Expatriates: The pros and cons

Extract

[...] For the four basic types of foreign operations the parent company can utilize, communication flows will be highest for integrated constituent operations, somewhat less for worldwide innovators and implementer enterprises, and the lowest for subsidiaries that are local innovators. For the analysis contained herein, managers sourced on the host country level would be viewed as more cost-effective concerning the familiarization of the parent company with the local culture and market in the new foreign operation. If one was to assume that any company considering expansion into a foreign market would wish to minimize the costs of such an operation, all other things being equal, a host country manager would have to be viewed as less expensive concerning familiarization expenses. [...]

[...] This paper has attempted to examine the advantages and disadvantages as to how the expenses associated with an expatriate manager as compared to a host country source manager should be viewed by a company in order to optimize performance of the foreign operation in the organization as a whole. Conclusion Research concerning human resource staffing issues as regards international business personnel needs has emphasized the importance of the selection decision. Little has been done concerning the integration of this decision in the context of foreign business strategies. [...]

[...] Expatriate Decisions Based on Costs One analytical methodology for determining the attractiveness of using expatriate versus a host country national concerning staffing requirements is done purely on a cost basis based upon three principal types (Hill and Kirn 1988). The first type of expenses concern those needed for the parent organization to be able to familiarize itself with the foreign marketing culture. The next types of expenses are those associated with the transference of internal know-how to the foreign market under consideration. [...]

[...] Expatriate Economic and Cultural Advantages and Disadvantages For any company that is considering becoming or is a multinational company, cross-border success is only going to happen if the firm can understand, simulate, and reconcile its own domestic corporate culture strategic successes to the foreign legal, ideological and cultural realities, in such a way that advances its global goals and strategies. As a result, management must be aware of the dominant foreign market realities that exist, and be able to obtain the optimum performance from their employees within that market. [...]

[...] The transference of this know- how during a transition period is generally characterized by intensive management involvement in the day to day activities and entails lower than anticipated productivity, at least at the beginning of operations. The second type of knowledge transfer concerns processes, technology, and production equipment. The new local labor force needs to be instructed as to how to install, maintain, and utilize all the necessary equipment for production. The expenses associated with these procedures need to be taken into consideration. [...]