Global talent management and inpatriate social capital building: a status inconsistency perspective
Global talent management and inpatriate social capital building: a status inconsistency perspective
A recent analysis of the Fortune 500 list illustrates a trend that speaks to the strategic employment of foreign-born chief executive officers (CEOs) at leading global organizations based in the USA. This trend refers to the relatively embryonic staffing method of inpatriation which is concerned with the transference of ‘host or third-country nationals to the home-country organization [i.e. headquarter (HQ)] on a semi-permanent to permanent assignment with the intent to provide knowledge and expertise by serving as a “linking-pin” to the global marketplace’ (Harvey & Novicevic, 2004, p. 1176). While the traditional expatriation of HQ personnel to foreign subsidiaries continues to serve as a prominent and useful global staffing strategy, global organizations are simultaneously diversifying their pool of global employees (Mayrhofer, Reichel, & Sparrow, 2012) to meet the demands driven by the globalization of business. The mix of international assignment methods, beyond expatriation or home-country nationals, is felt with an increasing presence of host or third-country nationals at HQ locations (GMAC, 2014).
We argue that the staffing of inpatriates has reached momentum in global organizations, with over 10% of the Fortune 500 companies hosting representatives of foreign nations to reign as President and CEO. As of 2013, these CEOs carry passports reaching from Bangladesh to Bermuda, England to Egypt, Israel to Italy, Netherlands to New Zealand, Scotland to South Africa and many other countries in between. The trend of transferring foreigntalenttohome-countryorganizationshasnonethelessnotbeenrestrictedtotheCEOlevel or to US organizations; inpatriate presence is widespread and covers not only varying levels of management (Harvey & Buckley, 1997) but also country locations spanning across different stages of economic development. Royal Dutch Shell, for example, is a global organization that employs inpatriates with over 38 nationalities at its London HQ across several levels of management (Pechter, 1993). It is anticipated that the use of inpatriates will continuetogrowinthefuture,particularlyinEuropeanandinUS-basedglobalorganizations (Collings, McDonnell, Gunnigle, & Lavelle, 2012; Peterson, 2003; Reiche, 2011).
A grave concern however persists relative to the manner with which global organizations and academics interpret the role and effective management of inpatriates. In the most fundamental sense, inpatriates assume a role that goes beyond what expatriates have been able to accomplish thus far relative to knowledge transfer (Kiessling, Harvey, & Garrison, 2004; Li & Scullion, 2010; Reiche, 2011; Stein & Barbara, 2011). Inpatriates are knowledge transfer agents. To execute knowledge transfers, inpatriates need several forms of capital, such as cognitive capital (Murtha, Lenway, & Bagozzi, 1998), political capital (Harvey & Novicevic, 2004) and social capital (Kostova & Roth, 2003). Kostova and Roth (2003) suggest that social capital is necessary to generate connections across borders in order to perform boundary-spanning roles, and the knowledge inpatriates hold about their native country and subsidiary operations is intended for transfer to the HQ, under the condition that the subsidiary has greater proprietary knowledge (cf. Delios & Bjo¨rkman, 2000). This process is opposite to the logic applied to expatriate assignments, in which expatriates are transferred as part of a coordination and control strategy in global organizations (Edstrom & Galbraith, 1977).
The proper execution of a boundary-spanning role for inpatriates is dependent upon reaching commensurate social capital at HQ. Social capital concerns an actor’s (i.e. the inpatriate’s) structural, relational and cognitive networks (Putnam, 2000) present within a society such that it can function effectively, while inter-unit social capital is created by inpatriates linking their home- and host-country social capital to access previously unconnected knowledge resources (Reiche, Harzing, & Kraimer, 2009). If social capital at either the home- or host-country is not as developed as the other (or a grand imbalance exists), it can create a weak exchange of inter-unit intellectual capital (Reiche et al., 2009) and thus interfere with the development of inter-unit social capital (Kostova & Roth, 2003). Because HQ social capital is likely lacking for inpatriates (initially and potentially throughout the assignment if not addressed), we suggest that not only is the social capital at HQ weak, but because of that, it would appear that inter-unit social capital is weak also.
Social capital accumulation at HQ would appear to be problematic for inpatriates due to reasons of status differences, which are elaborated on further in the next section. The inpatriate and expatriate inherently have different perceived levels of status at the HQ and subsidiary locations, respectively. Status, or lack thereof, can subsequently reduce the impact an inpatriate may have on HQ decision-making. Arguably, attaining an elevated status can occur if an appropriate set of social capital is accumulated, while social capital is accumulated by breaking down the barriers to status inconsistency. In this paper, status inconsistency theory (Blair, 1977, 1994; Lenski, 1954; McGrath, 1976) guides our thinking in addressing the status barriers that can help or hinder inpatriates in translating social capital into a high-potential boundary-spanning role. As such, the first of our aims is to understand the extent to which status helps or hinders such boundary-spanning efforts. We link this discussion to an exploration of the types of social capital needed to achieve social capital at HQ to ultimately create inter-unit social capital.
The second aim builds on the idea that status incongruences must be managed by individuals and organizations alike. While the first aim spoke to the idea that inpatriates are responsible for developing (inter-unit) social capital, the second aims speaks to the idea that, at the organizational level, support is also necessary. The second aim therefore is linked to how organizational support, extended by the global organization in the form of global talent management (GTM) practices, can alleviate status incongruence to allow for social capital to be built.
Global talent management
In reality, there is no consensus or consistent definition of GTM; it is interpreted in multiple ways (Farndale, Scullion, & Sparrow, 2010; Preece, Iles, & Jones, 2013; Scullion, Collings, & Caligiuri, 2010; Tarique & Schuler, 2010). However, for the purpose of this paper we adopt the popular GTM definition by Scullion et al. (2010) which states that GTM ‘includes all organizational activities for the purpose of attracting, selecting, developing, and retaining the best employees in the most strategic roles (those roles necessary to achieve organizational strategic priorities) on a global scale’ (p. 106). GTM normally equates to around 10% of the workforce. Essentially, these are employees with a track record of high potential and high performance who have the capacity to have a disproportionately significant impact on the business. Based on this definition and assumptions, inpatriates could be perceived as those employees who fill strategic roles with high performance goals, which leads to knowledge transfer and knowledge sharing capabilities (Reiche et al., 2009).
