 Can Anton Keep Ana happy

Expat Dilemma
in her foreign assignment ?

Colgate Palmolive

 Q1. What is your critical evaluation of Colgate Palmolive’s

international assignment policy? What weakness do you
find?

 Q2. What should an MNC consider when designing a

policy regarding international career development ?
CHAPTER 5
SOURCING HUMAN RESOURCES FOR
GLOBAL MARKETS – STAFFING,
RECRUITMENT AND SELECTION
APPROACHES TO STAFFING
 Ethnocentric
 In
ethnocentric firms, few foreign subsidiaries have no
autonomy and strategic decisions are made at
headquarters.
 Key positions in domestic and foreign operations are
held by managers from headquarters. Subsidiaries are
managed by staff from the home country (PCNs)
business reasons
 A perceived lack of qualified host-country nationals (HCNs).

 The need to maintain good communication, coordination and control links with
corporate headquarters.

 reduce the perceived high risks inherent in these novel environments.

 To ensure that the new subsidiary complies with overall corporate objectives and
policies; or because local staff may not have the required level of competence.

 Having your own person, in whom you can place a degree of trust to do the right thing,
can moderate the perceived high risk involved in foreign activities.
 Disadvantages
 Itlimits the promotion opportunities of HCNs, which may lead to
reduced productivity and increased turnover among that group.

 The adaptation of expatriate managers to host countries often takes a

long time, during which PCNs often make mistakes and poor decisions.

 When PCN and HCN compensation packages are compared, the often
considerable income gap in favor of PCNs may be viewed by HCNs as
unjustified.

 For many expatriates a key overseas position means new status,

authority, and an increase in standard of living. These changes may
affect expatriates’ sensitivity to the needs and expectations of their
host country subordinates which may be quite different to the
perceptions of the PCN manager.
 Polycentric
 Using a polycentric approach involves the MNE treating
each subsidiary as a distinct national entity with some
decision-making autonomy.
 Subsidiaries are usually managed by local nationals
(HCNs), who are seldom promoted to positions at
headquarters, and PCNs are rarely transferred to foreign
subsidiary operations
advantages
 Employing HCNs eliminates language barriers; avoids the adjustment problems
of expatriate managers and their families, and removes the need for expensive
cultural awareness training programs.

 Employment of HCNs allows a multinational company to take a lower profile in

sensitive political situations.

 Employment of HCNs is often less expensive, even if a premium is paid to attract

high-quality local applicants.

 This approach gives continuity to the management of foreign subsidiaries and

avoids the turnover of key managers that, by its very nature, results from an
ethnocentric approach.
Disadvantages:
 Bridging the gap between HCN subsidiary managers and PCN managers at
corporate headquarters is difficult.
 Language barriers,
 Conflicting national loyalties

 A range of cultural differences (for example, personal value differences and

differences in attitudes to business) may isolate the corporate headquarters

 Parent-country managers also have limited opportunities to gain overseas

experience. As headquarters positions are held only by PCNs, the senior corporate
management group will have limited exposure to international operations and,
over time, this may constrain strategic decision-making and resource allocation

 Host-country managers have limited opportunities to gain experience outside

their own country and cannot progress beyond the senior positions in their own
subsidiary.
Geocentric
 With a geocentric approach, the MNE is taking a
global approach to its operations, recognizing that
each part (subsidiaries and headquarters) makes a
unique contribution with its unique competence. It
is accompanied by a worldwide integrated
business,
 nationality is less important than ability

 https://www.youtube.com/watch?v=OxPHIS96iH0
company Vodafone would like to
achieve. As a company speaker
said
 We want to create an international class of managers. In our
view, the right way to do it is to have people close to one
another, sharing their different approaches and understanding
how each different part of the company now faces specific
business challenges in the same overall scenario.
 We want to develop a group of people who understand the
challenges of being global on the one hand and are still
deeply rooted in the local countries on the other. Our
target is to develop an international management capability
that can leverage our global scale and scope to maintain our
leadership in the industry
 Regiocentric
 Likethe geocentric approach, it utilizes a wider pool of managers but in a
limited way. Staff may move outside their home countries but only within
the particular geographic region.

