The Role of Expatriation in the Context of Managing Diversity in International Organizations
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The Role of Expatriation in the
Context of Managing Diversity in
International Organizations
Die Rolle von Expatriation im Kontext von Managing
Diversity in internationalen Organisationen
Daniel H. Scheible Abstract (English)
Daniel H. Scheible is a Pro- Today’s international organizations are characterized by a high level of diversity.
fessor of Business Adminis- Work teams consist of people with a variety of experiences, abilities, cultural and ethnic
tration and Intercultural backgrounds. Expatriates enhance this range of diversity. The paper at hand examines
Competence at Rhine- which role expatriates and the management of expatriation play in terms of managing
Waal University, Germany. an organization’s diversity. For this purpose, a literature review has been conducted
He holds a PhD in Eco- and the findings have been contrasted with the results of an exploratory survey in a
nomics from Witten-Her- multinational corporation.
decke University. Besides
research and teaching, he In the academic discourse, expatriation management and diversity management
works as a consultant and have been separated areas so far. There are a few studies on expatriation which exa-
trainer mine diversity-related aspects. In managing diversity literature a few studies could be
identified which mention expatriation. But no study examines the intentional usage of
expatriation as an instrument to actively manage diversity. When aligning these results
with the empirical findings of the above mentioned survey, it becomes apparent that
expatriates and human resource practitioners do not see diversity and expatriation as
an integrated concept, too.
These results seem surprising since organizational learning, based on the variety of
individual experiences, traits, and qualifications, is the basis of both expatriation and
diversity management. The conceptualization of an integrated approach appears to be a
promising task for further research.
Keywords: expatriation, diversity management, human resource management, organi-
zational learning, international organization
Abstract (Deutsch)
Internationale Organisationen weisen heutzutage einen hohen Grad an Diversität auf.
Arbeitsgruppen bestehen aus Menschen mit einer Vielfalt von Erfahrungen, Fähigkei-
ten, kulturellen und ethnischen Hintergründen. Expatriates erhöhen diese Vielfalt. Im
vorliegenden Artikel wird daher die Rolle von Expatriates und des Managements von
Expatriation im Zusammenhang mit dem Management von Diversity in der Organi-
sation untersucht. Zu diesem Zweck wurde ein Literaturreview durchgeführt, dessen
Ergebnisse mit den Ergebnissen einer explorativen Studie in einem multinationalen
Unternehmen abgeglichen wurden.
87Expatriation Management und Diversity Management sind im akademischen Dis-
kurs bislang getrennte Gebiete. So werden nur in ein paar wenigen Studien zu Ex-
patriation Aspekte genannt, die einen Bezug zum Diversity Management aufweisen.
Auch in der Literatur über Diversity Management finden sich nur wenige Studien, in
denen Expatriation thematisiert wird. Expatriation als bewusst eingesetztes Mittel zur
aktiven Steuerung von Vielfalt wird jedoch in keiner Studie beschrieben. Gleicht man
dies mit den Ergebnissen der erwähnten empirischen Untersuchung ab, wird deutlich,
dass auch in der Unternehmenspraxis weder Expatriates noch Personaler Diversity
und Expatriation als integriertes Konzept ansehen.
Diese Ergebnisse überraschen insofern, als dass organisationales Lernen, welches auf
der Vielfalt von individuellen Erfahrungen, Eigenschaften und Qualifikationen be-
ruht, die Grundlage für Expatriation Management wie auch Diversity Management
ist. Diese beiden Ansätze konzeptionell miteinander zu verbinden, erweist sich somit
als lohnenswertes Feld für weitere Forschung.
