THE ROLE OF SENIOR ,EXPATRIATE MANAGERS

IN THE GLOBALIZATION PROCESS:

AN ANALYSIS OF ITS SIGNIFICANCE
AND KEY COMPONENTS

HELEN SAKHO .

Ph.D.

2001
 24 SfP 2D02

THE ROLE OF SENIOR EXPATRIATE MANAGERS

IN THE GLOBALIZATION PROCESS:
AN ANALYSIS OF ITS SIGNIFICANCE
AND KEY COMPONENTS

HELEN SAKHO

A thesis submitted in partial fulfillment of the

requirements of South Bank University for the degree of
Doctor of Philosophy

November 2001
 Acknowledgments

First and foremost, I wish to thank my supervisor and mentor, Grazia Ietto-
Gillies, for her extensive and consistent support for this project. I am
particularly grateful to Grazia for not giving up on a working student with a lot
of caring responsibilities. Her patience and understanding were great sources of
help throughout this research.

I wish to thank South University Business School for granting me a scholarship

to undertake this work.

I am also grateful to Yvonne Guerrier for her input.

 Abstract

This research is about the global movement of a group of people identified

within new migratory movements associated with globalisation, and perceived
by academic and other contributors as an increasingly significant element in its
advancement. Expatriate managers - who are included in the category of 'highly
skilled' migrants in both official statistical calculations and in conceptual terms
in current discourse - are invariably perceived as a highly desirable group of
migrants and are accordingly welcomed and rewarded.

The research is qualitative and based mainly on 30 in-depth interviews

conducted in the UK with senior expatriate and human resource (HR) managers
attached to 23 American and European transnational corporations (TNCs). It is
structured around two core and four sub-categories, and uses a grounded theory
method of research to examine the key overall themes with which it is
concerned, allowing the evolution of new categories with their own distinctive
dimensions.

These research themes aim to facilitate a study of the particular contribution of

senior expatriates to the globalisation process by investigating their role and
place in the management of TNCs' global operations. They also aim to gauge
the impact of new technology on such a role and on expatriation. The suggestion
by existing research that internationalisation may be increasingly facilitated
(more cheaply) through technology rather than the physical presence of
expatriates around the globe, is examined and conceptual and empirical
interlinkages are presented between this possibility and the nature of the role of
(different) expatriates.

A particular aim of the research is to contextualise the migration of the highly

skilled in the multi-faceted processes of globalisation, requiring a detailed

II
consideration of some of these processes as well as the increasingly fierce
debate over their nature and scope.

Relying on the findings of the research, which stem from the accounts and
formulations of the participants, the research suggests that expatriate managers -
particularly at senior levels - continue to be a necessary pre-requisite for
globalisation; that they occupy a particular location in the international division
of labour and have a key task in shaping and creating new relations with and
within markets situated in cultures foreign to the home base(s) of the TNCs. The
transfer of skills via expatriation may thus be intertwined with the transfer and
safeguarding of historically specific power relations embodied in the diffusion
of economic and cultural values around the globe.

iii
Contents
Tilte I
Acknowledgement Ii

Abstract Iii

Contents Iv
List of Tables X
List of Boxes Xi
Abbreviations Xii

Chapter 1: Introduction 1
1.1 : Overall themes and purpose of this study 1
1.2: Underlying conceptual and methodological parameters 2
1.3: A glance at history 4
1.4: The structure and content of the document 5

Chapter 2: G lobalisation:
The General Context: Debates, Evidence and Perspectives 10
2.1: Introduction to the chapter 10
2.2: The scope of the debate 12
2.3: Underpinning concepts: 13
the shrinking of time and physical distance
Part I: The debate 16
2.4: The argument for globalisation as a new era 16
2.4.1: The growth of foreign direct investment (FDI) 16
2.4.2: The growing importance of TNCs 18
2.4.3: New migratory movements 23
2.5: The counter-arguments 24
2.5.1: The concept of the globe 25
2.5.2: The scope and scale of globalisation:
the historical objection 25

iv
 2.5.3: The growing importance of finance capital 26
2.5.4: The TNCs and their "home-bound" nature 28
2.5.5: The polarising impact of globalisation 28
Part II: Perspectives and interpretations 30
2.6: Processes and positions 30
2.7: Global labour markets and divisions of labour 35
2.8: Economic restructuring
and changing divisions of labour over space 36
2.9: A new 'techno-economic' paradigm? 41
2.10: Globalisation and power relations over space 43
2.11: Conclusion to the chapter 46

Chapter 3: Expatriate Managers:

Survey of Trends and Key Literature and Approaches 49
3.1: Introduction 49
3.2: Globalisation and international migration 50
3.3: Expatriate managers: definitions and magnitude of movement 51
3.4: Expatriates in the literature 57
3.5: Business development
and Human Resource Management approaches 58
3.6: Other approaches 63
3.6.1: Expatriate managers as knowledge carriers 64
3.6.2: Global managers as a new global elite 66
3.6.3: Expatriates as special migrants 70
3.7: Conclusion 74

Chapter 4: Research Strategy and Methodology: Theory and Practice 77

4.1: Introduction 77
4.2: Qualitative research: underlying concepts 77
4.3: The grounded theory tradition 79

v
 4.4: Rationale for the use of
qualitative research and the grounded theory approach 82
4.5: The research process 86
4.5.1: Sources of data 86
4.5.2: Sampling parameters 89
4.6: Research ethics and the issue of confidentiality 91
4.7: A general profile of TNCs and managers 92
4.7.1: The transnational corporations 93
4.7.2: The managers 97
4.8: Access 98
4.9: Recording the data 99
4.10: Data collection and analysis 100
4.11: Evolving categories and propositions 103
4.12: Conclusion 104

Chapter 5: The Role and Function of Expatriate Managers

in the Globalisation Process 106
5.1: Introduction 106
5.2: The role and function of expatriates: why are they sent? 107
5.3: Career and personal development 108
5.4: Corporate business and strategic needs 111
5.5: Skills transfer and the difference
between of technical and managerial skills 112
5.6: The transfer of technical skills 113
5.7: The transfer of (non-technical) managerial skills 116
5.7.1: Promoting global communication networks 116
5.7.2: Playing a liaison role 117
5.7.3: Standardisation and supervision of
local production processes 119
5.7.4: Intensifying the speed of globalisation 120

vi
 5.7.5: Training the locals 122
5.7.6: Representing the TNCs and protecting corporate 125
interests
5.7.7: Promoting and protecting the TNCs' core values 127
5.8: Core Values - meanings and significance 129
5.8.1: As rules and beliefs governing TNCs' global operations 130
5.8.2: As the embodiment of knowledge and trust of the centre 131
5.8.3: As personal qualities and ethics 133
5.8.4: As product and market-related knowledge 134
5.9: Core values and global markets 135
5.9.1: The function and purpose of core values 138
5.10: The primacy of managerial over technical skills 142
5.11: Conclusion 144

Chapter 6: Expatriate Managers: Who Might be Selected and

Who is Seen to Succeed on International Assignments 148
6.1: Introduction 148
6.2: Recruitment of expatriate managers:
key elements of policy and practice 149
6.2.1: Corporate inclusion and selection 150
6.2.2: Selection criteria - a general account 153
6.2.3: The significance of core values in the
recruitment of senior expatriates 155
6.2.4: Core values and the role of the headquarters 157
6.2.5: Corporate networks and impact of
networking on recruitment 159
6.2.6: The increasing importance of the
family in expatriate recruitment 161
6.3: The measurement of success of an international assignment 166
6.3.1: Evaluation of international assignments-

vii
 some general indicators 166
6.3.2: Global markets and the importance of "culture" 169
6.3.3: Examples of achievement and problems 174
6.4: Conclusion 180

Chapter 7: New Technologies and Expatriation:

Issues of Cost and Replacement 184
7.1: Introduction 184
7.2: Globalisation and the impact of new technology:
scope and manifestations of general impact 186
7.3: New technology and knowledge across space:
indications of transfer and access 190
7.4: New Technology: the impact on expatriate managers 193
7.5: New technology and its potential for
replacing expatriate managers 199
7.6: Expatriation and the issue of cost 205
7.7: The changing composition of expatriate managers:
other potential for cost reduction? 217
7.8: Conclusion 219

Chapter 8: The Flow and Movement of Expatriate Manager:

An Indication of the Direction of Skills
and Core Value Transfer Across Space 224
8.1: Introduction 224
8.2: Flow and movement: some general features 225
8.3: Dominant direction of movement: core to periphery 227
8.4: Other flows: periphery to core 231
8.5: Inter and intra-regional movements 235
8.6: Conclusion 239

viii
Chapter 9: Conclusion and Discussion 241

References 251
Appendix A A Profile of Participants 264
Appendix B Research Brief 273
Appendix C The Interview Questions 275

ix
 List of Tables

Table 2.l: Stock of outward FOr, developed market economies, 17

developing economies, central and eastern Europe. Selected
years, 1980-99. Percentage shares
Table 2.2: Stock of inward FOI, developed market economies, developing 17
economies and central and eastern Europe. Selected years,
1914-99. Percentage shares
Table 2.3: Industry composition of the top 100 TNCs 1990, 1997 and 18
1998
Table 2.4: Snapshot of the world's 100 largest TNCs, 1998 20
(Billions of dollars, number of employees and percentage
change)
Table 2.5: Share of mergers & acquisitions in FOI. Percentage of M&A 22
sales to FOI inflows and M&A purchases to FOI outflows by
world region; 1988-90, 1991-93, 1994-96 and 1997-99
Table 3.1: International migration, estimate from International Passenger 53
Survey: time series 1988 to 1997, Main reasons for migration,
thousands
Table 3.2: . Migration, estimates from the International Passenger Survey, 55
time series: 1988-1997, Usual occupation, thousands
Table 4.1: The TNCs in the sample by specific industrial sectors 93

Table 4.2: Ranking of TNCs covered by their total 1998 revenue, within 94
their own sector
Table 4.3: Geographical spread and depth of presence of the TNCs across 96
regions
Table 4.4: A profile of the TNC managers by function 97

Table 4.5: Purpose and function of categories and sub-categories 102

x
 List of Boxes

Box 5.1: Extracts from 1998 Annual Reports of two TNCs 133
Box 6.1: Extracts from expatriation policy document 162
Box 7.1: An example of expatriation contract:
terms and conditions, at 1995 prices 206

xi
 Abbreviations

DMEs developed market economies

CEE central and Eastern Europe
FDI foreign direct investment
GDP gross domestic product
IICN host country national
ILMs internal labour markets
M&A mergers and acquisitions
MNE multinational enterprise
NICs newly industrializing countries
R&D research and development
TeN third country national
TNC transnational corporations

xii
 CHAPTER 1

Introduction

1.1. Overall themes and purpose of this study

This study aims to present a detailed investigation into the role, place and
function of senior expatriate managers in "globalisation". In general terms,
expatriates are attached to different types of multinational or transnational
organisations and move from one geography to another. The expatriate
managers included in the sample of this study belong to transnational
corporations (TNCs)i and are sent to foreign markets in order to manage a
diversity of the TNCs' dispersed operations. Their movement across the globe is
commonly referred to in current discourse on the subject, as the migration of the
'highly skilled'. An inquiry into their role and place in the globalisation process
thus needs to involve an attempt to understand the specificity of the nature of
their skill and the importance of its transfer to foreign geographies.

This is also a study of the possibility or degree of the potential of new

technologies to change the need for or replace such managers who are perceived
(both in the literature and by the TNCs) as very expensive. In fact this aspect of
the study provided the initial impetus for this inquiry as existing research (Salt,

I The terms 'transnational corporation' (TNC) and 'multinational corporations' (MNE) are often used
interchangeably in the literature; they both refer to companies that own, manage and control productive
assets in more than one country. Throughout this dissertation, the expression TNC (adopted from United
Nations Conference on Trade and Development - UNCTAD) will be used unless direct reference is
being made to the work of other authors.
1997; Rudolph and Hillmann, 1998) identified it as an area In need of
investigation.

These two dimensions constitute the main closely interlinked, and as will be
demonstrated throughout the chapters, intrinsically inseparable themes of the
study.

1.2. Underlying conceptual and methodological parameters

Very early on in the research process, it became clear that in order for this
research to achieve its purpose, that is to say, to gain a detailed understanding of
the two above-mentioned themes and their interaction, it would need to take
account of the following main points.

The first relates to the context of the study. In its modern form, expatriation
takes place in the context of complex, multi-dimensional and often
contradictory economic, political and social processes associated with the much
debated and disputed concept of globalisation. It is therefore suggested here that
a study of expatriation and expatriates needs to be situated in its context. This
suggestion follows Peterson's analysis that 'In spite of the complexity and
instability associated with new times and post-modern perspectives, they are not
without pattern and meanings ... contextualisation both historically (exposing
how reality is made, not discovered) and multidimensionality (exposing the
interaction of agents, concepts, practices and institutions) is paramount (1996, p.
21).

The second point concerns the conceptual necessity of acknowledging and

addressing the multidimensional nature of such a study. The phenomenon of
globalisation is commonly understood as multifaceted. Also as discussed later

2
on, a study of one of its key agents - senior expatriate managers in charge of the
implementation of globalisation policies of TNCs - may best be conducted
through an interdisciplinary approach.

Finally, it needs to be noted that an early theoretical assumption made after a

review of the literature on expatriates influenced the determination of the focus
of the study. This assumption relates to the need (as much as possible) for a
certain degree of analytical concentration. This means that while some of the
descriptions and formulations reflected in this dissertation, in both the
theoretical chapters and the chapters on key findings (chapters five to eight),
may inevitably apply to other (less senior) groups of expatriate managers, the
focus of this study is on senior expatriate managers. The assumption referred to
above was later verified through the exploratory interviews, which specifically
demonstrated that for the purposes of this study at least, expatriates could not be
treated as a whole or homogenous group of people. They may migrate for
different reasons; have different responsibilities and powers and may be
perceived by the TNCs to carry and transfer· to other geographies different
skills. They may therefore belong to different locations in the global division of
labour and play different roles in global markets. Importantly for this study, and
as will be discussed in the forthcoming chapters, this means that their degree of
openness and vulnerability to the impact of technology may, therefore, be
different.

Before presenting a description of the structure and content of this thesis, it may
be appropriate to take a brief look at the history of expatriation.

3
1.3. A glance at history

Expatriation seems to have a long history. The existence of multinational or

transnational corporations, workforces attached to them, and a "global"
economy has been traced back to ancient times.

While most accounts of this history concentrate on the evolution of such

corporations in Europe in the Middle Ages, recent research (Moore and Lewis,
1999) argues that as far back in history as Assyrian times (around 2000 Be)
prototype forms of many of today's economic structures including an
international division of labour were already in place. The development of such
research has been facilitated by the ongoing discovery of records of business
history of the time 2 • Moore and Lewis argue, for example, that international
trade in Assyrian period took place via karum [a form of networked business
institutions] and '... constituted history's first recorded multinational
enterprises, complete with head offices, branch-plants, corporate hierarchy,
extraterritorial business law, foreign direct investment and value-added activity'
(1999, p. 67). Moreover, the authors point out that the managers of these
enterprises lived in foreign geographies '... in a manner similar to many of
today's expatriates' (ibid.).

In its current form expatriation has been associated with globalisation, a process
that most academic and other contributors would attribute to the last two or so
decades of capitalist economic development (please see section 2.1 of chapter
two). It is this form and the nature of its potentially changing patterns that are
the subject matter of this research.

2 The authors point out that their research was prompted by a statement by Dunning, who, in 1993,
wrote: •... earlier examples of embryonic MNEs can, most surely, be found in the colonising activities of
the Phoenicians and the Romans, and before that, in more ancient civilisations ... However, this sort of
history ... remains to be written' (quoted in Moore and Lewis, 1999, p. 17).

4
1.4. The structure and content of the document

Nine chapters make up this document. In line with the approach outlined in
section 1.2 above, the three chapters that follow this might be thought of as
contextual. These are chapters that are wholly concerned with key conceptual
and theoretical questions as well as positions relevant to different parts of this
research, ranging from the theoretical debates on globalisation to the treatment
of expatriation and expatriates in the literature. The subsequent four chapters
report the findings of the study, which comes to a close in chapter nine. These
chapters have a very different role; they are reliant only and entirely on the
formulations, interpretations and analyses of the 32 Participants (p)3 in this
study and thus constitute the empirical chapters. The following is a description
of individual chapters that follow the current chapter.

Chapter two is divided into two parts, both of which are concerned with
globalisation, introducing it as an increasingly multidisciplinary area of
academic inquiry. The chapter points out that, importantly for this study, social
scientists belonging to an array of different disciplines are beginning to make
explicit connections between the mobility and migration of the "highly skilled"
- amongst whom the sample of this study is included - and globalisation. Part I
of the chapter asks questions regarding the nature and scope of globalisation.
What is it? Why is it so fiercely debated? What kind of evidence do contributors
rely on to demonstrate its existence as a new era or to argue its antiquity? This
part details the key grounds of the debate and suggests that a discussion of its
main dimensions may be structured around the nature, scope, and impact of
globalisation as seen from different perspectives. Part II of the chapter presents
an historical account of the rise of globalisation. It outlines the different
theoretical positions on globalisation and discusses how and why the different
contributors and schools of thought may perceive its existence and welcome or

3The latter "P" denotes Participant throughout the document, and is from now on always followed by a
number that reflects a particular manager as referenced in the managers' portfolio in Appendix A.

5
reject its advancement. Amongst the key questions asked by this part are: Has
globalisation meant the rise of a new 'techno-economic' paradigm? What are
the key characteristics including any technological and organisational
dimensions of such a paradigm? What is a "global" division of labour? What is
the role of knowledge and its circulation around the world in this division of
labour? Has the increasing application of new technologies meant that such
knowledge may now be utilised differently? If uneven development and
deepening unequal economic and social relations characterise many or (as
argued by some contributors) all the processes associated with globalisation,
then is it plausible to conceive of power and the re-shaping of power relations
over space as a main thread that weaves the story of globalisation together,
regardless of how the story is told?

Chapter three focuses on expatriation and expatriate managers. It considers

definitions and classifications of these managers and presents data on their
movement across the globe with particular reference to the UK as the
geographical base of this study. The chapter moves on to present a review of the
literature on expatriates and suggests that for a multi and interdisciplinary study
such as this, a reasonable degree of conceptual cohesion might be secured by
organising the literature review around three main areas of inquiry that are
particularly relevant to the themes of this study: expatriates as knowledge
carriers; expatriates as a new breed of international managers or a new global
elite; and expatriates as a special group of migrants. The chapter is thereby able
to incorporate key contributions from a range of social science disciplines,
which have been concerned with the migration of the highly skilled.

Chapter four discusses research methodology, presenting a detailed discussion

of the rationale for adopting a qualitative research methodology for this study. It
also presents an element of quantitative analysis undertaken to illustrate the
degree of the geographical spread of some of the TNCs in the sample. The

6
 chapter covers both the conceptual and theoretical grounds for the
appropriateness of a qualitative methodology and the operational details of the
research process. A specific discussion of the grounded theory method and its
application to the research process is included in the chapter, which also
presents a model developed for the collection and analysis of the data and
explains the relationship between the core themes of the research and their sub-
themes or sub-categories4 •

Chapter five presents the first of the empirical chapters containing the key
findings of the study in relation to its first core category, namely the role and
place of (senior) expatriates in the globalisation process. The key questions
asked by this chapter are the following. What is the role of senior expatriate
managers in globalisation? What is distinctive about their contribution? What is
the nature of the knowledge they possess and how does such knowledge
translate itself into skill? Why are they sent? Can a local manager fill this role?
The formulations and analyses of the participants are detailed to demonstrate
their responses to these questions and the chapter subsequently presents
emerging concepts and processes that became of central importance to this
/

study.

Chapter six contains findings related to the recruitment of expatriates for

international assignments and also to the measurement of success of such
assignments at the end of the period of expatriation. The findings describe the
factors that the TNCs in the sample consider before expatriation takes place and
how they gauge the success or otherwise of their (different groups) of expatriate
managers. The chapter also attempts to make important interlinkages between
these and the findings of the last chapter on the role of senior expatriates.

4The definition of a category here is similar to that adopted by CrestweIl (1998, pp. 56-57) to represent
data that may be studied in relation to a central phenomenon. Each category contains associated sub-
categories, which dimensionalise the properties of the phenomenon with the aim of developing a more
complete understanding.

7
Chapter seven has the task of detailing the key findings regarding the impact of
new technologies on expatriation, as the second core category of this study. The
chapter investigates the TNCs' perceptions of such an impact through the
following questions: How does global communication takes place? What has the
impact of new technologies been on expatriation and expatriate managers? How
do the TNCs envision this impact might change in the future? Of particular
importance here is the issue of cost and the possibility of new technologies in
some way changing, substituting or replacing international assignments. Are
new technologies able to facilitate knowledge and skills transfer around the
globe without the need for physical presence? The chapter also investigates the
issue of replacement through the sub-category of the potentially changing
composition of expatriate managers. Are the TNCs actively recruiting, for
example, younger, third or host country managers as an alternative and
potentially cheaper source of labour?

The last set of research findings is reported in chapter eight, which considers the
movement of expatriate managers around the globe. It asks questions about the
direction(s) of the flow of these managers, as an additional sub-category aiming
to shed further light on some of the questions asked by this study including the
possibility of replacement, and the potentially changing relations between the
TNCs' core base(s) and their foreign geographies. If globalisation means active
presence by the TNCs in many countries and the existence of a global network
of knowledge, has the direction or indeed the nature of the movement of the
managers changed from what some participants would describe as a 'colonial'
model?

Chapter nine presents the conclusion of this study. Its principal concern is to
sum up and pull together the main findings of the study. A main aspect of this
task is to identify concepts and processes that have emerged and re-emerged
through the research process; and to attempt to explain these using the

8
participants' formulations. The chapter organises this task around the main
broad questions originally asked by the research, namely what is the role of
(senior) expatriate managers in globalisation; and what has the impact of new
technologies been on expatriation. A second task of the chapter is to situate
some of the main concepts and processes that have emerged in the context of the
theoretical discussions and positions presented by chapters two and three.

9
 CHAPTER 2

Globalisation
The General Context: Debates, Evidence and Perspectives

2.1. Introduction to the chapter

Much of the debate on globaIisation begins with and revolves around a wide
range of perceptions, which either focus on particular aspects of the current state
of the world economy or on the many consequences of its changing form for
other spheres of life.

That economic activity has, in the last 30 years or so, undergone fundamental
restructuring is no longer under dispute in the social sciences (Allen and
Massey, 1988). There is also general agreement amongst scholars of
globalisation that it is the internationalisation of capital by TNCs that has led to
significant changes in the organisation of production with subsequent changes
for labour and its organisation, with recent research pointing to the TNCs as the
main cause of globalisation (Ietto-Gillies, 2001). As will be indicated by this
and the forthcoming chapters, globalisation and the TNCs have also been
increasingly identified as a key agent in the creation of new migratory
movements, including the movement of expatriate and global managers around
the world. Consequent significant changes have also impacted on other spheres
of life, at different geographical scales. Held et al (1999) write in this
connection to point out that: 'Few areas of social life escape the reach of
processes of globalisation. These processes are reflected in all social domains

10
from the cultural through the economic, the political, the legal, the military and
the environmental. Globalisation is best understood as a multifaceted or
differentiated social phenomenon. It cannot be conceived as a singular condition
but instead refers to patterns of growing global interconnectedness within all
key domains of social activity. To understand the dynamics and consequences
of globalisation, therefore, demands some knowledge of the differential patterns
of global interconnectedness in each of these domains ... ' (p. 27).

This chapter is devoted to the presentation of the most relevant of these patterns
to this research and to a discussion of some key conceptual frameworks in the
globalisation literature.

The chapter is divided into two parts. The main task of part I is to construct a
picture of key grounds and aspects of the globalisation debate that continue to
shape the understanding of contributors belonging to an impressive range of
social science disciplines; and to present the type of argument and evidence that
each approach might, in general terms, rely on. This is followed by a discussion
of some general theoretical approaches to the investigation of globalisation in
part II, which also presents a brief historical background to the emergence of
globalisation - however defined and received. The shaping and re-shaping of the
internationaVglobal division of labour over space, assigning particular locations
in the hierarchy of work and employment and their associated income and status
to different countries, peoples and economic activities are considered in this
part; as is the possibility of the emergence of a new techno-economic paradigm.
Part II closes with a consideration of power as an integral concept, and power
relations as deeply embodied in the social relations of globalisation. This is
followed by a general conclusion to the chapter.

Both the debates and the theoretical approaches discussed in the two parts of the
chapter have played an important role in shaping many of the questions asked

11
 by this research; and in placing its findings, as well as its concluding thoughts,
in the context of the globalisation debate.

2.2. The scope of the debate

. The first point worthy of note is that the breadth and depth of interacting and
often contradictory global processes and structures are of such a magnitude that
globalisation itself has now increasingly been referred to as an area of academic
inquiry in its own right. Peterson (1996, p.20) identifies over 80 important
literatures on globalisation. These and other accounts are written from the
perspectives of international politics, political theory, socio-cultural studies,
sociology, gender studies, development studies, political economy, social
theory, geography, migration studies and a number of sub-disciplines related to
each of these disciplines. To this portfolio must be added an even greater and
growing number of economics-centred accounts presented by economists and
scholars of various branches of economics. The second is that regardless of the
specificity of disciplinary inquiry, "the field of globalisation" is increasingly
acknowledged as a multidisciplinary and interdisciplinary area. Thus, Thrift
(1988), commenting on accounts by writers who place isolated emphasis on key
actors on the world economy says: 'The world economy is the outcome of a
whole series of countervailing forces operating at a whole series of scales, no
one of which makes sense without the others.' (p. 7).

However, it also needs to be noted that the current widespread use and
acceptance of the very term and concept of globalisation has been argued to be
tantamount to the neutralisation of the discourse on capitalism and capitalist
development with severe implications not just for social sciences in general but
also for the analysis of economic development in the countries of the South
(Ramirez, 2000).

12
While most authors agree that the driving force of globalisation has been
economic in origin (Clark, 1997) important disagreements exist on arguably
three main grounds. The first relates to the level, scope and depth of the degree
of internationalisation and integration of the world economy. The second is
centred on whether the internationalisation of economic activity represents a
new era, a break from the past or an old system transforming itself in response
to a crisis in order to sustain capitalist rates of profit (please see section 2.8).
Finally, extensive debate exists about what it means for human society in terms
of prosperity or poverty, unity or division, inclusion or exclusion, peace or war,
security or insecurity in important spheres of life, including those of work and
employment, culture and identity and national sovereignty. A corresponding
range of concern has also developed over how to advance or resist globalisation,
associated with visions for potential future developments.

2.3. Underpinning concepts: the shrinking of time and physical

distance

The underpinning conceptualisations from which most accounts of globalisation

are implicitly or explicitly derived are based upon the notion that the distance
between territorial space and social relations - including the social relations of
production - may be compressed, shrunk or even eliminated. Two influential
sources come from Giddens (1990) and Harvey (1989). Harvey attributes the
'time-space compression' of globalisation as closely associated with periods of
crises and the consequent restructuring of capitalism, and places a great deal of
emphasis on the speeding up and intensification of socio-economic processes.
Gidden's notion of 'time-space distanciation' is based on an understanding of
the current global economy as a complex network of communication and
systems of production and exchange, stretching social relations across national
boundaries, dis embedding them out of the local context through four key

13
dimensions. These comprise the world capitalist economy, the world military
order, the nation-state system and the international division of labour. In an
important respect, this is in contrast to the influential world system theories
pioneered by Wallerstein (1974) that assign secondary importance to the nation-
state and attribute modern global transformations to primarily 'exogenous'
factors, namely global capital in search or in need of sustaining desirable rates
of profit. Giddens defines globalisation as follows: 'Globalisation can thus be
defined as the intensification of worldwide social relations which link distant
localities in such a way that local happenings are shaped by events occurring
many miles away and vice versa' (1990, p. 64).

These accounts carry the concepts of discontinuous historical processes and of

uneven development and in broad terms draw on Marx's formulation of the
'economy of time', towards which 'all economy ultimately reduces itself
(quoted in Hoogvelt, 1997, p. 118).

It is worth noting here that some authors have argued that arrangements
regarding time and distance, may not only be reshaped over time, but reflect the
key dimension of globalisation with far-reaching consequences beyond the
economic: 'It suddenly seems clear that the divisions of continents and of the
globe as a whole were the function of distances made once imposingly real
thanks to the primitiveness of transport and the hardships of travel...Indeed far
from being an objective, impersonal, physical 'given', 'distance' is a social
product; its length varies depending on the speed with which it may be
overcome (and, in a monetary economy, on the cost involved in the attainment
of that speed). All other socially produced factors of constitution, separation and
the maintenance of collective identities - like state borders or cultural barriers -
seem in retrospect merely secondary effects of that speed' (Bauman, 1998, p.
12).

14
Having outlined the basic underpinning conceptual formulations behind
understandings of globalisation, it is now appropriate to discuss the reasoning
behind the perception of globalisation as a process representing a fundamentally
different era in economic history, followed by a discussion of more cautious or
critical accounts.

15
 Part 1: the debate

2.4. The argument for globalisation as a new era

As mentioned earlier, globalisation, despite its multi-faceted manifestations in

all spheres of life, is commonly accepted as a process that has primarily been
driven by economic forces, the most significant components of which will be
presented by this section. The indicators and processes discussed here are
commonly cited in the literature on globalisation to indicate that this is an era in
history that signifies a radical change from the past, despite there being differing
perspectives (please see part II) on its impact or outcome.

2.4.1. The growth of foreign direct investment (FDI)

Since the 1980's, foreign direct investment (FOI)5 by transnational corporations

is conceived as the main motor of globalisation, and has been growing much
faster than trade. There is no doubt that the growth in FOI is a main reason for
arguing that the current phase of the internationalisation of the economy is
different from the previous era. Indeed, according to Hirst and Thompson
(1996) POI grew at an estimated annual rate of 34 per cent between 1983 and
1990, reaching a figure of $2 trillion in 1992 (pp. 53-55). By 1999, the stock of
FOI, as an indication of the capacity attached to global production, stood at $5
trillion (UNCT AD, 2000).

S Foreign investment in a country can be direct or portfolio investment, with the former implying
investment in 10 percent or more of the ordinary shares or voting power of a company being held by the
foreign investor, and the latter constituting investment that results in a lesser degree of ownership and no
control over the management of a company. Direct investment may be measured in terms of flows
(divided into inward and outward flows, containing net capital contributions, net lending such as short-
term loans, and retained earnings) and stocks, which refer to the total value of foreign capital in a
particular country/region at a given point in time.

16
Table 2.1: Stock of outward FDI, developed market economies, developing
economies, central and eastern Europe. Selected years, 1980-99.
Percentage shares
Host region 1980 1985 1990 1995 1999
Developed economies 96.9 95.4 95.2 90.8 89.9
Developing economies 3.1 4.6 4.8 9.0 9.8
Central & eastern Europe 0.001 0.004 0.02 0.2 0.3
Source: Ietto-Gillies, 2001

However, as indicated in figures 2.1 and 2.2, the major players responsible for
this great increase in international investment and production remain situated in
the advanced market economies of countries of the Triad: US, EU and Japan. As
can be seen from Table 2.2, the share of inward FDI stock in developing
economies was just over 30 percent of the total world stock and just under half
of what it was in 1914.

Table 2.2: Stock of inward FDI, developed market economies, developing

economies and central and eastern Europe. Selected years,
1914-99. Percentage shares
Host region 1914193819601971197519801985199019951999
Developed
economies 37.2 34.3 67.3 65.2 75.1 75.5 71.4 78.4 71.7 67.7
Developing
economies 62.8 65.7 32.3 30.9 24.9 24.5 28.6 21.4 27.0 30.1
Central &
Eastern Europe n.a. n.a. n.a. n.a. n.a. 0.02 0.02 0.2 1.3 2.2
Unallocated 0.4 3.9 -
Source: Ietto-Gillies, 2001

17
But there is an equally important economic and political significance attached to
FDI flows. Attraction of FDI has, over the last two decades, become an
important yardstick by which the success or otherwise of national economies
may be judged. Liberalisation policies in both advanced and less advanced
economies have often been adopted to gain a competitive advantage over others
in the race to attract FDI. Hence the following analysis notes that 'In the FDI
area, liberalisation is the most important policy trend of the 1990s, as part of the
broad-based effort to attract investment' (World Investment Report, XXVlll,

1994).

2.4.2. The growing importance of TNCs

There are now estimated to be 60,000 TNCs possessing 700,000 affiliates across
the globe (UNCT AD, 2000). Over 57 percent of the biggest 100 TNCs are
active in four industries: electronics/electrical equipment, motor vehicles, and
petroleum and exploration and distribution. Table 2.1 below gives a picture of
the industry composition of the world's top 100 TNCs.

Table 2.3: Industry composition of the top 100 TNCs 1990, 1997 and 1998
Number of entries Average TNI a
per industry (%)
Industry 199019971998 199019971998

Electronics/electrical Equipment!
computers 14 18 17 47.4 55.0 52.6
Motor vehicle and parts 13 14 14 35.8 46.7 49.0
Petroleum exploration/refiningl
distribution & mining 13 13 11 47.3 48.9 52.7
Food!beverages/tobacco 9 8 10 59.0 72.7 74.3
Chemicals 12 8 8 60.1 63.3 58.5

18
Pharmaceuticals 6 13 8 66.1 67.5 64.3
Diversified 2 7 6 29.7 42.3 38.0
Telecommunication 2 4 6 46.2 40.7 40.4
Trading 7 3 4 32.4 34.0 24.6
Retailing 1 3 71.5 52.0
Utilities 3 26.0
Metals 6 2 55.1 - 45.5
Media 2 1 2 82.6 72.8 86.7
Construction 4 3 1 58.8 70.3 90.5
Machinery/engineering 3 2 54.5 35.8 -
Other 7 5 5 57.6 60.8 69.9

Total!average 100 100 100 51.1 55.4 53.9

Source: UNCT AD, 2000
• TNI is the abbreviation for "transnationality index", which is calculated as the average of
three ratios: foreign assets to total assets, foreign sales to total sales and foreign employment to
total employment

As can be seen from this table, in 1998, 31 of the TNCs were involved with the
first two industries. Overall, almost one-third of total world output is under the
common control of TNCs (UNCTAD, 1994). The figure of sales only by foreign
affiliates (excluding parent companies) reached $14 trillion in 1999 (UNCTAD,
2000). As well as being responsible for one third of world trade only via their
internal transactions, TNCs are key players in the production and distribution of
all major commodities ranging from electronics and information technologies to
mining and food and agriculture. Indeed, it has been argued that trade and FDI
should be seen as complementary elements of globalisation and their interaction
as a manifestation of the power of the TNCs to act increasingly globally and to
integrate their acti vi ties further (Ietto-Gillies, 1997).

Increasingly, TNCs are responsible for over half of world's commercial

innovations; and with growing collaborative networking and strategic alliance
formation, this is likely to increase. Indeed, such 'technologlobalism' has meant

19
not only a necessary TNC-specific and high-cost innovation and research and
development, but also collaboration between TNCs, and other large and small
companies, often involving academic and scientific institutions.

A particularly important dimension of the impact of TNCs on local, national and

international economies is their employment-creation potential. The TNCs have
a crucial role in creating and shaping the international division of labour
amongst and within countries and workers. Such employment will clearly
impact on the well being of citizens of the globe wherever the TNCs decide to
locate their operations.

Table 2.4: Snapshot of the world's 100 largest TNCs, 1998

(Billions of dollars, number of employees and percentage change)
Change
Variable 1998 1997 1988 vs. 1997
(Percentage)
Assets
Foreign 1922 1 793 7.2
Total 4610 4212 9.4
Sales
Foreign 2963 2133 -3.3
Total 4099 3984 2.9
Employment
Foreign 6547719 5980740 9.5 ,
Total 12741 173 11 621 032 9.6
A verage index of
Transnationality 53.9 55.4 -1.5 a
Source: UNCT AD (2000)
a Thechange between 1997 and 1998 is expressed in percentage points

20
As demonstrated by the above table, in 1998, the top 100 largest TNCs were
responsible for the creation of a total number of jobs approaching l3 million.
Amongst these are seven (excluding TNCs in the financial markets) of the 23
TNCs included in this study, and together they have created almost 2 million of
these jobs.

Increasing evidence attests to a related dimension of the power of the TNCs:

their ability to entice national governments to adopt policies aimed at attracting,
accommodating and tempting them to stay. 'Given the economic importance of
POI, it is not surprising that all countries today seek to attract it and to make
their policies more attractive to investors ... over the period 1991-1999, 94 per
cent of the 1035 policy changes [regarding POI national laws] favoured
investors' (UNCDTAD, 2000, p. 6). These policy changes have invariably
entailed national policies aimed at further opening up opportunities for private
sector involvement and investment, which is increasingly occurring with global
players at the forefront. 'The structural power of trans-national capital has not
just informed the policy agenda of deregulation, it is also responsible for the
drive to privatisation, of the state sector in all countries of the world' (lIoogvelt,
1997, p. -l37). Such analyses indicate the power of TNCs to shape the
international and local economic and political agenda.

TNCs can secure or strengthen presence in other geographies through FOI in

two main ways: greenfield investment in a new firm creating new productive
capacity or mergers and acquisitions (M&As) involving the purchasing of an
existing facility. Amongst the main reasons for the latter option is the speed
with which strategic assets and presence can be secured in the face of fierce
competition from others, cutting the level of competition down (UNCTAO.
2000. p. 97).

21
Table 2.5 below illustrates the increasing importance of M&As in FDI flows,
showing that the majority of such investment by TNCs is through M&As.

As can be seen, M&As account for most FDI inflows and outflows in both
developed and less developed economies, with a world total standing at 77.1
percent and 79.5 percent respectively, in 1997-99, and with the value of all
M&As rising from 0.3 percent of world Gross Domestic Product (GOP) in 1980
to 8 per cent in 1999 (UNCTAD, 2000, xix).

Table 2.5: Share of mergers & acquisitions in FDI. Percentage of M&A

sales to FDI inflows and M&A purchases to FDI outflows by
world region; 1988-90,1991-93, 1994-96 and 1997-99
World region 19880-90 1991-93 1994-96 1997 -99

M&A sales as % of FDI inflows

Developed economies 77.4 67.8 81.3 65.6
Developing economies 24.4 55.7 18.1 37.1
World total 65.2 67.1 56.0 77.1

M&A purchases as % of FDI outflows

Developed economies 73.4 59.7 55.6 81.7
Developing economies 39.4 84.8 34.0 57.0
World total 63.2 57.9 52.4 79.5
Source: letto-Gillies, 2001

The TNCs have thus been increasingly able to influence the fate of the
international economy. The power of TNCs to locate or relocate international
production and jobs amongst competing geographies and groups of workers
worldwide has come to denote a 'global market discipline' used to bring into
line expectations and aspirations of people. 'It is the awareness of global
competition which constrains individuals and groups, and even national
governments, to conform to international standards of price and quality. We are

22
constantly reminded, in the experience of others' own daily lives, but even more
so in the way that this experience is reinforced by media coverage of events
occurring elsewhere, that unless we conform to these standards we will lose the
competition, lose our own jobs. Workers come to accept that it is 'proper' that
jobs should be lost because their company "has to" move elsewhere where
wages and conditions are less demanding ... because of the existence of a global
market discipline, it is sufficient for a company to merely threaten to set up a
plant abroad, for it to successfully drive down the wages to the globally
competitive level' (Hoogvelt, 1997, pp. 124-125). To this needs to be added the
power of TNCs to attract subsidies and grants from national governments when
they do threaten to leave.

2.4.3. New migratory movements

Associated with analyses of these economic processes, is the increasing

attention that has been paid to new types of migration generated by
globalisation. Globalisation has arguably created a dichotomy of migration,
aspects of which reflect the attitude of Western governments towards migrants
belonging to different spatial and social spectrums divided sharply into the
"desirable" (the "highly skilled" and professional migrants) and the
"undesirable" elements ("illegal" immigrants, refugees and asylum seekers).

Worker and work-related migrations in the globalisation era are perceived as

increasingly differentiated in a number of ways (King, 1995) and represent a
fundamental change from the mass migration of the decades between the 1950s
and early 1970s during which labour from poorer countries migrated to rich
Western countries to work in industries geared towards mass production and
mass consumption (Castles and Miller, 1998). Since the 1980s, migrants have
become more diverse and represent a wider mix of economic, social and cultural

23
backgrounds, which itself represents the globalisation of migration in this era
with more and more countries being connected with each other. However, a
particularly important and new type of migrant is the highly skilled global
migrant whose movement is welcomed (almost) everywhere and who represents
one end of the spectrum of the migration divide. 'One of the clearest
expressions of the globalisation of economic life, and of labour markets in
particular, is the rapid growth of skilled international migration - a new breed of
executive nomads who, whilst quantitatively much less important than the mass
labour migrants of the past, nevertheless wield enormous influence over the
functioning of the global economy.' (King, 1995, p. 24).

This type of movement, in which expatriates or corporate transferees attached to

TNCs are included, is of focal significance to this study and will be returned to
in forthcoming chapters. The literature review presented in chapter three is thus
informed by a growing body of literature pointing to expatriates as migrants of a
special type in the era of globalisation.

2.5. The counter-arguments

The existence of globalisation as a system that by definition, engulfs the globe,

is contested on several grounds. These range from disputes over the physical
totality of countries and populations included in or affected by global processes
and the true power and mobility of TNCs, to the degree of economic, political,
social and cultural divergence or convergence of countries and peoples. A
discussion of some key concerns is presented below.

24
2.5.1. The concept of the globe

A main objection of critics of globalisation theory is that it is not actually

global. That indicators of globalisation including trade and investment are
concentrated in a handful of advanced capitalist countries and regions to the
partial or whole exclusion of the rest of the world actually constituting the
majority of countries as well as populations.

