Among the various effects of
globalization, the internationalization of economic activities, with the
need to transfer skills and
processes from one structure to another, has become one of the main phenomena
in the operations of modern multinational companies; at the center of this
process is the figure of the expatriate (Hung-Wen & Liu, 2006).
Having myself a background as an expatriate working-student who
lives abroad, I consider this topic very close to my current circumstance and
this is the first reason why I chose to do a thorough research on it. The
second aim why I will investigate on this issue is because I obtained a
full-time internship at Philips, a company known for its large number of
My working manager has allowed
me to collect data and interviews from expats of the department in which I am working.
Thanks to the full access to the field, I will be permitted to analyse and put
under a magnifying glass how the Philips expatriates integrate into the new
working and cultural environment.
During the research interviews,
will be taken in consideration the personal situation of each interviewed , be
them an expatriate, a flex-patriate, an in-patriate or a rex-patriate (Mayerhofer,
Hartmann & Herbert, 2004; Harvey, Speier & Novicevic, 1999; Näsholm, 2014). These terms’ details will
be better explored before the interviews.
a successful asset for multinational companies
Since the end of the 1990s, the
growing international migration and in particular the mobility of highly
qualified workers has changed the strategic choices of companies, forced to embrace
a broader vision of human capital management. In this context there is the
figure of the expatriate, or that individual who moves abroad to achieve
objectives related to his work (Edmond, 2017). The term comes from the Latin
words ex and patria, “outside the homeland”, and is applied to the
general concept of immigrant (“expatriate”, n.d.). Therefore,
considering the business world in a more specific context and, it refers to
workers, professionals or artists transferred from one country to another by
the company in which they provide their services (Kesserling, 2014).
in the management of expatriates
In companies operating globally and
having a stable position in foreign markets, the figure of the expatriate
represents the meeting point between the subsidiary and the head office. The
need to send a prominent figure to foreign countries arises from the need to
put a competent candidate in a key strategic position within the staff; to
coordinate the company and facilitate relations between headquarters and the
subsidiary; to transfer knowledge to professionals local; to spread the culture
and values of the organization; to import or export technologies; to increase
the participation of the company in and disseminating them within the company
as a whole (Black & Gregersen, 1999). The management of expatriates and the
relationships that the headquarter continues to maintain with them play a very
important role for the company’s performance and for the personal success of
the expatriate (Porter & Transky, 1999). The worker sent to a subsidiary,
in fact, must be assessed as a resource that, considered as such, is
characterized by benefits and costs. The role of human resources, in this
context, assumes an even more important role than in a non-internationalized
enterprise because, in the management of expatriates, it will have to face
different cultures, different problems and different issues. Normally speaking
of Human Resource Management (HRM) we refer to all the activities of
recruitment, selection, training and compensation that a company carries out in
order to achieve its objectives. In this case, speaking of an internationalized
company, we will refer to the International Human Resource Management (IHRM)
which will have to realize the HRM objectives in a much more complex and varied
context. In fact, environments characterized by high cultural differences will
influence the strategies to be used in specific countries (Howe-Walsh &
2.2 HRM and
The main differences between
an HRM and an IHRM asserted by Dowling
et al. (2013, pp. 1-24) can be summarized in some main points:
1. The extension of the activities of the IHRM. An
exact organization regarding the allocation of human capital in the various
countries is of fundamental importance, taking into account foreign
competences, needs and subsidiaries.
2. The IHRM, working with subjects of different
origins and varied cultural forms, must act taking into account the different
values and expectations of each one.
3. The different laws present in each State are a
fundamental factor that the IHRM must take into account in implementing the
strategies to be adopted.
4. In selecting the personnel to be expatriated,
the private life of the worker must also be taken into account, as families or
personal relationships play an important role in the case of international
5. The risks and costs of the IHRM are higher than
the HRM as a wrong selection of international applicants has more negative consequences
than purely domestic choices (Ibidem).
relationship between the headquarter and the subsidiary.
A central theme for
multinational companies concerns the relationship between the mother-house and
the subsidiaries (Roth & Nigh, 1992). The choice of which strategy to undertake,
in fact, in addition to influencing the company’s performance, will also affect
the performance of expatriates who may have the support from their own Country
and achieve more or less efficient objectives assigned to them (Ibidem).
In recent years, the roles and functions of
headquarters and subsidiaries have changed significantly. If in the past the
role of subsidiaries was simply to replicate in the other countries what was
done by the parent company in the origin’s country ,
or at most they were limited to carrying out the tasks assigned to them by the
company’s business centre, today, their role and autonomy have grown
considerably, so much so that their importance lies precisely in responding
promptly to external stimuli (to the point that, in some cases, they can act
without having to obtain the consensual consent from the parent-house) and in
obtaining resources and knowledge from the outside that they can later share
with the whole company (Kostova, Marano & Tallman, 2016).
Generally, the roles that are played by the
headquarter concern the coordination, control and management of financial
resources. The aim of the parent company is to better manage the relations
between the various subsidiaries, exploiting the potential synergies between
the various units, monitoring their work and efficiently distributing the
financial resources (Collis, Young & Goold, 2012).
On the other hand, the role of subsidiaries
depends on how it is integrated into the company’s network and on the type of
strategy adopted by it. As already mentioned above, their importance has been
increasing over time, bringing the subsidiaries to be increasingly independent
of the parent company in terms of resources and decisions to be taken.
