Expatriation model with human resources management policies and practices

Abstract

Expatriation is a current process in companies to expand their international business. Expatriation is strongly related to multinational companies’ (MNC) performance abroad because the implementation of strategies occurs more slowly without the presence of the expatriate in the subsidiary. This research proposes an expatriation model as a process with three-phase that includes Human Resource Management policies and practices to show its contribution to business internationalization. The research is descriptive and qualitative, in which thirty semi-structured interviews were carried out with managers and expatriates from Brazilian and Portuguese MNCs. Data were analyzed using the content analysis technique supported by the MAXQDA software. The results show that there is no formal planning for expatriation in the MNCs examined. There is a greater diversity of informal practices that arise to fill the gaps in expatriation. The model shows diverse practices that can support the process, making it less painful for those involved and increasing the understanding of expatriation as an object of research. However, it is up to each MNC to adjust its perspectives to its operation contexts, as there is no intention to exhaust the model.

Keywords:
Human resource management; Expatriation model; Expatriation; Emerging countries; Internationalization

Resumo

A expatriação é um processo corrente nas empresas para a ampliação de negócios internacionais. A expatriação está fortemente relacionada com o desempenho empresarial no exterior, pois a implementação de estratégias ocorreria mais lentamente sem a presença do expatriado na subsidiária. Esta pesquisa tem como objetivo propor um modelo de expatriação como um processo em três fases que contemplam políticas e práticas de gestão de pessoas, a fim de mostrar a sua contribuição para a internacionalização empresarial. A pesquisa é descritiva e qualitativa e contou com 30 entrevistas semiestruturadas que foram realizadas com gestores e expatriados em empresas brasileiras e portuguesas. Os dados foram analisados por meio da técnica de análise de conteúdo apoiada pelo software MAXQDA. Os resultados mostram que, nas organizações analisadas, não há planejamento formal para a expatriação. Há, portanto, maior diversidade de práticas informais que surgem para suprir as lacunas da expatriação. O modelo mostra a diversidade de práticas que podem dar suporte ao processo, visando torná-lo menos penoso para os envolvidos, bem como amplia o entendimento sobre a expatriação como objeto de pesquisa. Cabe, entretanto, a cada empresa ajustar suas perspectivas a seus contextos de atuação, não se tendo a pretensão de esgotar o modelo.

Palavras-chave:
Gestão de pessoas; Modelo de expatriação; Expatriação; Países emergentes; Internacionalização

Resumen

La expatriación es un proceso actual en las empresas para expandir sus negocios internacionales. Está fuertemente relacionada con el desempeño de los negocios en el extranjero, ya que la implementación de las estrategias ocurriría más lentamente sin la presencia del expatriado en la filial. Esta investigación tiene como objetivo proponer un modelo de expatriación como un proceso de tres fases que incluye políticas y prácticas de gestión de personas, con el fin de mostrar su contribución a la internacionalización empresarial. Para la investigación, descriptiva y cualitativa, se realizaron 30 entrevistas semiestructuradas con gerentes y expatriados en empresas brasileñas y portuguesas. Los datos se analizaron mediante la técnica de análisis de contenido apoyada en el software MAXQDA. Los resultados muestran que, en las organizaciones analizadas, no existe una planificación formal para la expatriación. Hay, por tanto, una mayor diversidad de prácticas informales que surgen para llenar los vacíos en la expatriación. El modelo muestra la diversidad de prácticas que pueden apoyar el proceso, con el objetivo de hacerlo menos doloroso para los involucrados, así como ampliar la comprensión de la expatriación como objeto de investigación. Con todo, corresponde a cada empresa ajustar sus perspectivas a sus contextos operativos, sin ánimo de agotar el modelo.

Palabras clave:
Gestión de personas; Modelo de expatriación; Expatriación; Países emergentes; Internacionalización

INTRODUCTION

Expatriation is a current process in international business, which assumes a strategic role in multinational companies’ (MNCs) competitiveness (Chiang, Esch, Birtch, & Shaffer, 2018). With the possibility of coordinating and controlling the subsidiary (Brewster, Bonache, Cerdin, & Suutari, 2014), transferring knowledge (Kawai & Chung, 2019), and developing global leaders (Brewster et al., 2014; Caligiuri & Colakoglu, 2007; Chiang et al., 2018), the implementation of international strategies can be slower without the presence of an expatriate in a subsidiary. These actions show the strategic relevance of expatriation in international business (Collings, Scullion, & Morley, 2007).

Expatriation is a process - and not just an isolated practice - that comprises Human Resource Management (HRM) policies and practices, over three phases: i) the exit; ii) the working period abroad; and iii) the expatriate’s return. By not being considered a process, expatriation’s focus is on the second stage (working at the subsidiary), due to the immediate objective, which makes repatriation the end of a cycle, without major contributions. Repatriation is the end of the international experience, but, at the same time, is a fresh start that outlines new strategies stemming from knowledge achieved during the process.

The absence of a model implies lack of planning, which perpetuates process informality and marginalizes the contribution of expatriation to internationalization (Vianna & Souza, 2009). Expatriation, at the operational level, requires HRM policies and practices that serve as operational support to the expatriate, and, if strategically managed, can provide new directions to international businesses. Therefore, this paper suggests an expatriation model as a three-step process (preparation, mission, and return) that includes HRM policies and practices, showing its contribution to business internationalization.