 Regional managers may not be promoted to headquarters positions but

enjoy a degree of regional autonomy in decision making

 Forexample, a US-based MNE could create three regions: Europe, the

Americas, and Asia-Pacific. European staff would be transferred throughout
the European region but staff transfers to the Asia-Pacific region from
Europe would be rare, as would transfers from the regions to headquarters in
the United States
Advantages
 It facilitates interaction between managers
transferred to regional headquarters from
subsidiaries in that region and PCNs posted to the
regional headquarters.

 It reflects some sensitivity to local conditions,

since local subsidiaries are usually staffed almost
totally by HCNs
Disadvantages
 It can produce federalism at a regional rather than a
country basis and constrain the MNE from
developing a more global perspective.

 While this approach does improve career prospects at

the national level, it only moves the barrier to the
regional level. Talented managers may advance to
jobs in regional headquarters but less frequently to
positions at the MNE headquarters.
A philosophy towards staffing
 Context specificities –Cultural values may differ considerably
between the headquarters and the host country context. For
example, cultural similarity between parent country and subsidiary
country as a moderator in the relationship between MNE strategy
and subsidiary staffing.

 MNEs tend to staff cultural distant subsidiaries with PCNs which

had a positive effect on labor Organizational control and
coordination is maintained and facilitated.
 Promising managers are given international experience.
 PCNs may be the best people for the job because of special skills
and experiences.
 There is assurance that the subsidiary will comply with MNE
objectives, policies, etc.
 TCNs may be better informed than PCNs about the host-country
environment.
 Disadvantages
• Transfers must consider possible national animosities
(e.g. India and Pakistan).
• The host government may resent hiring of TCNs.
• TCNs may not want to return to their home country after
the assignment.

 The institutional environment includes, for example, the

legal environment and the education system
Firm specific variables –
 The most relevant variables are MNE structure and
strategy, international experience, corporate
governance and organizational culture which
describe the MNE as a whole.
Local unit specificities –
 as the staffing approach may vary with the cultural and
institutional environment it may also be dependent on the
specificities of the local unit. An important factor here is
the establishment method of the subsidiary, i.e., whether
it is a merger, an acquisition or a shared partnership.

 Furthermore, the strategic role of a subsidiary, its

strategic importance for the MNE as a whole and the
related questions of the need for control and the locus of
decision-making can influence staffing decisions.
IHRM practices
 – selection, training and development, compensation, and career
management (including expatriation and repatriation) play an
important role in the development of effective policies required to
sustain a preferred staffing approach
 These four groups of factors systematically influence staffing practices. Due to
situational factors, individual staffing decisions might be taken in a non-expected
way. Further, it has to be acknowledged that there are interdependencies between
these variables

 For example, a firm that is maturing into a networked organization (firm

specificity) will require IHRM approaches and activities that will assist its
ability to develop a flexible global organization that is centrally integrated and
coordinated yet locally responsive – a geocentric approach.

 However, a key assumption underlying the geocentric staffing philosophy is that

the MNE has sufficient numbers of high-caliber staff (PCNs, TCNs and HCNs)
constantly available for transfer anywhere, whenever global management needs
dictate
 https://www.youtube.com/watch?v=egojbAuAwgo
TRANSFERRING STAFF FOR
INTERNATIONAL BUSINESS
ACTIVITIES
 Reasons for international assignments
 Position filling- short-term position filling
continues and a lack of available skills is the major
reason for international assignments. In many
cases the most important assignment objectives
were ‘filling a managerial skills gap (22 per cent)’
and ‘filling a technical skills gap (21 per cent)’
 Management development. Staff are often 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
motivator for staff to agree to such transfers.
 ‘building management expertise’ as the third most
important reason for international assignments
 Organization development. 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.
 Compete in global markets might be developed
 investigating the assignments policies and measures
in 136 MNEs revealed that the importance of the
assignment objectives also differed by country-of-
origin.
 For example, the development of management skills
was one of the most important reasons for
international assignments in German MNEs
 MNEs from the US mainly sent managers abroad to
fill local skill gaps.
 Japanese as well as British MNEs indicated that the
development of new operations abroad was their
major reason to send expatriates abroad
Types of international assignments
 Short-term: up to three months. These are usually for
troubleshooting, project supervision, or a stopgap measure
until a more permanent arrangement can be found.
 Extended: up to one year. These may involve similar
activities as that for short-term assignments.
 Long-term: varies from one to five years, involving a
clearly defined role in the receiving operation (e.g. a
senior management role in a subsidiary).
 The long-term assignment has also been referred to as a
traditional expatriate assignment.
 Commuter assignments – special arrangements where
the employee commutes from the home country on a
weekly or bi-weekly basis to the place of work in
another country

