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By: Fiona Chawla
Garima Arora
ExpatriationandRepatriation
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Sources of Human Resources
Home country nationals
Host country nationals
Third-country nationals
Inpatriates
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Home-country Nationals
Are citizens of the country where theMNC is headquartered but live & workelsewhere
Often used To start up operations (most common reason)
To provide technical expertise
To help the MNC maintain financial controlover the operation
In top management positions
to give promising home-country managersinternational experience
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Host-country Nationals
Citizens of the country where they live & work They are familiar with the culture and know the
language They can often do a better job than home-country
nationals They are less expensive than home-country
personnel Host-country governments often prefer use of host-
country nationals and some require it
Hiring them is good public relations U. S. companies tend to rely heavily on host-country
nationals
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Third-country Nationals
People who are citizens of neither the
home country or the host country
Example: A Mexican, employed by an
American company, working in Argentina The employee's native country and the country
where he works are often in the samegeographic region
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Inpatriates
Persons who work in the home country
and are citizens of a different country
Advantages of inpatriates
Help to develop global core competencies Provide diversity and an international
perspective in the home office
Improve career opportunities for company
managers who are not from the home country
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EXPATRIATION
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Expatriate
Any person who lives and works outside
the country of which he/she is a citizen.
Includes home-country nationals, third-country nationals, and inpatriates.
In most cases, expatriates must have workvisas from the government of the country
where they live and work
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Factors in Selection of
Expatriates
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Adaptability to Cultural Change
Work experiences with cultures other than
ones own
Previous overseas travel
Knowledge of foreign languages
Recent immigration background or
heritage
Ability to integrate with different people,cultures, and types of businessorganizations
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Adaptability to Cultural Change
Ability to sense and accurately evaluate
events in the host country
Ability to solve problems within different
frameworks and perspectivesSensitivity to differences of culture,
politics, religion, and ethics
Flexibility in managing operations on a
continuous basis despite lack of
assistance and gaps in information
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Willingness to Take an
Overseas Assignment
Unmarried employees are more willingthan other groups to work overseas.
Married employees with teenage childrenare usually the least willing to workoverseas.
Employees with prior international
experience are more likely to accept anoverseas assignment.
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Willingness to Take an
Overseas Assignment
People who are most committed to theircareers are more likely to work overseas
Careers and attitudes of spouses have asignificant impact on employeewillingness to work overseas.
Employee and spouse perceptions of
company support are crucial toemployee willingness to work overseas.
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Compensation Details
Base Salary
Base salary: the amount of money that an
expatriate would receive for doing the
same job in the home country
Used as a basis to establish salary in the hostcountry Salary may be paid in home country currency,
host country currency, or a combination of thetwo
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Compensation Details
Allowances
Relocation allowance Cost-of-living allowances are paid when the
employee must incur extra costs that he would not
pay in the home country
Examples: housing allowance, and the costs ofprivate schools for the employee's children
Hardship allowance: Often paid to employeeswho work in a country with difficult livingconditions
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Compensation Details
Taxes
An expatriate may be required to pay incometaxes to both the host country and his/her nativecountry
The company compensates the employee for theextra amount of tax
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Compensation Details Summary
The cost of an expatriate employee =
salary costs+ benefit costs+ allowance costs+tax costs
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Compensation Approaches
The compensation package must be cost-
effective and should be seen as fair
Balance-sheet approach: ensure that the
expatriate does not lose money from theforeign assignment
Negotiation approach: Negotiate
compensation with each employee
Localization: Pay the expatriate a salary
comparable to local nationals
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Compensation Approaches
Lump sum method: give expatriate a pre-determinedamount of money. Employee decides how to spend it.
Cafeteria approach: Offer the employee a choice
among various compensation options, with a limit on
total costsRegional system: Set up a compensation system for
all expatriates who are assigned to a particular region
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Success Factors for Expatriates
They must :
Be Willing and motivated to go overseas
Be Technically able to do the job Be Adaptable
Have good interpersonal skills and be able to form
relationships
Have good communication ability Have supportive family
h t i t f il i
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Reasons why expatriates fail inforeign assignments
Spouse cannot adjust to new physical orcultural surroundings
Expatriate cannot adapt to new physical
or cultural surroundingsFamily problems
Manager is emotionally immature
Manager cannot cope with foreign dutiesManager is not technically competent
Manager lacks proper motivation for
foreign assignment
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REPATRIATION
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Repatriation of Expatriates Refers to the termination of the overseas assignment
and coming back to the home countryto thecountry where the HQ is located or to the homecountry subsidiary from where he/she wasexpatriated.
Repatriation is the final step in the expatriationprocess
Repatriation is important because with it areassociated a number of severe challenges for the
expatriate which may significantly determine his orher performance prior to the return to the homecountry, and which hinder the expatriatereintegration due to adjustment problems culture
shock (re-entry shock).
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Repatriation of Expatriates
Reasons for returning home
Readjustment problems
Transition strategies
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Repatriation of Expatriates
Reasons for returning to the home country
Most expatriates return home when theiragreed-on tour of duty is over
Some want their children educated in a home-country school
Some are not happy in the overseas assignment
Some return early because they failed to do a
good job
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Repatriation of Expatriates
Readjustment problems Out of sight, out of mind syndrome: the
expatriate may not have been considered forjobs that he/she could do well
Organizational changes may have:
eliminated the jobs for which the expatriate iswell-qualified
reduced the importance of the expatriate's
position or department The new job may be seen as a demotion.
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Repatriation of Expatriates
Readjustment problems Technological advances may have made the
expatriate's skills obsolete
The former expatriate may not have anopportunity to use skills gained abroad.
The former expatriate's salary and benefits may belower than they were abroad.
The former expatriate has to readjust to home-
country culture and adjust to a new job
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Effectiveness of Returning Expatriates
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Repatriation of Expatriates
Transition strategies: Help smooth the adjustmentfrom an overseas to a home-country assignment Repatriation agreement: addresses the concerns
of the individual and the company before theforeign assignment begins.
Keep the expat involved in home officecommunication and projects during the foreignassignment.
Appoint a higher-level manager as a career
mentor for the expatriate (helps to avoid "out ofsight, out of mind" problem).
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Repatriation Process
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Repatriation Phases
Preparation - developing plans for the future;gathering information about the new position
Physical relocation
Transition
Readjustment - coping with change
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Career anxietyNo post-assignment guarantee of employment
Loss of visibility and isolation
Changes in the home workplaceWork adjustment The employment relationship and career
expectation
Re-entry positionDevaluing of international experience
Coping with new role demands
Loss of status and pay
Individual reactions: job-
related
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Readjustment Challenges
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Treat as re-expatriation : similar to expatriationplan and execute systematically
Repatriation program : provide mentoring for
finding a new role, information on thechallenges as a result of the repatriation,
provide assistance
Repatriation strategies : time-bound
expatriation helps provide better preparednesswhere the expat is aware from the beginning
when his/her assignment ends and can plan
for next steps supported by the organization
Managing Repatriation
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