There is little academic interest in understanding how expatriation can contribute strategically. The strong emphasis on the reasons for expatriation failure leads to superficially mentioning practices as potential process improvements, without a deep analysis. Therefore, several studies have analyzed expatriation policies and practices in MNCs (Furusawa & Brewster, 2016; Kawai & Chung, 2019; Kraimer, Shaffer, & Bolino, 2009; Oddou, Osland, & Blakeney, 2009). Welch and Björkman’s (2014) literature survey confirms this context, and Gooderham, Mayrhofer, and Brewster (2019) show that studies on expatriation focus on examining cultural and institutional distances in the adoption of HRM practices, as well as the performance of the area.

Literature shows the predominance of ideal and prescriptive models with little actual data on real practices, in real contexts (Scullion & Starkey, 2000). There is an expressive number of studies that analyze variables as moderators of expatriation (Chiang et al., 2018), as well as their effects on practices (Brewster et al., 2014). Rational thinking, a characteristic of American research (Michailova, 2011), fosters the relentless search for statistical evidence in international business. Certifying the importance and need (or not) of a certain practice in expatriation results in contextual particularities being neglected. Hence, it is necessary to outline frameworks that reflect the different contexts in managing expatriation (Haak-Saheem, 2016).

Given the need for comparative studies of MNCs in developed and emerging economies (López-Duarte, Vidal-Suárez, & González-Díaz, 2020), especially regarding business internationalization (Vahlne, 2020), we chose to carry out this research in Brazilian and Portuguese organizations. Many studies on HRM are conducted in American MNCs (Collings et al., 2007; Gooderham et al., 2019) by American institutions (López-Duarte et al., 2020). HRM research hegemony at international level explains business neocolonial movements empirically (Caldas, Tonelli, & Lacombe, 2011), with little contribution to the literature and MNCs in emerging markets. Therefore, it is important to do more research in these countries, as they have peculiar attributes (Bueno & Domingues, 2011; Paul & Rosado-Serrano, 2019), and provide different contexts for MNCs’ operation (Michailova, 2011; Vahlne, 2020), compared to the American and European realities.

THE EXPATRIATION PROCESS

Expatriation demands the alignment of policies and practices with international strategies (Caligiuri & Colakoglu, 2007), as it relates to the business itself, and not only to HRM. Therefore, expatriation can be analyzed from the perspective of company and employee development (Chiang et al., 2018). HRM policies and practices serve both for the expatriate, to know what are his/her development possibilities, and for the company, to implement its international goals.

There is no consensus on which policies and practices are part of this process, and sometimes it is considered a simple employee’s trip. Often, practices are only mentioned, without explaining if they refer to the preparation, mission, or repatriation. Articles by Brewster et al. (2014), Caligiuri and Colakoglu (2007), Chiang et al. (2018), Knocke and Schuster (2017), and Tahir and Egleston (2019) do not agree on the stages and practices related to expatriation. There is great divergence in understanding expatriation as a process (with several stages) or a practice (mission-focused), so it may consist of two, three, or four stages. Brewster et al. (2014) and Tahir and Egleston (2019) approach the process in four stages: recruitment and selection; preparation/training; international assignment/adaptation; and repatriation. Kraimer et al. (2009) observe that repatriation is the last phase of expatriation, but Chiang et al. (2018) and Knocke and Schuster (2017) consider repatriation another stage, in addition to expatriation.

According to the literature, expatriation policies and practices define its organizational goal; profile analysis; candidate selection; explaining objectives, individual goals, and terms of assignment; guidance on documents; cultural and language training; technical and managerial training; compensation; health care; taxation; career management; the accompanying spouse; reception in the host country; local information; cultural adaption; return on investment; performance management; assessment of the internationalization level; knowledge management; and closeness between headquarters and subsidiaries (Brewster et al., 2014; Caligiuri & Colakoglu, 2007; Chiang et al., 2018; Collings et al., 2007; Fee & Michailova, 2020; Freitas & Dantas, 2011; Gallon, Scheffer, & Bitencourt, 2013; Knocke & Schuster, 2017; Lima & Braga, 2010; Maciel, Mores, Oliva, & Kubo, 2019; Oddou et al., 2009; Pintar, Martins, & Bernik, 2017; Scullion & Starkey, 2000; Suutari, Brewster, Mäkelä, Dickmann, & Tornikoski, 2018; Tahir & Egleston, 2019; Tung, 2016; Welch & Björkman, 2014).

Difficulties in managing repatriation and having an appropriate career plan for repatriates have led to underutilization and process wear (Collings et al., 2007; Oddou et al., 2009; Tahir & Egleston, 2019). Repatriation can be problematic (Collings & Isichei, 2018), as organizations neglect the return of expatriates, especially when they hold technical positions (Kraimer et al., 2009); MNCs allocate them in positions that do not use the knowledge achieved through expatriation, leading them to resign (Gallon et al., 2013; Kraimer et al., 2009; Lima & Braga, 2010; Maciel et al., 2019; Oddou et al., 2009).

Expatriates who are sent for developing themselves are more likely to move up in the company (Kraimer et al., 2009). Those who have acquired managerial skills will probably realize less career advancement (Kraimer et al., 2009), as they are used occasionally in expatriations (Haak-Saheem & Brewster, 2017). This situation makes new candidates perceive the process as a negative impact on their careers, thus compromising future expatriations (Collings et al., 2007; Gallon et al., 2013; Tahir & Egleston, 2019).

Organizations are not aware of how much knowledge they achieve through repatriates (Oddou et al., 2009). Expatriation allows the employee to acquire valuable skills for developing business strategies (Pintar et al., 2017). Knowledge on business practices, cultures, global alliances (Oddou et al., 2009), networks (Chiang et al., 2018; Kraimer et al., 2009), international markets (Plourde, Parker, & Schaan, 2014), and partners, among others, enable the emergence or enhancement of new internationalization strategies, and dissemination of global practices. Even if the expatriation goal refers to the operational and technical level, the achieved knowledge is strategic and valuable, and can make the company more competitive (Oddou et al., 2009) and global (Cascio & Boudreau, 2016), which reflects a strategic role for HRM in terms of the company’s international development (Scullion & Starkey, 2000).

