GaWC Research Bulletin 42

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The Expatriation Business and the Business of Expatriation

J.V. Beaverstock*


Scholars of skilled international migration have been slow to consider the work of International Human Resources (IHR) specialists in theorising highly-skilled expatriate migration in the world-system. This is a surprising omission by geographers and other social scientists alike, as work on expatriation from the IHR perspective, addressing such issues as expatriate selection, training, strategic roles, adjustment, gender and repatriation, have been very detailed and insightful, both theoretically and empirically, over the past twenty years or so. The purpose of this paper is to bring the expatriation business onto the research agenda of studying skilled international migration. This will be achieved in two ways. First, the paper will consider the theoretical merits of the expatriation business, drawn from the varied Anglo-American IHRs literatures. Second, an empirical study of the business of expatriation in several case studies of financial service transnational corporations will be analysed. The paper concludes by suggesting that whilst expatriation has become a fundamental globalization strategy of TNCs. The organisational process of expatriation is precarious for both firms and individuals alike.


"In 1996, an estimated 350,000 Americans were working outside of the United States. Eighty-eight per cent of expats were male and 65 per cent were accompanied by their spouses"
(Schell and Solomon, 1997, 174).

"... the total cost of relocating a senior UK employee and family to locations in the Far East between 1992 and 1997 was in the region of £5-600,000. Even international assignments to countries like America were estimated to cost, on average £100,000 a year in 1997"
(Forster, 2000, 128-129).

Processes of internationalisation and globalization have continued to splinter the productive activities of transnational corporations (TNCs) in the last decades of the Twentieth century, whether in primary, secondary or tertiary industries (Dicken, 1997; UNCTAD, 1996). Simultaneously, the swift globalization and concentration of foreign direct investment (FDI) and such corporate geographies to, for example, world cities, export processing zones or 'peripheral' regions of advanced capitalist economies (e.g. South Wales in the U.K.), has been followed by the steady growth of expatriation and international occupational mobility. As Harris and Brewster (1999, 488) observe, "[t]he rapid globalization of business has led to an ever increasing need to 'internationalize' managers within organizations." Its is now readily acknowledge in both geographical and international human resource (IHR) management literatures that one of the major implications of the ever increasing globalization, or localisation, of firms is the steady growth in the magnitude, importance and complexity of expatriation in the world system (e.g. Bartlett and Ghoshal, 19?; Beaverstock and Boardwell, 2000; Brewster, 1991; Forster 2000; Koser and Salt, 1998; Tung, 1988; Welch, 1994).

Research focused on the subject of international managers and expatriate assignments has mushroomed in management science over recent years. American researchers have been examining expatriation and international occupational mobility within U.S. TNCs since the 1970s and before (e.g. Baker and Ivancevich, 1970, 1971). Indeed, 1961 saw the publication of the U.S. John Wiley & Co. journal 'Human Resource Management.' Since the 1970s, we have witnessed the emergence of the study of 'International Human Resource Management' in 'western' management science, and latterly of course, global business school environs (stimulating the birth of new journals devoted to the subject area)1. The growth in the magnitude and empirical depth of research devoted to the study of international human resources, and international assignments with TNCs, is no accident. To a major extent, the proliferation of texts, quantitative analyses, articles in learned journals and international seminar courses on the subject of expatriation have evolved in order to solve one problem: expatriate failure.

Expatriate failure within TNCs is an extremely costly business. Mendenhall et al. (1987, 331) suggest that it has been, "estimated that between 20 to 50 per cent of personnel sent abroad return prematurely from their overseas assignment." Buckley and Brooke (1992) agree with this estimation, and suggest that the failure rate of expatriates can be as, "high as 70 per cent in the case of developing countries." While many researchers have debated the quantification of expatriates failure rates (e.g. Black, 1988; Forster, 1997; Harzing, 1995; Tung, 1982), others have tried to estimate their direct costs to the organization. For example, back in 1985, Copeland and Griggs estimated that American companies were losing on average $2billion a year in direct costs (on average $250,000 per failure), but Mendenhall et al. (1987) suggest more conservative losses of between $55,000 and $150,000. By the mid 1990s, failure rates were directly costed at $1 million per aborted assignment (Shannonhouse, 1996). However, once the unrealised business opportunities and loss of networks and 'face' are added to the direct costs, trying to estimate the overall effect of expatriate failure rates on the corporation's balance sheet becomes nigh on impossible.

International human resource specialists have focused their attention on the reduction of expatriate failure rates by investigating essentially why, how, when and where international assignees under-perform or abort international assignments. Essentially, such research is now extensively examining all aspects of expatriation, from selection, training, adjustment and strategic roles to gender relations, dual career couples, family, repatriation and career development (e.g. Adler 1994; Black, 1992; Brewster, 1994; Forster, 1994, 1999; Goodman, 1994; Harvey, 1985, 1998; Scullion, 1994). Moreover, such research findings have been empirically grounded into several key textbooks on expatriation, for example: Black et al.'s (1992) Global Assignments; Brewster's (1991) The Management of Expatriates; Schell and Solomon's (1997) Capitalizing on the Global Workforce; Selmer's (Eds.) (1995) Expatriate Management; and Tung's (1987) The New Expatriates.

In essence, the principal argument suggested in this paper is that expatriate praxis grounded in the international human resource literature can assist migration specialists to enhance our understanding of the complexity of expatriation in the world system. Human geographers and other social scientists can refine their own theorisation of skilled international migration, transient migration, and gender and migration in particular, through a critical analysis of the detailed quantitative research undertaken in contemporary IHR. Accordingly, the rest of this paper is devoted to begin such that task. After this introduction, the rest of this paper in divided into three major sections. The first section (Part Two) provides an extensive review of the major segments of IHR research and praxis which have investigated contemporary expatriation. Draw from the Anglo-American literatures in particular, the review of 'The Expatriation Business' focuses upon IHR studies of firms': organisational strategy towards expatriation; expatriate selection, training and adjustment programmes; gender relations; dual-career strategies; and repatriation policies. The second section (Part Three) reports an empirical study of 'The Business of Expatriation' within two transnational service corporations resulting from an interviewed based study of IHR management and expatriation in advanced producer service firms in 1998-9. Before the conclusions, the final substantive section of the paper (Part Four) discusses the IHR literature on expatriation in the context of the expatriation practices of the two case study firms. 


From an IHR perspective, understanding the 'Expatriation Business' has come about through the theoretical and empirical investigation of both firms' and individuals. Research orientated towards the firm have focused on organization strategy, selection and training, and towards the individual on gender relations, dual-careers, adjustment and repatriation. Each of these facets of the expatriation business will now be discussed in some detail.

Expatriate Organizational Strategy

The organizational rationale for TNCs to use expatriates rather than host-country nationals (HCMs) (local managers) has been the subject of great debate in the human resource literature, over many years (Brewster, 1991). Edstrom and Galbraith (1977) suggested that international transfers were executed by TNCs for one of three main reasons: staffing; management development; and organizational development. Since Edstrom and Glabraith (1977), the international human resource (e.g. Schell and Solomon, 1997; Tung, 1987) and geographical literatures (e.g. Beaverstock, 1996; Cormode, 199?; Salt, 1984, 1998, 1992; Wiltshire, 199?) have only make incremental insights into extending our understanding of the rationale for expatriation within TNCs.

For example, if we review one of the latest texts which focuses on expatriate organizational strategy within TNCs, Perkin's (1997) Internationalization - The People Dimension: Human Resources Strategies for Global Expansion, it become rather apparent that his rationale for employing expatriates instead of HCNs doesn't depart significantly from Edstrom and Galbraith's seminal work on international transfers in MNCs, as published twenty years earlier. Perkin's suggests that "organizations . need to develop a 'corporate memory', setting down in a structured and formal way 'best practice', so these can become common practices." (1997, 62). The major premise for Perkin's work on expatriates, is that expatriates are used as an organizational tool to disseminate 'corporate memory', or as he terms it "valuable project knowledge and expertise", which without their role would "reside solely with a small number of individuals" at headquarters. As Perkins (1997, 62-63) comments,

"Every successful major business will invest heavily in the development of a distinctive International Cadre of executives, capable of transferring the enterprise's commercial and operational philosophies and systems into every location in which they wish to do business. This group - capable of thinking global, acting local, and vice versa - will be among the premium capital and organization will wish to have access to".

