ABSTRACT
Virtually every publication on expatriate management starts with two issues. First, over the last three decades it has become almost ‘traditional’ to open an article on expatriate management by stating that expatriate failure rates are (very) high. In a recent article (Harzing 1995b) it was argued that there is in fact very little empirical proof for the persistent claim of high expatriate failure rates when measured as premature returns. A second issue that usually draws the attention is multinational enterprise (MNE) staffing policies. Do companies employ parent country nationals (PCNs), host country nationals (HCNs) or third country nationals (TCNs) as (top) managers in their subsidiaries and in which circumstances is one option favoured above another? Although many publications focus on the advantages and disadvantages of using expatriates as opposed to local managers and indicate the factors influencing MNE staffing policies (see e.g. Hamill 1989; Bowling and Schuler 1990; Hendry 1994; Hodgetts and Luthans 1994; Mead 1994; Borg and Harzing 1995; Briscoe 1995; Fatehi 1996), there are surprisingly few empirical studies that examine MNE staffing policies. All of the above publications refer to Tung (1981, 1982, 1987) in this respect. Although Tung’s study was a primer in the field, it is now more than fifteen years old. Recently, Kopp (1994) compared international human resource policies in Japanese, European and US multinationals.1 One of the issues studied was the nationality of top managers in overseas operations. Kopp’s study confirmed Tung’s finding that Japanese companies employ the largest number of PCNs in their subsidiaries, US companies the smallest, while the number of PCNs in subsidiaries in European companies lies between these two extremes. Kopp’s study did not differentiate among host countries, however, while neither Tung’s nor Kopp’s study takes industry effects into account. Further, as will be shown later in this chapter, both studies do not differentiate among European countries, neither when looking at headquarters, nor when looking at subsidiaries.