Given the limited role of subsidiaries’ HRM - especially in emerging countries - for adapting practices to the local context (Haak-Saheem, 2016), little is known about the diffusion of their actions to headquarters (Brewster, Mayrhofer, & Smale, 2016; Tung, 2016). Headquarters misses the opportunity to learn about subsidiaries’ policies and practices due to its neocolonizing look, assuming that it has nothing to learn from the colonized, just to teach (Caldas et al., 2011). Therefore, the reason for expatriation to emerging countries is based only on a cost reduction strategy, without considering the source of knowledge and global management.

Expatriation is seen as a way to enhance the global strategy by providing knowledge exchange (Caligiuri & Bonache, 2015) between employees, supported by policies and practices of global scope (Kawai & Chung, 2019), and not an occasional action, focused only on one expatriate with his/her own initiatives.

Although HRM has made significant progress towards a more strategic role, the implementation of a global structure is still incipient. HRM focuses on operational practices, and managers lack information on managing international employees; it remains stubbornly traditional before a global labor market that is dramatically changing (Cascio & Boudreau, 2016).

METHODOLOGICAL PROCEDURES

The research was descriptive, with a qualitative approach, appropriate to get in-depth information on expatriation and HRM in MNCs’ internationalization. We chose a qualitative research because it allows the non-replication of standard instruments that neglect the reality that surrounds the company (Caldas et al., 2011), especially in emerging countries. The study involved five Portuguese and three Brazilian MNCs, representing a developed European country and an emerging country. This choice was also due to the historical/cultural link, as Brazil is a former Portuguese colony, which brings the two countries closer, although they have quite different characteristics.

As many studies have headquarters as their unit of analysis (Welch & Björkman, 2014), we thought it timely to examine both headquarters and subsidiary perspectives (Brewster et al., 2016). We named the Portuguese organizations fictionally as Tourism (Lisbon), Energy (Lisbon), Cement (Lisbon), Export (Lisbon), and Plastics (Cascais/Portugal); and Rio de Janeiro, Minas Gerais and São Paulo (Brazil). The Brazilian MNCs were fictitiously named Metallic (Rio Grande do Sul), Iron (Rio Grande do Sul), and Electric (Rio Grande do Sul/Brazil and Porto/Portugal). These MNCs have internationalized more than ten years ago, carry out expatriation processes, and are present in several countries. Two people from outside these organizations were also interviewed: a Brazilian consultant expert in expatriation, who works with several MNCs that operate in Brazil, and a Portuguese consul based in Brazil, with whom we shared our internationalization experiences in both countries.

Following Knocke and Schuster (2017), to address the topic from the perspective of different positions, we collected data through interviews with Brazilian and Portuguese managers and expatriates, who knew about expatriation, internationalization, or Brazil-Portugal relations at the company. We did not use any additional criteria for choosing them (such as gender, age, or position). All those indicated by organizations were invited to participate in the research, and they could accept or refuse. Data collection began in Brazil, and was later extended to Portugal, with 30 interviews, which lasted a total of 29 hours and 55 minutes.

The interviews had a semi-structured script, designed according to the theoretical framework. Some were face-to-face and others through apps, since many interpersonal dynamics, which characterize in-person interviews, also take place at online interactions (Stewart & Shamdasani, 2016). This resource enabled reviewing and clarifying some issues exposed by respondents, as well as interviewing two people (E17 and E27) who were distant from the researcher.

After the transcription of all interviews (Milford et al., 2017), we analyzed data by using the content analysis technique, which consists of finding out the essence of meaning in a communication, through three stages: pre-analysis; exploration of the material; handling, inference, and interpretation of results (Bardin, 2009). In the first stage, we observed the differences and similarities between the units of analysis (in this case, the questions), in order to group them into primary categories based on the literature. We used data that emerged from the interviews to complement, support, or replace those from the literature (Haak-Saheem & Brewster, 2017) (Box 1).

Box 1
Primary categories of the expatriation process

After the classification process, the categories (expatriation policies and practices) were organized according to the three phases of expatriation: i) preparation; ii) mission; iii) repatriation; and ending with the analysis of iv) expatriation in the international strategy (final category). The categories were constantly revised throughout the process, in order to meet the criteria of mutual exclusion, homogeneity, productivity, pertinence and objectivity, and fidelity (Bardin, 2009). We used MAXQDA software to sort and restructure the categories. The researcher herself did the categorization and the initial analysis, as the software only improves the visualization and ranking of data. Even with the help of the tool, the researcher was the main data interpreter (Milford et al., 2017).

PROPOSING A MODEL

The proposed model (Figure 1) considers expatriation as a process structured in three phases (preparation, expatriation, and repatriation), whose policies and practices have organizational, individual, and operational focus that require the actions of home and host HRM. The first phase consists of preparing for expatriation, by defining the mission objective (organizational perspective) and the employee’s preparation (individual and operational perspective) in the home country.

The expatriation goal permeates the three phases of the process, showing their concerns and contributions: preparation, developing the work during the mission, and what the expatriate will do with the knowledge obtained, after returning from the mission. Brazilian MNCs use expatriation to control the subsidiary (Brewster et al., 2014); spread their own culture (Kawai & Chung, 2019); having someone they trust in management; or fill a technical demand. Although the traditional focus of expatriation control has extended to cover individual development (Caligiuri & Bonache, 2015), E17 (Vice President USA - Electric) was the only Brazilian interviewee who reported the development goal of achieving strategic positions after repatriation.