GTM is really about attracting, developing and retaining an elite group of people that have the capacity to disproportionately impact the bottom line of global business (Tarique & Schuler, 2010). Fawcett, Huestis, Powe, and Shanks (2004), for example, has found that talented employees add significantly more revenue growth than the industry average by employing who they deem to be talented individuals. For that and other reasons, global competition for a classified, talented workforce is rapidly increasing (Sparrow, Brewster, & Harris, 2004).
There is a need for a globally mobile workforce to perform boundary-spanning roles that comes in the form of social network building and facilitation of old and newly generated knowledge necessary to support global organizations (Farndale et al., 2010; Stahl et al., 2012). Human resource departments play a critical role in building social capital beyond organizational boundaries (Lengnick-Hall & Lengnick-Hall, 2006). In fact, social capital of expatriates has been shown to be important for global talent in that building social capital can result in richer, more trustworthy and cooperative relationships that can lead to opportunities for knowledge sharing (Ma¨kela¨, 2007). The same relationship has yet to be explored in the inpatriate context, and given our arguments above, it is a vital gap yet to be explored. The literature proposes that the identification, development and retention processes of global managers is particularly ill understood for those globally mobile employees who present themselves to the global organization as high-value boundary spanners who can ‘successfully develop social capital in multiple cultural settings’ (Taylor, 2007, p. 337).
A ‘one size fits all’ approach to GTM does not work when inpatriates are amongst the global players, for reasons explained in subsequent sections. If the GTM infrastructure
only caters to expatriate then inconsistency in status is also experienced; global organizations must make inpatriates feel as though their assignment purpose is legitimate which in turn makes inpatriates more inclined to build social capital at HQ. It would appear then that the contribution to the human resource management literature lies in addressing how GTM infrastructure can/needs to be modified to fit inpatriates, such that it helps to alleviate perceived differences. As we explore in detail in the paper, the premise is that inpatriates, compared to locals or expatriates (i.e. non-inpatriates), lack congruence relative to their personal and professional status, but also due to a lack of congruence built by insufficient adaptation of an organizational support infrastructure through means of GTM practices that can help alleviate inpatriates’ difficulties in building social capital at HQ. The present state of literature and practice leads us to pose the following three principal questions (see Figure 1).
First, what is the role of status in the inpatriate’s ability to perform their duty as a boundary-spanner? Second, why do different types of social capital at HQ enable inpatriates to effectively contribute as boundary-spanners in global organizations? Third, how can organizational support systems, in the form of GTM practices, contribute to social capital creation at HQ to perpetuate consistent inpatriate boundary-spanning efforts?
The paper progresses as follows: first, we draw upon status inconsistency theory to better understand the premise that inpatriates lack congruence relative to their personal, professional and infrastructural status while on assignment at HQ. Second, we gauge the significance of structural, relational, and cognitive social capital in empowering inpatriates to embrace their boundary-spanning role. Third, we recognize the need for a GTM infrastructure that accommodates unique inpatriate social capital building needs. Finally, we make recommendations relative to future areas of research and practice that can influence the legitimacy of inpatriates at HQ.
Theoretical foundation for predicting status on inpatriate assignments
Status inconsistency is defined as occurring in a given environment when an individual is different (inconsistent) from others in the group on one or more status dimensions (i.e. age, race, religion, education level) (Lenski, 1954). Status inconsistency theory (SIT) is based upon the premise that individuals recognize a lack of congruence, or conflicting ranks among daily activities, which creates conflict between two or more individuals relative to their status traits. This lack of congruence (i.e. status consistency) can force individuals to become stressed (Bacharach, Bamberger, & Mundell, 1993). If the individual’s assessment of inconsistency is high enough, it can cause a reactionary or coping behavior which is illustrated by the formation of stress (Homans, 1974; Lenski, 1954). Greater degrees of difference between an individual’s former and current context, whether at the individual or organizational level, may make it difficult to adjust to the modified status of the individual in a new setting.
The premise of this paper is that inpatriates differ from the traditional expatriates in the manner and extent that they recognize and/or experience status inconsistency. In this vein, we suggest that the connection between the inpatriate assignment and its purpose (i.e. boundary-spanning) can be significantly impaired by status inconsistencies and thus contribute negatively/counterproductively to social capital creation/development at HQ. Table 1 summarizes the distinctions between expatriates and inpatriates, which we will now use to explore the discrepancies in status in order to draw tentative conclusions about inpatriates’ abilities to perform their duty as boundary-spanners while located at the HQ.
First, the inpatriate and expatriate have different perceived status at their respective locations. Expatriate managers transferring to a foreign subsidiary often have the status as a HQ representative,accompanied bythe position/perceptionof havingpower andexperience not to mention knowledge about the parent company (Harzing, Pudelko, & Reiche, 2015; Reiche, 2007). Whereas the inpatriate may not be accredited the same status regime, power and respect are likely to depend on the perceived importance of the subsidiary from which the inpatriate stems (Harvey, 1997). Second, power renders influence. The expatriate subsequently has more influence with HQ than the inpatriate manager. For example, when expatriate managers transfer to a foreign subsidiary they have the status as a HQ representative, accompanied by the position of power due to experience and knowledge about the parent companyor HQ (i.e. structural, relational andcognitive social capital; Stein & Barbara, 2011). Inpatriates lack this influence due to their liability of newness at HQ. Inconsistencies in power and influence are thus perceived by inpatriates at HQ.
