International Human Resources Expatriate Assignment

Critically discuss the following statement. ‘An expatriate assignment is an important training and development tool, with international assignments being recognized as an important mechanism for developing international expertise. ’| || 10/11/2003| | The process expatriate assignment could be categorized as three stages. First, expatriate selection and given necessary information and pre-departure training for the expatriate assignment. Second, the expatriate serves in the international position.

Finally, the expatiate returns to PCN as a repatriate (Bossard & Peterson, 2005).The importance of establishing foreign networks exhibits an increasing trend in the recent years due to the increasing level of globalization (Mendehall, 2001). One of the powerful tools to complete such mission was the use of expatriate assignment. It is crucial for multinational company (MNC) to develop a solid foundation before entering international marketing. However, numerous empirical researches shown that majority of expatriates preserved a neutral and sometimes negative attitude for the impact of expatriate assignment on their careers (Black, Gregersen, Mendenhall, & Stroh, 1999; Adler, 2001).On the other hand, the HR management from U.

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S. MNCs shows a positive feeling (Black et al. , 1999).

Arthur and Rousseau (1996) suggested that manager values benefits from expatriate assignment for more qualitative perspectives. Because of this feature, it is likely variation existing between the stated strategies and the actual IHRM policies and practices. Furthermore, the problem with repatriation becomes more significant with longer time period of expatriation process. Therefore, the expatriation focused here is on long-term assignment which longer than one year.Also, the capability of utilisation of expatriate assignment on training and development will be discussed from individual and corporate perspective.

Research (Tung, 1998) found the primary motivation for expatriate to accept an international assignment is they view the overseas position as essential to their subsequent career advancement. Furthermore, expatriate values the international assignment as a chance to acquire skills and expertise generally not available at home.This positive attitude towards expatriate assignment, despite the problem with expatriation failure, enhances the likehood of successful expatriation.

One of the essential abilities to manage foreign environment is leadership development, it can be achieved by using expatriates (Newton, Hutchings & Kabanoff, 2007). Therefore, it is expected that the expatriate could improve leadership skills which could pursuit career advancement. However, the consequence of expatriate assignment is not necessary to be career advancement.The estimated failure rate of expatriate assignment ranges from a low as 3% to as high as 70% (Lorange, 2003:25). On the other hand, the company could also fail to capitalize upon their international experience because lack of adaptability. In either case, individual is likely to become unproductive or resign to other company upon return for best opportunities on their career development (Black et al, 1999). Consequently, the organization will lose the knowledge gained from the expatriate assignment and will make financial losses from attrition of repatriates.

Also, reverse culture shock and adjustment faced by expatriates when they return from international positions could severely influence their performance. Crocitto and Sullivan and Carraher (2005) proposed the model of learning cycle, indicated that successful expatriate experience is more likely to be achieved if solid linkages between organizational mentors were created. It is known that people towards to carve their own careers rather than allowing corporate to sculpture it.Not surprisingly, individual career behaviours create organizational patterns and inadvertently build company expertise and shape company structures. Therefore, a formal repatriation program is badly needed to help repatriate for readjustment. One crucial challenge arising from expatriate assignment is the culture shock and adjustment during the preparation and development of expatriates (Tung, 1998). The theory developed by Hofstede (1980) suggested that the national cultural differences have greater influence on shaping the management and business operations.The international experience from the repatriates has considerable positive effect on pre-departure training program.

Enhanced cultural awareness is expected, since the repatriates are more familiar with the host country culture. The expatriate experience from the repatriates could provide more realistic information on business context in the host country which develop positive attitude to the assignment. They could act as guidance to allocate the resources to ensure that the expatriates familiarized the new culture and produce appropriate behaviours necessary within that culture.In other word, the chance of expatriate failure is likely to be diminished. On the other hand, repatriate experience could also play a role to aid with expatriate selection. Appropriate candidate for expatriate required to have “the ability to learn new business concepts, to supervise subordinates from different culture, to deal with family relocation issues and to adjust personally to a new culture” (Webb, Wright, 1995:39). Thus, we can know that the candidate selection is not solely depends on the technical competence but also the relational abilities.The international experience from expatriates not only acquired the knowledge about cultural difference but also creates insights about subordinate relations (Lazarova, Tarique, 2005), which could give clear image on the criteria of the expatriate assignment and therefore ensure the ‘right’ candidate has been chosen.

Dowling and Welch (2004:66) concluded there are three reasons for expatriate assignment: (1) Position filling – transfer suitable candidate with required technical knowledge where local employee is not qualified. 2) Management development – improvement on management by expatriating manager to transfer international experience into benefit the organization. (3) Organisational development – applying the aforementioned changes to improve the organization structure, communication channels and processes. Harzing (2001) replacing the reason of organizational development with coordination and control function for the expatriate assignment.