 Reasons for these assignments can include that a

particular problem must be solved and the assigned
employee due to their experience and qualifications is
needed in two places at the same time or that the target
country is unstable

 35 per cent of the investigated companies have a policy

for commuter assignments in place and that this type of
assignment will even gain importance in the future
 Rotational assignments – employees commute
from the home country to a place of work in
another country for a short, set period followed by
a break in the home country.

 The employee’s family usually remains in the

home country. This arrangement is commonly
used on oil rigs and with hardship locations in the
global mining industry
 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 and lends
itself to short term contractual assignments in
conjunction with longer-term assignments and
virtual teams.
 Virtual assignments – where the employee does
not relocate to a host location but manages, from
home-base, various international responsibilities
for a part of the organization in another country.

 Inthis case, the manager relies heavily on

communication technologies such as telephone,
email or video conferences.
 Visits to the host country are also necessary
 The shortage of experienced staff prepared to
accept longer term postings, the immobile family,
and cost containment
 Indians
popular choice for senior roles at Asian
companies ( 2018) ET Bureau| Jul 10, 2018

 Nikon and Sony have appointed Indians to lead

their local operations, which were earlier managed
by the Japanese. Asian consumer electronics
makers are increasingly placing their trust on
Indian executives, especially at a time when
several of them are struggling in their home turf,
or finding the going tough in the largest markets,
and are expecting India to play a bigger role when
they are expanding to emerging markets.
 The number of expats in senior roles in the Indian
arms of Sony, Panasonic, Hitachi and Daikin too
have come down, while Samsung too now has
Indian executives in their global think tank. At
Daikin India, Indian executives have replaced
expats in seven critical functions like deputy plant
head, senior vice president (tech support) and
general managers for service, HR (factory) and
R&D. In Panasonic, expats in mid-to senior roles
are now 20%, compared with 40% three years ago
 Hitachi Air Conditioning India said overseas
entities have begun to realise that business is best
understood by locals and have started handing
over major roles to them.

 The overseas entities send in their representatives

from various departments to share best practices
being followed by various entities all over the
globe.
 Indian manufacturing companies are going all out
to woo expat talent in digital, artificial intelligence
and other new-age technologies, as they seek to
strengthen their global footprint with improved
products. Companies in sectors such as
automobile, industrial, pharmaceutical, chemical
and packaging are keen on bringing in people
familiar with international best practices who
can replicate the quality and precision of
developed markets such as North America, the
UK, Korea, Japan and Germany.
 automaker Mahindra & Mahindra has hired six
expats for top-level posts while the diversified
Vedanta Ltd in February brought in five expats at
senior levels in India.
 Expat hiring isn’t about numbers but about
inducting appropriate capabilities and talent,” said
Rajeshwar Tripathi, chief people officer, M&M,
which last year inducted 15 expats at senior levels.
“For critical roles, given the skill sets required, we
have been going abroad more often than in the
past.
 At Hero MotoCorp, Roberto Restelli joined the
company’s research and development team last
week, adding to the pool of 15 new senior expat
employees who have joined the Indian motorcycle
and scooter manufacturer in recent times. “Several
automotive experts from around the globe have
joined our research and development and
global product planning functions,
 Tripathi cites non-availability of local talent for
critical roles as the reason for the increase in
expat hiring. “The aim is also to achieve global
standards and to create instances to bring in global
expertise,” he said. The roles for which they were
hired include product development, ride and
handling, vehicle refinement, architecture,
technology-led programmes, safety to meet global
standards, electric vehicle, etc.
 Suresh Bose, head – group human resources at
Vedanta group, said, “Among the hired expats you
will find skills across all verticals and across all
areas including safety, environment, health,
technical and enabling. They will be responsible
for setting up processes in line with the best
practices from our industry around the globe.”
 Indian companies that are expanding their
footprint overseas have to focus on product
quality, meeting consumer needs and keeping up
with technological advances. These aspects require
relevant talent to be brought into their processes.
R Suresh, managing director of Insist Executive
Search, said that if there are four-five members in
the shortlist for a CEO search, two are invariably
expats. “We have started the CFO assignment of
one of the largest pharmaceutical companies,
where out of the five shortlisted candidates, three
are expats,” he said. For certain professions, there
is a dearth of talent in the country. These include
digital, large world-class manufacturing, research
and development, data sciences, artificial
intelligence, machine learning, etc., said experts.
 Itis a win-win for the executives too, as they are
seeing scale and growth in India. “The slowdown
in some overseas opportunities and the value of
the “India experience” tag also has got expat talent
to look at an India stint more favourably,” said
Prabir Jha, president & global chief people officer,
Cipla.
 https://www.youtube.com/watch?v=DQnoYZI2xn
k