Third, inpatriation furthers cultural and cognitive diversity, thus the inpatriate does not only face acculturation difficulties concerning a new environmental/national culture, but the inpatriate also needs to be socialized into the corporate culture of the HQ (Harvey, Speier, & Novicevic, 1999b, 1999c). Accordingly, these higher adjustment problems expose the inpatriate manager to a greater risk of status inconsistency and reduce their proper adjustment to and role execution at HQ. The more complex the adjustment impediments the more it triggers the need for a diverse organizational support infrastructure for this staffing option (Harvey et al., 1999b, 1999c). These special support requirements will be examined later in the paper.
Fourth, the purpose of the inpatriate and expatriate assignment are often distinctive: the aim of expatriation is to control the subsidiary and involves extensive interaction with
HQ, whilst inpatriates are conditionally integrated into HQ. The differences in the roles exercised can therefore create different status dynamics with respect to interactions of personnel present at each location. Finally, the global organizational staff composition reflects a geocentric view when using inpatriates, meaning the global organization favors using host- and third-country managers (Stein & Barbara, 2011). In contrast, the use of expatriates reflects an ethnocentric view towards international staffing; the global organization prefers to send HQ managers to the foreign subsidiaries (Briscoe, Schuler, & Claus, 2008; Reiche, Kraimer, & Harzing, 2009). These differences have taken their toll on inpatriates as they ‘march’ into HQs with the intent and obligation to share knowledge about their own home countries, but in the meantime these efforts are received with little respect, receptiveness, and acceptance by local or other nationals at the HQ location. We argue that status inconsistency theory provides a useful starting point to explain the acceptance between various categories or ranks of people (Blair, 1977, 1994), the inpatriate staffing method being one of them.
The key determinants of SIT are status traits as viewed by a number of different groups of individuals (McGrath, 1976). Status traits are defined as measurable or observable characteristics of managers that can be evaluated on the basis of honour, esteem, or desirability (Homans, 1974). Status characteristics can further be delineated when they are measured on a hierarchical scale (Lenski, 1954). Overall, status traits are subjective in the sense that the ‘eye of the beholder’ captures/defines them (Rayner & Cooper, 1997).
If the group member experiences status inconsistency due to ascribed status characteristics (e.g. having a college degree, being a part of top management and the like) they will more than likely want to change the status level; that is, if it is within their ability to do so. The action(s) that could be taken by the inpatriate manager to alter the status that was questioned thus achieved the expected status and met the expectations of the home country culture (Jackson, 1962). For example, if not having an advanced degree is creating status tension among inpatriates and their peers, the individual may proactively choose to remove that obstacle by obtaining the degree, thus achieving consistency in the hierarchy, and, thereby removing the conflict and proceed with functional behavior in the group.
However, if the issue in question is a matter such as gender, physical characteristics, race or even religion, the hierarchy may not be within the individual’s control and consequently they feel they cannot make or ‘ascribe’ to the change. This situation could leave the inpatriate experiencing elevated levels of stress and tension relative to the domestic employees. One reaction of the inpatriate manager could be to act out with dysfunctional behavior toward the group or members of the group who have presented the conflicting expectation (e.g. withhold tacit knowledge that would be helpful to the domestic managers).
In some instances, these differences could however also work bi-directionally. The inpatriate may perceive inconsistency because he feels inferior to his colleagues at HQ. However, he/she may also feel superior in some respects. For example, many inpatriate managers have been successful host country managers (Maley, 2009). Likewise, host countries have become more advanced, economically and socially and their workers are becoming more progressively skilled and qualified (Beechler, Pucik, Stephan, & Campbell, 2005). In sum, a lack of congruence or acknowledgment experienced by HQ personnel of inpatriates, their unique characteristics, and their needs can lead to inpatriates’ lowered perceptions of status, as active members of HQ. The paper offers the following proposition:
Research Proposition 1: Inpatriates will experience status inconsistencies due to perceived differences in social and professional rankings attributed by other members present at HQ.
Likewise, SIT is a useful tool that can help in the management of the inpatriate manager in the context of organizational support. For example, if there is awareness in the organization that the inpatriate managers are at risk of status inconsistency, human resource departments and/or related GTM infrastructure ought to create solutions to support the inpatriate manager. These solutions can include a specific set of GTM practices, which will help the inpatriate to create the appropriate tools that fend off mechanisms that could create perceptions of status inconsistency and thus allow for better social capital creation at HQ. There is a real inadequacy of preparing inpatriate managers or having a support system (i.e. inpatriate-specific GTM infrastructure) that then subsequently creates a decrease in probability that status differences are experienced by inpatriates at HQ. Only by understanding that the source of behaviours that manifest in status inconsistency can we begin to manage those behaviours. Inpatriate managers, with their inimitable propensity for status inconsistency (as per the discussion above) present a unique set of problems for HQ and, therefore it would appear that a concerted effort needs to be undertaken to ensure inpatriate managers’ adjustment is facilitated.
In sum, if global organizations’ support systems are only catering to expatriates then inconsistency in (global mobility) status is also experienced. Global organizations must make inpatriates feel as though their assignment purpose is legitimate which in turn makes inpatriates more inclined to build social capital at HQ. In sum, a lack of global mobility status congruence or acknowledgment, inpatriates can experience lowered perception of status relative to their position as part of a globally mobile workforce. The paper offers the following proposition:
Research Proposition 2: Inpatriates will experience status inconsistencies due to their perceived relative differences in the rank of their assignment and the support given to them by the global organization’s support structures.
In this section the paper has drawn upon SIT to better understand the premise that inpatriates lack congruence relative to their personal, professional and infrastructural status on assignment at HQ. Next, the paper argues for the significance of social capital at HQ and why it is important for inpatriates to accumulate it [social capital] to fulfil their boundary-spanning role.
