An Examination of the Liaison Role of the Host Country National First-Line Manager in Facilitating Effective Host Operation Knowledge Transfer

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An Examination of the Liaison Role of the
Host Country National First-Line Manager in
Facilitating Effective Host Operation Knowledge Transfer
by
Charles M. Vance
Loyola Marymount University
1 LMU Drive, MS 8385
Los Angeles, CA 90045, USA
T: 1-310-338-4508
F: 1-310-338-3000
Email: cvance@lmu.edu
Vlad Vaiman
FH Joanneum University of Applied Sciences
Eggenberger Allee 9-11
A-8020 Graz, Austria
T: +43 316 5453 6827
F: +43 316 5453 9 6827
Email: vlad.vaiman@fh-joanneum.at
Key Words: Host Country National, Liaison Role, International Management

An Examination of the Liaison Role of the
Host Country National First-Line Manager in
Facilitating Effective Host Operation Knowledge Transfer
Abstract
This paper broadens the conceptualization of MNC knowledge transfer to include the
importance of active involvement in a liaison role by host country nationals (HCNs), particularly
those HCN first-line managers and other administrative professionals reporting directly to
expatriates. This proposed HCN local liaison role between expatriates and the local host country
work environment (including local employees) is examined within theoretical constructs of
network theory and absorptive capacity. Then, based on an qualitative methodology that combined
a literature review with exploratory field interviews involving 15 expatriates and HCNs in China,
13 important and distinct behavioral functions of this liaison role are presented and discussed
within five broad dimensions: cultural interpreter, communication manager, information resource
broker, talent developer, and change agent. Finally, benefits and limitations of this HCN local
liaison role are considered, and recommendations are made for future field research to validate,
elucidate, and utilize this proposed model of the HCN local liaison role.
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An Examination of the Liaison Role of the
Host Country National First-Line Manager in
Facilitating Effective Host Operation Knowledge Transfer
Introduction
With the continuing growth and expansion of international operations incident to
globalization, multinational corporations (MNCs) and the prevailing management literature tend
to focus primarily on the role played by MNC parent country expatriates in achieving foreign
operation success, at the stark neglect of attention toward host country nationals (HCNs),
especially foreign employees being managed at host country operations (Toh & DeNisi 2005;
2003; Aycan & Kanungo 1997). In particular, a great emphasis has been placed on effective
selection and training methods for optimizing the success of expatriate managers, while often
neglecting the knowledge, skill, and attitude (KSA) development needs of the rest of the
international workforce in contributing to international business success (Vance & Paik 2006;
Suutari 2002; Vance & Ring 1994).
Knowledge management is increasingly recognized as a critical source of organizational
success and viability. The overall ability to exploit external knowledge—to recognize the value
of new information, assimilate it, and apply it to commercial ends—characterizes a firm’s
innovative capability, which in turn is critical for competitive viability (Sharkie 2003). However,
this growing field of thought asserts that competitive advantage is to be gained by organizations
that widely distribute knowledge and skills throughout their internal units and to all employees,
including host country employees, rather than entrusting knowledge to only a relatively few leaders
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and subject matter experts, such as expatriates in the host country and other managers at MNC
regional and parent country headquarters (Takeuchi & Nonaka 2004; Dixon 2000).
There has been a dramatic change in perceptions of the role of the expatriate in the
international assignment as we increasingly become a global information economy where
knowledge management is crucial (Doz, Santos & Williamson 2001; Thurow 2000). As a
testimony to this trend, recent extensive empirical and case studies have found that at both
subsidiary and headquarters levels, knowledge transfer is seen as the most important reason for
expatriation, while direct expatriate control and immediate task fulfillment are considered of less
importance (Hocking, Brown, & Harzing 2004; Harzing 2001). Through international
assignments, expatriate managers can not only apply and transfer knowledge from headquarters
to the foreign subsidiary, but also can acquire new knowledge and know-how from the foreign
subsidiary that can ultimately be transferred back to the parent company and throughout its
global operations (Riusala & Suutari 2004; Dunning 2003; Downes & Thomas 2002; 1999;
Kamoche 1997).
However, a significant amount of theoretical and empirical research in MNC knowledge
management renders the impression that the expatriate, in his or her traditional leadership role in
a foreign operation on behalf of a multinational corporation, is the exclusive major global player,
as if the contributions of the host country workforce were only of very minor consequence and
not worthy of our careful consideration and study in the total picture of MNC knowledge
management. Although this trend can be explained in part by the ethnocentric mindset
historically built into a majority of MNCs, it should not be an excuse for the perpetuation of such
a serious oversight (Nundi 1975; Zeira 1976). We believe that MNCs and their assigned
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expatriates that neglect attention to the host country workforce as a critical source of local
knowledge and information may greatly limit their knowledge management effectiveness.
