Is There a Need For Expat Managers?

Some people can't even eat the food, let alone get to grips with the lingo!

Having lived as something of an expat for over a decade (although I was officially "local hire" so never got the perks that were customary in overseas packages), from seeing serious cultural gaffs by guest managers more times than I imagined was even possible, and after hearing hundreds of stories of allegedly competent bosses crashing and burning on foreign soil, I decided to look to the literature for understanding.

Expatriates have been defined as “transnational elites” (Beaverstock, 2002), “skilled international migrants” (Findlay et al, 1996), and “high potential employees” (Oddou, 1991); there can be individual, short- or long-term, or dual-career expatriates (Harvey, 1997; Riusala and Suutari, 2000).

Globalization has given rise to human resource systems that utilize the competence of the individual (Adler and Bartholomew, 1992). Forster (2000) argued that international HR strategies are vital determinants of the success of international business ventures. The importance of expatriates is widely recognized and numerous researchers (e.g. Oddou, 1993) have proposed methods for better expat management.

The expat phenomenon merits scrutiny for diverse reasons: Scullion and Collings (2006) identifed three main objectives:

  1. to understand global staffing practices and strategies in relation to changing strategies of firms;
  2. to understand the connection between international strategies and staffing practices; and
  3. to understand how international staffing activities interlink.

Additionally, Collings et al (2007) argued that MNEs underestimate the complexities of global staffing. Torbiörn (1997) suggested MNEs adopt strategies according to their environment. However, many MNEs employ unrevised expatriate policies, despite the problems associated with them (Scullion and Brewster, 2001).

International assignments fulfill purposes ranging from addressing staff shortages, exerting control over overseas subsidiaries, to development of management talent (Feldman and Thomas, 1992). Much of the late C.20th literature - conspicuously pre-Web 2.0 - suggested a combination of company, host country, and individual factors must be considered when deciding overseas postings (Boyacigiller, 1990).

Typical expat functions have been identified as position filling, management development, and organization development (Harzing, 2001).

Areas of key focus in the literature of the 1980s and 1990s are expat selection (Tung, 1981; Mendehall et al 1987), purpose of assignments (Harzing and Ruysseveldt, 1995), duration of assignments, and incidence of assignment failure/premature repatriation, (Tung, 1981, 1987; Black et al, 1999; Ricks, 1999).

Empirical studies have also been carried out on gender-related differences in cross cultural adjustment, desire to terminate assignment, and supervisor-rated performance (e.g. Caligiuri and Tung, 1999).

Much too has been discussed under the term “cultural competence” (Leiba-O’Sullivan, 1999; Johnson et al, 2006) and the related personality requirements of successful expats, with implications for both selection processes and assignment outcomes. Mendenhall and Oddou (1985)   provided four dimensions of successful expatriate acculturation –

  1. self orientation;
  2. others orientation;
  3. perceptual ability; and
  4. cultural toughness.

Preventing expat failure requires dedicated strategic planning by the company, hence the complexity of the international environment from a staffing perspective (Hays, 1974). Taken together, these observations suggest the outcome of expat assignments is likely determined by complex combinations of internal and external factors (personality and policy).

Notice the dates of these studies. In 2010, when I wrote extensively about expats, the studies were old then. The role of disruptive communications and the part played by dramatic changes in the patterns of foreign direct investment have been inadequately accounted for in the human resource literature, which continues to look at outdated models (typical studies focus on Western expats operating in non-Western countries and the cultural competencies they require).

But this is what I want to know now: is the expatriate manager still necessary today, in this age of global media, cheap international travel, near-universal technology literacy, and low cost, highly usable communication technologies? How has technology impacted (if at all) on the need for people on the ground? Have global shifts in economic power created demand for new people with different competencies? Is the whole concept of "expatriate managers" redundant in a time in which every business with an internet presence is essentially international, sourcing and selling according to profitability, not location?