Capturing the effectiveness of inpatriate managers
Having established the impediment that status can pose to realizing boundary-spanning roles of inpatriates, the goal of this section is to articulate the ability of social capital building at HQ such that it creates inter-unit social capital across HQ and subsidiaries. As suggested to in the introduction, inter-unit social capital is different to social capital in that inter-unit social capital is created by inpatriates in linking their home- and hostcountry access to social capital together to help the global organization benefit from previously unconnected knowledge resources (Reiche et al., 2009). Therefore, if social capital at either the home- or host-country location is not as mature, it can lead to weak inter-unit social capital and therefore weak boundary-spanning capabilities. The essence of inpatriation would therefore be forlorn. A reason for possible imbalance of social capital from the HQ perspective is that the inpatriate, at least in the initial phases of assignment, is relatively new and could be experiencing liability of newness at the HQ location. For inpatriate managers to be successfully integrated into the HQ corporate culture, it is imperative for global organizations to understand the benefits derived from employing inpatriates and respond to their needs accordingly.
Social capital certainly is not homogeneous across all context and features the multiple dimensions. In relation to inpatriate managers we argue for three aspects of social capital to be relevant: structural social capital (i.e. configuration of a manager’s network of work relations), relational structural capital (i.e. quality of those relations), and cognitive social capital (i.e. making sense of information) (Augoustinos & Walker, 1995). Moran (2005) contends that all three elements of social capital will influence managerial performance, although in distinct ways: structural embeddedness plays a stronger role in explaining more routine, execution-oriented tasks, whilst, relational embeddedness plays a stronger role in explaining new, innovation-oriented tasks, for example. The accumulation of all three types of social capital at HQ plays an important factor in the inpatriates’ boundaryspanning role. To allow for the accrual of social capital, organizations must ensure that inpatriate managers are respected and seen as welcomed and important members of the HQ team rather than to appear as ongoing misplaced outsiders.
Building structural social capital
Structural social capital has been defined as the social interaction and connectivity levels between actors (Adler & Kwon, 2002). From a structural perspective, inpatriates’ HQ capital is defined as the number of social ties with HQ colleagues in different departments or work groups (Reiche, 2012). A strong structural social network has been associated with higher levels of creativity (Perry-Smith, 2006) and effective knowledge transfer (Hansen, 2002). It is the expectation then that the inpatriate manager located at HQ, with a strong internal and external social interface, will be able to facilitate change, strategic integration and organizational learning (Adler & Kwon, 2002; Kostova & Roth, 2003). However, in order to support inpatriate managers to step up to this expectation/role, the global organization must encourage the inpatriate to develop social capital skills (Griffith & Harvey, 2004; Harvey, Novicevic, & Speier, 2000b; Kiessling et al., 2004).
The support needed to encourage the successful development of structural social capital not only includes attentive inpatriate selection and outstanding inpatriate preparation that incorporates specialized attention from HRM and GTM programs (Harvey et al., 2000b), but also requires the inpatriate to have an appropriate set of political skill (Harvey & Novicevic, 2004; Kiessling & Harvey, 2006; Moeller & Harvey, 2011a; Reiche et al., 2009). It is envisioned that developing the inpatriate’s social structural networks can simulate a positive and dynamic capabilities approach to staffing global assignments that can foster a distinct competitive advantage for the global organization (Harvey, Novicevic, & Speier, 2000a). Reiche (2012) empirical study on inpatriates indicates that gaining host-unit social capital relates to having continued access to hostunit knowledge and continued transfer of host-unit knowledge to colleagues in assignees’ new positions.
Building relational social capital
Research suggests that inpatriate managers need to develop social collaborations at HQs to succeed (Reiche et al., 2009). Relational social capital or social relationships are resources that provide access to information and influence (Burt, 1992). It includes the key underlying normative conditions of trust, acceptability, and ethics that guide actors’ network relations (Adler & Kwon, 2002; Nahapiet & Ghoshal, 1998). Trust in particular, has been found to be the main element of relational social capital as it strengthens the relationship between the individual and her/his contact ties (Reiche, 2012) and also facilitates the sharing of strategic and tacit knowledge (Andrews & Delahaye, 2000). Likewise, Borgatti and Cross (2003) argue that trusting social relationships with other organizational members enable international assignees to learn from their HQ’s colleagues.
Building of trusting social relationships at HQ would appear to be problematic for the inpatriate, particularly in the initial stages of their assignment (Harvey et al., 1999c; Harvey, Reiche, & Moeller, 2011). For example, the variability in the inpatriate manager’s initial reception at HQ (Bhawuk & Brislin, 1992) and unfamiliarity with the way business is conducted at the HQs (Harvey et al., 2000a) can send a message of unwelcome to the inpatriate manager and thus create disappointments and frustrations between the inpatriate manager and other HQ staff. The result is that the mixture of staff members at the HQ experience difficulties in building trustworthy relationships (Harvey & Miceli, 1999; Harvey et al., 2011), harming the possibility of long-term relationships coming to fruition and contributing to organizational objectives.
Building cognitive social capital
Cognitive social capital refers to the recognition of different communicative environments made up of the psychological environment and differences in language and culture (Whorf, Carroll, Levinson, & Lee, 2012). The process of building cognitive social capital has been found to have a distinct impact on an inpatriate manager’s ‘frame of reference’ (Harvey, 1997; Harvey & Buckley, 1997; Harvey, Speier, & Novicevic, 1999a, 1999b; Novicevic, Buckley, Harvey, Halbesleben, & Rosiers, 2003), feelings of ascribed and achieved status (Harvey & Buckley, 1997; Harvey, Hartnell, & Novicevic, 2004; Harvey & Miceli, 1999), perception of foreignness as a liability rather than an asset (Moeller & Harvey, 2011b) and cultural reference points (Harvey et al., 2011; Moeller, Harvey, & Williams, 2010; Moeller, Harvey, Griffith, & Richey, 2013; Williams, Moeller, & Harvey, 2010). The idea is to create a shared cognitive social capital environment, whereby an understanding of differences in culture and language are not only encouraged, but cultivated. The anticipated outcome is a mutually beneficial collective action to achieve organizational goals.