Perkin's (1997) identifies two types of expatriate. First, the 'Parent/Headquartered Staff' who may be posted overseas at some point in their career for "skill transfer" reasons, but will certainly return to the headquarters subsequently. These are staff used by the TNC principally for: business travel; short-term assignments; and full (long-term) assignments. The second type of expatriate are referred to as 'International Staff.' These staff may begin a career with a TNC from anywhere in the world, and whose skills can be transferred to any posting. These are generally referred to in the literatures as Third-Country-Nationals (TCNs) (e.g. Tung, 1987). According to Perkin's (1997), TNCs use expatriate labour for two main reasons. First, to 'Support Business Strategy', where the rationale for the posting may be to: ensure that corporate business objectives are met; and, provide managerial and technical support for the recruitment and development of HCNs. Second, to 'Manage Career Development' of individuals (i.e. the assignment represents a valuable element of the individual's personal development and should be part of an International Development Plan). Neither of Perkin's (1997) two organizational rationales for understanding expatriation make any significant departures from Edstrom and Galbraith's (1977) analysis of the use of international transfers with TNCs.

Expatriate Selection2

Using 'selection systems' (Brewster, 1991) is an extremely important human resource device used by TNCs in order to identify potential expatriate staff. Research has shown that individual's are selected not only on their technical ability and managerial skills (as described by Baker and Ivancevich, 1971; Harvey, 1985; Mendenhall et al., 1995), but also on their 'softer' attributes, like for example their ability (and their family) to adapt to new cultural and working experiences (Rehfuss, 1982; Torbiorn, 1982). As Mendenhall and Oddou (1988, 22) have suggested, "technical competence has nothing to do with one's ability to adapt to a new environment, deal effectively with foreign co-workers, or perceive and if necessary initiate the foreign behavioural norms." All evidence in the literature points towards TNCs using very prescriptive selection criteria to identify potential expatriates from existing 'pools' of employees with high managerial potential (see for example Dowling and Schuler, 1990; Zeria and Banai, 1985): so called high-flyers (Brewster, 1991, BIC, 1991). For example, a summary of selection criteria is shown in Table 1 (see Black et al. 1992). Here, the studies of Miller (1973), Brewster (1991) and Bjorkman and Gertsen (1992) on selection criteria in US, European and Scandinavia TNCs shows: (I) the over-riding importance of selecting an individual on their technical expertise and ability to do the job; and (II) there are no real major differences in the variety of criteria tested in each 'nationality' group of TNCs (also see for example Birchal et al., 1995; Coulson and Thomas, 1992; Dowling et al., 1994; Teagarden and Gordon, 1995).

There is, however, a major critique in the literature for the actual use of selection criteria in practice by TNCs in their identification of expatriates or international managers. Empirical evidence suggests that the formal testing of expatriates using personality, psychological and adaptability tests are few and far between (Brewster, 1988; Forester, 1996; Scullion, 1994; Tung, 1981). As Harris and Brewster (1999, 497) suggest, "much of the key literature fails to encompass the reality of expatriate selection." In their detailed research on selection systems within TNCs they concluded that the "coffee machine system" was still one of the most common forms of identifying potential expatriates for overseas assignments. As they suggest (page 497),

"The coffee-machine system is the most common form of expatriate selection. What happens is that a senior line manager is standing by the coffee machine when he (usually a man) is joined by a colleague:

'How's it going?'
'Oh, you know, overworked and underpaid.'
'Tell me about it. As well as all the usual stuff, Jimmy in Mombai has just fallen ill and is being flown home. I've got no idea who we can get over there to pick up the pieces at short notice. It's driving me crazy.'
'Have you met that Simon on the fifth floor? He's in the same line of work. Very bright and looks like going a long way. He was telling me that he and his wife had a great holiday in Goa a couple of years ago. He seems to like India. Could be worth a chat.'
'Hey, thanks. I'll check him out.'
'No problem. They don't seem to improve the coffee though, do they?'

What happens next is that the organization's processes are brought in to play to legitimize the decision that has, in effect, already been taken."

In reality, Harris and Brewster (1999) reinforces the closed and informal nature of decision-making processes by IHR staff, or other line managers, in selecting potential expatriates. Moreover, the 'coffee machine' selection framework not only reproduces the restrictive nature of the 'networked pool' of potential candidates, but it also continues to uphold the gender bias in expatriate recruitment.

Expatriate Training3

"Cross-cultural training has long been advocated as a means of facilitating adjustment to the expatriate environment" (Brewster and Pickard, 1994, 18). Almost all academic research into expatriate training, or preparation, agree that it has an extremely positive impact on the success rate and organizational role of an international assignment (see for example Black and Mendenhall, 1990; De Cieri, 1989; Earley, 1987; Fish and Wood, 1996). But, empirical studies have indicated that in reality very little preparation takes place, and what training does exist is not very rigorous (Black et al., 1992). For example, according to Baliga and Baker (1985) only a quarter of US TNCs offered their newly selected expatriates training on departure for their assignment. Similarly, Black et al. (1992, 92-93) concede that by the early 1990s, only "35 per cent of US firms offer any predeparture, cross-cultural, or language training for their global managers" and conclude that "no wonder so many global managers struggle in their overseas assignments." Research from the European perspective has also supported the US empirical studies of the failure of TNCs to instil adequate cross-cultural training into their newly departing expatriate staff (also see Tung, 1981, 1982). In Torbiorn's (1982) study, it was suggested that about half of Swedish TNCs provided a formalised training programme and in Brewster's (1988) analysis of 25 European TNCs, only ten designated training courses. But, as the literatures shows (see footnote 4), empirical analysis on the provision of TNC expatriate training has been extremely sparse, and principally a phenomenon of study in the 1970s and 1980s.

Theoretically, however, IHR specialists have posited several 'training' models (Brewster, 1991) to reduce the expatriate's working and living cultural shocks (and his\her spouse and family) at the outset of their international assignment. For example, Tung (1981) advocated five categories of training: area studies (including environmental briefing and cultural orientation); cultural assimilation; language training; sensitivity training; and field experience. Tung (1982, 1987) tested this model on a study of US (of which 32% sponsored training programmes), European (69%) and Japanese (57%) TNCs, for different occupational groups (Table 2). Two main features stood out from this research. First, both US and European TNCs were more focused on training CEOs and functional heads, rather than trouble shooters, and the Japanese directed more training towards operatives. Second, language was deemed a very important category for training activities, especially for US and European CEOs and functional heads. This finding concurs with Brewster's (1991, 58) review of the literature which suggested that expatriates are much more "enthusiastic" about language training as it is equips them with "relational" as opposed to "technical" skills for the job.

Finally, IHR specialists agree that the very high investment cost of expatriate staffing is proportionally nowhere near matched by a similar investment in time devoted to comprehensive and rigorous training and preparation regimes within TNCs. During the 1990s, a major trend has been for TNCs, especially US and European, to outsource their expatriate training and preparation to specialist consultancies. In the European context, the Centre for International Briefing, Farnham Castle (U.K.) offers a comprehensive environmental briefing programme for expatriation to developing countries especially (see Tung, 1987), and Employment Conditions Abroad Ltd provide financial and cost of living intelligence for all countries around the globe (Beaverstock, 1996). Equally, major consultancies, like for example Andersen Consulting and PricewaterhouseCoopers offer TNCs comprehensive expatriate training, for both financial and orientation purposes. THC IHR departments rarely specialise in training and preparing expatriates for international assignments.

