The growth of the multinational organization, which has been part of the globalization process in recent years, has had the effect of changing and internationalizing many careers. Through the development of foreign facilities and mergers with foreign companies, multinational organizations extend their business internationally and often become global in scope, at the same time retaining a “head office” focus in a home country. This country is not necessarily the United States: In 2001, only 12 of the world’s 50 largest companies by foreign assets were based in the United States.
Multinational organizations have a number of competitive advantages, including the maintenance of a worldwide strategic focus, international reputation and “brand image,” and the ability to locate business in whichever country local conditions (such as prevailing labor costs) provide the greatest advantage. Against this, they may lack familiarity with local politics, mores, and culture. In all countries, there is periodic concern that the effect of multinational corporations, particularly very large ones, may be to concentrate power and resources in the hands of nonaccountable foreigners, usurp the functions of government, and act in a socially irresponsible manner, particularly in the displacement of labor and its replacement by low-cost foreign alternatives.
As far as labor is concerned, multinational organizations must decide whether to appoint local people or to expatriate employees from elsewhere, particularly the “home” country of the organization. Local employees have the advantage of familiarity with the local scene and often lower cost. Expatriates, mainly people who have already had several years’ experience in the organization, have better awareness of the strategy and global operations and culture of the organization and often have had more appropriate education and training than any locally available alternatives. If expatriates are mobile across countries within the organization, they also have the potential to cross-fertilize the organization with an understanding of its different locations.
A common pattern is to have foreign subsidiaries managed, at least initially, by experienced and knowledgeable managers from within the organization, particularly from the home country and head office, with the objective of securing close control and adherence by the subsidiary to organizational strategies and structures. These managers are frequently given “expatriate assignments” of up to five years, after which they return to their own countries. Local people are typically employed in lower-level, more routine work but may be developed to progressively fill more senior roles.
There has been much interest in, and research on, the effects of expatriate assignment on careers. On the positive side, moving to a new country, particularly a culturally dissimilar one, is likely to provide the opportunity for considerable personal growth, the development of cross-cultural skills and a global perspective, and an increase in the individual’s value, both in the employing organization and elsewhere. Against this, traveling across cultures adds additional stresses to those associated with any job change. Expatriates may lack “cultural intelligence,” or the ability to function well in unfamiliar cultural settings. Assignees are normally accompanied by their partners and children, who must make cultural and educational adjustments of their own.
There has been concern, too, about the phenomenon of “expatriate failure,” whereby the expatriate is forced to return early, leaves the organization, or fails to achieve his or her objectives. Returning assignees often find that their expectations of rapid career progression based on their newfound foreign expertise are not appreciated by the organizations. For these reasons, expatriation has failed to live up to its potential as a strategy for career development. There are also indications that expatriation failure is more common among American than among, for example, European expatriates, perhaps because the latter have a more cosmopolitan perspective.
Research in this area typically adopts a “human resources” frame; that is, it views failures in expatriation as failures in the management of expatriates and seeks to develop improved techniques of expatriate selection, training, orientation, mentoring, and career planning, which will reduce the likelihood of failure and increase the utilization of expatriate experience in organizations. The theory and practice of international human resource management emphasizes a more strategic approach that locates expatriate assignments within a broader organizational planning frame involving the appreciation of the employee’s long-term career development. A recent trend has been for multinationals to reduce long-term expatriate assignments in favor of “global executives,” who travel frequently and exercise authority in a number of foreign locations but continue to be based in their home countries.
In research and discourse about expatriate assignment, the perspective of the individual expatriate is sometimes lost. Expatriates often travel with their own objectives in mind, such as adventure, exploration, and living in different cultures, as well as organizational objectives. They also must take responsibility for the success or failure of their assignments and for the development of their own careers. “Expatriate failure” as defined by the organization on its own terms may have a corollary in “expatriate success” as defined by the individual, in terms of personal development, cross-cultural learning, newfound career mobility, and the opportunity to move to a more congenial organization.
Too great a preoccupation with expatriate assignment may divert attention from the careers of two other key groups. One group, foreign employees of multinationals, often have to make major adjustments in their careers to the new structural and cultural dictates of the owning organization. No doubt, the spreading of foreign direct investment around the world provides new opportunities for many workers, including the opportunity to travel, but it also poses great challenges. The other group is made up of the millions of people who each year migrate from their own countries to try to find greater opportunities elsewhere, including career opportunities. Migrants are typically energetic, but even those with good qualifications and experience have been discriminated against and marginalized in the workforce and have had their careers disrupted far more often than have corporate expatriates. This results in major human distress as well as underutilization of the diversity of precious human resources.
In coming years, the forces of globalization, multinationalism, migration, and workforce diversity can be expected to increase. International and “global” careers—which not only cross boundaries but lose their identification with any single country—will become more common. International travel will become a feature of more and more careers. Much mature thought and research is required to enable us to respond to these opportunities and challenges.
- Black, S. and Gregerson, H. B. 1999. “The Right Way to Manage Expats.” Harvard Business Review 77(2): 52-63.
- Osland, J. C. 1995. The Adventure of Working Abroad: Hero Tales from the Global Frontier. San Francisco, CA: Jossey-Bass.
- Thomas, D. C. 2002. International Management: A Cross-Cultural Perspective. Thousand Oaks, CA: Sage.