Foreign executives in local organisations: An exploration of differences to other types of expatriates

Abstract

Purpose
– The purpose of this paper is to investigate foreign executives appointed into cultural contexts distant from their country of origin and headquarters of organisations to which host-country nationals (HCNs) they supervise and HCN superiors they report to attribute a “local” national identity. Significant differences of these foreign executives in local organisations (FELOs) from other forms of expatriation, including assigned and self-initiated expatriates, are identified and discussed.

Design/methodology/approach
– The research utilises a qualitative exploratory approach based on triangulated multiple data sources. Data are sourced from in-depth semi-structured interviews with foreign executives ( n =46) from 13 countries and their host-country peers ( n =25) in organisations founded and headquartered in Malaysia. Dyadic data from the two sample groups are used to triangulate findings, while non-dyadic and socio-biographical data add further insight.

Findings
– The data analysis identifies issues surrounding allegiance, trust, and control, assumptions about income levels, and exposure to heightened local scrutiny as components of the distinct nature of the FELO experience.

Research limitations/implications
– Implications for future research on new types of international cross-cultural workplaces are discussed. While construct definitions for self-initiated expatriation (SIE) in the wider mobility and migration literature are still in flux, international management research may be at risk of neglecting local workplaces and perspectives.

Practical implications
– The FELO phenomenon differs significantly from expatriate assignments between headquarters and foreign subsidiaries of multinational corporations, and can be viewed as a rare and specific form of SIE. Its occurrence indicates an increasingly global market for individuals with career capital and global mobility.

Originality/value
– The findings elucidate the situation of FELOs and provide comparisons to other types of expatriates. The research contributes to extant literature on global mobility as it explores a specific cross-cultural phenomenon that has not been systematically investigated in the academic literature, but is described in the media and executive search firm publications as “fairly new, highly visible, and sometimes controversial” with demand for FELOs “likely to continue”.

Full text

Foreign executives in local
organisations
An exploration of differences to other types
of expatriates
Frithjof Arp
Department of Management, Monash University, Melbourne, Australia
Kate Hutchings
Department of Employment Relations and Human Resources,
Griffith University, Gold Coast, Australia, and
Wendy A. Smith
Department of Management, Monash University, Melbourne, Australia
Abstract
Purpose – The purpose of this paper is to investigate foreign executives appointed into cultural
contexts distant from their country of origin and headquarters of organisations to which host-country
nationals (HCNs) they supervise and HCN superiors they report to attribute a “local” national identity.
Significant differences of these foreign executives in local organisations (FELOs) from other forms of
expatriation, including assigned and self-initiated expatriates, are identified and discussed.
Design/methodology/approach – The research utilises a qualitative exploratory approach based
on triangulated multiple data sources. Data are sourced from in-depth semi-structured interviews
with foreign executives (n¼46) from 13 countries and their host-country peers (n¼25) in
organisations founded and headquartered in Malaysia. Dyadic data from the two sample groups are
used to triangulate findings, while non-dyadic and socio-biographical data add further insight.
Findings – The data analysis identifies issues surrounding allegiance, trust, and control, assumptions
about income levels, and exposure to heightened local scrutiny as components of the distinct natureof the
FELO experience.
Research limitations/implications – Implications for future research on new types of international
cross-cultural workplaces are discussed. Whileconstruct definitions for self-initiated expatriation (SIE) in
the wider mobility and migration literature are still in flux, international management research may be at
risk of neglecting local workplaces and perspectives.
Practical implications – The FELO phenomenon differs significantly from expatriate assignments
between headquarters and foreign subsidiaries of multinational corporations, and can be viewed as a
rare and specific form of SIE. Its occurrence indicates an increasingly global market for individuals
with career capital and global mobility.
Originality/value – The findings elucidate the situation of FELOs and provide comparisons to other
types of expatriates. The research contributes to extant literature on global mobility as it explores a
specific cross-cultural phenomenon that has not been systematically investigated in the academic
literature, but is described in the media and executive search firm publications as “fairly new, highly
visible, and sometimes controversial” with demand for FELOs “likely to continue”.
Keywords Cultural distance, Expatriates, Global mobility, Career capital, Differences,
Foreign executives, Local organizations, Self-initiated expatriation
Paper type Research paper
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/2049-8799.htm
Journal of Global Mobility
Vol. 1 No. 3, 2013
pp. 312-335
rEmerald Group Publishing Limited
2049-8799
DOI 10.11 08/JGM-0 1-2013-00 06
The contribution of anonymous reviewers to this paper is gratefully acknowledged. Their
criticism encouraged a better contextualisation of the FELO concept against existing theoretical
concepts such as SIE, migration and corporate expatriation, the incorporation of the latest SIE
research, and a deepened analysis and discussion involving implications for future research.
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Introduction
This paper examines foreign executives in local organisations (FELOs) based
on research that identifies significant differences from various other forms of self-
initiated expatriation (SIE) as well as organisational expatriate assignments
(EAs) between headquarters and foreign subsidiaries of multinational corporations
(MNC). The FELO phenomenon surfaces in isolated media reports and
practitioner publications. The Economist (2010), for example, describes Japanese
organisations as an “insular lot”, but reports that several are hiring foreign
executives, and theorises that Japan is “opening up”. A newspaper in Pakistan
scrutinises foreign executives recruited by a local dairy industry organisation
(The International News Islamabad, 2008), and several Americans have been appointed
to executive positions in local organisations in India (Bloomberg, 2010). An international
executive search firm (The Korn/Ferry Institute, 2009) discusses “highly visible”
foreign executives in Korean and Chinese organisations whose appointments
“can be controversial”, but notes that “the demand for these executives will likely
continue”.
The media coverage of the phenomenon has several defining commonalities. First,
the executives are prominently described as foreign. Second, the foreign individuals so
described work at the executive level; they hold managerial positions supervising host-
country nationals (HCNs). Third, the organisations are described as local; a national
identity is attached to them by the reporting media and it is implied that significant
cultural distance is involved in these affiliations between foreign executives and
local organisations. Fourth, the positions reportedly filled by these foreign executives
are local positions; they are not positions in foreign subsidiaries of these local
organisations, but positions in the country where these organisations have their
headquarters.
To highlight the significant differences between this phenomenon and established
conceptualisations in the extant literature (as discussed below), the acronym FELO –
for FELOs – is proposed and used in this article. Conceptually, FELOs can be viewed
as part of the increasing globalisation of workplaces and border- and boundary-less
global careers (Arthur and Rousseau, 1996; Banai and Harry, 2004; Carr et al., 2005;
Collings et al., 2007; Stahl et al., 2002; Suutari and Ma
¨kela
¨, 2007; Thomas et al., 2005).
FELOs can also be seen as part of the larger phenomenon of self-initiated expatriates
(Inkson et al., 1997; Suutari and Brewster, 2000; Vance, 2005) as they have proactively
“made their own way” (to use the expression of Suutari and Brewster, 2000) to their
host-country to seek career opportunities. However, data collected for this paper
shows that important differences to established conceptualisations exist (see Table I
and discussion below).
