidiaries:** Assignments can be used to ensure subsidiaries adopt homogenous practices and align with headquarters' strategic direction, thereby exerting formal control [3](#page=3) [4](#page=4). * **Know-how transfer:** Expatriates are instrumental in transferring technical and managerial knowledge, especially tacit knowledge that is difficult to codify [3](#page=3). * **Facilitating communication:** They act as crucial communication conduits, bridging the gap between subsidiaries and headquarters, and promoting information flow across different international units [3](#page=3). * **Developing a common identity:** Expatriate assignments can help foster a unified organizational culture, promoting a global mindset and building international networks among employees [3](#page=3). * **Developing high-potential managers:** International assignments serve as a developmental tool, equipping promising managers with global competencies and experience. This aligns with the goal of 44% of companies that aim to provide assignees with training in specific skills or procedures [3](#page=3). * **Improving performance of international operations:** A significant objective is to enhance the overall performance of international operations, with 51% of companies citing this as a reason for expatriate assignments [3](#page=3). * **Building a global way of working:** Expatriates contribute to establishing a consistent global approach to business operations and strategy, a goal for 41% of companies [3](#page=3). * **Building skills and experience:** Assignments are also used to build skills and experience within international operations, a goal for 43% of companies [3](#page=3). ### 1.3 Roles of expatriates in foreign subsidiaries Expatriates fulfill various critical roles within foreign subsidiaries, often extending beyond their formal job description. These roles can be categorized based on their impact on control and communication within the subsidiary [4](#page=4). * **Formal direct control:** Expatriates can replace or supplement centralized decision-making processes from headquarters, thereby exercising formal control over subsidiary operations. This role directly influences how decisions are made and implemented within the foreign unit [4](#page=4). * **Informal communication:** Expatriates play a vital role in establishing and maintaining informal communication networks within the subsidiary. They are responsible for weaving a web of connections that facilitates the flow of information, ideas, and social capital, which is crucial for subsidiary integration and effectiveness [4](#page=4). * **Socialization and informal communication networks:** Beyond just communication, expatriates are often in charge of the socialization process within subsidiaries. This involves helping new employees, both local and other expatriates, integrate into the company culture and build relationships, thus strengthening informal communication networks [4](#page=4). > **Tip:** The roles of expatriates can be conceptualized using metaphors like "bears," "bumble-bees," and "spiders." "Bears" represent those in charge of formal direct control, being dominant and implementing HQ's will. "Bumble-bees" are focused on socialization and informal communication, flitting between different parts of the organization. "Spiders" are adept at creating extensive informal communication networks, connecting various nodes within the subsidiary [4](#page=4). > **Example:** An expatriate manager sent to a subsidiary in Asia might be tasked with ensuring the subsidiary adopts the company's global performance management system (formal control). Simultaneously, they might actively organize social events and informal meetings to build rapport among local staff and other international assignees, thereby strengthening informal communication networks and aiding socialization [4](#page=4). --- # Types of international assignments International assignments represent various forms of employee transfers to foreign locations, differing significantly in duration, family involvement, and cost implications [7](#page=7). ### 2.1 Long-term assignment A long-term assignment is a temporary transfer typically lasting between one to five years, although extensions are common. This type of assignment usually involves the employee's family relocating with them. These assignments are characterized by deep knowledge development for the employee and are considered costly for the organization [7](#page=7). ### 2.2 Short-term assignment Short-term assignments are temporary transfers generally lasting from three to twelve months. In contrast to long-term assignments, the employee's family does not relocate. These assignments are less expensive for the company and can sometimes lead to family problems for the employee [8](#page=8). ### 2.3 Commuter assignment A commuter assignment involves a temporary transfer where an employee resides in their home country but regularly travels to a host country for work, often returning home on weekends. The employee's family does not relocate, making it less expensive than other assignment types. However, this arrangement can potentially lead to employee burnout [8](#page=8). ### 2.4 Frequent business traveller This type of assignment is a temporary transfer of approximately three to six months in duration. It typically uses a business visa rather than a work permit in the host country. The employee and their family do not relocate, and it is considered less expensive but can also lead to burnout [9](#page=9). ### 2.5 Flexpatriate A flexpatriate assignment is a short-term temporary arrangement where an employee travels from their home country to various international locations to engage in face-to-face business interactions, subsequently