Expatriate Adjustment

Adjustment is generally defined as "the degree of a person's psychological comfort with various aspects of a new setting" (Black and Gregersen, 1988, 277). Research in this field of IHRM takes the form of identifying an expatriate's cultural shocks and their adjustment to the host's cultural environment4. Effectively, the literature in this field of activity has taken three major standpoints. First, a series of studies have focused on the effectiveness of training on expatriate adjustment. Second, drawn from the psychology literatures, commentators have tried to understand how people reduce culture shock in their new working and living environments. Third, theoretical and empirical studies have focused on the adjustment of expatriate families and children, and the influence of expatriate communities on adjustment processes.

Expatriate training regimes are linked specially to effective expatriate adjustment in the field. As Brewster (1995, 57) maintains, "cross-cultural training has long been advocated as a means of facilitating adjustment to the expatriate environment" (also see Tung, 1987). The successful measure of a TNCs cross-cultural training programmes can be quantified in terms of the ease at which expatriates will adjust and function appropriately in the hosting environment. All research shows that adaptation and successful assimilation into the field is strongly linked, but not statistically, to an expatriates: individual skills; managerial level; martial status; organizational support; and, host nationals' attitudes towards them (see for example Caliguri and Cascio, 1998; Tung, 1998). In an idea situation, a rigorous TNC selection procedure and training regime would reduce stress for both employee and spouse, and thus enable a smoother adjustment process. But, as we have already observed, in reality informal/closed expatriate selection procedures and non-existent or less rigorous training regimes do very little for stress management and adjustment processes (Brewster, 1994). Brewster (1995) recommends that TNCs be much more proactive with their training and preparation programmes, which should include for both employee and family: informal briefings with recently returned expatriates (preferably from the same hosting office); 'look-see' visits; overlaps with incumbent expatriates; and shadowing.

A second strand in the literature has focused on how expatriates manage or cope with the complexity of culture shock in the host environment. Tung's (1998) survey of 409 expatriates in 51 countries found that almost one third of the sample took between six and twelve months to adjust to their new locality. Specifically, expatriates have to adjust to: their new job requirements and organisational processes (work); interacting with local HCNs colleagues (interaction); and general living conditions abroad (general) (Black et al., 1992). Shaffer et al. (1999) uses Black et al.'s (1992) aforementioned model of the 'Determinants of Adjustment to International Assignments' on a survey of 452 expatriates assigned to 45 different countries (as illustrated in Table 3). Sheffer (1999) has been able to show that while work factors dominated adjustment in job and organizational factors, a combination of work, interaction and general adjustment problems influences adjustment in both non-work and individual factors.

Other research has indicated that expatriates and their families develop 'coping mechanisms' to reduce culture shock and adjustment problems. Returning back to Tung's (1998) survey of expatriates, she observed that eight major coping mechanisms were actively pursed by these expatriates to ease their adjustment processes in the field (Table 4). Equally, at a theoretical level, writers have conceptualise how people attempt to overcome processes of cultural adjustment in foreign environs (see for example Adler, 1975). One major contribution in this field of enquiry has been Torbiorn's (1982) work, which has pioneered the use of Oberg's (1960) writings on adjustment to new cultural environments to explain the phases of expatriate adjustment (also see Marx,1999 - Figure 1). In this study, he suggested that newly arriving expatriates would experience a 'honeymoon' phase, followed by 'culture shock' and a slow path to recovery and further 'adjustment' (for a critique see: Black and Mendenhall, 1990; Brewster 1994; Selmer and de Leon, 1989; 1993; Nicholson, 1984).

The third major standpoint in the literature on culture shock and adjustment has focused on spouses, families and children. According to Brewster (1995, 58), "it is now clear that often the partner's failure to adjust leads to the early termination of an assignment" (see for example Harvey, 1985; Black and Stephens, 1989). The preparation of families for expatriate assignments is woefully underestimated by TNCs, especially given the increasingly expensive costs of sending them abroad (Brewster, 1991; Schell and Solomon, 1997). Equally, the adjustment challenges faced by families are immeasureable, Spouses must confront the new challenges of literally setting up home and preparing for everyday life in a different country, coupled with parental responsibility. Research has shown that addressing such challenges has created major stress points for spouses - especially focused on such important tasks as doing the shopping, making new friends, dealing with schooling and organising home maintenance, for example (see for example, Black and Stephens, 1989; Forster, 1992, 1999; Fukuda and Chu, 1994). Children are not immune from the culture shock of living away from home. They have concerns over: their schooling and education; independence in a new environment; identity; and desire to establish new friendship networks (see for example De Leon and McPartlin, 1994; Schell and Solomon, 1997). In short, all of these adjustment problems can be very stressful and disruptive to the expatriate's family life in their new cultural environment.

Outside of the limited institutional framework which supports expatriate families, research has shown that considerable stress reduction mechanisms have come from the influence of incumbent expatriate communities (Black and Gregersen, 1991; Brewster, 1991; 1994; Brewster and Pickard, 1994; Cohen, 1977). Brewster and Pickard (1994, 30-31) maintain that both large and small expatriate communities provide "levels of support to newly arrived spouses from the host environment . [which] . allows for the spuse to 'adjust' relatively easily, but this 'adjustment' may be more to the local expatriate community than to the host-country environment itself." Although, this model has yet to be statistically tested in rigorous empirical studies, logic dictates that it does have more than a degree of reality as expatriates spouses, especially females, face quite severe adjustment problems in their new environments.


Women still face organizational discrimination in expatriation. The substantial under-representation of women expatriates worldwide is endemic in contemporary globalization. Empirical research has continually reported that woman expatriates make up less than fifteen per cent of all known expatriation. As Caligiuri and Tung (1999, 763) report, "until the late 1980s, only 5 per cent of all American expatriates, 1 per cent of Japanese expatriates and 9 per cent of Finnish expatriates were women." In Florkowski and Fogel's (1995) study of 225 expatriates they found that only eleven per cent were woman. More recently, in Tung's (1997) research (of 409 expatriates) the figure had increased slightly to 13.9 per cent. But, Adler's (1994) comprehensive analysis of 696 North American companies 13,338 expatriates worldwide revealed that only 3 per cent, 402, were woman. As she suggests ".the most single most uncontroversial, indisputable statement one can make about woman in international management is that there are very few of them" (Adler, 1994, 255). Accordingly, the literature on expatriate women managers has focused on one major issue: why they face significant barriers of entry into worldwide expatriation.5

A review of the contemporary literature on women expatriate managers all agree that a "glass ceiling appears 'to persist'" (Caligiuri and Tung, 1999). The major recruitment problems facing women manager are both objective and subjective (Adler, 1994). Objectively, women face major structural problems in recruitment for expatriate positions (and the global labour market at CEO and professional and managerial levels). As there are far fewer women in professional managerial positions than men worldwide, proportionally less women become expatriate managers6 (Caligiuri and Tung, 1999). But, more importantly, the 'coffee machine system' still remains as one of the major selection processes, which actively continues to discriminate against women as "vacancies reflect a male-type bias" (Harris and Brewster, 1999, 498).

It is subjective factors, however, that are much more significant when considering why women face perpetuated under-recruitment as expatriate managers. Adler (1994, 1987), one of the major international specialists in this field of research, suggests that organisations under-deploy women on international assignments because they continue to stereotypically reproduce "myths" which obstruct women from undertaking global career paths:

"Myth 1: Women do not want to be international managers;
Myth 2: Companies refuse to send women abroad;
Myth 3: Foreigners' prejudice against women renders them ineffective, even when the women are interested in foreign assignments and successful in being sent."

Moreover, it has been the last myth, that woman are negatively-stereotyped by host-nationals which is cited as the most subjective factor, and therefore untested rationale, which accounts for the reluctance of TNCs to expatriate female managers abroad (Caligiuri and Tung, 1999).

In subsequent empirical research, Adler (1994) and others (e.g. Caligiuri et al., 1999; Napier and Taylor, 1995; Punnett et al., 1992; Stone, 1991) have statistically refuted all of these "myths." But, moreover, many writers on this subject area are now prescribing very detailed policy statements for TNCs to actively maximise the potential of their female CEOs and professional and managerial as expatriates. For example, Caligiuri and Cascio (1998) suggest that TNCs can increase their female expatriate workforce, and enhance their experiences abroad by executing these three major strategies: (1) develop specialist cross-cultural training for females going on global assignments, to minimise failure rates; (2) widen selection procedures to include more talented women in their expatriate 'pools'; (3) actively promote women as 'best-qualified' expatriates in order to dispel their 'token image' and break down those stereotypical myths associated with expatriate women managers.