The research presented here is delimited to identifying and discussing significant
differences between FELOs and other expatriates. The purpose is to elucidate the
situation of FELOs through empirical findings, with comparisons to other types of
expatriates as a secondary objective. Hence, the broad research question for this
inductive research can be summarised as “What is the situation of foreign executives
appointed to headquarter positions of local organisations?” The paper begins with an
overview of organisational EAs and SIE. This is followed by a description of the
methods utilised in this research. The paper then presents the findings and analyses
socio-biographical information collected from participants to discuss key differences
between FELOs, EAs, and SIEs. The paper concludes with contributions to theory and
suggestions for further research.
313
Foreign
executives

Study and acronym
used
Construct definition and main
theme Sample, method, setting Cultural distance? Executive level? Local organisation?
(Inkson et al., 1997)
SIE
Self-initiated
expatriation ¼travelling and
working abroad for overseas
experience; contrasted to EAs
Case studies of 12 New
Zealanders returned from
Britain and other European
countries
Little No Foreign MNCs and local
organisations
(Suutari and Brewster,
2000)
SFE
Self-initiated expatriates
finding foreign (rather than
overseas) work
Mixed-method; 147 Finns who
travel and work in Europe
(69%), North-America (10%),
Asia (13%), and other regions
(8%) are compared to “classic”
Finnish EAs
Some Described as “lower
level than
expatriates”
54% local organisations
across the 6 SIE categories
(Inkson and Myers,
2003)
SIE
Self-initiated travel (at least six
months) and career
development
Interview study of 50 SIEs
below the age of 40 after their
return to New Zealand
Little No Unclear
(Myers and Pringle,
2005)
SIE and SFE
SIE ¼young people; minimal
planning; career not their
primary focus; duration longer
than a tourist excursion
Gendered analysis of a previous
study sample (Inkson and
Myers, 2003) of 50 returned
SIEs from New Zealand
Little No Unclear
(Vance, 2005)
SIE
SIE ¼self-initiated and planned
expatriation
Main theme of the study is pre-
international career preparation
Field interviews with 48
American expatriates in
Hong Kong, Taipei, Beijing,
Tokyo, and Seoul
(sample includes 8 Asian-
Americans)
Little
Americans working in one
Swiss, two German, and 35
American MNCs, and large
local organisations
described as “very similar”
Unclear 10
(two SIEs have changed
from previous EAs with US
firms; unclear whether the
remaining 8 local
organisations employ the 8
Asian-Americans in the
sample)
(Lee, 2005)
SIE
SIE ¼individuals hired on a
contractual basis and not
transferred overseas by parent
organisations
Survey of 302 SIEs in 39
organisations in Singapore;
apparently many of them
“guest workers” from
neighbouring countries
Some
(sample includes 15% from
neighbouring Malaysia)
Unclear Foreign MNCs and local
organisations
(continued)
Tabl e I.
Overview of some
key studies utilising
the SIE construct
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Study and acronym
used
Construct definition and main
theme Sample, method, setting Cultural distance? Executive level? Local organisation?
(Richardson and
Mallon, 2005)
SDE
SDE ¼self-directed
expatriation
In-depth interviews with
predominantly young British
academics in New Zealand,
Singapore, Turkey, and the
United Arab Emirates
Some Unclear Unclear
(Bozionelos, 2009)
SIE
SIE ¼individuals who become
expatriates on their own
initiative and outside the
boundaries of multinational
corporations
Survey of 46 middle-aged,
experienced nurses in a Saudi
hospital. Job satisfaction as
a function of mentee/prote
´ge
´
experience
Significant for the non-
Arab sample sub-group (46
non-Saudi Arab and 160
non-Arab nurses)
No Yes
(Biemann and
Andresen, 2010)
SE
SEs ¼self-initiated expatriates
vs AEs ¼assigned expatriates
Survey of 159 German-
speaking managers (40 SEs
and 119 AEs) in 33 countries
including China (30), India (20),
Russia (seven), and the UK
(seven)
Presumably, but unclear
due to sample selection
method
Unclear due to
sample selection
method
Unclear
(Peltokorpi and
Froese, 2009)
SIE
SIEs contrasted to EAs Survey and comparison of
mostly young SIEs (n¼124)
to EAs (n¼55) in Japan
(sample includes 13 SIEs from
Asian countries)
Most coming from
significant cultural distance
37 of 124 work
in managerial
positions
67 of 124 SIEs in local
organisations
(Froese, 2012)
SIE
SIE ¼highly qualified people
who can work in almost any
country they desire
Interviews with 30 SIE
academics in South Korea
motivated to expatriate by
a desire for international
experience, attractive job
conditions, family ties, and poor
labour markets in their home
countries
Yes No Yes
Tabl e I.
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Foreign
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Literature review
EAs
Much of the expatriation literature takes an organisational perspective, as the initiative
for international assignments typically comes from employers (Suutari and Brewster,
2000). Literature on the strategic use of EAs (e.g. Collings and Scullion, 2006; Harvey
et al., 2001; Harzing, 2001b) discusses the relative merit of staffing MNC subsidiaries
with parent-country nationals (PCNs), HCNs, or third-country nationals (TCNs).
It considers the transfer of executives from MNC headquarters to foreign subsidiaries
(expatriates), from one foreign subsidiary to another foreign subsidiary (transpatriates),
and from foreign subsidiaries to MNC headquarters (inpatriates). As its main proponents
define “inpatriation” as “the relocation of foreign employees/managers to the parent
country of the organization” (Harvey et al., 2011, p. 1, emphasis added), this relocation of
existing employees occurring within an MNC differs from the appointment of FELOs
as described above. In addition, the inpatriation literature predominantly focuses on
temporary reassignments for the purpose of further expansion of globalised MNCs
into the country of origin of the inpatriate: “the emerging market that the organization is
attempting to penetrate” (Harvey et al., 1999, p. 41). Further, the term “inpatriate” has
added a modicum of confusion surrounding the definition of expatriates, as its proponents
define HCNs as inpatriates. However, HCNs only become inpatriates when they are
transferred into the MNC’s parent-country operations as expatriates, and it is therefore
questionable “whether the term ‘inpatriate’ adds enough value to justify its use” (Dowling
et al., 2008, p. 4).
From an organisational perspective, retaining control of foreign subsidiaries is a
paramount aspect of EAs. While other strategic purposes include management
development (Edstro
¨m and Galbraith, 1977a), the transfer of knowledge to (Hocking
et al., 2004, 2007), and the shaping of organisational culture in foreign subsidiaries
(Bonache and Brewster, 2001), issues of allegiance, trust, and control feature prominently.
Executives trust other executives with the same nationality more than those with a
different nationality – not only in nationally homogeneous organisations but also in
nationally heterogeneous organisations (Banai and Reisel, 1999). Although MNCs move
to fill executive positions in subsidiaries with HCNs (localization), many positions in
culturally or geographically distant countries continue to be filled with PCNs – despite the
high cost of EAs to organisations (Edstro
¨m and Galbraith, 1977b; Harzing, 2001a).
Organisations typically have to provide expatriates with their country of origin standard
of living, and offer an additional premium to motivate employees to accept assignments in
culturally distant host-countries. Therefore, expatriate compensation packages typically
include various kinds of allowances, premiums, and insurance (Dowling et al., 1999).
This high cost to organisations of allowing managers to maintain their country of origin
standard of living could be expected to be relevant to the FELO phenomenon, too.
