This document discusses how organizational culture affects expatriates and a company's attempt to reduce costs through international expansion. It begins with an introduction on globalization and free trade. It then covers organizational culture and how cultural values impact work behaviors. Leadership challenges in multicultural environments are examined, particularly the characteristics needed in expatriate leaders. Issues with expatriating employees like costs, repatriation, and performance evaluations are analyzed. Challenges of mergers and acquisitions across cultures are also discussed. The document argues that developing cultural intelligence in leaders is important for successful international expansion while attempting to reduce costs.

1. Mémoire d’Analyses Appliquées
Worldwide Management
How culture affects expatriates and the struggling attempt to
reduce costs. A view
Human Resources Management 2015/2016 Alumn: Luigi Basso
Academic Year 2015/2016 Professor: Nicolas Nolf

2. May the strength of my brain lead me to make the right choices.

3. 2
Contents
I. Introduction 3
I.1 Globalization as a result of free trade economy
II. Organizational culture 6
III. Leadership 10
III.1 How cultural intelligence may help future expansions
IV. Expatriation issues 15
IV.1 Candidates’ outline
IV.2 Cost analysis 17
IV.3 Repatriation Issues 18
IV.4 Performance evaluation 20
V. Acquisitions and Mergers 22
V.1 How to deal with an hybrid culture
VI. International Human Resources Management 25
VII. Workforces 28
VII.1 Different needs for different tasks
VIII. Conclusion 29
References 30

4. 3
I. Introduction
I.1 Globalization as a result of free trade economy
Over the last few years we are used to referring to globalisation as a common word, as
economic energies spread worldwide.
In the late 90s this concept was barely new, still unknown to people and it was difficult to
provide a full explanation of the term itself.
Globalisation was an emerging force in our economical cultural and political life, which was
expected to redirect and change our lives for the duration. Our history had already witnessed
an inevitable change of course in what was our yet-to- become international
economical/financial life.
The story of globalisation traced back to the XVI century with fierce argument over
protectionism and free trade economy. With reference to protectionism (which see Colbert
as the father, having been the first to establish a protectionist economy set), we shall refer to
the primary idea of a country defending its national economy. The government can do so by
introducing economic measures, such as customs duties for the incoming goods or strict
regulations for competitors willing to enter that given area.
The country should also protect its factories and its manufacturing fields in order to compete
in the industrial scenario; in the same way, it is the government’s duty to look after
employees once the factory is confronted with a drop in production or it is about to shut
down.
As far as consumers are concerned, a scenario like this will inevitably affect their purchasing
power due to the lack of competition. Moreover, companies have no interest in lowering
prices and invest on innovation, hence a lack of choice for the costumers and the breakdown
of the country’s competitiveness.
The free trade system, by contrast, allows the government to set scale economies and
conquer new market shares in other countries. Investments on technologies and their
transfer become vital for companies in order to keep up with competitors and ensure
consumers with the best prices and the best range of choices.
Regarding the downsizes of this model, we shall take into account that fierce competition
pushes enterprises to find out or elaborate further solutions to keep on remaining on the
market.
As happened over the last few years, a small amount of offshoring processes has taken
place, in particular toward countries where it is said to be easier to manufacture at lower
prices.

5. 4
This has led to both socio-geographic destabilization and to the so-called “financial
dumping”. In order to avoid delocalization, the government tends to low taxes and fees for
companies, thus cutting back on essential resources for the improvement of social
conditions. A social dumping is then expected to come along with a financial one.
Moving from a national to an international context, enterprises, nowadays, are to change
their strategy sets and to act on a global market. With no boundaries, a company, on its
route to internalization, can plan new strategies of diversification and leadership, reducing
fixed and variable costs. In this new context, partnerships amongst firms become vital.
Thanks to innovation and new technologies, they are able to make up alliances and
cooperation in order to have a chance of surviving in the fierce global markets competition.
(This is the case of air transportation with their transnational cordsharing programs in order
to cover most of the market, as the example of Air France-KLM and the American Delta
Airlines).
On their way to being global, each board of directors decide what kind of technical
organization the company should have. Generally speaking, the process of production is
externalized, leaving the main offices, such as the marketing or the research and
development department, in the mother land. The bigger a company is, the more important
all the partnerships with small national actors will become. For the first ones, this allows a
better segmentation of the market in the host country, on the other hand, for national small
enterprises; a partnership with a multi-national one might represent the tipping point in their
possible development.
Nowadays, it sounds usual to refer to “intercultural or international management”. As citizens
of the XXI century, in a world that counts over 7 billion citizens, firms are to come out from
the illusion that wars, political instability or terrorist attacks are out of that “business” world.
Externalizing a sector or simply posting someone in a different city and context look like
more challenging than it seems to be; it might be risky and imprudent and it requires a great
amount of financial resources. From the management point of view, this could be even more
difficult, because it demands the need of developing the right interpersonal skills.
Consequently, “before thinking who needs to go where, just think who needs to know what”
Having a knowledge of how to manage internationally becomes crucial in order to find or to
adopt the best measures in both global and local terms.
However, companies still do not understand fully the importance of a national culture. This,
of course, impacts negatively on the brand image, entailing management issues which might
lead the company to direct failure.

6. 5
Every enterprise should determine its own implementation strategy in details and it should
lead to a calling into question of the existing measures and procedures in order to find a
mutual ground between the parties and opt for a winning approach.
The three main questions seem to be then:
1) What partner is the most suitable in accordance with a given business?
2) What characteristics an expatriate leader should have?
3) Is it possible to apply a common global mindset between the mother company and its
subsidiaries?
The purpose of this paper aims to investigate over the clash among cultures given a
business context.
As a result of my readings, I will provide what, in my perspective, the main guidelines might
be.
In the first section I will go over the meaning of organizational culture, along with the issues
it may rise, I, then, move to the core of my reasoning, that is to say, the contrast between the
demand of valuable expatriate, but the necessity to reduce costs. In particular, I will pay
attention to expenses, repatriation issues and performance evaluation.
Furthermore, I will focus on the main problems which an acquisition or a merger may
impose. This will afford a wider perspective, where I will introduce the concept of
international human resources management and argue for the need to establish up to three
workforces.