She also suggested that organizational development is the ultimate result rather than the reason of expatriate assignment providing all transfers were accomplished.Position filling is critical for MNCs since it is the foundation of all three levels of developments. The transfer of knowledge, especially tacit knowledge is difficult to be transferred (Dowling et al, 2004). New knowledge, from the HCN point of view, can be a key factor for organizational transform and improvement. As such, expatriate assignment can act as important tool on training and developing professional expertise and to obtain better understanding of global organization.Although expatriates act as knowledge source to help co-workers and train them, and as result, there is little or no new knowledge is acquired. Not surprisingly, the competency of the expatriate is expected to be decreased over time. Hence, it is possible that the expatriate found their knowledge become obsolescing after the expatriate assignment.

In the case of establishing new subsidiary, expatiation provides the opportunities to acquire cross-border knowledge, and repatriation creates the chance of spreading and implementing this knowledge within the centre of the organization.On the other hand, the use of social capital could be the most important factor which could outweighs the mentioned knowledge lost. Appropriate utilization of social capital enables individual and organization to access, discover and integrate knowledge (Inkpen & Tsang, 2005). Thus, different opportunities of learning new knowledge and transfer knowledge could stem from intensive interactions with HCN. There are various role of an expatriate in the international assignment. However, all roles of an expatriate are directly or indirectly related to developing network and linkage between PCN and HCN.As mentioned before, the critical aim of MNCs use expatriate assignment is to establish business networks to gain competitive advantages. International team is usually formed during the expatriate assignment (Dowling, 2004).

By utilizing international team, employees are exposed to various organization units. Consequently, the strong local network of relationships is built which could have significant positive effect on the lateral assignments, such as providing professional guidance. The networks established between firms can be viewed as social capital which is valuable resources for individual or company.

The amplified trust developed between firms can enhance the relationship between companies, and hence the organization can obtain various benefits, for instance, the flow of preferential knowledge. The network of individual relationships is often interrelated to the organizational network. As an instance, a joint venture of two firms can be established by personal connections and relationship network. One effective method to achieve management development is transferring HCN managers to headquarters (Scullion, 1994).

By doing so, it is expected the HCN managers are exposed to headquarter corporate culture and facilitate the organisational development. The underlying reason is obvious because the success of expatriate assignment is the combination result of successful working between expatriate and TCNs local co-workers. The transfer of employment practices across borders increases the capacity of MNCs to implement expertise, and hence has the potential of higher efficiency. However, consequence is personnel dependent (Harzing, 2004).The transfer will not be accomplished when the expatriate see their interests as being threatened. The underlying political nature is complicated.

A good example is the case study of ABB (Belanger, Berggren, Bjorkman & Kohler, 1999). The management of ABB underestimated the tensions between different teams which resulted in severe negative impact on international coordination and therefore organization productivity. The third and the ultimate goal of expatriate assignment is to facilitate the transfer of knowledge into organization development through improvement on communication and control mechanisms with MNCs.Expatriates are also expected to not only ensuring the adopted systems and processes operates at optimal condition, but also inevitably involved in demonstrating the working mechanisms of these systems and processes, in addition to screening the productivity of HCNs. Expatriates can act as an agent of control to monitor the MNCs’ foreign operation (Dowling et al, 2004) and improve the channel of knowledge transfer through both formal and informal mechanisms (Fang, Jiang, Makino & Beamish, 2010). Therefore expatriates are required to play various roles in control and coordination.

Formal mechanisms include liaison positions and parent-level, permanent committees (Fang et al. , 2010). Usually, the expatriate managers will be assigned for such positions because they are the key personnel responsible for formulating and operating the global strategy. Therefore, organizational development is achieved.

Higher level of knowledge transfer within the organization is expected since it provides the conduit for subsidiary members communicate with others within the cross-border network. On the other hand, informal mechanisms include personal connection and interpersonal relationship networks (Fang et al. 2010).In most case, expatriates are expected to have stronger social tie which allows them engage in corporate socialization. Through the increased participation in corporate socialization, enhanced communication is expected which also strengthen the channel of information exchange between subsidiary and parent firm. Therefore, the knowledge transfer within the organization is facilitated with competency to achieve organizational development.

In conclusion, it is important for MNCs to use expatriate assignment for training and development since expatriate can served as knowledge carrier and has significant positive effect on transfer of knowledge.From organizational point of view, expatriate assignment plays an important role on control and coordination of training and development. On the other hand, due to the international experience, the likehood of expatriate failure is diminished by the positive effect on cross-cultural training.

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