International Assignments—

Transferring Staff for International

Business Activities

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International Assignments
 In a survey of 203 companies by the consulting firm
PriceWaterhouseCoopers, participants expected their
use of expatriates would continue to grow in
response to pressures for internationally mobile staff.
 This trend may be regarded as evidence of a
continuing commitment to international business
operations.
 Another survey of global trends in international
assignments, by the consulting firm GMAC Global
Relocation Services, confirmed this trend.

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Reasons to Use Expatriates or
International Assignments
 1. to train host-country nationals and to
transfer knowledge and technologies.
 2. to manage a joint venture or merger.
 3. to set up and manage a subsidiary.
 4. to ensure effective control of subsidiaries
through the transmission of corporate culture,
mission, and vision.
 5. to enter new markets through sales and
market presence from the parent company.
 6. to fill staff positions and vacancies.

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Reasons to Use Expatriates or
International Assignments
 7. to improve the flow of communication
between HQ and subsidiaries.
 8. to develop global leadership competencies.
 9. to foster international skills, awareness,
sensitivity, and knowledge throughout the
organization.
 10. to increase efficiency and profits.
 We can summarize the reasons for using
expatriates or international assignments into
3 broad areas:

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Reasons for International
Assignments
 1. Position filling—expatriates are used as
position fillers, to occupy positions that for
various reasons cannot be filled by local
workforce.
 Depending on the type of position and the
level involved, a MNC either employ someone
locally or transfer a suitable candidate. The
most common reason for international
assignment is to fill skills gap or to transfer
know-how, due to a lack of local expertise.
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Reasons for International
Assignments
 2. Management development—expatriates are
used as agent of management development
to increase firm’s bank and repertoire of
managerial skills.
 Staff can be moved into other parts of the
organization for training and development
purposes, and to assist in the development of
common corporate values.
 The perceived link between international
experience and career development can be a
motivation for staff to agree to such transfer.
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Reasons for International
Assignments
 3. Organization development—expatriates are used as a
means of organization development to diffuse specialist
knowledge and skills through the firm in a way that is
not limited by geographical locations and contexts.
 The strategic objectives of the operation come into play:
 --the need for control.
 --the transfer of knowledge, competence, procedures,
and practices into various locations.
 --to exploit global market opportunities.
 Achieving these objectives will help develop
organizational capabilities to enable a firm to compete in
the global market.

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Reasons for International
Assignments
 Indeed, the 2002 PriceWaterhouseCoopers
Report found that greater staff mobility
assisted in supporting a global corporate
culture and in the cross-fertilization of ideas
and practices.
 International assignments allow staff to gain
a broader perspective, as they become more
familiar with more than one operation.
 Cultivation of human capital or talent is part
of organization development.
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Types of International
Assignments
 Employees are transferred
internationally for varying lengths of
time depending on the purpose of the
transfer and the nature of the task to
be performed.
 Companies tend to classify types
according to the length or duration of
the assignment.
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Types of International
Assignments
 1. Short-term—up to 3 months. These
are usually for troubleshooting, project
supervision, or a stopgap measure until
a more permanent arrangement can be
found.
 2. Extended—up to 1 year. These may
involve similar activities as that for
short-term assignments.
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Types of International
Assignments
 3. Long term—varies from 1 to 5 years,
involving a clearly defined role in the
receiving operation, such as Managing
Director of a subsidiary.
 It also refers to as a traditional expatriate
assignment.
 It should be noted that the definitions of
short-term and long-term assignments vary
and depend upon organizational choices.
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Types of Non-Standard
Assignments
 1. Commuter assignment.
 Special arrangements where the person concerned
commutes from the home country on a weekly or bi-
weekly basis to the place of work in another country.
 Cross-border workers or daily commuters (e.g.,
Malaysians going to work in Singapore everyday) are
not included.
 Usually the family of the assignee stays in the home
country.
 For example, the person lives in London but works in
Moscow.

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Types of Non-Standard
Assignments
 2. Rotational assignments
 Employees commute from the home country
to a place of work in another country for a
short, set period of time followed by a break
in the home country.
 Usually used on oil rigs or in other hardship
locations.
 The family usually remains in the home
country.

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Types of Non-Standard
Assignments
 3. Contractual assignments
 Used in situations where employees with
specific skills vital to an international project
are assigned for a limited duration of 6 to 12
months.
 Research and development (R&D) is one area
that is using multinational project teams on
shorter-term contractual assignments.