7. 6
II. Organizational Culture.
This sections aims to explain in general terms what “organizational culture” is about. Due to
a length allowance, I will not go over all the cultural values or dimensions (Geert Hofstede,
Fons Trompenaars) intentionally, taken them as already known. I will focus on those ones,
which I find more consistent with this paper.
The “culture literature” counts about 160 definitions of national culture. Whether we refer to
an anthropological definition or to a sociological one, we come to know that culture is the
result of a “total”, something untouchable. Individual perceptions, tastes and needs can be
understood as a function of our environment and how it has conceived us. A series of
teachings that are automatically transmitted to the next generation and so on.
Margaret Mead refers to culture as “a learnt behavior, a collection of beliefs, habits and
traditions, shared by a group of people and successively learned by people who enter
society”1
. Applying this criterion to a business context, one will be forced to watch and to
interpret a given model that will become the example for his or her career. It is not by
accident that Schein’s definition of organizational culture will focus on leadership,
communication and dynamics within a group. The famous credo of “how things are done
around here” reflects the kind of accepted and expected behaviors which are inferable from
the outside, that’s to say what could be seen on the surface level (Schein 1992). It is up to
the workplace to help a newcomer to integrate within the company and to provide him/her
with the social rules of the group.
The corporate culture thus stems from a set of values, beliefs, norms and rewarding
systems, which have already been accepted, then shared, by others employees. Entering a
group will lead to a collective learning and to the shaping of one’s thinking acting and feeling
as well. Even though everyone’s background is different in terms of values and mentalities,
the work culture aims to establish a common platform among colleagues, without you feeling
neglected or left out.
Culture affects every situation and each organization has its own corporate perspective,
there can’t be the same philosophy among companies.
Schein’s model is composed by three steps2
. Also known as the “onion model” we could
refer to the outer layer as “artifacts”, that is to say all the symbols and things which are
1
Intercultural management notes (2015), M1LA01AN, Paris Sorbonne Université.
2
Schein 1992 « Organizational culture & leadership »

8. 7
perceived directly, for instance, the dressing code of a company, food, office layouts or
general behaviors.
Of course, they all need interpretation but their appraisal is far easier than the so called
“values and norms”. This category is partly visible and party unaware. In a bid to explain
“why we do things around here” (Schein), we enter a more intimate sphere that deals with
attitudes and personality which do play a key role within an organization. What a person
really thinks does influence the internal equilibrium of a group. As we keep on spoiling the
onion, we come to what is known as “basics assumptions”. As the term suggests,
assumptions are invisible, taken for granted. To this category we can include the way one
hides or expresses feelings, social relations, or commonly, the use of time and space. As the
iceberg model, what lies under the surface, does represent the deepest part of our inner self.
However, if one has not fully understood the culture, there might be the risk of stereotyping.
Assuming that all the people presenting more or less the same features might be coming
from the same culture is the wrong approach. Intercultural management requires entering a
new logic, as we can consider it as the result of two encountering cultures.
Even though we do belong to a global universe, intercultural exists since ages. The nautical
discoverings of 600 are a perfect illustration of the matter.
The purpose of managing internationally is to recognize cultures, without comparing them
but learning how they could be combined together.
Schein truly believes in a consistent correlation between one’s culture and a raising problem.
When an issue emerges, there, comes the culture of a person, which in a way, might be
seen as his/her personality. Considering one’s background becomes thus crucial. Cultural
variables, applied to this context, suggest why a person thinks or acts the way he/she does.
This might be the result of the education process or religious beliefs, or in broader terms, the
political or economic situation of a given country. (Just think about democratic, communist or
dictatorial systems of government which do impose different constraints on a company
willing to gain new market shares overseas).
Culture, itself, does guarantee one’s belonging to a given group. It helps a person find a
reflection of what is “mine” and what is different.
Furthermore, in his writings, Schein pays particular attention to the so-called “Myth of the
three cultures”. This theory predicts that each organization is expected to have three main
different points of view; we can talk about operating, professional and design culture, each of
one demanding a specific interpretation of the project that is in progress.

9. 8
What seems to unite all is synchronization and consistency. By the way, as the reality of
famous grounding has shown3
, mastering these two features is not so easy and it does not
go without saying. It is not unusual to notice that also within a national company, the
marketing department seems to think and interpret models differently to the financial one.
This gap or discrepancy in communication is already one of the most unnoticed issue
affecting national companies. The situation changes dramatically given an international
context; intercultural management requires more efforts and a deep self-analysis.
Managers cannot pretend to transplant their own culture directly to the host country, without
taking into account what is going on at destination. Therefore, they should be able to adopt a
contingency management, taking into consideration the others’ needs.
That is why it is advisable to have a knowledge of who I am first, not pretending that my way
of doing business is best. There is not a better management style than another.
Managing should be a combination of transfer of know-how and human oriented features. In
an international context, this, of course, requires preparation and self-awareness of one’s
national culture. Worldwide companies should look for help outside, if in need.
Over the last few years the concept of ‘indoor university”4
’ has taken place; it could be
associated to a benchmarking analysis where, companies get down to brass tacks and they
are in charge of sorting out expatriates’ experiences, along with their pros and cons, and
spread this knowledge on behalf of the other employees. This might be the case of EADS-
Airbus that offers tuition programs in order to enrich their workers about multicultural
contexts. Experience thus becomes an intangible asset for enterprises.
Unfortunately small companies keep on underestimating this factor and its negative impact
will, inevitably, reflect on their turnovers.
It is a common thinking to reduce this argument to the only use of foreign languages. If so,
why working in the United States becomes so different comparing to a job in Great Britain?
There might be open answers, but what comes a priori is that we all need training and
develop the right skills to go beyond the simple language barrier.
Under a strategic point of view, having a cultural sensibility, helps managers better
acknowledge the others’ thoughts and perspectives, better valuate situations, thus predicting
valuable deadlines and foresee all possible issues that might rise up.
3
Swissair grounding 2002, “The last days of Swissair” (2006) M.Steiner.
4
Virginia Drummond « Le management interculturel (2015) » 3 edition.