 https://www.youtube.com/watch?v=COQgJyCpU4
A

 https://www.youtube.com/watch?v=i9RyE9-ZGK
E

 https://www.youtube.com/watch?
v=QS5n2R9wtmo
THE ROLES OF AN EXPATRIATE
Agent of socialization
 depended heavily on the contacts I had developed
over the years. The time spent in international
assignments was invaluable. I knew important
people in several key operations. I knew how they
operated and what was important to them. They
also knew that I was credible and would help them
when the opportunity arose.
 While short-term assignments may not allow the
expatriate to develop as wide a range of contacts in
one location to the degree that a traditional
assignment permits, over time they can increase
the number and variety of networks, building
channels for the transfer of ideas and competence
 Boundary spanning refers to activities, such as
gathering information, that bridge internal and
external organizational contexts. Expatriates are
considered boundary spanners because they can
collect host country information, act as
representatives of their firms in the host country,
and can influence agents
 International assignments do assist in knowledge
sharing and competence transfer, and encourage
adoption of common work practices which may
strengthen elements of corporate culture.
 The experience of a Chinese employee in the
Chinese operation of a European oil company. Her
time in the parent’s operation in Europe enabled
her to appreciate how the company valued its
name and reputation, and was able to better
understand the company’s code of conduct and
attitude towards occupational health and safety.
The Right Way to Manage
Expats ( HBR)
 companies have more need to focus for
international assignments: to develop global
leadership skills.
 Such companies would concur with a recent
observation by GE’s CEO: “The Jack Welch of the
future cannot be like me. I’ve spent my entire
career in the United States.
 The next head of GE will be somebody who has
spent time in Bombay, in Hong Kong, in Buenos
Aires.” An executive cannot develop a global
perspective on business or become comfortable
with foreign cultures by staying at headquarters or
taking short business trips abroad. Such
intangibles come instead as a result of having
spent more than one sustained period working
abroad.
 nearly 80% of midsize and large companies currently
send professionals abroad—and 45% plan to increase
the number they have on assignment.

  On average, expatriates cost two to three times what

they would in an equivalent position back home. A
fully loaded expatriate package including benefits
and cost-of-living adjustments costs anywhere
from $300,000 to $1 million annually, probably the
single largest expenditure most companies make on
any one individual except for the CEO.
  between 10% and 20% of all U.S. managers sent
abroad returned early because of job
dissatisfaction or difficulties in adjusting to a
foreign country.
 Of those who stayed for the duration, nearly one-
third did not perform up to the expectations of
their superiors.
 And perhaps most problematic, one-fourth of those
who completed an assignment left their company,
often to join a competitor, within one year after
repatriation. That’s a turnover rate double that of
managers who did not go abroad.
 companies consign the responsibility of expat
selection, training, and support to the human
resources department.
 Few HR managers—only 11%, according to
research—have ever worked abroad themselves
 most have little understanding of a global
assignment’s unique personal and professional
challenges.
 As a result, they often get bogged down in the
administrative minutiae of international
assignments instead of capturing strategic
opportunities.
 GE Medical Systems, for example, has all but
eliminated unwanted turnover after repatriation
and has seen its international sales expand from
10% to more than 50% of its total sales during the
last ten years.
focus on knowledge creation and
global leadership development