Gaining this set of skills also improves the probability of the inpatriate manager to foster/mentor other inpatriates that are relocated to the HQs. The social network provides the inpatriate manager with the organization’s credibility that is necessary to effectively move between the global market and that of the domestic environment of HQ. This fluidity of movement between the organization and environment is central to developing both organizational hubs.
The frame-of-reference of inpatriate managers is based on their country-of-origin; it has a strong impact on how they interact with others and the way they approach a problem or project (Harvey & Buckley, 1997). Culturally speaking, an inpatriate manager from an Eastern culture will show a preference for deductive analysis, whereas managers at a typical Western global organization’s HQ predominantly show a preference for inductive analysis. Harvey et al. (1999a) suggest that the greater the cultural ‘frame of reference’ between the HQ and inpatriate, the greater the difficulty and time taken for the inpatriate to adapt to HQ environment and the nuances of ‘how it operates’.
The liability of foreignness concept is the result of stigmatization and stereotyping, often done subconsciously when inpatriates are involved (Calhoun, 2002; Moeller & Harvey, 2011b). Extended exposure to liabilities derived from being foreign have been found to be associated with inpatriates’ reduced ability to cope and poor problem solving skills resulting in extenuated stress levels and intention to quit (Moeller & Harvey, 2011b). In order to overcome liability of foreignness, it is projected that global managers of the future must develop a multicultural mindset and to steer away from an ethnocentric mindset (Aguirre & Messineo, 1997; Harvey et al., 1999c; Harvey, Kiessling, & Moeller, 2011; Harvey & Novicevic, 2000b; Harvey, Speier, & Novicevic, 2002).
Status inconsistency relates to the inpatriate managers perceived difficulty in obtaining the same level of credibility and respect at HQ as the inpatriate received in their home country locations. Harvey and Buckley (1997) note that the grave consequences in store for the inpatriate manager are hard to overlook. For instance, when inpatriate managers leave their subsidiaries they are likely very well respected, highly productive managers (Maley & Moeller, 2014). They have accorded rewards and recognition of being a successful executive. However, once they arrive at HQ, status and accompanying rewards are frequently missing and the resulting lack of organizational support leads to poor selfefficacy, negative performance appraisals and overall a poor sense of acceptance at HQ (Harvey et al., 1999a). Status inconsistency may therefore eventually lead to distress and dissatisfaction (Harvey & Buckley, 1997; Harvey, Speier, & Novecevic, 2001a, 2001b). Moreover, the tension associated with this status can spill over to the family and may generate additional stress and culture shock for the family unit (Harvey & Fung, 2000). Based on these observations, the paper offers the following proposition:
Proposition 3: Inpatriates will have to be conscious of the lack of structural, relational and cognitive social capital experienced at HQ locations in an effort to allow for adequate inter-unit social capital to be built and to help realize their boundary-spanning capabilities.
Because of the earlier described status inconsistency issues, it is prescribed to develop a HRM support system that caters to the specific needs of inpatriate managers. This ensures a transition that enables inpatriates to do their job – knowledge transfer and knowledge sharing. An appropriate structure in support of inpatriate assignments will go a long way in reaping the benefit of this type of assignee.
Developing a GTM infrastructure to support inpatriate managers’ social capital building efforts
This paper has so far argued that social capital value is different for expatriate and inpatriates. Allegedly, the inpatriate staffing method is understood less amongst the global organizational hierarchy and has much room for growth relative to organizations’ comprehensibility of inpatriate-specific issues. The first part of this paper addressed the drivers of those challenges, namely status incongruence issues. This latter part of the paper now addresses the mechanisms global organizations ought to apply to help alleviate inpatriate-specific social capital building difficulties experienced as a result of the different status inconsistencies experienced. The discussion and propositions are mapped out using the parameters proposed in the GTM literature.
This paper acknowledges that inpatriates can present a competitive advantage to global organizations (Deloitte, 2011; Harvey et al., 2000a; Joyce & Slocum, 2012; World Economic Forum, 2011). A GTM infrastructure can help to bring out the best in inpatriates, but Kim, Park, and Prescott (2003) have argued that the globalization of talent bring with it the requirement to create new HRM tools, methods and processes that fit the globally mobile workforce and that enables them to become boundary-spanners. Until further research is able to clarify some of the fundamental issues around GTM (Collings, 2014), it is difficult to establish concise guidelines for inpatriate. However, this paper attempts to take one step closer in identifying the appropriate GTM technique of inpatriate managers as boundary-spanners, knowing that the literature has not kept pace with practice (Al Ariss, Cascio, & Paauwe, 2014).
In terms of the corporate HR role in GTM, Farndale et al. (2010) speak of the ‘guardian of culture role’, which if done correctly could create a climate in which people feel encouraged to be mobile but valued for their differences. It is exactly this idea that we are proposing the inpatriate staffing method is missing – an environment in which its uniqueness (compared to expatriates) is valued and acted upon at the corporate level rather than allowing inpatriates to fend for them. The paper offers the following general proposition before articulating more precise propositions in the context existing GTM literature:
Proposition 4: The presence of an inpatriate-specific organizational support system in the form of GTM practices suggests a favorable organizational mindset towards inpatriates as valuable members of the globally mobile workforce capable of building social capital at headquarter.
We are interested in exploring the attraction and selection, or generally speaking the recruitment, process of individuals who are mobile and who might fit the inpatriate assignment lifestyle. Global organizations need to establish a realistic job preview even prior to interviewing such that decisions on both accounts can be made whether the candidate is emotionally, cognitively and behaviorally/physically up for the challenges at HQ. It is also not uncommon for decisions around inpatriate recruitment to be made at HQs and as a result recruitment of inpatriate managers is quite HQ centric (Collings et al., 2012). We support Collings et al. (2012) in that senior managers in subsidiaries should have more ‘voice’ in who gets sent to HQ.
