International Management Report: Expatriates in the Globalized Economy

This report delves into the realm of international management, examining the critical role of expatriates in a globalized economy. It explores the advantages of using expatriates, such as their expertise and ability to transfer home-country business practices, while also addressing the challenges they face, including cultural sensitivity, ethical awareness, and lack of local support. The report analyzes the causes of expatriate failure, highlighting factors such as inadequate preparation and disconnection from the home country, and suggests measures to enhance expatriate success. It also provides a comparative analysis of cultural differences between the US, India, and Europe, emphasizing the importance of cultural understanding. Furthermore, the report discusses various staffing approaches, including ethnocentric, polycentric, regiocentric, and geocentric methods, and recommends ethnocentric approach in certain scenarios. The conclusion emphasizes the benefits of expatriates for business expansion, while also acknowledging associated costs and risks.

INTERNATIONAL
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
International business describes their concept which includes the trade and business
activities of goods, services, capital, technology as well as knowledge across national boundaries
or within international market. This activity helps the business organizations to put together all
the fields of buying and selling, speculation, expertise, features and communiqué. This report
will portray the thoughts about the reasons regarding usage of expatriates in globalised economy
along with the causes of their failure. Apart from this, the study will also highlight the
impression of various implications of the findings.
MAIN BODY
Businesses expand their operations across their national boundaries in order to seek various
opportunities to operate their business activities in other countries. Such kind of expansions
usually presents various opportunities as well as challenges while working in foreign
environment. In most of the cases, the role, experiences, knowledge, skill and talent of the
expatriate manager can have a major impact on the organization and it’s subordinate. Expatriate
managers are those who are not residents of the host country but are employed because of their
expertise and specialised knowledge as well as operational abilities. The expatriates have been
utilized by the firms as they are able to bring the culture and processes of the home country
business to the new office which is situated at the host country (Shaffer, M., 2018). Most of the
expatriates have worked within their company’s local offices, so that they will understand the
way in which office works.
The above description helps to understand that expatriates are important in order to transfer
culture from one country to another and this act as a biggest barrier as well while working at
outside home country. The culture has been described in detail and efficiently by Edward T. Hall
who describe the culture study in detail with the help of Culture Iceberg model. The researcher
develops this model to analyse the culture and states that if the culture within the society is the
iceberg, then there are some aspects which are visible above the water level but, there is even
larger portion hidden beneath the water surface.

Figure 1: Culture Iceberg
(Source: Explore Tikizi, 2021)
https://exploretikizia.com/7-things-must-understand-costa-rican-culture/culture-iceberg/
The above picture illustrate that the external or the conscious part of the culture is what
we are able to see easily as the top of the iceberg includes behaviour and beliefs. While the
internal or subconscious part of culture is under the surface of the society and include some
beliefs and the values along with people thought patterns which are totally out of control but still
exists under individuals’ behaviour. The major difference among the internal as well as external
culture is that the internal culture is implicitly learned, unaware in nature, difficult to change and
have depend on the individual knowledge while on the other hand external culture is openly
learned, completely conscious about the behaviour, can be changes easily and have intent kind of
knowledge. In order to learn the internal behaviour, Hall suggests that while entering into the
new culture, never judge the new culture according to the facts that has been seen on upper part
of the water (Pickard, J., 2018). One must take their time to get to know individuals from that
culture while interacting them effectively. This is the only way through which one can able to
uncover the values, beliefs that underlies the behaviour of the society. It is obvious that different
country have different kind of culture and in order to describe this, below table has been
prepared showing difference between US, Indian and European culture:

US Culture Indian Culture European Culture
Individuals are able to
influence future decisions.
Life is pre planned and human
actions are pre determined.
Groupies
Change work conditions in
order to achieve objectives
that are committed to the
organization.
Need to adjust as the human
actions are pre decided.
Open environment in order to
adapt changes according to the
goals and objectives.
Data based flow of decisions Decisions flow from
experienced and wisdom of
authorities
Decision flow in relaxed
manner irrespective of the
position.
Protestant ethic Joint family and authoritarian
values
Society values
Cultural difficulties faced in India are caste system, gender discrimination, dowry system,
communalism, poverty as well as unemployment while in USA and Europe there are no such
kind of difficulties occur.
In order to set up business into new country area, it has been analysed from long back
that there are various benefits of using expatriate managers such as:
 They have international experience as depending on the role, they are able to set
their professional skills which will make them best candidate for that position.
They are effective characteristics related to adaptability and problem solving
which are also cultivated during the time of living abroad or outside parent
country.
 Expats generally self motivated and daring kind of people who look the life in
bigger picture and ready to take any kind of challenges for their success in career.
It is a well known concept that career success automatically enhances the life
style of an individual (Magnini, V.P., 2017). The procedure of moving to abroad
always comes with some opportunities along with some challenges as well.
 Expatriates are expertise people which have knowledge in context of every topic
as they are well aware about the office culture from both the ends. However, the
complete involvement with local employees is somehow difficult for them but the