 Many companies send people abroad to reward

them, to get them out of the way, or to fill an
immediate business need. At companies that
manage the international assignment process well,
however, people are given foreign posts for two
related reasons: to generate and transfer
knowledge, to develop their global leadership
skills, or to do both.
 Assign overseas posts to people whose technical
skills are matched or exceeded by their cross-
cultural abilities-
 do not assume that people who have succeeded at
home will repeat that success abroad.

 end expatriate assignments with a deliberate

repatriation process-
 The truth is, repatriation is a time of major
upheaval, professionally and personally, for two-
thirds of expats. Companies that recognize this
fact help their returning people by providing them
with career guidance and enabling them to put
their international experience to work.
 A vice president for Disney, for example, was
posted in 1993 to EuroDisney, the company’s
struggling theme park just outside Paris. Stephen
Burke arrived in France with the same mental map
of the company as the senior managers at home.
He believed, for instance, that families and alcohol
do not mix at Disney theme parks.
 But after living in France for several months,
Burke came to see what an affront Euro-Disney’s
no-alcohol policy was to most of its potential local
customers. A glass of wine with lunch was as
French as a cheeseburger was American. Further,
Burke came to see that Disney’s lack of focus on
tour operators—a more important distribution
channel in Europe than in North America—made it
inconvenient to book reservations for complete
vacation packages, which many Europeans prefer
to arrange.
 With his new perspective on the local market, Burke
pushed hard to persuade Disney’s top management to
sell wine at its French park and to create complete
vacation packages for tour operators.
 He succeeded. Because of those and other changes,
attendance and hotel occupancy soon skyrocketed,
and EuroDisney posted its first operational profit.
Burke told us afterward, “The assignment to
EuroDisney caused me to challenge long-held
assumptions that were based on my experiences and
career at Disney. After living in France, I came to
look at the world quite differently.”
 Not every employee going abroad has abundant
knowledge to share or the right stuff to be the
company’s future CEO. What matters, however, is
that executives explicitly know beforehand why
they are sending a person overseas—and that the
reason goes beyond an immediate business
problem.
  For example, a communications company recently
transferred one of its top lean-manufacturing
experts from Asia to the United States. His task
was to help managers understand and implement
the practices that had been perfected in Singapore
and Japan. The company’s senior executives did
not expect him to hone his leadership capabilities
because they did not believe that he would ascend
the corporate ranks. Knowing the main purpose of
his posting, the expert was able to focus his energy
on downloading his knowledge to other managers.
Moreover, he did not build up unrealistic
expectations that he would be promoted after
returning home.
Sending the Right People

  a senior manager at a U.S. carmaker who was an

expert at negotiating contracts with his company’s
steel suppliers. When transferred to Korea to
conduct similar deals, the man’s confrontational
style did nothing but offend the consensus-minded
Koreans—to the point where suppliers would not
even speak to him directly. What was worse, the
man was unwilling to change his way of doing
business. He was soon called back to the company’s
home office, and his replacement spent a year
undoing the damage he left in his wake.
A Drive to Communicate.

 Most expats will try to communicate with local people

in their new country, but people who end up being
successful in their jobs are those that don’t give up
after early attempts either fail or embarrass them. To
identify such people, the most effective companies in
our research scanned their ranks for employees who
were both enthusiastic and extroverted in conversation,
and not afraid to try out their fractured French or talk
with someone whose English was weak.
Broad-Based Sociability.

 The tendency for many people posted overseas is

to stick with a small circle of fellow expats. By
contrast, successful global managers establish
social ties to the local residents, from shopkeepers
to government officials. 
Cultural Flexibility.

