When managers are sent in exchange programs to foreign subsidiaries, they get a grip of how to run things smoother, they acknowledge the different markets and have a better understanding of how to implement the changes when returning home. They learn how to make good decisions even when facing ambiguous circumstances and how to increase their employees motivation. Newly acquired companies tend to be very dependent on the international assignees sent from the head office because of the lack of experience working with foreign operations, and because they trust their existing managers more than foreign unknown managers for the development of the business.
Usually there is a lack in skills in the local workforce, but Sparkle created Sparkle ‘university’ in Zurich to provide specialized courses for managers around the world in the purpose of improving the learning between factories in different countries. Briscoe et al. (2009, p.172) argues that ‘the use of international assignees (especially from headquarters) is high during the initial stages of foreign operations in order to accomplish technology transfer , including production and management technologies, product knowledge transfer, and staffing and implementing a startup. The number of international assignees will then decline as the firm’s local managers and technical and functional staff assimilate this knowledge. The number may later expand, again, as local operations become increasingly integrated into a global operational framework.
International assignees are carefully selected because errors in selection can lead to a negative impact of operations overseas. Factors like the maturity of the candidate , the adaptability, individual resourcefulness, emotional stability, interest in the assignment and topic, as well as the ability to handle foreign language(s) and job suitability as general fact are considered in depth. The company must pay close attention to avoid the failure of international assignments driven by the inability to merge with new cultures from stereotyping and prejudices brought against the foreign culture.
Containing the costs of international assignees can be a challenge from the firm’s perspective. Briscoe et al. (2009, p.187) goes into this topic, stating ‘Moving employees from country to country is expensive, both in direct remuneration (compensation and benefits), and in the administration of their relocation expenses. Consequently, many MNEs are searching for ways to reduce the costs. For example, MNEs are dealing with these high costs by replacing international assignees with more short-term assignments and extended business trips, outsourcing the administrative aspects of managing international assignees, and looking for ways to reduce the compensation incentives and add-ons that make international assignments so expensive.’
Edwards and Rees (2006, p.160) present knowledge management in multinationals as follows: ‘Much of the writing on multinationals assumes that a key source of competition advantage can be their ability to transfer knowledge across their sites. The concepts of ‘situated cognition’ in particular and the ’embeddedness’ of economic activity in general suggest that this process will rarely be straightforward.’. The knowledge transfer depend largely on the factors like fertile quality of relationship between local and international employees, and their motivation and abilities. (Bonache and Zárraga-Oberty, 2008). In Sparkle’s HRM practices, this is a main focus.
Implications of the knowledge transfer are a good personal contact and shared experiences between the different departments in the firm and between individual employees. An individual’s motivational factors of knowledge transfer relates primarily to explicit knowledge transfer since people only get motivated to transfer that of which they are fully aware. A study conducted by Arvidsson and Birkinshaw (2004 cited Edwards 2006 p.163) argue that ‘capabilities developed locally are often ‘sticky’, hard to identify and do not flow easily between subsidiary units.’
For Sparkle, international assignments are key generators of knowledge to be passed in the business of the firm. However, there are concerns from some parts that management in some firms cannot adapt and implement as well some practices or knowledge passed on, as compared to original units. It is widely accepted the fact that the competitive advantage of a company relies on the knowledge within the boundaries of the firm and the way the information flows between the different departments.
While abroad, international assignees are faced with different challenges, both work-related and on an emotional level. The stressful conditions of integrating in the new workplace, potential language problems, tough work demands can push the assignees into the “cultural shock”. Adapting and coping with the new environment are interpersonal skills that differ from each employee, but for the success of an international assignment, they need to adapt to the new settings and devote to gaining as much experience as possible to transfer when returning home. ‘In this context, one can see how EI can play a key role in enhancing an international assignee’s awareness and management of his/her emotions and thus enable him/her to face new, challenging situations more effectively.’, argues Arvil and Magnini (2007 cited Gabel-Shemueli 2011 p. 211-215).
Winfred (1995, p.101) suggests that ‘Across many countries, job knowledge and technical or managerial ability appear to be the primary factors that have been used in selecting international assignees (Black, Gregersen, ; Mendenhall, 1992). Consequently, given the principal focus on technical and managerial ability, one could speculate that in terms of this factor, international assignees are a fairly homogenous group. That is, they are all very skilled and knowledgeable in what they do. If this is the case, then differences in other more psycho-social factors could begin to play a more central role in differentiating successful and unsuccessful assignees.’.
More recent studies (Tahvanainen and Welch 2005) show some of the key advantages and disadvantages of an international assignment. Some of the advantages presented were the flexibility, simplicity and cost effectiveness. In the case a employee was more keen on working in short-term foreign assignment rather a long-term one, contractual changes were made. The simplicity was based on the fact that assignee’s families were not forced to relocate in the foreign country with them, so that their children should not move schools or partners lose their jobs.
The salary was fixed to the home country, but in the event of the home country being less developed, financial help was provided for the cost of living, and other benefits were introduced along with a good progress management. Also, in some cases of short-term assignments, the country would fall for an agreement even if the employees didn’t have a work permit. Short-term assignments were generally found to be more cost-effective than long-term. Some disadvantages presented were taxation, side effects like alcoholism and marital divorces, work permits and the relationship that employees developed with local colleagues and consumers.
To sum up with, international assignments are a key factor in the success of global HRM practices with Sparkle for the learning outcome that employees and managers bring to the table in the boundaries of the organisation. Sparkle chooses its assignees through a series of selection methods that take into account the emotional intelligence, which help the assignees cope with the cultural shock, increase productivity and motivation in relation to work demand and cooperation with the host companies co-workers.
Valuable experience of the local markets, as well as learning new practices and about new products, gained in foreign markets, is a powerful instrument to pass on through knowledge learning. Sparkle can develop new technologies and cope with ever changing customer demand over the world. This practice can increase economies of scale with the cost of having a good information flow between the departments of the firm. The increase in international management skills in Sparkle and development of Sparkle-wide intra-net will help the company disseminate knowledge.
Bonache, J. AND Zárraga-Oberty, C. (2008). Determinants of the success of international assignees as knowledge transferors: a theoretical framework. The International Journal of Human Resource Management [online], 19(1), 1-18.
Available from: https://dspace.lib.cranfield.ac.uk/bitstream/1826/4345/1/Determinants_of_the_success_of_international_assignees.pdf [Accessed 27 Nov 2012]
Briscoe, D. R. AND Schuler, R. S. AND Claus, L. (2009). International Human Resource Management: Policies and practices for multinational enterprises. 3rd ed. Oxon: Routledge .