Local organisations in emerging economies may be less tolerant of the high cost
associated with appointing foreign executives, and this may help explain a relative rarity
of FELO appointments. In essence, such concerns may add to a possible “liability
of foreignness” at the individual level observed elsewhere (Fang et al., 2013). Yet,
international appointments involving the high costs of maintaining country of origin
living standards are not the only form of expatriation.
SIE
While the initiative for expatriation to distant countries typically comes from
employers, it can also originate with individuals. Inkson et al. (1997, p. 358) established
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the SIE construct to describe non-organisational forms of expatriation, noting that
“every year thousands of young people head overseas for a prolonged period of travel,
work, and tourism”. They find that SIEs often aim for personal development and
cultural enrichment, in contrast to organisational expatriates who may have accepted
assignments to distant countries primarily for financial rewards. Motives other than
financial rewards might be relevant to the FELO phenomenon, too, as taking
on positions in headquarters of culturally and geographically distant local
organisations could be based on “developmental or learning-driven” motivations
(cf. Stahl et al., 2009).
The SIE construct is used in studies on a very wide variety of international
workplaces. Studies of SIEs include academics teaching in Northern Europe,
New Zealand, Singapore, South Korea, Turkey, and the United Arab Emirates (Froese,
2012; Richardson and Mallon, 2005; Selmer and Lauring, 2010, 2011, 2012), young
travellers that work abroad for overseas experience (Inkson et al., 1997; Inkson and
Myers, 2003; Myers and Pringle, 2005; Peltokorpi and Froese, 2009), contract workers
from neighbouring countries in Singapore (Lee, 2005), and Finnish engineering
union members in fear of unemployment that seek jobs in other European countries
(Suutari and Brewster, 2000). The frequency of studies on SIE academics appears to be
motivated by a desire of these individuals to investigate themselves, as “many
prominent authors writing on SIEs are either living in a country other than their home
country or have spent considerable periods living and working outside their home
country” (Doherty et al., 2013, p. 103). The utility of such studies to management theory
may be limited: Froese (2012) notes that the work of academics is relatively
autonomous, can be conducted in a similar fashion across different countries, and that
“SIEs with other types of jobs that require more interaction with locals and knowledge
of the local context may experience more work adjustment problems than the members
of the academic profession” (Froese, 2012, p. 1110). Geographical and cultural distance
is also very limited in many of the workplaces described in SIE studies, and Suutari
and Brewster (2000) therefore use the expression self-initiated foreign experience (SFE)
in neighbouring countries, rather than self-initiated overseas experience in culturally
and geographically distant countries, noting that “almost everyone can work in other
countries without crossing a sea” (Suutari and Brewster, 2000, p. 435).
As the SIE construct has been positioned in a variety of different ways, there are
probably too many sub-groups for a single SIE construct and a lack of data about each.
Richardson and Mallon (2005), for example, describe self-initiated or self-directed
expatriation as an increasingly common career choice of British academics in the context
of the internationalisation of higher education. The vast number of teachers of English as
a foreign language worldwide also falls into the SIE category, and the SIE construct can
be further extended to describe individuals in many other fields including the healthcare,
food and hospitality industries, or even seasonal harvest workers and professional sports
trainers. Lee (2005), for example, surveys underemployment in a sample of 302 SIEs in 39
organisations (both local and foreign) in Singapore. “Most of them were working in a
managerial capacity”, Lee writes, but the high ratio of SIEs per organisation (an average
of eight) probably indicates, on average, roles other than those of executives. In addition,
only 5.1 per cent of the sample was above 50 years of age, 13.1 per cent were teachers,
25 per cent professors, and 10.6 per cent were in other non-managerial positions.
Further, that sample includes individuals from neighbouring Malaysia (approximately
15 per cent). Malaysia and Singapore only became separate countries in 1965, and
continue to share many commonalities. It could be argued that Malaysians working in
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Foreign
executives

Singapore are only technically ex patria, that their cultural distance to Singaporeans is
minimal, and that grouping them together with the other SIEs in the sample (originating
from the UK, the USA, Australia, and India) could be viewed as a farfetched interpretation
of overseas experience. In a migration literature context, many individuals in that and
other samples might well be referred to as “guest workers”. Bozionelos (2009), for
example, researches self-initiated expatriate nurses in Saudi Arabia (22.3 per cent of
which were from neighbouring Arab countries) and points out that the SIE construct
includes individuals who “view expatriation primarily as a means, sometimes the only
one, to maintain their professional status and earn a living” (Bozionelos, 2009, p. 114).
This observation adds a different connotation to the “initiative” component of the
SIE construct, as the motivation to expatriate can simply be a lack of choice (also see
Froese, 2012, p. 1102) or serendipity (see e.g. Richardson and Mallon, 2005, p. 412)
rather than agency and deliberate initiative. Vance (2005), in turn, reports on a sample
of 48 American and Asian-American SIEs in Beijing, Hong Kong, Taipei, Seoul, and
Tokyo. He finds that the majority work in the international subsidiaries of large foreign
MNOs, and only ten of them work in local organisations. However, it is unclear whether
these ten SIEs in local organisations include those described as Asian-American, and
what positions they hold. Once again, cultural distance, “foreignness” and ex patria
contexts might be minimal.
A very valuable study in this regard is Suutari and Brewster’s (2000) investigation
of 147 SIEs and their 301 organisational expatriate assignee countrymen (all of them
Finnish engineering union members). The authors provide an initial categorisation of
SIEs from their comparative report, but emphasise that no clearly differentiating
characteristics could be identified about some sub-categories because of the diversity
and small size of sub-groups. A few SIEs in that sample do work for local organisations,
but primarily in near-by countries. Most work in European countries (69 per cent), and
only a minority on distant shores (North America 10 per cent, Asia 13 per cent, and others
8 per cent). Thus, a meta-analysis of samples in studies utilising the SIE construct
indicates that only very few individuals in these studies have all the defining
characteristics of FELOs (work at executive level, in local organisations, in distant
countries), and that the SIE construct is therefore too loosely defined to describe the
FELO phenomenon. Overall, the preoccupation with the SIE construct is not quite
understandable, as clearly “both SIEs and corporate expatriates belong to the broader
grouping of “expatriates” defined as individuals who are living outside of their home
country on what they expect to be a temporary basis” (Doherty et al., 2013, p. 103). Some
studies of SIEs and other expatriates (Peltokorpi and Froese, 2009) are apparently even
“repackaged” for publication elsewhere, with the SIE moniker dropped and both sample
groups then indistinctly described as expatriates (Peltokorpi and Froese, 2012).
Hence, FELOs can be viewed as SIEs or, more generally, expatriates. However, only
very few SIEs (Inkson et al., 1997) and migrants (Al Ariss and Crowley-Henry, 2013),
international itinerants (Banai and Harry, 2004), immigrant professionals (Fang et al.,
2009), global nomads (Glanz, 2003), independent internationally mobile professionals
(McKenna and Richardson, 2007) or expatriates by any other name are FELOs.
The present study is the first to report significant differences of FELOs from other
forms of expatriation, as perceived by both sides (foreign and local) of this international
cross-cultural phenomenon.