 Itis human nature to gravitate toward the familiar

—that’s why many Americans overseas find
themselves eating lunch at McDonald’s. But the
expats who add the most value to their companies
—by staying for the duration and being open to
local market trends—are those who willingly
experiment with different customs. In India, such
people eat dal and chapatis for lunch; in Brazil,
they follow the fortunes of the local jai alai team.
Cosmopolitan Orientation.

 Expats with a cosmopolitan mind-set intuitively

understand that different cultural norms have value
and meaning to those who practice them.
Companies that send the right people abroad have
identified individuals who respect diverse
viewpoints; they live and let live.
A Collaborative Negotiation
Style.

 When expats negotiate with foreigners, the

potential for conflict is much higher than it is
when they are dealing with compatriots. Different
cultures can hold radically different expectations
about the way negotiations should be conducted.
Thus a collaborative negotiation style, which can
be important enough in business at home, becomes
absolutely critical abroad.
 Consider the approach taken by the vice chairman
of Huntsman Corporation, a private chemicals
company based in Salt Lake City with sales
of $4.75 billion. Over the last five years, Jon
Huntsman, Jr., has developed an informal but
highly successful method for assessing cultural
aptitudes in his employees. 
 He regularly asks managers that he thinks have
global leadership potential to accompany him on
international trips, even if immediate business
needs don’t justify the expense. During such trips,
he takes the managers to local restaurants,
shopping areas, and side streets and observes their
behavior. Do they approach the strange and
unusual sights, sounds, smells, and tastes with
curiosity or do they look for the nearest Pizza Hut?
Do they try to communicate with local
shopkeepers or do they hustle back to the Hilton?
 Huntsman also observes how managers act among
foreigners at home. In social settings, he watches
to see if they seek out the foreign guests or talk
only with people they already know. During
negotiations with foreigners, he gauges his
managers’ ability to take a collaborative rather
than a combative approach.
 Other companies, such as LG Group, a $70 billion
Korean conglomerate, take a more formal
approach to assessing candidates for foreign
assignments. Early in their careers, candidates
complete a survey of about 100 questions designed
to rate their preparation for global assignments and
their cross-cultural skills.
 Afterward, LG employees and their managers
discuss how specific training courses or future on-
the-job experiences could help them enhance their
strengths and overcome their weaknesses. From
this discussion, a personalized development plan
and timetable are generated. Because LG’s
potential expats are given time to develop their
skills, about 97% of them succeed in meeting the
company’s expectations when they are eventually
sent on international assignments.
 The surveys used by LG were purchased from an
outside company and cost from $300 to $500 per
person.
 Other organizations develop them in-house, with
the help of their training or HR departments.
 In either case, the survey questions generally ask
people not to evaluate their own characteristics but
to describe their past behavior. For example, they
might be asked when they had last eaten a meal
from a cuisine that was unfamiliar to them.
 A third approach to identifying potential expats is
used by Colgate-Palmolive, which has about 70% of
its sales outside the United States and decades of
international experience.
 To fill its entry-level marketing positions, the
company recruits students from universities or
business schools who can demonstrate an ability to
handle cross-cultural situations.
 They may have already worked or lived abroad and
will at the very least have traveled extensively;
 they will often be able to speak a foreign language.
In this way, Colgate-Palmolive leverages the
investment that other companies have made in an
employee’s first experience abroad.
 Colgate-Palmolive takes a similarly cautious approach
once such promising young people are on staff.
 Instead of sending them on long assignments abroad,
it sends them on a series of training stints lasting 6 to
18 months.
 These assignments do not come with the costly
benefits that are provided to high-level expats, such as
allowances for housing and a car.
 This strategy means the company can provide young
managers with a broad range of overseas experience.
 One manager hired in the United States, for example,
spent time in the Czech Republic and the Baltic states
and recently became country manager in Ukraine—all
before celebrating his thirtieth birthday.
 Companies face a trade-off between the accuracy
and the cost of expat assessment.
 Although Colgate-Palmolive’s approach is
probably the most accurate way to assess an
individual’s potential to succeed on international
assignments, it comes with a substantial price tag.
 That approach is probably most appropriate for a
multinational that needs a large cadre of global
managers.
 For companies with lesser workforce
requirements, the less costly approaches of
Huntsman and LG may make more sense.
Finishing the Right Way
 findings of research:
 about one-third of the expats we surveyed were
still filling temporary assignments three months
after coming home.
 More than three-quarters felt that their permanent
position upon returning home was a demotion
from their posting abroad
 61% said that they lacked opportunities to put
their foreign experience to work.
 No wonder the average turnover rate of returning
professionals reaches 25%. one company that over
a two-year period lost all the managers it sent on
international assignments within a year of their
return—25 people in all. It might just as well have
written a check for $50 million and tossed it to the
winds.
 The story of a senior engineer from a European
electronics company is typical. The man was sent
to Saudi Arabia on a four-year assignment, at a
cost to his employers of about $4 million. During
those four years, he learned fluent Arabic, gained
new technical skills, and made friends with
important business people in the Saudi community.
But upon returning home, the man was shocked to
find himself frequently scolded that “the way
things were done in Saudi Arabia has nothing to do
with the way we do things at headquarters.”
 Worse, he was kept waiting almost nine months
for a permanent assignment which, when it came,
gave him less authority than he had had abroad.
Not surprisingly, the engineer left to join a direct
competitor a few months later and ended up using
the knowledge and skills he had acquired in Saudi
Arabia against his former employer.
 Thatdisappointment can be particularly strong for
senior expats who have gotten used to the
independence of running a foreign operation. As
one U.K. expatriate recently observed, “If you
have been the orchestra conductor overseas, it is
very difficult to accept a position as second fiddle
back home.”
 Changes in and out of the office can also make
homecoming difficult. The company may have
reshuffled its top management, reorganized its
reporting structure, or even reshaped its culture.
Old mentors may have moved on, leaving the
returning employee to deal with new decision
makers and power brokers.
 Things change in people’s personal lives, too.
Friends may have moved away, figuratively or
literally. Children may find it hard to settle back
into school or relate to old playmates.
 At Monsanto, for example, the head office starts
thinking about the next assignments for returning
expats three to six months before they will return.
As a first step, an HR officer and a line manager
who is senior to the expat—both with international
experience—assess the skills that the expat has
gained during her experience overseas.