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Types of Non-Standard
Assignments
 4. Virtual assignments.
 The employee does not relocate to a host country but
manages international responsibilities for the
organization in another country from home-base.
 The manager heavily relies on communications
technologies such as telephone, email, or video
conferencing.
 Frequent visits to the host country are necessary.
 Virtual assignments tend to be used for regional
positions—such as European Marketing Manager,
where the person is mainly coordinating a number of
countries marketing activities but is based at a
regional center.
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Non-Standard Assignments
 Non-standard assignments assist in overcoming the
high costs of international assignment.
 However, they are not always effective substitutes
for the traditional expatriate assignments.
 For example, the viability of using commuter
assignments over an extended period of time is in
question due to the build up of stress resulting from
intensive travel commitments and the adverse impact
of personal relationships.

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The International Assignment
Process
 The international assignment process
consists of 3 distinct phases:
 1. The pre-assignment phase—selection
and preparation.
 2. The actual assignment phase
 3. The post-assignment stage—
repatriation.

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The International Assignment
Process

Selection and Preparation → Actual

Assignment → Repatriation

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The International Assignment
Process
 1. Selection and Preparation Stage (Pre-
assignment phase)
 The expatriate selection process should focus
explicitly on the strengths and weaknesses of
the applicant.
 Both personality characteristics as well as
interpersonal skills should be taken into
consideration, besides technical competence
and knowledge.
 Selection criteria must be developed to guide
selection.
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The International Assignment
Process
 To prepare individuals who have been
selected for an international posting,
diverse cross-cultural training programs
should be developed.
 The cross-cultural and communication
training programs will facilitate their
adjustment to the foreign culture.

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The International Assignment
Process
 2. Actual Assignment Stage
 The exposure to a foreign culture will involve high
levels of stress and uncertainty.
 It has been common to describe this phenomenon as
‘culture shock’.
 Expatriate adjustment includes (1) anticipatory
adjustment and (2) in-country adjustment.
 Anticipatory adjustment can have an important
positive impact on in-country adjustment.

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The International Assignment
Process
 Anticipatory adjustment--a cognitive
adjustment where international assignees
anticipate and mentally prepare for relocating
to the new location--is positively influenced
by cross-cultural training and previous
international assignment and experience.
 These help build up realistic expectations and
this will reduce uncertainty and surprises, and
hence, lower the level of culture shock .
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The International Assignment
Process
 The in-country adjustment includes
 (1) adjustment to work,
 (2) adjustment to interacting with
HCNs, and
 (3) general adjustment to the living
conditions abroad.

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The International Assignment
Process
 (1) Adjustment to work is influenced by job-related
factors such as:
 Role novelty—the extent to which the current role is
different from past roles.
 Role clarity—the extent to which what is expected
from the assignee is clear and unambiguous.
 Role conflict—conflicting signals about what is
expected in the new work setting.
 Role discretion—flexibility in the execution of the job.

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The International Assignment
Process
 (2) Adjustment to interaction is affected by:
 (a) Organizational factors such as supervisor
and co-worker support, mentors, and social
relationship at work (social network).
 (b) Individual factors such as language
proficiency and previous assignment
(experience).

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The International Assignment
Process
 (3) General adjustment to the living
conditions abroad involves adjustment to
food, climate, education, transportation,
safety and health conditions.
 General adjustment is also influenced by
other non-work factors such as spouse
adjustment and cultural novelty.
 The inclusion of spouse in any training and
support programs will contribute positively to
spouse adjustment.
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The International Assignment
Process
 3. Repatriation Stage
 It has long been recognized that the
return to one’s home country after a
prolonged stay abroad is subject to
adjustment challenges similar to those
of initial transfer.
 Adequate repatriation support must be
given to repatriates.

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The International Assignment
Process
 Repatriation support practices include:
 (a) Pre-departure briefings on what to expect
during repatriation.
 (b) career planning session.
 (c) an agreement outlining the type of
position assignees will be offered upon
repatriation.
 (d) mentoring programs while on assignment
(home-country mentor relationship).

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The International Assignment
Process
 Repatriation support practices include:
 (e) reorientation programs about the changes
in the company.
 (f) repatriation training seminars on
emotional responses following repatriation.
 (g) financial counseling and financial/tax
assistance.
 (h) on-going communication with the home
office.