Table I provides an overview of SIE studies and highlights where there is some
reference in their samples to aspects which comprise the FELO phenomenon. Studies
that do not report empirical findings from research populations, are purely conceptual
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in nature, or do not in some other way have relevance to the present study have been
left out. By investigating a particular group of: individuals at the managerial level;
positions in local organisations rather than subsidiaries of foreign multinationals;
and affiliations involving significant cultural distance, the present study focuses on
important managerial, international and cross-cultural aspects of workplace research.
The subsequent section outlines the methods applied in this research.
Methods
Malaysia was chosen as the research setting for an investigation of the FELO
phenomenon for three reasons. First, English is a language commonly used in Malaysian
organisations by both host-country nationals and foreigners. This facilitated conducting
research in one language with all participants (both foreign and local). Second, Malaysia
has a large population of foreign executives from various countries. This provided the
perspectives of a reasonable number of foreign participants from a variety of cultural
backgrounds. Third, Malaysia’s population comprises large heterogeneous groups
(although typically categorised as Chinese, Indian, and Malay “ethnicities”) which allowed
for perspectives of local participants from various cultural backgrounds. Characteristics
of the FELO phenomenon were described in the same way (and distinguished from other
forms of expatriation) by these locals and are likely to reflect characteristics specific and
unique to the FELO phenomenon. Thus, although the data may have a Malaysian
character, this research setting provides a basis from which theory may be generated
about the FELO phenomenon for comparisons in other settings (see “pattern matching” in
Yin, 2003).
Approach
An exploratory theory-building approach was chosen to achieve a better
understanding of the research topic, and to develop (rather than test) theory.
Interviews are considered a means of accessing unquantifiable facts, allowing the
researcher to “share in the understandings and perceptions of others” (Berg, 2007).
While interviews can also assist in the analysis of quantitative data, their main
purpose is theory construction (Bryman, 2008). Following recommendations in the
literature (e.g. Minichiello et al., 2008), in-depth interviews were selected in order to
obtain rich and substantive insights into the FELO phenomenon from the perceptions
of both foreign and local participants. Hence, this research can be viewed as following
the triangulated multiple data source approach advocated by Al Ariss and Crowley-
Henry (2013, p. 86) in their recommendations for future SIE research directions. Dyadic
data from the two sample groups are used to triangulate findings, while non-dyadic
and socio-biographical data add further insight.
Sample
The two sample groups comprised FELOs and their local peers in some of Malaysia’s
largest groups of companies listed on Bursa Malaysia (formerly the Kuala Lumpur
Stock Exchange (KLSE)), government-linked and non-government-linked organisations,
as well as privately held Malaysian small- and medium-sized enterprises (SMEs). The
FELO cases represent a comprehensive cross-section of organisations founded and
headquartered in Malaysia, and a wide range of manufacturing and service industries.
Table II provides an overview of nationalities and gender in the FELO sample group.
The 25 host-country interviewees are labelled LOCAL in capital letters here.
The LOCAL sample group comprised colleagues of FELOs, board members, senior
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staff members, chairpersons, and family members as well as business analysts and
executive search consultants who were familiar with local organisations’ FELO
appointment practices. It included participants who had been bestowed with honorific
non-hereditary Malaysian titles, such as Tan Sri, Dato’, and Datuk. These denote high
awards that higher echelon identities in the corporate sector are frequently bestowed
with for their contribution to Malaysia’s economy, and bearers of such titles are
generally recognised by the public as important business people. Overall, the LOCAL
sample group consisted of well educated, often highly influential Malaysian
individuals. Table III provides information about the LOCAL interviewees according
to Malaysia’s ubiquitous tri-ethnic schema of categorisation.
Sample selection. The selection of potential interviewees was undertaken by
researching a database of 13,318 Malaysian corp orate directors (MINT online database
Bureau Van Dijk Online Publishing, 2008), as well as annual reports, corporate
documents, and regulatory stock-market filings. Only organisations founded and
headquartered in Malaysia were considered, and the “major shareholder analysis” section
in the annual reports was used for this purpose. For institutional shareholders acting as
trustees or nominees, the classification of the Malaysian share-market operator as either
local (tempatan) or foreign (asing) was taken into account. Annual reports and corporate
documents were obtained from the KLSE web site (Bursa Malaysia, www.klse.com.my)
and other public records. A total of 136 names of foreign individuals (i.e. potential FELO
participants) were identified by this method. In addition, snowball sampling was utilised
when contacting potential foreign and local participants already identified, and during
data collection in Malaysia. This involved asking foreign and local interviewees to suggest
other FELOs and their local peers. The final sample size reflects the rare occurrence of the
FELO phenomenon in Malaysia. An indication of this was that the snowball sampling
soon yielded the same suggestions for potential foreign participants.
Access to sample. Using the selection criteria described above, participants (both
foreign and local) were approached to participate in this study through e-mail and
formal letters of invitation. Obtaining the direct personal contact details of potential
participants proved to be the biggest challenge. To comply with research ethics
guidelines of an Australian university, the following sequential steps were taken to
establish contact and gain permission for the interviews.
First, a “Request for Contact Details” was e-mailed to organisations if the individual
e-mail addresses of potential participants was not known and only an organisational
Nationality Gender
German 17 Male 41
British 8 Female 5
Australian 6
Ten other nationalities (no5 each) 15
Table II.
Foreign sample group
Ethnic group Gender
Chinese 14 Male 14
Malay 7 Female 11
Indian 4
Table III.
Host-country
sample group
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e-mail address was available. If individual e-mail addresses were known, or upon reply
from organisations, a “Request for Participation in Management Research Project” was
then e-mailed to the individuals or their personal assistants if the individuals did not
respond themselves. This request had a formal “Explanatory Statement” as required
by the research ethics guidelines. On occasion, the response was an expression
of organisational consent to participate (i.e. the response confirmed participation of
dyadic (foreign and local) interviewees. However, in most cases the individuals
responded separately if they were interested in the research topic. A large number of
individuals (primarily prospective local participants) did not respond at all or declined
to participate. Among those who responded in the negative, some cited workload
commitments while others expressed concerns about privacy and confidentiality.
Positive responses to the requests for participation were followed up with a message of
thanks, in combination with suggestions for meeting dates and times. In some cases,
positive responses included the offer to assist with the snowball sampling.
Sample size. The 46 FELOs interviewed represent a third of the 136 potential FELO
participants identified in Malaysia. This sample size was thought to be more than
appropriate since “the validity, meaningfulness, and insights generated from qualitative
inquiry have more to do with the information-richness of the cases selected and the
observational/analytical capabilities of the researcher than with sample size” (Patton,
2002, p. 245). Table IV provides comparative information about the age and position
of both sample groups, and the organisations for which they work.
In-depth semi-structured interviews were conducted in and around Kuala Lumpur,
Malaysia from 27 April to 23 September 2009. Given the novelty of the topic and the
exploratory nature of the study, only a preliminary semi-structured interview guide
was used. The interviews commenced with a series of questions concerning
socio-biographical data including age, education, number of years in the organisation,
and marital status. Following this, the interviews moved to broad, open-ended
questions such as “How would you describe your position and role in this
organisation?” Interviewees were allowed, indeed invited, to elaborate on various
aspects that they believed to be significant: “Please feel free to elaborate and describe
your career, how you came to this country, how you came to the position you now work
in, and what you do in this position”. Probing questions were asked whenever
FELOs LOCALs
Age of interviewees
Range 28-68 29-74
Median 52 48
Average 51 50
Interquartile range 44-60 44-57
Executive position
Board director 13 8
CEO, COO or MD 21 8
Employed executive 12 9
Type of organisation
Private enterprise 26 14
Public-listed company 16 9
Government- or state-controlled/NGOs/non-profit sector 4 2
Tabl e IV.