We also support the idea that subsidiaries should acquire strategic independence in aspects of their operations (Mudambi & Navarra, 2004); in particular they need to improve their bargaining power vis-a`-vis the HQs in relationship to inpatriate assignments. Several organizations have been found to successfully permit their subsidiary more autonomy in the selection of global managers. For example, Medtronic (Fortune 500 medical devices company) have effectively sanctioned their subsidiaries more authority. Along similar lines, Agilent Technologies have gainfully tendered more relocation decisions to their subsidiaries (Wiechmann, Ryan, & Hemingway, 2003).
We argued earlier that, it is the experience of inpatriates at HQ that empowers them to fulfil their duties as a boundary-spanner. However, if their past experience and wealth of information is disregarded and the inpatriate managers lose face they will not be effective boundary spanners. Consequently, inpatriates need a great deal of humility to manage the transition from being a leader in the subsidiary to disciple at HQ. Maley and Kramar (2007) describe this as having to be a ‘small fish in a big pond’. In an attempt to overcome inpatriate self-effacement, Harvey et al. (2011) argue that inpatriate managers should be selected based upon ‘multiple IQs’ which include; cognitive, emotional, political, cultural, organizational, network, innovative and intuitive intelligence. These diverse intelligences indicate competency at overcoming the unique environment at HQ as well as the learning capacity of inpatriate managers. The bottom line is that that the same techniques traditionally used for the selection of expatriate managers should not be used in the selection process for inpatriate managers (Harvey & Novicevic, 2002; Harvey, Novicevic, & Kiessling, 2002).
This paper does expand on the idea proposed by Harvey and colleagues in 2002; even though this paper does not strive to articulate the precise mechanics of revising the inpatriate selection process, instead it points out that a proper understanding and acknowledgement by global organizations of elements such as the inpatriate’s: (1) assignment characteristics/dynamics (i.e. status and influence differentials, adjustments, goal congruency and staff compositions issues) and (2) assignment purpose (i.e. boundary spanning across home- and host-country locations) in recruitment processes can play a role in alleviating social capital creation/development issues. For example, it is desired that the global organization has a capable and resilient individual at HQ who can acknowledge deficiencies in social capital (as per Research Proposition 3) to build inter-unit social capital. At the same time, the effective recruitment of such an individual is dependent upon an organization’s support system or GTM infrastructure (as per Research Proposition 2) that recognizes the differences between staffing methods and that then modifies its existing practices.
Through such modifications, global organizations generate a legitimatized atmosphere for inpatriates. No longer are expatriate-specific practices applied to inpatriate contexts, and in turn, inpatriates are more inclined, better yet, enabled, to build social capital at HQ. Effective recruitment of inpatriates as such requires the global organization to seek an understanding and acknowledgment relative to the inpatriate role and assignment characteristics/dynamics compared to that of other members of the global workforce such as expatriates. The paper offers the following proposition:
Proposition 5: GTM recruitment practices must be adapted to alleviate status inconsistencies experienced by inpatriates such that it helps build social capital at HQ faster.
We are interested in exploring parameters around the preparedness and subsequent developmental processes required in a GTM system for inpatriates to achieve social capital at HQ. The development of inpatriates will need to be targeted towards eliminating status inconsistencies before and upon arrival at the assignment location (HQ), such that social capital can be built. Time taken to prepare the inpatriate prior to the assignment, while they are still in their home country location, would be time well spent since their job preview may very well be based on what they have seen/heard expatriates experience. The adjustment to HQ matters greatly in that a realistic relocation preview and is a means to reduce culture shock for the inpatriate and their families (Harvey & Fung, 2000). Matters of status inconsistency issues and its drivers should be discussed at this time.
As organizations continue to globalize, the need for managers with experience and ability to address the complex environment of global business will also continue to grow. Harvey (1997) contends that organizations must attend to heightening the awareness of inpatriate managers’ inter-cultural training to achieve multiculturalism and cross-national harmony. Harvey and Mejias (2002) essentially addresses the shortage of IT professionals and the appropriate training and educational strategies that can be considered in training inpatriated IT professionals. Training can and should take place before departure much like on expatriate assignments, however keeping in mind the adjustments to both national as well as organizational culture relevant for inpatriates.
Moeller et al. (2010) attempted to acquire an understanding of the contextual implications vital for an adjustment process that allows for the successful incorporation of inpatriates into HQs. It is suggested that individualized socialization tactics and sociocultural and psychological adjustments are both equally necessary and should be tended to. Results of an empirical study showed that due to the cultural diversity of inpatriates, training pedagogy, training materials, trainers, the length of time to train, and assessment of the effectiveness of the training effort may need to be modified from the more generic, standardized training model (Harvey & Miceli, 1999). Others concur with the adjustment difficulties based on differences in culture (Williams et al., 2010), learning styles (Harvey & Miceli, 1999), and stigmatizing marks attributed to foreign nationals (Moeller & Harvey, 2011a).
The outcomes of general adjustment come in the form of increased attempts at knowledge sharing, which is in line with Reiche (2006) who suggests that bilateral knowledge transfer between inpatriates and HQ staff is the main corporate motive for using inpatriate assignments. Gertsen and Sø (2012), in a study using inpatriates from the People’s Republic of China, the USA, Brazil and Japan, indicate that inpatriates’ knowledge has yet to be exploited in a systematic manner, but that they are very well situated to act as boundary spanners and cultural mediators. It is advised that inpatriates, though formally located at the HQ, need to make frequent overseas trips back to emerging markets to provide direction and facilitate tacit knowledge transfer to create knowledge (Harvey et al., 1999a). In the end, effective developmental efforts created for inpatriates requires the GTM to seek an understanding and acknowledgment relative to the inpatriate role and assignment characteristics/dynamics compared to that of other members of the global workforce such as expatriates. The paper offers the following proposition:
Proposition 6: GTM developmental practices must be adapted to alleviate status inconsistencies experienced by inpatriates such that it helps to build social capital at HQ faster.