Tables 2.1 and 2.2 in section 2.4 of this chapter contain the empirical basis for
the objection: the vast majority of FDI circulates and stays between and within
the rich countries of the world, and this trend had been on the increase. Behind
these trends, it is argued, lies the complete or partial exclusion of the vast
majority of countries and the peoples of the globe from globalisation.

Thus, those reluctant to accept the concept of globalisation suggest that the term
globalisation should be replaced with terms such as intensified
internationalisation, regionalisation or indeed triadisation to indicate the
concentration of economic activity in the Triad of US, EU and Japanese
economies. Ruigrok and Van Tulder (1995), for example, in agreement with
Hirst and Thompson and other more 'traditionalist' contributors, argue that what
is at most appropriate for conceptualising the current state of the world economy
is 'triadisation' rather than anything else.

2.5.2. The scope and scale of globalisation: the historical objection

Contributors objecting to the embracing of globalisation as a new phenomenon

argue that the drive to internationalise products and markets is not a new
process or discovery. As far back as in 1848, Marx and Engels wrote of
capitalism as a system that was in need of constant expansion and restructuring

25
with the consequences that ring familiar to those referred to by globalisation
theory, advanced by writers of various disciplines: 'The need for a constantly
expanding market for its products chases the bourgeoisie over the whole surface
of the globe. It must nestle everywhere, settle everywhere, establish connections
everywhere ... The bourgeoisie has through its exploitation of the world market
given a cosmopolitan character to production and consumption in every country.
All old-established national industries have been destroyed or daily are being
destroyed. They are dislodged by new industries... whose products are
consumed not at home but in every quarter of the globe ... In the place of the old
local and national seclusion we have intercourse in every direction, universal
interdependence of nations' (quoted in Renton, 2001, p. 28). Here Marx and
Engels point to the 'logic' of capitalist expansion necessitating the conquest of
global markets and the internationalisation of production and consumption.

Different contributors present figures and measurements relating to indicators of

the existence and interconnectedness of the international economy as the
empirical basis for this objection. Hirst and Thompson (1996), for example,
measure the extent of 'openness' of a number of key economies in the Triad,
taking international trade and capital flows since 1913 as indicators of the extent
of globalisation and conclude that ' ... the international economy was in many
ways more open in the pre-1914 period than it has been at any time since,
including that from the late 1970s onwards ... Thus the present period is by no
means unprecedented' (p. 31). Capitalist internationalisation is, therefore,
perceived as nothing new.

2.5.3. The growing importance of finance capital

Financial markets are often conceived as the most globalised of all markets,
given the speed and accuracy with which financial transactions can be
conducted around the world through the use of new technology. Foreign direct

26
investment (FOI) is only one part of total capital flows around the globe. Those
reluctant to accept globalisation as a new era, rely on what they argue is an
unprecedented level of integration of financial markets, arguing that the
importance of increasing FOI is overstated. To take an example, between 1980
and 1990, there was an annual compounded rate of growth of 28 per cent in
cross-boarder equities, amounting to a rise of $120 billion to $1.4 trillion; and
an increase of 537 percent in international bond markets, going up from $259
billion to $1.6 trillion (Hoogvelt, 1997, pp. 80-81). These figures do not include
FOI and other capital flows, or flows of short-term transactions in foreign
exchange markets. Thrift (1988) sums up the internationalisation of currency
and banking and the internationalisation of capital markets resulting in a new
and comprehensive financial system including the creation of tax havens: 'The
result has been that the international financial system is now a 24-hour-a-day
business, with dealing in currency, shares and bonds migrating around the world
with the passage of the sun' (p. 23).

Indeed, the market for money is now the biggest market in the world with the
value of money becoming increasingly transferable across countries in the
context of unprecedented deregulation of the sector worldwide, reflected in the
virtual non-existence of national stock markets. Facilitated by crucial
advancements in new communications technology, ' ... the "market for money"
is now the largest in the world, so that the turnover in the market for currencies
in 1993 surpassed $1000 million per day' (Leyshon, 1995, p. 39).

Thus one contextual objection is to figures relating to FOI flows being relied
upon without regard to the much higher magnitude of non-FOI financial flows.

27
2.5.4. The TNCs and their "home-bound" nature

Nearly 90 per cent of the top 100 TNCs have their headquarters based in their
home countries and these are located in the Triad of the US, Western Europe
and Japan (UNCTAD, 2000).

Indeed, the basis of one counter argument made against the acceptance of
globalisation is that far from being footloose and without allegiance to country,
the TNCs remain attached to a home base. Hirst and Thompson (1996), for
example, argue that multinational corporations are heavily reliant upon their
home base as the centre of all their key activities. 'Home base' here is defined
as where the key strategic functions of TNCs are concentrated to form (at best) a
'regional base' (p. 82). The authors take the increasingly important dimension
of research and development activity by TNCs and add that ' ... at the most
between 10 and 30 percent of the technological activity of multinationals is
likely to be located in foreign subsidiaries' (ibid, p. 98). A related but distinct
point of contention is that given that TNCs are not as footloose as they may
appear, their link with national governments and their concern with both
competition and success, remain largely a national or at most a regional and not
a global concern.

2.5.5 The polarising impact of globalisation

Another commonly expressed concern is that globalisation is a primarily

Western conceptualisation, and sometimes portrayed as a label to conceal the
economic and social polarisation created by fierce competition between
American, European, Japanese and to a limited extent a number of South East
Asian TNCs, and their associated states.

28
Chossudovsky (1998) explains such polarisation: 'At the heart of the global
economic system, lies an unequal structure of trade, production and credit,
which defines the role, and position of countries in the global economy ... By
the turn of the century, the world population will be over six billion of which 5
billion will be living in poor countries while the rich countries with some 15
percent of world population control close to 80 per cent of total world income ...
With a population of more than 600 million people, the gross product of the
entire sub-Saharan African region is approximately half that of the state of
Texas' (pp. 37-38). Others, including Castells, point to an unprecedented
disparity of access and opportunity between different geographies: 'Within the
framework of the new informational economy, a significant part of the world
population is shifting from a position of structural exploitation to a structural
position of irrelevance' (1993, p. 37).

And Hirst and Thompson (1996), taking the case of FDI, quantify the disparity
as only 28 percent of the world population receiving 91.5 percent of the total
FDI (P. 68), and indeed argue that expansionary economic activities of TNCs
are yet to prove their effectiveness globally.

A similar concern is expressed by the United Nations Human Development

Report (2000), which points to the unprecedented increase in global inequalities
and the marginalisation of poor countries and poor people in more recent
history: 'The distance between the incomes of the richest and poorest country
was about 3 to 1 in 1820, 35 to 1 in 1950,44 to 1 in 1973 and 72 to 1 in 1992'
(p.6).

29
 Part II: Perspectives and interpretations

2.6. Processes and positions

While the first part of this chapter detailed a number of key grounds around
which the debate over the nature, impact and scope of globalisation continues to
evolve, this part presents the most recent research, which has attempted to
understand and clarify the various positions taken on globalisation and its
consequences by different theoretical frameworks. The section thus serves to
contextualise the debate using more general theoretical models, and pays
particular attention to frameworks that attempt to integrate the intertwined
processes of globalisation towards analysis and explanation. It is this context,
which informs the background to many of the conceptual and theoretical
questions raised in chapter one as the starting point for this interdisciplinary
study.

In an attempt to bring together both the key concepts underpinning globalisation

and to locate the various (sometimes overlapping) approaches to globalisation in
a clear model, Cochrane and Pain (2000) adopt and represent the analysis
developed by Held et al (1999) into a useful and interesting account pointing to
four distinctive features of globalisation; and identify four specific theoretical
positions in relation to these. Held et al (1999) place their analysis of
globalisation into a framework, which investigates the 'extensity of global
networks; the intensity of global interconnectedness; the velocity of global
flows; and the impact propensity of global interconnectedness' (p. 17).

30
Cochrane and Pain (2000) take these features of globalisation, and point to the
key concepts of globalisation as stretched social relations, intensification of
flows, increasing interpenetration and global infrastructure.

The stretching of social relations across the globe is seen as exposing

individuals in distant parts of the world to the same cultural, economic and
political processes. These could, for example, include the development of
common consumption patterns or common exposure to global environmental
degradation. Intensification of economic flows such as FDI and networks of
interaction and interconnectedness is seen as the second feature of globalisation,
which entails a new and greater density of impact of events being felt by
physically separate individual places. Increasing interpenetration, a third feature
of globalisation, is the process by which apparently distant societies and cultures
are brought face to face with each other at the local level. An example cited is
the existence of immigrant communities in Western countries, which has
created diversified cultures co-existing in specific localities and maintaining
contacts with remote parts of the world. The same analysis could be applied to
expatriate communities around the globe, including the UK. Such communities
maintain direct and often extensive economic, cultural and other links with their
home base(s) while living in a distant locality. In fact, it has, for example, been
argued that expatriate communities are close-knit and have limited contact with
the host country culture (Adler, 1997). The final feature of globalisation is the
emergence of a global infrastructure that has enabled formal and informal
arrangements to exist, as required by globalised networks to be operational. The
key components of development for this characteristic of globalisation are
information and communications technologies that enable global markets to
interact and grow.

As the debate on globalisation matures with the passage of time, it may be

easier to see how the different foci of emphasis outlined in part I of this chapter

31
and the different theoretical positions approach the phenomenon. In this respect,
a particularly useful dimension of the analysis by Cochrane and Pain (2000) is a
classification of the theoretical (and arguably associated ideological) positions
on globalisation as an area of inquiry that has been increasingly marked by an
overwhelming and sometimes overlapping number of claims and counter-claims
in different fields of social sciences. They argue that the different approaches to
globalisation may be divided into four distinctive groups, each of which points
to different processes occurring at the global level and relies on different
evidence to interpret globalisation. They classify the groups into four: globalists
who can in tum be divided into positive and pessimistic (sometimes referred to
in the literature as realist globalists), traditionalists and transformationalists.

The first group (both factions of which believe that globalisation is a new and
real phenomenon) argue that globalisation has brought about a tangible and
significant shift in the geography of economic and social relations and that
national economies, national cultures, and national regimes of governance are
increasingly subordinated to global economic, cultural and political processes.
The two perspectives rely on the same evidence presented in part I, regarding,
for example, the growing importance of TNCs and the primacy of global
processes over the nation state. They do, however, differ on the impact that
globalisation has had on the world. Positive globalists believe that the era of
globalisation is marked by welcome possibilities for change that will improve
the economic, social and cultural conditions of all citizens of the globe, bringing
people, cultures and living conditions closer together in an improved
environment. Any negative impacts, including greater economic and social
polarisation across space, can be controlled and minimised by more responsible
systems and mechanisms for governing globalisation. Pessimist/realist
globalists, on the other hand, emphasise the domination of economic processes
such as FDI flows by the big economic powers, particularly the North
American, Western European and Japanese economies and point to the

32
increasing polarisation between and within countries in the era of globalisation.
The position of pessimistic globalists is the same as those believing that
globalisation is tantamount to a new imperialism in all its spheres including
culture (Tomlinson, 1997). A number of Marxist and neo-Marxist contributors
in different fields of social sciences would adhere to this position, although
further extensive debate continues as to the precise form of imperialism, with
some contributors arguing that globalisation is in fact just a new phase in the
development of classical imperialism (Freeman, 2001, for example).

Traditionalists are grouped together as those who perceive globalisation as a

myth, or at best, exaggerated. Increases in FDI flows, although substantial, were
still only about 5.2 percent of total world investments in 1995, with the bulk
continuing to be investment found from sources like domestic savings
(Thompson, 2000, p. 109). Furthermore, worldwide trade and the exchange of
goods and services goes back a long time and a progression of this
internationalisation is believed to be as intensive if not more intensive in the 19th
century, when the economic interests of the great powers - still represented by
nation-states and their TNCs - dominated the world. Globalisation is thus also
seen as a continuation of pre-existing unequal economic and other relations.
Arising from this belief is a common concern that the traditionalists share with
pessimistic/realist globalists about continuing and deepening global inequalities.
Thus, Thompson, as a leading traditionalist, writes: 'The idea that we live in a
world adequately described by the term globalisation is a dominant one ... we
should remain, at a minimum, sceptical of this trend, but perhaps more
seriously, to be suspicious of it altogether. Thus my conclusion is a rather
traditionalist one ... If globalisation is upon us in the way the globalists (whether
the enthusiasts for it or those who condemn it) suggest, then it is at best a very
uneven process. In as much as globalisation has become the new grand theory of
the social sciences the concept probably offers much more than it can deliver'
(ibid, p. 123).

33
The final theoretical position is adopted by transformationalists who perceive
globalisation as a more complex phenomenon than articulated by the other
approaches. Both the globalists and the traditionalist accounts are exaggerated;
and while transforming economic, political and social processes have occurred
and produced complex networks of interaction at different geographical scales,
the outcome of these processes is not inevitable, obvious or irreversible. Nation-
states as well as other local and national agencies do still matter and can resist
the indirectly exercised power of large transnational corporations in order to
bring about social and political accountability. An influential transformationalist
is Castells, whose theoretical position is particularly relevant to this study
because it focuses on transformations in information technologies that have
dramatically changed knowledge production and distribution in the process of
economic restructuring.

Also of direct theoretical and conceptual relevance is the attention paid by

Castells, and other theorists (please see below) to divisions of labour across
space. Castells, for example, writes: 'The informational economy tends to be, in
its essence, a global economy; and its structure and logic define, within the
emerging world order, a new division of labour' (1993, p. 20). Similarly, and
concurring with a number of other economists, Dunning concludes: 'The
globalising economy, then, is, first and foremost about the international division
of labour' (1994, p. 9).

The creation and organisation of divisions of labour around the world have been
and continue to be the subject of considerable academic interest as a central
feature of the internationaVglobal economy. It may, therefore, be useful at this
point to present a more specific discussion of this aspect of globalisation and the
key characteristics of its changing nature in the era of globalisation, particularly
because this is where the movement of expatriate managers needs to be placed.

34
2.7. Global labour markets and divisions of labour

Discussions of globalisation invariably contain explicit (as reflected in the last

section) or implicit references to how labour is organised over space or around
and within the globe. Important questions relating to this organisation may be
asked about the scope and nature of markets of labour, that is structures,
processes and agents that make production take place globally but inevitably in
specific localities.

A particularly pertinent connection to be made here is between the analysis

presented so far in this section and the migration dichotomy discussed in section
2.4.3 of part I of this ch~pter. This is so because as forcefully analysed by
Hymer, 'When a corporation invests abroad, it not only sends capital and
management out, but also establishes a system for drawing foreign capital and
labour into an integrated world network. When many firms from many countries
do this together on an expanded scale, as has been true in the last decade and
will increasingly be true in the next, they are forming a new world system'
(Hymer, 1972, p. 76).

Thus, issues of social relations including power relations between continents,

regions, countries and localities become relevant, as do those between different
groups of workers and managers around the globe. The very existence of
expatriate managers can be argued to firstly represent the presence of global
labour markets and secondly their differentiated nature. Hymer (1976) identified
the key features of the changing political economy of international production,
emphasising the changing form of production at the international level with the
transnatoinal corporation not only taking a central place but also as the main
creator of a global division of labour with the accompanying divisions in status
and power.

35
Therefore, 'on an expanded' scale, the TNCs may well be the main agents
responsible for the creation of international/global labour markets; and such
markets may reflect a key dimension of the very process of globalisation which
is itself identified with new migratory movements. Indeed, as will be discussed
in the next chapter, expatriates are increasingly viewed in the literature as
'special migrants' (see section 3.6.3 of chapter 3). Here it is hoped sufficient to
discuss the important link between economic restructuring, the creation of
global labour markets and the new migratory movements as a feature of
globalisation. This connection is made by King (1995), who writes: 'Changes in
the global economy, which feed through to the level of particular places and
regions via restructured production processes and reshaped local labour markets,
have tended to polarise labour demand into high-skill and low-skill categories ...
Migration processes are affected accordingly, so that the skill profile of today's
international migrants tends to reflect the polarity ... ' (p. 23).

This section attempted to make overall interlinkages between TNCs as key

agents in the process of globalisation creating and shaping global labour
markets to suit restructured production processes, and different types of
migrants in this process. The next section discusses the specific features of the
current international division of labour, starting with a brief historical
background to its creation.

2.8. Economic restructuring and changing divisions of labour over

space

The concept of a new international division of labour is integral.; to the

understanding of a 'new regime of accumulation', albeit defined with numerous
variations, as the reproduction of capitalist social relations on an ever-
expanding scale (Wright, 1978). A primary condition for such expansion is the

36
creation and penetration of new markets by firms; and central to its efficient
advancement remains the pivotal role of technological progress. This is why in
analyses of divisions of labour in capitalist economies much attention is paid to
the role of technology and to its impact in terms of substituting certain types of
labour and to its capacity to create new forms of managerial control.

It is worth noting that the notion of a division of labour over space; the type of
work different groups of workers perform and differentiated labour processes is
not new and as indicated by chapter one, may go back to ancient times. In more
recent history Hobson (1905) described an international division of labour
within his general description of imperialist exploitation, as a process by which
powerful European states extracted raw materials from the poorer countries of
Africa and Asia for transformation into goods consumed in Europe or to export
back to the colonies and semi-colonies. A further and supplementary feature of
this regime was the "export" of lower labour value to the core capitalist
countries - during specific periods - in the form of migrant labour in times of
need: when jobs unwanted by the native workers who could afford to refuse
them were filled by the migrants.

Since the late 1960' s, however, the international economic system is said to
have entered a "crisis", necessitating new responses and solutions. Conditions
of capital accumulation, which were ensured by the post-war Keynesian
economics, regulated by a "Fordist" regime of accumulation based on mass
production and consumption; and on a social contract in advance capitalist
economies, came to an end.

International capitalism entered its most severe recessionary phase from this
period with the rate of profit falling in the main advanced capitalist countries
(Mandel, 1978, 1995, others). The rate of profit fell considerably in all these
countries and in the US economy by an estimated 45 percent, from 22 percent in

37
the late 1940's to 12 percent in the mid 1970's (Mosely, 1999, p. 28). By the
1970' s it was evident that in order to restore profitable accumulation a whole
series of measures needed to be taken. The result was a far-reaching programme
of unprecedented rationalisation and restructuring. Internationally, the world
"order" created by World War Two and the old division of labour - mentioned
above - were distorted.

Amongst the significant measures taken to respond to the crisis was the
adoption of relocation policies by TNCs, primarily in search of cheaper and
more vulnerable (likely not to be unionised) labour for their international
production. Mies (1986) describes the new arrangement as a process whereby
' ... labour-intensive - and hence labour-cost-intensive production processes
should be exported to the colonies now called developing countries ... that the
whole industrial plants should be shifted to these countries and that Third World
workers, because of their low wage levels, should now produce the machine
made consumer goods for the masses in the Western countries' (p. 113).

Some authors have argued that the new international division of labour started
to take shape precisely because of policies by TNCs emphasising the location
and relocation of various components of production to different localities
around the globe (Frobel et al, 1980, for example). As discussed in part I, the
TNCs were and remain the main agents that set in motion processes that dictate
where and how international production should take place, and they are assisted
in this process by the fast and continual advancements in new technological
developments. The key question regarding the international division of labour in
the globalisation era, however, remains the following: What are the specific
distinguishing factors that assign different localities, different groups of labour
and different production and labour processes to different geographies around
the globe? Of equal significance is the impact of new technologies on who

38
performs what type of work and where in the world, within the increasingly
interconnected transnational networks of operation.

According to Castells, while the TNCs are the main creator of such divisions, it
has increasingly been the distinction between their higher value-added and
lower-value added activities that shapes and reshapes the new division of labour
with the information technologies playing the key role in the chain of value
creation. With the advent of a global economy, there emerges a new feature
based on the technological capacity of an economy that enables it to compete.
The thrust of Castells' s argument is that the new international di vision of labour
is a division based not on labour cost but on the ability of economies to produce
higher-value-added commodities. As production moves from mass
standardisation along Fordist lines to high quality customisation targeted at
specific markets, the importance of quality in all factors of production increases
dramatically. Global competitiveness is determined by the location of national
economies in the hierarchy of technological advancement. Castells concludes
from this model that the informational economy is essentially global, attaching
to itself a new global and increasingly unevenly developed division of labour.

But what is perhaps particularly intriguing about divisions of labour in the

globalisation era is the apparent shifting form of this high versus low value-
added production relation. At the core of this relationship lies the ability of
different workforces in and within different regions and countries to produce
and control or to apply new technological knowledge to the production,
distribution and marketing of goods and services. This tendency is discussed by
Hoogvelt, who writes: 'Today something curious is happening... many
information-intensive activities previously classed a 'high value-added'
activities are today 'real-time,6 activities that may be carried out anywhere in
the global system' (Hoogvelt, p. 145). This means that globalisation may be

6 A number of the participants in this study use this concept frequently to explain the globalisation
strategies of their TNCs. See comment by P 12 on page 187, for example.

39
seen to have changed the political economy of the 'old' core versus peripheral
relations of production, with important consequences for the organisation of
labour and its use everywhere in the world. 'Thus, the global division of labour
is rendering a core-periphery relationship that cuts across national and
geographical boundaries, bringing on board within the core, segments of the
Third World, and relegating segments and groups in both the traditional core of
the system and in the Third World to peripheral status. Core-periphery is
becoming a social relationship, and no longer a geographic one' (ibid.).

Taking the notions of uneven development and the eroslOn of boundaries

guarding traditional divisions of labour over space, it can be seen that in fact
one feature of globalisation is the fragmented use of both labour and new
technology not just between continents, countries, regions. and localities but
within them. For example, London - commonly perceived as a world city and
the global banker for finance capital, contains within it pockets of decay and
poverty similar to those prevalent in poor countries. These enclaves are often
inhabited by immigrants, particularly women, working in the harshest
conditions with no employment or health protection and for meagre wages paid
by TNC suppliers and contractors (Mitter, 1986). Indeed, the whole of the UK
has been described as performing a 'dual role' in the international division of
labour with the high value-added activities such as research and development
and management and financial control functions primarily concentrated in
London and the South East, and low-cost production located in the North and
North Western regions (Massey, 1988).

A number of the key processes discussed so far are examined by Castells (1993;
1996; 2000), who develops a multi-faceted model that combines the major
changes in the current world economy, during the last three decades. It is useful
to consider this model in a little more detail as it provides an integrated model
embracing features of globalisation discussed so far, and others, which are of

40
significance to this study, as individual or interacting factors playing an
important role in the global restructuring process.

2.9. A new 'techno-economic' paradigm?

The suggestion that there has been a new techno-economic paradigm, points to
the possibility of the emergence of qualitatively different structures and
processes that have facilitated the transformation of economic activity. Castells
(1996) - along with other contributors - calls this transformation the
'informational mode of development', in which information is commodified. It
is no longer just a raw material belonging to the 'other factors' of production
category; it becomes both the input and the output of economic activity and
production, but crucially, unlike other commodities, its value does not
deteriorate with time and application. For Castells, the new economy has several
distinctive characteristics, the most relevant of which to this study are as
follows.

The first is the increasing degree with which the production process and
productivity are affected by the application of science, technology, and
managerial know-how. It is acknowledged that the application of new
knowledge has always been important, but it is the degree of the significance of
its application in the growth of productivity, as opposed to increasing input of
labour (or indeed capital) that is new.

The second feature of the informational economy is the shift in advanced market
economies 7 to information-processing centred activities and the increasing
importance of the 'service sector' (although he notes the systematic linkage

7 This shift, however, is not confined to developed market economies only. Service sector production
including information processing has been on the increase in the developing countries too. A well-
known example is India, parts of whose regions and cities are increasingly connected to the global
economy via the outsourcing of information-processing activities.

41
between manufacturing and the service sector, distancing himself from post-
industrialist accounts such as that developed by Bell in 1973 and by an
increasing number of other contributors since then). A significant feature of
services relates to the increasingly number of people who now work in
information processing activities, albeit in a hierarchy of importance. It is the
processing of information that becomes the catalyst for economic development.
Castells thus states that: 'Moreover, the quality of information and one's
efficiency in acquiring and processing it now constitutes the strategic factor in
both competitiveness and productivity for firms, regions and countries'
(Castells, 1993, pp. 17-18).

The third relates to the changing form of the organisation of production. Despite
the trend towards the concentration of economic and other powers in the hands
of a few giant corporations, the organisation of production has shifted from
mass standardised to flexible and customised. Indeed, this process does reflect
one of the most interesting dimensions of globalisation: the centralisation of
economic power coupled with the decentralisation of production.

The fourth feature reflects the increasing globalisation of the world economy
and the growing networks of connectedness between different economic
processes and agents ' ... the new economy is a global economy, in which
capital, production, management, markets, labour, information, and technology
are organised across national boundaries. Although nation-states are still
fundamental realities to be reckoned with in thinking about economic structures
and processes, what is significant is that the unit of economic accounting, as
well as the frame of reference for economic strategies, can no longer be the
national economy. Competition is played out globally, not only by the
multinational corporations but also by small and medium-sized enterprises that
connect directly or indirectly to the world market through their linkages in the
networks that relate them to the large firms' (Castells, 1993, pp. 18-19).

42
Finally, the new economy has at its core the technological revolution that has
enhanced telecommunications to a degree so as to make it possible for the
global economy to actually exist and function. What, however, is particularly
useful about Castells's informational development mode is that it concentrates
on two interconnected but distinct dimensions: the technological and the
organisational. Much attention is thus paid to the changing role, significance
and place of each dimension in the restructuring process that created the new
phase of economic development aimed at restoring falling rates of profit.

Amongst the most important features of technological transformations in

international production are their capacity to facilitate the connection of
spatially separated units scattered around the globe to management that is
reintegrated at the level of the firm via flexible telecommunications and flexible
manufacturing. In terms of organisational transformations, shifting patterns of
production and of management control have created the 'network enterprise',
which is marked by two key characteristics. The first is its 'connectedness',
which Castells defines as 'its structural ability to facilitate noise-free
communication between its [spatially separated] components', and the second,
'its consistency, that is, the extent to which there is a sharing of interests
between the network's goals and the goals of its components' (Castells, 2000, p.
187). In this way, the new mode of capitalist development sustains profitable
production, creating a new global social structure with the key dimensions of
space, time and technology.

2.10. Giobalisation and power relations over space

Embodied in the processes, structures and relationships under consideration in

both parts of this chapter are the concept and practice of power; whether it is

43
uneven development between or within geographies, divided labour markets,
discriminating FOI flows, or differentiated migratory movements, it is power
relations that appear to be visibly present across space.

The whole concept of power and its manifestations over space are of particular
importance in the study of globalisation in general or indeed of its specific
dimensions. As Held et al (1999) point out: 'Globalisation concerns the
expanding scale on which power is organised and exercised, that is, the
extensive spatial reach of networks and circuits of power. Indeed, power is a
fundamental attribute of globalisation. In the increasingly interconnected global
system, the exercise of power through the decisions, actions, or inactions, of
agencies on one continent can have significant consequences for nations,
communities and households in other continents. Power relations are deeply
inscribed in the very processes of globalisation ... Political and economic elites
in the world's major metropolitan areas are much more tightly integrated into,
and have much greater control over, global networks than do the subsistence
farmers of Burundi' (p. 28).

What is perhaps specifically important about power in the context of

globalisation and global production is that it appears to constitute an important
thread that weaves the processes of globalisation together, be it in the creation
of an unequal international division of labour or in the divided connectedness of
the global 'network enterprise'. A key question that arises here, for example, is
that in the totality of the global corporation, what happens to power relations
within the network enterprise? If the components of the network share its goals
with the core of the enterprise (as Castells argues), where is the starting point of
the 'connectedness', and does it mean that they will have access to the same
kind and level of power within it? According to Hymer, organisationally,
hierarchies of power remain visibly in tact; that is to say that although the
various components attached to the network might be of significance to the

44
corporation, the organisation of power relations across, is unequal between
them. Hymer (1979) incorporates these power relations into his analysis of
divisions of labour that the multinational/transnational corporations create via
international production. He writes: 'Multinational corporations are torn in two
directions. On the one hand, they must adapt to local circumstances in each
country. This calls for decentralised decision making. On the other hand, they
must co-ordinate their activities in various parts of the world and stimulate the
flow of ideas from one part of their empire to another. This calls for centralised
control. They must therefore develop an organisational structure to balance the
need for co-ordination with the need for adaptation to a patchwork quilt of
languages, laws, and customs' (p. 161). To Hymer, however, such adaptations
do not entail the granting of equal status to the various units or components of
the enterprise, despite its internationalist position regarding production.
Elsewhere, Hymer writes of the vertical hierarchy created by the multinational
corporation according to which different tasks and associated levels of status are
accorded to people in different locations; at the bottom of this hierarchy (at local
andlor regional levels) are the many nationalities which the multinational
employs to fulfil less significant roles leaving the top decision-making and
control functions to the increasingly homogenous north European nationals 8
(Hymer, 1972).

In sum, the processes of organisation and exercise of power over space appear
to be seen as significant aspects of globalisation in its multifaceted
manifestations. In an interdisciplinary study of globalisation, this entails the
acknowledgement of potentially unequal and divisive power arrangements
across the globe, induding those within the network enterprise. An analytical
approach to an understanding of expatriation and the presence of expatriates in
distant geographies would thus entail an examination of how power is
negotiated and mediated between the core or the global (home base and usually

8 Although Hymer's reference in this article is to north European corporations. the same analysis is
implied in relation to other multinationals.

45
headquarters of the TNC) and the other geography, that is to say the periphery
or the local.

2.11. Conclusion to the chapter

This chapter was organised in two parts for two main reasons. The first reason
was to present in sufficient detail, the contextual concepts, processes and
theoretical approaches that have informed the background to this study.
Secondly, the chapter aimed to organise and capture as much as possible the
vastness of the debate on globalisation, particularly for an interdisciplinary
approach, in an adequately systematic manner. The underlying purpose was to
identify key interlinkages between globalisation processes and the emergence of
the specific subject matter of this study, that is expatriate managers.

The main aim of part I of the chapter was to present an analysis of the nature of
globalisation, noting its multi-faceted presence in today's world; and to discuss
some of the reasoning behind arguments that either confirm or reject its
existence or economic and other potential. This entailed a consideration of the
underpinning concepts of globalisation and of some of the evidence and
arguments that have led to globalisation being perceived as a new era of
economic and social activity or rejected as an old system transforming itself in
order to survive profitably. The general debate on globalisation was presented
through some of the indicators around which the dispute over its scope, nature
and impact continues to evolve.

Despite the varying views and arguments presented on the scope and impact of
the further internationalisation of the world economy, the TNCs were identified
as the key agents that drive the process of globalisation forward, albeit with

46
differing degrees of significance attached to their importance or geographical
reach.

Part II of this chapter was concerned with placing the globalisation debate in the
context of more general theoretical frameworks that attempt to explain
globalisation from different perspectives. This part devoted a somewhat detailed
attention to a number of the key concepts and processes emphasised by some of
these approaches identifying them as the most pertinent to this study.

It looked in some detail at the issue of the changing division of labour at the
global level and within global labour markets; and noted that it is increasingly
access to new technologies and the application of information and knowledge
that allocates different groups of people and countries to different locations in
the production process, or indeed excludes them from it. The particular
characteristic of a global division of labour was noted as an increasingly social
and not necessarily geographical division. The migration of the "highly skilled"
from North America into the UK as a comparable advanced capitalist country is
a good example of this process. Important interlinkages made in this part
between new and differentiated migratory movements and the correspondingly
divided global labour markets.

The consideration in the latter section of this part of the notion of a new
'techno-economic paradigm' brought together some of the issues and arguments
presented in different sections of the chapter. Such a paradigm, the emergence
of which was only possible with ever-expanding technological advancements,
has at its heart the 'network enterprise' with its own particular characteristics.
The part concluded with a consideration of power relations over space, and
considered how unequal power arrangements - whether they were exercised
within the networked enterprise or through differentiated FDI flows - were seen
by some approaches as a fundamental attribute of globalisation.

47
Changing production and labour processes over what appears to be increasingly
expanding space and the intensification of the internationalisation of the world
economy, as well as the subsequent organisational and other changes that these
processes may have brought about, are particularly important to this study.
Equally important is the migratory paradox created by globalisation, for
expatriate managers are part of this paradox - themselves a creation of
globalisation. Without TNCs striving to achieve global presence and success,
there would not be a need for expatriates to be located in geographies outside
their home countries. The growing attention they have received from academic
and other sources may reflect a corresponding degree of importance being
attached to their role in the globalisation process. The next chapter is thus
devoted to the study of expatriate managers in this context.

48
 CHAPTER 3

Expatriate Managers: Survey of Trends and Key Literature and

Approaches

3.1. Introduction

This chapter has two main tasks. The first is to consider some definitions of
expatriate managers and to present data available on the magnitude of their
movement across national boundaries, with particular reference to inward trends
into the UK as the geographical base of this study. The second concern of the
chapter is to locate relevant literature and treatment of expatriate managers in
relation to a number of different dimensions from which their movement across
borders has been considered.

It is important to note here that the literature on expatriates and the concepts and
processes contained therein combined with the literature on and approaches to
globalisation presented by the last chapter, to inform the focus and direction of
this research.

Expatriates are discussed in much of the literature in terms of the movement of

the 'highly skilled' or of 'skilled transients' (Findley, 1995) or variously
included in discussions of the growth of international managers or corporate
transferees. These terms are commonly used generically and interchangeably to
refer specifically to the movement of a group of trans nationally mobile people
who have emerged in the era of globalisation. While common agreement exists
that empirical data on such a movement is at best, very poor, agreement also
exists with regards to their great significance.

49
3.2. Globalisation and international migration

Importantly, there is now a growing concern echoed in some analyses concerned

with new types of migration that the movement of the highly skilled should be
placed in a contextual and historical framework. That is to say, that such a
movement has arisen as a result of internationalisation of production by the
TNCs in the globalisation era as a new (or continuing) phase (or form) of
capitalist development, approaches to which were discussed in detail in chapter
two. This recognition is resulting in conceptual connections developing between
studies of globalisation and of migration in different social science disciplines.
Most of the globalisation accounts covered in chapter two, for example, refer to
the movement of the highly skilled as a new and important trend, the
significance of which is primarily qualitative because of the relatively small
number of people involved.

Similarly, migration studies are increasingly placing this trend as a special

movement in the context of globalisation and global economic restructuring. For
example, Pelleriln (1996), in her analysis of global restructuring and
international migration(s), argues that 'In order to understand the current
complex reality of migration, one needs to locate both the phenomenon and the
method9 of understanding it within their historical context... The fact that
international migration cannot be understood outside the context in which it
unfolds does not indicate that it is simply a reaction to whatever historical
change is taking place. It suggests instead that migration always takes place
within structures and social practices. In other words, migrants, are not a social

9 Pellerin's reference to method here relates to traditional conceptual frameworks on international

migration tending to rely on only quantitative data and variables in analysing migration trends. The
author suggests that in such analyses much meaning may be lost in understanding the totality of the
migration experience including the migrants' role as agents of social change in a historical sense (1995,
p.83).

50
category isolated from class, gender or ethnic group' (p. 82). Pellerin links the
movement of the highly skilled specifically to globalisation and the expansion
strategies of transnational corporations. She stresses the attachment of (all)
migrants to social structures; and considers their actions arising from their place
and position within these structures. Migrants crossing over boarders are,
therefore, not perceived as passive elements in the process of some change that
has resulted in their movement but as active agents impacting on and shaping
that very process.

3.3. Expatriate managers: definitions and magnitude of movement

There do not seem to be clear definitions of expatriates or specific mechanisms

for data collection on this group. What is clear is that they belong to the core
segments of the workforces of transnational and/or international corporations,
with the senior managerial expatriates belonging to their higher echelons.

There are, of course, other expatriate managers attached not to TNCs but to
international organisations such as the United Nations or to a variety of
diplomatic service who are not included in this study.

The reasons for using expatriate managers may differ according to the business
requirements of a TNC, such as setting up new operations, identifying and
negotiating mergers and acquisitions (M&As)IO, heading up joint ventures or
troubleshooting in an existing operation.

Salt (1997) presents the most up-to-date statistics on the gender and other socio-
economic characteristics of 'transferees', based upon aggregated (1985-1996,

10 As will be illustrated by various examples in forthcoming chapters, M&As occupy a special place in
the experience of many of the participants in this study with some having come to the UK specifically to
identify acquisition opportunities and to facilitate them.

51
excluding 1992, for which figures are not available) data derived from the
Labour Force Survey (LFS) of 1992. Transferees or secondees are probably the
closest category to be found to the sample of this survey. Salt confirms the
difficulties connected with data collection: 'It is difficult to determine the
overall trends in secondment on a national basis, let alone an international basis.
Compared with the total amount of migration between countries, that of the
highly skilled - among whom corporate expatriates are only one group - is
small in volume' (Salt, 1997, p. 6). Jl Salt's analysis does nevertheless provide a
useful insight into the internal labour markets (ILMs) of TNCs engaged in
expansion, relocation and expatriation. His figures confirm the general gender
and geographical bias of such migration. The vast majority of transferees (four-
fifths) are male. Over 60 percent are accompanied by their families and live in
Greater London and the South East. Salt's analysis also reveals a greater
representation of males (81 %) amongst UK nationals, compared to foreign,
particularly EU nationals (75%). This is in line with other research (Scullion,
1994, for example) indicating that women in British multinationals were not
making as much progress in management as women in American
multinationals.

According to Salt and Singleton (1995), the largest group of recipients of long-
term work permits in the UK are highly skilled professional and managerial
people, mostly from other industrially advanced countries. Amongst these, two
countries stand out: the US, which has consistently received more than 25
percent of all work permits issued, and Japan. During the 1984-93 period, for
example, work permits issued by the Horne Office to workers from these two
countries accounted for 40-50 percent of all work permits issued and their
nationals also received considerably higher salaries compared with other
nationals.

II This would be commonly confirmed by the responses of the participants in this research who put the
number of expatriates, particularly at the level considered here, to be insignificant compared to total
number of employees.

52
Other data on the migration of the highly skilled come from the International
Passenger Survey (IPS). This is a survey conducted by the Office for National
Statistics (ONS) on a continuous basis, at the main ports of entry into the UK.
The definition of migrant extends to anybody who stays for over one year, and
definitions of occupation and work relate to employment one year prior to the
move. This means that the non-UK expatriates included in this study would all
be officially classified as migrants in pursuit of work and career-related
advancements or moves. The following two tables present a general picture
constructed from the IPS survey in 1997, as the latest available data.

Table 3.1: International migration, estimate from International Passenger

Survey: time series 1988 to 1997
Main reasons for migration, thousands
Year All Wolk relatcrl Accompany/ Formal Other No
Reasons Join Study rea'lOl1

stated

United Kingdom
Inflow
1988 216.0 46.9 (1).5 33.8 28.8 37.0
1989 249.8 40.3 87.4 36.7 32.6 528
1990 266.8 56.3 75.6 49.1 35.7 SO.O
1991 266.5 40.7 CJ2.7 54.0 36.0 43.1
1992 215.9 40.0 75.8 37.9 33.6 28.6
1993 213.4 41.0 721 45.8 37.9 16.5
1994 253.2 520 77.0 48.6 56.1 18.6
1995 245.5 51.3 56.6 59.8 62.3 15.6
1996 2722 66.1 65.6 61.2 59.7 19.4
1997 284.6 621 71.0 84.3 54.2 13.0

53
Outflow
1988 237.2 51.9 71.4 5.2 26.4 823
1989 205.4 43.6 59.0 8.1 25.9 68.8
1990 230.8 56.6 67.5 6.6 26.0 74.1
1991 238.9 56.5 70.1 11.4 30.9 70.0
1992 227.0 59.0 627 9.8 57.6 37.9
1993 215.9 77.9 56.0 13.8 41.1 27.1
1994 1<xl.8 55.9 55.8 14.1 43.4 21.6
1995 191.6 69.5 45.8 8.0 49.4 18.8
1996 216.1 80.8 59.6 7.1 54.9 13.7
1997 224.5 75.4 53.1 122 00.4 23.4
Source: adapted from ONS figures, 1997, Table 2.6

As can be seen from Table 3.1, between 1988 and 1997, there was a steady
increase in work-related migration into the UK, rising from 46.9 thousand to
62.1 thousand people. This indicates increasing work-related mobility amongst
those sampled (258,000 people in 1997). These figures concur with the above-
mentioned figures derived from the Home Office on work permit issues
pointing to the increasing mobility of professional and managerial groups. A
similarly significant and, in fact, higher rise is also indicated by the figures of
work-related migration from the UK. These trends indicate a steadily increasing
number of people migrating into and out of the UK for employment-related
reasons. A more detailed breakdown of this trend is presented in Table 3.2,
which gives a breakdown of these trends by occupation, usefully separating the
professional and managerial population.

