Seminar Paper, 2011, 15 Pages
University of Applied Sciences Mainz - Faculty of Business
Master of Science in International Business
Expatriation in the world of modern technologies and
the convenience of international traveling
Course: Management in international Firms
Presented by: Patrick Daum
Word Count: 2640
Mainz, November 30, 2010
ICE Inter City Express
HR Human Resources
HRM Human Resources Management
UK United Kingdom
US United States of America
,,If globalization is seen as inexorable, then companies will need a globally mobile workforce tasked with administering their far-flung but rapidly growing operations” (cf. The Economist, 2010).
Corporate business strategies involving mergers and acquisitions, greenfield investments or international joint ventures underline the importance of acting international throughout all business activities. Consequently human resources (HR) is facing an increased need for employees willing to work abroad for a limited time period. International human resources management has entitled these cross-border workers as ,,expatriates”. According to studies published in 2008 by a leading business consulting company 80% out of 4,200 graduates in 44 countries declared they would like to work abroad for a limited time period (The Economist, 2010). Examples provided above indicate that demand as well as supply characterizes the expatriation market, underlining the relevance of this approach in global business. Throughout this essay, the term ,,expatriate” is used to refer to employees, which are moving from their parent company to foreign subsidiaries or from one country to another while staying in the employment of the same firm. Excluded from this discussion are international students, lifestyle migrants or people that moved due to economic reasons or were hired to fill vacant job positions in other countries. (Briscoe / Schuller, 2004, p.208).
This essay critically examines the question whether ,,with the growth on modern communication technologies, such as email and video-conferencing, and the ease of international travel, expatriates will become an extinct species.” Pros and cons will be discussed in order to weight different perspectives and provide a final conclusion.
Expatriation - Discontinued Model? 2
Beardwell and Clark point out the relevance of a tight fit between business and human resources strategies (Beardwell / Clayton, 2007, p.4-9). From a strategic perspective internationalization tendencies became relevant for many companies during the second half of the 20 th century. Driven by motives such as labor cost reduction, market growth or worldwide production they began to establish themselves abroad. In this process expatriates are fulfilling the following three main functions: First, launching local operations. Second, transferring technical or functional expertise to local markets. Third, developing managerial structures abroad (Briscoe / Schuller, 2004, p.230).
In recent years, the number of international staff assignments increased steadily. The percentage of delegated top managers remained relatively constant, growing numbers were tracked on operational level. (Hoppe, 2003) However, the current economic situation leads to an increased cost pressure on human resources management. Current practices in sending employees abroad have to be reviewed critically, as today modern communication technologies or short business trips provide more cost effective solutions to manage global projects (Hoppe, 2003). The following arguments support the replacement of the traditional expatriation approach.
Modern communication technologies are currently revolutionizing society, markets and the traditional way corporations interact internally as well as with clients. This trend is expressed by the establishment of virtual teams, which are an aggregation of people from different locations, utilizing e-mail, teleconference or virtual web- and video conferencing software in order to meet virtually and move on as soon as group objectives are achieved. Personal contact might be an exception (Picot et al., 2001). These platforms provide the opportunity to interact worldwide on a low cost level while being based in the HQ. Special subscriptions with communication providers deliver flat rate Internet access and low cost calling to selected telephone numbers or specific countries. These modern technologies provide the opportunity to fulfill elementary tasks, which have previously been in the hands of expatriates, while staying in the HQ. Consequently, these tools allow the combination of job responsibilities and social (family) functions. This is key as research has shown that the happiness of children and the spouse can have a strong impact on the overall work moral and performance (Moore, 2006, p. 211). Communication experts forecast that in 2012 30 percent of all fully employed people will communicate via virtual teams, underlining the potential to replace expatriates partially (Fokus Money Online, 2008). Disadvantages linked to the usage of virtual teams and the question whether this approach can be implemented for every project type will be discussed later in this paper.
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