Host-Country National Expatriates

Abstract

IntroductionThe role of managers in managing the local subsidiaries of multinational corporations is said to be important for the performance of the company (Black, Morrison, & Gregersen, 1999; Delios & Bjorkman, 2000). In addition, Japanese companies have been noted as having a strong tendency to control local subsidiaries, using employees sent from the country (Kopp, 1994; Oki, 2013; Peterson, Sargent, Napier, & Shim, 1996; Shiraki, 2006).However, sending employees to overseas subsidiaries may result in expatriate failure when the employees or their family members do not adapt well to foreign cultures and must return home before the end of their assignment (Collings, Scullion, & Morley, 2007; Tung, 1981, 1982, 1987). Thus, it has been said that using expatriates sent from the country as managers of overseas subsidiaries in the initial start-up phase and then later using managers promoted from host-country nationals is desirable (Evans, Pucik, & Barsoux, 2002; Furusawa, 2008). It is pointed out that reasons for promoting host-country nationals are to get rid of the image of being parent country-centric and build good relationships with local governments and local companies, while being able to hire and keep even better employees (Furusawa, 2008).It has been implicitly assumed that the management of local subsidiaries will come from either (a) sending someone from the country (a parent-country national expatriate, or P-CONE) or (b) using a local resource (a host-country national). In contrast with these two options, this paper focuses on a third option that involves headquarters (c) hiring a local resource (a host-country national expatriate, or H-CONE) in the country and sending that person to the host country. These resources differ from immigrants, self-initiated expatriates, inpatriates, short-term engagements, virtual engagements and so on (Briscoe, Schuler, & Tarique, 2011; Inkson, Arthur, Pringle, & Barry, 1997; Kim, 2013; Suutari & Brewster, 2000).1Recent years have seen many exchange students flow into Japan from other parts of Asia, as well as an increasing number of foreign exchange students hired by Japanese companies. For Japanese companies expanding in other parts of Asia, the third option of H-CONEs, or foreign exchange students hired in Japan and sent to their country of origin, has already become a realistic one. This paper uses the case of an H-CONE to compare and summarize the advantages of H-CONEs over traditional expatriates and host-country nationals from human resource perspective. If a company is able to use this type of resource, they may expect smoother overseas operations while avoiding problems with a lack of home-country employees available for expatriation. This is particularly important for small and medium-sized enterprises (SMEs) that lack such a resource pool in the country (Collings et al., 2007; Hamamatsu, 2016a).MethodsOut of an awareness of the aforementioned problems, this paper studies the case of an SME, Company A, which hired a foreigner and sent that person to an overseas site. Multiple interviews were conducted with the president of Company A in Japan, and X, a Chinese general manager of Company A's Chinese subsidiary, Company α. After being hired in Japan, X was sent to China, where the company was ramping up production. This paper focuses on X's activities there, and the involvement of the president of the headquarters company.Data was collected via the following process. First, the president of Company A was interviewed on November 24, 2009. Afterward, a visit was made to the Chinese subsidiary, Company α, on December 1, 2009, to conduct interviews with X. Later, in 2010 and 2011, a follow-up was done with the president of Company A to confirm the content of the prior interview and discuss subsequent events.Case StudyOutline of overseas operationFounded in 1964, Company A is an SME with twelve employees that develops, manufactures, and sells rubber and plastic products for the automotive industry. …