Various scholars have called for a refocus in research in international management by
being more inclusive of the needs and contributions of HCNs in the success of MNC foreign
operations (Tarique, Schuler & Gong 2006; Toh & DeNisi 2005; 2003; Vance & Paik 2005;
Selmer & De Leon 1996; 1993; Vance & Ring 1994). One line of past HCN-focused research
has examined potentially useful staffing decisions where HCN executives eventually replace
expatriates in heading and controlling foreign operations. These staffing assignments often have
been recommended particularly after these upper-level HCNs have had significant company-
provided developmental experience, such as in the form of extended “inpatriate” assignments for
two or more years at the MNC’s parent country headquarters (Harvey et al. 1999), where the new
executive HCNs eventually return to their own home countries to provide leadership in the
foreign operation that is aligned with MNC strategy and culture, yet still very responsive to host
country conditions. Nevertheless, more HCN-focused research is needed for foreign operations
in earlier stages of internationalization where traditional expatriates are still holding major
leadership responsibilities.
Expatriates traditionally have been considered to serve in a crucial liaison role between
MNC headquarters and the host country operation, communicating and implementing company
performance objectives at the local host country operation, and hopefully returning useful local
knowledge and information back to headquarters decision-makers (Kamoche 1997; Edstrom &
Galbraith 1977). In this paper we are speaking of more traditional expatriates as senior,
experienced executives who are assigned to head up MNC operations abroad primarily to
achieve particular business objectives rather than to obtain valuable professional development
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experience. However, this traditional exclusive liaison function of the expatriate senior manager
may have a severely limited capacity for thorough, effective knowledge transfer within the
foreign operation and back to headquarters. The one or more HCN first-line managers and other
administrative professionals and support staff who report to an expatriate typically are involved
in two-way knowledge and information flow interactions between both the expatriate and the
local host country environment (including internal HCN peer and lower-level HCN employees;
and external local market factors such as legal and regulatory conditions and parties,
competitors, vendors, customers, social norms and customs). This critical juncture for affecting
these frequent interactions appears to place these particularly influential HCN professional
“direct reports” in an important liaison role where they may have a unique and valuable
contribution to effective knowledge transfer within the foreign operation. And with subsequent
expatriate knowledge transfer, this HCN local liaison role may ultimately have a significant
impact on knowledge acquisition and decision-making throughout other foreign operations and
at regional and global MNC headquarters. This important local liaison role of the HCN
professional is depicted in Figure 1. The failure of multinational organizations to understand the
nature and appreciate the potential contributions of this HCN local liaison role in effective
overall knowledge management likely will lead to the lack of HCN staffing and development
policies that are essential for sustaining this role. On the other hand, organizations that recognize
and make appropriate human resource investments to support this HCN local liaison role may
achieve a decided competitive advantage.
(Insert Fig. 1 about here)
The purpose of this paper is to broaden our conceptualization of MNC knowledge transfer
to include the active involvement of HCN professionals in a key liaison role. We first will discuss
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this proposed liaison role of the HCN professional (henceforth called HCN liaison or HCNL)
within the theoretical constructs of network theory and absorptive capacity. Then, based on a
review of pertinent literature and an analysis of the results of exploratory field interviews with
Western expatriates in China and HCN Chinese managers and other administrative professionals
reporting to the expatriates, we propose several possible important general dimensions and specific
behavioral functions in a model of this HCNL role between the host country environment and the
host operation’s traditional expatriate management. Finally, we will consider benefits and
limitations of this HCNL role, and propose areas for future exploratory field research to help
validate and elucidate the present model, as well as to provide practical guidance for MNCs in
strengthening and gaining from this potentially important HCNL role.
Theoretical Support for the HCNL Role in MNC Knowledge Transfer
Network theory. This approach has been useful in understanding organizations by
focusing on the linkage between social objects over time (Tichy & Fombrun 1979). Network
theory contributes to structural theories for organizing by pointing to a practical way to study
organizational phenomena and examine the formal and informal ties that connect groups and
individuals within an organization, as well as by identifying the roles that individuals play in the
network (Fulk & Boyd 1991; Pearce & David 1983). In network theory, the liaison role is
important in forming strong ties between groups in organizations. Network theory supports the
early conceptualization of the expatriate assignment as fulfilling the MNC need of a form of
control at local foreign operations that also provides a liaison between headquarters and the host
country operation—including the host country workforce located there (Edstrom & Galbraith
1977).