Stichworte: Expatriation, Diversity Management, Personalmanagement, organisatio-
nales Lernen, internationale Organisation
1. Introduction employees who are sent abroad are
called expatriates or in short ‘expats’
International organizations are charac- (Luthans / Doh 2009:469). That termi-
terized by high levels of diversity. The nology is not without problems since it
drivers of diversity within organiza- remains in the ethnocentric tradition of
tions are manifold. Among others, Cox international human resource man-
(1994:3) identified the development of agement: Employees are expatriated,
population demographics and the in- which means that they are sent abroad
creasing need for immigration in many – from the headquarters’ perspective.
industrial countries as a driver. 20 years But today’s international organizations
later, OECD data distinctly show that need managers and experts who are
international labor migration is a key not “limited to managing relationships
source for many of these countries in the between headquarters and a single for-
attempt to maintain their workforces eign subsidiary” (Adler/Bartholomew
(OECD 2015:22). On the other hand, 1992:53). International assignments are
intra-organizational circumstances no one-way processes nowadays, they
foster diversity. More and more op- happen between all the different entities
erations are organized in projects with and in different ways, as the PwC report
multidisciplinary project teams (Larson “Talent mobility 2020 and beyond”
/ Gray 2014:3). And in international reveals (PwC 2012:11f.). Nevertheless,
organizations, team members may the term ‘expatriate’ is so common that
belong to various parts of the organi- it is used in the following text, too.
zation, located in different countries.
So far, it is evident that expatriates raise
These arrangements vary from virtual
the level of cultural diversity in the
team work via electronic media over the
work teams they join. It is simply a con-
involvement of short-term business trips
sequence of their presence. But do ex-
on a mutual basis up to assignments of
patriates actually contribute to diversity
members from other locations for the
beyond this passive role? Which role
entire duration of the project (PwC
does expatriation play when it comes to
2012:12).
systematically managing diversity in an
international organization?
Indeed, these cross-border assignments
are a frequently used instrument in
international organizations. In the 2. Research design
terminology of international human
resource management, this phenom- In the attempt to shed some light on
enon is known as ‘expatriation’ and the role of expatriation in the context of
88 interculture j ourna l 16/27 (2 0 1 7 )managing diversity, a two-tier research All these aims have in common that
strategy has been applied. On the one expatriation is first of all used in the
hand, a literature review has been car- attempt to achieve unification in form
ried out to investigate how the phe- of a unified worldwide strategy, the ap-
nomenon of expatriation is discussed plication of the same technology in all
in diversity management literature plants at home and abroad, the devel-
and – vice versa – in which way aspects opment of a cadre of junior managers
of managing diversity are addressed in across national boundaries, etc. This is
the scientific discussion about expatri- in line with traditional managerial con-
ate management. On the other hand, cepts of achieving economies of scale
findings of an empirical study (Scheible and improving efficiency by increasing
2015) have been used. the size of an operating unit. At first,
diversification seems to be contradic-
tory to these concepts. On the other
3. The literature review hand, a few studies on expatriation have
addressed aspects of managing diversity
3.1. Methodology of the in recent years.
literature review
Kooskora and Bekker (2007) focused
A systematic literature review has been on gender diversity and asked why
conducted. By filling the entry masks the number of female expatriates was
of the relevant databases with ‘diversity significantly lower than the number of
management’ AND ‘expatriation’ (and male expats. But they did not go beyond
related terms), only a few hits could be the examination of the phenomenon.
identified. The analysis of these hits led Expatriation has not been put in the
to the inclusion of 13 journal articles. context of managing gender inequality
Nevertheless, it is worth having a closer in international organizations, yet. The
look at both spheres, the diversity man- same is true for an article by Scullion
agement discourse and the expatriate and Brewster (2001), in which informal
management discourse, as well as their barriers for women in international
overlaps. management such as prejudices and a
lack of networking facilities (Scullion /
Brewster 2001:353) are mentioned, but
3.2. Findings from the
both spheres – managing expatriation
literature review and managing diversity – are not inter-
3.2.1. Aspects of diversity in the linked. McEvoy and Buller (2013:216)
context of expatriate management stated that “today’s dual-career couple
environment” might be a problem when
Authors started to describe expatriation, it comes to getting potential expatriates
its reasons and its outcomes as early as to accept foreign assignments, but again,
in the 1970s (e.g., Edstrom / Galbraith a constructive management of dual-ca-
1977). The reasons most often men- reer issues is not addressed any further.