The dissemination of culture (Kawai & Chung, 2019) and subsidiary control (Brewster et al., 2014) were the purpose of Portuguese MNCs at the beginning of internationalization. In the current global strategy, E1 (CEO - Plastics) understands that expatriation is the relocation of someone in another country, to fill a local demand, without the perspective of going back to the home country. However, expatriates E12 (General Manager Brazil - Plastics) and E13 (Supervisor Brazil - Plastics), who work in Brazil, have expectations of returning to Portugal, because of their family ties and their wish for career advancement. Therefore, to mitigate frustration, it is necessary to align the expectations and goals of the parties involved.

These two cases show the importance of planning the three phases of expatriation from the beginning of the process, since MNCs have managed the career after repatriation sloppily, which compromises the whole process (Collings & Isichei, 2018; Collings et al., 2007; Gallon et al., 2013; Kraimer et al., 2009; Lima & Braga, 2010; Maciel et al., 2019; Oddou et al., 2009; Tahir & Egleston, 2019).

Achieving the expatriation goal will be more successful if the employee is supported by HRM policies and practices (Collings et al., 2007; Tahir & Egleston, 2019).

E20 (international HRM analyst Brazil - Electric) brought issues that hinder HRM action in preparing for expatriation and the proposed goals. Business context changes quickly, preventing a formal planning for all expatriates: “I think that you will not find many MNCs in Brazil, I don’t know in the world, that will say: ‘Well, I’ll get a person, prepare him/her in two years and then send abroad’. Until you prepare this person, in two years, he/she will have already left the company”.

For leadership development and job succession, for example, expatriation is generally planned, and company and expatriate know the route to be taken. Organizational support for technical expatriates, however, develops incrementally, and not strategically (Haak-Saheem & Brewster, 2017). Such a situation shows the informal nature of the process, justified by the dynamics of corporate business.

Figure 1
Expatriation process model

The objective and the expected organizational results should be analyzed according with the cost involved in the mission. E16 (HRM director Brazil - Electric), E24 (international director - Metallic), and E25 (commercial manager - Metallic) emphasize expatriation compensation and costs. Based on North American studies, E20 (international HRM analyst - Brazil - Electric) observes that an expatriate costs around four times more than a local employee. It is possible that a Brazilian expatriate costs more, due to the benefits provided by the labor law, such as a 25% salary increase and vacations in Brazil, for the expatriate and his/her family.

Although expatriate recruitment is an important practice, it tends to be neglected. E20 (international HRM analyst Brazil - Electric) reports that this is because of the emergency nature of the process, and should be used only for specific positions; hence, there are few appropriate options.

Expatriation is sometimes seen as an obligation. But it is an important practice, since we must consider the willingness and motivation for global work (Caligiuri & Bonache, 2015). Maybe the company is not aware of the skills or the desire of a particular person to go abroad, disregarding to invite employees who could meet these demands. The lack of open, transparent, and formal processes for selecting expatriates contributes to determining a standard profile for them.

The selection must be based on the expatriation goals (Collings et al., 2007) and on the analysis of the candidates’ profile. It is important to analyze the risk to which the expatriate is exposed, regarding issues on gender, color, ethnicity, and foreignness in some markets (A. K. Bader, Froese, & Kraeh, 2018; Fraga, Gallon, & Vaz, 2021; Gallon et al., 2013). We highlight the importance of including the family in the selection (Tahir & Egleston, 2019), as well as discussing its insertion or not in expatriation. E24 (international director - Metallic) reports that his company does not send families that are not legally married, because of previous bad experiences. In the United Arab Emirates, for example, there is punishment for singles who are not related and live in the same house (Haak-Saheem, 2016). The link facilitates company’s support in the host country, as well as visa-related issues.

Through the psychological analysis of the candidates and their family, both their likeliness to adapt to other cultures and their health conditions are assessed. Several situations were reported by interviewees on expatriates and/or family members who had an early return due to bad behavior, excessive alcohol consumption, health problems, lack of psychological structure, incompatibility with the local culture, and family homesickness. In India, for example, food is a critical aspect, due to hygiene conditions, strong spices, and religious values (impossibility of eating beef). E24 (International Director - Metallic) reports health problems of expatriates in India, like significant weight loss, anemia, fainting due to lack of food, infectious diseases. A more careful selection could avoid such organizational costs and emotional distress.

When selecting a person, the firm must establish individual and organizational goals and explain the work to be done. A contract must be signed, defining remuneration, benefits, health plan, expatriation time, and career perspective, among other pertinent issues. This is because the expatriate often assumes a function of higher hierarchical status abroad, with false expectations on a future position after repatriation (Gallon et al., 2013).

Some expatriates reported informal conversations with managers on the possibility of organizational advance after the mission, considering it a career driving process, which does not always happen. The expatriate’s career perspective should be agreed upon at the time of the contract, mainly due to the various expatriation goals.

It is also important to clarify issues regarding income, on how the expatriate can manage the financial resources resulting from expatriation, and their taxation. It is necessary to provide documents for the trip: an entry visa for the expatriate and his/her family members, certificate of vaccination, and other required certificates and documents. The role of HRM practices focused on the individual is to help preparing the trip and reducing potential bureaucratic or personal problems in the host country.

HRM should provide the necessary support for the person to do his/her work and achieve the expatriation goal (Collings et al., 2007; Tahir & Egleston, 2019). If technical or managerial training is needed, it should be accomplished before the trip, enabling the expatriate to follow co-workers who perform similar functions as those he/she will take on. Before going for a long-term expatriation, he/she can make short-term travels to facilitate cultural adaptation (A. K. Bader et al., 2018).