However, the restriction of our conceptualization of this important liaison role to
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expatriates alone may miss other potentially important interactions involving information exchange
and knowledge transfer, such as those interactions between influential HCN professionals and the
local host country workforce. This restriction is especially problematic where there may be limited
meaningful interactions between expatriates and even executive HCNs at the head of the local
operation and employees at much lower levels. As specified by Fulk and Boyd (1991), liaisons
must be located in a position with significant access to organizational groups to build strong ties
between those groups and facilitate effective communication and knowledge transfer. There is a
strong possibility that many HCN professionals who report to and interact regularly with
expatriates may also be in an excellent position physically and psychologically and with strong ties
to facilitate such effective communication and knowledge transfer.
Absorptive Capacity. The ability of a firm to exploit external knowledge has been
referred to as “absorptive capacity,” and is greatly influenced by such factors as the firm’s prior
related knowledge, beliefs, and basic assumptions (Cohen & Levinthal 1990; De Long & Fahey
2000). These factors possessed within the organization are important because they influence the
receptivity to and interpretation of external information, as well as the organization’s subsequent
ability to assimilate and utilize the information deemed valuable. And as the absorptive capacity
involves not only the intake of external knowledge but also its flow across organizational units
through to eventual productive and commercial application, this internal flow can be influenced
by the extent of inter-unit “homophily,” or the degree to which two or more interacting
individuals or groups are similar in certain critical attributes, such as beliefs, education, priorities,
and values (Bhagat, Kedia, Harveston & Triandis 2002; Gupta & Govindarajan 2000).
These attributes of homophily or similarity are associated with both cognitive (e.g.,
comprehension of facts, procedures) and affective (e.g., values, beliefs) domains of learning
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(Bloom 1956; Krathwohl, Bloom & Masia 1964), and can be achieved through both formal
efforts of employee training and development, and informal organizational processes of
normative integration and socialization (Black & Mendenhall 1990; Van Maanen & Schein 1979;
Bartlett & Ghoshal 1989). Common overarching values and commitment within the affective
domain are fundamental to MNC efforts to enhance global integration and control that
transcends national cultural differences through a shared organizational culture and alignment of
priorities (House, Javidan, Hanges & Dorfman 2002; Gupta & Govindarajan 2002; Rowden
2002). The development of these common values and shared commitment and identity
contributes to each party’s motivational disposition to both accept and offer useful knowledge,
and thus promoting the free flow of information and increasing overall absorptive capacity
(Gupta & Govindarajan 2000).
As asserted by Cohen and Levinthal (1990), the development of an organization's
absorptive capacity will build on the state of development of the absorptive capacity of its
individual organizational members, and, as an extension, the absorptive capacity of the various
organizational groups and units where the individuals work. Besides expatriates assigned to a
foreign operation, that operation’s host country workforce represents a potential group of
individuals that can recognize and acquire pertinent knowledge that is beneficial to the MNC
(Boyett & Currie 2004). The HCNL in particular, given appropriate training in MNC culture,
operations, and strategy, and with experience in productive interactions with upper management,
may be in a position that is especially well-suited to facilitate shared knowledge flow, common
understanding, and common priorities (thus, increased homophily) between other HNC
employees and the expatriate management of the local operation.
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With regard to increasing absorptive capacity related to the flow of information between
organizational units, training interventions can be used to build commonly held KSAs among
HCNLs and expatriates that promote homophily (Vance & Paik 2005). As a major objective of
expatriate training is to enhance the expatriate’s understanding of cultural differences and ability
to work with HCNs to facilitate management knowledge and know-how transfer from the
headquarters to foreign subsidiaries, a similar training objective should also be directed toward
HCNLs. Their increased knowledge of company objectives, procedures, and organizational
culture, as well as increased motivation and commitment to company and work operation success,
can enhance their motivational disposition affecting openness and receptivity to this flow of
knowledge and information brought by the expatriate from company headquarters as well as
from other company organizational units. And in turn as a liaison they are in a strong position to
influence the understanding and motivational disposition of their peers and lower-level HCNs,
and thus facilitate thorough knowledge transfer to these HCN levels within the organization.
Likewise, HCNLs’ improved understanding of the needs and purposes of the expatriate and
company as a whole, along with favorable motivational disposition, can support their liaison
transfer role to facilitate critical information flow from their host country employees to
expatriates and others at top management of the local operation, which may then, as earlier
depicted in Figure 1, proceed to flow to regional and global MNC headquarters and other foreign
host country units within the MNC (Dunning 2003; Gupta & Govindarajan 2000; Cohen &
Levinthal 1990).