54
Table 3.2: International Migration, estimates from the International
Passenger Survey, time series: 1988-1997, thousands
Usualoccupation*
United Kingdom
Year All Professional Manual Student House- Other Children Employed
persons and and wives adults persons as
managerial clerical percentage
of the total

Inflow
1988 216.0 66.7 43.8 34.7 25.2 6.6 38.9 51
1989 249.8 75.5 48.8 39.1 31.3 6.2 48.8 50
1990 266.8 93.1 53.2 49.7 23.8 3.6 43.3 55
1991 266.5 80.5 56.1 44.0 32.5 3.6 49.8 51
1992 215.9 62.6 44.4 38.6 29.1 7.4 33.8 50
1993 213.4 65.9 42.9 45.5 19.6 4.3 35.1 51
1994 253.2 82.4 56.3 46.0 21.3 10.2 37.0 55
1995 245.5 86.4 46.4 59.2 16.3 5.9 31.3 54
1996 272.2 89.3 57.4 62.5 20.6 9.4 32.9 54
1997 284.6 93.2 44.0 78.8 17.6 8.7 42.2 48
Outflow
1988 237.2 67.6 51.6 36.8 16.5 17.4 47.3 50
1989 205.4 70.6 49.3 31.0 12.7 7.2 34.5 58
1990 230.8 74.5 56.3 39.7 14.0 4.0 42.3 57
1991 238.9 81.6 49.4 39.9 19.8 7.2 41.0 55
1992 227.0 81.9 46.9 39.8 14.7 6.5 37.1 57
1993 215.9 70.1 44.5 43.0 14.7 8.9 33.2 54
1994 190.8 55.0 48.5 36.7 14.7 8.9 26.9 54
1995 191.6 62.2 41.8 41.5 11.1 6.3 26.9 54
1996 216.1 83.8 46.3 33.4 12.4 1.4 28.8 60

5S
1997 224.5 85.5 48.0 44.7 15.5 6.0 25.0 59
Source: adapted from NOS figures, 1997, Table 2.7
*Occupation refers to regular employment prior to migration

What emerges from these figures is a clear increase in the number of

professional and managerial people moving across national boundaries and into
and out of the UK. The number of professional and managerial people corning
. into the UK rose from 66.7 thousand in 1988 to 93.2 thousand in 1997, despite
reductions in numbers in the early 1990's. Their percentage may be compared to
those in the manual and clerical category, which shows great stability over this
period and a fall in the case of the outward trend. However, according to Salt
(1997, p. 9) the number of corporate transferees into the UK appears to have
fallen between 1985 and 1996, from 29,004 persons to 21,925. This may be due
to a number of different and/or interacting reasons such as the high cost of
transfer or the impact of new technology enabling TNCs to transfer certain skills
through means other than traditional expatriation. As indicated by the last two
chapters, it is an attempt to explore these reasons and explain the impact of
technology that lies at the core of this thesis.

One main difficulty with these figures is that they treat the professional and
managerial group as a whole category. This means that the figures do not
distinguish between corporate managerial and other types of professional
transferees with clear consequences for analysing the specific place of these
different groups in the globalisation process, and for understanding the degree
of their potential openness to the impact of new technologies. In addition, the
figures do not give figures for internal transferees.

This section has pointed to some of the difficulties regarding the collection of
data on the movement of managers across borders. Expatriate managers - who
constitute a very small numerical component even within the general category
of professional and managerial - are likely to account for a very small

56
proportion of the total population classified as skilled migrants. Their
movement, therefore, remains a matter of qualitative significance and represents
a new trend in migration in the globalisation era.

Furthermore, the movement of the highly skilled is likely to increase with the
growth of globalisation, despite potential trade-offs between different skill
categories and new technology, or any changing forms of migration. Such
growth is considered as a significant manifestation of accelerating globalisation
processes, exemplified by the analysis that: 'Another new trend is a worldwide
shift towards migration of the highly skilled workers... As multinational
companies expand, they develop their own internal markets for skilled labour ...
The growth of multinational enterprise seems likely to spur the next big
development in the history of migration' (The Economist, 1997, p. 9).

3.4. Expatriates in the literature

The rest of this chapter is devoted to a consideration of key literature on

expatriates. It begins with an analysis of business and management perspectives
on expatriation. This is followed by an integration of aspects of these accounts
with approaches from other social science disciplines, including political
economy, economics, geography and sociology where they have concerned
themselves with the migration of skill and corporate knowledge in the
globalisation era. In order to lend some degree of structure and cohesion to the
consideration of a wide and varied range of literature, the latter part organises
the different strands of the literature relevant to the key themes of this research
as suggested in section 1.4 of chapter one.

57
3.5. Business development and Human Resource Management
approaches

Much of the literature on expatriates has concerned itself with problems

associated with expatriation, and with making expatriation work. Expatriate
managers are perceived - and increasingly explicitly discussed - as key elements
in the success (or otherwise) of globalisation strategies of TNCs in a fiercely
competitive environment. The key concern of this type of approach to
expatriation is the success of the movement of the highly skilled and mobile,
and the resolution of difficulties confronting TNCs in the management of
international assignments. Despite a number of overlapping themes emerging
from the common contextual base of business and efficiency-related
considerations, such approaches are concerned with the problems of expatriation
from a variety of positions. Some focus on issues relating to dual-career
families, stress and failure levels amongst the highly mobile (Forster, 1997;
Smith, 1992; Scullion, 1992, 1994; Harzing, 1995). Others approach the subject
from a gender-specific perspective concentrating on the severe under-
representation of women on international assignments (Adler, 1994a, 1994b;
Harris, 1993; Hardill, 1997; Hammond and Holton, 1993).

Expatriation is also discussed from an international business management

viewpoint with emphasis on Human Resource Management (Welch and Welch,
1997; Forster and Johnsen, 1996; Brewster 1988, 1992; Baruch, 1995, Harzing
1996).

The different approaches often address the movements and/or composition of

the highly mobile and those considered as highly skilled or possessing the
potential to acquire skills and experience deemed necessary for the international
growth and prosperity of corporations. It is commonly the mobility of
professional and managerial staff that is the focus of analysis, although as

58
mentioned earlier, generally, no clear distinction is made between different
groups of corporate managers and professionals. Also common is an
acknowledgement of the growing significance of the success of such managers
in an increasingly globalised economy. Globalisation goes hand in hand with
increased mobility of expertise. Furthermore, with increasing global
competition, the successful management of international assignments and of the
process of interaction of the global and the local gain growing and crucial
importance. It is in this context that Human Resource managers and TNCs are
encouraged to take a strategic approach to globalising their management
processes and systems.

This strand of literature is often written to demonstrate an operational or

ideological deficiency in the outlook of corporations such as lack of support for
families on international assignments in the resettlement process, lack of
involvement of Human Resource departments at the earlier stages of
internationalisation, or the neglect of potential women international managers. It
is also common to focus on difficulties relating to international assignments,
including failure rates, and problems associated with suitable career
development paths upon repatriation.

Consequently, there is a growing and (often prescriptive) literature on remedial

actions that need to be taken by TNCs to alleviate difficulties associated with
international assignments, such as the need to pay more serious attention to
cross-cultural training and more effective pre-expatriation preparations (see
Adsit et al (1997) and Manev and Stevenson (2001), for example).

It may be useful to summarise here a number of key points that are either
commonly made by these approaches are or of particular relevance to this study:

59
1. Although dual career issues have been gaining increasing importance in
recent years, there is general agreement amongst the authors on the
proportion of dual-career families being small; and the significance of the
financial sacrifices made by women in these family is debated (Bonney
and Love, 1991). Most accounts note that while the experience of
expatriation in terms of cultural adjustment processes, for example, is
varied, the overall monetary packages that accompany international
assignments can be extremely generous, even for dual-career families.

2. The extent of use of expatriate managers is seen as related to the growth

path of corporations, the degree of their international presence and their
organisational structure. As organisations move from domestic to global,
having passed through the international and multinational stages, their
use of expatriate labour changes (Adler and Mackie, 1990). It is at
international and global stages that they use expatriate managers the
most. The use of expatriates might thus, in general terms, be somewhat
dependent on the size and structure of the organisation. This dimension
of the discussion is taken up by other research that attempts to link
together the globalisation of knowledge and management systems with
various management capacities. Hickson and Pugh (1995), adopt and
develop a typology of managers using the broad term of cross-cultural
managers dividing them into international managers, expatriates,
technical specialists and occasional parachutists, each performing a
different function requiring differing periods of absence from the base of
a TNC. The link between this typology of managers to organisational
structure, and levels of centralisation or decentralisation of control is not
clear- cut. However, Bartlett and Ghoshal (1989), identify four key types
of international business structure. The most integrated type - the trans-
national organisation - maximises knowledge efficiency by developing
highly interactive units. While benefiting from flexibility at the local

60
 level, this type of business structure allows knowledge networks to
develop and access each other around the globe. The global organisation
represents the opposite extreme: it maintains full ethnocentrism (please
see 3 below) with the centre retaining full control and decision-making
powers, with the aim of producing standard products in different
locations. In between, are two other structures belonging to international
organisations where global developments in some activities such as
finance and R&D are centralised, but responsiveness to local markets is
present; and the multi-national organisations, where the centre maintains
a smaller degree of control and products and organisational behaviour are
locally modified 12. A key feature of transnational companies is that in
addition to great importance being attached to the transfer of TNC-
specific knowledge, the issue of corporate culture becomes particularly
significant. 'In addition to this [knowledge transfer] however,
transnational companies are unique in the importance they attach to
international transfers to strengthen corporate culture and to train
expatriates for future positions at other subsidiaries' (Harzing 1996, p. 7).

3. Corporations might employ a number of different policies towards the

global management of their operations: an 'ethnocentric' approach
whereby the significant positions in foreign operations are staffed by
expatriates from the home country; a 'geocentric' outlook employing the
'best' people for the job, regardless of nationality; or a 'polycentric' or
'regiocentric' one which, respectively, aim at developing local and
regional managers (Dowling and Schuler, 1990). In some intensely
service-based industries such as hotel and tourism, where service
provision is immediate, highly visible and localised, the polycentric and

12 In the absence of self-classification, it is very difficult to state where exactly the structure of each
TNC may fall, and given the organisational complexities of some TNCs, it is likely that some structures
may overlap. The corporations in the sample of this study include a variety of corporations at different
stages of internationalisation with a bias towards bigger TNCs. Please see Table 4.2 for a general
classification of ranking.

61
 regiocentric may be perceived as particularly desirable, and some
companies in the hotel and tourism sector. for example. may be using a
combination of the two approaches (Gliatis and Guerrier, 1994). Although
this may still largely only apply to the bulk of the workers or specialist
managers where local knowledge and expertise are important. with the
corporate management positions being filled by international managers
from the TNCs' internal labour markets (ILMs). In practice, and despite
formal procedures by some corporations aimed at recruiting host country
nationals (HCNs) and third country nationals (TCNs), the vast majority
of TNCs rely heavily on expatriates from the home country to run their
foreign operations (Scullion 1994; Rudolph and Hillmann, 1998).

4. There is some evidence that in addition to cost, factors associated with

the family including dual-career, stress levels amongst partners, failure
rates and other similar factors have an impact on expatriation (Smith
1992; Gupta and Jenkins 1985) with possible implications for
expatriation policies.

5. Some evidence exists that more efficient troubleshooting policies (shorter

trips and visits, for example) are being employed by TNCs. The
considerable increase in the volume of business travel in the last few
years is linked to this process (Salt and Ford. 1993).

6. Technological developments. particularly those in communications,

might be leading to other alternative management strategies (Salt, 1997;
Rudolph and Hillmann, 1998). Expatriate managers are carriers of
specialist expertise. Their value-adding potential may have the potential
of being transferred electronically at a cheaper rate. Such strategies may
also be materialising through the use of younger (and more likely to be
unmarried) and host country managers.

62
3.6. Other approaches

There are two points to be made regarding the rest of the literature presented
below. The first is that most international management and HR-related accounts
do not concern themselves with the main conceptual or analytical themes of this
research. While some discuss aspects of the role of expatriates, such a role is
often considered in the context of corporate efficiency and cultural adjustment
of expatriates to a new environment. Brewster (1992), for example, points to a
'paradox of adjustment' faced by expatriates and explores their role as
'teachers' and/or 'learners' when they are situated in other cultures. Another
example is a (quantitative) study by Harzing (1996), which considers the
relative importance of 'functions of expatriation', and has also provided useful
background information for the current study (please also see 2 in section 3.5
above).

However, the nature of the role of senior expatriate managers in global

economic restructuring, the distinctiveness of their skill(s) and the importance
of this for the fulfilment of this role; or the degree of their potential replacement
by new technology do not appear to be areas of specific concern in this strand of
the literature. Indeed, as was mentioned above and will be detailed in the next
chapter, the potential trade-off between expatriation and new technology has
been indicated by previous research as an area in need of further research; and
constitutes a key reason for conducting this study. Nonetheless, this section
makes an attempt to integrate as much as possible business and management-
centred approaches into a survey of other relevant literature. It therefore
presents literature drawn from a number of relevant disciplines, and structures it
around key dimensions from which international managers, including expatriate
managers have been studied.

63
The primary dimensions which are most relevant to this study and around which
some form of focus and cohesion might be achieved here are suggested as:
expatriates as knowledge carriers; expatriates as a new breed of international
managers constituting a new global elite; and expatriates as a special group of
migrants.

The second point is that although key literature on each dimension is presented
separately, the concept of knowledge and the process of its production and
circulation around the globe interconnect the three categories. In other words, it
is invariably the notion of knowledge - materialising in some form of "value-
adding" potential and/or specific skill(s) - and its transfer that appear to
constitute the key features in the production of analyses by the contributors.

3.6.1. Expatriate managers as knowledge carriers

As much of the literature on expatriates contains the concept of knowledge, and

its transfer around different units of a corporation scattered around the world, it
is important to clarify what is meant by knowledge. It is acknowledged here that
this is not an easy task; and that despite investigations of knowledge and ways
of knowing going back to ancient times, the definition and source of knowledge,
its production as well as its relation to epistemological and ontological questions
continue to remain the subject of academic inquiry, including in recent research
(see Goldblatt, 2000, for example). In the context of the literature on
global/expatriate managers, however, the following definition appears to be the
most comprehensive. 'Knowledge systems, whether implicit or explicit, are the
'glue' which holds together or integrates the diverse activities and units [of
TNCs]. The component parts of such systems, at least with reference to
management and organisation; include competencies (expertise, technique, skill,
etc.), values (beliefs, preferences, etc.) and language. The systems themselves

64
can range from the social-technical frameworks necessary to operationalise
common work design in a global production, to the corporate culture which
facilitates common values and employee commitment to the company'
(Thompson et ai, 1993, p. 1).

The idea that there is an emerging group of highly mobile, highly rewarded and
powerful people managing - by way of transfer of knowledge and expertise-
new production and production processes around the globe, is considered in the
literature by writers with different perceptions of globalisation. These managers
are primarily perceived as knowledge and network experts, producing, utilising
and communicating knowledge within the network enterprise such as that
described by Castells (see section 2.9 of chapter one).

Salt (1997) offers a useful distinction between two processes in his explanation
of the decline in the use of the secondment system employed within the internal
labour markets (ILMs) of international corporations in the UK context. The first
relates to the cost of secondment (expatriation), in its many manifestations,
including monetary strain on the corporation and the cost to the employees in
terms of stress, potential job sacrifices by women in dual-career families and
other negative effects of a relocation on the family. The second, he refers to as
more of a 'conceptual' trend. 'What is being transferred is expertise. We can
think of the individual as a repository of expertise. Where skills are manual,
then a physical presence is required. But with many "brain skills" it is
knowledge that is required and needs to be relocated. In a growing number of
circumstances this can be achieved in a variety of ways, not necessary requiring
traditional forms of secondment, or indeed secondment at all' (Salt, 1997, p.
10).

While this is a useful way of thinking about the migration of skill and expertise,
like most other accounts of the movement of the highly skilled, it appears to

65
assume a clear and universal understanding of the notion of 'skill' and
'expertise'. A definition of these attributes is not offered, nor is specific analysis
made of why they are so important for globalisation. A different approach is
adopted by Tang and Wood (1999), who argue that the 'skill' that forms the
basis of the expertise under discussion here, may not be accumulation of
knowledge via the usual route of training and education that directly contributes
to the production process. It is a type of skill that is gained through experience
and connections in social and corporate networks. 'Our 'highly-skilled' workers
are a small group - managers, entrepreneurs, designers, engineers, and other top
business professionals - and their skills are not the usual sort of human capital,
acquired by purposive investment in education and training ... and the high
wages they command are better thought of as a rent rather than a return to
investment' (Tang and Wood, 1999, p. 4).

What emerges from these formulations is that notions of skill, expertise and
knowledge do not appear to be universally understood as meaning a given and
clear quality. Recent research on knowledge and its production confirms a
diversity of understandings of what constitutes knowledge; points to its meaning
being dependent on the socio-economic and cultural context; and importantly, to
the possibility that it may be socially, culturally and politically constructed
(Goldblatt, 2000).

3.6.2. Global managers as a new global elite

Increased globalisation of production, facilitated and expedited by

unprecedented technological innovation, has necessitated the development of
new management systems that are qualitatively different. While a distinction
can be made between international managers and management systems, there is

66
clearly some interactive and dynamic relationship between systems and the
people they contain (Thompson et ai, 1993).

Kanter (1995) defines the new global managers as follows: '... The
cosmopolitan class is a small global elite of business leaders creating powerful,
border-spinning networks. These cosmopolitans have unlimited opportunities
because of their ability to tap resources or gain access to knowledge anywhere
in the world ... Cosmopolitans are card-carrying members of the world class -
often literally card-carrying with passports or air tickets to admit them. They
lead companies that are linked to global chains. Comfortable in many places and
able to understand and bridge the differences among them ... ' (pp. 22-23). She
refers to a new social global divide, between the 'cosmopolitans' and the locals,
which has replaced the traditional division between managers and workers in
the industrial economy. ' .. .Indeed, it is because cosmopolitans bring the best
and latest concepts, the highest levels of competence, and excellent connections
that they gain influence over the locals' (ibid).

Based on her findings of a major survey of 2,650 business managers in five

major US cities engaged in global production and distribution, Kanter (1995),
reports finding specific divisions of labour across theses operations. She divides
the labour involved as thinkers (those who specialise in concepts and
innovation-Boston, for example, is seen as one city that is inhabited by those
whose brain power shapes the global economy); makers (blue-collar workers
who execute actual production tasks); and traders as people involved in
networking and connections.

Other accounts (Reich, 1991, for example) also refer to the emergence of a new
world class of corporate managers who create, embody as well as spread around
the world the latest business know-how; the standard-setters, the shapers of new
management technologies and practice. 'A growing cadre of global managers-

67
supranational corporate players, whose allegiance is to enhanced world-wide
corporate performance, not to one nation's economic success ... We are
witnessing the creation of a power from capitalism, practised globally by
managers who are more distant, more economically driven - in essence more
coldly rational in their decisions, having shed old affiliations with people and
place' (Reich, 1991, p. 77).

Salt (1997) also hypothesises that a number of factors including the costs of
repatriation, localisation of skills acquisition through, for example, sales
networks or joint ventures and more efficient information technology may be
leading to the evolution of a 'highly skilled elite, with very specialised skills' (p.
10).

Other contributors take up the domination of power by this skilled elite. Massey
(1991) discusses the 'power-geometry' of globalisation, and places
differentiated degrees of mobility and movement around the globe in the context
of an analysis of social differentiation. She sees certain groups of people
including those organising global economic and financial flows and managing
trans-national operations as being 'in charge' of the time-space compression
discussed in the last chapter. She writes: ' ... at the end of all spectra are those
who are both doing the moving and the communication and who are in some
way in a position of control in relation to it [globalisation]' (Massey, 1991, p.
26).

An analysis of the position of those 'in charge' of globalisation processes is

taken up by Sklair (1991), who argues that global managers attached to TNCs
constitute a new 'trans-national capitalist class'. Sklair considers this class as
the major player of transnational practices (economic, cultural and political) and
sees its interests served by the fulfilment of the interests of the TNCs. In short,
'This class consists of those people who see their own interests and/or the

68
interests of their nation, as best served by an identification with the interests of
the capitalist global system, in particular the interests of the countries of
capitalist core and the trans-national corporations domiciled in them' (Sklair,
1991, p. 8).

The idea that such a group of people actually exists and is currently managing
global capitalism, and constitutes a class/group of a free-floating knowledge
elite has, however, been questioned from other angles including organisational
and management-centred accounts. At the heart of counter arguments lies a
suspicion that the 'convergent' thesis as extended to the management of
globalisation is not a very strong one. The ability of a group of managers who
can function similarly and as effectively in all cultures may be constrained by
cultural differences amongst the workforces of even the most international
corporations (Hofstede, 1991; Hickson and Derek, 1995).

In addition, the operational ability of even transnational corporations to

transcend national boundaries in the transfer of knowledge may be questionable
and existing research (Scull ian, 1992, others) indicates that TNCs do not
necessarily take a strategic view to nurturing truly global managers, and that
international operations and assignments are often approached in an ad-hoc
manner. Much of the literature on international management is indeed written to
point out the necessity for TNCs to take a more strategic approach towards the
creation of global managers as crucial instruments in successful globalisation
strategies.

Taking a case study approach to examining issues of knowledge transfer and

global/local integration within two highly integrated transnational organisations
(Volvo and Abba Hotels), Thompson et al (1993) found that co-ordination and
control systems were highly centralised and dictate local standards of operation
and behaviour. According to their perspective, the notion of 'supranational

69
trouble shooters' in the form of highly skilled and mobile executives is not a
useful way of understanding the globalisation of expertise; the
internationalisation of management systems may be better understood by
looking at managers who stay close to corporate headquarters but have a broad
overview of the whole enterprise. What their work does suggest, however, is
that the pattern of control may vary in accordance with forms of ownership; and
that the globalisation of corporate knowledge by TNCs is an inherently uneven
process. Even Volvo, which represents a highly integrated corporation, does not
have equally integrated operations across the globe. In both cases, however,
Swedish (as opposed to "free-floating" managers) were present at senior levels
in a variety of capacities.

This is in line with Hymer's analysis of power relations within the

multinational/transnational corporation as they relate to divisions of labour and
of status arising from the globalisation of production (please see section 2.10 of
chapter two). What has changed and is perhaps more clearly evident since
Hymer's formulations in the 1970's, is the changing nature of such power
relations from a traditional (for example North-South or core-periphery)
geographical divide to a social one; the case of the over-representation of
American and Japanese expatriate managers in the UK (see section 3.3) might
be an example of this new transformation.

3.6.3. Expatriates as special migrants

As mentioned in the introduction, studies of migration and migration literature

increasingly acknowledge the movement of global expertise as a new
phenomenon, and incorporate in their analysis accounts of such movements
across the globe. Furthermore, as discussed in section 3.3, official statistics
define anybody staying for longer than one year as a migrant. The participants

70
in this study lived and worked in the UK (and some continue to do so) for a
period ranging from three to twelve years. Although hitherto little research
exists on expatriates or global managers specifically as economic migrants,
recent literature does begin to attempt to study the migratory paradoxes created
by globalisation, which contains within it the movement of such migrants. Miles
(1999) develops the idea of a changing political economy of migration that has
come about as a result of contradictory state control of migration and a
polarisation of new migratory movements between different classes of migrants.
Castles and Miller (1993) discuss this type of migration explicitly in the context
of global economic restructuring, arguing that 'Highly skilled migration grew
rapidly in the 1980's and 1990's, and is a key element of globalisation' (p. 92).
The same authors consider the 'skilled transients' as 'agents of modernisation
and social transformation' who 'can go anywhere in response to attractive
combinations of income levels and lifestyles. This is one of the factors
contributing to the concentration of innovation and control in the "world cities"
which dominate the global economy' (ibid.).

In common with other types and groups of migrants, skilled migrants including
expatriates, move within geographies via different routes. TNCs may attract
their international managers from the international labour markets at large, or
move them around the globe within their internal labour markets (lLMs).
Findlay (1995, pp. 519-520), for example, sees skilled migration occurring
within a diversity of migration channels. But the most important channel is
probably through the ILMs of TNCs (Castles and Miller, 1993).

At the heart of this approach to a consideration of highly skilled and mobile

expatriates as special migrants, appears to lie a concern about new
developments in international labour markets and the restructuring of the global
economy. King (1995) points to the rapid growth of international skilled
migration as one of the clearest manifestations of the 'globalisation of economic

71
life, and of labour markets in particular' (p. 24). His analysis links the
emergence of globalisation with global economic restructuring, presenting an
explicit account of how the process of globalisation, which has entailed the
restructuring of production processes and local and regional labour markets, has
polarised international labour markets. 'This polarisation also reflects an
emerging duality between a primary labour market of well-paid, secure and
pensionable jobs and a secondary labour market of poorly-paid, insecure and
often part-time employment. Migration processes are affected accordingly, so
that the skill profile of today's international migrants tends to reflect the polarity
between highly-trained professionals, scientists and technicians on the one hand,
and low-grade casual, flexible service labour on the other' (ibid., p. 23).

Hirst and Thompson (1996), however, are doubtful of the existence of an

international market for labour as such. 'The supposed era of "globalisation" has
not seen the rise of a new unregulated and internationalised market in labour
migration. In many ways, for the world's unprivileged and poor there are fewer
international migratory options now than there were in the past' (pp. 30-31).
Their thinking on this issue reflects their traditionalist position as outlined in the
last chapter, warning against what they consider are exaggerated perceptions of
globalisation processes and also pointing to the divisive and unequal power
relations contained within "global" labour markets.

Brah et al (1999) point to the movement of the highly skilled as one exception
in generally restrictive contemporary migratory movements. The exception 'is
the "club-class" migrant - predominantly male and most likely to be white -
with high-level professional or managerial qualifications and technical skills,
employed within the 'core' sectors of the world economy' (p. 6).

Tang and Wood (1999) integrate the concepts of globalisation, skill,

international labour markets and wage inequalities to develop a theoretical

72
model, which produces a wage paradox in relation to segments of the labour
markets that have been globalised. They argue that globalisation has created a
double effect in such labour markets. On the one hand, it means that there may
be a greater convergence of wages between some less-skilled workers in rich
countries and less-skilled workers in the poorer countries, while on the other, a
greater divergence of wages is occurring between the highly skilled and the less-
skilled workers within counties. Inequality in labour markets between and
within countries is a primary cause of increasing social polarisation in the
globalisation era. Tang and Wood therefore conclude: ' ... globalisation has
been a major cause of recent changes in wage inequalities. between and within
countries' (p. 30). This is a particularly pertinent study because while such
polarisation is well documented in general terms. studies pointing to the highly
skilled in this process are rare.

A conceptually similar but distinctive paradox of globalisation is identified by

Bauman (1998), who points to mobility itself as developing as a significant
stratification factor at the global level. He points to the emergence of an
increasingly polarised hierarchy of mobility at the two extremes of which lie
very different types of migrants. The welcomed, desired and appreciated
migrants amongst whom he places global businessmen, and global cultural
managers (as well as some academics) and the undesirable poor migrants who
have increasingly been forced to stay out by national states of the rich countries.
Bauman makes explicit connections between globalisation, divisions of labour,
new technology and mobility. 'Once emancipated from space, capital no longer
needs itinerant labour (while its most emancipated, most advanced high-tech
avant-garde needs hardly any labour, mobile or immobile) ... The widely noted,
increasingly worrying polarisation of the world and its population is not an
external, alien, disturbing 'spoke in the wheel' interference with the process of
globalisation; it is its effect' (p. 93).

73
A similar dichotomy of mobility and movement is discussed by Hoogvelt
(1997), who ascribes the mobility of 'knowledge workers' and their ability to
command high wages globally to their position in the international division of
labour. International production in the globalisation era as characterised by high
value-adding in contrast to low value-adding activities, allows capital to be
mobile at the lower end of the production chain. She argues that capital can
search freely for cheaper labour and raw materials across space (and in all
geographies), minimising and equalising wage rates at the lowest denominator;
while at the higher end of the spectrum, it is knowledge workers and managers
who are mobile in search of the highest financial rewards for their services.

3.7. Conclusion

This chapter began by presenting some definitions and existing data on

expatriate managers (also referred to as international managers, global
managers, transferees or secondees). While acknowledging the paucity of data
and the limitations of general classifications, it proceeded to present a general
picture of the trends in the migration of the highly skilled as a crucial dimension
of globalisation.

The chapter discussed key strands of literature written on these managers from a
variety of viewpoints and disciplines. The first strand of the literature
considered contains business and management-centred accounts, which provide
useful descriptions of some of the features of expatriation ranging from how and
when a TNC might use expatriates to some of the problems faced by TNCs such
as the cost of expatriation.

The last section of the literature review attempted to pull together the different
approaches around the key questions of this research. These are concerned with

74
expatriate managers as carriers of corporate knowledge; as a growing and
increasingly mobile and important global elite; and as a special group of
migrants created by globalisation.

International and expatriate managers are seen as 'knowledge carriers',

knowledge and its transfer around the world in the form of the materialisation of
certain types of skill being seen as a crucial element in the success of the
network enterprise. A working definition of knowledge was introduced in
section 3.6.1, indicated their knowledge and skill(s) as containing both technical
and non-technical components including corporate belief and value systems;
and acting as the 'glue' that holds knowledge systems within the enterprise
together.

Section 3.6.2 presented the literature written on global/expatriate managers as a

new global elite. This group of highly mobile people is described as an elite or a
class of people who possess certain powers and represent certain power
relations in connection to the materialisation and implementation of
globalisation. The existence of a truly global and mobile elite, free from the
home country or core culture of TNCs remains disputed.

The last strand of the literature - organised around the theme of expatriates as
special migrants - was presented by 3.6.3, which describes the first factor that
makes expatriate/international managers special as their being welcomed. This
is particularly important in the context of unprecedented restrictions placed by
Western governments on other migrants in the globalisation era. Moreover, they
are perceived as representing a special case because their freedom of mobility
brings them immediate financial rewards and status. They are seen as active
agents of global transformation, important aspects of which have been
increasingly segmented global labour markets and wage polarisation.

75
The chapter attempted to establish - conceptually and empirically - a number of
interlinkages between the contextual analysis of globalisation undertaken by the
last chapter and the specificity of the subject matter of this research as the focus
of this one. These include the changing political economy of production and of
migration now interacting to shape some of the key paradoxes of globalisation:
high value-added versus low value-added economic activity; corresponding
divisions of labour over space based increasingly on social rather than
geographical relations; segmented "global" labour markets and associated
polarisation of income and mobility.

What is perhaps also worthy of special note here is that the literature presented
by the chapter is produced by contributors from a number of social science
disciplines who also have very different interpretations of the impact of
globalisation as discussed in the last chapter. They do, however, often describe
the same processes and point to similar dimensions of globalisation. For
example, the emergence of a knowledge elite and the accompanying global
division of labour is clearly acknowledged, described and celebrated by Kanter,
an influential advocate of globalisation and a key positive globalist but viewed
with grave concern by some of the other approaches presented.

The literature presented here has both informed the research process of this
study, and been utilised in understanding its key findings. Although a wide
range of literature has been consulted in the research process providing very
useful contextual framework for this study, the specific focal questions of this
research, that is the distinctiveness of the role of senior expatriate managers in
the era of global economic restructuring; the specific nature of their skill; or the
degree of the substitutability of these managers with new technology do not
appear - to the author's knowledge - to have not been extensively researched
before.

76
 CHAPTER 4

Research Strategy and Methodology: Theory and Practice

4.1. Introduction

This chapter begins with a conceptual and theoretical analysis of the

methodology employed by this study, presenting a general account of
qualitative research methods on which the research is primarily based (please
see also an element of quantitative analysis conducted for the study as detailed
in section 4.7.1 and reflected by Table 4.3). The chapter next presents a
discussion of the specific type of qualitative method used, namely the grounded
theory method. A discussion of the rationale for using this method and of its
application to the essential categories and dimensions of the research as well as
the research process is then presented. The chapter ends with the presentation of
a matrix system for collecting, organising and integrating the data that also
serves as a basis for the development of theory in the final chapter relating to
the main findings of the research.

4.2. Qualitative research: underlying concepts

Creswell (1998) defines qualitative research as ' ... an enqUIry process of

understanding based on distinct methodological traditions of enquiry that
explore a social or human problem. The researcher builds a complex or holistic
picture, analyses words, reports detailed views of informants and conducts a
study in a natural setting' (p. 15).

77
Qualitative research has increasingly been utilised by a wide range of theoretical
perspectives and social science disciplines as research where findings are
produced through a primarily non-mathematical process of data collection in
order to identify concepts and relationships in raw data and to produce from
these a theoretical framework or proposition (Easterby-Smith et ai, 1991;
Mason, 1996; Strauss and Corbin, 1998).

Creswell, in Qualitative Inquiry and Research Design (1998) examines five

important research traditions embraced by qualitative research, which include,
biography, grounded theory, ethnography and case study research. Typically,
research methods can include interviews, observations, focus groups, records,
videotapes and some limited quantitative data, for example, background
information or tables (Strauss and Corbin, 1998; Mason, 1996; Creswell, 1998).

Such research characteristically takes place through researchers interacting with

their subjects to collect or generate information. lanesick (1998) thus states: 'its
[qualitative research] perspective is naturalistic and interpretative with regard to
the understanding of human experience. It stresses the socially constructed
nature of reality ... ' (p. 116), with the participants in a study formulating and
creating meanings with regard to their experience of, for example, a
phenomenon or a process.

This means that, in general, qualitative research would not accept the existence
of an objective reality or set of facts which can be recorded, analysed and
understood in the context of a universally embraced conceptual framework, and
as such disputes the approach of the positivist tradition, generally embodied in
the quantitative research paradigm (Easterby-Smith et ai, 1991; Denzin and
Lincoln, 1994). It involves the analysis and interpretation of phenomena in
relation to the meanings developed by participants in the research. Therefore,
qualitative researchers would generally consider that "reality" is primarily a
subjective concept, created from multiple dimensions and understandings.

78
The data generated through such a process is likely to be capable of unravelling
meanings and underlying explanations, in contrast to quantitative research,
which is usually primarily used to identify or create trends and correlations.
Importantly, this way of investigating a subject matter creates the possibility of
gaining a multi-dimensional insight and a detailed understanding. Creswell
(1998) thus emphasises qualitative research as being 'a complex holistic
picture ... that takes the reader into the multiple dimensions of a problem or issue
and displays it in all its complexity' (p.15).

In short, the conceptual basis of qualitative research is: 'grounded in a

philosophical position which is broadly 'interpretivist' in the sense that it is
concerned with how the social world is interpreted, understood, experienced or
produced' (Mason, 1996, p. 4).

Strauss and Corbin (1998) outline three primary strands involved in qualitative
research, which as broadly summarised here comprise firstly, the collection of
data from a variety of sources; secondly, the procedures used by qualitative
researchers to interpret or analyse and organise the data through a process of
coding; and thirdly, the stage relating to the production of findings. This process
will be analysed in more detail below as part of the discussion on the grounded
theory research tradition.

4.3. The grounded theory tradition

This research has used the grounded theory method of qualitative research as its
primary method of investigation. This research method was developed by
Glaser and Strauss in their work The Discovery of Grounded Theory (1967),
which aimed to provide legitimacy to qualitative research. It also sought to unite

79
theory development and empirical research within the research process, hence
the label 'grounded theory', and the development of the procedure that ensures
the theory is embedded in the actual, methodically collected and analysed
research data, as outlined in more detail below. The qualitative researcher, as
Creswell (1998) puts it might: 'choose a grounded theory study to generate or
elaborate a theory' (p. 40) and allows the theory to emerge from the data.

Specifically then, the primary value of the grounded theory method is that it
facilitates the systematic collection and analysis of data, as well as the
formulation of theory. A particular feature of this methodology is that the data
collection, analysis and the final theoretical perspective are very closely linked,
combining to develop meanings and explanations that emerge from the data.
Theory arrived at through this process is based on ' ... data, systematically
gathered and analysed through the research process. In this method, data
collection, analysis, and eventual theory stand in close relation to one another'
(Strauss and Corbin, 1998, p. 12) with the researcher going 'back and forth'
within the data in order to develop concepts and attributes associated with
research categories and sub-categories.

The particular procedure employed here is referred to as 'constant comparative

method' (Glaser and Strauss, 1967) whereby the researcher investigates the
same issues, concepts or processes in different situations and settings. In the
case of this research, for example, the different settings would relate to the 23
TNCs included in the sample.

An important feature of this method is that in the process outlined above, 'A
researcher does not begin a project with a preconceived theory in mind, (unless
his or her purpose is to elaborate and extend existing knowledge). Rather, the
researcher begins an area of study and allows the theory to emerge from the
data' (Strauss and Corbin, 1998, p. 12). A related central feature of the

80
grounded theory method is commonly referred to as allowing a process where
the 'theory comes last' and where the theory and explanations are allowed to
emerge directly from the data by a process known as 'inductive reasoning'
(Glaser and Strauss, 1967; Strauss and Corbin 1998, Mason, 1996).

It is, however, arguable whether absolutely pure forms of this research strategy
(or indeed of other methods) have ever been used or followed. Mason (1996)
identifies three main philosophies in social science research: 'theory comes
first' through mainly deductive reasoning; 'theory comes last' through inductive
reasoning; and the 'dialectical approach' where data generation, analysis and
theory are integrated. She does, however, emphasise that these approaches are
unlikely to ever be practised in a 'pure' form and that ' ... most research
strategies probably draw on a combination of approaches' (p. 142). In a similar
vein, Patton (1987) points to the possibility (and often the practice) of
combining inductive and deductive processes, especially where exploratory
work has been undertaken to find out what the key questions are. In the case of
this research too, while the philosophy adopted is closest to the second and third
above-mentioned positions, the conduct of detailed exploratory interviews at the
beginning of the research process combined with the influence of existing
literature on the initial categories and on the key questions asked of the
participants (giving the process some degree of overall structure) means that the
research did not start in a total conceptual vacuum.

As mentioned earlier, the grounded theory method sets down a procedure

known as 'coding' for recording and sorting categories of information, and for
establishing conceptual links between data and theory (Glaser and Strauss,
1967; Miles and Huberman 1994; Strauss and Corbin, 1998). The coding
procedures are detailed below.

81
The first procedure is known as 'open coding', whereby categories of
information are created through very close examination of the data text and
close immersion in the data, when the data is fractured or 'sliced' (Mason, 1996,
p. 143), followed by a thorough process of sorting, coding and comparisons.
Open coding is followed by a procedure known as axial coding, which involves
reassembling the data, through the development of links between a specific
primary category (or categories) to a series of related sub-categories (Strauss
and Corbin, 1998; Bryman and Burgess, 199; Creswell, 1998). The next stage is
referred to as 'selective coding', whereby the main or core category is
systematically related to other categories to formulate conditional propositions
(or hypotheses). Creswell describes this stage as when the researcher 'writes a
story that integrates the categories in the axial coding model' (Creswell, 1998,
p. 57), with a view to setting out theoretical propositions.

4.4. Rationale for the use of qualitative research and the grounded
theory approach

This study used a qualitative research method following the prinCiple that such
an approach can be used to investigate particular topics about which little is
known, or where a gap in knowledge has been identified. Creswell, for example,
writes: 'The strongest and most scholarly rationale for a study ... follows from a
documented need in the literature for increased understanding ... about an
issue ... and a qualitative study may fill a void in existing literature, establish a
new line of thinking or assess an issue with an understudied group or
population' (Creswell, 1998, p. 94).

The investigation of both overall themes of this research (please see section 1.1
of chapter one) was undertaken largely because of an identified gap in existing
knowledge; and a lack of clarity over the nature of the skills possessed by

82
(senior) expatriate managers which would have made the issue of their potential
substitution or replacement difficult to research.

As mentioned earlier, the primary purpose of this research was to gain a clear
insight into and a detailed understanding of the following:

1. The role, place and function of senior expatriate managers in the

globalisation process, and
2. The impact of new technology on the above and on expatriation.

The reasons why the grounded theory approach was used in this particular study
are as follows. As mentioned in chapter three, whilst there is a comprehensive
and growing body of literature on the subject of professionaVmanagerial
expatriation, particularly when written from the point of view of Human
Resource management studies, the researcher found that most of this literature
does not discuss or explore the specific nature of the skills or the reasons for
their being so important for the globalisation process. As detailed and discussed
by the last two chapters, the sample of this study and other expatriates are
invariably referred to in the literature as the 'highly skilled'. Although a very
limited number of the more analytical accounts presented in chapter three, do
begin to make general references to how these skills are acquired by
internationaVglobal managers, the specific nature of such skills or the reason(s)
for their being so necessary for globalisation and thus so highly rewarded, have
not, to the author's knowledge, been analysed in a comprehensive manner.

In addition, and equally importantly, the literature referred to a gap in existing

knowledge and research concerning the impact of new technology on expatriate
managers and international assignments, pointing, in particular, to the
possibility of its having a substitution effect on expensive repatriation (Salt,
1997; Rudolph and Hillmann, 1998). Such potential substitution effect had not

83
to date been explored in any previous research, and consequently the nature or
scope of any substitution effect had not been defined. The literature thus
provided the researcher with a stimulus to explore important dimensions in need
of further development, inherent to the grounded theory approach. As
mentioned in chapter one, this was the main initial impetus for undertaking this
research and although the impact of technology is treated as a second core
category, this does not imply empirical or conceptual subordination to the first
core category relating to the role of senior expatriates. Indeed,. the two
categories are inseparably linked and the main reason for analysing and
presenting the role of senior expatriates as the first category is a logical one;
without understanding what it is that these managers do at the global level it
seemed impossible to ascertain whether and how they may be open to
replacement by new technology. The theoretical propositions advanced in final
chapter (nine) are based on how these two core categories were found to be
interacting in their multiple dimensions.

The researcher considered that the most appropriate way to gain an

understanding of the gaps in knowledge referred to above was to investigate the
meanings that those responsible for managing this type of migration across the
globe attached to the role of senior expatriates in the process of globalisation;
and how they defined the particular skills and experience that were sought in
these managers. The same methodological philosophy was adopted in relation to
the potential substitution impact: the participants were asked to define and
discuss the impact of new technology on expatriates and expatriation and to
consider its potential to replace them. These issues were investigated through
asking open-ended questions (attached as Appendix C) about the role of senior
expatriates in the globalisation process and the distinctive contribution that they
were seen to be making, as well as the impact of technology on expatriation.

84
However, an important methodological point needs to be made here regarding
the degree of structure attached to this study. Although the questions posed to
the participants were open-ended, the interviews conducted for the study are
referred to as semi-structured (please see section 4.5.1) because, as mentioned
earlier (see section 4.3), the overall boundaries of the research questions had
been informed by existing literature and by exploratory work.