Interviewee age, position,
and type of organisation
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appropriate to clarify details, resolve contradictions, or extract further explanations as
has been suggested in the literature on research interviews (Minichiello et al., 2008).
The data analysis utilised NVIVO (version 8) software that provides content
analysis tools for large amounts of interview data and the systematic identification and
coding of themes that are common both within and across sample groups. Interviews
were transcribed and text segments coded into themes. The coding process started
with a large number of “free nodes” which was gradually reduced and sorted into a
more hierarchical “tree node” structure, with sub-nodes reflecting more nuanced sub-
themes (Richards, 2005). While this tiered structure emerged naturally from the data,
it resembles a first-, second- and third-order scheme becoming increasingly prevalent
for inductive research (Gioia et al., 2013, p. 25). Within this tree node structure, the
second-order node named “Distinct nature, rarity, and depth of the FELO experience”
along with six third-order sub-nodes emerged and will be utilised herein (see Table V).
Themes emerging from the interviews showed a high level of consistency after about
25 interviews, in line with figures frequently cited in the literature (Denzin and Lincoln,
2008; Guest et al., 2006). The data are presented here in the form of verbatim quotes as
well as frequency tables for themes that were of sufficient note to interviewees to be
articulated in detail. Phrases highlighted in bold within the verbatim quotes were used
for coding of sub-nodes in NVIVO. These sub-nodes identify mention of issues specific
to the FELO phenomenon or points that differentiate FELOs from expatriates.
The frequency tables detail both the number of comments made by FELOs in respect to
each theme and the number of FELOs mentioning the theme as well as the number
of comments made by LOCALs in respect to each theme and the number of LOCALs
mentioning each theme. Themes in the tables are ordered by descending FELO
comment frequency.
Findings
A large number of relatively unspecific interview comments (335 from FELOs and 82
from LOCALs) are broadly associated with the distinct nature, rarity, and depth of the
FELO phenomenon. These general comments illustrate and support the argument that
the FELO phenomenon is quite distinct from EAs. Allegiance, trust, and control, for
example, are at the core of both phenomena but affect FELOs and EAs in opposing
directions. While allegiance, trust, and control explain the frequency of MNCs utilising
PCNs for EAs involving PCNs, they limit the occurrence of the FELO phenomenon
because, in the words of one interviewee, owners of local organisations “risk having
some of the advantages they have as controlling shareholders cut off [y] So there is
still that fear of loss of control. That’s what you experience” (FELO No. 17).
Sub-theme Comments FELOs Comments LOCALs
Assumptions about FELO income levels as a potential
source of resentment 126 44 90 25
FELOs are not in the country “just for the money” but
for the experience 91 39 23 15
FELOs are exposed to heightened local scrutiny 70 30 26 14
The long host-country work experience of FELOs 65 30 43 22
FELOs do not have the safety-net of expatriates 42 25 9 7
Glass ceiling for FELOs and top jobs reserved for locals 27 18 11 10
Tabl e V.
Distinct nature, rarity,
and depth of the
FELO experience
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Broad theme: distinct nature, rarity, and depth of the FELO experience
Comments from all participants indicated that FELOs are a rare phenomenon, which
resulted in some FELOs being quite interested in this study and one responding to the
initial interview request with: “Thank you for your interest in this rather exotic group
of people” (FELO No. 6; e-mail 18 Feb 2009). The rarity of FELOs adds to their
distinctness from other international positions, as noted:
I’m the only non-Malaysian in this organisation, the only non-Malaysian! In the whole
[deleted] group. [y] I think most foreigners are in JVs [joint ventures], partnerships and
the like, where they run business on behalf of the foreign partner.[y]SoI’m a bit
unique, I suppose, somewhat (FELO No. 4).
Even within my group [of companies] I’m still special after all those years [y] – in a
group that has 10,000 employees (FELO No. 10).
LOCALs were agreed on the rarity, “You don’t see a lot. And if you’re talking about
local ‘private limited’ companies, there’s hardly a single foreigner” (LOCAL No. 23),
but were divided over whether the FELO phenomenon is an increasing or diminishing
trend:
It’s still rare for foreigners to work in local organisations. Still rare. In financial
services maybe more than any other [y][y] Communications maybe, increasingly more
(LOCAL No. 1; seeing an increase in the FELO phenomenon).
There’s not many [FELOs] around anymore, actually ‘cause people are moving
away [from appointing FELOs] (LOCAL No. 12; se eing the FELO phenomenon
diminishing).
Comments on more specific themes elucidated the differences between the FELO
phenomenon and EAs. Table V lists these sub-themes, ranked by the frequency of
FELO comments and discussed in the following section.
Assumptions about income levels, in the country for the experience, and exposure to
heightened local scrutiny
The consensus of interviewees was that FELOs generally earn substantially less than
expatriates, and do not receive housing allowances, school fees for children, or annual
family trip tickets that often comprise the “expatriate compensation package”.
The remuneration of FELOs was reported to be the same or slightly higher than that of
host-country colleagues. Some FELOs claimed that their remuneration was lower than
that of local peers in similar positions. LOCALs familiar with actual income levels
confirmed that many FELOs work for the cross-cultural experience rather than
financial gain. Both groups of interviewees reported that HCN colleagues generally
assume the remuneration of FELOs to be equivalent to that of typical expatriates, and
that this can be a potential source of resentment:
However transparent you are about [remuneration] packages and stuff like that, there’s
always going to be this [perception]: “You pay him more; more perks, more allowances.
And why is he better? Only because he’s foreign?” (LOCAL No. 10).
FELOs are generally exposed to heightened local scrutiny:
I was the only [nationality deleted] sitting there among a group of 200 Chinese. [y] I felt very
insecure because everybody’s eyes were on me: “Why is he here? Is he so good that he’s
here?” (FELO No. 2).
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I think, we begin with a bit of resentment: “Why is this person here? I could have done
that job! You didn’t ask me!” and I think that’s hard, I think emotionally that’s really hard on
the foreign guys coming here (LOCAL No. 10).
On occasion, that exposure to scrutiny and resentment includes a nationalistic bias
from the local media, or “finger-pointing” from peers, colleagues, and staff:
I’ve been blasted in the Malaysian media because we had some [y] issues here.
“How can we have a ‘mat salleh’ {i.e. Caucasian} running the nation’s icon?” Berita Harian
{a Malaysian newspaper} absolutely smashed me (FELO No. 4).
And I am very conscious about the fact that there is nobody else on the board to whom they
possibly could point the finger (FELO No. 7).
The long host-country work experience of FELOs
The host-country work experience of FELOs was mentioned relatively more often by
LOCAL interviewees than by FELOs, suggesting that HCNs attach significant
importance to this theme. Both sample groups typically contrasted the long host-
country work experience of FELOs to that of expatriates:
I think many of the typical expats; they have a very limited timeframe, a very
limited horizon. They say: “Ok, I do another three years, then I go to the next secondment.”
