Leveraging expatriates for international business expansion strategy

Expatriate & International Business Expansion

A guide to leveraging expatriates

The major benefits that this report

Major factors influencing choice of host countries for expansion

Suggested two countries for expansion

Three criteria to consider when deciding which employees to send abroad

Major methods and/or incentives to encourage employees to become expatriates

Strategy to ensure that both the Executive Committee and the Board of Directors are committed to the expansions

Two recommended books for expatriates

Guide for expatriates for one to two (1-2) years.

Framework for presentation

A guide to leveraging expatriates

In the growing trend of companies going global and starting to look out for new markets, companies are sending more and more employee to work outside their home countries as expatriates. In this case at hand, as the CEO the The company needs to leverage expatriates the expatriate is most likely to have experience of working with the company and is an advantage for the company in sending and expatriate rather than hiring someone from the new market.

The expatriates are able to better identify and meet the company's objectives and understand the aims better than the local employees.

The same management style with that of Home Company is allowed to be followed by an expatriate and can help the local employees to understand and follow the company objectives and hence it is important to send expatriate.

The company would be able to better control and coordinate the overseas operations if an expatriate, known closely by the company by virtue of having worked in the Home Company, is sent to the new market. Therefore controlling the new business in the new market is easier.

Expatriates play an important role in breaking down the barrier that often exists between the parent company and subsidiaries and will help the company to reduce risks and tackle technical problems.

A good supplier relation can be established by the expatriates through coordination but and knowledge transfer and in improving business relations.

The expatriate will also help in replicating the company culture in the new market and among the new employees hired from the new market. This ultimately would help the company to better its relations with the employees of the host country and the company will be able to better understand their needs.

There are however certain disadvantages of leveraging expatriates. There are chances that the expatriates can misunderstand the political situation and which can cause political risk in the new market.

There can be certain constraints in understanding the local language and culture of the host country by the expatriate which can hamper company's operations.

The cost factor should be looked into by the company as the costs of sending and expatriate to a host country can be costly.

The major benefits that this report

The report will be useful to the company in more ways than one.

The report will help the company to understand the role and importance of sending expatriates to the new market and the advantages that the company can have from taking the decision.

The company can also discuss and debate the advantages of control and coordination allowed by sending expatriates to the host country against the costs that are involved in sending them and their family.

The company will also be able to understand and make and assessment of the period of time that the expatriates would require to spend in the host country.

Major factors influencing choice of host countries for expansion

It is assumed that company is based in the U.S. and most the employees are of Amercian origin.

Apart from the market opportunities, while choosing the possible countries for expansion the following factors were kept in mind.

Distance: the country to be chosen should not be logistically too far away and should not be in a remote area. It is suggested that the country to be chosen should be within the distance that the present logistics of the company can easily reach.

Cultural Background: it is advised that for the purpose of business expansion the cultural background of the host country needs to be kept in min. It needs to be ascertained that the host country should not have a culture that is averse to the use of the products that the company produces.

Knowledge about the country: having relatively adequate knowledge about the countries of expansion is necessary. The company should choose the two countries about which there is enough knowledge especially about the market behaviors, the political scenario, the legal and the regulatory structure, etc.

Language: the language that majority of the people of the host country speaks is important to allow easy and smooth set up of business and easy exchange of ideas and interaction with suppliers and distributors in the new market. it is also important that the local people should understand and be able to somewhat communicate in the language that the expatriates are comfortable in.

Finally it is desirable that the country to be chosen for expansion has some relatives of the employees of the company so that any expatriate sent there can have ease of settlement.

Suggested two countries for expansion

It is suggested that based on the parameters above, the company should choose the United Kingdom and China for expansion.

The reasons for choosing UK is that it has a culture that is very similar to the U.S. culture, there is no language barrier, logistically the country is well placed and there is a lot of information and knowledge available in the public domain about the country and its market. It would also suit expatriates to settle in the UK along with their families and help establish business in the host country.

The huge domestic market of China is the primary reason for choosing the country for expansion. The country is accustomed to a corporate culture and apart from the language barrier it would be relatively simple for expatriates to settle there. English as a language for communication is also fast developing in China.

Three criteria to consider when deciding which employees to send abroad

The three most important criteria that would help decide which employee to be sent abroad are:

The desire of the employee to have exciting and new experiences in life and at work is one of the primary factors that would be considered. This is so because working in a foreign country would be an adventure it itself and something absolutely new for the individual both in personal life and at work. Such an employee should be able to navigate language barriers, culture shock and the attachment to the way of life back home.

The employee should also be able to understand the culture in which they will have to live and work and be able to adjust to the change in culture and the new ways of life and work. The employee to be sent abroad should also have a certain degree of cultural sensitivity and be respectful of the new culture where he/she would work.

The employee to be sent broad needs to be flexible in work and manner. This is essential as the employee, as an expatriate, would have to adjust to new cultures and ways of life at work and hence the established methods that the employee has been following might also require change. The employee should be flexible enough to be able to adapt to the new style of living and working.

Framework for presentation

UK has been expanding at the rate of 2.46% from 1956 until 2015, reaching an all-time high of 9.80% in the first quarter of 1973 and a record low of -5.80% in the first quarter of 2009. In the second quarter of 2015, the economy expanded by 2.60%.

In the second quarter of 2015, the Chinese economy expanded by 7%. Between 1989 till 2015, the GDP Annual Growth Rate in China averaged 10.92% and reach an all time high of 105% in the third quarter of 1995 and recorded lowest growth of 3.80% in the fourth quarter of 1990.

The renting and buying norms for foreigners and foreign companies are fairly simple in the two countries that have been identified.