Toward a Model of the HCN Local Liaison Role
Based on the above conceptual context, a model of the HCNL role was constructed using
procedures of domain and theme analysis in taxonomy development (Spradley 1980; Carney
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1972). In this qualitative procedure, notes were made from a review of pertinent international
management literature. These notes were combined with notes from 15 exploratory field
interviews: six Western expatriates (four US, one French, and one British) working in three
different US MNC operations in three different cities in China, and nine Chinese managers and
administrative professionals reporting to them. In these approximately 30-minute open-ended
interviews, expatriates and their direct reports were individually asked to identify and provide
examples of ways in which HCN managers and other administrative professionals, in their position
between the expatriate and the host country work environment, could assist the expatriate in
achieving success in the foreign assignment. Based on our review of our combined notes from the
literature review and field interviews, we identified distinct behavioral functions of the HCNL role
that may contribute to improved MNC knowledge transfer and overall effectiveness of the foreign
operation. Each behavioral function, consistent with our liaison concept depicted in Figure 1, is bi-
directional in terms of knowledge/information flow and serves as a bridge between the expatriate
and local HCN employees, as well as other factors in the host country environment.
Some similar behavioral functions were combined under more meaningful and inclusive
functional categories, according to Carney’s (1972) “pragmatic reduction,” to arrange the array of
behavioral functions into a smaller number of classification categories. On occasion, observations
within a single functional category were deemed sufficiently dissimilar to be placed into two
separate behavioral functions. Finally 13 different behavioral function categories were identified as
components of the HCNL role. As they were identified, contrast dimensions of the 13 behavioral
function categories were examined through componential analysis for further taxonomy conceptual
development, leading to the final organization of the 13 behavioral function categories into five
general groups or dimensions of behavioral functions comprising the HCNL role: cultural
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interpreter, communication manager, information resource broker, talent developer, and change
agent (refer to Figure 2). Although presented and discussed separately here, these general
dimensions and accompanying behavioral functions are clearly not mutually exclusive, but are
interrelated and can influence one another significantly.
(Insert Fig. 2 about here)
Dimension I: Cultural Interpreter
Managing cross-cultural differences represents an ongoing daunting challenge for
effective MNC knowledge management (Elenkov & Fileva 2006; Li & Scullion 2006; Paik &
Choi 2005). To help cope with these challenges, the HCNL can profitably serve as a cultural
interpreter. As suggested by Chikudate (1995), there are at least three important behavioral
functions that HCNLs may engage in as cultural interpreters: equivocal communicator, cultural
guide, and conflict mediator.
Equivocal communicator. In this first cultural interpreter function the HCNL may
interpret for both HCN employees (including peer and lower-level) and expatriates any uncertain
and equivocal communication exchanges and events occurring within or outside the host operation.
The function of equivocal communicator “calls attention to the need in organizations to make sense
of things…and to translate cues into meaning for organizational participants” (Daft & Weick 1984:
286). Due to a lack of significant work experience in the host country, an expatriate may greatly
benefit from increased understanding provided by the HCNL’s interpretation of the otherwise
seemingly equivocal and puzzling information and messages, verbal and non-verbal, associated
with the host country operation. With appropriate training in company strategy, operations, and
culture, the HCNL also is in a strong position to assist other HCN employees in understanding and
making sense of organizational communication, MNC decisions, and events affecting and
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unfolding around them. This increased understanding for both expatriate and HCN employees thus
contributes to their enhanced absorptive capacity (Vance & Paik 2005).
Cultural guide. Beyond mere interpretation, in their function as cultural interpreters
HCNLs may proactively serve as cultural guides to direct expatriates in their effective
acculturation to the host country work environment by helping them understand culturally-driven
events and activities that take place at the host-country operation. In addition, they may provide
guidance to other HCNs in their acculturation to both MNC general organizational culture and
parent country culture. Just as cultural anthropologists in their fieldwork efforts to study and
understand human cultures often seek out effective “key informants” to guide them to culturally
appropriate interpretations of observed actions and events (Rapport & Overing 2000), liaison
HCNs may serve as key informants to guide the acculturation and expanded understanding of both
expatriates and host country employees.
Conflict mediator. Since both expatriates and HCN employees tend to try to make sense
of the events around them based on their own limited culturally-based frames of reference, there
are bound to be some aspects involving cross-cultural interaction that fail to make sense, or
which might even appear to suggest insult or offense where such is not intended. Thus, this
potential lack of understanding on the parts of both expatriates and host country employees can
often lead to conflict, which tends to severely restrict knowledge transfer and information
sharing due to the lack of trust and a spirit of collaboration (i.e., poor motivational disposition).