The Dual-Career Dilemma

All IHR research which has focused on the impact of dual-career couples on TNC international assignments recognise that it is a very complex organizational problem that is often very difficult to solve. Moreover, it leads to high incidences of expatriate failure.7 In many cases, when a partner in the relationships accepts the international assignment for the accompanying spouse (which is most likely to be a woman) if often leads to enormous culture shock and long time-lags of adjustment, which may never be totally overcome.

Research undertaken by Schell and Solomon (1997) report that spouses who leave careers to 'trail' overseas with their partners face many severe difficulties, which can last throughout the posting, or until it is aborted. They suggest that there are six potential inter-linking problems associated with spouses involved in dual-career moves, all of which are major barriers to successful cross-cultural assimilation. First, the lack of organizational support for the spouse is more likely to ensure that she (sic) is to be left in charge of the move, setting-up new home in the host country and organizing children, without suitable cross-cultural training (as undertaken by the other partner in the TNC environment). Second, the immediate loss of home support groups make spouses feel very isolated and vulnerable in new cultural environments, especially where they have no ready made community to fit into (like at home). Third, spouses loose self-esteem very quickly, exacerbated by the loss of a career, and the need to undertake everyday mundane task, which in themselves become very challenging (like for example shopping, organizing home maintenance etc.). Fourth, spouses obviously curtail or put on hold their own career track, which can cause resentment to the partner for being transferred abroad and the worry of not being able to restart the career on return to the home country. Fifth, spouses loose their own income associated with their job, which can relate to loss of independence, and of course, a reduced gross household income. Finally, spouses find it extremely difficult to find employment in the host country, due primarily to immigration legislation. All of these problems in combination, which the literature usually suggests is the case (see footnote 8), makes it extremely difficult for spouses to overcome psychologically the everyday lifecourse of an expatriate posting.

Accordingly, a corpus of literature on the dilemma of dual-career moves, and the plight of the spouse, is orientated towards providing solutions for the sort of cross-cultural problems outlined by Schell and Solomon (1997) (e.g. Black et al. 1991; Harvey 1997). For example, Harvey et al. (1999, 810) suggests that the "process of mentoring an expatriate and trailing spouse in a dual career couple could enhance the probability of expatriate success and contribute to cross-cultural learning." Essentially, for the spouse, mentoring would provide a degree of "culture guidance" pre-departure and "developmental" support on assignment (Harvey et al., 1999). Harvey et al. (1999, 820-822) have developed a dual career expatriate mentoring programme (figure 2), in order to ensure "faster and more efficient" adjustment in the host country. Essentially, they recommend that mentoring occurs at all stages of expatriation (pre-, during and on repatriation), and that for each stage it is constantly reviewed, assessed and updated accordingly. Unfortunately, as with many other 'peripheral factors' embracing expatriation within TNCs, organisations still continue to devote very few resources to spouses and family adjustment processes (Brewster, 1991; Tung, 1987).


Perhaps one of the most under-researched facets of expatriation is the experience of repatriated managers (and their families) when they return to their country of origin (Black, 1989; Forster, 1994)8. Brewster (1991, 88) suggests that such research has been ignored because, "it used to be thought that re-entry was straightforward." Much of the evidence in the literature suggests that staff experience 'reverse culture shock' and other serious adjustment problems on repatriation, with respect to both work and home environments, especially if they have been away for long periods of time (Howard, 1974; Johnston, 1991). Moreover, research by authors such as Adler (1981), Black and Gregersen (1991) and Stroh (1995) indicate that turnover rates amongst repatriates are as high as 25 per cent, which is much higher than domestic managers (Black et al. 1992).

From the organizational perspective, returning managers can find it very difficult to re-integrate back into the workplace. The common assumption is that expatriation results in career development and promotion on return to the home country. However, research on this subject is very sparse, and detailed empirical studies show no clear statistical relationship between expatriation and career advancement (Adler, 1981; Brewster, 1991; Mendenhall et al., 1977). In fact, research indicates the opposite, in that returnees find it very difficult to psychologically adjust to their new work environment, especially if it does not match the seniority, status and prestige of their former expatriate post (Adler, 1981; Howard, 1974; Smith, 1975). In Forster's (1994) recent survey of 124 returnees to the UK he suggested that there were five major adaptation problems facing employees on re-entry. These were (1994, page 407):

"1. If the home organization has undergone restructuring or other forms of organizational change, streamlining or decentralization may have made some jobs redundant;

2. If their original job position/roles have changed radically or been removed altogether while they have been abroad;

3. If they have not been kept up to date about these changes or received adequate re-training or information prior to their return;

4. If expatriates have unrealistic or unrealizable expectations about their career prospects and quality of life outside work after their return to the UK;

5. If the organization has been experiencing problems of rationalization or downsizing and is looking to off-load more mature employees."

Furthermore, when Forster (1994) questioned his sample on the principal concerns that they had on repatriation, 63 per cent reported being 'extremely' or 'very' concerned about career development on their return (Table 5).

Much contemporary research, therefore, is focused on how TNCs can manage repatriation effectively and efficiently, and reduce turnover rates (see Feldman and Thomas, 1992; 1993; 1995; footnote 8). Brewster (1991) suggests that TNCs should be much more proactive in repatriation. He argues that TNCs can take effective measures to increase retention rates on repatriation. Such measures include: pre-repatriation de-briefings to discuss career progression; encourage early involvement in home work projects; encourage involvement in home support networks; undertake regular management reviews; establish mentoring and 'bonding'; and, of great importance, develop good career planning. With respect to spouses, many of the repatriation adjustment problems are associated around their return to work, and for professional and managerial spouses, their re-entry into the higher echelons of the labour market (Black et al., 1992).


Following Tung's (1987) example of reporting detailed case studies of international human resource management in British, Swiss and German multinational corporations, this part of the paper considers the international assignment policies and practices at two major financial service TNCs: Firm A and Firm B. Firm A is a global accountancy partnership, ranked in the Top Ten International Accounting Networks. In 1999 it had approximately 825 offices in 160 countries, which employed 6,800 partners and 64,500 professional staff. Firm B is a major European Banking Conglomerate that offers clients a full range of financial and other services. World-wide it has 93,000 staff in over 50 countries, of which 40,000 are in professional and managerial positions (International Human Resource Manager).

The following comparative analysis of the business of expatriation in Firm's A and B will focused particularly on their perspective of international assignments and will highlight both policy and practice involved with: organizational staffing strategy; selection and training; mentoring and adjustment (including compensation); female expatriates; dual-career couples; and repatriation. All material presented in these two case studies were derived from in-depth, one to two hour recorded interviews with the firm's respective International Human Resource Managers, which are supplemented with both published and unpublished secondary sources. For reasons of confidentiality, all secondary sources have been disguised, and will not be referred to in the text in the appropriate referencing system.

Organizational Staffing Policies for Expatriation

Like all global accountancy practices, Firm A's worldwide international office network grew very rapidly during the 1980s through both organic means and processes of mergers and acquisitions. As the global practice is divided into individual cost-centred partnerships (or member firms - of which this practice has 146), the UK member firm is responsible for its own expatriate programme. The accountancy practice's expatriate policy is a replicated throughout its 146 member firms, which is a common practice strategy undertaken in all forms of corporate policy within global accountancy partnerships (member firms).

Firm B has become one of Europe's premier banks over a relatively short period of time. It had acquired several British merchant and American investment banks during the 1980s and 1990s. The global headquarters of the bank is control of the bank's International Assignment programme, but in practice, each of the groups five separate divisions operationalises the programme at their discretion. Thus, each of the groups five major divisions (Retail & Private Banking; Corporate Real Estate; Global Corporate & Institutions [e.g. Investment Banking]; Global Technology Services; and Asset Management) has its own Human Resource's department, which is responsible for international assignments. The HR department in London is responsible for the Global Corporate & Institutions division of the bank (GCI) which includes approximately 6,000 professional staff (principally in investment banking).