10. 9
A good deal of surveys has been conducted over the correlation between company sector
and the specific nature of a job. Unfortunately, it remains unclear whether it is the specificity
of a given job that influences the culture or the company itself. More a job requires technical
skills, more restraining cultural variables will be.
Virginia Drummond in her writings (2015)5
, presents three different attitudes which might stir
up in a multicultural business environment.
“I”, as an outsider, tends to use fictitious ways in order to stabilize or, at worst, normalize the
situation.
- “I” will try to think in general terms about the culture the “other” has, “I” will stereotype and
think in global terms, such as “ The Spanish are”
- If the “other” does something out of imaginations, “I” will tend to label him as “unstable
person”, thus avoiding to make efforts to understand him/her or, at least, to glance at
his/her culture.
- The other way round, “I” will try to look for a common ground between me and the “other”
(working on a mutual project, could be the easiest way, for instance).
It could go without saying that one’s perspective stems from what he/she had been
experiencing so far. In some cases, this may also come from the educational system itself
which frames one’s way of reasoning. There are educational systems, such as the French
one, where pupils are taught how to think logically and follow a deductive thinking pattern,
others, how to think pragmatically and analytically. This undoubtedly will impact on the on-
the-job scenario, once the students will become future executives or employees.
We can go over a few steps which might be considered as the key points for a worth mutual
transfer of knowledge.
-Building up trustworthy relationships between the parties.
- Valuing what is similar and retaining what is different as an urge to find a common ground.
- Real workshops.
- Feedback evaluation.
A manager which have intercultural skills may assure a better performance on behalf of the
company because it can deliver a better service, adopted to the target country and make a
brand have a good reputation on that side.
5
Virginia Drummond « Le management interculturel (2015) » 3 edition pg.

11. 10
III. Leadership
III.1 How cultural intelligence may help future expansions.
Managers all around the world are believed to be able to manage mostly everywhere.
Actually, the process of managing or leading has not always gone smoothly across
countries. Leaders or managers have not been fully educated or prepared enough to deal
with the hardships which might be encountered when abroad.
What makes an organization unique, could be related to its leadership and management
policy.
There are plenty of leadership styles that will dictate the philosophy of the company.
Tannenbaum and Schmidt6
present a grid of leadership styles which stems from
authoritarian boss-centered leaderships to democratic subordinate-centered ones.
Even though there is a tendency of merging what is a leader and what is a manager, their
nature is totally different. The former will plan, allocate resources, control and solve
problems; the latter will show a direction, motivate, function as the example and support all
the members of a team. Leadership, in this sense, stems from social influence, requires
others and it includes goals.
The concept itself could be applied to every business reality, but is it possible to apply the
same rules everywhere?
Before moving on to the explanation of “global mindset”, I think it is worth mentioning the
importance of “cultural intelligence” (Gardner 1985).
This barely new concept comes along with the one of cultural skills. It could be expressed as
the capability of understanding what is different, thus acquiring a better sensibility, which will
foster one’s interpersonal skills. It allows you to reinforce your identity, but, at the same time,
it pushes you beyond, out from that comfort zone which everybody has, into a new universe,
where everything could be coming into question.
Cultural intelligence is then composed by three steps.
At first level, what is named “inner component”, that is the ability of wondering about a given
situation, our brain tries to come to a full explanation of what we have experienced. Further
on, some parts of the image in our brain are selected in order to find whether a solution or a
proper answer. The last step is a series of learnings which allow one to retain or retrieve
what is important.
6
Prof DR Lassleben H; Human Resources Management, ESB Business school

12. 11
Gardner also expresses four dimensions that enable all the process:
1) A cognitive function, where we do retain what one thinks and it will be also useful on the
long term.
2) A sensitive function that’s to say the ability to come out from our comfort zone and coming
to term with what is unknown to us.
3) A behavioral function where one will act using all his/her experience and skills.
4) A metacognitive function which stands for the acknowledgement of all the three ones prior
mentioned.
Leading is the ability to influence and to drive people with different backgrounds, cultures or
psychology, towards a common goal which will bring benefits to the whole group.
Managing internationally requires a changing of paradigm. Doing so both locally and
globally, of course, results to be more complex. In this sense, all the leadership skills, such
as, strategic thinking, decision making and enabling teams, are no longer enough.
An international contest demands:
- Appreciation of cultural diversity.
- Advanced technological savvy.
- Balance among partnerships or alliances and sharing leadership.
Worldwide companies should come to a “global standardization”, with the ability to
customize products in relation to the needs of that given country. This may be achieved by
using that “sharing leadership”7
, the ability to rely on local delegation, which can shed light
on certain features, customs or practices, underestimated by foreign managers.
Scholars have identifies three main area of investigation dealing with interculturalism.
When entering a new society there is always a process of examination that comes first. It
might be due to curiosity or just to acquire that “comfort” which seems lost as soon as one
crosses the national borders. Examination demands a close attention to what might help a
company expand abroad or what might be the threat. Culture does affect the degree to
which managers are concerned with employees’ job satisfaction and, more important, what
management style is more appropriate.
Later on, over the settling-in period, during an everlasting cultural education, foreign
managers rely on their experience as the best teacher they have.
7
Chevrier S. “Le management interculturel” (2016), Puf Editor, 3 edition.