tioned for the application of expatria-
tion are allocation and coordination Besides those diversity-related aspects
between headquarters and international of managing expatriation, another
subsidiaries, the transfer of techno- direction of studies has appeared in
logical and managerial know-how, the the field of expatriation management:
implementation of strategies, organiza- the examination of the effectiveness of
tional development, and the aim to in- expatriated and repatriated managers.
fluence the corporate culture (Edstrom Bolino (2007:819f.) found that there
/ Galbraith 1977, Hocking / Brown / is a body of studies which suggest that
Harzing 2007, Perlmutter 1969, Selmer managers with expatriate experience
1995). Expatriates implement elements are more effective at managing multina-
of the headquarters’ base of knowledge tional corporations (MNCs) than those
by establishing routines and processes without such an experience. Experiences
in the subsidiaries abroad and training gained in subsidiaries abroad have an
their colleagues there. impact on expatriates’ behavior over
89the long run (Auh / Menguc 2005:257, within the organization and ensure that
Saka-Helmhout 2007:305). So, the aim no single management group dominates
of improving leadership performance others” (Bartlett / Ghoshal 2002:76). If
can be addressed by diversifying the the right balance of beliefs and compe-
group of top managers by means of a tencies is established, the institutional
targeted expatriate management. The context allows for changes towards
management team undergoes a develop- favorable practices and routines (Saka-
ment towards a culturally diverse group Helmhout 2007:295).
of people who bring in their interna-
tional experiences for the benefit of the 3.2.2. Aspects of expatriation in
organization (Doherty / Dickmann the context of diversity manage-
2009:311). ment
Today’s diversity management ap-
What may speak against this concept of proaches first of all base on the as-
managing diversity by means of expatri- sumption that organizations can
ation is the fact that many expats leave create a competitive advantage by using
their organizations within a short pe- manifold knowledge and experiences
riod of time after their return. Research of different people in the organization
has found that one out of four expat in a synergetic and effective way (Cox
managers quits his/her job within one 1994, Gardenswartz / Rowe 2008).
year of repatriation (van der Heijden / The arguments that properly managed
van Eugen / Paauwe 2009:831). This heterogeneity can lead to enhanced
is usually seen as a failure of expatriate creativity and innovation, to a higher
management. But McEvoy and Buller level of employees’ commitment, and
(2013:219) reply: “[I]t could be consid- consequently to a higher performance
ered a success if the repatriate transfers of the organization (Bassett-Jones 2005,
useful explicit and tacit knowledge Ely / Thomas 2001) are largely accepted
gained back to the parent company even today – in organization development as
if the individual eventually takes his/ well as in human resource management.
her new skills and knowledge to another In fact, this business case argument has
organization that perhaps values it more widely replaced the former rationale of
highly.” In return, managers with expat managing diversity for moral reasons
experience from other organizations can such as avoiding discrimination (Tatli
be attracted so that the intended range 2011:242). Nevertheless, aspects like
of experiences in the management team legitimacy and fairness still play an im-
can be developed. However, Harvey portant role – especially when it comes
and Moeller (2009) see some limita- to legal requirements under the various
tions of this concept since “[t]here may anti-discrimination acts in an increasing
be a maximum number/percentage of number of countries these days (Nishii /
‘outsiders’ and/or foreigners that will be Özbilgin 2007:1883).
acceptable in the organization” (Harvey
/ Moeller 2009:278). When asking which role expatria-
tion plays in this context, little can be
With the focus on effectiveness in found. Nishii and Özbilgin (2007) have
global context, expatriate management developed a conceptual framework for
leaves the ethnocentric attitude. Interna- global diversity management. One ele-
tional assignments are no longer one- ment of the framework is the develop-
way transfers of concepts and know- ment of global competencies under
how; they become an instrument for which international assignments are
organization development on a mutual listed as an instrument for “systematic
basis, characterized by a high level of in- talent development” (Nishii / Özbilgin
tegration and strong ties between all the 2007:1887). It is acknowledged that
locations of the organization (Bartlett international assignments are a highly
/ Ghoshal 2002:72ff.). But Bartlett effective means of developing global
and Ghoshal also stated that: “[Man- competence, but considering the costs
agement] must be able to balance the of these assignments, it is stated that the
diversity of perspectives and capabilities instrument should be applied only se-
90 interculture j ourna l 16/27 (2 0 1 7 )lectively (Nishii / Özbilgin 2007:1888). all-embracing diversity management
Apart from this, the article does not approach, but at least, organizations
discuss international assignments any have to meet the relevant legal require-
further. ments. Both spheres deal with manag-
ing knowledge, enabling people with
One study that combines diversity specific characteristics and experiences
management and expatriation was con- to enter new environments in which
ducted by Lauring (2013). The author their abilities can be used productively.