With their understanding of both expatriate and host country employee perspectives, HCNLs
may mediate between both parties to clarify perspectives and frames of reference, and manage
inevitable conflict constructively.
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In addition, HCNLs may strive to facilitate an ongoing amiable climate between the two
parties that optimizes mutual motivational disposition in support of effective two-way
knowledge transfer. One American human resource director within a Japanese bank subsidiary
located in Los Angeles once mentioned that much of her time was spent in addressing destructive
rumors within the HCN grapevine, dispelling locally-held negative cultural stereotypes and even
racist attitudes toward expatriate and MNC Tokyo headquarters management, and in dealing with
other forms of cross-cultural conflict. She firmly believed that her and other HCN managers'
important liaison role in managing inevitable cross-cultural conflict within the foreign subsidiary
and often directed toward parent country headquarters should be clearly acknowledged, and
ongoing training should be provided for HCN professionals to support this important morale
building and maintenance responsibility among the host country workforce.
Dimension II: Communication Manager
As part of effective knowledge transfer within the host country operation and surrounding
external environment, the HCNL can make valuable contributions as a communication manager.
Different behavioral functions within this liaison role dimension include communication facilitator,
mediator, and moderator.
Communication facilitator. The HCNL is in a key position to facilitate and promote free-
flowing multi-directional communication within the foreign operation and across boundaries
within the local external environment. An important part of this function particularly for the HCN
workforce is helping to develop a general climate of trust and expectation that open and honest
communication with expatriate management will be valued and even rewarded. The HCNL also
can provide guidance and encouragement to other HCNs in contacting the expatriate directly about
issues and concerns, thus facilitating the exchange of information. The HCNL also can provide
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guidance to the expatriate in how to optimize his or her optimal physical and psychological
accessibility to HCN employees to encourage their direct communications.
Communication mediator. In many cases the HCNL may serve in a valuable relay or
mediator function to support the effective flow of communications in multiple directions.
Especially when the expatriate and the local workforce do not share a common language, the
HCNL who also is fluent in the expatriate’s language can serve as an invaluable mediator in
receiving, translating, and passing on intended messages between the expatriate and the local
employees. Or when local employees are for whatever reason hesitant to communicate directly
with the expatriate, such as in the need to communicate bad news or upward negative feedback to
the expatriate (Vance 2006), the trusted HCNL may solicit and receive the information from HCNs
and relay it on to the expatriate in an anonymous fashion. As a mediator the HCNL can also serve
as a helpful information gate keeper for the expatriate in receiving messages from external sources,
such as from a barrage of interested potential local vendors, and then selectively determine what
messages should be passed on to the expatriate for his/her direct attention and action.
Communication moderator. The host country professional as a liaison also has the
ability to revise or moderate information as it is relayed in both directions between the host
country work environment and expatriate management. For example, in translating a speech
being delivered by an expatriate to a local operation’s workforce, a savvy HCNL might note a
phrase or choice of words used by the expatriate that, if translated literally, could cause
unnecessary concerns or anxiety among the workers, and therefore make the decision to translate
the message in a fashion that relays the intended message but in a more acceptable manner for
the local workforce. In one actual experience shared by one Chinese HCNL shared with us,
during a company meeting she was translating for an expatriate who was displeased with the
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explanations for production delays being offered by local employees. In frustration, the
expatriate responded to these excuses with, “You stupid Chinese are always making excuses, but
you’re just plain lazy!” The very capable HCNL immediately recognized that an accurate
translation of the expatriate’s message would be very destructive, and altered the translation in a
way that could lead to a productive resolution of the difficulty. Following the meeting she also
expressed privately to the expatriate her personal displeasure with his statement, saying that she
also is Chinese, and that his choice of words were insulting to her and would have had dire
consequences to the company if she had not decided to alter the translation. And this
developmental feedback from the HCNL was appreciated by the expatriate who showed deep
regret for his careless expression of frustration.
In a similar way to revising the content of a message to make it more acceptable for the
recipient, the HCNL may choose to revise the timing of message delivery and delay the transfer
of information to the expatriate or to the host country workforce until they are best able to
receive and process the information (Davy 2006). Whatever the moderating influence on
communications, it is important that it have an overall positive impact on productivity and
performance improvement rather than simply keeping all parties happy.
Dimension III: Information Resource Broker
The HCNL represents a vital broker or source of many forms of information for both
HCN employees and the expatriate. Here we will focus in particular on the HCNL’s value to the
expatriate through the important resource broker functions of information boundary spanner,
organizational memory, and informal organization knowledge source.