Firm A's UK firm (which will now be referred to as Firm A UK) has endured a long legacy of transferring partners and professional staff between its international office network. During the 1980s, it was annually sending between 100-150 expatriates on international assignment for periods between two and three years, throughout Firm A's network of world-wide offices (and member firms). From the early 1990s onwards, this figured increased to approximately 450 expatriates per annum, out of a total practice number of 800-1,000 international transfers. Firm A maintains that "international transfers represent an integral part of the training and development of our personnel and reflect our commitment to give outstanding client service world-wide." (Firm A, A World of Experience).

Firm B (now referred to Firm B GCI) began expatriation of investment bankers in the mid1980s, but as a Group it has an extremely long history of sending bankers (principally commercial bankers) to its world-wide office network on both temporary and permanent time-scales. As with investment banking, Firm B GCI's expatriation is very precarious. The number of expatriates have increased during periods of boom in financial markets around the globe, where instant demand is needed for particular skills, but has declined rapidly as markets tumble and bank has executed redundancy programmes for domestic and expatriates (Beaverstock, 1996b). Firm B GCI's International Human Resources Consulting & Services Manager (IHRCSM) estimated that at least five per cent of the Group's 40,000 professional staff would be on overseas assignment at any point time (circa 2,000), of which 30 - 60 would leave London on an annual basis (London has 6,000 professionals). Such staff would be assigned to the Groups other major GCI divisional hubs (New York, Tokyo, Singapore, Hong Kong and Sydney).

At Firm A UK the duration of expatriate assignments is from six months to three years, or more. As the firm has no career expatriates, or as they are referred to Third-Country-Nationals, international assignments, as directed by Firm A UK's International Secondment Department (a sub-department of the Human Resources Team), are undertaken to fulfil either the individual's, firm's or client's organizational needs. In theory, Firm A (including Firm A UK) transfers partners and professional staff within international assignments in order to, "fulfil specific career objectives . answer urgent requests for additional professional help . [and] . fulfil plans to visit a particular country, or become proficient in a foreign language, or to obtain a professional qualification abroad" (Firm A, A World of Experience). Firm A adopts a very formalised International Transferees Programme, which "plans, organises and controls transfers in a structured way" (Firm A, A World of Experience). The programme is divided into two major organizational policies: International Secondments; and International Transfers. The distinction between the two policies are very simple. Those send abroad on International Secondments will come back to the UK, and be guaranteed re-employment after their assignment has been successfully completed. But, those transferred have no guarantee of a job on their return.

In practice, Firm A UK sends the majority of their staff abroad on International Secondments in order to fulfil a specific corporate demand, which is usually a skill-transfer. As Firm A UK's International Secondment Manager (ISM) suggested,

".the reason that we send people on secondments is transferring skills, so financial services is probably our biggest mover. Some offices are actually run by expatriates. Armenia is an example of that . Other reasons for secondments; it is a perk, a wonderful opportunity; transferable skills; sometimes, but not all of the time t can be for staffing levels, so to justify staffing levels. For instance, there will be certain peaks and troughs in any office within each discipline throughout the year, so audit for instance has very significant or defined peaks and troughs, you will have your busy periods, you will have your year ends, with that in mind, sometimes an overseas office will have a requirement of staff which we can suitably fill because we are over staffed, it is quieter period for us and that is where short term secondments come into play . so people will go overseas, for a need, so Australia will say to me, 'we are really busy we are going to need 20-30 short termers for July, August, September'."

Most Firm A UK international assignees are principally posted to the developed economies, as the ISM reported,

"Key areas. US, used to be just New York but now it is all over, every office, if you are looking at consulting, they are all going to the West coast, if you are looking at financial services, the majority are going to Boston, Chicago, New York, your big financial areas mainly the North East, if you are looking at areas of tax, they go all over. The other big recruiter is Sydney and Melbourne both being big financial service centres. New Zealand, Auckland, Wellington, they are quite small offices, so they have quite a big expatriate program in comparison to the size of the office. Europe, we send people to France, Germany, Eastern Europe. Canada is another big recruiter. Then you have got the islands, Bermuda, British Virgin Islands, Cayman Islands, they are financial service hubs, they do best is insurance or banking and the other area is tourism."

Firm A UK also sends staff on secondment to clientele, who remain employees of the firm, and receives International Secondees from other member firms in the global practice because of London's position as a leading financial centre. As the ISM commented, " . we do get a lot of expatriates coming in from New York, Australia, South Africa, Europe, all over the world, all coming into London because they see London as a centre of excellence so by then sending their staff here they and encouraging them to come in, they're going to eventually bring those skills back to their home office."

Firm B has a very formalised corporate strategy for expatriation, referred to as the 'Global Policy for International Assignments.' The Group's philosophy is that "in order to develop its role as a global player in most business areas, the Group requires international staff. To meet the Group's growing business needs for internationally-experienced staff, the strategic importance of cross-border assignments is evident" (Firm B Human Resources Consulting & Services). Firm B distinguishes between six types of international assignments:

"Expatriates - individuals who, in response to their special skills, knowledge or abilities are asked by the Group to take on an assignment abroad for a defined period of time, with the intention of returning to their home location;

Development Transfers - staff assigned to work in a specific international location as part of their individual development plan in order to gain skills and experience, whether for training or management development purposes. Assignments are limited to a defined period of time, after which employees return to their home location;

Volunteer Expatriates - staff who request an international assignment for personal or professional reasons. Assignments are normally set for a limited period of time, after which these staff members return to their home base;

Globally Mobile Staff - staff with specific managerial and professional expertise who work in a location which is not their natural home base. Third Country nationals may also be included in this category;

International Staff Exchange - offered to promising younger employees who demonstrate high potential in order to broaden and intensify their training through international experience. They are assigned for a one year and the home location bears all their costs;

Short Term Assignments - staff will remain employed by their home location and continue to receive home remuneration"

In practice, in Firm B GCI division, most staff on international assignment would be posted for two to three years and fall into the Expatriate category. As the bank's IHRCSM stated,

"By far the largest proportion are expatriated for their technical skills, particularly where we have expatriated people to places like Russia, South Africa, Latin America, but also other locations. There is an enormous skill shortage in Tokyo, and a lot of our expatriates are in Tokyo and the associated back office back up to that . particularly on the controlling and operations side and I.T now, that is the bulk of our expats."

As a legacy from the acquisition of an American Bank, Firm B GCI has 12 Third Country Nationals working in the major hub offices of the division, hired on local contracts. London does receive increasing numbers of International Staff Exchange trainees from the Group's global headquarters, which totals on average 40 per annum. But, most of the staff coming in to London are foreign 'Expatriates' from New York (American), Frankfurt (German) and Tokyo (Japanese). The IHRCSM had no idea how international staff were in each expatriate category as defined by the bank.

Selection and Training

Throughout the accountancy partnership, Firm A maintain that "opportunities are open to all out highly-rated personnel" (Firm A, A World of Experience). In practice, post-qualified staff who wish to be internationally assigned within the partnership, apply for specific vacancies in international offices, which are advertised internally via the firm's world-wide-web 'career opportunities' bulletin board, and/or in-house staff magazine. The selection process in the UK practice is open and is administered by the International Secondments Manager. As the ISM comments,

"The initial process is decided by the candidate, somebody who wants to go for the vacancy. We advertise the vacancy, they come to me and say they are interested in going overseas, they fill in an application form, the UK would support that application form, we would then send it overseas for consideration, sometimes partners come in and interview, some have interviews here or whatever, but inevitably the overseas partners decides who they will take. In some cases you will have people nominated."