WeareinterestedinexploringtheimprovementsneededforinpatriateswithinGTMsystems to remain at the HQ location for a sustained period of time, which is necessary to have an impact as a boundary-spanner. Research has identified career advancement as one of the most prominent individual expectations or motives for inpatriate managers to accept an assignment (Harvey et al., 1999c; Maley & Kramar, 2007; Reiche, 2007). It has become clear that local nationals’ career aspirations are generally not limited to the local organization but will extend beyond national boundaries. Previous work has sometimes suggested that international assignment experience might have career-enhancing effects (e.g. Ng, Eby, Sorensen, & Feldman, 2005), we argue that the relationship between inpatriation and career success is not so straightforward nor is it very well acknowledged. In other words, there are factors that will influence the degree to which the HQ experiences help or hinder the advancement of employees who have worked at HQ as inpatriate managers.
Two moderating forces in particular have a huge influence on determining the inpatriate manager’s career development. The first force is the motive of the assignment and has been described as either organizational or individual oriented (Edstrom & Galbraith, 1977). The organizational purpose is based on the assumption that inpatriation will assist the global organization to successfully disseminate contextual knowledge between global organization HQ and subsidiaries (Harvey et al., 2000b; Kostova & Roth, 2003; Reiche, 2012). On the other side, the individual oriented motive provides the inpatriate manager with corporate socialization and firm-specific skills in readiness for future management positions within the global organization (Bonache, Brewster, & Suutari, 2001; Moeller et al., 2010).
The second moderating force is the duration of the assignment to HQ. Critical conceptual differences exist with respect to the time frame of the inpatriate assignment. On the one hand, Harvey and colleagues consider that the inpatriate assignment is semipermanent to permanent (Harvey & Buckley, 1997; Harvey et al., 1999a, 2000a, 2011). Similarly, Barnett and Toyne (1991) imply that the inpatriate assignment is a semipermanent mission. On the other hand, some scholars differ with respect to the duration of the inpatriate assignment (i.e. Adler, 2002; Collings et al., 2012; Peterson, 2003; Reiche, 2012) and define inpatriation as a temporary assignment to the parent organization’s HQ. Adler (2002) underscores the temporary nature of inpatriate assignments and identifies the allocation of inpatriates to HQ is intended to initiate them into HQ corporate culture, after which they will return to their subsidiary. This interpretation emphasizes the individual developmental motive of an inpatriate assignment (Bonache et al., 2001).
This inconsistency may partly be explained in that Harvey and colleagues almost always refer to ‘inpatriate managers’ and focus their research towards relocation of inpatriates at the ‘management’ level (the exceptions here are Harvey and Mejias (2002) and Harvey et al. (2004), which specifically examine IT and Healthcare workers). Whereas, the remaining inpatriate scholars refer to the more general term ‘inpatriates’ and may therefore implicitly refer to a less senior employee (Reiche, 2012). We emphasize the permanent nature of inpatriate assignments for two reasons: First, Harvey and colleagues, who have made the largest and most significant contribution to the inpatriate research, have consistently referred to the nature of the assignment as being semi-permanent. Second, it is the indefinite nature of the inpatriate assignment that may be more challenging and problematicin termsofcareer developmentandretention fortheinpatriate, andcallsforour attention.
Thus, the duration and nature of the typical inpatriate assignment is a contentious issue. However, it has important implications on many aspects of the assignment to HQ. For example, it is recognized that remaining in the same expatriate position for an extended period of time can be hazardous for the individual’s adjustment (Takeuchi, Wang, Marinova, & Yao, 2009) and intentions to leave (van der Heijden, de Lange, Demerouti, & van der Heijde, 2009). In the context of the inpatriate manager, the unlimited duration of the inpatriate contract is a huge contributing factor to career uncertainty and ambiguity which manifests itself as a lack of trust between the inpatriate and the global organization, eventually leading to stress and possible failure of the assignment (Harvey et al., 2011).
Notwithstanding, it is evident that many inpatriate managers do survive the uncertainty surrounding the tenure of their relocation to HQ. However, their individual expectations for career advancement and retention at HQ may be thwarted, because it is generally more problematic for inpatriate managers to rise to senior positions at the global organization’s HQ than it is for PCNs (Collings, Scullion, & Dowling, 2009; Reiche et al., 2009). Termed the ‘bamboo ceiling’ and attributed to the ethnic origin of the inpatriate manager, this leads to premature career plateau (Harvey et al., 2004). Because of these issues and the fact that due to inpatriates’ peripheral status at HQ, inpatriates’ career advancement intentions and organizations’ retention intensions are not always conveyed properly.
Long-term career support for the inpatriate manager may provide the safety net and allay their concerns about the availability of suitable future positions in the global organization (Kraimer, Shaffer, & Bolino, 2009). More significantly, Reiche (2012) defines career support in terms of the inpatriates’ general beliefs about the extent to which the global organization provides support for their long-term career development. This would indicate the importance of clear communication about the global organization’s motive of the inpatriation assignment (Harvey & Buckley, 1997) and a frank discussion between the global organization’s GTM department and the inpatriate manager in regards to their probable career path/prospects, whether it is leadership or otherwise related. GTM departments ought to have clarity in their communication about future career prospects and these communications should occur regularly during the assignment, which supports with our earlier assertion about the need to align the expectations of the supervisor and the inpatriate manager. In a manner similar to incongruous performance appraisal expectations, incongruous career expectations will have an enormous influence on the inpatriate manager’s perception about the extent to which the organization values their contributions and cares about their well-being (Eisenberger, Huntington, Hutchison, & Sowa, 1986; Reiche et al., 2009) and thus their retention. In the end, effective retention of inpatriates requires the global organization to seek an understanding and acknowledgment relative to the inpatriate role and assignment characteristics/dynamics compared to that of other members of the global workforce such as expatriates. The paper offers the following and final proposition:
Proposition 7: Inpatriate-specific GTM practices have the potential to retain inpatriates despite some status inconsistencies experienced to enable a continuous flow of boundary-spanning efforts.
