Assignment VIII

1.      You have been offered a reasonably lucrative expatriate assignment for the next three years, and your boss will have a meeting about the assignment with you next week. How would you discuss the assignment with your boss? 

Expatriates are strategists representing the interests of the MNE’s headquarters. Expatriates, especially PCNs who have a long tenure with a particular MNE, may have internalized the parent firm’s values and norms. They may not only enable headquarters to control subsidiaries, but also facilitate the socialization process to bring subsidiaries into an MNE’s global “orbit.”  Expatriates act as daily managers to run operations and to build local capabilities. One of the reasons that they are sent in the first place is often due to a lack of local management talent.  Expatriates are also ambassadors. Representing headquarters, they build relationships with local managers, employees, suppliers, customers, and officials. Importantly, expatriates also represent the interests of the subsidiaries when interacting with headquarters.  Finally, expatriates are trainers for their replacements. Over time, some localization in staffing is inevitable, calling for expatriates to train local employees.

As there will be some many responsibilities with come along the title of the expatriate. I will ask my boss for providing me necessary training and development program so that I wouldn’t face any difficulties in the host country. And definitely I will ask for proper psychological contract so that I wouldn’t have any problems when I come back to the headquarters in the parent country.

Training

-          Pre-departure training for expatriates is a must for the success for those expatriates in the host countries. Most of the expatriates fail because they are not provided with proper training; their bosses just only wish them good luck.

-          The duration of training many vary according to the tenure of the expatriates. If they are going for just few days, they should be given short training. But if they are going for comparatively long period of time, they should be given training regarding culture, language, sensitivity training, managerial and leadership skills. Some of the firms now involve the spouse in those training programs.

            Development for expatriates and repatriates

              Returning expatriates are called repatriates.

              Psychological contract : Some of the firm, they do psychological contract with the expatriates which is an informal understanding of expected delivery of benefits in the future for current services. But that is very easy to violate.

 Career anxiety : Most of expatriates fail because of the career anxiety. Having been “big  fish in a small pond” in subsidiaries, they often feel like “small fish in a big pond” at headquarters. Instead of being promoted, many end up taking a comparable (or lower-level) position.

 Loss of status : Overseas, they are “big shots,” rubbing shoulders with local politicians and visiting dignitaries. They often command lavish expatriate premiums, with chauffeured cars and maids. However, most of these perks disappear once they return.

 Cultural re-adjustment : It will be very difficult to re-adjust with the old culture after they have adjusted in the culture of host country not only for expatriates but for their spouse and children.

2.      What are the major issues and problems facing expatriates on foreign assignments? What can the firm do to help alleviate these problems and issues?

Non-native employees who work and reside in a foreign country are known as Expatriates. Such people have different roles and responsibilities such as they have to act as strategists, daily managers, ambassadors as well as trainers at the same time.

o  Strategists – represent interests of the MNE’s headquarters

o   Daily managers – run operations and build local capabilities

o   Ambassadors – represent headquarter’s interests, build relationship with host-country stakeholders; represent subsidiary to headquarters

o  Trainers – for their replacements

                                                            

Therefore, during their tenure in host country they have to face lots of issues and problems.

Some of the major problems which is faced by expatriates on foreign assignments are:

-          Loneliness

-          Cultural Differences

-          Language Issues

-          Cost of Living

-          Health Care

So, what can firm do to help alleviate these kinds of problems and issues?

 Firstly, firms need to be very careful while selecting the perfect candidate for the expatriate job. Some of the factors that should be taken into consideration are:

·         Corporate headquarters preferences

·         Host country/subsidiary preferences

·         Language

·         Technical ability and expertise

·         Cross-cultural adaptability

·         Spouse and family preferences

After selecting the candidate, he/she should be given proper training to make them prepared to do a particular job. To improve the managerial and other skills they should be developed and groomed in a proper way.

Training

-          Pre-departure training for expatriates is a must for the success for those expatriates in the host countries. Most of the expatriates fail because they are not provided with proper training; their bosses just only wish them good luck.

-          The duration of training many vary according to the tenure of the expatriates. If they are going for just few days, they should be given short training. But if they are going for comparatively long period of time, they should be given training regarding culture, language, sensitivity training, managerial and leadership skills. Some of the firms now involve the spouse in those training programs.

Development for expatriates and repatriates

Returning expatriates are called repatriates.

Psychological contract : Some of the firm, they do psychological contract with the expatriates which is an informal understanding of expected delivery of benefits in the future for current services. But that is very easy to violate.

 Career anxiety : Most of expatriates fail because of the career anxiety. Having been “big fish in a small pond” in subsidiaries, they often feel like “small fish in a big pond” at headquarters. Instead of being promoted, many end up taking a comparable (or lower-level) position.

 Loss of status : Overseas, they are “big shots,” rubbing shoulders with local politicians and visiting dignitaries. They often command lavish expatriate premiums, with chauffeured cars and maids. However, most of these perks disappear once they return.

 Cultural re-adjustment

It will be very difficult to re-adjust with the old culture after they have adjusted in the culture of host country not only for expatriates but for their spouse and children.

So, proper career-development plan should be constructed which comes with a mentor. They will help alleviate the ‘out-of-sight, out-of-mind’ feeling

by ensuring that the expatriate is not forgotten at headquarters and by helping secure a challenging position for the expatriate upon return.

3.      Some argue that investing in emerging economies greatly increases the economic development and standard of living at the base of the global economic pyramid. Others contend that moving jobs to low-cost countries not only abandons corporate social responsibility (CSR) for domestic employees and communities in developed economies but also exploits the poor in emerging economies and destroys the environment. Assume you are either (1) the CEO of a multinational enterprise (MNE) headquarted in a developed economy moving production to a low-cost country or (2) the leader of a labor union in the home country of the same MNE and about to lose lots of jobs. How would you participate in this discussion? 

i)                    CEO of a Multinational enterprise

If I were to be CEO of a Multinational enterprise, I would definitely want to invest in emerging economies because of the availability of low labor cost and market opportunities. And we have heard and seen lots of cases of MNEs who had exploited labors in developing countries to fulfill their business goals and to maximize the profit. As a result of it, they were not able to sustain for a long period of time. For a long term sustainability, it is very important for any business to carry out the business activities ethically. This not only helps in sustainability but it will create good brand name not among the customers and other stakeholders but internal employees of the organization will also be satisfied. As a CEO of MNE, I will try to satisfy the employee with reasonable pay and working condition. I may not be able to maximize my profit as expected but the labor cost will still be lower than the home country. Slowly and gradually the company will start to flourish not only because of its product but because of the CSR as well.

ii)                  Leader of a labor union

Definitely when a MNE invest in emerging economies there will be adverse effect on the home country nationals especially those who are working for those MNEs. There would be huge crisis of unemployment in home nations. So what can be done? But we cannot forget the fact that surely it will create job loss in the source country which is generally production related but it will also create jobs. Because of globalization, there will be gain of a skilled, professional and managerial kind of jobs in the home country. So, it will be balanced somehow in the home country. And as a leader of labor union, I can only regulate some of the labor union issues but I cannot stop company to go global. And if the company will have positive growth on expansion and also get competitive advantage I will support the company.