And this is – from my point of view – the biggest difference (FELO No. 19).
LOCALs in particular saw this long tenure as a positive difference to expatriates,
and reported that it leads to better integration in the local organisation and the
host-country society at large:
If your view is more long-term, they {i.e. HCNs} will invest more in a relationship with
you. If you’re a foreigner and they generally sense that you’re not long-term, why would
they build a relationship with you? (LOCAL No. 1).
They [FELOs] have more of an investment, if you like – emotional and all the rest of it – with
the country. Whereas a typical expat just sees it as an opportunity, you know, to [y]for
career development; three years [y] There isn’t that sense of connection and ownership
with the country (LOCAL No. 16).
FELOs do not have the safety-net of expatriates
A majority of FELOs felt that they lacked the “safety net” enjoyed by expatriates. Only
a few LOCALs mentioned this theme (see Table V), likely indicating that they may find
it difficult to empathise with feelings of being a foreigner in a foreign country, given
that few have lived and worked internationally:
It’s a bit like a high wire act without a safety-net underneath you. [y]The support
mechanism isn’t there as it is in an international company. I mean, you can stuff up
for various reasons with an international company. But whatever happens, the company
will probably put you back into your home country and make sure that
you’re taken care of. I mean, there’s all sort of legal implications and influences there
(FELO No. 31).
I have a local contract, with local rules. The difference to an expatriate is: the
expatriate has a “home base”. In normal cases he has a contract for four or five years, when he
gets back he gets a position there. If you work for a local company, that’s all gone.
As you’re “local”, of course the safety of the multinational is not there, the safety-net.
So, if something goes wrong, you’re on your own. If something goeswrong with an expatriate,
you let the company [take care of you]. That’s the difference (FELO No. 35).
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Glass ceiling for FELOs and top jobs reserved for locals
While expatriates are often posted to the top-position in the host-country hierarchy,
FELOs report to a local boss, a board of local directors, shareholders, or business
partners. Top positions are unlikely to be available to FELOs:
Unless it’s a multinational company, then it’s ok, but if it is a Malaysian company, I think
they would make sure there’s always a Malaysian on top (FELO No. 16).
Of course they allow you to run [the company] and to do all that work, but in public,
they will have a “Datuk” or “Tan Sri” – a Malay guy {“Datuk” and “Tan Sri” are Malaysian
non-hereditary titles}. [y] But there will come a time when the limit becomes
apparent to where I can go in this group. Can I become the Group CEO? I do not see that
(FELO No. 10).
While MNCs typically provide merit-based career-paths for their executives, FELOs
are aware that a “glass ceiling” exists for them, and that many senior positions are
filled without regard to merit. Both sample groups agreed that a foreigner at the top of
a local organisation is often untenable for political reasons:
The higher up you go, I think, the messier the politics are going to become. Because there
are people in the organisation who will be in their positions only for the fact that
they are Malaysian and may be not particularly good at their jobs. But as a foreigner
moves up through the ranks, you realise you are not going to be able to outperform
that individual, to get his job, or move beyond them.[y] I think the navigation
through an organisation chart [y] it’s difficult for a foreigner. A lot of nationals stay
static in their position for a long, long time – regardless of performance, good or bad. [y]
There always is going to be somebody, somebody else sitting in that chair
(FELO No. 27).
Because, you know, politically they cannot allow a foreigner to be at the helm of such
key organisations. So it’s no way that you would ever have a foreigner at the helm of
[that local organisation] or, you know, a local bank. I mean, it just [y] it just wouldn’t happen;
it’s just politically untenable I think (LOCAL No. 16).
Similar sentiments may block the ascent of FELOs in family-operated organisations:
They’re a public-listed company – the position that the father wants to leave when
he retires, he wants his son to take over the place and [y][y] He’ll do the Harvard-
thing, he’ll do whatever, and then come back and walk in and, at twenty-seven, be the
CEO or International Sales Manager [y]. Rather than someone else. If they need expertise
from the outside [y] but they’re not going to put [a foreigner] into such a high position
(LOCAL No. 12).
Is it possible for him, that one day he’ll be the chairman of that [company]? The answer is
“yes”. Why, because they’re not an owner-managed business. That’s the difference.
So, even for me, if I was to join an owner-managed business outside, chances are [y] that
there’s a glass-ceiling (LOCAL No. 9).
In such cases, FELOs often maintain a low profile, work behind the scenes, and take a
backseat in the public eye behind local colleagues:
Oh, because I’m not after the top job! [y] I like to be very influential, but my job has
always been to advise behind the scenes, help people re-think, have an independent idea.
But I don’t have to be there at the time when [y]. I don’t have to give the interviews and
the press conferences.[y] And I’m vice-president of [deleted] but I will never be
president of [deleted] (FELO No. 8).
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Discussion
Significant differences are apparent between EAs, most SIEs researched to date, and
the distinct nature, rarity, and depth of the FELO phenomenon. The first and
most obvious difference is the relative frequency of these international positions.
As expected from the review of literature, issues of allegiance, trust, and control
make FELOs a rare phenomenon. The findings clearly indicate that owners of local
organisations generally doubt the allegiance of foreigners, distrust expatriates, trust
executives of their own nationality more, and wish to retain control of their operations:
the hiring of foreign executives remains controversial and rare. Nevertheless, the
obvious theory emerging from these findings is that global competition has apparently
reached a level at which local organisations in emerging economies, despite concerns
about allegiance, trust and control, are joining the marketplace for global managerial
talent. The notion of “career capital” that characterises much of the SIE literature
(Jokinen et al., 2008; Suutari and Ma
¨kela
¨, 2007), and that is probably the single most
important aspect distinguishing SIE from more general migration research (Al Ariss
and Crowley-Henry, 2013, p. 83), is the key “product” traded in this international
market. The value of this product (i.e. career capital) can outweigh the “liability of
foreignness” at the individual level (Fang et al., 2013) that many FELOs in the present
study describe.
Second, most expatriates in the subsidiaries of multinationals are of the same
nationality as the headquarter staff of their employer. In contrast, FELOs are typically
the only foreign individual in the organisations for which they work. While expatriates
in MNC subsidiaries (PCNs and TCNs) are likely to report to other PCNs or TCNs,
FELOs report to HCN superiors. Expatriate chief executive officers (CEOs) or managing
directors (MDs) of MNC subsidiaries usually report to PCN superiors in distant
headquarter offices that often know little about the subsidiary’s country of operation, and
rarely get involved in day-to-day operations. In contrast, FELOs in CEO or MD positions
report to HCN superiors who are well informed about the country of operations and often
have significant influence on operational decisions. From the perspective of management
theory, this raises interesting questions. Do FELOs need to have better managerial skills
than expatriate managers in the subsidiaries of MNCs and even managers of a typical
MNC headquarter? FELOs have to work under a level of scrutiny akin to that of a highly
involved and very critical chairman/supervisory board at home (as good CEOs have to
do). In addition, FELOs have to work in a culturally different environment (as expatriates
have to do). The ability to perform under both of these pressures is likely to be scarce and
probably another reason for the rarity of the FELO phenomenon.