Information boundary spanner. As competitive forces grow more intense in the local
marketplace, there is a correspondingly greater need to be closely and accurately attuned to local
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market knowledge (Boyacigiller 1990). The HCNL who is very familiar with local external
market conditions beyond the company’s boundaries (including government regulations,
resources, customs, obstacles, and competitors) can greatly assist the expatriate in obtaining
necessary market information upon which sound business decisions can be based.
Organizational memory. As we recently noted in a visit to Panasonic in Tijuana,
Mexico, some MNCs are noted for rotating new senior expatriates in and out of a foreign
operation approximately every three-to-five years. However, the HCN professionals who report
to these revolving expatriates often remain with the foreign operation in a similar position for a
longer duration. Although it is hoped that preceding expatriates will pass on as much helpful
information as possible to their successors, much valuable local experience-based knowledge
inevitably is not transferred, especially more tacit knowledge that tends to be exchanged more
informally in the course of ongoing daily interactions. The remaining HCNL therefore represents
an important source of continuity and organizational memory of knowledge and experience.
Their bits of tacit and explicit knowledge gained through past experience can subsequently be
brought to bear on present activities with the new expatriate, thus preserving the ability to build
upon and take advantage of past learning (Moorman & Miner 1998; Stein 1995).
Informal organization knowledge source. A considerable amount of knowledge and
information about what to avoid and how to get work efficiently accomplished in an organization
is informal and never officially encoded into official company policies and procedural
documents (Laubach 2005; Morton, et al. 2004) The HCNL can be a valuable source of this
informal organization knowledge, providing it on an as-needed basis. A new expatriate in
particular would be wise to seek information early about local political dynamics, informal rules,
and other aspects of the local organizational culture to avoid unnecessary conflict and clashes.
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Local organization culture change, reinforced by new policies and human resource management
measures, might be deemed necessary by a new expatriate aiming to dramatically change a local
operation’s performance. However, it typically is far better for an expatriate, especially where
immediate change is not called for, to adjust and fit into a pre-existing social system that is
already functioning effectively rather than to waste valuable time and energy trying to change the
system to fit the expatriate. The HCNL can be an important source of informal information to
help effect this initial expatriate adaptation. And related to the communication mediator function,
on an ongoing basis the HCNL also can be a valuable source for relaying “grapevine”
information and informal feedback from the local workforce that can be useful to the expatriate
in formulating new plans.
Dimension IV: Talent Developer
Besides being a source of information and advice for the expatriate and HCNs to
facilitate productivity, the HCNL also can serve as a trainer and daily coach for developing the
KSAs of HCNs and expatriates, rendering them more valuable organizational assets for the
future. This talent development through a more distinct mentoring influence can also have
important implications for the future careers of expatriates and HCNs alike. We now will
examine in more detail the talent developer dimension of the HCNL role with its trainer/coach
and mentor behavioral functions.
Trainer/coach. Beyond the previously mentioned cultural guide function of providing
information to expatriates and the local workforce to assist them in enhancing cross-cultural
understanding, the HCN local liaison also can provide formal training and less formal on-the-job
coaching to enhance knowledge, stimulate knowledge transfer, and effect productive skill
development among expatriates and workforce members (Wang & Chan 2006; Vance & Paik
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2005). The on-the-job coaching provided by the HCNL through regular interaction to expatriates
and lower-level HCNs alike can be particularly important for the transfer of tacit knowledge that
is difficult to codify and impart by means of more formal training and information sharing
efforts (Napier 2005). Besides training on specialized skills and local procedures, this
developmental focus can include purposeful orientation and socialization effort for new HCN
employees to ensure that they understand and commit to key common priorities and values of the
host country operation. As an agent possessing optimal homophily with new HCN employees,
the HCNL may be especially suited to provide this training for optimal credibility and
acceptance among the HCN trainees, and hence optimal message transfer.
Although training for new expatriates provided by the HCNL will likely be much less
formal than for the new HCN employees, the acquisition of new understanding and insight for
these recently arrived expatriates can nevertheless be significant and continue over time. For
example, Napier (2005) has described helpful knowledge sharing and coaching by Vietnamese
school administrators for Western expatriates with whom they worked in such areas as local
procedures and working within a transition economy, which helped to avoid future difficulties
and improve the expatriates’ work performance. Besides the sharing of technical and job-related
knowledge, the ongoing coaching support inherent in the HCNL-expatriate working relationship
can serve as a helpful influence in the expatriate’s positive psychological adjustment to the
international assignment (Johnson et al. 2003). And in addition to on-site expatriate coaching,
Vance and Ensher (2002) also describe how HCNL experience-based input and critical incidents
can be particularly valuable for increasing the validity of pre-departure expatriate training at
MNC headquarters.