Cultural and language training of expatriates and their family members (A. K. Bader et al., 2018; Tahir & Egleston, 2019) make them aware of the cultural values of the host country, instead of a form of local restriction (Western ethnocentrism).

The company can have a portfolio with information from previous experiences (employees and family members), and make it available to future expatriates. This is a way of valuing expatriation, because when people are asked to share their experiences, they feel useful. The portfolio should neither be bureaucratic, to the point of burdening and forcing the expatriate to contribute with the document, nor too extensive, discouraging people to consult it.

Providing face-to-face meetings with families is a friendly and quick way to exchange information. Although it is unlikely to eliminate cultural shock, information about the economy, weather, school recommendations for children, places to live, and cultural differences bring people closer to the reality of the host country (Tahir & Egleston, 2019) and reduces the anxiety of the family’s new routine.

The image of the host country disseminated abroad affects the outward of new expatriates. E11 (HRM manager Brazil - Plastics) reports that recently two Spanish gave up coming to Brazil because they were “worried about safety”. Expatriates who are in Brazil often get a positive surprise, because they come “expecting more violence and more poverty exposed” (E12 - general manager Brazil - Plastics).

Psychological counseling prepares people involved in the process for the difficulties they will find, and guides them on how to deal with the change, the strangeness, and the distance from friends and family. It also reduces psychological problems that the family may suffer because of the changes resulting from expatriation. The spouse, for example, may have to leave his/her job in the home country, and not get a work visa at the host country, causing discomfort in the family nucleus.

When the expatriate arrives at the foreign country, the mission (second phase) begins. The company that expatriates its employees must have a reception system to guide them in the new environment (Tahir & Egleston, 2019), not restricted to bureaucratic issues. A person should be assigned to welcome the individual and his/her family, receiving them at the airport and providing basic information to help with adaptation, such as the location of markets, shopping malls, banks, school options, and places to live. E18 (technical assistant Europe - Electric) reports that the Portuguese HRM helped him with bureaucratic processes, like getting a taxpayer identification number. However, he would prefer to receive assistance and information on housing and other daily situations.

Consistent with the results of other studies (Haak-Saheem & Brewster, 2017), E21 (international market manager Europe - Electric) explains that he faced problems during his expatriation because he did not have the organization’s support, which is given according to the hierarchical position: “I learned to get by on my own. When you find some problems, depending on your position in the company, it can be more or less difficult”. The informality of the process causes employees to be treated differently, increasing organizational conflicts and charges, which the company does not see as its responsibility: “There are many people who consider that, in expatriation, you become a company’s child, and I think this is exaggerated” (E17 - Vice President USA - Electric).

Bureaucratic issues related to the visa require the organization’ support, because not all countries allow the expatriate to leave the home country with a definitive work visa, being necessary to renew it frequently. E18 (technical assistant Europe - Electric) said that it took two years to get his resident visa. This difficulty was caused by bureaucratic obstacles, company’s lack of experience, and lack of communication between Portuguese and Brazilian units. E14 (International Sales Supervisor Brazil - Electric) reports that the Portuguese company’s lawyer delayed the process of his visa because he did not want the presence of Brazilians.

The company should consider the expatriate as a new employee, because he is really new in that place. It is important to formally introduce the expatriate to his/her colleagues in order to reduce the insecurity at the work environment, and provide him/her with an escort to give information on the company and the place of work. Unlike Portuguese expatriates, Brazilians report that Portuguese resist to learn new working practices from them, as well as accepting them as colleagues. E23 (international sales supervisor Brazil - Electric) described a situation: “The director asked: ‘Who is this Brazilian that is coming here and will take my place?’”.

Psychological support is a continuous practice throughout the process - expatriation and repatriation - because people tend to underestimate the challenges of expatriation until they experience them. The changes imposed by expatriation, such as prejudice and stereotypes regarding the foreigner (Fraga et al., 2021; Gallon et al., 2013), affect their mental health in different ways. Besides the organizational context, prejudice toward Brazilians was identified in the social environment, mainly by expatriates’ wives, when trying to find a job, make friends, look for educational institutions, and even “when they went to see the apartment. The first thing the landlord thought was that the goal was to open a ‘massage parlor’” (E18 - technical assistant Europe - Electric).

Language training must be offered, since the expatriate often did not have enough time to learn the new language at the home country. Although the English language prevails in corporate business, not all countries adopt it in their social structure. Brazil, for example, lacks language teaching in elementary education: “Brazilians don’t speak languages; Brazilians speak Portuguese” (E1 - CEO - Plastics). Language was an obstacle mentioned by interviewees, even by those who knew it. Differences in the rhythm of speech, accent, and semantics make Portuguese and Brazilians not always understand each other clearly, causing discomfort in the initial contacts. However, interviewees reported that after the initial adaption, the common language facilitated communication between them.

Cultural differences are shown in several studies (B. Bader, Stoermer, A. K. Bader, & Schuster, 2018). Brazilians’ social behavior contrasts with that of the Portuguese. Interviewees reported that there is a fine line between corruption and “the Brazilian way” (E1 - CEO - Plastics), because Brazilian people have the habit “of taking advantage of situations” (E4 - general director Brazil - Plastics). E4 (CEO Brazil - Plastics) understands that this is reflected in employees’ behavior, mentioning the implementation of the code of conduct, which is more difficult to put into practice in Brazilian MNCs than in European ones. E1 (CEO - Plastics) has a similar perception, and reports having seen, in on one of his visits to the Brazilian company, an employee urinating in public.