In sum, we propose that global organizations need to develop more strategic approaches towards the GTM (recruitment inclusive of attraction as selection mechanisms, development and retention) on inpatriate managers such that turnover at HQ remains low, workplace satisfaction at HQ remains high, and the global organization can claim bottom-line performance benefits from inpatriate assignments. As such, we continue to question the legitimacy of extant HR infrastructure, in the context of GTM, towards the inpatriate managerial employee base.
An inpatriate future research agenda
Despite the progress made in the domain of staffing globally (Vance & Paik, 2010), inpatriation has received limited attention. Unless the need for a global mindset becomes irrelevant, inpatriates will continuously be in demand to supplement the ethnocentric and thus limited focus provided by home-country personnel and expatriates. As Dowling and Welch (2005) have pointed out, the viability of using expatriate managers within a global organization is becoming debatable with regard to their ability to manage the escalating demands in the global marketplace. Employing inpatriation staff members however, demands a nuanced GTM system to be successfully integrated into global organizations, because the responsibilities carried out by inpatriates are those that are not achievable with expatriate status as they exercise control over foreign operations (Jaussaud & Schaaper, 2006).
A clearer, more distinct effort must be made to understand the recruitment (i.e. attraction and selection), development and retention dimensions concerning inpatriate assignments. Evidence suggests that without particular attention to these GTM elements, the inpatriate manager’s performance will almost certainly decline or end prematurely. At the same time, specific improvements to the management of talent globally will increase productivity, motivation and retention rates of inpatriate managers, and help to build a significant intangible advantage for the global organization. In particular we reason that more empirical studies are required with regard to the inpatriate manager to verify what has conceptually and theoretically been proposed.
Attuning GTM practices and policies towards inpatriation is vital. In doing so it signals organizations’ understanding of the significantly different goals and dynamics that must not only be acknowledged but acted upon to ensure the successful integration of inpatriates. Modifications must be made throughout the entire GTM process – from identification to retention practices. We advert the following: If inpatriation is acknowledged as a separate staffing method (significantly different from expatriation) and adequate revisions to the GTM process are made, the likelihood of better inpatriates adjustment and impact increases. In turn, heightened levels of adjustment are suggested to increase the chances of social capital gain.
Supported by theoretical works, a limited amount of empirical studies have so far shown that inpatriates do contribute significantly to the global organization’s bottom line (Maley, 2011; Reiche, 2012). Yet, we posit that the inpatriate process has not been analyzed to the extent that the expatriate process has. To a large extent extant inpatriate literature has had as its focal and reference point organizations located within the USA and Europe (predominantly Germany, see Reiche, 2006). It would be of interest to expand upon this trend but using South American, Asian, Asian-Pacific, and potentially African countries as the HQ location using the GTM context.
Ideas, particularly from a conceptual, theoretical, and empirical perspective, that may feed future inpatriate research endeavors could revolve around: (1) the motivation of inpatriates at various stages and the inferred difference in inpatriate systems relative to their country-of-origin; (2) remuneration scheme; (3) developing contextual leadership training/programs; (4) retention models; and ultimately (5) evaluation of contribution of inpatriates (e.g. knowledge sharing attempts) and assessment of the return on investment of inpatriates.
Summary and conclusion
In review, the overarching purpose of this paper was to heighten the significance of inpatriates and to position this staffing method as a viable, fruitful, and protagonist way to supplement the expatriate staffing method and to achieve a competitive advantage contrary to other global competitors. The context for doing so is the GTM literature, a rapidly emerging yet underdeveloped academic area of study in today’s business world. The key to this discussion is that inpatriate managers represent a new and viable reservoir of global staffing candidates. Evidence suggests that there is an episodic resistance toward the integration of inpatriate managers and their career progression to management positions in the parent-country organization or HQ (Collings et al., 2009; Harvey et al., 2004). This might possibly turn into an unspoken but concerted form of status inconsistency lessening the chances of gaining the benefits of hosting inpatriates. If such bias becomes widespread it can impact negatively not only the future contributions of these inpatriate managers but also the image of global organizations attempting to infuse diversity into their management perspective.
Another central node in this paper is a discussion concerning the development of a distinctive GTM infrastructure to support inpatriates that includes effective recruitment, development and retention practices. We endeavored to examine how GTM can support inpatriates at all stages and recommended that the GTM climate specially tailored recruitment strategy. For example, a performance appraisal system that is tailored to detect problems with status inconsistency in inpatriate is beneficial for the assignee himself/ herself but also for the organization. The specific inpatriate recommendation will go some way to create a inpatriate friendly HR climate in which the inpatriate can construct strong social capital, in particular relationships capital that include the key underlying normative conditions of trust, acceptability, and ethics that guide actors’ network relations (Adler & Kwon, 2002; Nahapiet & Ghoshal, 1998).
The inference from the literature is that the inpatriation of managers to the HQ has significant merit for the global organization in terms of representing a proactive strategic GTM response to globalization – balancing of multicultural and transcultural dimensions in global staffing – and is as a consequence increasingly the choice of international assignment for many global organizations. Some of the noteworthy themes in this paper include: the disadvantages of HQ centric HRM practices, the general lack of clarity in communication about the motive of the assignment, and misaligned GTM expectations between the inpatriate and her/his supervisor (see Stahl et al., 2012), leading to a poor retention process and result. Through these efforts, we are hopeful to have energized and set the foundation for future research on inpatriation, thereby continuing to leverage their utility in global organizations today.
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