13. 12
Last, but not least, exposure. It has to do with the interaction with locals and with the
retrieval of foreign people which might have already worked there, who might provide the
manager with precious advice and recommendations.
It is worth considering that cultural intelligence is complementary to one’s cultural skills.
Although the first one is in oneself since his/her early years, the second could be
developed later on.
Several features have been recognized as a good starting point in order to become a
performing international manager or leader.
-Having lived in more than one country,
-Having travelled to other countries.
-Speaking more than one language fluently.
- Having experienced international assignments or having schooled abroad.
On the other hand, if one has not accomplished all these missions, it does not mean that
he/she cannot reach the same level.
Consequently, it has been noticed that the above features are likely to lead to two different
styles.
Who has lived abroad, for instance, is said to be better at welcoming strangers, at learning
foreign languages faster and at creating new alternatives, by contrast, who has earned a
more national mindset is prone to avoid communication unclarity and to pay particular
attention to goal achievements.
Again, a local mindset is considered to be more predictable, to be better trained against
unexpected surprises and to be more structural, whereas, it goes without saying, a global
mindset is open to what is new, foresees changes as opportunities and not as threats,
appreciates teamwork diversity and it is able to work beyond cultural boundaries.
Global management also helps distinguish between expatriates and top managers.
Whether expatriates are chosen on location basis, global managers are expected to work
in every environment, due to their skills which help them handle each situation, always
assuring the best performance for the company they represent.

14. 13
The notion of “global mindset” basically refers to three axes8
:
1) A cultural axis which reflects the diversity between cultures and the only mutual ground
will be the internationality of its actors.
2) A strategic axis, which could be considered a main asset for a person, that is to say the
ability to perceive the world differently, thus managing or leading accordingly, always
considering what is new as the tipping point.
3) A multidimensional axis, which stems from the combination of one’s skills, knowledge
and attention to the “other” along with its own reality.
What could be taken for granted lies in the possibility of adopting this global oriented
pathway, both to a local context, as the mediator between two entities.
What characteristics a global leader should have?
As already mentioned, a leader is someone chosen by a group, who is able to work as an
example inferable by others. Although some could have inner leadership skills since early
years, those ones might not work elsewhere than home. There, comes that need of
developing that savoir-faire which will enable the implication of policies in agreement with
cultural parameters.
The perspective of a leader is then different among countries. Americans believe that
he/she is someone who should not hesitate in order to take decisions and to be able to
handle every kind of situation, for the Japanese, differently, a leader is a person with a
major sensibility which has to express the willingness to take into account the others’
perspectives and considerations.
Leaving apart, intentionally, all the “technical” features which a leader should have, I totally
agree with Drummond’ writings (2015) about five elements which are to be mastered, even
though, sometimes, one could get sidetracked.
1) Sensibility.
2) Curiosity and being open-minded.
3) Humbleness.
4) Willingness to learn and acknowledge.
5) Psychological stability.
8
Virginia Drummond « Le management interculturel (2015) » 3 edition pg.

15. 14
With regard to the first one, a person should pay particular attention to all details, such as
the way one speaks along with the semiotic body language. Our unconscious directly
perceives them and we should avoid judging rationally.
Being curious will definitely help have a deeper appreciation of the culture in question. In
this way, the process of integration might even be easier, without one having to handle
with stressful situations.
Equally, being open-minded and willing to learn new philosophies will contribute to
enriching your culture. Being asked to share who you are first, then learn what might be
new for you. For instance, if one will start working with gay people, he/she will learn a lot
about the LGBT world, thus going beyond stereotypes, misunderstanding or whatever.
Being humble and patient also lead to a better self-awareness, which will also help play
down one’s ethnocentrism, thus ameliorating interpersonal relationships.
Last, psychological stability, of course, helps one being self-confident enough to enter a
new dimension of living.
I found consistent introducing the instructing features found in the well-known book written
by the Chinese philosopher, The Art of War9
.
In short, there are 5 values which help make a qualitative leap.
1) REN, that’s to say, a manger should keep his human-oriented side.
2) YI, being equal.
3) ZHI, wisdom and ability to establish interpersonal relationships.
4) YONG, being brave, and no hesitation in order to take decisions.
5) YANG, hierarchy and strictness.
9
Sun Tzu « The art of war », Mondadori, IT

16. 15
IV. Expatriation issues
IV.1 Candidates’ outline
There are plenty of tools and ways to evaluate and analyze company performances. In some
way, we also tend to see in executives, who rank high on the top management level, the
example of good governance.
In this framework, the human resources department covers the most important role, no
matter what the nature of the company might be.
In order for a company to have the best intangible assets, human resources consultants are
to have the ability to foresee any business needs and act accordingly, choosing the right
personnel.
Basically it is going to be a question of the right match, where candidates are to be chosen
in relation to the tasks that require accomplishment. Making investment on human resources
becomes thus critical to fulfil a business need so as to satisfy a market demand. It is not a
luxury any longer, but a necessity.
Moreover, in my perspective, choosing the right candidates helps a company develop a
better uncertainty avoidance (As we shall see later on, it deals with the ability to foresee the
future, and managing accordingly).
In the on-going framework of globalisation, corporations have been looking for new
partnerships or opportunities abroad, in order to enhance their networks, hence their need of
expansion. Over the last few years, the communication between cultures has not always
gone gently, even though technologies have been trying to bridge the gap, therefore, it is still
common in business to rely more on “expatriates” rather than virtual assignments.
The use of expatriates was already popular in the States in the 40-50s, again, today,
although things have changed, the concept remains the same.
Why does a company need assignees willing to relocate?
Basically there are three needs which have to be filled:
1) Transfer of the company knowledge.
2) Development of global leadership skills.
3) Establishment the same corporate vision in the host country.
Regrettably, firms although they demand willing assignee, are loath to send them out due to
the pressure to reduce costs, in order to face competition.