For secondments, the ISM suggested that, "if a department had some one they wanted to hold onto, they might put them forward for a secondment," but, for short-term secondments, for example to Australia for three-months, "everybody wants to go . they are not as focused on overseas experience, they see this as a wonderful opportunity." As for pre-departure cross-cultural training, Firm A UK focused particularly on the logistical planning of the assignment. A Transfer Coordinator in the London, or other UK home office, would give advice on taxation equalization, visa and work permits, including spouse. There was no evidence of work/task related training being undertaken prior to departure. Previous research on this firm, however, did reveal that it had used The Centre for International Briefing, Farnham Castle, for cultural awareness training for senior staff (partners) being seconded to developing countries.9

As Firm B GCI recruit 'Expatriates' in the main and their selection process is significantly more closed and informal that Firm A's. The IHRCSM was very pointed on issues dealing with selection, as he suggested,

"Essentially, in order to become an expatriate, you need to have somebody who is going to say, 'we want Joe Bloggs to work in Singapore, but at the end of a certain period of time, or at some stage, we want him to come back to the UK'. That would then mean that person was an expat."

Firm B GCI used Employment Conditions Abroad Ltd for pre-departure cross-cultural training seminars for employees and their families, and offered specialist language training for their expatriates. The Group firmly "recommended that expatriates take these classes prior to departure while you are still at home" (Firm B Human Resources Consulting & Services).

Mentoring and Adjustment

Firm A UK uses 'The Firm A Passport' check-list mechanism to ensure that candidates' are fully aware of the aims and objectives of their assignment, and that they are met as fully as possible. This is not an appraisal or counselling mechanism organised by the home office. The primary purpose of this schema is to ensure that the candidate monitors with their Home and Receiving Coordinator: pre-transfer planning (logistical training as mentioned above); arrival in the receiving office (e.g. accommodation, banking, social security); professional development during the transfer; and, prior to leaving the logistical issues (e.g. advice on tax affairs etc.). Firm A UK does not provide mentoring or counselling to help relieve the working and household dislocation caused by cross-border adjustment. As the ISM stated

"The biggest issue when you send someone overseas is that, although you offer them a right to return, they are almost forgotten by their home office, they are forgotten by the people that they wok with, they forget too. It is almost impossible for us to track and monitor secondees overseas, me as a co ordinator, I couldn't do it, I can monitor them quarterly, half yearly, but I am talking about regular monitoring."

Mentoring and counselling is the responsibility of the receiving office - "They are paid locally, they are monitored locally, appraised locally, they are promoted locally, everything" (ISM, Firm A UK). Each newly arrived expatriate is assisted by the Transfer Coordinator, however, the focus of all appraisal and counselling is on adjustment in the workplace. Thus, training courses are attended to help the transferee operate effectively in the local environment, but there is no evidence of advice given on assimilation into the living environment.

Firm A UK strongly inferred that the international assignees relocation or compensation package were financial instruments implemented especially to relieve the burden of cross-cultural adjustment. At interview the ISM was extremely enthusiastic about forwarding information on the quality of their compensation package. As she suggested,

"At the moment we run a thing called 'Peer Group Packages', and they go onto a local package. In some instances this causes a huge problem because some areas obviously don't pay anywhere near the equivalent of London, and then you have the added problem that these secondees are often trying to maintain property and a life here in the UK. We also have another type of package which is a 'Tax Equalised Package', whereby we look at their UK salary and we do our calculations to exchange that to the local currency, and then obviously do cost of living adjustments and tax equalise the whole package so that the person goes to the overseas office every month with the same amount of money in their pocket that they would have got in the UK. They are still paid locally."

Firm B GCI had no mentoring programme in host offices for expatriates. Instead, they expected newly arrived expatriates to undertake both "professional preparation" on their new task and "specific preparation" on getting to know their counterparts (and line-managers) in the receiving office. They expected the expatriate to fit into the local working environment with minimum dislocation. The GCI division had no concept of staff needing mentoring or advice in non-work procesess during expatriation. Like Firm A, Firm B GCI focused all of their attention on smoothing out the 'logistical' problem of adjustment for the expatriate, which they considered would alleviate cultural adjustment, like for example finding them somewhere to live or solving their personal finances. Firm B GCI out-sourced the logistics of preparing expatriates for an international assignment to Employment Conditions Abroad Ltd and Arthur Andersen & Co. Both these organisations provided a full range of relocation services (e.g. renting accommodation, recommending schools for children etc.), cost of living indexes, advice on social security and pensions, and spouse work permits, if required.

Firm B GCI 'Living Standard Protection' scheme (compensation package), was extremely comprehensive. It included: cost of living allowance; additional regional allowance; market salary; living standard protection calculation; temporary housing allowance (one month); reimbursement of school fees; home leave flights (one business class); social security/pension provision; car/club membership; holiday entitlement; full moving costs; and relocation lump sum payment (two months gross salary, plus an addition $1,000 per dependent) (Firm B Human Resources Consulting & Services). As the IHRCSM suggested,

"You have got to treat your key staff very well because otherwise they will just walk. For most of these people the expatriate package is pretty irrelevant, they will look at there salary as this is quite significant, and the housing is convenient, home leave flights, tax preparation, all of these things make life more convenient for them but at the end of the day, the only thing they have got eyes for is that massive figure at the end of each bonus year. Arguments about packages normally occur at the lower levels, where ratio between bonus and packages is less."

Given the high costs of the 'Living Standard Protection' scheme, those assignees who remain in the receiving office after a period of five years, will be contractually transferred to local terms and conditions.

Female Expatriates

Accountancy, unlike many other financial sectors, have relatively high participation rates for females at professional levels (Beaverstock, 1996), but organizational exclusion still exists (Crompton and Sandersen, 1990). Firm A UK's ISM suggested that "gender is completely irrelevant" in the selection of international secondees and transferees. Women were able to apply for vacancies in international offices, but "it is more awkward for females to go and work and live . in the UAE or Saudi . and it is very rare that I have to discourage someone because of their gender" (ISM, Firm A UK). The ISM, however, was unable to confirm the proportion of females on either international secondments or transfers, and their relative seniority within the professional accountancy grades. Research undertaken in the early 1990s on this firm by the author revealed that the incumbent ISM reported that the difference between men and women on international assignment was as little as "60-40".

Extremely high levels of female exclusion exist in merchant and investment banking (McDowell and Court, 1994). While the Banking Group maintains that it recruits all international assignees on their relative skills base for the "development of their individual business talents", males dominated expatriation in Firm B GCI. As the IHRCSM very openly suggested

"It is a fairly male dominated profession. There are a number of very senior female positions in the organisation, but that doesn't actually mean a great deal. If you want the proportion of women in the investment bank and then a proportion of female ex-pats, there are less. The reason is quite simple. You can be a local female employee of an investment bank quite happily because you can work with your husband in the same country and there is no conflict, whereas if you are on assignment there is enormous tension, between whose career comes first."

The IHRCSM could not give any figures on the number of female expatriates on assignment in the GCI division, in fact he could not think of any, but did confirm that there were substantially many on international assignment within the rest of the Group, particularly in the retail and private banking division. Moreover, throughout the interview he constantly used the term "guy" or "guys" when discussing assignees in the GCI division.

Dual-Career Couples

Firm A UK makes very little provision for dual-career assignees. Spouses and family are included in pre-transfer planning associated with visa and work permit requirements, where appropriate, but then are absent from all other dialogue. As Firm A UK only focuses cross-cultural training on the work environment, the adjustment processes of the 'trailing' spouse are left to the assignee and spouse to negotiate in the host environment. In contrast, Firm A UK is able to offer spouse authorisation for North Americans to work in the UK, but the arrangements are not reciprocated.

Firm B GCI have a specific "spouse assistance" programme to help support dual-career assignees (Firm B Human Resources Consulting & Services). Under the term of this programme, "the host location will, at its discretion, help spouse to adjust to the new location, and may pay for additional language classes." Spouses are also "offered assistance with finding a job and obtaining a work permit . however, there will be no recognition for the loss of a spouse's income whilst on assignment." The IHRCSM reported that spouse assistance was included with the employees pre-preparation, as undertaken by the out-sourcing companies (ECA Ltd, Arthur Andersen & Co.). On average fifty per cent of assignees in the GCI division were married, but problems of adjustment were evident in the households where both partners had professional jobs, and the bank did recognise that it could result in expatriate failures. As the IHRCSM reported,

"The ones who are married with children, then the wife very often doesn't work, the level of income earned by the husband means she doesn't need to work and also the hours worked by the husband often means that she can't work, someone has to be there to keep the household going. It is really the young married couples without children, where there is sometimes a tension. It just doesn't happen very often. In those sorts of situations, either the bank will try and find the spouse a job, or if he or she is with another bank she'll try and find a job with that other bank in the host location. So it doesn't usually stop an assignment what does sometimes stop an assignment is if they can't find a job and you know we have a policy of not recognising loss of spousal income but as a household we cannot afford to do this."