In the tradition of the research methodology detailed earlier, the research

process took into account issues relating to the interaction of data organisation,
analysis and interpretation from the outset of research design. Please see Table
4.5 on page 102.

The thematic interview questions were designed systematically and developed

in light of the fact that existing literature on the subject had pointed explicitly to
gaps in current knowledge; and contained a lack of clarity regarding the concept
of skill, indicating a conceptual void in current analysis. Equally importantly,
they had benefited greatly from the discussions of the exploratory interviews. At
the same time, the questions posed were flexible and open to a degree that
allowed the development of propositions to be shaped and directed by the
participants' freely formulated accounts and analyses.

The researcher saturated the categories through the interviews with a group of
senior expatriate managers, until no significant or new further information could
be found (Creswell, 1998; Mason 1996, for example) and transcribed and
studied the interview data in very fine detail. In this and throughout the coding
process, the researcher was influenced directly by the language and expressions
used by the participants in this study and by the meanings which they gave to
and conveyed regarding their experiences. Throughout the chapters which detail
the key findings of this study (chapters five to eight), it is the participants'
thoughts, interpretations and formulations that are constantly present, shaping

85
what emerges as multi-dimensional analyses regarding the particular questions
asked by each category and sub-category.

The next section further details the application of the methodology and the key
dimensions of the research process.

4.5. The research process

The research process, as refereed to here, incorporates different dimensions and

elements that made up the various stages of the study. The key aspects are
detailed separately below.

4.5.1. Sources of data

The research is based on the following sources of data:

a) Standardised, open-ended semi-structured and in-depth interviews:

In line with the grounded theory method of inquiry, the interviews were
conducted by asking each participant the same set of open-ended
questions, with no pre-coded or pre-determined categories of answers.
The key purpose of the interviews was to gain a true and detailed
understanding of the meanings and interpretations attached to the role of
expatriate managers in the global economy and the globalisation process;
and of how this role may be being affected by significant developments
in new technologies (or by other factors such as changing composition of
expatriate managers potentially providing cheaper sources of labour to
the TNCs). The total number of interviews with TNC managers was 30 13 ,

13 For details of TNCs and the managers interviewed, please see sections 4.7.1 and 4.7.2.

86
 and represents the principal source from which the focal themes of the
research have been informed and its key propositions developed (please
see chapter nine).

b) Expatriate women's group:

Very early on in the research process, it became clear that expatriation
involved more than the movement of just one individual, usually a male
manager. The expatriate women's group evolved naturally from the first
exploratory interviews 14 and also from contact with the expatriate school
(please see c below). As mentioned in chapters two and three, a whole
infrastructure is attached to this type of migration, including
expatriate/international schools created for the children of international
managers. The expatriate women's group is part of a bigger parents'
group attached to the school through formal structures and enjoys a
considerable degree of power including the recruitment (primarily from
North America or other international branches of the school) of the
highest levels of administrators for the school. Regular and frequent
contacts with the group (which included the spouses of many of the
managers interviewed) and also with other women and families who were
not regular attendants, were maintained throughout the research period
(four years) and have in fact been on-going mostly until the families
repatriate and in a number of cases remained after repatriation.

The group was attended by (mostly) women parents who have

accompanied their partner on an international assignment. In return for
the researcher offering expatriate spouses advice and practical assistance
through organising and facilitating workshops on education and (mostly)

14 At these interviews. the researcher was asked by the male managers if she would contact their spouses
in order to explain possibilities and opportunities available for education and personal development in
London and the South East. The managers saw this as complimentary to what was offered by the HR
departments of their TNCs as it would be offered by someone working inside the education system in
the UK.

87
voluntary employment in London and the South East, she was allowed to
join the group and take notes of the discussions, seminars, and meetings.
This group provided invaluable insight into the greater context of
expatriation, as a migratory process involving whole families and
communities. Close contact with the group also ensured that an
understanding of the context of expatriation went beyond the families
included in the sample. An important factor here was that the researcher
came into close and regular contact with many expatriate families who
were not attached to a senior expatriate; they were accompanying
expatriates who worked, for example, as engineers, computer and finance
specialists and ecologists.

Another useful dimension of this type of contact was to gain first-hand

insight into dual-career issues, identified by some of the literature as
increasingly important. A (somewhat unexpected) outcome, however,
was that dual-career issues did not appear to present a problem for these
families. While some women welcomed (and a few utilised) a training
and personal development allowance offered to them by the TNCs, the
expatriate package alone was commonly expressed as a very good
enticement to move. This is in line with the findings of Bonney and Love
(1991) referred to on page 60.

The group was also the source of many of the interviews, which took
place through trust and relationship building between the women and the
researcher. Here, the researcher was seen as a teacher working towards a
research degree and a "local" resident (living close to the schools and to
many of the managers' workplaces, and TNC headquarters in the South
East). Both factors were seen as important by the group and by the local
expatriate school in allowing the researcher into the many discussions as
well as the numerous events (for examples, seminars, workshops and

88
 discussions on expatriation, successful resettlement in the UK,
repatriation and mobility) which are organised on an on-going basis for
the expatriate community.

However, while the information and insights gained through contact with
these women; and gaining interview access to otherwise unavailable
global managers were extremely useful, the data presented in chapters
five to eight regarding the themes of the research are solely based on the
interpretations of the managers themselves, acquired from their
interviews.

c) The expatriate school:

A further two interviews were undertaken with a Director of Admissions
of an expatriate school housing some 700 expatriate children, and the
Head of one of the divisions of the school. 15 The purpose of these
interviews was to gain further insight into the central infrastructures of
expatriation, following children's schooling and education often being
identified by the literature (and subsequently by the participants) as one
of the most important considerations prior to expatriation, and also as an
important cost to TNCs. The researcher thus approached the school
knowing its importance in the expatriation support infrastructures. Also
several interviews materialised through the school contacts.

4.5.2. Sampling parameters

The following parameters were adopted when approaching the TNCs, individual
managers and the school:

IS In addition to a number of American schools in London, there are two main private schools (offering
four very large campuses each hosting a population similar to the school visited, plus a boarding
facility) in Surrey that cater specifically for the needs of expatriate families. They are situated in Thorpe,
Egham, Cobham, and Hillingdon. The schools constitute a crucial factor in expatriate packages
negotiated, usually before departure. They constitute a very important educational as well as community
(expatriate) resource.

89
1. All participants had to be working at senior corporate levels despite
sectoral and organisational differences amongst the corporations they
worked for. This constituted the discriminatory element in the sample,
and follows Mason's proposition that in this type of research which aims
to unravel meanings, it is the 'knowers' in the field who need to be
consulted (Mason, 1996, p. 141). The participants were global managers
with a strategic view of the TNCs' operations worldwide. This enabled
them to bring into their formulations experiences that often went beyond
the particular international assignments they were on as well as the TNCs
they were attached to at the time of the interviews.

2. The managers had to have a managerial responsibility or policy overview

of expatriation, which granted them specific expertise in this field. This
level of seniority was sought by the research for the additional reason
that the participants would be in a position to comment on the nature of
the skill(s) sought in expatriates and on their role, including in relation to
less senior expatriates. Their seniority meant that they had managerial
responsibility - either as HR managers or as high-ranking managers 16 to
decide and facilitate the movement of other expatriates, including senior
expatriates around the globe. In situations of mergers and acquisitions,
where a number of the managers were involved in creating and
negotiating a new corporation, they would invariably be a key (if not the
sole) decision-maker as to which expatriates would have a position in the
organisation.

Clearly, this was an important issue for the research, particularly for its
second core category (impact of new technology) because it avoided, as

16 A good example of such cases is provided by the experience of Participant 25 (please see description
of P25 in appendix A). When this participant decided to join a rival TNC in the UK, he was the key
decision-maker on which (scientific and research) expatriates who were also stationed in the UK under
his management would move with him with the possibility of further international assignments.

90
 much as possible, the possibility of asking the managers to comment on
their own potential replacement in the future, while leaving them free to
consider the issue of impact from an overall global viewpoint.
Nevertheless, detailed attention was always paid (through the constant
comparative analysis outlined earlier) to any potential discrepancies
between HR and non-HR accounts.

4.6. Research ethics and the issue of confidentiality

During the early stages of the research, the researcher became intensely aware
of the sensitive nature of this topic, particularly taken from the angle of purpose
and role of the sample; and equally importantly, that such research is inherently
political and shaped by multiple ethical and ideological positions (Denzin and
Lincoln, 1994; Miles and Huberman, 1994).

A great deal of effort was thus made to ensure that the research was conducted
with utmost openness, ensuring that all participants were sent a general
Research Brief, (attached as Appendix B) prior to the interviews. When in
principle agreement was given for the interviews to take place, the participants
were offered the full list of questions to be discussed, before the interviews.
Furthermore, the issue of total confidentiality of the names of the participants
and their TNCS l7 was emphasised throughout the process, after the initial
undertaking given in the Research Brief. The researcher went through the
questions with the interview guide open to both the researcher and the
participant.

17 At the request of several of the managers other specific details, including dctails relating to the TNCs
are not presented here or in any other printed material. However, general profiles of TNCs and managers
are providcd in section 4.7 and in Appendix A.

91
It was also clear that the sample represented a powerful group with the ability
and, indeed, the responsibility to transfer corporate resources, including capital,
labour and technology across the globe.

The researcher, however, found that the vast majority of the participants were
open and transparent about their own experiences as well as the role of
expatriates. The researcher also found them to be remarkably clear-minded,
focused and enthusiastic about their place in the globalisation process. They
were positive globalists, thoroughly comfortable with the power bestowed upon
them by globalisation and by the TNCs. They strongly identified with the
globalisation drive of their respective TNCs, and believed that globalisation was
the way towards economic prosperity and democracy at different geographical
scales.

There were, however, two exceptions to this, expressed by two women

managers. Participant 23, a US expatriate expressed some concern about •... the
polarising forces of globalisation as 'un-Christian'; and Participant 29, who
commented that: ' ... Where is it [globalisation] all going to end? This has also
led to the polarisation of society: you will end up with a few - and they are a
few, compared to the rest- who work for these big companies, who are
extremely well-paid, highly motivated, highly-skilled ... Most people who work
locally in a community have no decision, no power; they are just at the will of
these huge companies. Yet, they are expected to cope with it somehow. There is
a sense of helplessness ... It is a situation of a few winners, and it is a winner
takes all situation' (transcripts from PIS and P29 interviews).

4.7. A general profile of TNCs and managers

The participants for the main interviews (3D) were drawn from 23 TNCs
working in a variety of manufacturing and service industries. They were all

92
senior expatriate managers working in the UK for European (7) and American
(16) TNCs, and Human Resource (HR) managers. The two components of the
sample do not necessarily correspond in terms of belonging to the same
corporation. The functional division of the main interviews was as follows: 20
senior expatriates, and 10 HR managers, with special responsibility for
expatriates and expatriation policies.

In addition to a general profile of the managers and the TNCs below, a detailed
profile of the participants is presented in Appendix A.

The tables below present a general picture of some key features of participating
TNCs and managers, preserving, as much as possible, the confidentiality
agreement between the TNCs and the author.

4.7.1. The transnatoinal corporations

Table 4.1: The TNCs in the sample by specific industrial sectors

Industry Number of TNCs covered in each industry
Petroleum and refining 2
Airlines 1
Food 1
Aerospace 1
Metal products 1
Insurance 2
Banking and Securities 2
Soaps, cosmetics 2
EntertainmentlMedia 2
Pharmaceuticals 1
Chemicals 2

93
 Motor vehicles and parts 3
Medical 1
Telecommunications 1
Plastics 1
Total 23
..
• Industnal classificatIOn for companies is adopted from Fortune Global 500, 1998 edlhon .

As can be seen from the above table, the TNCs were drawn from a wide range
of industries and sectors, with the common characteristic being their
significance in the global economy, an indication of which is presented below.

Table 4.2: Ranking of TNCs covered by their total 1998 revenue, within
their own sector
Number of TNCs Industry Ranking
9 1
4 3
1 4
1 9
1 11
7 Greater than 11
Total 23
..
Source: Global 500, produced by Fortune and Hoovers, 1998 edition .

The first column of this table indicates the number of TNCs in the sample, while
the second places them in order of significance (as measured by their total 1998
revenue) within their own industry. For example, the top row indicates that 9 of
the 23 of the TNCs were number one in their industry and the bottom row points
to seven of the TNCs occupying a place of significance lower than number 11th
in their own industries.

94
Globally, and regardless of industrial specificity, that is to say taking account of
all the TNCs in the world, in the same year (1998), seven 18 of the TNCs were
amongst the world's 100 largest TNCs, ranked by foreign assets (UNCTAD,
2000).

As discussed in chapter one, a number of arguments are commonly advanced to

demonstrate either the perceived existence of globalisation or the tenuous scope
of its conceptual and actual reach. Whatever definitions and evidence are called
upon to confirm or confront the notion of globalisation, what is clear is that at
the core of globalisation lies expansion; TNCs, confronted by ever fiercer global
competition, have increasingly moved to secure presence in new markets.

Quantitative research was therefore conducted in order to test the expansionary

scope of the TNCs in this sample. Using the 1997 version of Dun and Bradstreet
database, data was generated to indicate the standing of the TNCs covered by
the study in terms of the number of countries in which they had a presence,
followed by a detailed breakdown of presence represented by the number of
subsidiaries (ignoring dormant operations).

The methodology employed here was based on that developed by letto-Gillies

(1998) and used in UNCTAD 1998 and 2001.

While accurate data could not be collated and analysed for all the TNCs (23 in
total), spreadsheets were produced for 13 of them. The results are shown in
Table 4.3 on the next page.

18 The UNCTAD (2000) figures do not include financial TNCs. As there are four large and significant
banking. securities and insurance TNCs in the sample. the number of TNCs belonging to the 100 largest
TNCs in the world. is likely to be greater than seven.

95
Table 4.3: Geographical spread and depth of presence of the TNCs across
regions
Sample In ALL No of Subs
TNCs Home Country No of Countries DMEs NICs CEE
1 291 71 714 125 6
2 302 92 827 354 14
3 45 68 150 96 12
4 99 27 181 23 0
5 59 17 105 14 0
6 65 31 110 22 0
7 9 31 170 25 0
8 43 46 124 76 8
9 215 14 258 6 0
10 130 109 946 248 11
11 44 22 78 14 1
12 95 28 149 30 1
13 36 31 54 24 0

Source: Calculations based on Dun and Bradstreet database, 1997 version

The first column of the above table indicates the number of operations that each
TNC has in its home country, while the second reflects its presence in foreign
lands. Columns 3, 4, and 5 represent such presence by world regions, taking the
number of subsidiaries attached to each TNC as a main indicator. What these
figures indicate is that the 13 TNCs have a varying but extensive presence
worldwide.

These figures underestimate the degree of involvement of the TNCs in a number

of ways. They include subsidiaries only; the number of affiliates is likely to be
much greater. They do not give information about non-equity involvements
such as joint ventures or about alliances.

96
Figures extracted from the annual reports of TNCs that could not be included in
these calculations also point to a similarly extensive degree of presence.

4.7.2. The Managers

The 30 managers interviewed had a gender composition of 8 women and 22

men, with the women being concentrated in the HR component of the sample.
Only two of the managers interviewed were women expatriates working in
senior positions outside the HR function. Ten of the managers interviewed were
HR managers who had particular responsibility for expatriation and some of
whom were themselves expatriates on an international assignment at the time of
the interview, or had been expatriates in the past. The remaining (20) managers
were working as senior expatriates in other positions.

As mentioned in section 4.5.1, in addition to managers attached to the TNCs,

two other senior managers (one male and one female) working for one of the
American schools were interviewed, and provided invaluable insight into the
migratory infrastructure attached to expatriation.

Table 4.4 below presents a profile of the managers interviewed (excluding the
two school administrators).

Table 4.4: A profile of the TNC managers by function

Position within TNC Number of managers
Human Resource Manager 10
Director of Research &Development 1
Project General Manager (Joint 2
Venture)

97
 Head of Quality Control 1
Head of Finance 2
Senior Corporate Strategist 2
International Manufacturing Manager 1
Head of Disposable Products 1
Managing Director 2
Business Development 2
ManagerlDirector
Chief Executive Director/Officer 3
Sales Director - Europe 2
Planning and Development Manager 1
Total 30

Details of all (32) participants are presented in appendix A.

4.8. Access

The sample researched by this study is highly mobile, transient and generally
inaccessible, particularly at the level of seniority targeted by the study. Initial
interviews were secured through existing links19 with industry whereby a
number of the TNCs were asked for interviews with their senior managers

As mentioned earlier, a significant number of the interviews came through the

expatriate women's group, whereby the women would offer support for an
interview with their spouse (or his manager) and the researcher would follow
the leads by verbal and written contact until the interview materialised; several
other interviews were initiated through the expatriate school.

19 The author is grateful to her supervisor. who facilitated these contacts. which led to several others.

98
All interviews were secured on the basis of trust between the researcher, the
women and the institutions around expatriation. Most interviews would, on
average, take over a few months to arrange, with some interviews taking up to
two years to take place.

4.9. Recording the Data

Most interviews were recorded on tape, the number of tape-recorded interviews

amounting to 20, and lasting on average for one hour and twenty minutes.
Generally, the managers were very used to articulating their thoughts clearly
and confidently, and did not seem to mind being recorded. Five of the 30
managers, however, expressed a preference for the researcher to take notes
rather than tape record the conversation. This was fully respected by the
researcher, who did nonetheless ask the participants (either during the interview
or later on) to confirm the precision of the data where direct quotations are used.
Only in one case (Participant 7) was this impossible, owing to the interviewee
leaving the TNC and the researcher being unable to trace him. It will be noted
by the reader that no direct quotations have been used from the interview with
this participant.

Five of the interviews were not recorded due to reasons such as tape recorder
malfunctioning, and buildings having to be evacuated due to a fire breaking out
or on a couple of occasions because of fire drill practice. On another occasion
unexpected protest demonstrations took place within the building at the time of
the interview, disrupting the interviewing process.

The recording process was, in any case, always supplemented with field notes,
ensuring that the data was not lost due to problems with the tape recorder or the
potential loss of or damage to tapes. Field notes were always written
immediately after the interviews. As mentioned earlier, where direct quotations

99
have been used from interviews not recorded on the tape, they represent the
researcher writing down word by word the responses of the participants who
were informed at the time that the response might be used as significant data
and would therefore have to be a totally accurate reflection of the participants'
formulations.

4.10. Data collection and analysis

While it is acknowledged here that the mechanisms of organising data are

different for different researchers, and there are no standard formula as in
statistical data analysis or one right way of organising, analysing and
interpreting qualitative data (Patton, 1987), the conduct of this research took
account of issues relating to data organisation, analysis and interpretation from
the very beginning of research design.

The interview questions were given initial validation, modified and refined by
exploratory interviews being conducted with two senior expatriate managers,
who participated in the interviews over a total of four separate sessions each
lasting for approximately two hours. The two participants were then interviewed
again and only at this stage was the data generated included in the final data
files. This process ensured not only that the themes were relevant and
meaningful, but also that they became fully focused, eliminating issues that
although tempting to explore, fell outside the focal areas of the study, or were
likely to lead to unsubstantiated judgements on the part of the researcher.

An example of the testing of the themes was the consideration of the interaction
of cultural (national or ethnic) identity with that of organisational culture. While
such interaction might be considered a perfectly legitimate area of inquiry20,
following the exploratory interviews, it eliminated itself from this study

100
altogether. The participants had been carefully selected as not only senior
expatriates but as third county nationals (TCNs are nationals who come from a
third country apart from the home or host country of the TNC) managing major
operations of two of the largest TNCs in the sample. They were selected also
because of their positions within the TNCs as Head of Research and
Development and Head of Finance, bringing into the initial discussions expert
knowledge on areas of special relevance to the focal themes of the study,
particularly the impact of new technologies and the notions of knowledge and
skill.

Both participants reported that at their level of seniority, culture defined in

terms of ethnicity did not affect their role, or function in the globalisation
process. They both reported that in order to function as senior global managers
in their TNCs, they had come a long way towards upholding the TNCs' vision
of the globe, despite belonging to cultures different from the core cultures of
their TNCs' home base. If a core or dominant culture did matter, it would be the
culture of the home base of the TNCs, but even then what mattered most was
the specificity of the corporate organisational culture of a TNC. In the words of
one manager, they had 'to feel, think and act like all global corporate managers
belonging to the TNC' (field notes, exploratory interviews). This was seen as
the key element in understanding "culture" in the context of globalisation by
TNCs. However, issues relating to the inclusion or otherwise of third or host
country nationals emerged within the sub-categories of recruitment; of the
changing composition of expatriates; and of the direction of movement of
expatriates around the globe.

The following is the evolved conceptual matrix from which specific questions
were formulated. As detailed below, the researcher also used this system in

20 See, for example. Hickson and Derek (1995).

101
order to ensure the integration of the research process, and as a tool for theory
development in the tradition of the grounded theory method.

Table 4.5: Purpose and function of categories and sub-categories

Themes/Categories Function Status
Role, place and To gain understanding of Core
function of expatriate dis tincti veness category
managers
Recruitment To gain insight into the TNC internal Sub-
procedures and labour market category
processes
Measurement of To gain understanding of the final Sub-
success or otherwise value of expatriation category

New Technology To identify the impact of new Core

technology and global category
communication on expatriates
To assess the scale and scope
of any impact
To gauge cheapening / cost
reduction potential
Changes in the To locate any changing patterns Sub-
profile of expatriates To gauge the impact of cost category
of expatriation

Movement of To identify core / periphery patterns Sub-

expatriates around To explore the concept of a category
the globe 'global elite'

102
Such a classification system for themes and categories served several purposes.
Firstly, it meant that the data resulting from the detailed questions formulated
from the themes were more likely to embody clear responses. Secondly, this
initial thematic clarity also enabled the researcher to remain focused on
"fleshing out" meanings and interpretations that the respondents attached to
each theme. Thirdly, it allowed an open but systematic verification system of
the meaningfulness and accuracy of categories, as well as the placing of
interconnecting data in specific categories. In this way, the problem of
'divergence' identified by Guba (1978, p. 53) that 'The existence of a large
number of unassignable or overlapping data is a good example of some basic
fault in the category system' was avoided. And finally, an important function of
the matrix was that it helped to facilitate the integration of the research process,
as well as helping towards the development of theoretical propositions. This
aspect is illustrated by some examples in the following section.

4.11. Evolving categories and propositions

From the first core or primary category of role and function, emerged another
category of core values (discussed in chapter five) related to the specific skills
which such expatriate managers possess and are required to have by their TNCs;
and to the need to transmit the core values of the TNCs to foreign locations as a
crucial dimension of their role.

From the second original core category of new technology, a non-substitution

effect emerged because the specific skills and expertise possessed by the
expatriate managers, identified under the first primary category, and detailed
above, required direct physical presence. This was an imperative in the case of
senior managers (please see chapter nine for a full discussion).

103
In this way, the two main categories can be linked directly to one another. The
main categories were supported by sub-categories that aim to further enhance
understanding of the various dimensions involved here. Examples of sub-
categories include an inquiry into how these (senior) expatriate managers are
actually recruited for the assignment and what precisely determines the
movement of these expatriate managers across the globe, that is a specific
general direction or flow around the globe, for example from the home country
to other geographies/locations, vice-versa, or within other geographies. Another
category originally identified and explored further in the research, referred to
the changes in the profile and composition of the expatriate managers over
recent years, specifically whether the composition of the managers had in fact
changed for reasons relating to cost or indeed any other reason.

Through the analysis of the categories and sub-categories the researcher sought
to deconstruct the nature of the skills of senior expatriate managers. In this way
the proposition that these particular skills related to the ability to transmit the
core values of the TNC to foreign geographical locations, and that as such they
were an irreplaceable element in the current process of globalisation, was
developed. This reflects how, via the coding procedures characteristic of the
grounded theory method, the researcher progressed from the specific categories
outlined above, to more general propositions (Glaser and Strauss, 1967; Strauss
and Corbin, 1998; Mason, 1996; Creswell, 1998).

The various forthcoming chapters, which are organised around the key research
themes, address the development of propositions in much more detail.

4.12. Conclusion

This chapter presented a detailed account of both the conceptual and theoretical basis
for the adaptation of the strategy and methodology employed by the study, and of the
operational processes involved.

104
The chapter discussed the general underlying concepts and principles of
qualitative research methods, followed by a discussion of the main analysing
tools of the grounded theory method, and how these were applied and utilised
throughout the research process. It then presented a matrix system developed as
a basis for data collection and analysis, and for theory development.

The chapter suggested that the particular methodology employed was

appropriate for developing an understanding of areas where gaps in knowledge
had been identified in the literature or a conceptual void existed. Such a
methodology, which relies heavily on the analyses and formulations of the
participants to develop this understanding, was also appropriate given the
politically sensitive nature of the study.

105
 CHAPTER 5

The Role and Function of Expatriate Managers in the Globalisation

Process

5.1. Introduction

This chapter presents the mam findings of this study relating to its first
category: the role and function of expatriate managers in the globalisation
process. It begins with an analysis of the role of expatriate managers with
particular reference to senior expatriates, and considers the definitions and
meanings attached to their role from a number of dimensions identified by the
participants.

The main issues relating to this theme were explored through posing the
following open-ended questions to the participants:

1. What is the role of expatriate managers, particularly at senior levels?

2. What is distinctive about their contribution?
3. Why are they sent?
4. Can a local manager fill this role?

The participants' expressions of meanings, definitions and interpretations are

reported and structured around the most significant data that emerged and
discussed in some detail throughout the chapter. The responses are referenced in

106
accordance with the classification of the participants' profile presented in
Appendix A.

Issues arising from the last question of the interviews, relating to the possibility
of local managers filling the defined roles are, however, considered in equal
detail in the next chapter, the focus of which is the recruitment of expatriate
managers and in chapter seven. This is because some of the findings of this part
of the research sit more comfortably within the actual context of recruitment and
movement of expatriates.

The main task of the current chapter is to present an account of how the various
dimensions of the role and function of expatriate managers and the different
elements contained therein are perceived and interpreted by the participants.

5.2. The role and function of expatriates: why are they sent?

The specific role that expatriate managers play in the globalisation process was
commonly linked by the participants to the reasons why they are despatched to
foreign geographies where the TNCs are present. It is, therefore, necessary first
to present an account of why expatriation takes place.

In broad terms, there seem to be two main perceived reasons for expatriation:
one reason for sending expatriates relates to career and personal development of
the expatriate, and the second arises from a corporate business need resulting
from globalisation strategies. Although the two reasons do reinforce each other
at times, they each contain a variety of possibilities, which were commonly
perceived by the participants as distinctive. This is explained by a participant,
who was himself a senior expatriate and whose assignment was to act as the

lO7
manager of the HR department of one of the biggest US corporations in the
sample and in the world:

'Expatriation strategy works on two main principles: to get the

infrastructure for a global corporation and run with it, or for
individual development aspects.' (P4)

While the outcomes of these broad expatriation policies may and often do
overlap in terms of, for example, benefits to both the expatriates and the TNCs,
the reasoning behind them may be different.

The following sections explain in more detail reasons for expatriation as pointed
out by the respondents.

5.3. Career and personal development

TNCs may send senior managers or potential candidates for more senior
management positions to gain international experience, a major component of
which is increasingly seen as learning about and exposure to other cultures:

'One role for some expat managers is a training role. We move

some managers into certain countries to further their career, give
them additional skills in cross-cultural awareness and dealing with
different cultures.' (PI)

In some situations, the experience gained on an internation~l assignment is seen

as so important that a TNC may - particularly if it is actively working towards
the creation of a global cadre of managers - consider the filling of a skill

108
shortage or the fulfilment of a technical or functional need, a secondary reason
for expatriation. The next participant explains this:

'The other reason is for the purpose of the individual's

development through going on an assignment. It is secondary in
the average package what the person actually contributes in the
[foreign] country. What he learns from the assignment is
important and in such cases we already know what that person's
next position will be.' (PI5)

Expatriate managers seem to have a considerable degree of choice in shaping

and influencing the initiation of expatriation and nature and scope of an
international assignment, as exemplified by the following cases.

'In other situations, we do send out expatriates purely to develop

assignments for themselves. So they will go either on a purely
training assignment or one where there is a large developmental
aspect for them even though it is a benefit for the business as
well.' (P13)

'The other purpose is when we want some people to get global

experience; we send them on expatriate assignments. I am a case
in point here. Back in the US, I worked on getting international
experience.' (P4)

'As I said, we21 wanted the challenge of the move, so I made it

clear from the beginning that I wanted international exposure.'
(PI!)

21 The respondent's reference here is to the whole family who also accompanied him on the assignment.
This is a very important aspect of expatriation; the international move is increasingly seen as a move by
the whole family and not only the male manager. As discussed further in the next chapter, issues around

109
Expatriation is often explicitly expressed as leading to a more superior position
within the company and expatriates have in many cases been selected as having
the potential to become key corporate leaders and gaining international
experience is an increasingly important way towards achieving higher status and
reward. As the following examples illustrate, career enrichment as a result of
expatriation may result in a variety of situations including functional managers
being placed in general managerial positions following expatriation or senior
managers gaining global exposure, which is increasingly deemed essential for
further advancement within the TNCs.

'I was from what they call a commercial background: finance,

supplier chain, IT. But here [at the TNC's headquarters] it is very
much a general role. It is part of personal development. 1 think I
will go back to quite an important job'. (P3)

'Another reason why you might have an ex pat in a new or existing

market is someone's development. We do have expats that we are
grooming for a senior position. If we see that the future of the
company is in international markets, and we do, there are many
more new business opportunities outside the US than there are
inside. So we will need to grow people who are international
leaders. You cannot grow them in America and maintain them
internationally; it does not work. So we will match up our high
potential people with our key business opportunities and try to
make a case that the person will get the right skills if he goes.'
(PIS)

the welfare of all family members, including family housing and particularly children's education
feature prominently in many of the respondents' accounts of expatriation.

110
When the development and advancement of expatriates is planned on a world-
wide basis, a TNC might have a geographical hierarchy of significance in mind,
as in the following case belonging to a European TNC:

'We might appoint somebody CEO in a small country so that he

will be able to manage a big country down the road. To us, that
makes a lot of sense.' (PI5)

Such a movement might also be facilitated by the TNC with regional expansion
in mind. A third country national (TCN) who has proved to be a competent
operator in a certain market might be brought into the TNC's centre and send
back to manage other regional operations. As one of the few TCNs (very few
could be identified by the TNCs at the level of seniority targeted by this
research) explains:

'I think that my move here was in consideration of my future job.

They said: "Let's move him to the headquarters [in London], as he
is one of potentially good people in Asia in the future". You have
to appreciate that 50 percent of our business is going to be in the
developing countries, so they will need more and more people. I
think if I am successful, more and more Asians will come after
me. The general aim is to have more and more Asians coming
over.' (P3)

5.4. Corporate business and strategic needs

In addition to initiating expatriation for career and personal development, the

TNCs covered used expatriates in a variety of situations, induding managing
joint ventures, setting up and supervising new businesses, identifying

III
acquisition opportunities and to 'clean up' difficult operations. Although a wide
range of differing reasons and circumstances might necessitate the use of
expatriate managers, an understanding that these managers carry special skills is
explicit in both the literature on the subject and in all the respondents' accounts.
A number of important questions arise here, including: What is the nature and
specificity of such skills? What type of knowledge do they embody? How are
they acquired? Are the same set of skills required of all expatriates? Why are
they so desirable? What is their function in the fulfilment of the role of
expatriates in the globalisation process?

The rest of this chapter is devoted to detailing how the participants define such
skills; and how they conceptualise the importance of these skills for the success
of international assignments as a key instrument for the advancement of the
TNCs' globalisation strategies.

5.5. Skills transfer and the difference between of technical and

managerial skills

While all participants acknowledge that the transfer of skills from the centre to
other geographies has historically been an important function of expatriation,
they appear to distinguish between technical skills and corporate managerial
skills. The respondents invariably indicate the existence of a difference in the
type and nature of the skill(s), knowledge or know-how being transferred.

This distinction is very important for understanding the role of expatriate

managers in a number of ways. Firstly, it provides the basis for the reasoning
behind the argument presented in chapter three that expatriates cannot be treated
as a homogenous group; they carry skills, the nature and function of which are
different. Secondly, and following from the first point, their openness to the

112
impact of technology and indeed the degree of their substitutability by, for
example, local managers, will be different. Thirdly, this distinction indicates
that the notion of 'skill' is not universally understood as meaning one obvious
thing: it is a concept as well as a socially constructed attribute; and may
therefore be open to multi-faceted interpretations.

It is therefore necessary to consider in a little more detail this distinction as

described by the following examples.

'In this TNC, I find that they are supplying either a technical or
business knowledge ... that may not be available in the local
country.' (P26)

'There are two aspects: one is technical skill and expertise such as
IT and finance. The other is business know-how.' (P27)

'There are basically two aspects: one is technical expertise and the
other is general business know- how.' (P8)

The next two sections discuss the process of skills transfer along the lines
distinguished by the participants, incorporating a variety of key dimensions.

5.6. The transfer of technical skills

This section presents an account of the first aspect, that is to say the transfer of
technical skills to localities where a shortage of certain skills is seen to exist.
Interestingly, the skills transfer that the participants discuss appears to take
place through a process embodying a multi-layered and complex geographical
web, which defies the traditional movement of skill from more to less advanced

113
market economies. This is exemplified by the next statement pointing to a
shortage of skill and knowledge perceived to exist in Surrey in the South East of
the UK, necessitating the migration of a large number of expatriates from the
US.

'They are some specialist areas where we bring expatriates in, like
in our Research and Development facility in Surrey. There, a large
number of expatriates are brought in for their technical
knowledge. A sizeable number are from North America ...
Typically we will bring people in to help staff with the seed of
knowledge.' (P4)

The transfer of technology and technical skills between geographies is often

explicitly expressed as embodying a geographical hierarchy. The following
respondent indicates an expected shortage of finance-related technical skills, for
example, in what he clearly envisages as an emerging market:

'I think one aspect is technical skills. Sometimes you use

expatriates to fill in the gaps. Let's say you want a Vietnamese
financial director. .. that will be very difficult. His technical skills
would be very limited.' (P3)

As mentioned earlier, such a hierarchy, however, is also evidently perceived in

the case of geographies such as the UK where the next respondent was placed as
a senior expatriate. He shares his own experience:

'In my case, we had a very specific need for doing a lot of

acquisitions. We had a very specific need in finance and I have a
lot of experience in the US with that. So in our worldwide
resource pool of finance staff, I had the best experience that just

114
 happened to come from America. Technically, I could just as
easily have come from Malaysia, Indonesia or Argentina. But that
is not likely. In the field of finance and economics, many of the
new theories and evolutions emanate out of North America,
particularly the US. So you are keen to have people from the US
who are more advanced than some other countries just by the
nature of the maturity of capital markets in the US. So Americans
tend to be more skilled because they are living in a country in
which the latest understanding of financial instruments, of
technology is developed.' (P20)

The technological domination of Western and particularly North American

TNCs is evident, and sometimes expressed explicitly as an aspect of the
expatriate's role, as in the following example:

'The role of the expat is very important from a technological point

of view. It does not necessarily mean that all the advances are
made in the US, the UK, or such countries. We are now finding
that our Indian operation is instituting a number of advances,
which they are selling to the US. But, nevertheless the facilities
are usually much greater in the developed countries.' (PI3)

The next participant summarises some key dimensions of expatriation so far

considered. That is to say, the existence of different types of skills being
transferred; the associated potential rewards attached to expatriation in terms of
career advancement; and the importance of gaining international experience.

'There are very clearly two types of expatriates. One is the

professional expats who generally speaking would be technical,
sales or IT or in a similar function. So they have a specific

115
 expertise, and they have really been sent there because they have a
greater level of expertise than the local managers do in that
particular area. And probably, their next job may well be back at
the same or higher level. There is then what you might call the
high potential expats who are being groomed for stardom and in a
sense it is much more important to give them experience of the
totality.' (P2)

5.7. The transfer of (non-technical) managerial skills

The transfer of non-technical skills, often described by the participants as

general business know-how or knowledge, appears to be perceived by them also
as a multi-dimensional process. This process emerges as a crucial dimension of
the role played by expatriate - particularly senior expatriates - and has several
(sometimes closely related but nonetheless seen as distinctive) dimensions,
which are formulated by the participants in the following sub- sections.

5.7.1. Promoting global communication networks

An important dimension of the role of the expatriate is commonly expressed as

maintaining and promoting the TNCs' global networks of communication and
corporate understanding.

'Probably the biggest benefit of using expats is the networking. I

think one of the things that expats can contribute to a lot is the
introduction of other people to their own personal networks and to
enable them to tap into those. This is an important aspect of their

116
 role, because the bigger we grow, the less this is going to happen
on an informal basis.' (P13)

In the process of establishing and consolidating global networks, the

headquarters of a TNC often plays a key role as the main source of confirmation
and support for expatriates, as illustrated by the examples below.

'Our headquarters are in Boston. And I know the way people do

things in South Boston. I know the people over there.' (P16)

'We bring in expatriate expertise so that ... people know where the
headquarters are. That is to say that although this is a global firm,
the person needs to understand the people at the headquarters;
needs to know who the managers are.' (P12)

'Senior managers are sent overseas to manage businesses that are

historically in North America. They know the US networks and
relationships.' (P23)

5.7.2. Playing a liaison role

Somewhat associated with their role as promoters of global communication

networks, expatriates may be seen as providing an important channel of liaison
between the centre and the TNC's international operations. They also provide a
mediating role between the various geographies in which the TNCs are present.
They thus appear to be perceived as the agents of mediation and negotiation
who ensure effective advancement and maintenance of global Communication
networks.

117
 'I think one thing that the expats can bring in is a sense of liaison
regarding what is going on in other countries. So it is a link with
what is happening out there, beyond what goes on in internal
papers and conferences.' (P 13)

'Also of importance is the role of negotiating and mediating

between Europe and the US.' (P14)

This sense of liaison and the process of creating a circuit of knowledge that
links the core to other geographies of presence is often clearly described as
assigning a special place to the TNCs' headquarters.

'It is also important from the point of view of the headquarters.

Obviously when they send an expat to a foreign geography, they
want him to come back with first-hand knowledge of what is
going on in the subsidiary, and this might impact on the
development of strategic policies.' (P29)

'We emphasise the bringing back to the centre the experience

gained on international assignments.' (P22)

In the creation and maintenance of knowledge systems within the TNCs then,
what appears to emerge is that such knowledge is human-embodied. It is
transferred by expatriates throughout the world and brought back to the centre.
To a TNC the loss of an expatriate might therefore mean a loss of knowledge
within the corporation arising from the non-return of the expatriate to the centre.
In fact, the issue of expatriates not returning to the centre, not bringing back the
knowledge and expertise gained in other geographies, was seen by a number of
the TNCs as a real problem, which they had in practice experienced. As the
following respondent comments:

118
 'There is always a danger of people staying too long, becoming
localised and not coming back to the centre.' (P9)

5.7.3. Standardisation and supervision of local production processes

The TNCs, particularly those engaged in manufacturing worldwide, commonly

describe one aspect of the role of expatriates as ensuring that their global
operations were conducted in the image of the centre, that is an image that
would be recognisable on a global basis.

'Expats are sent to supervise our presence. In emerging markets

where the shop-floor production is not up to our standards, we will
stay and develop local subcontractors.' (P14)

Such presence is so important to some TNCs that they would, in the short term,
be willing to incur losses in production in order to secure a strategic presence in
the long run. The same respondent explains this process, as practised in Russia:

'We will stay, even if we have to squash and destroy inappropriate

products. And we do practise this.'

Standardisation of production processes and products is, however, not confined

in geographies where the newly emerging infrastructures may be perceived as
inadequate. It is often a process implemented on a worldwide basis.

'One thing we want to do is to make it one factory in multiple

locations. Once it is our factory, it will be one process. We make
the same products here, in Brazil, or in Mexico City and Milan. So

119
 what we would like to see is having the same process. The
equipment I have here on the factory floor is just the same as the
equipment in South Boston: (P16)

As the next respondent explains, the issue of control is a crucial dimension of

the standardisation of production processes, even in situations where legally, an
equal partnership might exist:

'Taking the example of a joint venture, they [the foreign partner]

will come and say to us we will give you land, money, machinery,
but we will retain operational control regardless of our share in the
joint venture. We must control the business. It 'is our reputation
that is on the line. Here the expat plays an absolutely important
role ... As far as we are concerned it becomes an extension of our
way of doing things. It [the factory] has to run along our lines, a
recognisable factory that has our branding. The expat knows all
this.' (P9)

5.7.4. Intensifying the speed of globalisation

Senior expatriates commonly emphasise how their intervention in other

geographies may ensure the speedy development of business operations.

'One of the most common reasons for expatriation is because of

developing new markets. We normally find that when we set up a
new business we start it initially with expats in the senior and
technical levels. We did this when we set up in India about three
years ago. We did that quite widely at that stage because we knew

120
 that it was very fast development that we were aiming for in
India.' (PI3)

'Our expatriate managers will be people with great capacity to

make things happen faster, to launch products faster in new
markets.' (P25)

As the next example illustrates, this 'making things happen' fast, is often seen to
involve the building of whole infrastructures in a foreign geography:

'The objective is typically when we want to take quick capacity

out of the ground in geography. The purpose of the expatriate
intervention is to prepare the local business to lead the corporate
business. Recent examples are our intervention in Eastern Europe
and more recently in the Balkans. Here we would typically bring
in a number of people from Europe and North America and over
the course of two or three years they would build up the
infrastructure.' (P4)

The issue of speed appears to be particularly important when rival TNCs have
already established a presence in the given market. The speed with which senior
expatriates can overtake their rivals in the market effectively increasing their
TNC's market share is an important criterion for entrusting the expatriate with
other new developments and new markets.

