A theoretical Framework for Expatriate Selection

Topics: Knowledge, Subsidiary, Knowledge management Pages: 3 (2122 words) Published: December 13, 2013
A theoretical framework for expatriate selection

Amanpreet Randhawa
London School of Economics, Apr’13
_____________________________________________________________________________________ Multinational corporations expend considerable time and effort meeting the challenges of managing foreign subsidiaries, and a key aspect of these challenges is the trade-off between optimizing subsidiary and corporate performance, of which an important strategic component is the subsidiary staffing decision, i.e. the choice between employing parent country nationals (PCNs) or home country nationals (HCNs) to head the subsidiary. Aside from these, certain external factors such as national institutional frameworks (rules, regulations and norms) and environmental complexity (cultural distance between home and host country) may also influence the staffing choice (Gaur et al. 2007). Research in this area has not only highlighted the benefits of employing expatriates by emphasizing their contributions to coordination and control (Harzing, 2001) and to knowledge transfer and management (Chang et al. 2012), but also determinants of their deployment: level of international expansion (Harzing, 2001), cultural and institutional distance (Gaur et al, 2007), required capabilities (Harvey & Moeller, 2009) and the units’ interdependence (Chang et al., 2012). These determinants or situational factors are justified in terms of previous organizational economics frameworks as agency/ transaction costs, i.e. level of international expansion and institutional distance and resource based view of the firm, i.e. required capabilities and units’ interdependence (Bonache et al., 2010). The essay attempts to unpack the aforementioned determinants and understand how, by using these frameworks, an MNC may be assisted appropriately in deciding who heads its new foreign subsidiary. To start therefore, I have tried to assimilate points of view from various authors highlighting needs of MNCs at initial...

References: 
Bonache, J; Brewster, C; Suutari, V; De Saá, P (2010); Expatriation: Traditional Criticisms and

Doellgast, V (2013); Week 4 – Lecture Slides, ID 438, London School of Economics

Donnelly, E (2013); Week 4 – Case Answer, ID 438, London School of Economics

Gaur, A.S.; Delios, A; Singh, K (2007); Institutional Environments, Staffing Strategies and Subsidiary
Harvey, M. and Moeller, M. (2009) 'Expatriate Managers: A historical review '. International Journal
of Management Reviews
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