Managing Overseas Assignments to Build Organizational Knowledge

Article excerpt

International experience is broadly recognized as a vital asset to top management teams of multinational corporations (MNCs); however, few organizations systematically develop and protect this asset among middle managers. Here we suggest expatriate managers are a source of long-term competitive advantage because of the tacit (or implied) knowledge gained from exposure to international markets. To leverage this knowledge, MNCs must build infrastructures that facilitate the assimilation and institutionalization of expatriate learning.

Our study of more than 200 expatriates identifies the link between expatriate success and organizational performance but also reveals that the factors

shaping the relationship change over the international life of the organization. By recognizing the contingent nature of the determinants of expatriate success over the organization's international cycle, HR managers can facilitate positive individual and organizational outcomes. In addition to the successful completion of the expatriate assignments, they can build an institutional architecture that transfers country-specific learning to organizational memory.

This article closes by identifying three best practices for firms interested in leveraging the expatriate learning cycle:

1. Address individual and organizational goals to foster mutual benefit.

2. Invest in expatriate success, not just expatriation, through flexible expatriate policies.

3. Incorporate the expatriate experience into long-term career planning.

Expatriation, the practice of sending home country managers to other country locations, is a popular, albeit expensive, practice among MNCs (O'Boyle, 1989). Expatriates, familiar with the culture, language, and customs of headquarters, can facilitate the transfer of corporate culture between headquarters and the subsidiary, enhancing communication and coordination (Boyacigiller, 1991; Rosenzweig, 1994). They can also provide technical and managerial skills that may not be immediately available at the local level. Sometimes used to ease temporary staffing needs, expatriates are also valuable as mechanisms for corporate control in vital markets. Finally, expatriates may be utilized to enforce and protect the company's interests (Bird & Dunbar, 1991; Dowling, Schuler, & Welch, 1994).

Expatriation is not without costs. In addition to the obvious financial resources necessary to transfer a manager and his or her family physically to another country, there are hidden costs as well. Assignments often may not be completed, necessitating the replacement of the expatriate (Bird & Dunbar, 1991; Black, 1988). Frequently cited reasons for this outcome include the inability of the expatriate or the spouse and family to adjust to the new environment (Black & Gregersen, 1991; Black, Mendenhall, & Oddou, 1991; Gaylord, 1979; Harvey, 1985) or diminished job satisfaction and effectiveness (Feldman & Thomas, 1992; Feldman & Tompson, 1993; Hodgetts, 1993; Miller, 1975; Naumann, 1993; Stening & Hammer, 1992) as a result of workplace conflict around differences in norms and culture.

Another hidden cost associated with expatriation is the inability to retain the executive upon return to the home country. Many expatriates do not have guaranteed positions at home once they successfully complete their assignments. The executive often returns to find himself/herself on the periphery of the organizational infrastructure. One repatriated executive referred to this territory as "managerial limbo land." Despite keeping in touch by phone and e-mail, this Fortune 500 company executive returned from his role as regional manager for Asia only to find changes that left him feeling marginalized. "I really felt like an outsider when they put me in the new wing and I had to search for the men's room," this 10-year veteran of the company remarked, "but that was only symbolic of the other subtle changes that left me feeling like I no longer belonged. …