'They [a main rival] were there before us. We had to move infast,
and we did. After two years it was us and not them who had the
bigger share of the market. So here I am, going on to my next
market.' (P2)

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5.7.5. Training the locals

Training a local cadre of managers is often described as one aspect of the role of
expatriate managers. The degree to which this function is satisfactorily fulfilled,
however, remains unclear beyond the point that the replacement of the
expatriates with the locals does not always materialise, even though it is the
stated objective of many of the TNCs interviewed.

The other important point to note here is that while the training element might
appear to be an active dimension of both technical and non-technical skills
transfer via expatriation, a distinction is again made between how the process of
transfer differs for different groups of expatriates. This is another manifestation
of the problematic nature of treating all expatriates as a homogenous group and
perceiving the notion of 'skill' as a universally understood attribute. These
different dimensions are discussed below.

'One of their [expatriates'] functions and their objectives is

usually to train their local replacement. .. The aim when we set up
new businesses is to hire and develop local replacements. That is
the intent at all levels. Now, it does not always work out at all
levels.' (P13)

The distinction made between different levels is confirmed by the next

respondent, who having expressed a firm desire to recruit locally everywhere
and having personally overseen (against what she describes as 'considerable
opposition' from within the TNC) the development of a global equal
opportunities policy, comments:

122
 'Our intention is to replace expats. Now 40 percent of managers
are locals; these would be middle managers. So, only our general
managers and engineers go out from the centre.' (P22)

It is difficult to present with any degree of certainty, even an indicative picture

of the degree of replacement of expatriates with locals by the TNCs. There are
two reasons for this. The first reason is that in the vast majority of cases the
TNCs appeared to have no quantitative data in this respect. What would be
offered, would, at best, be impressions of the possibility of change or stated
intentions of replacement. Clearly, this type of qualitative research, the main
objective of which is to unravel meanings and enhance understanding of a
subject, cannot accurately explore the numerical aspect of such potentially
changing trends. The second reason relates to the ability of some expatriates to
negotiate an internationalist career for themselves and to live as expatriates by
choice. A number of the managers interviewed had negotiated this process for
themselves and their families, and had enjoyed being expatriates to such an
extent that they were reluctant to go back. A number of the American families
living in the UK had applied to become naturalised; others welcomed the
expatriate manager being headhunted by UK-based rival TNCs and were
considering staying on indefinitely (as in the case of P25, described in Appendix
A). Several other managers negotiated transfers from the UK to a third location.

The following are some examples that demonstrate the degree of flexibility,
which might exist:

'But this [an international assignment] is not necessarily where it

ends. You have the option of continuously being an expat for the
rest of your career. An Italian manager came here for his IT skills.
His appointment finished in 1994. He integrated well with the
society here, so he went onto another assignment. When it came to

123
 making recommendations, the general manager says: 'He knows
our local operation, let's keep him in place.' (P26)

'The intention is that they don't stay forever. Some expatriates

may only do one international assignment. Others might be career
internationalists.' (PI8)

However the same respondent does indicate that things may have changed in
recent years:

'In theJold
, days ... we sent people out there and they stayed for a
long time, maybe 5 -7 years in one place and then onto another
for another 5-7 years. It was more like sending them to colonies,
to take care of the empire out there. They had certain skills,
which were important for operating internationally, but they were
not our best. Now we want to send only our best, for two reasons.
First, it does not make sense to send someone as an expat if you
can find a better local person. So you only send an expat if they
are better and bring in more profits or revenue. Also it is
extraordinarily costly to send an expat. From a commercial point
of view you will only do that if they are doing something
special.'

The 'special' contribution of expatriates regardless of their extraordinary cost is

the subject of further consideration in the next two sections, and will be also be
returned to in other parts of this thesis. What emerge from this section is that the
issue of replacement of expatriates by local managers is problematic and that
despite a stated intention by the TNCs, it does not always happen. Please also
see chapters six and eight.

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5.7.6. Representing the TNCs and protecting corporate interests

Expatriate managers appear to become the face of an otherwise absent TNC in

the foreign geography. They become the trusted representatives of their
_corporation, charged with the multi-faceted task of safeguarding and promoting
the TNCs' interests in a foreign location. The following are typical expressions.

'In major centres of the world senior expatriates are put in charge
and become the face of our corporation'. (P 1)

'We have a mission in the company: we are its ambassadors'. (P16)

They are often charged with the task of representing the present face of a TNC,
and with protecting the economic and political interests of the TNC. The
managers appear to see themselves as playing a crucial role in globalisation
strategies and associated processes of a TNC positioning and establishing itself
in a new or emerging market, and in shaping and influencing local cultures. In
the following examples this process is explicitly described as going as far as
attempting to restructure foreign localities in a number of way.

'What I think is very much the case is that ex pats do have a role
in determining the political ideology, consumption patterns and
even cultures in the locality.' (P26)

The next respondent - a senior manager attached to one of the biggest oil
companies in the world - explains that his TNC is occasionally placed in
politically embarrassing situations created by environmentalist pressure groups,
and provides a clear example of how the changing of such patterns may become
necessary.

125
 'We need people to be aware, not necessarily environmentally
aware as in the strict sense of pollution, but politically aware.
This means being aware that you are living in a different culture,
where the rules are different, being sensitive enough to recognise
the differences but strong enough to be prepared to challenge
them. You have to adapt to the rules, and if need be change them
to shape the agenda.' (P 1)

The political awareness pointed to by the last respondent is extended and

directly linked to safeguarding the economic interests of the TNC, as he
explains:

'We will always keep a small number of [senior] expats whose

main job will be to look after the shareholders' interests. [The
corporation] needs to have its interests looked after.'

Here too, the headquarters may be explicitly described as directly influencing

the expatriates' role in the process of corporate control and protection.

'They are not going out exactly as company spies, but as

observers of the actual practice, of how policies that are made in
the central headquarters are put into practice.' (P29)

The same participant carries on to offer an overview of the policies of the many
TNCs she works with as advisor in her capacity as Head of the International
Section of an influential international management development organisation.
Her analysis combines several aspects of the discussion here, including the issue
of trust seen by the headquarters as necessary for the protection of the TNCs'
interests, particularly in times of difficulties or crises, as well as the exclusion of

126
local managers who appear to be perceived as incapable of trouble-shooting in
their own localities:

'Some companies say they are rapidly increasing the number of

senior home country managers, but it seems that when things go
wrong, there is a tendency to put in lots of expats, because there is
a feeling of rescue, of coming in and sorting the problem out. This
means that they don't rely on the new ways of working that are
developing; they don't allow the local managers a chance; they
just pull in senior expats as fire fighters.'

In some cases, as exemplified by the next participant, representing the TNC and
its headquarters and becoming its face and its trusted agent are perceived to be
the primary reason for expatriation, despite the expatriate's lack of involvement
with the local economy:

'Take the example of Surrey, which has a number of American

enclaves. The question is how many Americans are here, often
without any skills to share [with the locals] just to be the face of
the corporation, of the headquarters.' (P26)

5.7.7. Promoting and protecting the TNCs' core values

As demonstrated throughout this section, the process of the global transfer of

skills is perceived as a multi-dimensional process. The previous section pointed
to several key dimensions of the way in which the role of expatriate managers
embodies these dimensions.

127
The promotion and protection of the core values of TNCs, however, was
universally described to be the most prominent aspect of the role of the
managers, and particularly senior managers such as those participating in this
research. The TNCs commonly point to the understanding, embracing and
protecting of the core values of a TNC, as the most important skill desirable in
expatriate managers, and in fact specifically required of a senior expatriate.

'As an expat, you walk in, and you are first and foremost an
establisher and protector of your company's values.' (P4)

'Expats are the most important promoters of core values and core
cultures.' (P 14)

Although most of the TNCs in the sample did have a written statement of core
values, (sometimes described variously as, for example, 'core principles' or
'global vision'), a number did not have a formal statement or had just acquired
one, as in the following example.

'Historically speaking, there was no formal system. We did not

have - and I believe still do not properly have - formal corporate
values. We have just acquired a statement of Corpora~e Purpose.
So the expat's role was absolutely vital in communicating the
unspoken rules. And that is probably still the same.' (P2)

This aspect of the research, therefore, required detailed inquiry. The further
exploration of corporate core values led to the subject of core values developing
as part of the key findings of this research in relation to theme one, the role,
place and function of expatriate managers in the globalisation process. A more
detailed understanding of the place and significance of core values served to
explain:

128
 1. The nature of the skill that senior expatriates needed to possess
2. The primacy of this skill over other skill-sets including technical
skills
3. The factors that may disqualify local managers from managing
TNCs' global operations in their own locality (please see also chapter
six), and
4. The different levels of potential vulnerability of different groups of
expatriate managers and different types of international assignments
in terms of the impact of new technologies (discussed fully in chapter
seven).

It is important to note here that the embodiment and transfer of core values by
senior expatriates appear to cut across all the dimensions of the role of
expatriates. In other words, they were seen by the participants as the crucial
skill, the primary attribute in a senior expatriate - whether the expatriates were
standardising and supervising production processes in a locality, promoting the
TNCs' economic and political interests, training the locals or indeed engaged in
the fulfilment of any other aspect of their role while on an international
assignment. This aspect of the discussion is explored in more detail in the rest
of the chapter. However, It is first necessary to present an analysis of what
meanings and definitions the participants attached to core values and how they
saw them reflected in the work of expatriate managers in order to reflect their
thinking more specifically.

5.8. Core Values - meanings and significance

The participants defined core values in a number of ways, assigning them a

variety of attributes, and perceiving them to fulfil several functions. And while

129
core values continue to be intrinsically linked to the role of expatriate managers
and to the skill(s) they carry and transfer, the participants often appear to
perceive them as overshadowing all other aspects of their role.

In this respect, it is worth noting that despite the significance attached to the
role of expatriate managers as carriers of the TNCs' core values; and despite
their embracing and promotion being seen as a crucial skill in (particularly)
senior expatriates, a common understanding of the meaning of these values
does not seem to exist.

The next sub-sections, however, presents an account of the most common

definitions as formulated by the participants. The data presented in the rest of
the chapter, are derived from the core category of the role, place and function of
expatriate managers, the function of which was to gain an understanding of the
distinctiveness of the role of expatriate managers.

The participants' various definitions of core values are responses to the open-
ended question of 'What are Core Values?' which evolved through the
exploratory interviews and was then explored throughout the research process.

5.8.1. As rules and beliefs governing TNCs' global operations

Core values are sometimes defined as a set of rules and beliefs that are
necessary to hold the global operations of the TNCs together. These rules and
beliefs seem to add up to a culture, which despite being perceived differently,
primarily appears to point to a single value system that is capable of being
shared within the corporation and transferred from the core of the TNC to other
geographies where it is present. The following are common descriptions.

130
 'What makes them global corporations is that they have a global
set of values [with] people whose attitude is the same wherever
they are in the world.' (PI8)

'You have to have some shared things that people believe in; you
have to live them, for they are to be institutionalised core values.'
(P20)

These rules are sometimes described as providing a guide for expatriates

working in different geographies.

'Those are the rules you play wherever you are ... This is a big
global company and if these core values are gotten wrong, then
our shareholders will tell us at the AGM. It is important to us to
get it right wherever we are. These rules are the same wherever we
are. So an expat will have to apply them within the joint venture. It
is also something for the expat Ii ving away from home to hold on
to.' (PI)

5.8.2. As the embodiment of knowledge and trust of the centre

Core values are commonly linked to the possession of TNC-specific knowledge

as a key skill in expatriate managers. Prominent in this perception is the
recurring importance of knowledge of the headquarters, and the relationships it
contains. Also featuring prominently is the key issue of trust; the expatriate is
seen as needing the trust of the centre. These aspects are explained through the
following examples.

131
 'You need up-to-date company knowledge, including relationships
and sub-relationships within it... Networking is important, and
one would need to consider what kind of network is going to be
necessary, be it in Poland, South Africa or Peru.' (P9)

'These skills are extremely important. Managers must know the

organisation well, must know the relationships within the
headquarters and must be able to network. All this happens around
core values, and this is particularly so for senior expats.' (P23)

The issue of trust is invariably implicit in the main descriptions offered by the
participants. The expatriate manager, particularly at senior levels, is the trusted
representative of the TNC, and it is the ability of the expatriate to gain the trust
of the centre that is seen as the key skill. This is often expressed explicitly, as in
the following examples.

'This [expatriation] really means that the office in the US do not

trust anybody out there. You [the expatriate] are our manager, we
trust you, so you go over there and become our trusted lieutenant.'
(P26)

'Although this is a global company, the person needs to

understand the people at the headquarters, and who the managers
are. So really these skills [understanding core values] are about
understanding New York. The senior managers need to have
confidence that this person who is out there, in a different time
zone and land, understands our ways, our culture, our knowledge
systems and controls. Within what I have just described, core
values are very important, and the expatriate needs to understand
them fully.' (P12)

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5.8.3. As personal qualities and ethics

A much emphasised and common description of an important aspect of core

values is that reflecting personal attributes such as 'honesty', 'decency',
'truthfulness', 'devotion', 'integrity', and other similar concepts 22 • Expatriate
managers are seen as role models for local workforces, and these qualities are
deemed desirable in an expatriate manager. The following examples typify a
large number of the responses generated.

'As we try to create this corporate culture, we use these things

called our values, and these have changed over time. Cultural
values are being a good corporate citizen, not being too selfish.'
(P12)

'These are things like openness and responsibility.' (P22)

It is worth noting that the Annual Reports of many of the TNCs surveyed (and
those of other multinational and transnational companies) invariably contain an
account of their global values and beliefs, which contain similar concepts. The
following are two examples containing the key points of the core values as
printed in the publications. The two TNCs work in different sectors belonging to
the service and manufacturing industries respectively.

Box 5.1: Extracts from 1998 Annual Reports of two TNCs

TNC 1

Mission: Our mission is to achieve clear leadership, worldwide, where we

choose to compete.

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Values: We expect integrity, civility, openness, support for others and
commitment to the highest standards of achievement... to good
citizenship.
TNC2

Mission: To be the undisputed leader worldwide.

Values: Honesty and responsibility, innovative and team-inspired, global

and caring good neighbour, safe and secure.

As can be seen from the above example, the qualities included in these
companies' core values are very similar to those discussed by the TNCs in the
sample of this study. The core values above appear to serve the TNCs' global
vision echoing the desire to achieve global presence and leadership in the face
of global competition (please also see section 5.9 below).

5.8.4. As product and market-related knowledge

Core values are sometimes specifically defined in relation to TNC-related

knowledge of products and markets, and the basis of global success, the
possession of which is the skill that expatriate managers embody and transfer.

These descriptions are often indirectly or directly linked to the TNCs'

competitive advantage, and to their branding and marketing policies in the home
or main markets. The following are typical examples.

22For a critical analysis on the emergence and use of such terms in the globalisation era, see
Gee et al, 1996.

134
 'These are like a company set of values ... The expat would need
to be truly able to interpret and articulate these values as a part of
their role.' (P 19)

The same respondent then explains how these company values are linked with
company performance and success:

'This is a strongly branded company, and so brand values are very

important ... these are the values that differentiate a company from
its competitors. We are in a competitive market and the only
difference between us and them, the only thing that has made us
successful is our innovative approach to customer service.'

The next participant confirms aspects of the last statement:

'These [core values] are a very important part of the skill set.
They are a mixture of not only technical competence, but also
company knowledge and product knowledge.' (PIO)

5.9. Core values and global markets

The previous sections considered in some detail the role of expatriate managers
in its various dimensions, particularly in relation to the transfer of core values.
Some aspects of this account, however, appeared to be quite vague and
intangible. A participant confirms this ambiguity:

'Well, from the outside, these things are not very tangible. On an
emotional level, there is a lot of passion about the company
culture and things like that. It is things like making a decision to

135
 make a customer happy. Some companies may not be interested in
articulating this. Once you do, you can say that person [worker]
has a certain behaviour [making the customer happy] and if that
person is successful, that is what makes us successful.' (P19)

In addition to being vague, concepts such as honesty, openness, dignity and

feeling happy or empowered, for example, are likely to be socially constructed
in the context of geographical specificity and this further undermines the
development of clear definitional understanding.

Further exploration of some aspects was sought in order to gauge whether

greater conceptual clarity could be gained from the participants' responses. The
participants were asked to exemplify the manifestation of these attributes in
practice and provide further clarifying detail. This process did allow some
further clarity, as detailed below.

The values described by the participants appear to translate themselves into the
more tangible processes of the operation of market economies, which at this
point in time, the participants relate to globalisation, such as increasingly
harsher global competition, market performance and profit margins. The
following examples offer further clarity on how core values might translate
themselves into the operations of the global economy.

'We operate under conditions of fierce competition; understanding

the corporate values means understanding these as being things
like profitability growth and technology protection.' (P27)

A competition-led drive towards customer satisfaction globally is indicated by

another respondent as a key aspect of his TNC's core values, an aspect, the

136
importance of which led to a reconsideration of the core values of this trans-
national.

'Our core values are hugely important. But what we have done is
to re-establish our values to satisfy the world customer. The
purpose of this stated philosophy [now] is to try to teach people
what our management principles look like in practice. For
example, that the interests of the individual and the company are
one and the same.' (P4)

The next respondene 3 explains some of the connections between core values
and markets and customers.

'Going back to the sort of things we aim for ... to be the best in our
class, goes back to customer satisfaction, and to our market share.
We have got various initiatives like our Quality Programme, our
Total Cycle Time Reduction, which reduces the time to do things.
They [core values] do translate into the market place.' (PI3)

Another participant also considers this aspect in relation to market shares:

'A lot of companies will look to [expatriate] managers to bring in

exactly these core values. I know that we were very concerned
about China, about corruption there. But at the end of the day, a
person who raises your market share by 5 or 10% is just as
successful as one who cares, for example, about community
values.' (P26)

23The respondent, like other employees of the TNC, wore a company badge that had her TNC's core
values printed on it containing a number of attributes similar to those described in section 5.8.3, and
explained that this was practised in the company to remind people of the importance of these values.

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The next participant explains the relationship between core values and profit
margins:

'To be honest... our core values go up and down with our

profits ... We will change them according to market conditions.'
(P32)

The participants were, generally, acutely aware of the need to expand rapidly
and of the necessary conditions for the success of globalisation strategies in the
current era. This expatriate, who heads the R&D facility of a large TNC sums
up the context in which competition is played out globally:

'To succeed in globalisation, you need two things: new markets

and new products. You need both of them fast. The value-adding
contribution of people like me [senior expatriates] is to employ the
global values of the corporation and ensure that we can launch
products and management processes in other places effectively,
and profitably'. (P5)

5.9.1. The function and purpose of core values

The last section presented a somewhat more tangible account of how core
values were seen to relate to global competition and market conditions. The
current section aims to present a more specific analysis of their purpose - that is
to say the variety of ways in which core values are employed, and reasons for
their employment.

An important aspect of the function of core values appears to be the promotion

of a global corporate culture in a TNC. Here too, the function of core values,

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constituting an integral aspect of a global culture, is linked to global competition
and the operations of markets, as the next participant explains:

'Their function is to transfer our culture, mission and vision across

the world. This company has a mission, which is basically to
become the world leader in this sector.' (P28)

Despite the importance attached by the TNCs to the cultural component of core
values at the global level, creating a single transnational corporate culture to act
as a basis of a value system is not an easy task. The same respondent explains
the difficulties inherent in this process:

'You can say here are our shared beliefs and values. But to get
people from 50 or 60 nationalities all behaving in the same way,
believing in the same values is very difficult. So many companies
fall on that.'

Nevertheless, promoting a global culture remains an important aspect of the

expatriates' role. The following response typifies the perception that local
cultures may need to be changed or reshaped in order to be integrated into the
core culture:

'I think that these key beliefs are very important and that they are
not necessarily easy to introduce into other cultures. So actually
working within those cultures in order to get those key beliefs
integrated is a big role for expats.' (P13)

And the significance of such integration of cultures rises in situations of mergers

and take-overs, as explained by this manager:

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 'My main marching order was: "make sure you inculcate into the
organisation the [TNC's] values." I had to bring alive these values
in an organisation growing through acquisitions. It is a bit like
making a 'melting pot' happen. In the UK, for example, most of
our businesses are acquired businesses, with folks having been
used to different sets of values and philosophies. We, as expatriate
managers, are charged with the task of taking such wide-ranging
values and making them consistent. It is one of the things we do. It
is tremendously important, and is also an unsettling aspect of
expatriate work.' (P4)

Here too what emerges is a tendency for core cultures - manifesting themselves
as the culture of the home base country of the TNC - to be seen as dominant
cultures into which other cultures need to be moulded. The following three
American managers working for two US corporations are explicit about this
process, including language and ways of doing business as their points of
reference:

'We need a combination of people who understand the firm

globally, and communicating these values effectively is a key
thing. This means they need to be able to speak American 24 , And
that is one of the reasons why I am finally convinced that we have
to have ex pats in management positions, because they can
communicate core values in the [right] language.' (P6)

24 Here the reference to the' American language' is clearly not to the English language, which the
Americans also speak. It is a way of operating including the conduct of business that the participant has
in mind. An attempt to clarify this broad but nonetheless often mentioned concept led to it being defined
as 'a way of doing business that is based on fast results in terms of profits and performance; a way that
is quick in its enabling and problem-solving ethos' (P17). The same participant contrasts this to the
'British way of working as slow,lazy, outdated and unenthusiastic' (field notes, exploratory interviews).

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 'Expats are carriers of corporate culture, which is about the
American way of doing things. The American way of doing
business globally is the most important skill.' (P14)

'The most important role of an expat is to communicate a

corporate vision. And that depends on where you are from. An
American company will run on a different philosophy. Even
though at the end of the day you have to manufacture and sell, in
every company you still need somebody to communicate a
corporate vision.' (P32)

Expatriates moving from the core and representing the TNCs' core (home
country) culture in other geographies are sometimes explicitly critical of other
cultures, and see the success of their assignment and their TNC linked to a
cultural restructuring of the locality they are in. In the following example, an
English expatriate manager destined to head a joint venture in Italy, explains in
considerable detail how, in his view, the 'Italian way of thinking and working'
does not adhere to his perception of how a global corporation should run. Long
breaks from work, inability to take initiative and feel 'empowered' by the labour
process, are amongst attributes that lead the participant to conclude that' They
[the Italians] are backward.' He further explains that:

'In terms of the culture of their work place, the Italians are very
different. In some ways they are 30 years behind our philosophy
and culture. That was an issue we needed to sort out. We needed
to know what kind of a culture we would have within the
organisation.' (P 10)

In this example, the respondent explains how in his view the Italian workforce
at the shop floor of the TNC's subsidiary might change to fit a 'world class

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production venture'. He is asked to consider the specific function of his TNC's
core values in this process:

'They go to work and if they are instructed and told what to do,
that is all they do. They will not solve their own little day-to-day
problems. Whereas if you immerse them in their work and make
them feel part of the team ... they will resolve their problems ...
and consequently the company will get the benefits. Basically that
is what we are trying to do: team-working, empowerment, smaller
cells, where people feel empowered and valued in their jobs.'

The next respondent points to another cultural difference seen as unfitting for
globalisation, in a different part of the world.

'I was in Turkey recently, negotiating a joint venture. Really, we

wanted a take-over but they did not allow it. We preferred that
because it was quicker and faster production. Culturally they are
very nice and hospitable, but they don't understand western
business calculations. This has caused us enormous difficulties.'
(P27)

5.10. The primacy of managerial over technical skills

Another interesting and perhaps surprising indication that emerges from the
participants' accounts is that high-level technical skills alone are not sufficient
for a significant international assignment, particularly in the case of senior
corporate expatriates. The ability to understand and to promote core values in a
foreign location is often expressed explicitly as a specific overriding skill. In
other words, the skill to understand and the ability to transfer core values take

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primacy over technical skills. Interestingly, this appears to be the case in both
service and manufacturing TNCs alike, as the next participant explains:

'In the case of senior expats, both sets of skills are important.
Sometimes you have to make adjustments if you do not have
people who have both. If you are sending someone to train people
and leave, then that is fine. What does not work is sending
someone with the technical skills who has none of the rest. They
fail every single time. We would not hire anybody who had the
technical skills but not those [core values].' (PI8)

Another manger representing a manufacturing TNC comments:

'We actually select people ... not just because they are good, but
primarily because they can translate these [core values] into
practice.' (P5)

The following participant, who had a strategic overview of expatriation policies

of a large number of TNCs, links the two sets of skills together and sums up the
reasons why one type of skill may be more important for global ising TNCs.

'In actual fact the role of the expat as the corporate glue and
transferring the corporate culture around the globe has increased.
This is so because as technical expertise can be increasingly
replicated around the globe, so the expats don't necessarily have a
technical function. Their role on the corporate cultural front is
really important.' (P29)

As stated earlier, the concept of core values and the issue of their constituting a
key feature in skills transfer, emerged as particularly important for the themes of

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this research. They will, therefore, be returned to in various parts of the
remaining chapters.

5.11. Conclusion

This chapter considered the role and function of expatriate managers in the
globalisation process, paying detailed attention to several dimensions of their
role that had emerged through the research process and were elaborated by the
participants as significant. It discussed the importance of this theme as a core
theme of this study and the implications of this for other themes, particularly the
second core theme, namely the possibility of new technology replacing
expatriates. The key findings presented by the chapter may be summarised as
follows.

The TNCs may use expatriation for two broad and often interlinked and
overlapping reasons. The first is related to the increasing recognition that with
globalisation comes the necessity to understand the cultural context of foreign
markets in order to globalise successfully. The TNCs thus expose their
employees to cross-cultural training via expatriation, particularly if, in the words
of one participant (P2), those sent on international assignments are being
'groomed for stardom'. In this respect, expatriation will usually herald the
promise of a more senior position within the TNC's internal labour market. A
second main reason why expatriates are used is to do with the immediate needs
of a TNC to launch or manage dispersed operations in existing or new markets.
The latter is the reason for all the participants in this research living and
working in the UK.

The participants often point to the changing nature of modern expatriation from
an almost compulsory move determined by the TNC to one that may be

144
welcomed, actively pursued and influenced by the manager in recognition of
better future prospects andlor exciting challenges.

Senior expatriates play a multi-dimensional role in globalisation. Amongst the

most significant aspects of their role are: the promotion of global networks of
communication; acting as mediators between the core (usually a TNC's
headquarters) and other geographies, and creating circuits of knowledge that
reflect the TNCs' sense of globality; ensuring that global products and
production processes match the image of the centre and its branding and
marketing strategies; enhancing the speed of globalisation strategies; training
local workforces; and representing the face of otherwise absent TNCs' and
safeguarding the TNCs' political and economic interests.

Embedded in the execution of all these dimensions is the concept of skills and
skills transfer around the globe. The chapter reports how gaining an insight into
this entailed the disentangling of the concept of skill and skill transfer from the
point of the TNCs; and discusses the emergent crucial importance of a set of
knowledge and belief systems - the core values of a TNC - that appear to form
the key component of such skill(s). The most important aspect of the skill of
expatriate managers - particularly at senior levels - is seen as being able to
utilise their corporations' core values and vision in managing and advancing
global operations.

The chapter details meanings and interpretations attached to core value and
presents examples of such meanings and also of participants' formulations on
the purpose of core values. A range of understandings and interpretations
surround the concept of core values. These include their being perceived as a set
of beliefs governing global activities; as the representation of the trust of the
centre; as personal attributes; and as knowledge of the products and markets of a
TNC. In their most concrete form, these values appear to be embedded in the

145
TNCs' competitive advantage in terms of their managerial ability,
distinguishing them from their competitors with the respondents identifying
tangible and explicit links between these and the business success of the TNCs
regarding presence, competition, market shares and profit margins.

The distinguishing feature of such indicators of success in the globalisation era

is commonly acknowledged by the participants as relating to the fact that they
are now all global: competition is acted out globally; presence is required to be
global; and market shares and profits need to be secured fast in the face of
competition that arrives from other global players.

The chapter also considered how these values were considered by the
respondents as constituting a 'global' culture, the inculcation of which is not
without problems. This process becomes particularly important in situations of
mergers and acquisitions.

Indications of patterns of domination of the core over other geographies were

presented as manifestations of hierarchical relationships embedded in the
globalisation process. Senior expatriates going out from the core base(s) of
TNCs are seen as trusted agents, charged with the task of influencing and
shaping globalisation processes in their different dimensions including the
restructuring of production processes, and of local cultural and political
relations.

An important feature of the domination of the core is exemplified by the chapter

as the recurring significance of a TNC's headquarters, seen as the centre, from
which core values stem and to which knowledge of dispersed global operations
must return.

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The data presented in the chapter illustrate that senior expatriate mangers are
carriers of more than technical knowledge; and that technical skills might in fact
occupy a secondary place in the skill-set required of these expatriates. In this
respect, the chapter points to a complex web of geographical hierarchy
emerging and going beyond the historically unequal exchange and transfer of
skill from the more to the less advanced economies. In other words, expatriate
managers despatched to the UK from North America appear to be playing a
similar role to those despatched to less developed market economies. Their role
thus appears to be one that is increasingly related to the perceived necessity to
inculcate and promote transnational core values in whichever geography a TNC
is present, in an attempt to secure presence and success in a fiercely competitive
global economy.

Finally, the chapter points to how the perceptions of 'skill' discussed in this
chapter may influence the recruitment policies of TNCs in practice; and
suggested that this provides a conceptual and empirical link between this and
the next chapter, which considers the recruitment of expatriate managers and the
measurement of their performance while on international assignments, as sub-
category of this research.

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 CHAPTER 6

Expatriate Managers: Who Might be Selected and Who is Seen to Succeed

on International Assignments

6.1. Introduction

Chapter five, which was devoted to the presentation of key findings of this study
in respect of the role of senior expatriate managers, suggested that a study of
how these managers were selected for international assignments, and how the
success or failure of international assignments was determined by TNCs, were
important for a clearer understanding of their role and value in the globalisation
process. Possible conceptual and empirical interlinkages between this and the
last chapters were discussed in detail in the research design and parameters
presented in chapter four. In the data classification and analysis matrix
developed there (please see table 4.5 in chapter four) the dimensions of the
study covered by the present chapter, were presented as the two sub- categories
supporting the first core theme of this research, namely the role of senior
expatriate managers in the globalisation process.

The purpose of the first sub-category (recruitment) was to gain an understanding

of how the internal labour markets of the TNCs covered worked. Such insight
would provide a relatively detailed picture of policies and practices of selection
and reasons for inclusion as well as exclusion of managers in the globalisation
process. The second sub-category relates to the measurement of success of
international assignments, and aims to gain an understanding of the final output
and value of expatriation.

148
The current chapter is thus divided into two parts, each dealing with the findings
of one sub-category: section 6.2 provides an analysis of recruitment processes
while section 6.3 is devoted to building a picture of how the success or failure of
international assignments might be perceived by the expatriates and the TNCs in
this study.

The conclusion of the chapter brings together the key connections and also
identifies a number of conceptual and empirical connections between the
findings of this chapter and those presented in the last.

6.2. Recruitment of expatriate managers: key elements of policy and

practice

The TNCs covered appear to have a set of key competencies against which they
recruit their senior managers. Knowledge of these competencies might be
formally formulated within the corporation or be circulated and practised
informally by decision-makers concerned with selection for international
assignments.

In this part of the research, the interviewees were asked: 'How does your
corporation recruit its expatriates, particularly senior expatriate managers?'

What is presented here is an account of some principal findings stemming from

the responses of the participants.

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6.2.1. Corporate inclusion and selection

In the vast majority of cases, the TNCs appear to operate within enclosed
internal labour markets. Senior expatriates are people who are known to the
company and who have already gained the trust of the headquarters and those at
the top of the corporation.

Here too, a distinction is frequently made between various levels of

management positions and also between technical and non-technical
assignments, echoing what was reported in the last chapter. Two of the
managers who describe the general principle involved formulate the following
responses, which typify these distinctions respectively:

'We advertise all jobs, certainly up to middle management on the

Intranet25 • The very senior jobs are appointed by the Executive
Committees.' (PI)

'If it is purely at the technical level, we may sometimes recruit

people from outside. Sometimes we may not have the sort of
people we need or they may be working on other projects so we
might hire someone and send them out.' (P5)

In certain situations, however, it may not be possible for the TNC to recruit a
senior manager from its pool of managers in the given market segment. The
TNC - particularly if its operations are very diverse globally - might rely on its
own managers despite their business experience being different and specific to
another line of production. The next manager explains that her TNC prefers to
send in someone who knows the business as well as the corporation and its

25Reference here is to the internal electronic communication system within the corporation, which is
used by this and most of the other TNCs to disseminate general information.

150
values, but will consider appointing from its larger internal labour market, if
necessary.

'Our preference would be to enter the market with somebody who

knows the corporation, knows our business in the relevant market
segment... rather than have somebody... who just happens to
understand the business. The only place we are going to get the
expertise is from our own company or from another company
[TNC's own] in another market.' (PI8)

In other situations, a TNC might recruit from the open international labour
market despite a strongly expressed preference for self-reliance, as in the case of
this TNC belonging to the financial markets.

'We practically never hire an expat as a new recruit. .. Now if we

are looking for someone to do mortgages or to run global
economics and that fails, we would advertise locally and use head
- hunters here in Europe ... So usually it is an internal transfer.'
(P2)

The next respondent confirms the occasional nature of recruiting from the
outside, but points to the significance of the candidate being known to the TNC.

'Occasionally the company will bring in people from outside who

have the skills for a company of this size. They will [however]
have to be people known to the corporation.' (Pl)

The TNCs are often explicit about the reasons for their preference of internal
corporate managers. The issues of trust, corporate global culture and values and
the ability to understand and inculcate in other geographies a corporation's core

151
values feature strongly in the responses. Although this process is considered
separately in section 6.2.3, its key dimensions keep appearing throughout the
responses and seem to be ever present on the participants' minds when
formulating even very general analyses of recruitment processes. For example,
the last participant cited above carries on to explain the importance of a global
culture, making the link between different levels and functions of managers he
had referred to earlier.

'If it is at management level, it will usually be someone from

within the corporation, because one of our aims is obviously the
development of a global transnational culture.'

When extended to the recruitment of local managers within (and for the
management of) foreign geographies, the issue of core values and the
acquisition of skills related to the understanding of a TNC's global vision re-
appears.

, ... A local manager can fill the role from his point of view but I
don't think he can do it from the corporation's point of view.
They would not have the trust. .. ' (P32)

A TNC might, however, identify a potential future regional manager from a

foreign location, and invest in their future. For example, the next participant
explains that often his TNC will create 'artificial' assignments - that is to say,
assignments not related to any existing work or projects - the whole purpose of
which is to introduce foreign managers to the culture of the core. The participant
is a senior manager working for a large manufacturing TNC.

'We have what we call 'bubble assignments'. These are

assignments specifically for high-flying managers with a lot of

152
 potential. Recently I brought into the headquarters an excellent
engineer from Saudi Arabia. I know he has all the engineering
skills I need; I also know he will never run this corporation from
Boston [headquarters]. But I do think what he might do one day is
to run our Middle East business, so I will bring him to the centre,
maybe several times, because even to do that he will need to know
our culture, our values and he will need to install these in others.'
(P14)

Indeed, what emerges again, in the context of recruitment policies of the TNCs,
is the ability to transfer core values as the crucial skill. This is commonly
described as the most significant reason for recruitment - particularly at senior
managerial levels - and, therefore, merits separate mention. An account of this
aspect is presented in section 6.2.3, which follows a general description of
selection criteria below.

6.2.2. Selection criteria· a general account

Most TNCs reported having a set of core competencies, which they look for in a
senior expatriate. The following responses demonstrate this.

'There is a list of skills and competencies like clarity of purpose,

intellectual power, drive, resilience, leadership and team-working
ability. Those people [with these skills] will generally be given
first opportunity at the interesting and good or high-development
potential jobs that become available internationally.' (P2)

While these qualities may be expected of all managers including national

managers, the expatriate needs to possess the desire and ability to work in

153
foreign operations and therefore with other cultures. Indeed, with intensifying
globalisation of economic activity, the TNCs attach increasing importance to
cultural sensitivity and awareness. The following participant, who had in-depth
knowledge of UK TNCs' expatriation policies and an overview of the workings
of a large number ofTNCs internationally, comments:

'Increasingly TNCs are beginning to distinguish between

performance on national and international levels. They are
increasingly aware that good performance in a country may not be
sufficient, that there are different competencies required for
international assignments such as increased adaptability, flexibility
and cultural awareness and communication skills. Of course, all
these are needed for a domestic role, but they are needed in greater
depth for an international role. More companies are paying
attention to this at the beginning now. They [expatriates] are sent
to places like Farnham Castle for a week with their partners
[spouses] to get training in these areas. Companies are realising
that you cannot just transfer people from the UK to overseas
without selection and preparation.' (P29)

The emphasis on pre-departure cultural training is targeted at business activity

and how business is conducted in other countries, as this American expatriate
based in Surrey, explains:

'We have begun recruiting on a cultural basis. Clearly, if you have

a previous international assignment, that is positive. Speaking to
other expatriates stationed in early 1990's, they would basically be
sent; told to go. When I was being sent, we 26 were asked to have a

26Reference is to the expatriate's whole family including young children. The importance of the family
in this type of migration is increasingly acknowledged by TNCs and the needs of the family
accommodated for. This is discussed further in section 6.2.6.

l54
 psychological, a cultural profile. A company whose services we
buy sat us down and asked us about the history and knowledge of
England and based on their score, sent us through for one week of
cultural training. I found it helped a lot, at least from the point of
view of the English doing business.' (P26)

In addition to being culturally sensitive, some TNCs might expect their senior
expatriates to set a behavioural example for others in the geography to which
they are being sent. This is explained by the next participant.

'We screen for people who will have a remarkable impact beyond
the usual business credentials expected of senior managers. We
screen for the person's ability to work with others. The ultimate
success of an expatriate is whether they make that happen,
whether they can provide a good role model'. (P5)

6.2.3. The significance of core values in the recruitment of senior

expatriates

The last section described some general qualities that corporations looked for in
a senior expatriate manager, and presented an account of how the TNCs
attached increasing importance to the ability of the expatriate to work with and
within other cultures. Beyond this general description, however, emerges from
the responses, a particular quality required from expatriates associated with the
transfer of corporate core values.

The last respondent cited above explained the importance of an expatriate being
able to provide a 'good role model' to others in a foreign geography. He
proceeds to make further and more explicit connections between this

155
requirement, his TNC's core values as well as the ability to transfer these over
the possession of technical qualifications:

'We actually select people for international assignments, not just

because they are technically good, but because they can translate
our core values into practice.'

The next participant explains that the understanding and upholding of core
values by senior managers is crucial to his TNC's global success. Having
expressed doubt about the ability of local managers, particularly in developing
economies, to uphold such values properly, he explains:

'It is something that can complicate things, but it is a shared way

in which we will operate. And that is critical... otherwise you
cannot really have an international operation. You have to have
some shared things that people believe in. So many companies fall
on that. They say: "Here are our shared beliefs/ values" ... but you
still have to live by them, for they are corporate values.' (P20)

Another participant, who details the importance of trust in the ability of the
expatriate to understand the corporation's core values, confirms the importance
of the ability to transfer corporate core values to other geographies. The
participant explicitly links this to the issue of the exclusion of other managers
from the internal labour markets of TNCs.

'They [outsiders/locals] would not have the trust and the trust
comes with basically knowing the person you have in place and in
most cases you don't do that by hiring someone from the outside. [
don't think that's really possible. But [ think it also has to do with
understanding corporate values. Corporations are different and

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 they have different core values. Trust is probably the biggest
reason they have expats filling these positions. It certainly has
nothing to do with intelligence, training, schooling or anything
else. The trust comes from working with people having the same
corporate view. I was recruited out of college. I grew up in a
corporate environment and was placed in a position, which I don't
think is unusual. Again I think it has to do with bringing people up
in a common environment.' (P28)

The common environment that the last participant refers to is often seen as
provided by the TNC's headquarters. Indeed, the importance of the headquarters
as the centre of corporate power, as well as the key entity that creates or
significantly shapes the TNCs' global business values, re-emerges in the
recruitment context, as indicated in the next section.

6.2.4. Core values and the role of the headquarters

The importance of a TNC's headquarters and the reportedly intrinsic

relationship with trust were mentioned in some detail in section 5.7.6 of chapter
five. In this section of the research, the significance of exposure to a TNC's
headquarters as well as of gaining its trust are also often mentioned by the
participants as a crucial factor in the recruitment of senior expatriates. Here too,
it is the headquarters that appears to play the guiding force for the formation of
a core global culture, which in tum shapes the TNC's core values and its
perceived distinctiveness from its competitors. While the extent and frequency
of exposure to the headquarters may differ depending on circumstance, its place
remains prominent in the recruitment of managers in a number of ways. The
following are some typical expressions.

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The first example is formulated by a US national, who is on his second (and
more senior) international assignment in the UK. He explains that while
ultimately a global manager may be recruited, who is not a home country
national they would need to possess strong connections with the headquarters.

'Recruitment is rarely from the outside at this level. Usually

people go out from there [the US-based headquarters] and go back
to the headquarters after three to five years. Some people like
myself come back for the second time. So people would have been
with the company for five to ten years; they would have worked
with the senior people there.' (P7)

A very senior expatriate, who after a long assignment (12 years) in the UK, was
transferred back to the US and put in charge of the global division of one of the
major businesses of his TNC, provides the next example. His account confirms
the vagueness of definitions and meanings attached to the notion of value,
culture and vision as discussed throughout the last chapter, but nevertheless
points to the continued prominence of the headquarters, including its prominent
place, in areas such as recruitment of expatriates.

