Academic journal article Multinational Business Review

Global Organizational Control: A New Role by Inpatriates

Academic journal article Multinational Business Review

Global Organizational Control: A New Role by Inpatriates

Article excerpt

ABSTRACT:

As organizations have expanded globally, control mechanisms utilized in the past may need to be supplemented with a new type of personnel, that of the inpatriate. Expatriates were the most widely used staffing for corporate control, but due to various issues, a complementary set of employees to facilitate corporate goals could be utilized. Inpatriation, as a practical and conceptual means to augment expatriation, is discussed, compared with, and contrasted to, expatriation. This research explores the use of inpatriates in facilitating global control.

INTRODUCTION

Global corporations are faced with a global marketplace characterized by uncertainty, diversity among global competitors, rapid technological change, widespread price wars, and seemingly endless reorganizations (Ilinitch, Lewin & D'Aveni, 1998). Although the attributes of globalization are evident, most of the world's organizations have not appreciated their potential influence on their organization's structure or operations. There is little doubt organizational viability in the next century will require the firm to be more global in its outlook, if not in its operations (Rhinesmith, 1993). The firms that foster a flexible and innovative environment within their organizations will enjoy success in the dynamic global economy.

The global marketplace has recast the strategic focus of firms from careful exploitation of highly durable strategic assets to the steady creation of many new, intangible ones that provide a momentary competitive edge in the global marketplace (D'Aveni, 1999). Designing control mechanisms to utilize and protect these intangible assets will require innovative, flexible techniques that will obligate substantial local knowledge. The continuous creation and control of these new highly durable assets suggest implementation of a sophisticated control system that provides direction and simultaneous flows of information to both safeguard and utilize the firm's core competencies.

Essentially, organizations must develop an environment that encourages and fosters the ability to achieve organizational objectives even though the desired outcomes may seem to be contradictory. For example, the firm must achieve a level of internal flexibility while maintaining a stable environment, it must be able to diversify while maintaining focus, and employees must appreciate that they have the freedom to act autonomously even though it may sometimes be against a strong organizational culture (Ilinitch, Lewin & D'Aveni, 1998). The ability to monitor and control a firm's activities is critical to an organization's ability to sustain flexibility and achieve organizational objectives.

The global economy has created an increasingly dynamic competitive landscape (Ireland & Hitt, 1997). Many corporations have changed their organizational structures in response to environmental conditions (Miles & Snow, 1984,1986; Thorelli, 1986; Webster, 1992) and have even reoriented their exchange relationships from relatively shortterm discrete transactions to longterm commitments (Anderson & Narus, 1991). The orientation towards longer-term commitments has generated increased integration, which ultimately has led to greater reliance on control mechanisms. Consequently, the ability to utilize control mechanisms effectively will be a vital strategic asset in the global market. The inpatriate, with their knowledge of local customs and established network of personal and business relationships, will facilitate intra- and interorganizational control.

The importance of acquiring and diffusing knowledge across the firm is now recognized as critical to global success (Mahoney, 1995). By leveraging learning and innovation, different competencies can be brought together and applied to new products and new markets (Bartlett & Ghoshal, 1989; Prahalad & Hamel, 1990). The strategic management literature suggests that learning, knowledge acquisition, and adaptation are important potential sources of competitive advantage (Spender, 1996). …

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