ABSTRACT

While the previous chapter considered the factors which influence the composition of management teams in subsidiary operations, this chapter will focus on the reasons why MNCs use expatriate assignments. As noted earlier there is an increasing realisation among academics and practitioners alike that people are the key to successfully competing in the global economy (Black et al., 1999). In Doz et al.’s (2001:1) words companies must ‘innovate by learning from the world’. In this regard expatriate employees generally play a key role in implementing a multinational company’s global strategy. Further, as the approaches to and strategies associated with international business have become more complex so too have the staffing options for the firms involved (Briscoe and Schuler, 2004), thus the discussions in this chapter should be considered in companion to later discussions on inpatriation. In this chapter we will examine the rationale for utilising expatriate assignments primarily from a headquarters’ point of view. This is significant for three reasons. First, empirical research has shown that the reasons why expatriates are sent on assignment may impact on job performances, adjustment and roles performed (Shay and Baack, 2004), although it is important to not that there may be few ‘pure’ cases whereby assignments have a singular purpose. Rather many assignments generally have more than one rationale (Sparrow et al., 2004). Second, while it has been argued that traditionally global assignments were not used for strategic purposes, but rather to carry out specific tasks due to a lack of confidence in local managements’ competence to perform same, more recently leading MNCs are realising the strategic importance of international assignments (Black et al., 1999). Third, as organisations are increasingly monitoring the costs associated with expatriate assignments, and exploring alternatives to the traditional long-term assignment, the purposes of assignments will need to be clearly articulated and justified. We begin our discussion by considering a further seminal work in the field of international staffing, Edström and Galbraith’s (1977) study.