returning to their home country. Similar to frequent business travellers, the employee and their family do not relocate, keeping costs down but posing a risk of burnout [9](#page=9). ### 2.6 Accommodation assignment An accommodation assignment is a type of international employment facilitated by an organization in a host country at the employee's request for a specific, often employee-initiated, period. This is commonly utilized when an employee's spouse has received an assignment in the same host country. These assignments are beneficial for employee retention but are often not budgeted for within the company's standard expatriate packages [10](#page=10). ### 2.7 Interregional assignment This is a temporary transfer where the home and host countries are situated within the same defined geographical area, such as Southeast Asia. The employee and their family do not relocate. These assignments are instrumental in building regional talent and expertise and are less expensive due to fewer benefits being provided [10](#page=10). ### 2.8 One-way transfer A one-way transfer is a permanent relocation where an employee severs ties with their home country and becomes a local employee in the host country, with no company-supported option for return. Both the employee and their family relocate permanently, eliminating the need for repatriation. This type of transfer can increase the risk of employee turnover in the host country [11](#page=11). ### 2.9 Localization Localization involves transitioning an expatriate employee to an employment status and package within the host country that is equivalent to that of local nationals. The primary goals are cost control for the organization, though it also increases the risk of turnover as the assignee may then seek opportunities locally [11](#page=11). ### 2.10 Indefinite assignment An indefinite assignment is a temporary transfer without a predetermined end date, although it is still intended to be temporary rather than permanent. This arrangement allows for the real-time achievement of assignment objectives. However, it can become costly over the long term [12](#page=12). ### 2.11 Rotational assignment A rotational assignment is a temporary transfer requiring an employee to work for a specific number of consecutive assignments. An employee is dispatched to two or more locations for a defined timeframe. These assignments are noted for high employee retention but are costly for the organization [12](#page=12). --- # The expatriation cycle: pre-assignment, actual assignment, and repatriation The expatriation cycle encompasses three distinct but interconnected stages: pre-assignment, the actual assignment, and repatriation, each presenting unique challenges and requiring specific considerations for successful international human resource management [13](#page=13). ### 3.1 Pre-assignment stage The pre-assignment stage is crucial for setting the foundation for a successful international assignment, focusing on selection, preparation, and training. The selection process should consider a range of factors beyond purely technical skills to ensure the expatriate and their family can adapt to the new environment [13](#page=13). #### 3.1.1 Factors influencing expatriate selection Experts highlight several key attributes for selecting expatriates: * **Social and Interpersonal Skills:** Communication skills, interpersonal sensitivity, extroversion, and empathy are vital for navigating foreign cultures and building relationships [14](#page=14). * **Cultural and Social Interests:** A genuine interest in understanding and engaging with the host culture is important [14](#page=14). * **Technical Skills:** Classical managerial skills and a strong need for achievement remain important [14](#page=14). * **Family Support:** While family configuration is not a decisive factor, the support and integration of the spouse are significantly important [14](#page=14). * **Language Fluency:** Language skills are beneficial but should not be the sole deciding criterion [14](#page=14). * **Other Factors:** A low sickness record, minimal family ties, availability for preparation training, and a history of vacations abroad can also be considered [14](#page=14). > **Tip:** While technical skills are necessary, prioritize candidates with strong social and intercultural competencies, as these are often the differentiators for long-term success and adaptation. #### 3.1.2 Pitfalls and negative motivations for expatriation Certain motivations or organizational practices can lead to problematic expatriate assignments: * **Blocked National Careers:** Expatriation driven by a lack of advancement opportunities in the home country can lead to dissatisfaction [15](#page=15). * **"Getting rid of nerds or freaks":** Sending employees perceived as antisocial or problematic is a poor selection strategy [15](#page=15). * **Forced Assignments:** Sending individuals who do not volunteer can result in resistance and poor performance [15](#page=15). * **Perception of "Once Expatriate – Always Expatriate":** This can lead to a feeling of being sidelined from career progression in the home country [15](#page=15). * **Expatriation as Escape:** Viewing an international assignment as a way to escape problems rather than embrace an opportunity is detrimental [15](#page=15). ### 3.2 Actual assignment stage The actual assignment phase is characterized by the expatriate's experience in the foreign environment, focusing on adaptation and performance [16](#page=16). #### 3.2.1 Cross-cultural adjustment Cross-cultural adjustment is defined as "the degree of a person’s psychological comfort and familiarity with various aspects of the foreign environment". This is a dynamic process influenced by several key factors [16](#page=16): * **Individual Factors:** The expatriate's mindset and personal attributes play a significant role [16](#page=16). * **Nature of the Job (Work):** The clarity of the role and the demands of the job itself are critical [16](#page=16). * **Organizational Context:** Support systems, training, and the overall company culture in the host country influence adjustment [16](#page=16). * **External Factors (Private Sphere):** The integration of the expatriate's spouse and family into the local community and the availability of logistical support are crucial [16](#page=16). > **Example:** A spouse's successful integration into a local social network, which might include joining a parents' network for support with children's schooling or job hunting, significantly eases the expatriate's overall adjustment. Organizations like Nestlé, Philip Morris International, and Ernst & Young have supported such initiatives [17](#page=17). #### 3.2.2 Expatriate performance and failure Expatriate performance is intrinsically linked to their ability to adjust. Expatriate failure is defined as the premature return of the expatriate manager to their home country. The cost of such failure is substantial, estimated at three times the expatriate's annual salary, plus relocation service costs, and potentially impacted by currency exchange rates and assignment location [18](#page=18). ### 3.3 Repatriation stage The repatriation stage marks the expatriate's return to their home country, bringing its own set of challenges related to readjustment, knowledge transfer, and career issues [19](#page=19) [20](#page=20). #### 3.3.1 Repatriate adjustment challenges Similar to expatriate adjustment, repatriation involves navigating new and often unexpected issues: * **Identity Problems:** Repatriates may experience a sense of not belonging in their home country after their international experience [20](#page=20). * **Employability Problems:** These arise when new knowledge and competencies acquired abroad are not identified, are not needed, or are difficult to integrate into the home organization's structure [20](#page=20). * **Planning Problems:** Difficulty finding an adequate job position, challenges in planning due to organizational downsizing or reconfiguration, and the struggle to convince potential supervisors about their value are common. Repatriates also tend to "over-evaluate" the worth of their acquired international experience [20](#page=20). The factors influencing repatriate adjustment mirror those of expatriate adjustment, including: * Individual factors [20](#page=20). * Nature of the job (work) [20](#page=20). * Organizational context [20](#page=20). * External factors (private sphere) [20](#page=20). #### 3.3.2 Knowledge transfer and career issues A critical aspect of repatriation is the effective transfer of knowledge and skills gained abroad back into the home organization. Failure to do so can lead to a loss of organizational learning and underutilization of repatriate talent. Career issues also surface, as repatriates must re-establish their careers, often finding that their international experience is not fully recognized or valued, leading to potential stagnation or dissatisfaction [20](#page=20). > **Tip:** Organizations should implement structured repatriation programs that include career counseling, role-clarification, and opportunities to leverage the expatriate's international experience to maximize the benefits of global assignments for both the employee and the company [20](#page=20). --- ## Common mistakes to avoid - Review all topics thoroughly before exams - Pay attention to formulas and key definitions - Practice with examples provided in each section - Don't memorize without understanding the underlying concepts

| Term | Definition | |------|------------| | Expatriate | An individual employed by a business organization who is temporarily sent to work in a foreign subsidiary to complete a task or achieve an organizational goal. | | Know-how transfer | The process of transmitting technical and managerial knowledge and expertise, which can include tacit knowledge that is difficult to articulate. | | Tacitness | Refers to knowledge that is difficult to articulate, codify, or transfer through written or spoken words, often learned through experience and practice. | | Global mindset | The ability to perceive, understand, and engage with diverse cultures and perspectives, fostering a broader understanding of international business operations. | | International assignment | A temporary transfer of an employee to work in a foreign country to fulfill specific business objectives or develop managerial competencies. | | Repatriation | The process of an expatriate employee returning to their home country after completing an international assignment, which involves readjustment and career reintegration. | | Cross-cultural adjustment | The process by which an expatriate becomes psychologically comfortable and familiar with the various aspects of a foreign environment, including the culture and social norms. | | Expatriate failure | The premature return of an expatriate manager to their home country before the planned completion of their international assignment, often due to adjustment difficulties or performance issues. | | Localization | The transition of an expatriate employee to an employment status and package within the host country that is equivalent to that of local nationals, effectively integrating them into the local workforce. | | Tacit knowledge | Knowledge that is acquired through experience and is difficult to express or transfer, often related to skills, intuitions, and practical know-how. | | Tacit | Difficult to express or explain; implied rather than stated explicitly. |