examined how far diversity manage- So, why is there no systematic research
ment standards of a MNC’s headquar- on how to integrate both management
ters are conflicting with the expatriation activities? And if there is no research,
realities in its oversea subsidiaries. So, in does this mean that practitioners do not
this study expatriation is not considered try to combine both fields?
as a tool of diversity management but as
an instrument of international human In the attempt to shed some light on
resource management which makes the these questions, a first exploratory study
application of diversity policies chal- has been conducted and its findings
lenging. In the examined case, Scandi- shall be briefly summarized here (for a
navian expats filled executive positions more comprehensive presentation cf.
in a Saudi subsidiary of a Scandinavian Scheible 2015).
MNC. The author describes the study
as an extreme case since he identified a
4.1. Methodology of the
lot of conflicts between the corporate
diversity management strategy and the
empirical study
legal and social realities in the subsid- In an international mechanical engi-
iary company (Lauring 2013:212). neering company both current ex-
Interesting when examining the role of patriates and human resource (HR)
expatriation in the context of managing managers have been interviewed with
diversity is the finding that expatri- the purpose to evaluate whether the
ate managers have little incentive to foundation of expatriation manage-
commit to the headquarters’ diversity ment in a comprehensive diversity
policies as long as the evaluation of their management approach is thinkable
success is mainly based on the financial and implementable. The examined
performance of the subsidiary they organization with its 100+ years of
manage (Lauring 2013:217f.). history is headquartered in Germany
and internationalized early. The past
As a conclusion of this part of the
decades have been characterized by a
literature review, it can be stated that
multitude of international acquisitions,
challenges of an international roll-out
joint-ventures, mergers, and demerg-
of diversity management have been
ers. Today, the company has got around
discussed in a few articles. But no study
22,000 employees worldwide. Besides
examines the intentional usage of
Germany, main production plants are
expatriation as an instrument to actively
located in Brazil, China, France, India,
manage diversity and implement di-
Italy, the UK, and the USA. Expatriates
versity management policies across the
have been assigned whenever a technical
subsidiaries abroad.
demand occurred. Policies concerning
the management of such international
4. An exploratory assignments have been in place, but a
empirical study strategic approach of expatriate man-
agement in order to develop employees
The findings from the literature review and the organization has been missing.
are remarkable. International organiza- Aspects of managing diversity have
tions make use of international assign- been addressed in order to meet legal
ments – some more, some less. Thus, requirements and corporate governance
there is a need for managing expatriates. concerns, but no integrated diversity
The same is true for managing diver- management approach has been devel-
sity. Not every organization has got an oped.
91Cohort Numer of respondents
Australian Chinese Czech French British US Total
subsidiary subsidiary subsidiary subsidiary subsidiary subsidiary
Expatriates 1 3 2 3 2 3 14
HR managers 1 1 1 1 1 1 6
Total 2 4 3 4 3 4 20
Tab. 1: Conducted interviews
The data were gathered in semi-struc- a face-to-face basis. On the other hand,
tured interviews with 14 expatriates one expat described a situation where
and six HR managers of the company. misunderstandings based on cultural
The interviewees were located in six differences led to unfavorable circum-
subsidiaries of the company in Austra- stances. When applying evidence from
lia, China, Czech Republic, France, the the field of diversity management to
UK, and the USA. Their distribution this instance, it can be concluded that
is shown in Table 1. 13 expats held forming a productive team, consisting
executive positions, one was a project of people with diverse backgrounds,
member. requires facilitation (Gardenswartz and
Rowe 2008). In many cases, expats may
All interviews were conducted via be able to assume the role of being fa-
telephone. The questions covered cilitators. But if differences between the
aspects of the expatriation process and expat and other team members cause
its management, the role of expatriation trouble, a third party is needed.