'Even though at the end of the day you have to manufacture and
sell in every country, you still need somebody to communicate a
corporate vision. Now I am not sure if it's corporate vision or
corporate values but you have to have an understanding of
corporate focus and goals. Trust is the big word. You have to be
trusted by the headquarters in the States.' (P32)

The next participant explains the importance of the headquarters in the selection
process, while also pointing to the process not necessarily being as systematic as
may be desirable.

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 'There is not a particularly good process. If a position opens up
somewhere, the company might ask do we have anybody? It is
also individuals making it known to the headquarters that they're
interested in an international career. Basically it is now rare for top
positions not to go to people without international experience.'
(P28)

The question of networking at and with the headquarters is often mentioned by

the participants, and is explicitly discussed by those who seem to offer a more
explicit and transparent answer to the question of how recruitment took place
within their TNC. The next section presents a summary of some descriptions.

6.2.5. Corporate networks and the impact of networking on

recruitment

In general, the participants seem to ascribe certain benefits to networking with

the centre or the headquarters, a main aspect of which is to increase the
individual's scope to secure or shape an international assignment. The
headquarters is seen as the centre of power, proximity with which produces
additional power for the individual. Networking is often done on an informal
basis. A senior expatriate, who describes his assignment as the result of informal
networking, provides the following example. lIe states:

'One of the reasons why it happened like this was that informal
networks were as powerful, if not more powerful, than formal
networks. One of the reasons why I am working here today is that
the chairman of the company I worked for there [the European

159
 headquarters] had worked in the UK previously. So there were
connections.' (P2)

Promoting networks and networking, including on an informal basis, is

sometimes described as part and parcel of normal expectations of management
within a TNC.

'There is an informal network within this TNC, where managers

are expected to develop staff and high quality teams, and in doing
that we are all accountable for spotting people and ensuring that
they can perform at the same level in other settings. So, part of the
process for me was that I spent 3-4 years around the guy who runs
Group Finance before I came here.' (P20)

Networking with the centre also appears to directly increase the power of the
expatriate to negotiate the next assignment. This participant, who completed his
assignment in the UK and had negotiated his repatriation back to the US, states:

'My own thinking is that it all depends on how much noise you
make at the headquarters, and how well you network with those
guys. I have just negotiated with them a new international
assignment. I wanted it because it is a challenge and I want the
challenge. It took some effort, but I am off next week.' (P 14)

The next manager, who continues to stay in the UK, points to similar
advantages related to networking with the centre of power:

' ... It is a tightly controlled [corporation] and based in New York

that unless you have people who understood the power base and
had the connections to it, it was not possible to get things done ....

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 I would say it's been very helpful to me that I am an American
who wants to be here longer term, because I can communicate
very effectively with anyone I need to in New York. They know
that it's in their best interest that I'm here, and effectively it's my
desire to be here. So really the two coincide.' (P6)

6.2.6. The increasing importance of the family in expatriate

recruitment

The TNCs and their HR management policies increasingly see the migration of
expatriates as migration of the whole family unit, and not just the manager. This
is because the unhappiness of the family is increasingly openly acknowledged
as affecting the performance of the (usually male) manager. Failure of an
international assignment is a costly business for the TNC.

An HR manager belonging to a large American TNC discusses the importance

of the family in the recruitment process and prior to departure:

'And we look for family stability. A happy home environment,

husband, wife and children, good relations amongst them, will
ease the difficulties with the stress that always goes with an
international assignment. These are probably the most important
factors [for successful performance of the manager].' (P4)

It is for this reason that particular attention is paid to migratory infrastructures

such as schools and housing being made appropriate and attractive in addition to
pre-departure training and briefing being tailored towards the whole family.

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Most TNCs in the sample considered any documentation on expatriation
policies as confidential and something that needed to be guarded from outsiders.
However, in one case such a document, which related to the management of
international assignments, was made available to the researcher by a HR
manager (participant 7) of a European TNC27 • Extracts from this document
indicate the importance of ensuring 'good performance' of the expatriate
manager and the extent of assistance the TNC is willing to offer to ensure the
comfort of the expatriate's family. The document from which the following has
been extracted outlines the TNC's policy for all expatriates. Further
enhancement of the expatriation package is offered on an individual basis. For
an example of such a package for a senior expatriate, please see box 6.1 below.

Box 6.1: Extracts from expatriation policy document

'With the introduction of this policy within a worldwide framework we are
confident that wherever staff are based a consistent approach will be adopted for
international assignments. This approach, with its commitment to
internationalism, will position us ahead of our competition in the
encouragement we offer our people and will facilitate a greater number of
international staff movements.
The policies and practices described here are not set in stone. We may need to
vary them in special circumstances. And we want to refine and improve them in
the light of our experience and having regard to 'best practice' in competitor
organisations. Please give your feedback and any information you receive on
competitor practice to the company. We will:
• Obtain visas and work permits.
• Remove the 'hassle' of the move and ensure staff have mInimUm
distraction from the job in hand.
• Select removal companies.
• Find accommodation.

27 The researcher was grateful to this TNC (one of the smallest corporations in the sample) for allowing
162
• Locate suitable schooling.
• Help sponsor partners, to the extent that we can In seeking job
opportunities and local contact networks.
• Allocate a sponsor from the local staff to give personal support to the
transferees in their first few weeks in the new location.
• Use the experience of other staff to provide guidance on life and everyday
information to function effectively in the new environment.
• Maintain contact with managers in the home and host countries during the
moving process.
• Ensure a 'customer care' questionnaire is completed and an interview held
with each transferee. This will make us aware and how we measure up.'

As can be seen from this document, the ease of transfer and the happiness of the
expatriate in his/her new environment are seen to be of considerable importance.
This TNC puts such a policy in place with the behaviour of its competitors in
mind, and appears to actively encourage the expatriate to let the corporation
know if it does not match up to other TNCs in terms of benefits and
compensation. An integral part of such an approach is to ensure that the
assignment is a happy and enriching experience for the whole family. The TNC
therefore removes the 'hassle' of migration by providing extensive migratory
infrastructures.

Indeed, what emerged strongly and consistently from discussions with the
managers, the expatriate women's group and with the expatriate school and its
administrators was the importance of availability of a 'good education' for the
children of expatriate families. Interestingly, what is evident here too is that
such availability does not relate only to the traditional divide between developed
and less developed economies where educational facilities may be perceived as

access to this document.

163.
inadequate. Therefore, while this HR manager (P8) explains that: 'There are
places where it would be difficult for children because it would damage
continuity of education', indications were that the expatriates simply would not
have come to a geography like the UK either, if their children's education was
seen to suffer in any way. American expatriates, for example, even though they
may have been on numerous assignments worldwide, expect their children to be
taught an American curriculum wherever they are expatriated to, including
countries such as the UK with which they share a common language. Although
all TNCs in the sample offer to pay for a choice regarding education in private
local schools, very few expatriates had chosen British schools. The vast
majority of the managers interviewed sent their children to American schools, of
which only in Surrey, there are four major campuses. Interestingly, other non-
US, including European expatriates also seem to favour these schools and opt
for an American or an international education. Of the four schools (each with a
population of approximately 700 children), two offer a strictly American
education and the others a more international curriculum offering the additional
certificate of the International Baccalaureate.

Of all the managers interviewed, only one American expatriate (Participant 11)
had opted to place one of his children in a private British school. While the
intention of the family was to expose the child to another culture, the
experiment had failed after one year with the child showing a severe reaction to
cultural change and needing continued psychological support and counselling.
The child was subsequently returned to the American school. In fact, each
school employs a number of counsellors and psychologists attached to it who
offer a variety of comprehensive services regarding relocation and cultural
adjustment.

The issue of the happiness of the spouse of the expatriate manager has also been
gaining increasing importance with globalisation. The HR manager quoted

164
above carries on to explain the importance of ensuring the spouse's happiness as
well:

'There are some places where it would be difficult to be

accompanied because there is nothing whatever for the partner. So
we would wish to identify such issues as early as possible in the
recruiting process and not wait till there is a problem.' (P8)

Most of the TNCs included in this study offered financial assistance to the
spouse (mostly women) for personal development purposes. Through the
expatriate women's group, the researcher was often asked to find appropriate
cour'ses for women to pursue. The financial assistance offered to the women was
varied and could be as large as $5000.00 per annum. Additionally, all expatriate
schools offer a full and well-attended annual programme (sponsored by various
TNCs) of seminars and lectures around issues relating to different aspects of
expatriation and relocation as well as on personal development paths, serviced
by professional experts in the field. The women attended these regularly and
found them useful both in terms of personal development and as a valuable
resource for their community as a whole (field notes, expatriate women's
meetings).

So far, this chapter has dealt with some main issues stemming from the study of
the recruitment of expatriate, particularly senior expatriate managers. As
mentioned in the introduction, the chapter proceeds to discuss how TNCs
measure performance and success or failure of an international assignment.

165
6.3. The measurement of success of an international assignment

In this part of the research, the participants were asked to explain how the
success or otherwise of an international assignment might be determined within
their TNC. The following provides an indicative picture of how the TNCs might
measure success.

6.3.1. Evaluation of international assignments • some general

indicators

In general, all TNCs report having some form of criteria for assessing the
effectiveness of international assignments, usually on an annual or project-based
basis as indicated by the following response, which beyond a basic measure of
'survival' indicates the existence of some pre-set criteria:

'If there has not been a failure; if the family is not unhappy such
as in the case of cultural maladjustment, generally you're brought
to an assignment with a particular goal in mind and will be
assessed against set objectives.' (P28)

The importance of completing the assignment as a measurement of success is

confirmed by the Director of the Business Unit of a US Medical TNC whose
work contained a large scientific and technical component. lIe also indicates the
specificity of his own case:

'In my case it would be technology spread and acceptance [in

Europe]. Someone else will be assessed on whether he completed
the assignment.' (P20)

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The distinction between technical and managerial expatriates appears to
continue to produce some difference, with technical assignments sometimes
being perceived as capable of easier evaluation. However, the difference seems
to become insignificant with rising levels of seniority (please see below)
resulting in similar expectations being made of all senior managers. The
following are some examples, the first one of which is provided by a senior
expatriate in a Financial Markets TNC:

'This is a difficult question to answer, because it depends on what

business they have been part of it. We have some expats who are
in operations, who are in technology, who have come here to
further develop the system, created linkages with the global
systems with the global systems in New York [the headquarters]
etc. I would say that their success can be measured on a project by
project basis.' (P2)

And the following measure of success is anticipated by a UK manager,

proposed by the parent company - headquartered in the UK- to act preferably as
the manager (or as co-manager if this meant that the much delayed project
would take off) of a joint venture in Italy:

'In my own case, as a technical manager, a carrier of technical

knowledge, it would be to see if I implemented a technology
transfer system effectively.' (PIO)

However, as mentioned earlier, the TNCs appear to expect all senior managers
to contribute to their operations in foreign geographies something that will last
far beyond the life cycle of a project or a product. The next HR manager
explains:

167
 'The other super-ordinate factor with managerial [technical and
non-technical] positions is [whether] that person left a lasting
imprint on the organisation. Has he made it a better organisation?
I am thinking here in terms of management. With Research and
Development, it is more likely to be that person brought an
additional sense of technical perspective, of innovation, whereas
in our home country I would not be assessed so much in terms of
leaving a lasting imprint, as I would be here. We are about three-
and-a-half times more expensive than a local with schooling and
so on. So, "Was he worth it?" will be the question for this TNC'
(P4)

However, this section needs to note that there appear to be different degrees of
formality attached to the evaluation process(s) and the indicators for success or
otherwise also appear to differ across the board. On the whole, the procedures
for determining the success of an international assignment appear to be less
stringent than the TNCs would wish. The TNCs were particularly concerned
with this perceived shortcoming given the very high cost of expatriates. The
first account is by a participant, who was responsible for the international
section of a leading management development institute. She offers the following
overview:

'For lots of companies this is still the missing link; they haven't
put into place proper assessment processes. From talking to
companies, it appears that success is measured by whether a
person actually stayed in the locality for the agreed time; that they
didn't do anything wrong; that they didn't upset the local
operation... But evaluation is very important, for both the
individual if they come back to the home country or go to another

168
 international assignment and also for succession planning and
future management building.' (P29)

Dissatisfaction with monitoring and evaluation procedures is often expressed

with the high cost of expatriation invariably present in the participants' minds:

'We don't measure them as thoroughly or ideally as I think we

should ... particularly as the person will be costing the business so
much more than conventional employees. It is too informal at the
moment, by picking things up. This is something that we will need
to work towards.' (P8)

Nonetheless, the issue of the ability of an expatriate to work within other

cultures features prominently in many of the descriptions offered by the
participants. As with the recruitment process, particular attention is paid to how
well the expatriate performed in a geography with a foreign culture. This is
discussed further below.

6.3.2. Global markets and the importance of "culture"

Many of the TNCs interviewed describe cultural awareness and sensitivity of

the expatriate as an additional dimension of success, a quality, which appears as
largely specific to the expatriate manager. The following manager, for example,
offers a full explanation of his perception of specificity of cultural awareness
within general criteria, with particular reference to China, where he was head of
a joint venture and also in charge of other UK expatriates there:

'Within the company performance is assessed annually. At the

beginning of the year we list our tasks and objectives for the year.

169
 An expat's criterion would generally be no different from a similar
job anywhere in the world. For example, a sales manager in
Indonesia would have his objectives related to that market, but
essentially the same criteria would be applied to a sales manager
in Scotland. There would be some cultural things: they would be
expected to develop contact with ministries. For expats an element
of relationship building would be applied. So for us in this project,
we have to develop relationships with certain ministers in Beijing,
[and with] certain influential people in Shanghai, because
relationships are very important in China. It's a society built on
relationships. We spend a considerable amount of time going
round, meeting people, talking about our projects and taking them
to banquets. This is how you do business in China.' (PI)

It is worth noting here that despite the important distinction often made between
technical and non-technical positions, once again, the issue of culture and the
ability to work with other cultures remains significant for all senior expatriates.
The next account of measurement of success points to the importance of
specificity of what within this and other TNCs is perceived as culture.

'An expat who is successful in America, might be a total disaster

in China. So in addition to the usual measurements, for example
taking technology in the case of technical managers, it is things
like how well they [can] work with other cultures.' (PS)

In this section of the research - as was the case with concepts such as core
values and the often seemingly vague attributes that these seem to contain -
(please see sections 5.8 and 5.9 of chapter five) what emerges from a significant
number of responses appears to relate to business performance and to traditional
indices of success in the market place. The only distinguishing feature of culture

170
appears to be that in the context of giobalisation and the need to conduct
business successfully, the TNCs need to take note of how business is conducted
in a specific locality. In other words, the measurement of success appears to be
according to (traditional) business objectives applied in the globalisation era,
that is to sayan era where business needs to be conducted globally and therefore
in a variety of cultural contexts. Conversely, as indicated by the illuminating
account presented below, lack of achievement of an expatriate by traditional
business objectives is seen as a cultural failure.

'We measure them in terms of the business objectives - just the

same as anybody else28 • We don't do anything else. We look at the
results. They have business objectives set for the year. They also
have personal development plans, etc. And what we want them to
do is produce business results, and if they don't do that, it means
they were not able to adjust culturally.' (PI8)

Importantly for this study, this is where the role of senior expatriates and how
well (or otherwise) that role seems to have been performed, find greater clarity.
This senior participant explains the general principle involved, explaining the
primary measure of success:

'The first is: can the person build the business? No matter where
you work, you have got to be able to build the business, and this is
[ultimately] defined as greater market share and greater profit
margins' (P4)

This primacy of results in the market place is confirmed by a participant in

charge of expatriation policies of a large US Entertainment TNC, who having
emphasised that creativity is particularly important to her corporation, explains

28 Reference here is to senior managers generally.

171
that success is ultimately measured against 'business goals, market share, profits
and other traditional business criteria.' (P 19)

Beyond this general principle, certain more specific requirements become more
evident as a number of managers explain what success means in global markets.
One key indicator of success is the ability of the expatriate to have identified
and implemented opportunities for global growth. And in the global growth
path, the ability to negotiate and close take-over and acquisition deals are
singled out as particularly important. The following response typifies what is
seen as success in this process.

'They need to prove over time that they can successfully manage
large operations. To have extraordinary people management skills
is very critical, and they need to have developed a global view.
That is that they can really move up and get out of the day-to-day
business and think more globally, see the big picture. I like the
concept' of this helicopter view. Some people never get off the
ground. They need to be visionaries, which is the capability to
think ahead 3-5 years and rather accurately predict certain
involvements ... I mean acquisitions and mergers.' (PIS)

The importance of materialising mergers and take-overs was discussed in the

last chapter as an important aspect of the senior expatriate manager's role, and it
emerges here too as a distinguishing feature of the measurement of success in
the global economy. This participant, who had been sent to identify, via the UK,
acquisition possibilities in Europe for his US-based TNC, comments on how his
success will be measured:

'By producing the end result. If it's an acquisition, for example, as

in my case, by actually identifying and taking over a company that

172
 would strategically serve the corporation's interests. This would
mean transferring the core values and ways of doing business as
well as meeting the cultural adjustment issues.' (PI5)

This expatriate (one of the only two non-HR women managers in the sample)
who was transferred to the UK because of her track record of successful
acquisitions, explains that the success of all expatriates in her company would
be measured against individual criteria, but states the specificity of her own case
as follows:

'There are objectives for each expat, depending on their job and
function. But certainly in my case it has been whether I can
continue the successful take-overs that brought me here in the first
place.' (P23)

The issue of take-overs is also important from a different angle even in cases
where growth by acquisition has not been an important component of an
expatriate's job, as in the next example:

'Objectives are according to criteria such as numbers of

acquisitions, but also whether you left yourself open to take-overs
or not, whether you made sure that the company was secure and
not vulnerable to outsiders' take-over intentions.' (P27)

Another example of the seemingly inherent importance of take-overs and

acquisitions in the globalisation process is provided by the case below where the
participant appears to reflect on the experience of his assignment not leading to
growth via the acquisition route as somewhat unusual.

173
 'I guess if you base success on market share we have been
successful. We have a better handle on the European market in
general. There were no acquisitions, which is interesting.' (P32)

6.3.3. Examples of achievement and problems

Perceptions of success by both HR and non-HR managers contain a strong

element of recognition and concern about the need for the international
assignment to have produced favourable results for the career of the expatriate
as well as for the TNC. As mentioned in chapter four, the sample of this study
represents an important group of positive globalists. In that sense and as far as
the success of an international assignment is concerned, no major contradictions
appear to exist between the perceptions of the TNCs (as may have been
articulated by the HR managers, for example) and the managers themselves.

The managers interviewed often talk about the measurement of success from the
point of view of their skill and personal development and fulfilment and the
happiness of their families, as well as expressing a strong interest in
safeguarding the TNCs' interests. Most who were repatriated within the
duration of the study and beyond (approximately four years of contact with the
researcher) were absorbed back into the internal labour markets of the same
TNC, successfully and willingly. All went to higher positions or negotiated
contracts (usually with the same but in a number of cases with rival TNCs) that
10 some way were more ideally suited to them and/or their family
circumstances.

As well as many positive accounts, however, there do exist instances of special

problems and difficulties during or post29 the assignment. Detailed below are

29 The management of repatriation appears to be taken increasingly seriously by TNCs. During the
course of the interviews, the researcher was asked by two of the TNCs if she would be willing to

174
some examples of both positive and problematic outcomes from different
perspecti ves.

The following relates to the very positive experience of an expatriate, who

having completed his assignment, was (at the time of interview) about to join
another corporation. He explains what the last assignment has meant for him
and how his imminent departure takes place with the blessing of his current
TNC.

'From my point of view it [success] would be: did I build a more

unique set of skills and capabilities, which I would not have the
experience of had I not been in another environment? Am I more
capable now than I was 2 years ago? Did international exposure
give me more skills? Yes, I am leaving them now but [this TNC],
like all other similar companies, cannot meet my professional and
family needs every time [even though] they can most of the time.
The Chairman of the company came and spent hours with me
when I said I was leaving. We agreed that I am going to go to this
job but they would love to have me back at any time and at a
higher level. I will go on this next assignment and it will give me
experiences in oil, in gas, in deeper experiences in energy.' (P20)

The case of this manager also typifies the degree of choice and flexibility that
senior expatriates might enjoy in choosing their next assignment in terms of
reaching a desired balance between personal development, career progression
and family life and commitments. The same participants elaborates:

'And it [the new assignment] specifically meets some location

needs that my wife and I have. So, that, to me, is perfect. The most

undertake. or otherwise facilitate further research regarding repatriation and how it could be made more
effective.

175
 important thing to me now is that we will be near her family. We
think this is great living and we would like to come back say, in
five years time, when we're a little older.'

Losing an experienced expatriate to another corporation, however, although

ultimately beyond the control of a TNC, may not always be seen as
unproblematic as in the last example. In the case mentioned next, an HR
manager expresses concern over potential loss of expatriates after they have
completed their assignment.

, ... The expatriate may have progressed in their career as an expat

and therefore will be coming back at a higher level than when they
went out and that could be difficult to accommodate. That is true
everywhere, and it's especially true for people going from the
emerging markets to more developed ones. When they go back
they miss the extra uplift. And that can be very difficult, because
there is a tendency for them to want to stay permanently in the
host country and if we say 'No, that is not what you were there
for', we do sometimes lose them. And they stay in the host
country, working for a competitor, which is even worse.' (PI3)

The next example illustrates the unpredictable nature of events after the
assignment is over or when the expatriate decides it is time to go home. Here,
the participant takes a broader view of success and includes the post assignment
experience, and although the case she discusses is resolved to the former
expatriate's satisfaction, the timing of repatriation or the next relocation is not
without its problems.

, ... The other interesting thing to look at is what happens to expats

when they finish a position and how they will be reintegrated back

176
 into the firm, and what jobs they give them. This is very difficult
to measure. It's based on what openings there are when the
individual decides they want to go back. We had a number of
individuals like that. For example, my former boss had been over
here for 4-5 years. He decided and told the firm that he wanted to
go back before last September when his eldest daughter was about
to go to kindergarten in the US. His wife and he had decided that,
because they were going to definitely go back. Finding him a job
for that September l?ecame very difficult, despite the fact that he
had been very successful in what he did here ... But we did
manage.' (P6)

It is worth mentioning that in some cases there are other factors that may
interfere with measuring the success of an international assignment that have
little to do with performance on the job. The next manager explains that his
TNC has learned that an international assignment is a life experience and as it
can take several long years events can occur that are outside the TNC's usual
channels of control. He points to a particular trend, which he has come across
several times in his career as manager of expatriates attached to this UK-based
TNC:

'There is, for example, a tendency amongst British expats to like

Asian women ... An expat on an assignment in the Far East fell in
love there and divorced his wife. His family came back on their
own, while he refused repatriation. Now, how do you measure
success here?' (P9)

However, a main problem associated with international assignments from the

point of view of the expatriate (and frequently discussed by the participants,
especially in the expatriate women's group and within the school) relates to

177
uncertainty over the period of the assignment. The researcher witnessed several
sudden moves by a number of TNCs, ca~sing disruption to the families. These
situations arose for a number of reasons, including general economic slow down
and/or poor business performance and falling profits requiring TNCs to shed
labour globally with the restructuring inevitably affecting some of the
expatriates stationed in the UK. However, instances arising from mergers and
acquisitions (M&As) and the restructuring of (usually) two TNCs, do
distinguish themselves from other situations in terms of levels of stress and
anxiety that they produce. A number of the TNCs in the sample (over one third)
have been involved in recent mergers and/or key acquisitions. In these
situations, great uncertainty may exist as to who will stay and who will go back.
Often managers within the same TNC will compete for new positions so that
they can stay. The speed and rigour with which this process is carried out,
impacts upon the families, including the continuity of children's education.
Within the expatriate school(s) such an impact is openly acknowledged and the
educational infrastructure is geared towards comforting the affected families,
particularly the children. For example, at high points of M&As taking place
rapidly, the weekly bulletin of the school(s) will openly express sympathy for
the leaving families affected by corporate mergers and wish them well 30. As
mentioned earlier, a particular source of anxiety in these situations is the speed
with which restructuring takes place and the limited amount of time the families
are given to adjust to change. This is despite what the participants often describe
as 'extremely generous' compensation packages offered by the TNCs, in line
with their usual level of financial remuneration; and indeed, despite a whole
other migration infrastructure being made available to the departing families,
including the TNCs arranging and meeting the cost of packing, removal and
storage of furniture for up to one year (to allow the families time to think about
renting or buying a house in the home or a third country) and arranging for the
families to stay in hotels between the end of their housing arrangements in the

30Direct quotations from these publications cannot be used here for reasons of confidentiality but, in
1999, the researcher was given a copy of such a bulletin to consult.

178
UK and their final departure. The next participant, draws on her extensive
experience of M&As to elaborates the fast and uncertain process attached to
mergers and acquisitions:

' ... Senior teams are put together extremely quickly, in a matter of
weeks. This is much quicker than before. The whole issue here is
the integration of two corporate cultures and styles, and who is
actually going to form the top team. What is the selection process?
Who is going to get the top jobs? Is it going to be a new corporate
culture or a mix of the two previous ones?' (P29)

It might be interesting to note, however, that the spouses of senior managers

appear to have a considerable amount of influence in shaping the future of the
expatriate family. At the meetings of the expatriate women's group, the women
often reported taking over from their travelling husbands, negotiations with the
TNCs' HR departments with regard to various aspects of expatriation and
repatriation. The women regularly deal with issues relating to schooling and
housing (location, rental allowances and leasing conditions). In some instances,
particularly when it was the TNC's decision to move the family, such influence
could increase substantially. In one case a senior manager was given the
opportunity to be repatriated to an even higher position in the US. While the
male manager welcomed the offer, this spouse refused to move the children
before the end of the school year. She also refused to move house despite the
conditions of the lease stipulating that the full amount of annual rent had to be
paid if sufficient notice was not given to the landlord. The basis of her refusal to
move house was the stress that organising such a move would cause her. The
TNC ended up paying the full annual rent at the cost of £10,000.00 per month,
even though the family would continue to stay there for an additional two
months only (field notes, expatriate women's group meeting).

179
Numerous other cases relating to the involvement of the women in decision-
making regarding family issues and living standards were reported at the
Women on the Move - International Mobility Conference held in 1998, in Paris.
At this conference, examples were presented of women taking the initiative and
using the international assignment productively for themselves, their families
and indeed for the TNCs. Here too, the women seemed to strongly identify with
the TNCs. Indeed, a number of the participating groups of women actually
referred to themselves as the 'wives' of a TNC and presented themselves to
others as such. An interesting case study was presented by a number of women
whose husbands worked for the French-based telecommunications TNC,
Schlumberger. The women had set up an organisation called Schlumberger
Spouse Association (SSA), which had been created with the help of the
company's HR department to offer support to the spouses and the families of
their expatriates. Over a long period of negotiations for funding and
development, SSA was able to set up the Spouse Intranet project, which the
women described in their presentation as 'an innovative concept that helps
bridge the communication gap and create a Virtual Expatriate Support Network.
The SSA picks up where HR leaves off, and provides the vital link between
Corporate, HR and the expatriate family' (WOTM conference, session on
Family and Spouse Issues, March 1998, Paris).

6.4. Conclusion

This chapter presented an account of two further dimensions explored by this

part of the study, namely the recruitment of senior expatriate managers followed
by a discussion of some indicators of the success of international assignments as
well as some of the problems associated with them from different points of
view.

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The chapter attempted to provide an insight into what qualities the TNCs
expected of managers on international assignments; what factors they
considered prior to selection and expatriation; and how they perceived the
success or failure of their managers.

By and large, the TNCs in this study operate on the basis of closed internal
labour markets. This means that the majority of senior managerial expatriates
attached to these TNCs would be corporate transferees. The distinction between
technical (particularly less senior) and non-technical managers is an important
factor, which contributes to both selection and evaluation processes. In the case
of technical managers, the TNCs appear more at ease with bringing in outsiders
to do a specific job. However, this seems to change when an assignment is to be
more than a functional and technical task such as a specific technical training
assignment.

In all cases, however, the TNCs look for the ability of senior managers to
transfer corporate values via the assignment. The ability to work effectively
with and within other cultures appears to be the key factor in both recruitment
and expatriation and the measurement of performance. Such ability is
ultimately, it seems, invariably expected to translate into the ability to achieve
(traditional) business performance criteria such as greater market shares and
larger profit margins in foreign markets. In the era of globalisation, what also
appears to be sought more vigorously is the ability of the expatriate to move
faster, to successfully facilitate acquisitions and take-overs and/or protect their
own TNC from the same.

Closeness with corporate headquarters in securing or shaping expatriation and

repatriation is a very important factor, as is the trust of the headquarters -
continued to be seen as the centre of power - in the expatriate's capabilities to
manage global operations and to inculcate corporate values. In recruitment and

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evaluation processes, the issue of corporate core values and culture and their
global transfer continue to be seen as crucial. Deep exposure to a TNC's
headquarters for training in these value systems may facilitate the inclusion of a
host country manager in the upper echelons of a TNC's internal labour market
at a regional level. The skills acquired via such training include the gaining of
the trust of the centre in the ability of the manager to inculcate these values in
other locals.

It needs to be noted that these findings emerged to reiterate a number of the key
findings presented in the last chapter. The main and perhaps most important re-
emerging connections between the findings so far (relating to the first core
category and its associated sub-categories) include:

• The prominent place of the values and culture of the core and the
importance of transferring these globally

• The reported inevitability of these translating themselves into

tangible performance-related indicators of success in the market
place in an increasingly global and competitive economy

• The particular significance of M&As

• The importance of speed in the implementation of growth strategies,

and

• The existence of the trust of the centre as a key factor in the inclusion
or exclusion of managers from the internal labour markets of the
TNCs.

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A key finding presented by the chapter is that the TNCs pay particular attention
to the happiness and well being of the expatriate family, shedding light on the
process attached to this type of migration. A crucial aspect of this is the TNCs'
facilitating whole migratory infrastructures surrounding both pre and post-
assignment moves. The success and happiness of the family is perceived as an
important pre-requisite for successful performance of the expatriate manager
and therefore for the success of the international assignment.

This section brings to an end the investigation of the first core and its associated
sub-categories. The next chapter will detail the key findings of the second core
theme of the study: the impact of new technologies, together with its own
associated sub-categories of cost and composition of senior expatriate managers.

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 CHAPTER 7

New Technologies and Expatriation: Issues of Cost and Replacement

7.1. Introduction

This chapter details the key findings of this study in relation to the impact of
new technologies 3l on expatriation and expatriate managers, as the second core
theme of the research.

In addition to their being particularly important due to their central place in this
inquiry, these findings are of particular significance for a number of reasons. As
stated in chapter one and detailed in chapter four, recent research points
explicitly to a gap in knowledge on the possibility of new technology reducing
TNCs' reliance on costly expatriation (Salt, 1997; Rudolph and Hillmann,
1998). Such research points to the possibility that technological developments,
particularly those in communications, might be leading to alternative
management strategies with the potential of a trade-off occurring between
traditional expatriate assignments and these technologies. As knowledge
becomes increasingly transferable more cheaply and efficiently via electronic
and other media of communication, TNCs might increasingly turn to new
technology to substitute expatriate managers. These findings also reflect an
attempt to link together some of the different categories and sub-categories of
this part of the research in an effort to develop a comprehensive insight.

The chapter is divided into three parts. The first part discusses the general
impact of new technologies and how they are seen to have affected the position

31 The term new technology is used here in a sense similar to that adopted by CastelIs (2000) as a broad
spectrum incorporating the use of machines and software in micro-electronics. computing and
telecommunications technologies (p. 29).

184
of expatriate managers and expatriation. The second concerns itself with the
potential of substitution that may be occurring between expatriate managers and
new technologies and any impact on the extent and patterns of expatriation. It
also explores the potential for the replacement of expatriate managers,
investigating more specifically how the TNCs and the managers envisage the
future impact of new technologies and/or whether they are actively aware of
potential impacts. The third and final part reports some specific findings in
relation to the cost reduction aspect of the discussion. In fact, the question of
cost (as indeed reflected by the findings detailed previously) is intrinsically
linked to the application of new technologies and their potential to replace these
expensive global managers. In this part, other possibilities of replacement
including the use of alternative sources of labour such as younger managers
(who are likely to be unaccompanied by a family or at an earlier point in their
career and therefore cheaper) are also discussed briefly. The questions explored
in the latter part of this section constitute those relating to the sub-category of
the "changing composition of expatriate managers". The purpose of this
particular sub-category is to investigate the possible sources of substitution of
expatriate managers beyond
,
new technologies.

The chapter closes with a summary of main points and some conceptual and
empirical connections emerging between the core and subcategories.

Before presenting the findings, it is important to note here that the questions
investigated by this part of the research elicited great consistency and proximity
of response from the participants with regards to all the sections detailed in the
chapter.

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7.2. Globalisation and the impact of new technology: scope and
manifestations of general impact

In this part of the research, the participants were asked the following open-
ended questions:

1. How does global communication take place?

2. What has the impact of new technologies been on expatriate
managers?
3. What is their vision of the future impact of technology on
expatriation?
4. Will new technology ever replace expatriates?

The responses to these questions are not necessarily reported in an equal amount
of detail here. This is because it soon became clear, for example, that all the
TNCs covered did use the wide range of the technologies available, including
the Internet, voice-mail, tele-conferencing and to a lesser but increasing degree
video-conferencing. So the scope for the use of technological hardware, for
example, is not reported separately or in detail. Rather, it is the impact of
information and communications technologies that is the focus of the chapter.

The most significant effect of new technologies on the process of globalisation

has been the speed, ease and efficiency with which knowledge, data and
management information can be transferred across the globe and utilised. New
technologies have impacted on the nature of problem sharing and problem-
solving worldwide, promoting successful networking amongst managers and
decision-makers and breaking down barriers created by different time zones and
spatial distance. The following are examples of some general consequences of

186
the deployment of new technologies starting with some typical responses, which
point to the crucial factors of speed and ease of global communication.

'Technology has basically taken the time lag out of different

locations, and increased what we call 'real time' ... The real issue
is that you could not run a global business without the technology
of voice, data and video today. You could not be out of contact. ..
The business moves too quickly and you need on-line immediate
access. So that if there is a problem in Japan, somebody
elsewhere, anywhere in the globe, can pick the information and
make a quick evaluation, a quick decision regardless of the day
and the time ... If something happens [around the globe], I need to
know that before the US financial markets open because it might
have an impact on my business ... New technology does enhance
the business. I can communicate with anyone anywhere .. .' (P12)

'The impact is absolutely enormous ... I can e-mail somebody in

Thailand last thing tonight and get an answer when I come back to
the office in the morning. It's as simple as that.' (P3)

Despite the capacity of new technology to break down barriers of time and
distance, however, some problems remain. As the next respondent explains,
technology is not yet advanced enough to make time and geographical
differences completely irrelevant:

'We have just installed a global tele-conferencing practice

between Tokyo, London and LA. Those cities are eight hours
apart; there is absolutely no way that all parties can interact at a
reasonable hour. So somebody is always staying late for the

187
 booked call. Five o'clock in the morning here is nine at night in
the US, meaning that somebody is staying late.' (P26)

And the reality of time zones does also mean that certain types of technology
may be utilised more in some places than others, as explained by the next
manager:

'Video conferencing globally is difficult because of time zones. I

have used it in this job and in my previous job and in quite a lot of
discussions within Europe. You can do Europe and the States
reasonably well, but after that trying to communicate with the Far
East is really very difficult...' (P3)

Uneven development of infrastructure between and within regions and countries

is another obstacle to the deployment of some technologies, the utilisation of
which may be restricted in poorer geographies. Underdevelopment in poorer
countries means that although a TNC might decide to be present there, it may
face the problem of not having access a to basic infrastructure. This manager,
with vast experience of working in poor countries the natural resources of
which, he explains, his TNC had exploited for a very long time outlines the
difficulty:

'We are one of the first companies that went global

[technologically]... but the big problem is getting the
telecommunications system in the country where you are ... ' (P 1)

A TNC may well, however, have the capacity to create its own immediate
infrastructure, which apart from enabling it to do business in poorer countries
allows its expatriates to keep in touch with the centre. An interesting case is
presented by a Telecommunications TNC.

188
 'We are very much a technology-based company. We die if our
regional systems die. Technology has helped the expats to keep in
touch, but, of course, they do not all have access to e-mail because
they may be in some places where they cannot even dial in
properly ... We are setting up telephone networks, mobile phone
networks in some of these countries which do not have a land line
system .. .' (P13)

It is worthy of note that an additional dimension of difference, which may

dictate what kind of technology is employed in what geography, is culture.
Culture as seen by a number of TNCs, affects their global business
communication making preferable the deployment of certain types of
technology in certain areas of the globe. The following are examples of such
perceptions.

'Transfer of knowledge around the globe is dependent on

locality ... Americans, for example, are quick to pick up the phone.
A culture of communication develops ... Video-conferencing is
used in America, and Germany, but not really in our other joint
ventures.' (P8)

The same participant explains how new technology can be used for what seems
to amount to "editing" local traditions of communication. He takes the example
ofIndia and explains that because his Indian colleagues 'talk too much' and are
used to writing very long reports before they get to the 'real point of business' -
and this is seen from a Western point of view as a waste of time - the
application of the e-mail has been extremely useful. When he receives a long e-
mail from India, he can skim through it and identify the relevant points. As his

189
next statement reveals, he interprets his experience of business communication
in India, as explaining the bigger cultural and social attributes of Indian society.

, ... Indians are maniacs about writing long reports. Much time is
spent on what words to use and how to write the report. They are
concerned about what they say in a very hierarchical society.'

The next example is also indicative of the application of new technology being
specific to the geography. Here, the respondent explains that in a country like
Italy, for example, video-conferencing could not be deployed because this
would be problematic for the person communicating from outside Italy:

'It is hilarious. The camera is facing you and if you are Italian, you
are trying to speak with your hands. The other side sees these
spastic movements and thinks you are crazy. Tele-conferencing is
easier in this case.' (P26)

7.3. New technology and knowledge across space: indications of

transfer and access

Inherent in the process of technological advancement is the increasing capacity

of new technologies to successfully transfer know-how relating to any aspect of
the business despite a TNC's fragmented organisational structure or
decentralised production process, which have come to characterise a main
feature of economic activity in the globalisation era. New technology has
become the crucial vehicle through which knowledge can find its way through
the maze of global corporations. The following comment is by a participant,
who having described the totality of his TNC as 'vast', explains that new

190
technology overcomes potential problems of knowledge transfer in a large
corporation:

'The impact has been incredible. We can transfer processes from

one region to another. Things that are successful in one place are
used in another. It could be the production system or the business
concepts.' (P3)

The next manager, who points to a new aspect of globalisation, confirms the
increasing insignificance of the size of a global corporation:

'I think we are going to increasingly see that global companies are
not just huge corporations. Increasingly small and medium
companies are becoming global. My company is big in terms of
total business, but the actual functional business units are fairly
small. That is in fact one of the new dimensions of globalisation.
We [TNCs] are driving giobalisation. Without good
communication technologies, we cannot run a global operation.'
(PI I)

An interesting question relating to the geographical spread of TNCs and the

transfer of knowledge and know-how globally is whether within the TNCs'
transnational networks (indications of which were given by Table 4.3 on page
97), a "centre of knowledge" exists, and if so, where it is 10cated. 32 While the
existence of a centre of knowledge is not clearly acknowledged or discussed by
all the TNCs, some corporations are able to identify well-established
communication channels between the centre (usually meaning the headquarters)
and the operations of the TNC dispersed across the globe as well as within

32 This is a complex question, possibly requiring specific and more detailed investigation that could
ascertain the nature and scope of the knowledge circulated within TNCs and the degree of transparency
of and access to, for example, strategic management knowledge.

191
them. This participant, who, as a Senior Corporate Strategist working for one of
the oldest TNCs in the sample with a most complex organisational structure, is
particularly well placed to comment on this aspect, presents a general picture.

'Generally, there are two dynamics, one of which is vertically

downwards, from the corporate centre down into the business
groups, and from the business groups down to the operating
companies, and from the operating companies down to their
various departments. Then, there are a series of other networks 33 •••
more of a horizontal type. The operating companies will have
networks within each business group. The parties in each business
group will also have their ways of communicating ... ' (P2)

Another dimension, which is perhaps expectedly reinforced here, is that despite

the idea of the existence of new technology facilitating global networks, access
to the technology itself is not evenly distributed across the globe. And that,
furthermore, it is the centre that decides which geography should have access to
what type and level of technological advancement.

Data relating to the case of the same TNC in relation to two distinct joint
ventures in different parts of the world provide a particularly good example of
the centre's control over the distribution of technology. In the example cited
below, the manager talks about how technological power relations are organised
across space. He takes the example of two joint ventures: one in Italy and one in
China, comparing the level of access granted to each country.

'Our plans for technology were that we would have the state of the
art technology ... The Italian factory has the capacity to use it; has
the potential for making the products. The Chinese factory has this

)) The reference here is to networks concerned with mostly product-related rather than with strategic
issues.

192
 capability too. But we don't want to give China that technology. It
is a policy decision.' (PIO)

In another case of a joint venture in Vietnam, the issue of technology is again

indicated as one that facilitates inclusion in a global network while maintaining
divisions of access to the very technology itself.

'Our computers are incredible; our networks enable us to

communicate globally. Even in a place like Vietnam, the first
thing a manager is given is a PC. Then he is part of this network ...
but if the plant is not 100% ours and we have had to do a joint
venture such as in Vietnam, the technology including the know-
how is still ours: that could be the product concept, it could be the
marketing mix ... ' (P3)

The main area of inquiry here is how new technology, in the broad sense
described earlier has impacted on expatriate managers. Further consideration of
this issue and a detailed account of the impact are presented below.