This emerging theory also has implications for the hiring practices of established
MNCs. These organisations may benefit from hiring more executives who have worked
in local organisations. Indeed, FELOs may provide advantage as (a) “local hires” in
foreign subsidiaries, (b) transpatriates for subsidiaries in other countries, and (c)
in headquarter positions. In respect to (a), the involvement with local organisations is
like to have increased their country-specific experience, knowledge, and understanding
beyond that of assigned expatriates in the same host country (Ceteris paribus).
For example, FELOs may understand the inner workings of local joint-venture
partners better than assigned expatriates, have a good reputation to loose, and be more
acceptable to host-country colleagues due to their previous service to local employers.
They may therefore be seen as inclined to work towards outcomes that serve both their
host-country and the foreign multinational operating in it. Regarding (b), the insider
involvement with local organisations in one culturally and geographically distant
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country is likely to better prepare FELOs to understand organisations, colleagues, and
markets in other countries. This would make them suitable expatriates/transpatriates
for MNC elsewhere. Finally (c), FELOs’ understanding of the perspectives of local
organisations and colleagues in culturally different environments, combined with the
experience of working under heightened scrutiny, may prepare these individuals well
for headquarter positions in multinational organisations. In essence, established MNCs
may be able to gain back “career capital” from the global marketplace by appointing
former FELOs.
Third, the extent to which FELOs have to take host-country sensitivities into
account, and the nature of FELOs’ interactions with colleagues, staff members, and
other stakeholders of the local organisation differs from EAs. Expatriates typically
have a clear mandate to pursue the parent-company’s corporate strategy and
interests – which may conflict with local views. Locals likely explain and grudgingly
accept expatriate income levels as the price that foreign organisations are willing to
pay for “one of their own” to exercise foreign control. In contrast, FELO remuneration
is subject to intense scrutiny, as it is perceived to be “coming out of local coffers”, and to
be paid to “one of them” by “one of ours”. While expatriates generally have the backing
and support of their parent-country headquarters, FELOs do not have such a source
of power.
Fourth, FELOs are apparently trusted only after long periods of host-country
experience, and a level of involvement that exceeds typical EA periods. Significant
host-country experience of FELOs is likely to be an important element in reducing the
potential for resentment that results from HCN assumptions about FELO income
levels. As Table VI illustrates, the organisational tenure of FELOs in this study is
nearly as long as that of their LOCAL counterparts. Compared to typical expatriates,
the median host-country experience of FELOs (a median of 15 years), combined with a
median organisational tenure of seven years is very significant. The FELOs had also
generally had prior international experience. In contrast, only 10 per cent of typical
expatriates are reported to have had previous international experience when assigned.
Most EAs (65 per cent) are expected to be between one and four years, and 59 per cent
of assignments are completed on time (GRTS, 2010).
Fifth, the nature of the FELO experience includes the perception that the “expatriate
safety-net” is lacking. In addition, FELOs may not have the merit-based career-
advancement opportunities of other expatriates. Instead, they are subject to nepotism
in organisations that may give preference to political, ethnic, or family affiliation.
Theory emerging from the aggregated second, third, fourth, and fifth discussion
points above is that successful (i.e. “surviving”) FELOs will primarily be mature
individuals with significant international and host-country experience, and willing to
work without much backing or a safety net in a cultural environment different from
Number of countries lived
in longer than one year Years in Malaysia Years in local organisation
FELOs FELOs FELOs LOCALs
IQR 2-5 9-19 4-12 5-18
Range 2-8 2-44 2-24 2-30
Median 4 15 7 10
Average 4 15 9 12
Table VI.
International experience,
host-country experience,
and organisational tenure
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their own – the ultimate experienced trapeze artists. This theory is strengthened by the
median age (52 years) and interquartile range (44-60 years) of the FELO sample in this
study (see Table IV). In light of this, the motivation of FELOs for taking up and staying
in their positions requires discussion. The characteristic that FELOs have in common
with other types of SIEs appears to be a risk-tolerant career mobility started at a young
age. Biemann and Andresen (2010), for example, analyse differences in the reasons
for international work between assigned expatriates and self-initiated expatriates in
middle, executive, and top management positions (albeit from a small sample). They
found that SIEs start their international careers at a younger age, have higher
organisational mobility, and expect higher benefits from international experiences for
their future careers. Their career orientation appears to remain stable over different age
groups, whereas it declines with increasing age for expatriates on assignment. It is
likely, therefore, that individuals who have started expatriate careers at an early age
will form a disproportionately large percentage in studies of SIEs and, by extension,
FELOs. This theory would also agree with the distinction that Stahl et al. (2009)
make between developmental (or learning driven) and functional (demand driven)
expatriates. The former are described as more likely to do well in international
positions and to view their expatriation as a career stepping-stone to positions in other
organisations (and thus, probably, become FELOs).
Sixth, the motivation of local organisations warrants further discussion and
exploration beyond the scope of the present paper. Why foreign executives from
significant cultural distance are appointed to local headquarter positions and why
these positions are not filled with local executives must be examined in a comprehensive
fashion (Arp, 2013a). As organisational motivations vary (Arp, 2012), this leads to an
organisational typology (Arp, 2013b). The present study nevertheless illustrates that local
organisations do appoint foreign executives despite concerns about allegiance, trust, and
control. However, the composition of the sample (mostly FELOs with very significant
host-country involvement) also indicates a “survivorship-bias” in this cross-sectional
study (a static picture of a dynamic phenomenon): only those foreign executives that
are perceived to be significantly different from typical expatriates continue to hold their
positions in local organisations. Table VII provides an overview of key differences
between typical expatriates and FELOs.
Implications for future research
Thomas et al. (2005) had reasoned that research on new types of international cross-
cultural workplaces is at an early stage of development in which construct definitions
are just emerging. The present study can be viewed as an example for this
development, with implications for the way in which future research should change.
Recent reviews of a wide range of studies (Al Ariss and Crowley-Henry, 2013; Doherty
et al., 2013) indicate that definitions, at least for the SIE construct, are still in flux.
Indeed, Al Ariss and Crowley-Henry (2013, p. 90) conclude from their analysis of the
SIE and wider migration literature that “Rather than postulating a narrow focus on
SIE [y] the theoretical weaknesses concerning this topic could be better addressed
through a research agenda that is more inclusive in nature”. The findings of the present
study demonstrate that perceptions about expatriates (their own and those of their
local colleagues) are crucial for research into new international workplace phenomena,
as categorisations may depend on who expatriates work for. Local scrutiny varies
between expatriate categories, and perceptions about loyalty and control can have
significant effect.