Brazilian and Portuguese interviewees were unanimous in reporting that they underestimated the adaptation phase: “I think I underestimated it. I thought they were much more similar to us, and then I had to learn it there” (E14 - International sales supervisor Brazil - Electric). E16 (international director Brazil - Electric) confirms this perception, and states that the common language and Portuguese colonization in Brazil led to this understanding.

Being far away from the home company does not mean that the expatriate is disconnected from the events that take place there. Hence, communication with the home company must be a well-established practice, keeping the expatriate up to date by monitoring the organizational daily life. Knowledge management benefits from strengthening this relationship; waiting for the expatriate to report the learning achieved after repatriation can cause forgetting or missing information.

This process contributes to expatriate’s career management and performance, and avoids the “out of sight, out of mind” syndrome (Oddou et al., 2009). Tracking the expatriate’s skills and knowledge update during the assignment benefits adjustments in repatriation (Knocke & Schuster, 2017), for both the company and the employee. As a result of monitoring his/her performance, the expatriate may be rewarded in repatriation, either with further expatriation or with career advancement. However, E18 (technical assistant - Europe - Electric) observes that the informality of people responsible for the expatriates is harmful to the international employee, because, when the manager changes, the issues previously agreed upon are no longer valid. Furthermore, it is more difficult for the manager in the home country to be aware of the expatriate’s performance, which can hinder duly acknowledging the results achieved. Communication between the organizations is essential during the three phases of the expatriation process.

When the end of the contract is near, preparation for the expatriate to go back to the home country (repatriation) begins. This allows the employee to reconcile family aspects in advance, such as children’s school, moving to the home country, as well as dealing with his/her relocation in the home company. Understanding the impact of expatriation on the spouse’s career in repatriation is important (Knocke & Schuster, 2017), in order to relieve the damage caused by his/her distancing from the labor market.

When preparing the expatriate’s return, the home company should get ready to receive him/her, and the host company must prepare for the absence of that employee and for planning his/her succession. This practice is often neglected, and is only thought of when the expatriate has already left the host country. In other cases, return is postponed until a substitute is found, thus frustrating the expatriate’s expectation. E18 (technical assistant Europe - Electric) told that his initial contract was for three years, but he has been in Portugal for seven years: “this is the last time I postpone the contract. My wife can’t take it anymore”.

In repatriation, the first practices are common to the second phase, because the fact that the expatriate returns to the home country does not mean that he will not feel adaption difficulties. Both the expatriate and the company have undergone changes during this period, and the employee must get used to the new daily life (Freitas & Dantas, 2011; Gallon et al., 2013). Psychological support is still necessary for the expatriate and his/her family members, since they have experienced other possibilities of life, learning, and worldview, and will come back with new perspectives and plans. Living with people who did not go through the same experience, and the financial loss caused by repatriation can lead to frustration (Gallon et al., 2013). Repatriation is more than simply returning to the home country, and requires planning, like the other phases.

Welcoming the repatriate includes practices of adapting to the workplace; guidance on the company and the new position (Tahir & Egleston, 2019); introduction to colleagues; orientation on the layout and information system, if there were any significant changes; assistance in managing income. Some Brazilian interviewees in operational positions showed frustration regarding the lack of thanks from the company. It is important to acknowledge the expatriate and his/her family for their dedication, for having accepted the expatriation challenge (such as a letter thanking them for the time spent abroad).

Analyzing expatriation from the perspective of failure or success may cause losses to the process, which do not always correspond to reality. Therefore, performance management allows considering variables that show the complexity and limitations of management when faced with organizational support and evaluation instruments (Collings et al., 2007). Techniques to measure expatriations’ return on investment, based on individual and organizational goals outlined in preparing the mission - and not on random criteria - are important to bring more evidence of performance (Collings et al., 2007).

Network building is also a way to measure repatriate’s development (Chiang et al., 2018). Difficulties in acting caused by gender stereotypes, ethnicity, and foreignness (Fraga et al., 2021; Gallon et al., 2013), and the limitations of the host country (such as illness, exchange rate variations, economic instability of the country, and subsidiary performance) must be considered in performance management (Collings et al., 2007). Women expatriates, for example, suffer more harassment at the workplace than men (B. Bader et al., 2018).

Repatriation care should include what the expatriate will do with the newly developed skills, and what will happen regarding compensation and career (Collings et al., 2007; Tahir & Egleston, 2019). Appreciation does not necessarily occur through organizational advancement, but through more challenging assignments (Bonache, Brewster, Suutari, & Saá, 2010), or participation in future projects. Performance management is a way of explaining to employees why and how they will (or will not) be valued and rewarded in the company. Hence, performance and career management are interconnected practices.

Brazilian managers reported difficulty in reconciling, in repatriation, career expectations of all expatriates, because of the dynamism of the business context. An early return and trouble in finding a substitute in the host country, or having the expected position vacant at headquarters, are some problems that managers refer to: “The moment they want to return does not always coincide with the best the company can offer them. Thus, they get a bit frustrated and say: ‘I spent three, five, six years abroad, and I come back and have not achieved much’. It is all a matter of opportunity and timing” (E16 - International director Brazil - Electric). However, such obstacles could be controlled or reduced if there was planning from the beginning of the expatriation process.

Repatriates value their personal career more than their organizational career (Chiang et al., 2018; Gallon et al., 2013), because, after coming back, the company does not benefit from their experience (Gallon et al., 2013; Kraimer et al., 2009), putting them in positions that do not require international experience or knowledge (Oddou et al., 2009). Even if several studies show otherwise, the company may feel that the repatriate has not developed managerial skills, or does not have positions, at that moment, where he/she could use those skills (Kraimer et al., 2009). Therefore, repatriates who seek space in the company ‘become a problem’ (Gallon et al., 2013), while others seek new opportunities in the labor market (Gallon et al., 2013; Kraimer et al., 2009).