17. 16
As quoted by Oliver Meir “Moving the right people at the right costs and at the right time is
more complex than ever. Global mobility is changing, as companies increasingly look for
smarter ways to manage expatriates”. 10
The following situation worsens also due to the wrong assumption “Rules are the same
everywhere”.
From expatriates, executives can learn how to behave in a specific country; for instance they
can have enough knowledge about different negotiation tactics, as the ones existing
between Americans and Japanese. The former are known to be very thoughtful before
providing the counterpart with an answer. This attitude is not shared by Americans at all,
which are not used to waiting up to 7 minutes for a response.
How to select the right candidate?
There is still this contrast between the search of the best assignee and the failure of helping
expatriates make a successful transition to a rewarding new position, when returning to their
home office.
When planning overseas assignments, companies should have awareness about all the
expenses that will have to face. In particular, in the HR literature we can refer to three types
of assignments which, in turn, represent three different costs.
1) Short terms assignments, which are usually up to one year. The company will take charge
all of the expenses but it does not include family relocation.
2) Long term and permanent ones, which are very expensive and they both demand family
relocation.
Considering the economic efforts which have to be deployed, the HR department should
have a clear picture of the candidate in question. Of course, relocating, typically overseas,
requires a good deal of appealing economic factors in order to get him/her go, and on the
whole, everything should be dressed by a great self-motivation and huge expectations of
career improvement.
However, for financial reasons, companies have been wondering about the possibility of
teaching locals instead of sending managers abroad.
We acknowledge that this paper cannot provide a full solution, but I will try to think over the
main points of strengths and possible weaknesses in both cases.
10
M.Oliver, « The 2014 expatriate management conference » Marsh&McLennan Company.

18. 17
As mentioned above, valuable assignees are an intangible asset for the company they
probably make profit with; in this sense, rewarding performances are essential to assure the
company’s success.
In order to achieve so, corporations are to guarantee the best compensation packages and
condition. We can thus refer to extrinsic and intrinsic retribution. The former, of course, has a
financial nature; the latter considers career enhancement possibilities and opportunities.
IV.2 Cost analysis
As we have seen, companies strive for cutting on costs, and they are on their way in order to
elaborate new possibilities so as to economize on such important operation.
Basically expatriates cost up to 3/4 times more than they would be back home. The average
cost for an expatriation usually varies from 300,000 up to 1 million dollars, to which they
should add all expenses prior departure. As an example these include:
1) Cross cultural training for the employee and for his family, if needed, plus cost of air
transportation and free visits back home.
Once the assignee arrives at destination, the company should provide:
1) Housing.
2) Settling-in assistance.
3) Country transportation.
4) Adjust the salary to the meet the same standard living.
5) Repatriation support.
However, in order for them to cut on all the frills expatriation may request and as a result of
my readings, three tendencies are under review;
1) Use of Youngers manager instead of older executives.
2) The myth of “Locals can do that too”.
3) Modification of the compensation package.
Youngers, mostly in their twenties and thirties, seems to be more willing to relocate,
considering it as a formative experience which could be rewording in the long term. They
also look more adopted to go abroad, due to the lack of all the constraints an executives
might have.
However, a transition from a parent to a host company is not that obvious or demanded by
Youngers due to several reasons such as, the utopia of the “right of return” (they are not
willing to expatriate lest the might lose what they have achieved so far), or the high price to

19. 18
leave their home and family. Furthermore they seem to pay great attention to the
destination; New York or London are undoubtedly appealing cities, but sometimes the reality
could be different.
Relocation can also worsens due to the fear of not being integrated within the group of future
colleagues.
With regard to the second point, companies have been shifting from sending out parent
country nationals to use locals. In one hand, relocate executives is more expensive,
considering the family transfer and the bonus they might deserve.
Locals, on the other hand, can somehow assure a better performance thanks to their ability
to grasp the market from an inside perspective and their knowledge about all the “unwritten
rules”.
The drawback lies in salary procedures in relation to those laws, social security issues and
specific retirement plans, which might raise any issue in the distant future.
The third option, of course, seems to be more complex, because it depends on the status of
the executive first, then, on other features such as the chosen location, the fluctuating
exchanging rates and inflation.
Over the last few years, compensation packages based on local and international benefits
have gained popularity. One of that kind is LocalPlus11
. In order for the employee to
capitalize on his/her global experience, benefits, such as prizes, increasing salary or career
enhancement, are worth considering.
IV.3 Repatriation Issues
Rewarding performances are the basis of the company’s success, hence the need to send
out the best candidates. Their ability to express intercultural skills becomes a profit which
works as a warranty in order to shed positive light on the presence of the company
overseas.
However, companies do not invest extensively on an employee’s repatriation program.
International experiences do change workers and this should be used as an intangible asset
in order to stay afloat on the market.
Mission abroad requires efforts, in every sense, and as a result, when returning home, an
employee does want to be paid back, usually expecting a moving upwards the hierarchical
ladder.
11
M.Oliver, « The 2014 expatriate management conference » Marsh&McLennan Company.

20. 19
Astonishingly, the Ernst & Young’s 2013 Global Mobility Effectiveness Survey12
demonstrates that 41% of expatriates return to their former position, and in some cases they
might leave the company.
As stated by a British employee “If you have been the orchestra conductor overseas, it is
very difficult to accept a position as second fiddle back home”.13
This simple metaphor
explains perfectly what I have meant by “utopia of return”.
Worst, expatriates, sometimes have to face their colleague’s lack of appreciation in their
adventure abroad, not enjoying that “hero welcoming” which might already reward.
Weather there are not countless ways to consider an overseas assignment, given that it only
could be a failure or a victory, there is the ongoing controversy about how to define a
winning expatriation.
Should it be considered positive just because the assignee accomplished his/her task
entirely? When entering a new culture, a person typically acknowledges his ethnocentrism,
this could clash with the reality of the host country, creating what is known as “cultural
shock”.
In the same way, as mentioned, when entering a new corporate culture, one is immediately
redirect to a straight pattern of accepted and expected behaviors, which could be only
accepted either refused. Entering a new company means accepting and sharing that given
philosophy.
The next step is usually known as “socialization”. Here, comes when the newcomer infers all
the unwritten attitudes. Once acknowledged, the next step is “mutual acceptance”.
Other reasons for failing relocations:
1) Work dissatisfaction.
2) Family problems (level income, housing, schooling).
In order to overcome all these problems, companies are to establish a well elaborated
planning in order to prepare one’s returning, trying to reshape the corporate culture of the
national country. Through several readings, I have tried to retrieve some mutual features of
different repatriation programs.
1) Ensure a position, and trying to enhance job career opportunities.
2) Establish a new overseas assignment.
3) Sharing of their experience.
12
Alsop R. “When expats return home, what’s next?” (2014)
13
Black S and Gregersen H. Harvard Business Review “The right way to manage expats”