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Expatriates FELOs
Appointment Expatriate assignment in the foreign subsidiary of MNCs Executive search firms (“headhunted”), prior consulting
engagements, SIEs, EAs avoiding “reverse culture shock” of
repatriation
Trust and control Expatriates are typically of the same nationality as the headquarter staff of the
organisation for which they work
Employees in MNC subsidiaries (expatriate PCNs and TCNs) are likely to report to other
PCNs or TCNs. Expatriate CEOs/MDs of MNC-subsidiaries are likely to report to PCN
superiors in distant headquarter offices who often know little about the subsidiary’s
country of operation
Expatriates are seen by HCNs as representing foreign interests
Expatriates typically have the backing and support of their parent-country headquarter
FELOs are typically the only foreign individual in the
organisations for which they work
FELOs report to local (i.e. HCN) superiors. FELOs in CEO or
MD positions report to chairpersons, representatives of
family-owners, or dominant shareholders. These HCNs are very
well informed about the country of operations, and often have
significant influence on operational decisions
FELOs need to demonstrate their loyalty to local interests
FELOs neither have the “safety-net” of expatriates nor external
support
Income level Expatriate remuneration typically aims to compensate for the hardship of temporary
assignments to distant host-countries
FELO incomes are broadly in line with those of local peers, but
are nevertheless the subject of assumptions by HCN which can
lead to resentment
Host-country
experience
Expatriates often have no previous experience in their host-country FELOs often have very significant levels of host-country
experience from previous work in other local organisations or in
MNC-subsidiaries
Host-country
involvement
The “trailing spouses” of expatriates are typically foreign nationals
Expatriate families are typically part of expatriate communities, and often isolated from
their host-country
Expatriate dual-career couples often struggle to find employment for “trailing spouses”
A large number of FELOs is married to local spouses
Many FELOs are involved with host-country society to a
significant degree (often through their local spouses)
FELO dual-career couples (where spouses are local) do not
usually face difficulties of finding spouse employment
Mindset Often “hearts at home” or “dual allegiance” mindset (Gregersen and Black, 1992; also see
Hutchings, 2004)
Long-term expatriates often develop dual allegiance to their host-country colleagues and
distant parent-country headquarters
Instead of a “hearts at home”-mindset, a “global mindset” is
described for FELOs
FELOs have no need to bridge a divide between their
host-country colleagues and distant foreign headquarters. Their
allegiance, by definition, must be shown to the local headquarter
Age Typical expatriates (72%) are from 30 to 49 years old (GRTS, 2010) Typical FELOs in the present study (median age ¼52 years;
IQR ¼44 to 60 years) are somewhat older than
typical expatriates
Table VII.
Key differences between
typical expatriates
and FELOs
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International management research may be at risk of neglecting local positions and
perspectives. Indeed, Gelfand et al. (2007, p. 479) write that this is a critical challenge
for cross-cultural research, and emphasise the importance of “taking indigenous
[i.e. local] perspectives seriously, and moving beyond intracultural comparisons to
understand the dynamics of cross-cultural interfaces”. Expatriate categorisations are
subject to meaning attached by the individuals involved (both foreign and local).
Conceiving of scholarly categorisations and constructs in isolation (i.e. without first
collecting observations from both groups of individuals) may not aid the exploration
of new phenomena. For example, individuals described by some academics with the
preconceived, semantically, and etymologically confused term “inpatriate” (if meant to
be antonymic to the term expatriate as import is to export, it would have to be
impatriate) are likely to think of themselves simply as expatriates (ex patria ¼out of
the fatherland). Preconceived concepts and constructs may also lead to the inflation
and conflation of concepts that the SIE literature appears to suffer from. The problem
may be exacerbated by the frequency of studies on SIE academics by SIE academics.
For example, academics that have self-initiated their work in a culturally and
geographically distant foreign country may all categorise themselves as SIEs. However,
their local colleagues may distinguish between positions in local universities vs the
subsidiary campus of a foreign university. In the latter, SIE academics may be perceived as
very similar to expatriate academics assigned from the headquarters. Local colleagues as
well as the public may assume (and probably grudgingly accept) such academics to
receive a higher salary than local colleagues. In contrast, SIE academics working for a
local university may well be perceived as somewhat unusual and exposed to heightened
local scrutiny not unlike FELOs. A similar example can be given for the meaning of
concepts and terminology. The term “localization” has a specific meaning for management
scholars (i.e. multinationals increasingly filling subsidiary positions with host-country
nationals). However, local participants in the present study attached a different meaning:
the increasing adaptation of foreigners to local ways. Scholarly commitment to “taking
indigenous/local perspectives seriously” (Gelfand et al., 2007, p. 479) may involve the
questioning of established concepts and terminology in the literature. If local people prefer
to call themselves “local people” rather than “host country nationals”, inductive informant-
centric scholarship should probably reflect that. Local people think of the research setting
as their country, not a “host country” as etic-minded researchers may do. Similarly, if
established terminology in the academic literature (such as “localization” or “localized”)
connotes different meaning for local people, research should report this accordingly.
Local people may never quite see how “localization” can be initiated by a foreign
organisation (that fills positions in its subsidiary with host-country nationals), but instead
may feel that any localisation originates from their country (and that is its cultural
influence on foreigners). In sum, implications from the present research highlight the need
for more primary (grounded) research.
Conclusion
The present study addresses a gap in the extant international management literature
by exploring a type of affiliation that has not been previously examined. The findings
extend knowledge on the career capital derived by “developmental or learning driven”
individuals (Stahl et al., 2009) from boundary-less careers ( Jokinen et al., 2008; Stahl
et al., 2002; Suutari and Ma
¨kela
¨, 2007) and new forms of international phenomena
including SIE (e.g. Inkson et al., 1997; Peltokorpi and Froese, 2009; Suutari and Brewster,
2000). Providing an important step towards understanding the FELO phenomenon, the
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research extends theory about international positions in the international human resource
management literature. In triangulating data from two interviewee groups, this
study maintains rigour and robustness while recognising the subjective nature of the
experiences of research participants (as advocated for future SIE studies by Al Ariss and
Crowley-Henry, 2013, p. 89). By investigating both foreign and local perspectives in depth
and through qualitative methods, this research augments quantitative research (e.g. Banai
and Reisel, 1999) on the role of trust among executives from different countries and
cultures, and experimental research (e.g. Joardar et al., 2007; Thomas and Ravlin, 1995) on
the acceptance of foreign newcomers within cross-cultural workgroups.
However, there are significant limitations and a need for further research. The scope
of this paper is limited to exploring the situation of FELOs and reporting differences
to various other expatriates. Why foreign executives from significant cultural distance
are appointed to local headquarter positions, what they contribute, and why these
positions are not filled with local executives is examined elsewhere (Arp, 2013a).
Future case study and longitudinal research will be needed to provide a full picture of
all aspects of the FELO phenomenon over time. In addition, the present study explores
the FELO phenomenon in a single broad dimension: the FELO participants are
individuals perceived as “Western” in an “Eastern” environment. The terms “Western”
and “Eastern” create a superficial dichotomy that does not reflect the complexity and
heterogeneity within either construct. Globally, the FELO phenomenon could be
represented by “Eastern” executives holding headquarter positions in “Western”
organisations (or the reverse) as well as by African or Latin-American executives in the
headquarters of European organisations (or the reverse). Indeed, the FELO phenomenon
could also be represented by “Eastern” individuals in the “Eastern” setting chosen for
this study (for instance, Korean or Japanese executives in local Malaysian organisations).
However, because of its investigation of multiple cross-cultural interfaces (comprising
FELOs from 13 countries and their local peers from various cultural backgrounds), the
present study is not narrowly mono-dimensional but describes a pattern for comparisons
in other settings (cf. Yin, 2003). It is the first study that examines the situation of FELOs
and the distinct nature and depth of their experience. Accordingly, its key findings
provide some initial grounded theory and a basis for further theory generation on the
FELO phenomenon in other settings.
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Corresponding author
Dr Frithjof Arp can be contacted at: frithjof.arp@gmail.com
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