79. What are the functions of international assignments?

Fulfilling a Specific Need for Personnel and Know-how

The first role of international assignments is to fulfill the insufficient technical and managerial competencies in certain countries where the market structure is often characterized by a shortage of engineers, senior technicians, and trained managers.

Sharing and Transferring Knowledge

Another reason for using international assignments is to share and exchange information. A multinational organization can send an expatriate employee in order to better understand a subsidiary’s activities in a particular context, to share knowledge regarding a new type of equipment or a specific tool, or to communicate elements of its organizational culture, processes, or competencies. Expatriation allows for a rapid and efficient transfer of know-how. The need for such an assignment can arise, for instance, when setting up an activity that does not exist in the host country. Expatriation then plays a role in the training of the local personnel, until the subsidiaries enter a growing phase, who then replace the expatriate employees in management and supervision positions. It is important to note that the knowledge transfer does not only flow from the head office to the subsidiaries, but also between the subsidiaries and from the subsidiaries toward the head office. According to Black et al.,4 there are two unique aspects to expatriation with regard to information exchange. First, the duration of the assignments, between one and five years, allows the collection and transfer of complex information. Secondly, the information exchange takes place not only during the expatriation, but also afterward.

80. What are the reasons for using international assignments?

In the literature, four categories of international personnel have been identified, based on their country of origin and the location of their assignment. These categories are parent PCNs, HCNs, TCNs, and impatriates. The PCNs are employees from the multinational’s head-office (expatriate employees). For instance, a Japanese manager working in a Japanese multinational’s French subsidiary is an expatriate, or a PCN. The HCNs are employees from the host country (the subsidiary’s). For instance, a French manager working in a Japanese multinational’s French subsidiary is an HCN. The TCNs are employees from countries other than that of the multinational’s head office and that of the subsidiary. For instance, a Belgian manager working in a Japanese multinational’s French subsidiary is a TCN. An example of a multinational using these three types of international employees is Honda: working in Honda’s subsidiary in Dubai are one Japanese manager, an expatriate from Honda JAPAN, the international head office, one French expatriate from the European head office, and 35 HCNs (Indians and Philippinos). “Impatriates” (as opposed to expatriates) are HCNs sent to the head office. The reasons most frequently cited to justify hiring HCNs for transfer at the head office have to do with competence development of managers, knowledge transfer, and subsidiary integration. Moreover, generating a flow of impatriates toward the head office is an excellent way to trigger the process of socializing NPHs. Through impatriation, HCNs develop a sense of belonging to the global organization. The reasons for using impatriation determine the selection criteria for future impatriates. When the main goal is knowledge transfer and subsidiary integration, for example, communication skills in the multinational’s official language as well as in the subsidiary’s language are important criteria. Finally, it is worth noting that the duration of impatriations is generally shorter than that of expatriations. Many organizations use impatriates in order to reduce, in the end, the number of expatriates.