The Role of Expatriates in Management Development

1. Introduction

Expatriates have been of great significance in firms by providing highly skilled labor and techniques in the production process of the companies. Multinational companies (MNCs) have used expatriation as a tool to fill management gaps and to provide technical support in their foreign subsidiaries (Harris & Brewster, 1999). Furthermore, MNCs tend to use expatriates for developing specific capabilities within the company, such as knowledge and technology transfer and international experience (Harzing & Pinnington, 2010).

The purpose of this paper is to investigate the role of expatriates in management development from both historical and theoretical perspectives. Furthermore, this paper will survey empirical evidence on the role of expatriates in management development. The paper is structured as follows: Section 2 provides a historical perspective of the use of expatriates; Section 3 presents a theoretical perspective of the role of expatriates in management development; Section 4 surveys empirical evidence on the role of expatriates in management development; and Section 5 concludes the paper.

2. Historical perspective of the use of expatriates

The first recorded use of the term “expatriate” was in 1610 by Sir Thomas Roe when describing his travels to Turkey (Harris & Brewster, 1999). Since then, there has been a significant increase in the number of people working outside their home countries (Parada, 2014).

The reasons for why firms started to use expatriates are varied. For instance, Harris and Brewster (1999) suggest that one reason is due to an increased demand for scarce technical skills globally. In this way, MNCs could access these skills by relocating workers from other parts of their organizations or from other firms. Alternatively, De Cieri et al. (1993) propose that another reason is due to changes in technology which led to an increased need for international experience to manage new technologies being implemented in foreign subsidiaries.

The early uses of expatriates were often discouraged by host governments as they believed that these workers were taking jobs away from locals (Harris & Brewster, 1999). As a result, MNCs had to be creative in their approaches to using expatriates and often did so through disguising them as tourists or using them as consultants instead (Harris & Brewster, 1999). However, over time host governments became more accepting of workers from other countries and began to see the benefits that they brought with them such as new skills and technologies (Harris & Brewster, 1999).

3. Theoretical perspective of the role of expatriates in management development

There are several theories which help explain the role that expatriates play in management development. The Resource-Based View (RBV) suggests that a firm’s resources and capabilities are a source of sustained competitive advantage (Barney, 1991). In this way, MNCs can achieve a competitive advantage by utilizing the unique resources and capabilities which are available within their organization but not necessarily available to their competitors (Barney, 1991). Expatriates can be seen as a source of these unique resources and capabilities as they often possess specialized skills and knowledge which can be beneficial to an organization (Barney, 1991; Harzing & Pinnington, 2010).

The knowledge-based view (KBV) also emphasizes the importance of knowledge and human capital within an organization (Grant, 1996). In this way, MNCs can utilize the knowledge and expertise of their expatriates to gain a competitive advantage (Grant, 1996). For instance, expatriates can act as a source of knowledge transfer by sharing their skills and expertise with local employees (Harzing & Pinnington, 2010). Additionally, expatriates can also provide valuable international experience which can be beneficial to an organization (De Cieri et al., 1993).

4. Empirical evidence on the role of expatriates in management development

There is a growing body of empirical evidence which suggests that expatriates play a significant role in management development. For instance, a study by Harzing and Pinnington (2010) found that expatriates are often used by MNCs for knowledge transfer purposes. In this way, MNCs can utilize the skills and expertise of their expatriates to improve the capabilities of their foreign subsidiaries. Additionally, the study found that expatriates are also often used for cross-cultural training purposes. In this way, MNCs can provide their employees with the skills and knowledge necessary to effectively work in a foreign subsidiary.

A study by De Cieri et al. (1993) found that MNCs often use expatriates for developing specific capabilities within the company. In this way, MNCs can utilize the unique skills and expertise of their expatriates to improve the performance of their foreign subsidiaries. Additionally, the study found that MNCs often utilize expatriates for international experience purposes. In this way, MNCs can provide their employees with the opportunity to work in a foreign subsidiary and gain valuable international experience.

5. Conclusion

In conclusion, this paper has discussed the role of expatriates in management development from both historical and theoretical perspectives. Furthermore, this paper has surveyed empirical evidence on the role of expatriates in management development. The evidence suggests that expatriates play a significant role in management development and that they are often used by MNCs for knowledge transfer and cross-cultural training purposes. Additionally, the evidence suggests that MNCs often use expatriates for developing specific capabilities within the company and for international experience purposes.

FAQ

Expatriates offer a unique perspective to organizations due to their international experience and understanding of different cultures. This can be beneficial in management development as they can help develop more effective global leaders.

Expatriates can contribute to management development by sharing their knowledge and experiences with others, helping to create a more diverse and globalized workforce.

Organizations may face challenges when utilizing expatriates in management development due to language barriers, cultural differences, or the cost of expatriate assignments.

There are some negative aspects associated with using expatriates in management development, such as the potential for reverse culture shock or difficulty readjusting to life back home.