21. 20
Each repatriation should be managed individually, in order to assure the employee’s
satisfaction and rewarding.
This might be the case of the notorious sport clothing company Adidas, which shift from
neither guarantee the employee’s job, once back to the national country, to ask for monthly
report about their accomplishments abroad.
Repatriation need to be studied in depth, and managers should understand that employees
or executives’ expectations do move forward as fast as the need for companies to increase.
IV.4 Performance evaluation
While it might be easier to promote overseas assignments, it is definitely more challenging to
decide who should rate expatriate’s performance.
Should this be up to host country employees or to home country ones?
In the first scenario, parent companies might partly rely on foreigners’ evaluation due to their
personal perspective. In particular, host country employees may evaluate too harshly
expatriates or the other way round, such as in Indonesia, where harmony plays a crucial
role. In this sense, Indonesians may not be consistent about evaluation, lest they might ruin
the harmony in the company itself. Differently, home country rating system may, as well,
raise up issues and thus not being fully valuable. For instance, overseas expatriates may not
work with their home executives on daily basis.
It is recommended to elaborate a balanced set in order to achieve the best accuracy. In
order to do so, the HR department is to establish evaluation criteria in advanced, before the
expatriate leaves. This should help have a clear picture, therefore, a better rating system
along with a better performance appraisal.
There are three main mutual factors among companies which need consideration before
evaluating:
1) Expatriate’s role when overseas.
2) Cultural variables.
3) Strength of the organizational culture.
With reference to the first point, I found it consistent to difference the overseas expatriates to
global manager according to their degree of exposure. In a way, expatriate will be more
involved in day-to day issues with locals, being part of multicultural teams and so on. Global
managers, which are expected to have developed a contingency management, may be less
likely to work in groups and to undergo a daily supervision.

22. 21
Once these features have been applied, companies may decide on what terms an expatriate
should be evaluated. Basically, these ones are expected to be: financial, competence and
bias.
Generally speaking, financial evaluation is the most neutral, where expatriate’s feelings and
considerations might have not been taken into account. It is all about numbers and
economic/financial data, such as cash flow, return on investment or, broadly speaking,
profile and loss accounts. Although this perspective sounds to be the more effective, it may
hides countless issues such as economy instability, host market retailing differences or,
easier, the disregard of suggestion by the parent country to enhance success.
Furthermore, not taking into consideration the expatriate’s opinions or perspectives may lead
to demotivation which may imply a weaker performance in the long future.
The second indicator focuses on employees’ performance only. It deals with the regional
area or the office evaluator and it is supposed to be more human oriented. A possible failure
lies in the lack of contacts between the two companies, in the misunderstanding of a country
business environment, or more often, in the lack of appreciation of cultural issues.
The third feature refers to the cultural bias. Briefly, it has to do with further cultural
misunderstandings which might lead to stereotyping.
Over my readings, I came across a survey carried out by Karpin report (1995)14
about the
evaluation of Australian overseas managers by Asians.
Asia in the last few decades has got the attention of western and eastern companies willing
to make up partnerships with Asian counterparts. Australia was on its way of doing business
with them too. In particular, there are thousands of Australian expatriates spread over Asia,
Singapore counts 6000 of them.
However, they seems not to have fully understood the basic Asians cultural principles
because as a result of the Asian executives’ rating they are seen as “Friendly, but unwilling
to adapt to cultural differences and they appeared unaware of cultural differences between
countries” (Paukins et al ’95).
14
Woods P. “Training of Australian expatriates in SE Asia” pg401

23. 22
V. Acquisition and mergers
V.1 How to deal with an hybrid culture
Changes are always difficult weather they are wanted or forced.
Over the years, multinational companies have shown a strong desire for expansion, mainly
overseas, in order to maintain their market share and remain competitive.
Mergers or taking overs become thus a necessity, the effective way for the company growth.
Whereas these operations are considered not to go perfectly smoothly due to countless
issues, such as implementation difficulties and major changes, a good management policy is
to be at its basis.
In a bid to establish a new partnership or, in case of company acquisition, three main
features, in my opinion, should be the guidelines until the operation is ultimately completed.
- Consistency.
- Clarity.
- Awareness.
The first step, when considering merging, is to choose the right partner. Although there are
merger possibilities everywhere, which from a strategic and financial point of view they might
be winning, not considering the host culture and its features could be the reason for a direct
failure.
Two countries belonging to two totally different geographic clusters, such as Saudi Arabia
and the United States of America, demand major efforts in order to find the right
governance.
Commonly, mergers are not easy to accept by the acquiree due to that sense of superiority
of the acquiring one.
As Nahavandi and Malekzadeh have recognized four attitudes that may come to light when
merging15
.
–Assimilation, which corresponds to the acquiring company’s domination over the second
firm,
- Integration which involves a moderate level of conflict. The acquired company is willing to
accept the policies of the first.
–Separation which foresees the maintenance of the two cultures, as two different, but
complementary, entities.
– Deculturation which implies a high level of conflict, due to the lack of willingness to accept
the culture of the acquiring company.
15
Cecilia Cortina “The role of organizational culture in mergers and acquisitions” (2015)