 They also review potential job openings within

Monsanto. At the same time, the expat herself
writes a report that includes a self-assessment and
describes career goals. The three then meet and
decide which of the available jobs best fits the
expat’s capabilities and the organization’s needs.
 In the six years since it introduced the system,
Monsanto has dramatically reduced the turnover
rate of its returning expatriates. And because
returning employees participate in the process,
they feel valued and treated fairly—even if they
don’t get their job of first choice.
 Along with finding their returning expats suitable
jobs, effective companies also prepare them for
changes in their personal and professional
landscapes.
 For example, the oil and gas company Unocal
offers all expats and their families a daylong
debriefing program upon their return.
 The program focuses on common repatriation
difficulties, from communicating with colleagues
who have not worked abroad to helping children
fit in again with their peers.
 The participants watch videos of past expats and
their families discussing their experiences.
 That sets the stage for a live discussion. In many
cases, participants end up sharing tips for coping
with repatriation, such as keeping a journal. The
journal is useful, many returning expats say,
because it helps them examine the sources of their
frustrations and anxieties, which in turn helps
them think about what they might do to deal with
them better.
 Although participants find repatriation programs
useful, it is seldom cost effective for a company to
provide them in-house unless its volume of
international assignments is heavy.
 Most companies that offer such programs
outsource them to professional training companies
or form consortiums with other companies to share
the costs.
 Effective companies have realized that the money
they spend on these programs is a small price to
pay for retaining people with global insight and
experience.
 Companies that manage their expats successfully
follow the three practices that make the
assignments work from beginning to end.
 They focus on creating knowledge and developing
global leadership skills; they make sure that
candidates have cross-cultural skills to match their
technical abilities.
 They prepare people to make the transition back
to their home offices.
 Consider the dividends reaped by Honda of America
Manufacturing, perhaps one of the best examples of a
company that implements all three practices.
 Honda starts expat assignments with clear strategic
objectives such as the development of a new car model
or improved supplier relations.
 Assignees then complete a survey to identify personal
strengths and weaknesses related to the upcoming
assignment.
 Six months before an expat is scheduled to return
home, the company initiates an active matchmaking
process to locate a suitable job for that person; a
debriefing interview is conducted upon repatriation to
capture lessons learned from the assignment.
 As a result of Honda’s integrated approach, nearly
all of its expats consistently perform at or above
expectations, and the turnover rate for returning
employees is less than 5%. Most important, its
expats consistently attain the key strategic
objectives established at the beginning of each
assignment.
 Companies like Honda, GE, have learned how to
reap the full value of international assignments.
 Their CEOs share a conviction that sustained
global growth rests on the shoulders of key
individuals, particularly those with international
experience.
 As a result, those companies are poised to capture
tomorrow’s global market opportunities by making
their international assignments—the largest single
investments in executive development that they
will make—financially successful today.
 Factors that may influence
effectiveness include
 The creation of an environment of openness and
support for cross-fertilization of ideas and
implementation of ‘best practice’.
 The need for knowledge and information to travel
dyadically, that is, between the expatriate and the
host location, and back to the expatriate’s home
location, if the multinational is to benefit from
international assignments as a mechanism for
knowledge transfer.
 There is a link between the duration of the
assignment and the effective transfer of
knowledge. Some knowledge may be transferred
quickly while other skills and knowledge
(particularly where a high level of tacitness is
present) may take longer.