Currently, because of the high number of repatriates in Brazilian organizations, as well as higher turnover, managers are rethinking these issues. Although it is not a formal practice, E16 (director of the international market Brazil - Electric) observes that the company has valued expatriates by offering them better opportunities in Brazil. E19 (former international director Brazil - Electric) highlights the importance of analyzing what they add to the company and, with these data, make efforts to retain and value them, or give them opportunity to search another firm, if they are not satisfied with the job.

Repatriate retention is a challenge for MNCs (Kraimer et al., 2009; Oddou et al., 2009), and repatriation planning (Suutari et al., 2018) and support for organizational career development would facilitate their retention (Kraimer et al., 2009) and equalize expatriation costs (Suutari et al., 2018). This turnover has a financial cost for MNCs, considering the lost investment in repatriates, the loss of skills, knowledge, and networks acquired abroad, and the need to replace the individual (Chiang et al., 2018). For example, understanding why certain behaviors or practices are not consistent with the situation in the host country can help the company mature in the foreign market, but this knowledge disappears when the expatriate leaves the firm. Hence, all this investment is lost, by not giving it due strategic value, nor planning the expatriation process in three phases (Gallon et al., 2013; Kraimer et al., 2009).

Portuguese and Brazilian MNCs show that they do not have, for the expatriation process, any formal planning or goals related to their internationalization strategy. When expatriation is disconnected from international strategies (Caligiuri & Colakoglu, 2007), it becomes a practice with a beginning, middle, and end, to supply a specific demand. The reason is the lack of organizational performance and of an objective for repatriation. Many MNCs are simply unaware of the knowledge repatriates acquire; thus, they cannot be strategic about what they ignore (Oddou et al., 2009).

The contribution of expatriation is not perceived by executives, since expatriation performance and knowledge are reduced to the individual level; hence, they do not see a return for the organizational strategy.

Understanding expatriation as a movement of people between headquarters and the subsidiary shows process linearity. By overcoming this perspective, the procedure takes on greater importance and, possibly, will receive a strategic focus, because expatriation does not end with the mission. It is nurtured by valuable information - identified during performance management - that must be valued in repatriation, so that the company may develop new strategic and international directions, based on managing the acquired knowledge.

Managers are in a position to facilitate or block knowledge transfer by understanding how the repatriates’ know-how can be useful to the company (Oddou et al., 2009). However, they do not do so, because they lack organizational incentive. According to previous studies (Collings & Isichei, 2018; Gallon et al., 2013; Maciel et al., 2019; Pintar et al., 2017), interviewees said that MNCs have wasted knowledge from expatriates’ experience. Managers who do not understand the value of international learning, and treat repatriates as outsiders, by placing them in positions unrelated to their new skills, hamper knowledge management (Oddou et al., 2009).

Knowledge management must go beyond the simple transfer of processes and instruments between MNCs (Knocke & Schuster, 2017). Plourde et al. (2014) argue that expatriates can help the subsidiary where they are working to call headquarters attention. But this perception is limited in the face of global management. All units have the potential to contribute to global strategy, but often the company only focuses on those that show good results. One of the challenges of global mobility is a change in the purpose of expatriations, with knowledge transfer between headquarters and the different subsidiaries gaining relevance (Caligiuri & Bonache, 2015).

MNCs use non-systematic mechanisms for knowledge transfer (Oddou et al., 2009), and this informality can hinder the company’s global development. E12 (general manager Brazil - Plastics) emphasizes that he would like to pass on to headquarters the knowledge acquired, but there is no formal process for doing this. He believes that, when he returns, he will have the opportunity to report this to management. Hence, it is evident that expatriation does not have a strategic goal to envision a global company, among the MNCs we studied, although there is a specific objective of knowledge transfer from headquarters to the subsidiary.

Learning from local structures (Caldas et al., 2011), through the experience of expatriates (Fee & Michailova, 2020), is an important step for international development: “Without expatriates, HRM is a bit limited, because it designs national policies and cultures” (E12 - general manager Brazil - Plastics). Some MNCs are too ethnocentric to understand the advantage of global knowledge (Oddou et al., 2009).

Changes in the global market and the traditional focus of the area (Cascio & Boudreau, 2016) show the limited performance of HRM in expatriation (Scullion & Starkey, 2000). The absence of strategies to use knowledge and skills acquired by expatriates (Oddou et al., 2009) and of process planning is considered a limitation of international HRM. By overcoming headquarters’ neo-colonialism (Caldas et al., 2011) and increasing the role of subsidiaries’ HRM, beyond adapting policies to host locations (Haak-Saheem, 2016), knowledge transfer between headquarters and subsidiaries (Brewster et al., 2016; Tung, 2016) highlights how expatriation can enhance global strategy (Caligiuri & Bonache, 2015). E12 (general manager Brazil - Plastics) mentions Brazilian MNCs’ policies: “Brazil has several things to teach the world on social and environmental policy. I never thought that the country was so advanced in this matter. Portugal or France’s HRM have a lot to learn on ethical and social issues from Brazil’s HRM”.

Therefore, we emphasize the need to understand expatriation as an important process for international strategy, going beyond the traditional HRM practice. The expatriation phases complement and interact with one another, and operate in a broader context than the simple movement of the employee. We cannot confuse HRM policies and practices (Figure 2) with those of the expatriation process, which are rooted in international HRM (Figure 2).