Repatriation and 'reverse culture shock' is a consider problem for Firm A UK. On average 100 repatriates re-enter the UK annually, including secondees and transferees (being re-employed). Firm A had no repatriation policy and didn't consider it to be problematic of staff returning home. But, in the context of work, the ISM reported that returnees have not only "got no idea what has been going on . who has left, who is still here", but may experience downward mobility, or demotion, on return. As the ISM pointed out

"Within our disciplines and firm, there are very clear career paths set out. Your career path is relevant to the country that you are working in, so if you go away and you are promoted we don't take that necessarily into consideration. What an overseas office might see as a senior manager or a partner, we may see as an assistant manager. So, what we try to do is work with years of experience, and when people come back to be fair, we ignore the titles that have been received overseas, When you are dealing with somebody who has been away from the UK for three years you have to bear in mind that they haven't necessarily had the experience of their home office for some time..."

Firm A UK also encourages staff who wish to stay on an international secondment for more than three years to become 'localised', and contractually, become naturalised as host-county nationals (i.e. no longer expatriates). This is purely a cost cutting exercise to reduce the direct and indirect costs of repatriating after three years or more. Staff on assignment under the banner of the International Transfer Programme have no guarantee of a post on return to the home office, so they have to apply for vacancies at home prior to the end of their expatriate contract. The ISM reported no problems of repatriation with International Transferees. As for spouse and family adjustment, the ISM made no comment, as the firm was only interested in the well being of the seconded employee.

As Firm B GCI guarantee re-employment of their international assignees on the expatriate programme, the IHRCSM perceived that the bank had no problem with adjusting their personnel on re-entry to London. In contrast, the IHRCSM suggested that expatriate failure rates were much more serious than repatriation. He suggested that "half the assignments finished early" because "guys" were "either approached by another bank, which is quite frequent" or "made redundant" in the receiving office (which happened during the east Asian financial crisis).


So far in this paper, at one level the discussion has focused on the 'Expatriation Business', drawn from the in-depth theoretical and empirical studies of IHR specialists. On another level the analysis has investigated the 'Business of Expatriation' within two advanced producer service firms. In this section of the paper the major facets of the IHR literatures (on organization strategy; selection and training; adjustment; gender relations; dual-careers; and repatriation) will be re-evaluated in light of the organisational experiences of expatriation within the two case study TNCs (Table 1).

Organisational Strategy

As has been discussed previous, the IHR guru's make it very clear that expatriation is an important function of the organisation's globalization business strategy. Expatriation is used by organisations as a mechanism to staff offices, give employees international experience in situ and fulfil the organisational development of the firm. Evidence from the two firms studied supports all of the major evidence presented by the IHR literatures on the expatriation business. From a review of the two case studies, six major points can be made regarding expatriation organisational policy. First, both Firm A UK and B GCI posted staff on international assignments to transfer-skills across national boundaries, for particular managerial and administrative purposes. Second, with respect to posting staff as part of international management development programmes, it was only Firm A UK which executed this expatriation policy. As Firm A was a global accountancy group, with a very comprehensive international office network, international management development programmes were used as an integral human resource strategy for professional staff (see Beaverstock, 1996a). Firm B GCI did not operationalise international management programmes as all assignments were driven by staffing or organisational development requirements. Third, both Firm A UK and GCI expatriated staff for organisational development purposes in international locations. Expatriation was used to fill skill shortages in particular fee-earning or support (e.g. information technology) functions. Fourth, only Firm B GCI used Third-Country-Nationals and these were an historical expatriation legacy of a bank which they had recently acquired. Given TCNs relatively high costs, Firm B GCI were seeking to reduce their role in future years. Fifth, both firms executed standard expatriation policies within the global firm to define different sorts of expatriate posting, regulate flows, time-scales and to ensure equitable remuneration, relocation and dislocation packages between individuals, tasks and locations. Firm A UK had its International Secondment and International Transfer policies. Similarly, Firm B GCI had a very sophisticated expatriate policy, consisting of six elements: Expatriate, Development Transfer, Volunteer Expatriate, Globally Mobile Staff, International Staff Exchange and Short Term Assignment. Finally, expatriation was much more precarious for the accountant than the banker. Firm A UK's International Transfer policy does not guarantee a job on return to the UK, but all of Firm B GCI's policies re-employees staff on return to the sending location.


From a review of the IHR literatures, two bi-polar selection procedures operate within organisations: the open 'selection'; and the closed coffee-machine system. But, the common denominator of both systems is that staff are recruited because they have the appropriate technical competence and expertise to fulfil the job description. Firm A leans more towards the open selection system, as describe by Brewster (1991) and others (see footnote 3) (Table 1). Firm A advertises vacancies, requires application forms to be completed, interviews and undertakes varies testing procedures. In contrast, Firm B's selection process is closed. Potential expatriates are identified by word and mouth, or by recommendations from superiors, thus reinforcing the coffee-machine system and gender bias in expatriation, but all are selected on their technical expertise and 'ability' for the job.

Expatriate Training

Of the seven major fields of expatriate training programme illustrated in table 2 (Tung, 1981), both Firm's offered specialist in-house expatriate training for employees. But, the major emphasis of such training was on planning the logistics of the assignment (e.g. visa requirements, remuneration equalisation). For area, cultural and language training both firms sub-contracted out such functions to specialist consultants. Firm A UK used the Centre for International Briefing (Farnham Castle) and B GCI the consultants, Employment Conditions Abroad Ltd. Firm A UK, however, made no effort to prepare expatriate staff for the organisational culture of their new workplace, while B GCI made such provision, and extended its training provision to include spouses where appropriate. Accordingly, then, unlike the findings of Black et al. (1992) and others (e.g. Torbiorn, 1982) which reported the sparse provision of expatriate training within TNCs, both of these studies illustrated comprehensive training provision. This research illustrates that the firms' success at training expatriates are facilitated more by the fact that they sub-contract to specialist consultants rather than the desire to undertake such tasks in-house.

Expatriate Adjustment

Both the IHR literature and research findings from the firm studies indicated that TNCs are particularly slow to provide comprehensive adjustment training to expatriates (and their dependants) once the assignment has begun. Firm A UK and B GCI provided adjustment training for their employees pre-departure, which in-house focused on the logistics of the move, and through consultants was concerned with area and cultural training (as discussed earlier). Once the employee left London, both firms effectively washed their hands of any responsibility, and any local training, mentoring and appraisal became the responsibility of the host office. Both firms used 'local' staff to monitor the performance of expatriates, who were usually line-mangers. However, their role was to manage adjustment rather than to counsel or mentor. All problems associated with relocation packages (Firm A's - Peer Group Package, or Firm B's Living Standard Protection) were negotiated with local Personnel. But, firm G GCI did offer limited training to working spouses. As with the findings of the IHR specialists (e.g. Tung, 1998), both firms provided very little, if any, adjustment counselling for spouses, and those expatriates with families. Relocation specialist were used to recommend accommodation and schools, but firms took no active involvement in helping expatriate households adjust to their new cultural environment.

Gender, Dual-careers and Repatriation

The research findings on gender and expatriation within the two case study firms reinforced the view that women faced organisational discrimination in skill international migration (e.g. Adler, 1994), and financial services in general (McDowell and Court, 1994). Firm A UK was much more proactive in the recruitment of women expatriates than Firm B GCI, and the rationale for this can be traced back to Firm A's relatively open selection system for expatriates. Firm B GCI had no expatriate females working out of London. Their expatriates were constantly referred to as "guys" (by the IHRCSM) and were selected in London in a covert fashion (the coffee machine). In a similar vein, both firms did not execute a cultural adjustment programme for spouses (usually wives), and especially those with professional careers; the so called dual-career couples.