Mentor. Beyond knowledge sharing and skill development associated with the
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trainer/coach function, the HCNL may develop an ongoing relationship of trust and credibility to
assist individual employees as well as expatriates in promoting professional growth and career
development opportunities. The HCNL as mentor can serve as a helpful adviser and provide a
strong role model to younger, lower-level HCNs who are interested in future career development
and advancement within the local MNC operation and beyond. In a form of reverse mentoring
directed at expatriates (Singh, Bains & Vinnicombe 2002; Smith 2000), HCNLs can provide
useful on-site guidance that has both immediate and longer-term career development positive
impact (Feldman & Bolino 1999). In fact, this HCNL ongoing on-site mentoring support having
both immediate and longer-term career enhancement implications may also serve beyond initial
adjustment to help maintain an expatriate’s sense of well-being that can affect continued success
with the international assignment, which in turn may also have future positive career
repercussions for the expatriate (Selmer 2000).
Dimension V: Change Agent
The necessity of change (and at an accelerating pace) under the forces of globalization is
becoming increasing imperative for organizations in emerging and developed economies alike
(Siggelkow & Rivkin 2005; Hoskisson et al. 2000). In addition, national cultures can differ in the
speed and manner of accepting and adapting to change (Heales, Cockroft & Raduescu 2002).
Whenever an organization, including an MNC’s foreign operation, determines to adopt anything
from a broad new strategy to a specific new procedure, it faces the significant challenge of
bringing about change through its workforce. The HCNL can serve as a valuable change agent in
working with the expatriate to managing the process of change effectively. Two major
behavioral functions within this final important HCN local liaison role dimension of change
agent include executor and alignment facilitator.
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Executor. An expatriate may have a clear and reasonable picture of an appropriate new
direction or specific new performance goals for a foreign operation, but often will be ill-suited to
formulate specific implementation plans—including timing—to bring about desired change in
the host country operation. With the establishment of a clear sense of trust and confidence in the
HCNL, a wise expatriate will indicate his or her goals and objectives or intended outcomes, and
then allow the HCNL to carry out or execute the change in a way that best fits conditions of the
local workforce and external environment. With this autonomy and flexibility the HCNL should
of course be held accountable to the expatriate for both change outcomes and means of change.
Thus, in this fundamental way the HCN professional serves in a vital liaison role in
implementing strategy and bringing about effective change.
Internal alignment facilitator. A crucial function that the HCNL can perform as a
change agent is helping overcome potential HCN workforce resistance to the proposed change.
Related to the previously described trainer function, the HCNL may greatly decrease workforce
resistance by instructing local employees about the purpose and nature of the intended change,
and how the employees will be affected. As frequent, open communications are critical for
building employee trust and overcoming resistance to organizational change efforts, the HCNL
can serve as a rich communication source, often far more credible than the foreign expatriate, to
regularly keep employees informed before and during the change process. This resulting
increased understanding and trust regarding the change can help the employees themselves
contribute as informed and committed participants in the change effort, lending their experience-
based ideas and suggestions as details are worked out in the process of change implementation.
Another aspect of the alignment facilitator function is related to the previous discussion
of training, where the HCNL assists the local workforce in understanding and embracing
21

common company cultural values and priorities. This increased common identity through
company values alignment contributes to a high degree of homophily between HCNs and
expatriates, which increases mutual absorptive capacity and ability to receive and share
information that is vital to the success of a change effort (Vance & Paik 2005; Bhagat et al. 2002;
Gupta & Govindarajan 2000). In addition, this cultural values alignment may help to minimize
resistance and prepare employees to move in future directions of change in a more organized,
predictable, and consistent way, still based on the same common core values and priorities
(House, et al. 2002; Krumbholz & Maiden 2001).
Discussion
In this paper we have begun to consider the potentially important HCN local liaison role
that may contribute to building MNC absorptive capacity and receptivity for transferring useful
knowledge and know-how between the host country workforce and top management in the foreign
operation. This flow of potentially beneficial information can also continue to MNC headquarters
and to other MNC international units, thus potentially influencing and benefiting all MNC
operations. The liaison role that we consider here for the HCN professional is a significant
departure from the traditional notion of the MNC parent company expatriate as sole liaison
between MNC headquarters and the host country operation, and points to a potentially fruitful new
host country workforce focus in international management research that has heretofore been
neglected. We also believe that our proposed model of the HCN local liaison role may serve as a
useful imperative for MNCs in guiding their future efforts in employee development and
knowledge transfer beyond their traditional focus on the expatriate.