Figure 2
Human Resource Management in the expatriation process

For HRM having a strategic role without compromising support for the expatriate, it is necessary an area that focuses on international operations and a global HRM that sees the whole company, and not only based on headquarters’ experiences. Therefore, the international HRM is responsible for planning expatriation and for knowledge exchange between the units. The global GP seeks to know the conditions in the various countries, both internally and between them, employing workers of different nationalities and disseminating knowledge (Schuler, 2000). By assigning value to repatriation, MNCs can create a multicultural workforce, with global teams able to achieve organizational competitive advantage (Knocke & Schuster, 2017; Suutari et al., 2018). Hence, HRM acts as a driver of global strategy implementation (Scullion & Starkey, 2000).

FINAL REMARKS

As the global economy expands, international experience becomes a critical process for MNCs. When properly planned, it can create competitive advantage for individuals and organizations. This research suggests an expatriation model as a three-phase process (preparation, mission, and return) that includes policies and practices of human resource management, showing its contribution to business internationalization.

In the examined MNCs, results show that there is no formal planning for expatriation. It is an occasional and emergency action, especially in developing countries, where MNCs started a late internationalization process, compared to developed countries. Therefore, there is a great diversity of informal practices that emerged to fill gaps in the expatriation process. We emphasize the different expatriation goals, as a result of the stronger international market experience of Portuguese MNCs.

Analyzing MNCs in emerging and developed markets provides new theoretical and managerial discussions for international business studies. Given the late internationalization of emerging economies, there is an ethnocentric look at headquarters as the driver of global knowledge, and subsidiary practices represent local exceptions and adaptions. The implementation of global policies and practices that include the subsidiaries’ knowledge and remove the neo-colonialism bias (Caldas et al., 2011) enables expatriate’s knowledge to be valued, and the expatriation process to achieve strategic value in MNCs.

Therefore, the research contributed with four main issues, theoretically, managerially, and socially: i) it shows the diversity of HRM policies and practices, according to the perspective of MNCs coming from an emerging economic environment (since studies in emerging markets can bring a new content, in contrast to the strictly Anglo-Saxon perspective, this paper highlights the Brazilian context and MNCs in scientific studies on internationalization); ii) it structures the expatriation process, so it gets less painful for those involved (however, each organization should adjust its conceptions to its own operating contexts and to the corresponding situations, as this paper does not intend to be an exhausted model; iii) it extends the view on expatriation as a research object (understanding it as a process highlights its strategic importance, as well as guides scientific studies toward its analysis as a broad process, and not as separate and disconnected parts within the organizational sphere. This understanding improves expatriate support and emphasizes organizational gains of the process); and iv) understanding expatriation more than just an employee moving to fulfill a local demand (Collings & Isichei, 2018) emerges as a contemporary need for international HRM.

The field seems to be reactive to the global environment, as studies that seek to discuss expatriation end up finding areas ‘under development’ or ‘to be developed’ (Gallon et al., 2013; Lima & Braga, 2010). International HRM still creates fragmented policies to manage its talents (Lester et al., 2016), which compromises the development of strategies for global management.

There is a significant number of studies that analyze expatriates who go from emerging to developed countries; the reverse path has been little studied (López-Duarte et al., 2020). Ethnocentrism contributed for not acknowledging expatriations from the subsidiary to headquarters - ‘inpatriates’-, which are seen as having a training period on the headquarters’ culture. Since the study interviewed mostly expatriates and repatriates, it is important to complement the model with experiences of other expatriate configurations, such as global citizens, ‘inpatriates’, and ‘flex-patriates’, among others.

In addition, costs drive new forms of expatriation, where the home company ends the employment bond with the employee and hires him/her at the host firm, to circumvent Brazilian labor relations for international employees. This causes them to legally assume the attributes of self-expatriates, although this is not the objective of expatriation.

Academic discussions strive to demarcate three main forms of international mobility - assigned expatriates, self-expatriates, and migrants (Haak-Saheem, 2016). These demarcations fragment HRM policies in search of a consistent strategy, and do not reflect new global movements, which perpetuate the increase of people with international mobility without necessarily having organizational ties with their home country. An example are the countries of the United Arab Emirates, since 99% of employees in private MNCs are foreigners, but not obviously considered as expatriates. Such a context strengthens the need for studies on these other expatriate configurations.

The model also relied mostly on the expatriate experience of white, heterosexual, married men with children, emphasizing the dominant expatriate profile (Brewster et al., 2014; Caligiuri & Bonache, 2015). By including social issues of inequality, such as color, ethnicity, gender, origin (Fraga et al., 2021), age (Chiang et al., 2018), and social class will enable new perspectives on the model.

Finally, we emphasize that the COVID-19 pandemic caused social, contextual, and business changes, as each country chose to manage it differently, depending on its political stance, resources, and contexts, which highlights the importance of understanding its impact on different countries. In addition to the financial cost for organizations, expatriations were affected by issues related to the health and safety of expatriates and their family, as well as by the change of international strategies. Many MNCs had to cancel international missions and do business by videoconference, signaling a decrease in travel and expatriations (Mello & Tomei, 2021) and an impact on internationalization. Given the increase in remote work and the use of technologies that facilitate interaction and joint work of employees dispersed around the world, it is timely to analyze the impact of the pandemic on global mobility (Hajro, Caprar, Zikic, & Stahl, 2021) and on international business strategies.

ACKNOWLEDGMENTS

The author thanks The National Council for Scientific and Technological Development (CNPq) is a foundation linked to the Ministry of Science and Technology (MCT), to support Brazilian research. Project number: 406343/2021-7.

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  [Translated version] Note: All quotes in English translated by this article’s translator.

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Publication Dates

• Publication in this collection
  08 Jan 2024
• Date of issue
  Nov-Dec 2023

History

• Received
  11 Oct 2022
• Accepted
  30 Dec 2022