As with the findings of the IHR literatures, both firms had no corporate policy directed at repatriation. Despite the adjustment problems highlighted in Foster's (1994) study in particular (see table 5), and especially those repatriates concerned about career development and employment prospects on return, neither of these firms had policy, mentors or counsellors available to ease the process of repatriation. Moreover, the precarious aspect of repatriation was shown very clearly in Firm A, where those staff who left the UK, or any other sending office on an international transfer had no guarantee of a job on return. Equally, those staff who did return with the guarantee of employment could experience career demotion, as their previous managerial position in the host firm may not exist back in the sending office. Consequently, repatriation in both firms was completely neglected in the expatriation process.


In this paper, the main focus of the discussion has been directed at the theoretical and empirical contributions of organizational studies, and in particular, international human resources in advancing geographers' understanding of expatriation within the corporate world. Equally, the paper has highlighted the expatriation policies of two advance producer service TNCS, and illustrated quite clearly the gulf that exists between the IHR academic studies on expatriation and the practice of TNCs (especially in the areas of expatriate adjustment, dual-careers and repatriation). Three wider conclusions can be drawn from this empirical study. First, as with all the studies in the IHR literatures, this study has shown that TNC expatriation policies are very limited. Firm's direct all resources towards their employees, but these are quite limited in scope, as they usually consists of extensive logistical training pre-departure and the use of specialist consultancies for area and cultural training, and cost of living research. TNCs do not adequately, if at all, provide the expatriate household with adjustment training, and assistance with career spouses and the process of repatriation. Second, expatriation is a male business. From selection to posting, the IHR literatures and two case study firms show that expatriation is 'jobs for the boys.' But, what is very concerning about this trend, is that one of the firms studied (B GCI) is blind to their gender bias, and even within Firm A no positive recruitment strategies have been put in place to increase the number of women on international secondments or transfers. Third, expatriation is now firmly part of a firm's globalization strategy. Expatriation is no longer executed by firm's as a perk of the job. Instead, expatriation is a strategic organisational policy to manage offices, develop careers and extend business opportunities in foreign locations. Professional staff within advanced producer service firms are expected to be internationally mobile and the expatriation process is the key to that mobility.

In the near future, expatriates will remain an important organisational strategy for the TNC. It is becoming increasingly argued however, that their function will become much more strategically orientated towards trouble-shooting and project work rather than managerial activities. Consequently, expatriate assignments will become much shorter in duration, but much more frequent as professionals undertake many more short-term tasks, rotations and cross-national boundary commuting.10


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* . This research has been funded by the Economic and Social Research Council's Transnational Communities Programme project 'Embeddedness, Knowledge and Networks: British Expatriates in Global Financial Centres' (Award No. L214252001). The research assistantship of Dr. James T. Boardwell is also acknowledged. Abridged versions of this paper have been presented at the: 'New Patterns, New Theories: A Conference on International Migration', Nottingham Trent University, 11-13 September 2000; and 97th Association of American Geographers Annual Conference, New York, February 27 - 3 March.

1. For example, the International Journal of Human Resource Management was established in 1989; Human Resource Management Review in 1990.

2. See for example: Adler, 1993; Baliga and Baker, 1985; Brewster, 1991; Brewster and Pickard, 1994; Dowling et al, 1994; Harris and Brewster, 1995; Scullion, 1994; Menhenhall and Oddou, 1995; Tung, 1981, 1982, 1987, 1988a-b).

3. See for example Baker and Ivancevich, 1971; Bjorkman and Gertsen, 1990; Brewster, 1988; 1994; Guptara, 1986; Harris and Harris, 1972; Lanier, 1979; Mendenhall and Oddou, 1986; Rahim, 1983; Schwind, 1985; Tung, 1981).

4. See for example Brewster, 1994; Brislin 1981; Landin and Brislin, 1983; Mendenhall and Oddou, 1986; Schind, 1985).

5. See for example: Adler, 1984; 1987, 1994; Adler and Izreali, 1987; Caligiuri et al, 1999; Caligiuri and Tung, 1998; Davison and Punnett, 1995; Forster, 1999; Harris, 1995; Harris and Harris, 1988; Jelinek and Adler, 1988; Kirk and Mandox, 1988; Punnett et al, 1992; Westwood and Leung, 1994.

6. Smith's (1997) analysis of the highest ranking corporate positions in Fortune 500 companies found that only 2.4% were female.

7. See for example Harvey, 1998, 1999; Handler and Lane, 1995; Punnett et al, 1992; Stephens and Black, 1991.

8. See for example Adler, 1981; Black, 1992, 1994; Cagney, 1975; Johnston, 1991; Harvey, 1982; Hazzard, 1981; Howard, 1974; Stroh, 1995.

9. Interview undertaken in July 1993 with the firm's International Secondment Manager, London.

10. PwC examined 24,400 assignments in 82 TNCs and found that the vast majority were short-term postings for strategic business tasks (PwC, 2000).


Table 1: Common selection criteria for high-qualified expatriates in the United States, Europe and Scandinavia
(ranked in order of importance 1=highest)

United States

Selection criteria


Selection criteria


Selection criteria


1. Demonstrate performance in similar job

1. Technical expertise

1. Technical or other professional qualities

2. Direct knowledge of the particular job

2. Language

2. Previous achievements

3. General competitiveness and grasp of problems

2. Family support

3. Motivation

4. Leadership skills, ability to command respect

3. Managerial potential

4. Managerial talents

5. Administrative skills

4. Knowing company systems

5. Independence

6. Willingness to accept overseas assignment

5. Experience

6. Communication talents

7. Knowledge of the company

5. Marital status

7. Language skills

8. Reputation

6. Medical status

8. Ambition and commitment

9. Willingness to accept the responsibility of the job

6. Independence

9. Flexibility

10. Past performance in overseas assignment

6. Motivation

10. Adaptability of the family

11. Potential for more responsible position


12. Spouse's attitude to assignment


13. Ability to work with foreign employees


Source: Miller (1973) (United States); Brewster (1991) (Europe); Bjorkman and Gertsen (1992) (Scandinavia)


Table 2: Frequency of Training Programs Used for Each Job Category in US, European and Japanese Samples (%)

Job Category


Functional Head

Trouble Shooter


Training Programs













Environmental briefing













Cultural orientation













Cultural assimilator













Language training













Sensitivity training













Field Experience













Source: Tung (1987)


Table 3: Determinants of Adjustment to International Assignments

Job Factors
Role clarify (1)
Role discretion (1)
Role conflict (1)
Role Novelty (1)

Organizational Factors
Supervisor support (1)
Co-worker support (1)
Logistical support (2,3)

Non-Work Factors
Culture Novelty (2,3)
Spouse Adjustment (1,2,3)

Individual Factors
Achievements of self-efficacy (1,2,3)
Previous assignments (1,2,3)
Language fluency (1,2,3)


KEY: Expatriate Adjustment
(1) Work
(2) Interaction
(3) General

Source: Shaffer et al., (1991)


Table 4: Coping Mechanisms



Learning more about host country, including language


Socializing with host nationals


Spending more time with ones family


Communicating with family and friends back home


Socializing with other expatriates


Occupied with sports and athletics


Keeping busy with work all the time


Engaging in stress relieving activities, such as consume alcohol


Mean scores are based on 5-point scale, 5=strongly agree

Source: Tung (1998)


Table 5: The Principal Concerns of Expatriate Staff Returning to the UK


% reporting being 'extremely' or 'very' concerned

1. problems of career/employment


2. changes in standard of living


3. performance in current job


4. relationships with colleagues


5. evaluation of work by influential people in the organization


6. adapting to life back in the UK


7. support from the company after returning to the UK


8. disruption to home/family life


9. buying/selling houses


10. relationship with boss


Source: Forster (1994)


Edited and posted on the web on 14th March 2001