in the light of cooperation and com-
munication across various sites, percep- When asked about their role as facilita-
tion and appreciation of colleagues in tors of international cooperation and
subsidiaries, and the interrelation be- communication within the company,
tween expatriation and human resource the number one topic among respon-
development. After transcribing, struc- dents was language. Most of both expats
turing, and comparatively analyzing the as well as HR managers expressed the
interview records, the results were cross- opinion that improving the command
checked by one of the HR managers of English as a lingua franca in all parts
working in the central HR department of the enterprise may help to form a uni-
at the German headquarters. fied global entity and a strong corporate
culture. A German expat in France
called it “a real team”, a Czech HR man-
4.2. Findings from the ager wanted to develop “a common in-
empirical study ternational identity”. In order to achieve
this goal, he suggested: “Send more
Expatriates as well as HR managers employees from the [company]’s sites
described expatriation as an important worldwide to [location of headquarters]
means for international cooperation and so that these people get the chance to
organization development. Aspects like get to know the headquarters.”
the development of a global identifi-
cation with the company, becoming Additionally, several interviewees
acquainted with colleagues from the requested the provision of enhanced
other sites, sharing experiences and communication facilities. From those
passing on knowledge were most often aspects can be concluded that for the
mentioned. It is an interesting finding majority of interviewees standardization
in this context that cooperation signifi- is the clue to effectiveness in interna-
cantly improved in most cases, simply tional cooperation. Appreciation of
by having the exchange with expats on differences among and within the dif-
92 interculture j ourna l 16/27 (2 0 1 7 )ferent subunits of the organization was contributions of a culturally diverse top
to a large extent out of the respondents’ management team. On the other hand,
awareness. For example, it was men- the discussions about these topics often
tioned in some interviews that interna- remain in the ethnocentric tradition of
tional meetings are held in German or the expatriation management concept,
French sometimes – if all participants e.g., when questions like ‘how many
agree. However, this was not seen as foreigners may be accepted by the staff ’
a resource but as a ‘disturbance’ of an (Harvey / Moeller 2009) are discussed.
all-embracing company communication Modern diversity management ap-
in English. proaches could clearly deliver their con-
tribution when answering these kinds of
On the other hand, individual reports questions. Developing trust, eliminating
delivered a few hints that differences do dominance, and directly addressing
matter when it comes to expatriation. and openly discussing issues based on
One expatriate reported for example different cultural backgrounds may help
that due to his special position of being to overcome these acceptance problems
an expat, changes in the subsidiary he (Thomas / Ely 1996:13).
was stationed at could be implemented
more effectively. This shows that From a theoretical point of view it
advantages stemming from a variety can be said that the idea of organiza-
of individual employees are implicitly tional learning, based on the variety
recognized. of individual experiences, traits, and
qualifications, is the basis of both
Among HR managers, the belief that
concepts – the systematic assignment of
expatriation positively influences the
expats to foreign subsidiaries as well as
organization’s development was widely
the purposeful management of diver-
spread. All respondents out of this
sity. The similarity of the underlying
cohort wanted to foster international
paradigms has been growing with the
assignments and further develop instru-
increasing shift from fairness and legiti-
ments for doing so in a structured man-
macy aspects towards performance and
ner. On the other hand, this approach
innovation issues in managing diversity
faces some constraints when executives
(‘the business case argument’; cf. Tatli
in subsidiaries fear to lose talent – an as-
2011). Bartlett and Ghoshal (2002)
pect that can be found in the statement
addressed this link in their seminal
of a UK-based expat who mentioned
book ‘Managing Across Borders’ when
that “the different organizations don’t
they mentioned that the right balance
want to lose their good people”.
of perspectives and capabilities must be
found in the organization (Bartlett /
5. Discussion and conclu- Ghoshal 2002:76). However, this aspect
sions of their concept has resonated neither
with expatriation literature nor with
The literature review has shown that managing diversity literature.
