What are the major concerns for corporations in developing a

Solution

International corporations use expatriates to maintain corporate control and expertise in various global markets as well as to effectively facilitate entry into new markets. With a steady rise in corporate globalization, employees with international experience become a vital asset to any successful corporation. For that reason, Deresky (2013) suggests that the ability to develop a globally-experienced top management team depends largely on the success of expatriates’ assignments, which is all dependent upon the corporation’s ability to manage the transitions for both the expatriate their accompanying family members (p. 300). Consequently, effective human resource management of a company’s global ends not only with the completion of the international assignment, but rather with the successful return of the executive into company headquarters” (Deresky, 2013, p. 300).

Specifically, poor expatriate management can threaten a corporation’s performance and capabilities in the international sector. In fact, poor management prioritization or inattention often leads to failed international assignments. For instance, inadequate management planning on the selection of the expatriate for a particular international assignment will likely lead to the premature return their expatriate or the loss of their returned expatriates due to poor repatriation. Chew (2004) suggests that key predictors of expatriate selection success include: technical ability, managerial skills, cultural empathy, adaptability, diplomacy, language ability, positive attitude, emotional stability, maturity and adaptability of family.

Because the human resource management problems are typically more complex in these international circumstances, it often leads to failures in international business. Without a doubt, some of the leading problems encountered by both management and expatriates are unclear expectations, learning a new organization, and the under-utilization of overseas experiences (Vilet, 2012). Considering this, returning expatriates are always sought for these positions, because their previous experiences make the transitions easier on both parties; however, one of the challenges with expatriates is the inability to retain the expatriate upon return from the overseas assignment. According to a 2010 survey conducted by Brookfield Global Relocation, 38 percent of expatriate returnees quit within 12 months—a consistent figure for over 30 years (Vilet, 2012). Much of this can be contributed to the challenging nature of these assignments, poor management, or the limitations on career potential. Likely an outdated and underestimated cost today, research has “determined that the cost of losing a single repatriated employee has been estimated to be as high as $1.2 million” (Chew, 2004). To illustrate the rising concern of expatriate failure in the global perspective and the inability to adequately develop and retain successful corporate expatriates, significant external research has been conducted to identify these corporate concerns and assist with both the retention of current expatriates as well as effectively recovering from the loss of expatriate investments. Furthermore, by incorporating preventative measures these multinational corporation crises can be mitigated through adequate preparedness. By incorporating repatriation programs that combine career, family and financial counseling sessions may lead to higher expatriate returnees in the future, whereas failure to address these issues will likely continue to lead to higher and higher turnover rates.

References

Chew, J. (2004). Managing MNC Expatriates through Crises: A Challenge for International Human Resource Management, Research and Practice in Human Resource Management, 12(2), 1-30.

Deresky, Helen. (01/2013). International Management: Managing Across Borders and Cultures, Text and Cases, 8th Edition