 Much of what is transferred depends on the

expatriate concerned in terms of ability to teach
others and motivation to act as an agent of
knowledge transfer.
 The success of the knowledge transfer process
depends not only on the motivation and abilities of
the assignee but also on the local employees and
their relationships
 https://www.youtube.com/watch?
v=FGmYUW9DqzU&ab_channel=TomHaak
 SELECTION CRITERIA

 Technical ability - Since expatriates are

predominantly internal recruits, personnel evaluation
records can be examined and checked with the
candidate’s past and present superiors. The dilemma
is that past performance may have little or no bearing
on one’s ability to achieve a task in a foreign cultural
environment
Cross-cultural suitability: Competence,
adjustment and other indicators
 Softskills. Soft skills are a criterion which is
underestimated by many MNEs. They are a
precondition for intercultural competence

 They include psychological as well as personal

features, international experience and language
knowledge. Furthermore, a capacity to internalize
and provide training to local personnel is an often
neglected issue.
 However, this capacity may play a vital role for
the success of an international assignment due to
the crucial importance of knowledge and
technology transfer

 Intercultural competence - intercultural

competence, which is defined as ‘the ability to
function effectively in another culture’
 CQ is theoretically precise about what is and is not
part of its construct space.
 the conceptualization of CQ comprises four
factors: (1) metacognitive CQ (the mental
capability to acquire and understand cultural
knowledge),

 (2) cognitive CQ (knowledge about cultures, their

similarities and differences),
 (3)motivational CQ (interest and confidence in
functioning effectively in intercultural contexts),
 (4) behavioral CQ (the capability to flex
behaviors in intercultural interactions).
 General mental ability focuses on cognitive
abilities, is not specific to particular types of
contexts such as culturally diverse situations, and
does not include behavioural or motivational
aspects of intelligence.

 Emotional intelligence focuses on the ability to

deal with personal emotions. Like CQ, it goes
beyond academic and mental intelligence. It
differs, however, from CQ because it focuses on
the general ability to perceive and manage
emotions without consideration of cultural context
 the ability to encode and decode emotions in the
home culture does not automatically transfer to
unfamiliar cultures (Earley and Ang, 2003). Thus,
a person with high EI in one cultural context may
not be emotionally intelligent in another culture. In
contrast, CQ is culture free and refers to a general
set of capabilities with relevance to situations
characterized by cultural diversity
 CQ is a malleable capability that can be enhanced
by active engagement in education, travel,
international assignments, and other intercultural
experiences