International Managerial Staffing

International businesses use three types of executives to staff their foreign subsidiaries: home-country nationals (expatriates), host country nationals (locals), and third-country nationals. Using expatriates is costly for MNC's but expatriates are capable of moving from country to country and perform effectively. There are several advantages and disadvantages pertaining to which type of staffing is used.



The advantages of using expatriates are as follows: knowledge of the corporation's culture and management techniques, loyally to the corporation, influence at headquarters, easier to access the expatriates qualifications for the assignment, and maintaining the "foreign image." These advantages can and should be considered when choosing the correct staffing. However, there are disadvantages to using expatriates such as the expensive orientation programs that teach of the foreign country's culture. Smaller to medium sized businesses have difficulty providing the finances required for maximized success of their expatriates. These programs are very costly. The other disadvantages of staffing expatriates include the unfamiliarity of the foreign environment (laws, political processes, etc..), verbal and non-verbal communication problems, the inability to adapt to the foreign culture, not finding the best person for the job, and the expensive incentives to employ these highly qualified expatriates.



Using host-country locals is one of the alternative types of staffing for MNCs. The advantages of using host-country locals include: familiarity with the local environment, early productivity, knowing the local business subtleties, high level of "goodwill", and is usually less expensive than using expatriates. The disadvantages consist of: loyalty to their country rather than the company, the difficulty of finding the right person for the job, misunderstanding of the company's corporate culture, communication problems with home office, possible ulterior motives, weakness on dealing with government officials, and the expensive training and development programs.



The last staffing alternative is using third-country personnel or an expatriate from a different country. The advantages include additional source of personal, less costly, greater adaptability, and sometimes the better relationship of the third-country personnel to the host country. The disadvantages are potential weak relationships between third-country expatriate and host country, ulterior motives, and locals' preference of appointing their own citizens to managerial positions.

Selecting the appropriate staffing strategy relies heavily on country and company characteristics, staffing outlook, and percieved needs. Company characteristics can include ownership of foreign subsidiaries, technological sophistication, organizational structure, styles of management, and more. Country characteristics range from political stability to geographical location. These characteristics dictate what strategy should be used. Even after researching these characteristics there is room for failure. Many expatriates fail due to things such as culture shock. Culture shock can handicap communication with those native to the country resulting in possible failure in conducting business. After studying in China I can easily see the application of culture shock for new expatriates and the alienation that may come of it. There are numerous ways that an expatriate can fail. Another example is the appointment of women to managerial positions. Some countries still reject the idea of women in management, which is something that should always be considered when choosing a strategy.

All in all, there are many different aspects of staffing the right people that need to be addressed before implementation. As international managers, it is crucial to do just this to maximize the success of the MNC.