Case Study about Reducing the Cost of Expatriation in Austere Times
Abstract: The purpose of this paper is to explore ways in which the cost of expatriation can be reduced by contrasting expatriate management systems in two successful American companies. Data are gathered using in-depth interviews with international human resource (IHR) managers and analyses of company archival information. Comparative analysis shows striking differences between the two approaches–one more traditional and expensive, the other nontraditional and considerably less expensive. These differences suggest that a wide range of approaches to managing expatriates may be successful, arguing against a set of “best practices.” The analysis suggests less expensive ways of managing expatriates may be possible in some organizations and predicts several contingency factors to consider when designing expatriate management compensation and benefit packages.
Introduction: Businesses typically develop through four phases: domestic, international, multinational, and global (Adler & Gunderson, 2007). Today, there are fewer organizations competing solely on a domestic basis, and more operating globally in one form or another. Electronic media and decreased transportation costs allow even small businesses to compete internationally (Furnham, 1997), and increased competitive pressures frequently require a global presence even if a firm seeks to remain primarily domestic. This expanding global reach of many organizations has increased interest in the issue of expatriate management (Black & Gregersen, 1999; Toh & DeNisi, 2005). Expatriates are home country nationals sent abroad by the parent company to live and work temporarily in another country. In the initial stages of international expansion it is quite common to send expatriates to oversee the development of appropriate systems and procedures consistent with the parent company’s approach and outlook. Keep reading…