24. 23
It goes without saying that collaboration between the two parties is highly demanded; a good
merging should include elements from both cultures, trying to unify them, always being equal
so as to avoid resistance.
Astonishingly, although the principal issue might be pretty well connected to the use of two
different languages, this is not considered to be the main problem.
As we stated at the beginning, there cannot be two companies with the same corporate
culture, thus it cannot be pretended to transplant one’s culture to the host country without
any limitations or barrier. Americans will never work as French do.
In particular, this is acknowledgeable since the most visible details, such as the layout of
offices. American employees are physically separated from one another, just allowing a
limited interaction, whereas French offices are typically open spaces which allow employees
to freely discuss among each other.
Basically, this way of working does not call into question what the values of the company
are, it is just the way they are expressed.
Taking this as a simple example, in case of a hypothetical American-French merging, what
really matters lies in the shared core values, believes and behaviors of the two enterprises.
This contrast of two different way of expressing the same values, paradoxically, allow the
company integrate themselves in one another. Pretending to establish the same culture
becomes thus impossible, due to the inability of a company to change people or groups and
their inner nature.
In the culture literature of merging it is common to refer to the so-called “Emotional cycle of
change”, that’s to say, five phases out of which a transition is believed to go through.
The first one is “uninformed optimism”, where challenges and changes are not being faced
yet; employees have yet to realize what a merger is really about.
The second step is “informed pessimism”, where difficulties start being faced. Here, a
strategic plan is highly recommended in order to keep the situation under control until it
becomes reality for employees, which will be our third dimension.
The fourth one, “informed optimism” foresees the acceptance of the changing by the
workers.
On the whole, they should finally lead to the fifth phase, “rewarding” where results come to
light and benefits should strengthen.
Moreover, sharing the same values but adjusting them to the host country shed light on the
company trustworthiness, thus allowing shareholders to continue investing on behalf of the
firm.
Merging requires changes, some employees might be given new responsibility, other might
resign or new staff may enter the company.

25. 24
Everyone, from the top senior executive to the last frontline employee should have enough
knowledge of the on-going situation, which is why awareness and clarity play a key role.
Good governance should pay great attention to workers’ feelings, and perspectives, using
simple tools such as surveys. This conveys a positive feedback at their eyes, with no
intention to manipulate or to hide the truth. Structure and internal communication should be
assured en continuum, not allowing one to miss crucial information.
The HR department of the two parties should thus be able to guide the companies on the
same wavelength, so as to match the size and to reduce their distance.
As far as equality is concerned, great importance should be given to mutual decisions such
as the name of the new company, or the creation of the new logo. Here, happens to be that
process of familiarization and the redefinition of missions and goals.
Generally speaking, a good transition should lead to the following benefits.
1) A better team performance.
2) Focus on the costumer.
3) Consolidation of functions.
4) Stronger sense of community.
5) Openness to future with new missions and goals.
Briefly, some of the same premises could also be applied in case of multicultural teams.
To conclude, merger or taking overs are a life in business, there is no a preset solution that
works best.
The purpose of this section is to draw an idea of the main guidelines which could be adopted
in the following case. What is indisputable lies in the need of support the hybrid culture that
is expected to come out.
Worldwide merging companies could have their numbers right, but it is the human capital
which determines a failure or a victory, thus a top management sensitivity towards
employees becomes an inevitable condition, the only way to allow the transition go on softly.

26. 25
VI. International Human Resources Management
In the unpredictable framework of globalisation and, consequently, with the spread of new
technologies in order to shorten distances and avoid any restraint, the need of developing
human capital, becomes ever more important. Therefore, the role of HR demands more
attention, support and commitment.
With the breaking of geographic barriers, in today’s world, three majors’ company formats
have come to light. From a domestic market, corporations have shifted to an international
one, typically overseas. This has led to the birth to both multinational and transnational
companies. Considering that people tend to muddle up the two, I shall provide a brief
definition of the following entities. Although the former manufactures and sells good directly
in other countries, the home office has always got the control, considering the foreign offices
as subsidiaries. The latter fully relies on subsidiaries, which exercise total control over
production. These ones are expected to be better integrated in the host country, having left
the decision making or the research and development department over there. This is also
believed to lead to a better adaptation and customization of the good in accordance to the
needs of the population, thus involving a higher local responsiveness.
Predictably, law deregulation and the signings of free trade agreements have deeply
affected human resources policies; in the same way, the shifting from a local to a global
reality has brought troubles due to the need to act globally, regionally and locally.
However, HR have been having difficulties trying to bridge the following gap. This demands
a development of consistency and autonomy, which implies the separation from what should
be regional or local.
In order to maintain these two aspects, it is recommended the creation of a set of values,
adapted to the context, which serve as guidelines for HR practices.
As we shall see later on when managing, HR polices cannot be transplanted with no
consequences. For instance, since over 20 years, the American HR system has always
relied on the use of expatriates which were sent out to the host company in order to
establish the same corporate culture.
As times goes by, in order to face up the high costs that outsourcing demands, the human
resources management is to find new solution to assure the same valuable transfer of
knowledge and technology.
Basically, the mission for International HR is to:
– Manage a global workforce.
- Enhance leadership management.
- Provide global career.
In order for them to be accomplished, and before implanting a new strategy whether the
company is entering a new country or stays in its national boarders, the following

27. 26
department should make careful analysis concerning exogenous and endogenous factors
along with the needs of the business as well as the ones of the employees.
With reference to exogenous factors, we shall refer to the legal environment and to the
ability to act accordingly, respecting the labor market condition. Of course, it becomes
crucial to know what country leadership is on there (dictatorship may request other kind of
implementations rather than a republic or whatever), as well as identify any form of
discrimination and any religious beliefs.
Other features which could be worth mentioning are the level of education and the economy
system. With regard to the former, there might be disparities concerning economic
possibilities to access the educational sphere. For instance, the level of education is
Denmark, where universities are fully attended due to tuition free fees, is higher rather than
in Somalia, where this could not be possible due to the low level of income.
In a broader sense, these are said to be visible factors. Along with this, there are, somehow,
less foreseeable ones which, on the contrary, play a crucial role when establishing a
partnership or an international joint venture.
Here, I have found it consistent to refer to Geert Hofstede’s value dimension, in particular to
the contrast between:
1) Individualism/collectivism.
2) Power distance,
3) Uncertainty avoidance.
4) Long-short term orientation.
5) Masculinity/femininity.
The first dimension refers to the degree of personal versus group accomplishments.
Americans, in particular, are an individualistic society, whose members look after them first
and their personal goals, rather than working as united groups. Differently, Japanese usually
work in group and they do recognize the value of teams.
Power distance is linked to the degree of authority any society has. There are companies
where the borderline between employees and top managers is well marked, others where it
is blurred.
Most of the European societies are pretty well open to free discussion between workers and
executives; however, this might result to be a problem in Arabic countries, such as the
Emirates, where there is a net separation between subordinates and top executives.
Uncertainty avoidance describes the extent to which a company tolerates uncertainty. A
company that plans and organizes everything, foreseeing the near future, responds better in
organizational terms. This category is directly linked to long-short term orientation.
There are companies based on long future rewordings, others, on short term retribution. In
the Japanese context, for example, an employee that has been working on behalf of the