the diversity of an organization’s staff
has been addressed when it comes to But what about the praxis? Which role
expatriation. Especially the dimensions does expatriation play in the context of
‘gender’ and ‘nationality/ethnicity’ (cf. managing diversity in an international
Gardenswartz / Rowe 2008:33) are dis- organization? The study at hand can
cussed. But no attempt to integrate both only deliver first hints. The exploratory
expatriation and the management of di- research design is not suitable for a
versity could be detected. A comparison comprehensive answer of this question.
of various articles has revealed a state of Nevertheless, the findings allow the
disruption. On the one hand, the mul- conclusion that expats not only increase
titude of possibilities for international the diversity of work teams in subsidiar-
assignments is acknowledged and the ies (this can be interpreted as a passive
need to actively support employees who role); they also play an active part when
are underrepresented in the group of facilitating the cooperation of employ-
expatriates is seen as well as the positive ees across different sites. In the study,
93neither expatriates nor international higher number of different perspectives
HR practitioners saw expatriation prac- may deliver a more complete picture
tice in this light. They did not have the of the expectations towards the role
intention to exploit the diversity of their of expats in managing diversity. But
organization as effectively as possible. very few studies have systematically
A majority in both cohorts regarded combined different perspectives so far.
differences and variations more like an The perspective of local HR managers
obstacle for effective cooperation within in subsidiaries like in the study at hand
work teams and across work units. is widely neglected in research as well
as the perspective of so called third
This result may be biased due to the country nationals (McEvoy / Buller
fact that the examined organization is a 2013:214). But especially these ‘transpa-
highly engineering driven company in triates’ (Adler / Bartholomew 1992:54)
which the assumption that intense stan- are said to rapidly increase in number
dardization leads to optimal outcomes (cf. PwC 2012).
is popular. Nevertheless, it is surprising
since the respondents were experienced The implementation of the suggested
in situations of shifted contexts and integrated approach is challenging in
feelings of otherness. For those who are many ways. But two difficulties seem
engaged in diversity management, such to be especially critical: The scarcity of
a low level of appreciating diversity and resources in HR departments and the
its benefits among expats and HR prac- weak incentives of expats to commit to
titioners must be disappointing. How- and actively support their organization’s
ever, the analysis of the respondents’ diversity management policies due to
narratives has shown that expats put current compensation packages. As the
themselves into the role of an enabler empirical survey has shown, local HR
or change agent (sometimes uncon- practitioners are more than busy with
sciously). They saw positive effects of all the issues of operative expatriation
their otherness, but also limitations of management. As long as these day-to-
their effectiveness when they felt not ac- day concerns are not fully mastered,
cepted by colleagues. Providing support the conceptualization of an expatriate
in such a situation could be the domain policy, embedded in the overall diversity
of local HR managers in subsidiaries. philosophy of a company, remains diffi-
By applying established instruments cult (Scheible 2015:351). And concern-
of diversity management, expatriate ing the incentives, Lauring (2013:217f.)
effectiveness might be increased – an as- found that compensation mainly bases
sumption that requires further research. on the financial performance of the sub-
The fact that this link is not seen in HR sidiary which is managed by the expatri-
practice, suggests that the two spheres ate. This requires new concepts, too. So,
must be interlinked on a conceptual measures are needed which display suc-
basis. Embedding expatriation in an cesses at developing high-performance
organization’s diversity management ap- teams based on diversity. What is more,
proach – as Nishii and Özbilgin (2007) expats do not necessarily need to have
sketched it in their ‘conceptual frame- operative management responsibilities.
work of global diversity management’ If decisions about international assign-
– can be seen as an important step in ments were based on the individual
order to increase the management’s contribution an assignee could make
awareness of the potential contribu- to the team in the foreign subsidiary,
tions of expatriation to exploiting the the role of expats would surely change.
intended benefits of workforce diversity. They would no longer be considered
representatives of the headquarters who
As mentioned before, this study bases are expected to align the foreigners with
on a literature review and a first explor- the central doctrine but they would be
atory survey can merely be a starting regarded as teammates who are appreci-
point. The conceptualization of an ated for their special abilities and who
integrated approach should be accom- vice versa appreciate the abilities of the
panied by intense empirical research. A other team members on site.
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