Obviously, the importance of each centre depends on the level of benefits it brings
to the whole enterprise. An organizational unit that holds particular skills,
particular resources and maintains relations with key players in the host
country takes the name of a centre of
excellence, to which the parent company grants great autonomy (ibid.).
Thus, the type of interactions between
managers located in different countries affects the overall result. This
interaction, as affirms Hedlund, (1993) can be traced back to two main management
logics: hierarchical and heterarchical
Analyzing hierarchical logic, the parent
company manages subsidiaries through the use of bureaucratic and coercive
control systems. The decision-making power is largely in the hands of the
headquarter, which distributes the resources among the subsidiaries reproducing
the critical skills at the various units of the group. The power of
subsidiaries is limited and there is greater difficulty in grasping specific
skills and competences emerging from each of them (ibid.).
In heterarchical logic, however, strategic
choices are made as a result of interactions between headquarter and
subsidiaries. The management of resources is entrusted to the most capable and
interconnected organizational units. It is a more flexible logic, in which the
role of the parent-house is to coordinate the group and spread the skills
acquired from one unit to the other. The greater power entrusted to the various
centres allows to give greater flexibility to the network and to respond more
quickly to external stimuli (ibid.).
The two aspects of subsidiaries to consider
when choosing the strategy to adopt are the complexity of the environment in
which they operate and the level of resources they possess. The greater the
complexity of the environment and the greater the resources that the subsidiary
has, the greater the autonomy and the decision-making power entrusted to it
must be, and therefore the heterarchical logic should be preferred. Conversely,
a subsidiary operating in a rather simple environment that has few resources,
must necessarily depend on the headquarter which, consequently, must adopt a
hierarchical logic. It must be added, however, that a subsidiary with great
autonomy has higher agency costs and greater risks because, having resources
that allow it to operate independently, it can act with the intent of
satisfying its needs and carrying out the own interests at the expense of those
of the whole enterprise (ibid.).
steps to move abroad for an expat
3.1 Opportunities and obstacles for expatriates
A MNC’s worker who
is sent to a foreign subsidiary will face multiple opportunities opposed to
equal obstacles and / or problems. If on the one hand, the prospect of
achieving a better career position supplemented by a greater pay, as well as
the opportunity to try new experiences can incentivize the worker to his/her
relocation, there are a number of obstacles to consider.
of all, the transition from one country to another inevitably involves a total
change in habits and routines and, therefore, in everyday life. Furthermore,
another key element to consider is the private status of the expatriate, bearing
in mind whether or not the expat has a family (spouse and children), which make
the transfer to another country more complex.
On the other hand, from a business point of
view, it is possible that there is a change in the tasks performed that can
alter the motivations of the expat, causing less efficiency in achieving their
goals. Finally, a key problem, on which we will return later, is the so-called
cultural shock, caused by the need for the expatriate to have to adapt to a
different environment, forcing the latter to create new relationships with
actors more or less distant from his cultural point of view. In these
situations, a very important role is played by the mother-house that must support
the worker in any problematic phase of his stay-abroad.
Briefly, at a time when the
transfer abroad takes place, an expatriate will be subject to at least
three forms of adaptation compared to:
a) The tasks to be carried out: the transfer abroad
can be tied in with vertical or horizontal movements of one’s work activity;
b) The local work environment: the transfer
involves changes in the worker’s routines and relationships;
c) The general external environment: the transfer
implies the separation of the individual from his / her social context of
reference, especially in the non-working environment and requires adaptations
that influence daily life.
Considering all these positive and negative
variables associated with an expatriate, its management by the headquarter is a
crucial element for the success and the added value it can bring to the entire
business complex. In fact, if an expat manager manages to work in a comfortable
situation and is able to increase his skills, interacting with new cultures and
learning new knowledge, he can bring benefit to the whole group. Spreading new
experiences among colleagues, in keeping with the spirit of improving the
performance of the entire corporation.
becomes very important for the company to select carefully the candidates who
possess the professional, but also psychological and character requirements,
suitable to face this experience. In fact, it is necessary to select human
resources with certain characteristics.
all, expatriates must have soft skills that allow them to interpret social,
cultural and ethical differences. Moreover it is considered a decisive factor
in the choice of personnel the willingness to move, also linked to the family
situation which, as aforementioned, can make transfer more or less easy. Likewise,
communication skills and the knowledge of the language is considered an
essential prerogative as it is necessary to maintain relations with external
environment aimed at achieving the objectives of the company. Other factors to
be considered in the personnel selection phase are the expectations and
motivations of the expat manager since if they are aligned with those of the
company, they could reduce the agency costs.
during the recruitment phase, the company also analyses the psychological
characteristics of the candidates, using the “Big Five” model.
According to this model, the performances of the
expatriates are linked to the presence of five personality values:
stability: the ability to manage one’s emotions without being overwhelmed by
negative feelings such as anxiety, depression, vulnerability;
the tendency to be cooperative, leaving the competition aside to facilitate the
success of the group;
to experiences: the pleasure of beauty, of novelty, of creativity. It is
present in curious and innovative people;
the tendency to forge interpersonal relationships. It is essential for
expatriates, as it allows to link with local actors and facilitates the
exchange of knowledge.
the tendency to be purposeful, determined, attentive to details;