7.4. New Technology: the impact on expatriate manugers

The impact of technology on expatriate managers merits separate and detailed

consideration, because as mentioned earlier, it has been gaining increasing
attention as a factor that could facilitate international business at a distance and
reduce the need for expatriate managers. It is acknowledged here that the
shrinking of distance can happen at all geographical levels and any role that
technology might have may therefore be of consequence to all managers.
Clearly, the focus of this research is on managers who work in the context of
globalisation strategies by TNCs. What this section is thus able to examine is

193
the impact of new technologies on expatriate managers and whether or not such
an impact is of equal consequence for all expatriate managers and/or functions
of expatriation.

One important impact of technological advancement and the deployment of new

technology is that wherever expatriate managers are despatched to, they will not
feel isolated. New technology, as the Director of Sales (Europe) of this vast
motor vehicle TNC explains below, has facilitated a sense of connection within
the TNC. He says:

'New technology allows speedy communication. It reduces

isolation and increases connectedness. This greatly enhances the
expatriate's role.' (P28)

A key function of this 'connectedness' is often described by the managers as

enabling them to solve problems effectively via access to a global network of
expertise.

'Communication technology has transformed our networking and

management of knowledge. I can tap into any other senior
manager and talk through a problem anywhere in the world.' (P5)

An accessible knowledge system enables expatriate managers to ensure that

local problem solving benefits from global experience. The capacity to generate
appropriate solutions with a strategically global outlook equips these managers
to implement solutions that are in line with the overall philosophy of a TNC. As
the next manager explains:

'When I face a problem in the UK, I immediately think what

would my counterpart in Boston do? How would he get our

194
 culture, our global values to work for him here? And I can get on
the phone, video- conference with him, or e-mail. We carryon
until we get the right answer.' (PI7)

Efficient and effective problem solving, particularly in relation to speed of

communication, gains greater significance in situations of crises. The next
participant shares the example of a situation in which his TNC was faced with
the economic crises that hit some South East Asian countries in the late 1990's.
Referring to the importance of global communication, he describes how TNCs
are:

' ... able to transfer knowledge much more quickly and effectively
from different markets to others. One of the things we say, which
is not strictly about expats only but about transnationals, is that we
probably understand better than anybody else in South East Asia
how to cope with economic instability ... What we don't know
about the current level of hyper inflation is not worth knowing;
what we don't know about operating in markets where banks are
fragile, where the banking system is on the point of collapse, is not
worth knOwing ... ' (P2)

While the document, which he referred to as a 'crisis management manual'

could not be seen by the researcher as it was classified as top secret, the
participant explained that his TNC was saved a substantial amount of financial
and other difficulties as a result of its senior expatriate managers located in one
country developing a damage minimising advice manual that could be quickly
distributed around the world. The experience of the how the TNC embarked on
a path of market adjustment in one country hit by sudden economic upheaval
was shared globally amongst its operations within minutes, and utilised to solve
similar problems in other locations.

195
An interesting consequence of the connectedness that technology has achieved
relates to the issue of control and the centre now being able to maintain greater
control over its expatriates despite the physical distance:

'Before, people just disappeared, and only the occasional fax,

letter or phone call came. Now, there is no excuse for not keeping
contact, for not doing things like appraisals ... Now you can't
phone back two days later and say I was out of the office. Now
you are contactable ... This is the control issue.' (P22)

Another respondent discusses the issue of control from a different position

offering an insightful vision into a potential paradox of control created by
technological connections and how this may affect global managers.

'My opinion is that the senior people are already working for a
multinational government type of corporation. So even though
they have legal citizenship of one country, they probably have a de
facto citizenship of a much broader organisation, such as
MacDonald or Coca-Cola. This could be an ideological
citizenship. After a while, you have allegiance to the TNC, and the
knowledge base become so detailed ... You might say that's great
technology, but you might also say what a control structure, what
a control aspect! So the information goes around the world fast
and efficiently, and the standards [of market performance] may be
imposed externally. You have to keep up.' (P26)

Despite the importance of global networks and connections with great problem-
solving capacities, it is important to note that the effectiveness and potential
power of new technologies in realising solutions will be dependent on the nature
of the problem and the knowledge required for its solution. Once again, a

196
distinction is made between technical and non-technical problems with the
former being identified as being more capable of resolution via new
technologies.

'The impact of technology has been tremendous. It has meant that

people in China can talk directly to people in the design office in
Milton Keynes to solve a [technical] problem. The problem and
the solution can be shared on video. This means that we do not
have to fly half a dozen people all the way, meaning lost time, lost
production, lost money .. .' (PI)

The same manager elaborates his response in relation to the impact that new
technology has had on the nature and duration of travel:

'This [new technology] has impacted on the number of visits and

also on the quality and speed of the solutions we can come up
with.'

Another manager confirms that the application of new communication

technologies has impacted on the amount and length of travelling in his
corporation:

'The impact of technology has been absolutely profound. It has

transformed our industry ... Senior managers in the US can have
their big meetings on a video conference call, which means that
they do not all have to get on the plane and go to New York for
the day.' (P6)

The same participant, however, explains the need for the physical presence of
senior managerial expatriates in a given locality:

197
 'If it is going to be a big [senior] job then the person will have to
be physically present in whichever office they have been moved
to. Because I think, and I know this from my own experience here,
that it is virtually impossible to manage people unless you are near
them physically ... I mean to directly manage them.'

Further clarity and detail are provided by the following manager regarding the
specific impact of new technologies and the possible consequences for
expatriation:

'The impact has been extensive and important. E-mail, telephone

and video conferencing are used a lot. The impact on travelling
has been on short-term assignments only, but in terms of
expatriation, i.e. people on the ground in the country, there has
been no impact. New technology might reduce the need for
meetings or shorten the length of assignments, but core
expatriation has not been affected.' (P24)

This section presented an indicative picture of the general impact of new

technologies on expatriate managers. The specific question of whether
technology is capable of replacing expatriate managers is central to this study
and was explored through asking the interviewees to describe the present and
potential future capacity of new technologies in the replacement of expatriate
managers. The next section presents the respondents' analyses, which do
implicitly or explicitly contain a number of interlinkages with the present
section, including different functions and divisions of labour in expatriation; the
issue of core values and culture of the centre; and the organisation of power
relations across space.

198
7.5. New technology and its potential for replacing expatriate
managers

What follows here is a more detailed account of the impact of new technologies
on expatriate managers formulated by the participants provided via the study of
the issue of replacement or substitution of managers by technology. Before
discussing the main dimensions of the issue of replacement, it is worth
reaffirming the significance of this issue to this study.

Firstly, as pointed out in the introduction to this chapter, previous research

pointed to a gap in knowledge as to the possibility of new technologies
facilitating a trade-off between expatriates and a qualitatively different mode of
managing globalisation. The first thing that emerges from the resultant inquiry
into this potential is that this is not an easy question capable of being understood
through general analysis. As the responses cited in this section indicate, the
issue of replacement is multi-dimensional and importantly, also dependent on
where in the division of labour, the expatriate is located.

Secondly, the analyses presented here indicate that the issue of replacement
simply cannot be studied outside the context of the role that expatriate managers
play in the globalisation process. Thirdly, and most importantly, it is worth
noting that this part of the research also produced the most consistent and
similar responses across the TNCs. The degree of proximity of the participants'
formulations resembles that produced by the section on the role of expatriate
(particularly) senior expatriate managers, the various dimensions of which were
detailed in chapter five. What is presented next is an account of the participants'
perceptions on the issue of replacement.

199
In the vast maJonty of responses, what emerges is based on the familiar
distinction between technical and non-technical expatriates, with the associated
distinguishing feature in relation to the degree of seniority of the expatriate. The
following are some typical examples.

It all depends on whether we are transferring technology or

actually providing somebody with the expertise of the process and
expect them to walk away with it. In this case technology works.
But if we are trying to change the culture [installing core values]
in the facility, then you have to stay longer. Or if you are
developing a new market, then you have to stay .. .' (P 17)

'Technology is very important, and we do use it a lot at the

moment, but there is no impact on managerial expats. Yes, they
are very expensive. In our case they cost about $450,000 to
$900,000 per annum, but they are unique people with unique
contributions and skills 34 • They have to breathe the locality.' (PI8)

'No, the point is exactly that it [new technology] doesn '/ impact
equally. The technical person can work on a "store and forward"
basis. He might say: "This is my design; tell me what you think."
The objective of the interaction is to define the quality or quantity
of the product. That is a clear objective. But the person doing the
people's or soft skills cannot do this.' (P20)

And the next manager makes similar comments on the same issues, and further
elaborates what technology has done for his TNC.

34.For a description of how the participant views the importance of these skills. see her comment on
page 143.

200
 'The impact is two-fold: product development technology has
impacted on some assignments. They may be made shorter or in
some cases cut out. We can videoconference globally, which does
cut the amount of travelling I did to the US. This was good for me
because I can travel more within Europe now where I am really
based. But because of the sort of thing I mentioned about core
values and the transfer of ideology, you cannot replace these
things with communication technology. Technology has made
connections easier and faster, not replaced them.' (P21)

The following account is by the participant from the management development

institute, who has wide-ranging experience of expatriation policies, and whose
account indicates the differing impact as clearly as the accounts cited in the
previous descriptions:

'Obviously in the last three or four years things have changed a lot
with e-mail, telephone and video conferencing. There are networks
and network sharing, which means if you wallt to share
information, you can do so much more easily. At the same time it
does mean that, for example, lots of people don't have to go on
assignments, that they can be based in the home country. But this
cannot be for those who go out as company managers of factories
or plants, because of the necessity to transfer core values. New
technology can only replace visits if you are a knowledge worker,
a technical worker or in charge of the co-ordination of a project
such as finance.' (P22)

Beyond the distinction made between technical and non-technical managers, the
issue of replacement is disentangled by the participants whose accounts shed
further light on the limitations of new technologies. A consistent and common

201
picture emerges here pointing to reasons for the inability of new technology to
replace (particularly) senior managerial expatriates. The following are
examples, which indicate the continuing importance of core values transfer as
well as the significance of building and maintaining relationships:

'Technology has always been crucial to us. In terms of the impact

on expatriation and expats, it has primarily enhanced their role, but
it cannot replace them. It cannot replace eye-to-eye contact for us
working in a foreign place, trying to change the local culture, to
make our values fit in. I travel back to the US regularly. I travel a
lot within Europe. I do not think it has reduced this at this level
[corporate managerial]' (P 17)

'I would say that within this TNC the impact has not been
significant by way of substitution or anything like that. .. There is
nothing to prevent you from having video conferencing anytime
with anybody. It is different when you know the guy at the other
side, not because the language is common, but because he has
credibility and you understand where he is coming from. So I
would say that technology helps you keep those relationships, it
build relationships, helps make contact easier.' (P 17)

Prominent in most responses are the centrality of relationship building and the
importance of face-to-face contact. The need to maintain cohesion within a
global business is often indicated and personal contact is seen as a crucial factor
in this process; one that technology is incapable of replacing. The following
comment exemplifies this perception:

'This [new technology] does not replace face-to-face

communication though. You have to be on the ground ... Cold

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 communication by fax, e-mail is not sufficient... But the
important thing is to keep that personal contact to stay like a
family.' (P8)

In fact, as indicated by the next example, the issue of building relationships

globally and transferring the business culture and values of the centre appear to
have gained more importance. In this case, the manager emphasises that in fact
senior managers are travelling more within the regions where they are based:

'I would say [there is] no reduction of senior assignments.

Because what you go for is to form connections with the people
and to experience at first hand countries and cultures. There is no
substitute for that; electronic communication is no substitute. In
fact this is the year in which they [senior managers] are doing
more travelling personally... One of the things the centre
[headquarters] is doing now is being much more responsible for
communications, communicating our aims and objectives. t (P6)

Other accounts confirm the importance of personal contact particularly in

relation to further dimensions of the role of expatriate managers relating to their
responsibility as the face of a TNC, and its representative when negotiating the
centre's position, presence and interests. The following two examples
emphasise these points respectively.

Personal contact is crucial particularly for mergers and

acquisitions and for gift giving. You cannot send a gift, where it
matters, down the e-mail. New technology only enhances the
expatriates' role and enables them to communicate more
effectively.' (P22)

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 'I doubt if it [new technology] has or will ever replace expatriates.
No, it will not replace bodies with technology. You cannot replace
sitting across the table with your Chinese colleagues, looking them
in the eye, and saying, "No". (PI)

The next manager brings together some of the different dimensions

discussed in this section, and again points to expatriate managers being
"indispensable", emphasising their role as providing the linkage within
the corporation. Interestingly, the suggestion here is that any potential
decrease or increase in the number of expatriates will be a short-term
trend. Furthermore, the short-term impact of technology is said to
actually increase their number, while in the long-term a stable need for
senior expatriates is indicated.

'I doubt it [possibility of substitution] very much... \Ve will

always have to have expatriates; especially at senior levels. They
provide the linkage. There may be certain operations where you
don't need them for a period of time such as shrinking markets.
But we will always need them because of our [global] operations.
In some regards though, especially in the short term new
technology might actually increase the need for expats globally,
because different parts of the organisation are engaged in linking
into the global entity.' (P28)

And discussing the phenomenon of the "virtual expatriate" below, this manager
expresses doubt as to their effectiveness:

'I do not think it [new technology] will ever replace expats. As I

said, there are virtual expats such as we have got them. I can think
of one or two who try to effectively manage teams through a

204
 combination of telephone communication, e-mail and extended
business trips, but it is difficult. .. ' (Pl3)

7.6. Expatriation and the issue of cost

At the heart of the debate surrounding the impact of new technology on

expatriation and expatriate managers, lays the question of cost reduction. Faced
with fierce global competition and the necessity to rationalise and reduce costs,
the issue of the cost of expatriates has been gaining increasing attention, with
recent research - as mentioned in the introduction of this chapter - pointing to
the possibility of cost-reducing technology replacing expensive expatriates.

There is no doubt that expatriates are seen as very expensive by all the
participants in this study. This was alluded to in various comments by the
respondents at different points in their thinking processes and reported
previously. The costs that the managers in this sample mentioned ranged
between $400,000.00 and $900,000.00 per annum, depending on the locality
and level of seniority of the expatriate. Included in the expatriation packages
offered to expatriate managers are private education, housing, business or first-
class trips for the family (usually two per year) to go home, family cars, and
often payment for the cost of consumption of utilities (such as gas, electricity
and telephone). Often the families changed one of the trips to a holiday
destination, and spent the long summer holidays35 at home. Assignments are
usually for three to five years during which time the TNCs bear the cost of the
assignment.

35 The academic calendar of the schools is adjusted to make long trips home possible. The holiday
period during the summer break is almost twice as long as local British schools. starting in the first week
of June until the first week in September.

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The contract presented below belongs to one of the participants and contains
main items of typical provisions attached to senior expatriation packages. 36

Box 7.1: An example of expatriation contract: terms and conditions, at

1995 prices
The terms of your employment will be as follows:

You will receive an annual base salary of $120,000, and your next salary
review will take place in 1996.

For the year 1995, you will continue to participate in the annual bonus
plan in which you currently participate and appropriate tax equalisation
withholding will be calculated thereon.

From 1 January 1996, you will participate in the Group Remuneration

Programme for Senior Executives. Your level of participation will be:
Annual Incentive 50% at target
Mid-Term Incentive 75% at target
Stock Option Scheme I times your salary

The Company will assist you with provision of reasonable

accommodation in the UK, together with costs of utilities. The housing
allowance will be a GBP 3,500 per month. Utility expense claims should
be signed off by yourself and submitted to the company for payment.

[The company] will cover all closing costs associated with the sale of
your house in the US, including brokers' fees.

36 The researcher was particularly grateful for the generous gesture by this participant in making his
contract available to this study at the end of his assignment in 2000.

206
The company will meet the direct costs of removing personal belongings
to the UK.

You will be paid net of tax a one-off relocation allowance of I month's

salary ($10,000) + $5,000, making a total payment of $15,000.

Your current pension and healthcare benefits will remain in force under
your USA contract and continue to be administered by [the Company] in
the US. In addition, in order to ensure full medical coverage for yourself,
your wife and your children while in the UK, we will include you in the
BUPA Senior Executive Medical Plan operated in the UK.

You will be eligible for a company car for both business and private
purposes. The car will be in line with [Company] policy in the UK and
the company will meet the cost of all fuel and running costs.

The company will meet the cost of membership of one club of your
choice, to be agreed in advance.

You, your wife and your three children will be entitled to 2 return trips to
and from the USA each year paid by the company for domestic and
personal purposes. The tickets should correspond to your normal class of
business travel.

The company will cover the schooling costs in the UK for your children
to the age of 18, with a maximum cost of: GBP 10, 000 per annum per
child. These should be signed off by yourself- and submitted to the
company for payment.

You will be entitled to 4 weeks vacation per annum.

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 If for any reason during the course of this secondment the company
requires you to relocate to the USA, the company will meet all associated
costs. If you decide not to complete the secondment and return to the
USA, except for extreme personal circumstances, you will be responsible
for such costs. At the end of your secondment, the company will meet the
full costs of repatriating you and your family to the USA.

[Company accountants] will provide tax return preparation services to

yourself and general advice to the company. The object of this advice will
be to calculate your tax equalization payments so that you are not
prejudiced by your overseas assignment, and to make sure that your pay
arrangements are structured in the most tax effective way for the
company.

The sample contract above indicates the costly nature of expatriation. As can be
seen from its contents, a significant amount of the cost associated with the
transfer of this expatriate and his family is related to their living standards and
to the benefits that are secured for them by the TNC from a whole support
infrastructure surrounding expatriation including schooling, housing and tax
provisions. The principle of tax equalisation ensures that expatriates do not pay
too much tax on the benefits attached to the assignment. But it also means that
the TNC pays a considerable amount of tax on the perks attached to the
package. The Participant took the example of travel provision provided by his
contract and explained that this item would have cost the company almost twice
the actual cost of travel (five first-class return tickets to the US, twice a year,
amounting to approximately £50,000.00) due to tax equalisation. The
Participant estimated that during his assignment, his TNC had paid out
approximately £500,000.00 for his home visits as one item of the expatriation
package. In other words, the TNC pays the tax on such items because they
would be included in the expatriate's total income and are taxable. And because

208
the expatriate family going on a long assignment (in this case initially for three
years but extended to five) has the option of selling their home in the US, the
TNC would also pay for the cost of hotels and living costs while the family is
back in the home country on annual visits.

While the salaries of the rest of the managers or the details of their individual
financial arrangements were not discussed in the expatriate women's group or
with individual managers, the cost of housing and education is open knowledge.
According to the 2000-2001 publicity brochures of the AmericanlIntemational
schools, the average cost of educating an expatriate child at one of these schools
is approximately between £10,000.00 and £12,000.00 per year for each child,
rising to £18,000.00 for boarding students. The boarding facility is popular with
expatriates who have older children and are despatched to areas of the world
that are not popular, that is to say poor or politically unstable countries. The
typical cost of housing for an expatriate family in this sample ranged between
£4000.00 and £10,000.00 per month, as reported by the women who attended
the expatriate women's group. The expensive nature of this type of migration is
discussed by the Director of Admissions of an American School when he states
that:

'Yes, this is a very expensive school. We are more expensive than

Eton, which is just round the comer from us. But the families just
would not come to the UK though, if we were not here. The
companies [TNCs] also pay for high quality housing near the
schools, so a whole infrastructure has developed in the South East,
especially here in Surrey ... We have our own Housing Adviser
attached to the school ... The parents do not even see the invoices
for the cost of the schooe 7• I doubt very much if they are even
aware of how much they cost ... We just invoice the companies
and get reimbursed, always one year in advance .. .' (P31)

209
The participant, who had spent a considerable amount of time in England and
worked in various capacities in this and other similar schools (and whose wife
was a teacher at the school) expresses a degree of frustration with his
experience:

'I think that expatriation can change people's expectations

dramatically... To be honest it is sometimes amazing how
ignorant our customers [the parents] can be about the level of
service we provide here. We bring in38 all our teachers through a
very rigorous screening recruitment programme. and yet if the
slightest problem is experienced by their children, they get onto
the HR and complain ... '

As illustrated earlier, the respondents would sometimes expressly refer to the

financial rewards reaped by expatriates and their standards of living as
'excessive' and 'inflated'. A number of questions arise here. which surround the
issue of potential replacement of expatriates through means cheaper than
traditional expatriation. The key ones are as follows:

1. To what degree would the findings here reflect affirmation or

otherwise of earlier findings reported by the chapter in terms of the
limitations of technology as far as the issue of replacement was
concerned? Would seniority matter?
2. Would the issues of skill and core values and the trust of the centre.
which were explored and unpacked in detail by chapter five as some
key dimensions of the role of expatriate managers re-emerge in the
respondents' descriptions?

37Please see Box 7.1 on page 207 for an estimation of typical school fee provision by TNCs.
38 The vast majority of the teachers and administrators including those running various popular summer
and travel programmes for the schools are recruited directly from North America, with a few non-white
teachers brought in from other AmericanlInternational schools outside the region.

210
These issues were explored through posing to the following questions to the
participants:

1. Does the cost of expatriation matter? .

2. In their (participants') experience, are the TNCs adopting (cheaper)
alternative expatriation strategies (e.g. younger managers, host or
third country managers, or any other sources of labour?).

It is worth noting again that the responses reported here were remarkably
consistent across the TNCs with the respondents expressing very similar views.

This section may appropriately begin with a general description of some key
issues around cost, summarised by this manager, who emphasises the value that
his TNC places on the 'right skills':

'Cost matters everywhere. Expats are very expensive. An expat

into [even a place like] China would cost us $400,000 to $500,000
a year: big cars, housing, children's education plus inflated
salaries. As an expat you do very well, but. .. we recognise that if
someone is going to cost you that much, you want to make sure
that they have the right skills. And yes, seniority matters. If the
person has the right skills that we require for the job, and hence
the value that he was going to bring to that job outweighed the
cost, the cost would not be a major issue ... We would grin, bear it
and say, "Thank you very much".' (PI)

The vast majority of the respondents stated that the need to send out the 'right
people' with the 'right skills' would make their cost irrelevant. This is
exemplified by the following typical accounts:

211
 'Cost is no factor. This is a fact. If you relate the cost of the expat
programme to the overall turnover of the companies, it is nothing.
For me the key is the selection of the right people.' (P 11)

The issue of culture emerges again In this part of the discussion with the
managers and the ability of working with other cultures seen as constituting an
important and integral part of possessing the 'right skills'. For example, having
acknowledged that expatriation is expensive, the perception that the 'right
skills' carried by an expatriate - in the context of globalisation of corporate
business culture - are almost invaluable, is reiterated by the next respondent:

'Cost is always a consideration. And expats are expensive. But in

the final analysis ... and the thing is getting the right people to
go ... if we have someone with the right skills, really cost is not a
factor ... The only significant thing is that they need to have some
of the skills that will enable them to work with people not from the
same cultural background.' (P7)

'These factors don't make a difference. We don't look at that. On

average an expat costs 2 to 3 times more than a local. So, they
have to provide a very good value, and if they are the right person
and they are willing to go, you send them. It does not make any
difference to us whether they are single or have a family. Housing
and education costs do not come into the equation.' (P12)

As has been illustrated before, the issue of the cost to the TNCs of the
infrastructure attached to this type of migration, including the cost of education
and schooling is commonly present in the responses of the interview. But here
too, the issue of cost appears to be of little or no importance. The IIR manager
of a Telecommunications TNC explains:

212
 'Expats with school children are unbelievably expensive. because
schooling is enormously expensive. So it is probably a factor. but
it is certainly not an overriding one. Neither do I think it should
be. because if that is the person you need. then that is the cost you
are going to have to pay. We do not look at whittling down the
benefits that we would need to give to that expatriate because he is
expensive ... We do not cut down the benefits.' (P13)

Her account is confirmed by another senior expatriate, who reflects on his own
personal experience. at the end (the very last day) of his assignment:

'We do not consider such things. When I finish this interview. I

am going to go three houses 39 down, to say goodbye to a friend of
mine [working for the same TNC]. who has four children. That is
fairly expensive. I have three children. and their education alone
has been costing [the TNC] £36,000 per annum. If you multiply
that by three or five years, that is a lot of money ... When I came
down here, nobody had a clue how many children I had; no one
asked, no one cared. And I think that is very fair. If you have the
right talent, that is what matters. The incremental cost of a few
children, housing and so on is nothing, especially on significant
assignments. Do not get me wrong. This is a cheap company. It is

39 With increased globalisation, the need for appropriate family accommodation has risen sharply. The
respondent's reference here is to his colleague and his family living in a very large newly developed
luxurious housing complex in Surrey (one of several), which has specifically been built and marketed
with the global manager and his family in mind. These complexes provide the highest standard of
accommodation, with sports complexes and swimming pools, and importantly, 24-hllur security
surveillance. Free entrance to these complexes is not possible and all visitors need to report to the
security post stationed at the complex and are filmed by CCTV cameras. Several women attending the
expatriate women's group lived in one of such complexes and would often express a feeling of security
while their husbands were travelling, and also saw the complexes as providing an important base for the
expatriate community. Most are situated close to the American/international schools and/or covered by
their bussing service.

213
 Dutch and it does not waste money. To consider the cost of
families would be to be penny-wise and pound-foolish.' (P20)

The next participant, representing the experience of a leading international

management and personnel development institute, who had an overview of a
much larger number of TNCs than covered by this study, however, does point to
some changes in the remuneration systems for international assignments:

The packages are highly inflated, but some things have

changed. For example, 'hardship allowances' have stopped.
People used to get these for just going abroad. It is increasingly
recognised that if you are going to somewhere like Paris, it is not
exactly hardship ... but nevertheless housing is paid for, which
means having the option of renting your home [in home country]
and paying your mortgage out of that. If your schooling is paid
for, then that is also super. In addition, as an expatriate, you are
treated well; you have dinners with the locals and entertaining
budgets.' (P22)

She shares her own past experience of being an expatriate's spouse and relates
this to the high standards of living which she refers to above, including
expatriation packages:

'I was an expatriate wife myself, and it was absolutely brilliant.

Everyday, I drove around in a chunky Jeep, was looked after,
played tennis and had barbecues. Obviously there were times
when I missed friends and family back home, but it was a very
nice lifestyle.'

214
Some adjustments to expatriate packages were also reported by two members of
the expatriate women's group with regard to the cost of housing and family cars.
The women stated that their TNCs were thinking of introducing flat rate ceilings
for these items, mostly to be applied to middle managers. This meant that some
in-coming families would have to choose with the help of their HR departments,
accommodation and cars within the cost ceilings introduced by the TNC (field
notes, expatriate women's meetings).

This section has presented evidence that the TNCs distinguish quite clearly
between different groups of expatriate managers. While some TNCs might be
adjusting expatriate packages and reducing what they perceive as unjustifiable
expense, the cost of senior managerial expatriates or the relocation and
maintenance cost of their families, does not seem to matter to the TNCs. There
was no evidence that the number of senior expatriates might be being cut down.
To the contrary, any evidence found on this pointed to the opposite direction
such as indicated below.

'No, cost is not an issue with us. I do not see it that way. As I said
we are actually trying to increase the number of expatriates. Yes,
we might be trying to look at ways to make it more efficient40• but
at the same time we are trying to increase it. We have a production
services manager down in Reading. She is here with her husband
and she is on maternity leave now for her third child. I have three
kids ... They look for the best person for the job, and then if they
domestically carry a baggage with them. that is the way it goes.'
(PI?)

A further example is provided by the next participant, who reiterates the point
regarding cost and the issue of replacement, making a clear distinction with

40 The respondent's reference here is to the further deployment of new technology to enhance
networking and decision-making cohesion.

215
regard to seniority. Having emphasised the importance of the existence of trust
by the centre in the senior manager's ability to represent the TNC and run local
operations on global lines, he states:

'Middle managers can definitely be replaced, senior managers no -

not at all. There will probably be a deliberate strategy to put senior
managers in expatriate positions.' (P32)

In other situations such as the case presented below, placing more expatriates,
particularly at senior levels, may actually be an actively pursued policy of the
TNC:

'Our CEO is aggressively trying to increase it [number of

expatriates]. That's one of his targets, because, he thinks it adds
that much value to the business. Yes, It's expensive for the
company, but he feels and most of us feel that it makes a lot of
difference.' (P 16)

The last example to be cited by this section relates to the case of one senior
manager whose cost 'outstripped the cost of the whole of the local workforce' in
an African country. This participant explained that the issue of trust (or lack of
it) became such an important issue in the Democratic Republic of Congo, that
his TNC, an oil transnational with a long history of involvement in that part of
the globe, was more than happy to maintain its senior executive at 'an
extraordinary' cost in order to ensure that the TNC's strategic market position
and presence were guaranteed to continue. He elaborates the case as follows:

'To be quite honest, this was worth our while; we could trust him
as our senior expatriate to protect us and our presence. Yes, there
were probably hundreds of people working for him locally, but

216
 nobody cared that the cost of keeping him there was greater than
the cost of all of them put together ... He added value more than his
cost' . (P21)

7.7. The changing composition of expatriate managers: other

potential for cost reduction?

An associated area of inquiry explored here relates to the possibility that apart
from the deployment of new technologies, the cost of expatriation may be
reduced by the TNCs employing alternative sources of labour such as single
and/or younger people with no family costs or host or third country nationals
(TNCs). The participants were also asked to explain the impact (if any) of
potential alternatives on traditional expatriation policies.

By and large, the TNCs covered by the sample did not seek actively or indeed
consider the employment of, for example, younger managers as a less costly
alternative to the traditional manager likely to have a family following him
around the globe. If managers, particularly less senior managers were generally
becoming younger, this was seen as a reflection of social change in recent times,
and not an active decision on the part of the TNC. Some TNCs were recruiting
managers at an earlier age because of the realisation that globalisation needs a
cadre of managers who are exposed to other cultures from an early age, and are
excited about the prospect of having an international career. This was seen in
contrast to earlier times when expatriation was often seen as a last career move
into retirement. The following are typical formulations.

'Managers are probably getting younger. In the 1980's when there

were fewer international managers, they tended to be expatriated
as their last job; it was the pre-retirement job to boost their

217
 pension ... They were also people with grey hair who had the
experience to convince our partners that they were the right people
for the job and that this was the right company. Now, there are a
number of younger people who are probably the future General
Managers of the company, and who realise that they have to
realise an expatriate assignment in their career to climb the ranks
within the company. As the company expands, international
assignments and cultural awareness is one of the boxes that people
tick.' (PI)

The same respondent, however, carries on to link the issue of age with the level
of seniority on assignments that really matter and to the need for the expatriate
as the TNC's representative in a foreign land, to have the full trust of the
corporation. His account is confirmed by the next manager who states:

'International assignments are popular with very young managers,

but that is not what I would want. International assignments such
as managing joint ventures are too big and too important. We have
to send somebody of some stature. We do try to act as a catalyst
for personal development, but not when too much is at stake in a
fundamental job. That is not the profile we want for somebody
who runs a factory. You will find that the profile of ages is older
for those outside the UK than those working in the UK.' (P8)

This section may be concluded with the thoughts of this manager, which sum up
the key points of this aspect of the discussion:

'There may be some younger managers ... but I think tl)is is purely
societal and coincidental. Exceptions apart, there are very few

218
 senior managers who are young or single. In general, there are no
significant changes yet.' (P22)

7.8. Conclusion

This chapter contains the key findings derived from the second main category of
this research, namely the impact of new technologies on expatriates, which was
central to understanding the issue of the possibility of the substitution of
expatriate managers with as effective but cheaper ways of conducting global
business.

The chapter presented detailed accounts of the impact of new technology,

starting with a general picture of the consequences of the deployment of such
technologies for globalisation, followed by accounts of their specific impact on
expatriates. The issue of the cost of expatriate managers was explored in some
detail, and also in relation to the comprehensive infrastructure that has attached
itself to this type of migration. An important function of the chapter was to
identify common conceptual and empirical connections with key findings
reported in previous chapters in an attempt to develop an overall picture. A
summary of main points and connections is presented below.

The participants' responses indicate that the most significant general impact of
new technologies is that they have greatly enhanced the conduct of business at
the global level. Without them, globalisation - in the sense of modern global
economic activity spreading further and further over countries and regions of
the globe - could not have occurred. The speed and efficiency with which
information and knowledge can be transferred across the globe has had a
tremendous impact on the quality and pattern of economic activity worldwide.
Networking across space, the TNCs have become increasingly capable of

219
achieving a cohesive system of problem and solution sharing. Networks of
knowledge can be extended over the globe to inform local solutions. They are,
however, hindered by the poverty of local infrastructures in poorer locations
around the globe, and by uneven development. Indications of the power of the
TNCs to maintain (if not promote by deliberate policy) technological divisions
across space were presented, particularly through illuminating examples of
allowing or denying access to advanced technologies in situations of joint
ventures in different parts of the world.

The impact of new technologies on expatriate managers was considered in some

detail by the chapter. The main consequences of their application are to enable
expatriate managers to feel more connected and closer to the centre(s) of their
TNCs. They are now also more able to promote on-going networking and
immediate contact, despite physical absence. This has made expatriation more
effective, both in terms of expatriates being able to manage foreign operations
more effectively because of the existence of an immediate and accessible
knowledge system within the TNCs, as well as their being potentially more
traceable and thus accountable to the centre.

Instances were reported of new technologies having impacted on the number of

visits or the duration of some assignments. Several participants also reported
that in some cases it might be possible to cut short or eliminate some
assignments. The participants also offered examples of situations where
telecommunication technologies have reduced the amount of face-to-face
interaction, or the number of meetings and the need for physical presence.

However, the impact of new technologies was not perceived and described as
equal for all expatriate managers. One important connection that the chapter
made with previous findings was that it would be conceptually and empirically
difficult to shape an insight into this whole area of investigation without looking

220
more specifically at the role played by different groups of expatriate managers.
The participants, as in the last two chapters of findings, continued to make the
significant distinction between technical and managerial expatriates. While the
labour of technical "knowledge workers" (and/or less senior technical and
functional) managers could be potentially open to the impact of technology and
replaceable, that of senior managerial expatriates could not. Technical expertise
was seen as transferable across the globe at different geographical levels and
with considerable ease. Such expertise was possessed usually by middle and/or
functional managers such as those working in finance or product design, for
example. Senior corporate expatriates, who take control of foreign locations,
appear to be resilient to the impact of technology. The re-emergence of the
importance of understanding the global culture of the TNCs and promoting their
core values as an important aspect of the role played by these managers,
established another key link with previously reported findings, as did the
significance of the trust of the centre in these managers to shape local cultures
and/or assert the culture of the centre. These managers were once again seen as
the TNCs' trusted representative who would conduct local business with a
global outlook, an important part of which was to understand what the values
and interests of the centre were. They provided the link between the centre and
the TNCs dispersed operations, creating a sense of global totality.

The issue of the cost of expatriate managers was explored in detail by the
chapter to provide further clarity on the issue of replacement and the importance
of the cost the managers to the TNCs covered. A significant element of the cost
was reported as relating to the infrastructure created for this type of migration to
support the families of the managers. This issue was explored in some detail in
the last chapter, which pointed to the increasing importance that the TNCs
appear to assign to the happiness of the expatriate family as a main condition for
the success of an international assignment. This chapter detailed a consistent
picture, which pointed to the irrelevance of such costs. The TNCs recognised

221
the need to have 'the right people' in place and were happy to meet all the costs
associated with their transfer and relocation, despite being very conscious of
what they often described as 'inflated' expatriate packages.

No evidence at all was found that cost is an issue that affected the despatch of
senior corporate expatriates to foreign geographies. In fact, what did emerge
were examples of the number of senior expatriates being increased, despite their
cost.

The chapter further explored the future vision of the participants on the issue of
replacement and asked whether new technologies were seen as ever being able
to make irrelevant the need for the physical presence of expatriate managers.
Familiar lines were again drawn along the distinction between the functions
fulfilled by different groups and also with regard to their level of seniority. It
appears that new technologies are perceived as never having the potential to
replace managerial expatriates. The reasons stated for this by the participants are
commonly formulated to indicate the importance of relation building, the
promotion of a transnational business culture and the protection of the TNCs'
multi-faceted interests, none of which are seen as achievable with cold
communication technologies, no matter how advanced or varied in application
such technologies may be. These were seen as crucial aspects of the role played
by these managers in the globalisation process and continue to require physical
presence and representation.

An additional sub-category relating to the changing composition of expatriate

managers with regard to the issue of replacement and cost, and the possibility of
the TNCs being tempted to employ younger and potentially less costly
managers, was discussed briefly by the chapter. The TNCs were aware that their
managers were becoming younger in general, and ascribed this trend to a social
change rather than a deliberate recruitment policy. While because of the

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increasing importance of cultural awareness in the globalisation era, the TNCs
discussed were paying more attention to this issue at an earlier stage in their
managers' careers, none would be prepared to entrust a younger manager with a
significant managerial international assignment. In line with the above findings
on cost, the lower cost of the younger managers who are more likely to be
without a costly 'baggage', did not in any way seem to figure in corporate
calculations.

In short, the findings presented in this chapter reiterate earlier indications that as
long as the process of globalisation continues, managerial expatriates,
particularly at senior levels, are likely to remain an indispensable element in its
implementation, promotion and management.

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 CHAPTER 8

The Flow and Movement of Expatriate Manager: an Indication of the

Direction of Skills and Core Value Transfer Across Space

8.1. Introduction

The current chapter deals with an additional dimension (final sub-category) of

this research presenting the key findings related to the movement of expatriate
managers around the TNCs' foreign operations. The indicative detection of the
flow and movement of expatriate managers across the globe, was introduced in
chapter four as a sub-category, the aim of which was to identify any relational
patterns between the TNCs' core base(s) and their operations dispersed in other
geographies.

Embodied in such relationships are a number of concepts related to the themes

and sub-themes covered by the last three chapters. The further clarity gained by
investigating this particular sub-category helped to enhance the insight
developed by the findings reported earlier into a number of key areas. Examples
of some of the questions that are particularly important here are as follows.
What kind of pattern(s), if any, of the movement of skill and knowledge exist in
the case of the 23 TNCs covered by this study? Would the familiar divisions of
labour between technical and general managerial and also between different
positions of seniority be made? Given the significance attached by the TNCs to
the transfer of core values at the global scale, what is the direction of the flow of
these values in the globalisation era? How does the issue of the trust of a TNC

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in its expatriated representatives - to which much significance was attached -
manifest itself in their movements? Beyond making a specific inquiry into the
flow and movement of expatriate managers, the chapter thus serves to identify
any interconnections between the various dimensions of the research.

This section was researched through the following questions being posed to the
participants:

1. What determines the movement of expatriate managers around the

globe?
2. Is there a specific general direction around the globe? (e.g.: from the
home country to other geographies, vice versa, within geographies,
or in any other direction?)

Following a general analysis of the key features of the movement of expatriate

managers around the world in section 8.2 below, the key findings of this section
are presented in three parts to include movement from the core to peripheral
operations; movement from these operations to the core base(s) of the TNCs;
and movement of the managers within geographies where the TNCs are present.

8.2. Flow and movement: some general features

As a general indication, the picture that emerges from the movement of

expatriate managers around the world appears to be very clear. In the case of the
23 TNCs covered by this study the following patterns represent the main
directions of movement.

Of the 23 TNCs, 15 (65%) reported that the bulk of the movement of expatriate
managers was from the centre(s) of the TNCs to their peripheral operations. The

225
centre(s) are defined here as the core base(s) of the TNCs, usually representing
the location of their headquarter(s) and the periphery represents the locations of
the dispersed operations of the TNCs in other geographies. The location of the
core centres of the TNCs are mostly in the home country of a TNC, although
some TNCs (including a number in the sample) have more than one home
and/or regional headquarter(s) in countries that they see as significant for a
variety of reasons, including the existence of a large market or the need for
strategic presence. While the definitions employed here do not directly
correspond to the concept of core-periphery relations traditionally used in
development or international relations studies to signify unequal power
relations, there do appear to be some similarities in the conceptual application of
the terms with the centre (regardless of locational specificity) having direct or
indirect influence and control over the periphery. As the section details below,
the movements appear to take place for different reasons closely linked with
divisions based on seniority and status of different ,locations. Whilst these
divisions appear to be treated by the participants (both US and European) as
expected in the case of the poorer countries, the domination of the US managers
on grounds of seniority, for example, is evident even in the case of a geography
such as the UK. This is similar to other findings reported in earlier chapters.

The movement of managers from the peripheral locations of the TNCs to their
core base(s) is by contrast quite limited. Only eight of the TNCs covered (35%)
were able to comment on this direction of the movement. Of these, most
commented that such a movement was minor or limited with only four TNCs
describing it as occurring to any significant degree. Worthy of note here is that
even in these cases, the managers from the peripheral locations came to the
centre in order to be trained. There were no instances of a TNC relocating
managers from a peripheral location to be part of a management team based at a
central location, other than to train them at the centre or to expose them to its
culture.

226
An interesting finding of this section was the reported increase in the movement
of managers within peripheral geographies. Such a movement (frequently
referred to by the participants in relation to South East Asia) appears to have its
own reasons to do with language and cultural specificity of the region.

8.3. Dominant direction of movement: core to periphery

This section will present descriptions of the principal direction in which the
movement of expatriate managers takes place. Before describing these, it is
worth noting what several participants perceived to be a change in attitude
towards expatriation in the current era. In a number of cases the TNCs point to
an old model of expatriation, which they often describe as 'colonial', and
proclaim it to be dead, as in the following example:

'The old corporation was colonial, so they went out from America
and came back. That has reduced dramatically ... ' (PI8)

This participant carries on to elaborate on the direction of expatriation having

broadened within regional economies (see section 8.5), while another - a US
expatriate working for an oil TNC - confirms the existence of a colonial versus
modem model of expatriation:

'In terms of the movement, years ago, we had a sort of outpost

colonial attitude. But we have killed that now. That was a neat,
smart model for 100 years ago ... ' (P20)

Nevertheless, the participant explains that in the modem version of expatriation

there happen to exist centres of activity, which produce special talent that is then
expatriated to other locations:

227
 'In my case, for example, the centre of finance is possibly London
[or] Houston ... There are some others, but you cannot really get
into interesting finance without being in London or New York .. .'