The HCNL role that we propose with its major dimensions and respective behavioral
functions is not intended to negate or detract from the traditional liaison role and influence
22

potentially provided by an expatriate. On the contrary, these separate and differing liaison roles
may work in concert to enhance overall knowledge transfer and management within the host
country operation and throughout the MNC. The HCNL typically has the particular advantage of
close interaction with and credibility among HCN peers and lower-level employees, and who thus
likely will be more receptive to useful information and ideas that are presented by the HCNL.
HCNLs might therefore be in a stronger position to transfer knowledge and information from
upper management to the local workforce in a fashion that has a much more reliable and
productive impact. On the other hand, the parent country expatriate in particular will likely be in a
stronger position to share critical information from the host country operation to decision makers at
the MNC headquarters, as well as to other expatriate internal MNC network colleagues at other
host country units (Bird & Dunbar 1991; Boyacigiller 1990).
We believe that the proposed HCNL role has significant potential benefits for improving
overall knowledge transfer within the MNC, as well as for enhancing MNC performance capability
by more broadly building MNC human resource talent and common identity at foreign operations.
As we have discussed, the HCNL role can potentially transfer helpful information more effectively
to the lowest employee levels, as well as push employee socialization regarding MNC culture and
strategic priorities to these lower levels. Thus, this HCNL role may help effect a greater
understanding and commitment among the host country workforce to MNC goals and objectives,
as well as build greater common MNC identification within the firm.
Our proposed model of the HCNL role should now be examined and tested by further
exploratory field research in multiple host countries and MNCs across different industries. This
research is needed to validate, clarify, and likely expand upon the various liaison role dimensions
and related behavioral functions presented here. Further field research could provide a clearer
23

picture about which of these general dimensions and functions tend to be most frequently
enacted in the HCN liaison role, and which can have the greatest influence in knowledge transfer
and in contributing to overall foreign operation performance. Also, to enhance our understanding
it should be examined whether there is an evolutionary pattern for the development of the HCNL
role in the foreign operation over time, with different role dimensions and functions being more
prominent at different stages of development. More specifically, further research should examine
whether the behavioral functions of an effective HCNL role may occur differently under varying
experience and maturity levels of expatriates and local employees, and are greatly dependent on
the history and level of development of a given foreign operation. These role dimensions and
functional behaviors also may differ dramatically in different host country operations in various
industries and under different socioeconomic conditions. In addition, the motivational disposition
and absorptive capacity of expatriates and local HCNs that influence the two-way flow of
knowledge and information through the HCN local liaison are greatly determined by the trust
and credibility mutually held toward the HCNL. More work is needed to examine how the
HCNL can effectively build trust and maintain an image of fairness and optimal identification
with both expatriates and HCN employees to promote unrestricted knowledge transfer.
Finally, prescriptive field research will be very helpful in understanding effective
staffing, training, performance management, compensation, and other human resource practices
that support the various dimensions and functions of the HCNL role. For example, when
particular behavioral functions of the HCNL role are validated by field research, prescriptive
research should help develop effective measures for selecting job candidates who can best fulfill
those functions. In addition, these validated behavioral functions serve as a valuable guide for
training to ensure that the intended HCNLs develop the necessary skills sets to effectively carry
24

out this important liaison role. With this additional guidance, organizations will have the
opportunity to revise their management practices to more fully support and utilize the HCN local
liaison role to achieve a decided competitive advantage.
25

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Figure 1
Host Country National Professional in Local Liaison Role
Other MNC
Operation
Local Environment: HCN MNC
Knowledge as Knowledge Expatriate Regional
• Peer HCNs Flow Local Liaison Flow & Global
• Lower-Level HCNs HQ
• Local Market Factors
Other MNC
Operation
31

Figure 2
General Dimensions and Behavioral Function Categories
Comprising the HCNL Role
Dimension I. Cultural Interpreter
1. Equivocal communicator
2. Cultural guide
3. Conflict mediator
Dimension II. Communication Manager
4. Communication facilitator
5. Communication mediator
6. Communication moderator
Dimension III. Information Resource Broker
7. Information boundary spanner
8. Organizational memory
9. Informal organization knowledge source
Dimension IV. Talent Developer
10. Trainer/coach
11. Mentor
Dimension V. Change Agent
12. Executor
13. Internal Alignment facilitator
32