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Evaluation of International
Assignment Success
 It is crucial to evaluate the success of
international transfers for MNCs with a high
level of internationally mobile personnel.
 Measures of assignment success include:
 1. the intention or motivation to complete the
assignment.
 2. expatriate failure rates—measured as
premature return of the expatriate. The
failure rate can be very high, with commonly
cited figures between 16-50% for developed
countries.
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Evaluation of International
Assignment Success
 3. Individual benefits or success
criteria:
 During the assignment (short-term):
 --Task performance
 --Skill building, learning, and growth
 --ability to adjust during the assignment
 --job satisfaction
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Evaluation of International
Assignment Success
 3. Individual benefits or success criteria:
 After the assignment (long-term):
 --continued development
 --willingness to take up future assignments
 --development of contacts with key people
 --promotion
 --enlargement of responsibility

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Evaluation of International
Assignment Success
 4. organizational benefits or success
criteria:
 During the assignment (short-term):
 --accomplishment of organizational
tasks
 --achievement of key organizational
objectives (such as control and
coordination, knowledge transfer).

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Evaluation of International
Assignment Success
 4. organizational benefits or success criteria:
 After the assignment (long-term):
 --retention of repatriated employee
 --utilization of new expertise
 --transfer of expertise
 --encouragement of international mobility
among colleagues
 --willingness to accept future international
transfers.
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Evaluation of International
Assignment Success
 5. Return on investment (ROI) of
international assignment.
 Expatriate ROI can be defined as:
 A calculation in which the financial and
non-financial benefits to the MNC are
compared to the financial and non-
financial costs of the international
assignments.

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Evaluation of International
Assignment Success
 The ROI approach requires the analysis of all
IHRM support activities with respect to costs
and benefits in order to calculate expatriate
ROI.
 IHRM support activities include assignment
planning, expatriate selection, administering
the relocation program, expatriate
compensation, training and development,
family support practices, performance
management, repatriation and retention of
assignees.

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Evaluation of International
Assignment Success
 While the expenses associated directly
with the assignment such as the salary
or the relocation costs may be relatively
easy to quantify,
 it is more complex to estimate the
administrative and non-financial costs of
running an international assignment.

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Steps in the ROI Approach
 1. Determine all IHRM support activities
associated with the international assignment.
 2. Identify the financial and non-financial
costs associated with the IHRM support
activities.
 3. Identify the financial and non-financial
benefits associated with the international
assignment.
 4. Conduct a cost-benefit analysis at an
appropriate time within the context of the
assignment’s goals.
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The Roles of International
Staff
 A role is an organized set of behaviors that
are assigned to a particular position.
 The roles international staff play as a
consequence of being transferred from one
location to another must be clearly defined.
 The expected roles must be clearly
communicated to the applicants during the
recruitment and selection process.

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The Roles of Expatriates
 1. The expatriate as an agent of direct
control.
 The use of staff transfer can be regarded as a
bureaucratic control mechanism.
 The primary role is that of ensuring
compliance through direct supervision.
 Subsidiary compliance may be needed to
achieve strategic objectives for local
operations.

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The Roles of Expatriates
 2. The expatriate as an agent of socialization.
 This role is related to the use of corporate
culture as in informal control mechanism.
 There is an implicit expectation that
expatriates assist in the transfer of shared
values and beliefs.
 International assignments do assist in
knowledge sharing and competence transfer,
and encourage adoption of common work
practices, aspects of which may comprise
elements of corporate culture.
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The Roles of Expatriates
 3. The expatriates as network builders.
 International assignments are viewed as a way of
developing social capital—fostering interpersonal
linkages that can be used for informal control and
communication purposes.
 As employees move between various organizational
units, they develop a network of personal
relationships.
 Over time, international assignments allow expatriates
to develop a wide range of contacts and to increase
the number and variety of networks, giving
opportunities for the transfer of ideas and
competence.

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The Roles of Expatriates
 4. The expatriates as boundary spanners.
 boundary spanning activities refers to
activities, such as gathering information and
acting as representatives of the company,
that bridge internal and external
organizational contexts.
 Expatriates are considered boundary
spanners because they can collect and
disseminate host-country information, and act
as representatives of the firm in social
functions.
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The Roles of Expatriates
 5. The expatriates as language nodes
 An expatriate can become the point of contact when
he learned a foreign language from an international
assignment.
 The following example explain this role.
 A US expatriate learned how to speak Spanish in the
firm’s South American operations. Upon repatriation
back to US HQ, he became ‘the man in US who
speaks Spanish’. Employees from the firm’s Spanish
speaking operations will refer to him when
conducting business activities.