28. 27
company for years might be given a promotion or other rewards. American societies system
of awarding is more based on merits; no matter the age of the status of the person in
question.
In the same category I would also mention the importance of time (Trompenaars), along with
its multifaceted concept. There are societies, like the western ones, which perceive time as a
straight line, where, the future is predictable and can be managed accordingly.
Although the same concept is believed to be shared, there are already hardships to be on
the same time wavelength in the same geographic cluster. Italians, as well as Spanish, do
feel time differently to Germans.
Other societies, typically in the Middle-East, perceive time as a circular line where nothing
could be foreseen and it is all about a superior entity to decide. Thus the myth of Insha’Allah
may provoke several barriers for companies willing to make business there.
Moving on, we can refer to endogenous factor such as the disparities in income and living
conditions which differ to countries, the increasing demand on energy, raw material and
infrastructures, the growth in foreign direct investment (FDI), and geo-political issues such
as the integration of certain countries within the EU. On one hand, this presents new market
expansion realities and possibilities but also weak points, such as politic conflicts.
MacDonald’s is a clear example of a good IHRM. According to Fortune, it is believed to be
the best company for using cultural sensitivity to be successful.
They have entered worldwide markets with different cultures but, rather than changing their
primary philosophy, they have been successful in adapting it to local needs; that is why in
Japan a line of green tea has been integrated to the well know MacDonald’s menu.
Their key strength is the fulfilment of local expectations, interpreting them as normal
conditions which need respect in order to make business. In the same way, they contributed
to sharing a value with local nationals.
On the contrary, bad management decision and having underestimated local practices and
costumes have led a lot of companies directly to failure. This might be the case of two well-
known failures, respectively Target with reference to the Canadian market, and Walmart
regarding the German one.
In this reality of outsourcing and offshoring, International human resources should thus be
aligned with the global realities of multinational companies which have been trying to
establish economy of scale and yet be sensitive to local conditions. Moreover, they should
also assure the multinational companies’ effectiveness, that relies on acceptable financial
performances and, more important, on the trust of a company’s shareholders.
What seems extremely challenging for IHRM, in today’s reality, lies in the yet -to- be fulfil
need of creating multiple coordinated workforces.

29. 28
VII. Workforces.
VII.1 Different needs for different tasks
As we have seen so far, hyper competitiveness and growth strategies on global expansion,
force IHRM to adapt fast to global realities so as to forge the best human capital.
Over the years, an enhancement of worldwide working conditions has taken place. Today’s
world witnesses a potential more educated labor force with a greater awareness of the
occurring changes, a never-ending emigration flow and domestic or international mobility.
Due to the inability of establishing a global mindset, human resources see in transnational
teams their tipping point to their challenge. There are three main levels of implication for
international HR: societal, strategic and workforce level.
Societal level.
-Need to act in relation to predictable and unforeseeable consequences globalisation has
brought (openings of new markets and realities).
-Need to consider any issue of shareholders.
-Need to be social sensitive during the offshoring, outsourcing process.
Strategic level.
- Alignment of HR policies with global realities (expansion, cross-border alliances).
-Maintaining the knowledge transfer and technologies.
-Need to rely on the national workforce if needed.
Worforce level.
-Demand of high-quality managers that can motivate people.
- Adaptation to the locals' needs.
- Need to coordinate simultaneously up to three workforces (regional/local/global).
With a short reference to mobility, it has been observed a potential contradictory policy for
worldwide companies. In order to reduce costs, managers encourage employees to develop
a good level of autonomy and be responsible for their own careers and success within
organizations. Therefore, individual learning is perceived necessary and positive for stepping
forward. Mobility, however, may end up with an employee leaving the company, even though
he/she is perfectly integrated and accepted. This new fresh idea is known, in the corporate
literature, as “Me Inc.” policy.
To conclude, no one could know what are the practices that work best when dealing with
workforces, but what is sure is that hiring capable people, whether it is about locals or parent
company’s nationals, is the foremost condition to gain local credibility.16
16
Accenture, "How to manage a global workforce"

30. 29
VIII.Conclusion
Although globalization has increased possibilities for companies to expand domestically or
overseas, so as to increase their profits, these realities, in turn, have led to an unstable
scenario which mainly features chaos, uncertainty and unpredictability.
It is in this complexity that worldwide corporations must fight in order to stay competitive and
profitable for shareholders. Again, they are to guarantee the best communication system
between clients or colleagues, trying to overcome cultural boundaries.
As we have mentioned, there is no a better management policy than another; what does
matter is the willingness to go beyond one’s limits, always being respectful of the others’
core values and costumes. Of course, developing a strong cultural intelligence along with
enforcing one’s self-confidence may lead to the best refining of interpersonal skills.
Moreover, with the improvement of living conditions, fair treatments for workers are
demanded. It is up to human resources consultants to forge the best human capital and to
be well synchronized with the business needs.
As stated, worldwide human resources departments have been trying to solve intercultural
issues so far, with the help of expatriates, workshops or with other tools such as “indoor
universities”.
However, over the last decades the number of international trainings is still relatively small.
The experience exchange is also affected by the reluctance of companies to spread their
know-how, lest they might be stolen.
About the possibility of establishing a global manager, it would be worth investigating over
the advisability of a global HR department as well.
I acknowledge that this paper cannot be exhaustive but I tried to highlight what, in my
perspective, are the most important features when defining the best market strategy in order
to be competitive and gain people’s trust.

31. 30
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i
Unknown author, licensed by Creative Common (2012), downloaded by Andy Schmitz