The bulk of the movement of expatriates in this participant's TNC thus remains
from core to other geographies. Other participants also state this as a clear-cut
pattern. The following are typical examples. They appear to indicate a dominant
flow from the core regardless of the "nationality" of the TNC, which in the case
of this study, is confined to European and American TNCs.

'The bulk of expatriation in this TNC is from the core to the

[other] countries.' (PI - UK oil TNC)

'Most of our expatriates have come from the US.' (P13 - US

telecommunications TNC)

'Most people are English or Dutch' (P3 - European Domestic Care

and Food Products TNC)

, ... The tradition of sending people out from the UK and getting
them back again still goes on and is still the main part for us.' (P9
- UK Air Engine and Cars TNC)

'The flow is mostly from core to Western Europe, for example,

France and Germany.' (PI9 - US Entertainment TNC)

In descriptions of dominant flows, issues of exposure to the headquarters; the

importance of the culture of the core; and the significance of competent
networking re-emerge once again as important elements determining the

228
direction and nature of the flow. The statement of the next participant
exemplifies this.

'The flow is predominantly from the core [US] to other

geographies. In Europe, operations might be headed by Europeans,
but even they have to be very familiar with the US headquarters,
despite cultural differences.' (P23)

Seniority is often directly linked by the participants to the type and nature of the
movement of expatriates across and within the globe with the headquarters
playing a central role in the life of a few but remaining remote to the majority.
The next participant, working for a European TNC, explains the point.

'Most people [expats] are English or Dutch. That is the first point.
There are only 1500 people at the corporate centre. But there are
300,000 people working for us worldwide. We have 25000 people
who work from plantations in India, Malaysia and Africa. At the
more senior level, people do corne in and out of the corporate
centre more when they get close to the top ... ' (P2)

An American expatriate, working for a US corporation has a similar perception:

'Most expatriates go from North America and our headquarters to

these regions with very few going the other way round. There are
several from the UK to the US but mostly functional or technical
(IT, Finance, etc). Most senior expats will be Americans with
international experience.' (P28)

And in the words of another senior American manager based in UK, who,
explaining the reasons for the domination of the movement from the core to the

229
peripheral operations, appears to equate cultural globalisation directly with the
creation and the transfer of the culture of his TNC at the global level:

' ... The whole point is you need cultural globalisation ... Until the
infant can stand on its own feet, the headquarters [in the US]
provides the glue.' (PI I)

Indeed, the domination of the core and its central and powerful base seems
evident even where a TNC might proclaim and somewhat implement a policy to
increase local cadres of management, thus reducing the need for expatriates
from the core, as in the example below.

'Our policy is to increase local managers. In the past we had zero

percent local managers, now we have 40 percent. But the
movement of General Managers is crucial to globalisation. This
[the headquarters] is where our thinking takes place, where R&D
happens. where our culture is shaped... The movement will
always be predominantly from the centre, from the power house'.
(P22)

The statement made by the next participant represents an overview of the

movement, and while confirming the dominance of the core over periphery in
terms of the flow of expatriate managers, introduces other directions in which
such movements are taking place:

'I think the dominant movement would be from the core ... So you
get two types of [key] movement: from the core to the regions and
within the regions.' (P29)

230
Before discussing the movement of expatriate managers within the regions it is
useful to present a picture of the reverse of the movement so far considered, that
is to say from periphery to the core.

8.4. Other flows: periphery to core

Another direction of movement that is particularly relevant to this section is the

magnitude and nature of the flow of expatriate managers from other geographies
to the core location(s) of the TNCs. A main reason for this type of movement is
the need to train and develop more junior managers with a view to greater and
more consolidated strategic global development. Here too, issues related to the
hierarchy of seniority within the TNCs feature quite strongly in the participants'
responses, as do exposure to the headquarters and the familiar process of core
value transfer, which appear to play a key role in determining who is located
where.

The following examples are some typical formulations, which point to the key
features of this type of movement.

'The bulk of the assignments are people coming from Asia, or the
Eastern European emerging markets. And most tend to be more
junior .. .' (P l3)

'We have an obligation to train. We will either train in the country

or bring them over here [UK]... Those coming from other
geographies are not necessarily senior. If we take China, where we
have a joint venture, we have had to do extensive training in
manual crafts and basic management skills over the years.' (P8)

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 The same participant carries on to explain that the reverse of the movement, that
is to say. the movement of expatriates from the core to the other geographies is
usually by general managers and senior technical managers41 , confirming the
nature of the movement discussed in section 8.3.

As in the last section, the participants' descriptions of the flow and movement of
expatriate managers often contain elements relating to the dimensions of
closeness to the centre and cultural values, which also emerged in earlier
chapters as important dimensions of the research findings. This is illustrated by
the example of a third country national (TCN), who is being nurtured for a
senior job through exposure to the London-based headquarters of a European
TNC, from which he will return to a developing market, probably to head up the
TNC's regional division. He generalises his experience:

, ... If the expat is going to go back to a senior job, they need to be

more exposed to the headquarter's thinking, its culture and
networking .. .' (P3)

An American manager offers a similar explanation:

'Key managers 42 might also go to the core, but the movement of

the people from the geographies to the centre is limited.
Theoretically though, these other places such as Asia can also be
headed by Asians. So, sometimes lower or middle managers from
Asia go to the US for strategic management development.' (P23)

. 41 The reference here is to technical managers who in addition to the possession of technical (e.g.
engineering. finance. IT and so on) have control over the utilisation of resources including the labour of
others. in joint or other types of ventures by the TNC.
42 Key managers here mean managers who may be host country nationals heading the TNC's operations
in a locality but who need to have extensive experience of the culture of the core. in this case the US-
based headquarters.

232
In the decision to expatriate, the TNCs assign particular importance to certain
countries and regions as training and development grounds for less senior
managers. In the first instances, for example, the UK and London are seen as
favourable places for people from the peripheral operations to come to.

'Let's take the UK, for example. [Although] here the business has
never had a home-grown general manager, the UK, in particular, is
looked upon as a great training and development ground. A lot of
our managers will come here for training and development from
the regions. We then ship them out to our consumer markets.'
(P4)

It is sometimes language and culture that are indicated as a positive incentive

for movement:

•... Very few come to the centre. I can think of a number of South
Africans that we have in the centre [London-based headquarters].
We have got a South African in China, who came to the UK and
then went to China. There are a couple of Australians who have
come to the UK, and a few Americans but very few and not many.
But the bulk of the movement is between the UK and America, i.e.
outward. Almost it is the English language that tends to dictate
that; it is a common language.' (PI)

The language and culture of some parts of the world also appear to affect the
decision to move expatriates around in a different way. The participants usually
refer to Japan and South East Asia as rather impenetrable because of language
and cultural specificity. This participant explains this perception, confirming
key features of earlier findings regarding seniority, but also pointing to the

233
importance of language in determining movement for reasons other than
training:

'I would say that the movement is primarily from the US to [other]
geographies, and there is some movement from Europe to Asia ...
We did send [some] Japanese from Tokyo to London to cover the
London-based Japanese. But not at the senior level, it was
definitely at the operational level, i.e. sales people, traders. And
they will probably be going back at the same level, unless they are
exceptional, but we have not had that experience. 1 would say that
language plays a big part in that and it unfortunately handicaps a
number of [American] people.' (P6)

A TNC might wish to "protect" its home country expatriates from what it
perceives as excessive cultural adjustment. It might thus divide the globe into
regional cultural markets, as the next manager comments:

'We tend to have regional markets, so to speak. I mean just for

cultural reasons. If possible, we don't want people to make huge
cultural steps.' (PI5)

This section dealt with the movement of expatriate managers from dispersed
operations of the TNCs covered to their core base(s). What did emerge from this
part of the research is an increase in the movement of expatriate managers
within different geographies. This is detailed in the next section as a third trend
worthy of separate analysis.

234
8.5. Inter and intra-regional movements

When discussing the movement of expatriate managers across the globe, some
TNCs pointed to a new trend emerging as a result of intensifying globalisation.
This is actually discussed by a number of participants as the main direction of
their movement.

The section will also detail re-emerging elements reported in the earlier findings
relating to the issue of seniority, and core values.

The first account is by a participant, who usefully, points to this trend as

probably having occurred in the last three to five years. She then explains that
since the beginning of this period:

'There are some people who are going from the regions, not into
the headquarters, but into the regional divisions to learn for a
period of time. And there are some people who are in regions and
are going to other parts of the region ... [And] if you take the
South East Asian region, they have assignments in more than one
part of South East Asia, or in Europe they would have assignments
in Germany, London and France .. .' (PI8)

The statement by the next participant confirms the change in the direction of
movement as a new trend:

'It is changing. Increasingly, the demand is for people to move

from any country to any other country ... But increasingly we have
seen people moving around from our bigger centres' . (P9)

235
As mentioned above, the issue of seniority re-emerges as a main characteristic
of this type of movement, as in the next two examples.

'The majority of assignments are within regions. In the US, it is

common for people to move out; in Latin America, it is common
for people to move out, and in the Asian sphere it is common for
people to move around. The same thing applies to Europe and
Africa ... Inter-regional changes occur at a higher level: director,
president and vice-president.' (P26)

'There is increasing movement of managers, especially at senior

levels, amongst geographies. The individual [US national], who
runs our Paris office, for example, used to be in London. We
moved him from London to Paris; he was promoted to Managing
Director this year. It is anticipated that he'll come back to London
and take another senior position at some stage, [but] probably not
in the US.' (P6)

The issue of seniority is important not only as a factor, which may shape the
direction of the movement of these managers, but also one that raises another
interesting question lying at the very heart of the globalisation. Given the
reported increase in inter and intra-regional movement as a recent phenomenon,
the question that arises is whether globalisation has created a global or
supranational elite that roams around the world. This question was discussed in
chapter three (please see section 3.6.2) as a disputed topic that has been gaining
increasing attention; and while the breath and width of the current research, did
not allow it to engage in a detailed and focused investigation of this
phenomenon, what does emerge here is an interesting revelation by some of the
TNCs that such a group of people might exist. This is summarised succinctly by

236
the next participant, who is an HR manager of one of the biggest TNCs in the
sample:

'The way I look at it is that there is a certain point in time, a

certain level, where the Company deems its resources global. Yes,
from the General Manger upward ... But what we are talking about
is 35 to 40 people who travel the world seeing it as it really is, a
global, not a regional or local geographic market.' (P4)

The definition of a 'global elite' and its size are probably not easily
ascertained43 , and may be dependent on the size and/or the degree of
internationalisation by a TNC. However, the next TNC - also one of the biggest
in the sample and present in more than 100 countries - indicates that such a
group of people are present in the globalisation era. Here, the participant
explains their approximate magnitude.

'We have a number of people who spend a considerable amount of

their careers as expats. There are a small number of global expats
in Exploration, because their job is to explore for oil wherever
they can find it. The senior managers in Explorations are expats
who roam the world. But again they are predominantly British and
North American. Apart from these, there are about 500 others out
there.' (P I)

This section might be appropriately concluded with an analysis of why this type
of movement has been on the increase. It appears that with increasing

43 This participant was particularly interested in the concept of 'global managers' as a freely moving
group of persons who 'roam the world'. He took some time out of the interview to identify figures and
statistical data on the number of such people within his TNC. However, a clear categorisation or
definition or indeed figures relating to such a group did not exist, and he was ultimately able to give a
general estimate. In a number of incidents in the case of other TNCs, a similar process took place. What
is clear is that the participants have in mind a degree of transnationalism, a characteristic that equips the

237
globalisation and the associated increase in the maturity of the TNCs'
subsidiaries in foreign geographies, such locations may emerge over time to
possess some of the features of the headquarters of a TNC. The following
explanation outlines some key reasons.

, ... I think that the level of sophistication, of maturity of some of the

subsidiaries is such that they can be absolute clones in every way of the
headquarters ... If the decentralised system is fairly sophisticated, people
going into those subsidiaries can expect to have a high level of
development and responsibility. But some of them are not sophisticated,
so it might be felt necessary to have a period at the headquarters,
followed by going to the regions to inculcate some of those values ... It is
difficult to generalise, but I think because of two factors of good business
schools in Asia, for example, and the level of sophistication in some
subsidiaries, the need to go to headquarters is diminishing'. (P29)

In other words, it appears that as the processes of globalisation deepen and

broaden, the role of the headquarters, particularly so far as main regional
markets are concerned may in some ways and to some extent be duplicated
across the wOrld 4\ including the inculcation of corporate values by more mature
operations and at a regional level. Greater regional movements may somewhat
be facilitating this process.

manager to rise above all potentially restrictive cultural boundaries and operate in different geographies
as well as across them and their cultures.
44 Harzing (1996) suggests that it might be less expected for a subsidiary that is more mature and less
dependent on the headquarters to have a home country general manager. The increasing movement of
senior managers within geographies, and not necessarily only via the headquarters, might be partially
responsible for the development of such a relationship.

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8.6. Conclusion

This chapter presents the last of the key findings of this research. They are
derived from the participants' responses to the sub-category of the flow and
movement of senior expatriate managers around the operations of the 23 TNCs
covered.

The chapter acknowledges that comprehensive (or readily available) statistical

data on the directions of the movements were not available. Nevertheless, The
TNCs were able to highlight the key trends with considerable clarity. Three
trends were identified as follows.

The dominant movement of expatriate managers appears to continue to be from

the core centre(s} of the TNCs, these being the home country and/or their
regional headquarter(s}. This movement is heavily characterised by the seniority
and position of the manager going to the foreign operations. The subject of the
transfer of corporate core values via this type of movement, as well the
spreading of corporate networks of a TNC feature strongly in the participants'
formulations. In other words, the findings confirm that as far as this type of
movement is concerned, an important reason for its initiation, and perhaps its
key function is the transfer of corporate core culture and the inculcation of
corporate values in other geographies via senior corporate managers across the
TNCs.

A second, but less significant movement was reported to be from the periphery
to the core. This type of movement is quite limited and appeared to be
undertaken only by more junior managers. Its purpose is mainly to train existing
and/or potential future managers from the peripheral operations at the core of
the TNCs. A main reason for these managers to go to the centre is exposure to

239
the culture and networks of the centre. This process is seen as necessary for the
development and future progress of the managers in their own locality/regions.
The need for training in basic technical and management skills, which
sometimes a TNC might decide to conduct at its core plants in the home
country, is reported. Such a movement might also take place because the
necessary language skills required to meet the needs of a specific market
segment may not exist at the centre.

The third and final pattern that the chapter detailed is that relating to an increase
in the movement of expatriate managers within, usually regional, operations of
the TNCs. A number of the TNCs discussed this as the bulk of the movement in
their corporations. Here also, the movement was undertaken by senior managers
only, with the issue of culture and value transfer remaining central. Present in
the participants' formulations, were factors of cultural and language specificity
that might influence regional movement(s). The chapter indicated that an
implication of this new increased movement might be that with increased
globalisation, the role of the headquarters as the sole provider of a guiding
culture might decrease, while its influence is further and further diffused around
the globe via replicates created in its image.

The chapter briefly discussed the phenomenon of a new cadre of global

managers (or a new global/transnational elite that roam around the world
without allegiance to a specific place or people) as being identified by some
participants as very small number of people.

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 CHAPTER 9

Conclusion and Discussion

As will have been noted, each chapter of this dissertation ended with a detailed
conclusion of the main findings stemming from the investigation of relevant
categories and/or sub-categories explored by the chapter. The empirical chapters
(chapters five to eight), which were based wholly on the participants'
formulations and guided by their analyses, were also concerned with making
connections with findings previously reported, representing key interlinkages as
they emerged.

The task of this chapter is to present theoretical propositions developed by this

research based on its key findings, as the last stage of theory development
outlined in section 4.3 of chapter four. The chapter also attempts to situate them
in the context of the key dimensions of the theoretical chapters (chapters two to
four).

This thesis began with a discussion of the theoretical debates surrounding the
phenomenon of "globalisation" and proceeded to investigate the role and
possibility of replacement of senior expatriate managers, as a key element in its
advancement, using the grounded theory method of research. Its focus
throughout the chapters was to investigate two overarching and interacting
themes as outlined in chapter one: the role and function of senior expatriate
managers in globalisation and to what degree, if any, these managers were open
to the impact of new technologies (or to other cheaper sources of supply of
labour),

241
 The main propositions of this study relating to its two mam themes (or
categories) are as follows.

Senior expatriate managers are not susceptible to replacement by new

technologies and this resilience is likely to continue. The role they play in the
globalisation process cannot be fulfilled more cheaply through the deployment
of electronic or other technological means.

The reasons for this were articulated by the participants as relating to the crucial
role they play in representing and safeguarding the multifaceted economic and
political interests of transnational corporations. Their physical presence is
required in foreign geographies regardless of their cost to the TNCs. Their
value-adding contribution is seen by the corporations primarily in their ability to
transfer TNC-specific skill(s) and knowledge to other locations around the
globe. Such knowledge contains the understanding of global corporate value
systems as an essential ingredient, the worth of which cannot be subjected to
cost ceilings.

It is proposed that only through a profound understanding of the relationships

and networking practices at the TNCs' headquarters is it possible for the
managers to be trusted by the centre. Such trust is the major factor that places
senior executives from the home country of a TNC in charge of globalisation
strategies and excludes others including local managers from senior positions in
this process.

The findings lead to the proposition that these value systems are constructed by
the TNCs and seem to be primarily related to the TNCs' competitive advantage
towards their rivals. Faced with increasing competition from other global
players. the TNCs rely heavily on their senior expatriates in the process of
securing presence and market leadership as fast as possible. Inevitably this

242
process involves taking account of the business culture of foreign locations and
all (but particularly senior) expatriates are expected to make globalisation work
in the context of other cultures.

The managers participating in this study were very conscious of this

responsibility and aware that in situations involving mergers and acquisitions
they were relied upon even more to inculcate the value systems of the core
base(s) of a TNC in the new corporation, following an acquisition.

It is proposed that new technologies have impacted on the speed and quality of
knowledge transfer and management systems across the globe; decision-
making, problem solving and trouble-shooting processes have been enhanced in
speed and quality. This is particularly important in times of economic crises. For
senior managers this was the key impact of new technologies.

New technologies have, however, impacted on the nature and duration of some
assignments, eliminating the need for physical presence and/or shortening the
length of time necessary for some expatriates to stay away from the base. The
TNCs, profoundly aware of the cost of expatriate packages, will, whenever they
can take advantage of cheaper methods of knowledge transfer. Such impact is,
however, limited to functional and technical managers only. The distinction
between technical and non-technical skills and knowledge and its transfer across
the globe either diminishes or disappears altogether when a significant
assignment is at stake.

It is further proposed that new technologies are potentially capable of replacing

only functional (usually middle) and less senior managers whose "knowledge
products" may be transferred more cheaply across the world. Technical
corporate managers, that is to say managers whose jobs may contain a strong
element of scientific and engineering knowledge (including heads of R&D or

243
heads of subsidiaries or joint ventures engaged in manufacturing) are seen as
needing to carry knowledge that is beyond technical know-how. In the case of
these managers too, the key skill that the TNCs look for is their ability to
transfer value systems and the core culture of the TNC to foreign geographies.
Once they are in charge of a plant (even in a joint venture) or a research centre
or a technology transfer system, involving interactions with local processes and
agents involving more than a specific and short-lived project, their primary task
shifts to embrace the upholding, safeguarding and inculcating the TNCs core
values.

It is worth referring here to a methodological point. As can be seen from the

propositions advanced above, without the deployment of an interpretive and
grounded approach to this investigation, it would have been very difficult to
understand the connections that developed through the research process between
the different aspects of the role played by expatriates; the nature of the skills
they carry and transfer across the globe, and the potential for their replacement
by new technology. Neither would it have been possible to develop an analysis
of whom and what new technology can or cannot replace; nor and more
importantly perhaps, to explain its possible limitations in knowledge transfer.

At this point in the chapter it might be useful to discuss some of the main
findings and propositions of this study in relation to previous research discussed
in the chapters concerned with the background theoretical and conceptual
issues. For the sake of consistency and cohesion, it is suggested that this task
can be undertaken through the structure developed in chapter three (sections
3.6.1-3.6.3) which organised a review of the literature on the highly skilled (or
interchangeably referred to as the international managers or corporate
transferees) around the three themes of expatriates as knowledge carriers;
expatriates as a new breed of international managers or a new global elite; and
expatriates as special migrants. The purpose of identifying possible connections

244
with previous research is not to confirm or to refute particular positions
discussed in the earlier chapters (which would not be in line with the
methodological approach employed by this study as detailed in chapter four).
Rather, the aim here is to relate the propositions arrived at by this study to other
research and to situate them in the context of existing literature.

As knowledge carriers, senior executives appear to be unique. It is the nature

and the process by which they accumulate this knowledge and their ability to
process it effectively within markets situated in other cultures that makes them
"irreplaceable". Such knowledge is constructed by the TNCs and by and large
created and shaped via their headquarters. Although instances of the
participation of the peripheral geographies in the production of this knowledge
were reported, a hierarchy of access to the headquarters means that knowledge
going back to the centre is to enhance a TNC's sense of totality in which the
centre continues to have a leading place. The glue that holds together, that
ensures the connectedness of the network enterprise in Caste lIs' 5 new techno-
economic paradigm (please see section 2.9 in chapter two), is largely made up
of the knowledge that executive expatriates take back from the decentralised
units of TNCs scattered across space to the core and vice versa. However, with
intensifying, stretching and deepening of globalisation processes, there may be
an increasing role for the production and circulation of knowledge within more
mature markets without such heavy reliance on the home country headquarters.
This is reflected in a finding of the study that with increased globalisation the
bulk of the movement of expatriates (particularly senior expatriates) was within
regional bases of some of the TNCs where replicated images of the central
headquarters had been created. Nonetheless, in most cases regular training of
these (mostly) regional managers at the home-country base of a TNC was a pre-
requisite as was their induction to the core values of the transnational, indicating
that despite this new trend the TNCs' view of globalisation is a specific one that
is dictated from the core.

245
In this process, Hymer's formulations regarding unequal power relations and
divisions of labour resulting from international production by TNCs appear to
find empirical expression in this research. However, one interesting finding that
cuts across the findings of the categories and sub-categories of the research
relates to the possibility of the breakdown of the traditional core-periphery
relationship from a geographical to a social one. This finding is line with the
new type of relationship reported to characterise the globalisation era, as
discussed in chapter two. Knowledge, skill and technology no longer appear to
move from the centre (traditionally advanced capitalist economies) to the
periphery (less developed economies). Transnational knowledge circuits seem
to embody a more complex geographical web containing a mix of countries
where a TNC is present in whatever form. This study covered 23 TNCs of
European and American origins, all actively involved in business activities in
the core Triad of globalisation (and some poorer countries depending on
location). The considerable presence of (particularly) senior American
expatriates in the UK is a good example of the breakdown of this relationship;
in general, all participants saw their senior expatriates as carrying a skill and
fulfilling a role that could not be accomplished by others regardless of the
degree of economic advancement in the foreign country.

The sample of this study appears to situate itself well in the context of a new
global elite. Perceived to be highly skilled, highly desirable and sought after, the
senior expatriates attached to this study seem to enjoy mobility, and
unconditional financial and other life-enriching rewards. Massey's proposition
that they are 'in charge' of globalisation and time-space compression (please see
section 3.6.2 of chapter three) seems to be a welcomed position actively and
wholeheartedly adopted by the participants. As a class of people such as that
described by Sklair (and reported in the same section) they do appear to uphold
the interests of their TNCs and the associated states and are acutely aware that
in the era of globalisation, such interests must be advanced and defended

246
globally. However, only a very small number of "culturally neutral" global
managers, that is to say managers seen as able to act in a truly transnational
manner with and across cultures, were identified. The vast majority of the
managers identify quite strongly with a home/core (business) culture of their
TNC. The study reported instances pointing to aspects of the construction of
such identity through the dismissal of other cultures as "deficient" in some
way. Again, an interesting finding of the study is that examples of such attitudes
existed regardless of the geography of the TNCs' presence; they were expressed
by the participants in relation to, for example, India, Turkey, Italy and the UK.

A particular area of interest reported by this strand of the literature (expatriates

as a global elite or class) was the concept of a global division of labour and its
particular characteristics in the globalisation era. This is a concept not new to
many of the participants and explicitly articulated by some. In terms very
similar to those employed by Kanter whose position on the global division of
labour was discussed in this strand of the literature and by Massey (see pages 67
and 40 respectively), Participant 15 comments on the value of global knowledge
carriers within such divisions and also on divisions within the UK:

'So I think that truly global companies with a lot of production

capacity will continually move around in search of lower-
production centres ... the movement of production will be
continually determined by lower production costs and labour costs
are very important here. The UK is the lowest-cost production
place in Europe, but as you go more and more towards automated
production, the less important the traditional labour costs. The
people in the factory are becoming less and less important; the
machines are doing that work ... so more and more you have higher
paid thinkers. They are the biggest contributors ... ' (PIS)

247
Finally, some of the key findings of the study might be related to the third way
in which expatriates have been considered by other existing research: as special
migrants. The migration of the 'highly skilled' was reported in this strand of the
literature in section 3.6.3 as being seen as an essential and increasingly
significant element in globalisation.

Here, Pellerin's concept of migrants as 'agents of social change' (see footnote 9

on page 50) may well apply to the sample of this study as may Castles and
Miller's notion of the highly skilled as 'agents of modernisation and social
transformation'. Throughout the chapters on key findings, this study presented
examples of how the participants saw their role as one that entailed the
influencing and shaping of local structures, including in some cases extending
its scope to restructuring them. Senior expatriates appear to have the key
responsibility in bringing about changes that ensure globalisation is stretched,
deepened and intensified across space. They appear to constitute the human
faces behind FDI flows; the agents of globalisation who must ensure that
international production takes place profitably.

Such migration was also described as reflecting a stark dichotomy created by

globalisation. Firstly, in the era of globalisation where migration processes are
increasingly differentiated, these managers stand out as exceptionally
welcomed, rewarded and freely mobile migrants. This contrasts sharply with the
current situation of the vast majority of today's other migrants being kept away
by Western states often by means unprecedented in recent history such as - in
the case of the UK, for example - being detained and imprisoned on arrival.
Secondly, the increasingly divided and polarised nature of global labour markets
(notwithstanding cautionary analyses pointing to the tenuous existence of such
markets altogether) and the high financial rewards secured by the highly skilled
are argued by some contributors (see Tang and Wood's analysis, on page 73) to

248
be contributing towards increasingly differentiated wages within and between
countries.

There is little doubt that the sample of this study is part of this migration
dichotomy. Entrusted by the TNCs, and needed to advance globalisation
strategies, they are free to move in pursuit of exciting opportunities and
outstanding life-chances; they are highly desired, and appear to be rewarded
unquestionably. To this can perhaps be added another related and arguably
important dimension of this paradox touched upon by this study. In an era where
in the UK, for example, other "new" migrants (refugees and asylum seekers, in
particular) are being systematically dispersed away from already impoverished
support infrastructures in London and the South East, comprehensive and well-
resourced support systems and infrastructures appear to have been created for
the corporate migrants. Moreover, such infrastructures move ahead of the
migrants, await them on arrival and appear to be constantly improved as an
enticement for their movement, as discussed in chapter six (see box 6.1, for
example).

This dichotomy, in its multiple manifestations, is a dimension of globalisation,

which appears to be under-researched at the moment, as does indeed the whole
area of new migratory movements. This is particularly so in the case of research
that places new migratory movements within the context of globalisation and
the mobility of transnatoinal capital. It is with this kind of research need in mind
that Koser and Lutz (1998, p. 13) point to an 'urgent area for further research' in
the 21 sl century.

The present study hopes to have made a contribution towards contextualising

the migration of the highly skilled within the multi-dimensional processes of
globalisation, while shedding light on the specificity of the nature of their

249
movement and on some of its key components, including the "irreplaceable"
role played by senior expatriates in the new phase of capitalist development.

250
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Appendix A

A Profile of Participants

P1: European (UK) male. Project General Manager of a joint venture in

Jinshan, China, working for an oil TNC, with headquarters in London.
The participant was an experienced global manager, who had been on
many international assignments mostly within Europe, accompanied by
his wife and children. He managed the joint venture via frequent visits to
China, and the full use of new communication technologies, preferring to
be based in London owing to the perceived unattractiveness of the
location to his spouse.

P2: European (UK) male. He was the Senior Corporate Strategist of a

Domestic Care and Food Products TNC, who worked at the TNC's
headquarters in London. He had been on a number of international
assignments within Europe, with his spouse and children. His spouse
worked for the same TNC and chose to take an extended maternity leave,
but would have a part-time job with the corporation whenever she
decided to go back to paid employment.

P3: Asian male, and one of the three third country nationals (TCNs) in the
sample, the participant worked as a Senior Corporate Strategist of the
same TNC as P 2 above. He was relocated to work at the TNC's
headquarters in London, following successful management of various
operations in South East Asia. This was his first European assignment,
and it was intended from the beginning that he would return to the region
to manage regional operations at a higher level. His spouse and children,
who attended the American school in central London, and would stay in
London for at least three years, accompanied him.

264
P4: American male. Head of Human Resources of another Personal and
Domestic Care Products and Foods TNC, with headquarters in the US.
He was transferred to the UK (Surrey) to manage the human resources of
the newly built European headquarters. He was in charge of 7000 UK-
based employees including expatriates from the US. Married and
accompanied by his children, who attended one of the American schools
in Surrey, he had been in the UK on an extended assignment of six years.
This participant was repatriated to the US during the study, to take up a
similar position.

ps: Asian American male. Head of Research and Development of the same
TNC as p4, and accompanied by his spouse and children, who attended
one of the American schools in Surrey. The family had been on many
international assignments and the participant had managed the TNC's
operations in Indonesia, prior to coming to the UK. The participant and
his family were repatriated to the US, during the course of the research,
after five years in the UK.

P6: American female. Executive Director of a Financial Markets (Securities)

TNC, who had "gone local" through marriage to a UK resident. She had
been on a number of international assignments and worked closely with
other US dealers relocated to London, with a supervisory role for the
expatriates in addition to her main duties as manager of dealings. This
participant envisaged an 'endurance time' of a further three years in the
financial markets, after which she planned to retire at the age of 43.

P7: European (UK) male, in charge of human resources of a smaller but fast
expanding TNC, with specific responsibility for expatriation policies and
their standardisation. The participant had been on a number of visiting
trips to European (mostly UK) expatriates located in South East Asia.

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P8: European (UK) male. Director of International Human Resources, in
charge of expatriation policies of an Air Engines and Cars TNC. The
participant had been an expatriate himself on a number of assignments,
and his main role was to restructure expatriation policies towards greater
effectiveness.

P9: European (UK) male. International Manufacturing Manager of a Cars

TNC, with extensive experience of managing expatriates globally, the
participant had been responsible for visiting expatriates abroad and had
himself been an expatriate on a number of occasions in the past,
accompanied by his spouse and children.

PIO: European (UK) male. Manager of a Joint Venture in Italy, working for
the same TNC as P 10, and awaiting expatriation for a long time, while
the legal and organisational structures for the joint venture were being
put in place. The participant had been on a number of short assignments,
and would be commuting to Italy, due mainly to spouse's UK-based
employment.

P11: American male. Managing Director of a US Plastics TNC, relocated to

the UK to set up a manufacturing base and a sales operation for the UK
and for Europe. The participant worked and lived in Surrey where his
children attended one of the American schools. This was the participant's
first major international assignment, which lasted for five years, during
which time he closed two acquisition deals in Europe and set up and
managed the UK manufacturing base. He was repatriated to the US
during the course of the research to take up the position of Global
Manager, and pays frequent visits to the Europe and the UK. The spouse
of this participant was in paid employment back in the US, and

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 subsequently found a part-time job in the UK. The family has now been
repatriated to the US, with the participant being offered a substantial
promotion.

P12: American male. The participant was the Managing Director of

Operations, Services and Technology of a Financial Markets (Securities
and Banking) TNC and this was his second assignment in the UK. He
had extensive experience of global management and had been on a
number of assignments elsewhere, now only accompanied by his spouse
as the children had already left home.

P13: European (UK) female, who worked as Manager of Human Resources of

a Telecommunications TNC with a particular interest in repatriation
policies and management. The participant had extensive experience of
expatriate management and was particularly concerned that the TNC may
not be maximising its returns on investment in costly expatriation. She
had been given responsibility for the renegotiations of expatriate
contracts.

P14: American male. Head of Quality Control of an Aircraft TNC, this was the
participant's first major international appointment, which gradually
extended its scope to Europe including Russia, where the participant
stayed frequently and took control of quality procedures. He was
accompanied by his spouse and children who attended one of the
American schools in Surrey, and who stayed behind when the participant
travelled to Russia.

PIS: European (Swiss) male. Head of Human Resources, and responsible for
expatriate management. The participant worked for an Insurance TNC,
which has its headquarters in Europe. He had been on several

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 international assignments, and would be responsible for managing global
assignments following the up-coming merger with another Insurance
TNC.

P16: American male. This participant worked for a Personal Care Products
TNC as the Head of Disposable Products. He had been on a number of
international assignments and had spent the last five years managing the
TNC's plant in the UK (Middlesex). He was accompanied by his spouse
and children, who attended one of the American schools in Surrey. The
family was repatriated to the US during the research and the participant
promoted to a higher position, following which he expected to have one
more global assignment.

P17: This participant was another Third Country National (TNC), moved from
Spain to the UK for three years to head up a Special Projects - Finance
position. He worked for the same TNC as participant 16, but at the
administration site. This was the participant's first major international
assignment. A spouse and children, who all attended the American school
in Surrey, accompanied him. The family was repatriated to Spain during
the course of the study.

PIS: European (UK) female, working as Human Resource Manger for a US

Insurance TNC. The participant was responsible for expatriation policies
and had herself undertaken extensive research on the topic.

P19: European (UK) female working as Human Resources Development

Manager for a US entertainment TNC, with responsibility for expatriates.
The participant had herself been an expatriate in several South East Asian
countries, and still held responsibility for expatriates in some of those
countries.

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P20: American male. The participant worked for an oil TNC as its Chief
Executive Officer - Capital. This was his second major international
assignment and he and his family had spent five years in the UK, living
in Surrey with the children attending the American school. They were
repatriated to the US during the course of the research, but the participant
chose to join a rival TNC at the end of the assignment.

P21: European (Dutch) male, working for the same oil TNC as participant 20,
as its Planning and Development Manger. Based at the headquarters in
London, the participant commuted to Holland so as not disturb his
children's education because they were just a couple of years away from
starting university. The participant had been on several assignments
globally.

P22: European (UK) female. This participant worked for a Travel Services
TNC, as its Human Resource Manager. She was responsible for the
introduction of a new expatriation scheme aimed at reducing expatriation
costs and retaining global managers within the TNC. She travelled
extensively and had chosen not to have a family because of pressures of
constant travelling.

P23: American female. The participant was the second of only two (outside
the Human Resources function) women expatriate managers in the
sample. This was her first major international assignment, but she had
been responsible for two important acquisitions of European companies
from her US base. She worked as the Business Development Manager of
a US Cheinicals and Gas TNC. During the course of the study, the
participant decided to become part-time, as she felt unable to look after
her children, one of whom had a slight disability, and both of whom

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 attended one of the American schools in Surrey. She was followed by her
spouse who had immediately found a senior position with a British TNC
with extensive operations in the US (and which has since been taken over
by a US TNC). The Family was repatriated before the fieldwork for this
study was completed, with the participant being promoted to the position
of Vice President of a rival TNC in the US.

P24: Female (Australian). The participant was responsible for expatriation

management and worked as a Human Resources Advisor for a US
Personal Care Products TNC. She travelled extensively to visit
expatriates around the globe and had a particular interest in monitoring
expatriation policies.

P25: European (Swedish) male. This participant worked for a US

Pharmaceutical TNC, which had recently relocated its headquarters to
Europe. He was an experienced global manager who had spent the last
five years in the UK, accompanied by his spouse and four children who
all attended one of the American schools in Surrey. The participant was
the TNC's Business Information and Development Director.
Approaching the end of his assignment, the participant accepted an offer
from a rival TNC and moved, with his team of senior managers and
scientists and researches to the other TNC, and will be staying in the UK
indefinitely or at least until the children all graduate from high school.

P26: American (Italian) male. The participant worked as the Business Unit
Director for a US Medical TNC, and was on a three-year expatriation
package at the TNC's headquarters in Surrey (Ascot). He was
accompanied by his spouse and children who attended one of the
American schools in the area. The family has since been repatriated to
the US.

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P27: American (South African origin) male, this participant was the UK
Managing Director and the Head of European Business Development of a
US Special Chemicals TNC with its European headquarters in Croydon.
He was on a five-year expatriation contract, accompanied by his spouse
and three children who attended one of the American schools and lived in
Surrey.

P28: American male. The participant worked as the Director of Sales in

Europe, for a US Motor Vehicles TNC, and lived with his spouse and
three children, with the children attending the American school in
London. The family was on a three-year assignment, at the end of which
the participant and his family were relocated to Dubai, where he would
take up a similar position for the whole of the Middle East.

P29: European (UK) female working for a leading Management Development

Institute, and managing its international section, the participant had
herself been an expatriate in the US and was particularly interested in
assisting TNCs to develop better and more effective expatriation and
repatriation policies. Part of her role was to act as consultant to TNCs in
their global recruitment. The participant was responsible for managing a
major recently published survey of expatriation policies by TNCs.

P30: American female, who has 'gone local' via marriage, this participant
headed one of the American schools infants division. The school, situated
in Surrey, caters for over 700 expatriate families living in the South East.
The participant was an invaluable source of information to this research
in terms of the information she provided about her own role, the role of
expatriation infrastructures (schools, housing and other socio-economic
elements) and the general context of expatriation.

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P31: American male. The participant worked as Director of Admissions for
one of the American schools since the school was established in the
1980's, promoting the school to TNCs and arranging student admissions
prior to arrival. He supported this research by introducing the researcher
to several HR managers who were subsequently interviewed and also by
providing crucial information on expatriation, on general trends in
expatriation as well as on expatriation infrastructure.

P32: American male, who had the longest period of expatriation amongst the
sample. The participant had spent a total of 12 years in the UK,
progressing from one assignment to another. On his latest assignment, he
worked as the European Sales Director for the leading American TNC in
industrial and aerospace-related products. His spouse and three children,
the youngest of whom was born in England, accompanied him. The
participant and his family· were repatriated to the US in 2000, leaving
their daughter, who had graduated from one of the American schools to
attend university education in the UK. This was because the daughter had
developed strong friendships locally and was very reluctant to go back.
While this was very difficult for the family, the participant and his wife
saw it as a natural consequence of staying for so long, as well as a
financial gain, which would result because the cost of university
education is far less in the UK than the US.

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Appendix B

Research Brief (as distributed to all participants prior to interview)

The following details key aspects relating to a PhD study currently being
undertaken at the Business School of South Bank University. Its main aim is to
provide general information about the research.

a) Focus of research: use of expatriate managers and of new strategies

employed by Transnational Corporations (TNCs) in the management of
their global activities.

b) Purpose of inquiry: to gain an understanding of the role and function of

expatriate managers in the context of global strategic management; and
of how factors such as changing patterns of expatriate assignments and
new communication technologies might affect this role.

Broad themes around which discussions might be structured are presented

below, although some topics will be of particular interest to participants
concerned with Human Resource (HR) management. It is hoped to incorporate
in the research the views of HR as well as those of managers with experience of
management of international assignments.

• Factual information: position of participants; nature and purpose of their

jobs/assignments; and general information about Internal Labour Markets
(ILM) of the corporations.

• Issues relating to international assignments: purpose, geography,

recruitment procedures, levels of seniority attached to these; perceptions of

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 change in any aspects relating to how such assignments may be being re-
organised or distributed within TNCs.

• Expatriate labour: changes (if any are perceived) in demographic

characteristics of expatriates (age, gender, nationality, marital status, and
others).

• Perceived reasons for change.

• Issues relating to technology: examples of how it is utilised; its role in the

creation of "global pools of information and expertise"; and its perceived
impact on expatriate work.

The above themes are partly based on issues identified by previous research and
while one would expect matters such as expatriation costs and more efficient
troubleshooting to come up in the discussions, it is important to bear in mind
that they are likely to be subject to change and re-focusing. Potential
participants can be reassured of the completely confidential nature of the
research and its concern with highlighting general patterns and trends. Names of
individual managers, and corporations will not ever appear in any material
relating to this study.

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Appendix C

The interview questions:

Participant's position and function (technical, corporate managerial, specialist,
other)
Number of assignments undertaken?
Other (TNC or Participant) relevant information
A) Role and function
What is the role of expatriate managers, particularly senior expatriates?
What is distinctive about their contribution?
Why are they sent?
Can a local manager fill that role?
B) Recruitment
How are they (expatriates) recruited for the assignment (selection criteria, if
any)?
How will their success/otherwise be assessed at the end of the assignment?
C) Movement
What determines the movement of expatriate managers across the globe?
Is there a specific general direction around the globe (e.g.: from home country
to other geographies, vice versa, or any other direction)?
D) Cost and changes in profile and composition of expatriate managers
Does the cost of expatriation matter?

In their (the participant's) experience, has the composition of expatriate

managers changed in the last few years (e.g.: age, gender, marital status,
more/fewer third country or local nationals, or anything else)?
Any impact on traditional expatriate managers?
E) Global managers
In their experience, is there a growing cadre of expatriate managers that go
around the globe without allegiance to place and people?
Who are they?

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F) The impact of new technologies
How does global communication take place?
What has the impact of telecommunication been on expatriate mangers?
What is their vision of the future impact of technology on expatriation?
Will new technology ever replace expatriates?

Any other issues

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H.Sakho
Ph.D.
2001