major goal of the expatriate is to complete task in most appropriate manner.
Because an international candidate may have worked in similar field before and
may be ready to directly execute the plan in most efficient way.
The human resource director has to recruit correct candidate in order to fulfil the project
requirements. Generally there are four approaches of staffing or international recruitment such as
ethnocentric, polycentric, regiocentric and geocentric. Ethnocentric approach of recruitment
includes hiring of people from parent country in order to fill positions all over the world. It
includes relocation of existing employee to the host country. Polycentric approach describes as
hire local individuals in order to fill office positions in host country. Regiocentric staffing
approach includes hire or transfer people within the similar region to fill open positions or
complete particular task. And the last is Geocentric approach which means hire best candidate
whether from host country or form home country, in order to fulfil the assignment in best
possible manner. However, for this project ethnocentric approach is highly recommended as
while opening new branch at a new country, it would be easier for parent country people to
follow policies and procedures in the new branch. Also, expatriates can hire at less than hire
from local people can also contribute their share in minimizing hiring costs and also able to give
benefit to the firm as well (Oddou, G.R., 2019).
While recruiting candidate in order to complete the task and assignment in most
appropriate manner, there are certain potential challenges that has been faced by expatriates and
thus cause expatriate failure which means returning of expats to the home country. With several
studies that have been conducted in different multinational companies, it has been analysed that
failure rates are dissimilar in various countries along with differentiation in reasons. However,
the major reasons for expatriate failure are:
 Lack of cultural sensitivity: This limits employees’ ability to communicate effectively
with various different groups internally as well as externally. Culture is always involved
while discussing and understanding other people working in similar company. Lack of
knowledge, values and customs leads to poor communication and lack of sensitivity
which thus become a reason of expatriate failure.
 Lack of ethical awareness: Ethical awareness is described as ability to assign moral state
of affairs and look their attitude for the lives of others. Lack of ethical awareness creates

chaotic environment within office premises and thus becomes a reason for non working
of task by expats in appropriate manner.
 Lack of appreciation of diversity: It includes avoidance of understanding that each
individual is unique in their own manner and their ethics and culture are also different
which needs to be respected in any situation by the expatriates or even the local staff
members as well. But lack of this understanding creates negative situations which stops
expats to work within such environment.
 Lack of adequate preparation: Sometimes individuals are fail during te time that has
been given to them by their organization for become prepare practically as well as
mentally before shifting or moving forward to complete the assignment towards the host
country. But lack of adequate knowledge about the working environment, culture, values,
ethics and many other factors affects the functioning of expatriates in effective manner.
 Lack of awareness: Be deficient in consciousness about the needs of emerging markets
particularly if the expatriate manager is from a developed country. As everybody is aware
about the concept that in emerging markets there is always an existence of corruption,
which restricts the working of expats in free manner. Emerging markets are always ready
to invest in foreign markets due to high return on investment.
 Lack of awareness about CSR practices: Lack of awareness about the host country rules
and regulations, the individual is unable to fulfil corporate social responsibilities which
resulted in failure of the whole project as they are unable to attract more consumers
towards their business activities thus result in expats failure.
 Lack of local support: This also plays a vital role in order to make the expatriate
successful at host country. Their effective and efficient role provides complete support if
comes in positive manner.
 Disconnection from the home country: This creates a sense of dissatisfaction as well as
one can feel demotivated while disconnecting from their home country as well as their
family members.
In order to avoid such challenges, companies needs to adopt certain measures which will help
the expatriates in order to make successful while working in host country such as:

 Provide effective training with the help of efficient cultural workshops which
provide complete knowledge and understanding about the business practices that
needs to be followed while working in host country which also includes knowledge
related to taxation of host country as well as management of diverse people
individually as well as in group (Delios, A., 2020).
 Language fluency and ability to connect with other employees are highly important
for expatriate within the host country in order to become successful.
CONCLUSION
From the above report it has been concluded that expatriates are highly beneficial for any
organization who wants to start their business activities outside their home country. The
advantages of using expatriates for any business activity as they provide quality kind of work
over quantity, able to send appropriate person who are highly talented which might not available
in home country. While on the other hand choosing expatriates also affects the business in
adverse manner such as expatriates are quite expensive for the firm and also involves legal risks
while sending an individual outside their home country on behalf of the company.

REFERENCES
Books and journals
Chen, Y.P. and Shaffer, M., 2018. The influence of expatriate spouses’ coping strategies on
expatriate and spouse adjustment. Journal of Global Mobility: The Home of Expatriate
Management Research.
Brewster, C. and Pickard, J., 2018. Evaluating expatriate training. International Studies of
Management & Organization, 24(3), pp.18-35.
Delios, A., 2020. International business: an Asia Pacific perspective. FT Press.
Avril, A.B. and Magnini, V.P., 2017. A holistic approach to expatriate success. International
Journal of Contemporary Hospitality Management.
Mendenhall, M.E., Dunbar, E. and Oddou, G.R., 2019. Expatriate selection, training and career‐
pathing: a review and critique. Human Resource Management, 26(3), pp.331-345.
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