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The Roles of Expatriates
 6. The expatriate as an agent of
knowledge and competence transfer.
 This role is especially important when
expatriates are assigned for position
filling due to a lack of appropriate local
staff.
 The expatriate needs to help out co-
workers and train them.

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Non-Expatriates
 A considerable amount of international
business involves non-expatriates.
 Non-expatriates are people who travel
internationally yet are not considered
expatriates, as they do not relocate to
another country.
Non-Expatriates
 Non-expatriates are international
business travelers—persons for whom a
large proportion of their role involves
constant international visits to foreign
markets, subsidiary units, meetings,
and international projects.
Non-Expatriates
 They are popularly termed as:
 --road warriors
 --globetrotters
 --frequent fliers
 --flexpatriates

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Non-Expatriates
 International travel is an essential component
of their work, such as international sales
staff, whose job is almost totally comprised of
international travel.
 International sales staff attend trade fairs,
visit foreign agents and distributors,
demonstrate new products to potential
clients, and negotiate sales contracts.

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Non-Expatriates
 Similarly, international managers need
to make numerous, periodical visits to
international operations.
 They visit foreign locations to deal with
host-country government officials,
alliance partners, subcontracting firms,
and foreign suppliers.
Non-Expatriates
 International business travel can make
a heavy demands on staff.
 There is a very high level of stress
involved for those whose job
responsibilities contain a large
proportion of international business
travel.

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Stressors of Non-Expatriates
 Stressors include:
 1. Home and family issues--There is a greater
potential for family and marital relationships
to be strained.
 2. Work arrangements--The domestic side of
the job still has to be attended to. When the
traveler returns to the home office, they may
face urgent matters and backlogs of
paperwork.
 3. Travel logistics--Airline connections, hotel
accommodations, and meeting schedules.
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Stressors of Non-Expatriates
 Stressors include:
 4. Health concerns—Poor diet, lack of
exercise, lack of sleep, coping with jetlag, and
exposure to disease and other illnesses (such
as SARS and H1N1 influenza).
 5. Host-culture issues. The is non-expatriate
is still expected to be able to function in
unfamiliar environments and handle cultural
differences effectively.
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Non-Expatriates
 The heavy demands and high level of stress
must be clearly communicated when
recruiting non-expatriate staff.
 But excitement and thrills of conducting
business in foreign locations, the lifestyle (top
hotels, business-class travel, duty-free
shopping), and its general exotic nature are
the reasons why they enjoy international
business travel despite its very negatives.
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The Roles of Non-Expatriates
 Non-expatriate business travelers also
perform many roles of the expatriates
such as:
 Agent of socialization
 Network-builders
 Boundary spanners
 Language nodes
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Inpatriates
 If organizations work on a global scale they
need sufficient qualified staff to meet the
requirements of globalization.
 A shortage of multicultural managers
possessing global leadership competencies
may limit the opportunities of an MNC to gain
competitive advantage.
 To support this process, a new term for the
management development of a specific type
of HCN called inpatriation has recently
occurred.
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Inpatriates
 Inpatriation -- The transfer of subsidiary
staff to the HQ for a specific period of
time.
 Inpatriates – HCNs or TCNs from a
foreign location being transferred into
the HQ of the MNC.

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Key Drivers for Inpatriates
 1. The desire to create a global core competency and
a cultural diversity of strategic perspectives in the top
management team, thus, increasing the capability of
organizations to ‘think global and act local.’
 2. the desire to provide career opportunities for high-
potential employees in host countries, i.e., HCNs and
TCNs.
 3. The emergence of developing markets which often
represent difficult locations for expatriates in terms of
quality of life and cultural adjustment.
The Roles of Inpatriates
 Similarly, inpatriates also perform some of the roles
of the expatriates such as:
 Boundary spanners—serve as linking pin between
different organizational units of an MNC.
 Language nodes
 Senders of local contextual knowledge
 Receivers of firm-specific knowledge and competence
to enable them to master future management tasks
within the organization.
 END

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