The Bridging Role of Expatriates and Inpatriates in Knowledge Transfer in Multinational Corporations

• Author: B. Sebastian Reiche,Markus Pudelko,Anne‐Wil Harzing
• Published date: 01 July 2016
• DOI: http://doi.org/10.1002/hrm.21681
• Date: 01 July 2016

Human Resource Management, July–August 2016, Vol. 55, No. 4. Pp. 679–695

© 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI:10.1002/hrm.21681

Correspondence to: Anne-Wil Harzing, Middlesex University, The Burroughs, Hendon, London NW4 4BT,

United Kingdom, Tel: +44 (0) 20 8411 4407; E-mail: anne@harzing.com

suggests that at the subsidiary level, this knowl-

edge is not only transferred by traditional par-

ent-country national (PCN) expatriates but also

by other forms of assignees (i.e., third-country

nationals [TCNs]) (Hocking, Brown, & Harzing,

2007) and inpatriates (i.e., local managers who

have been inpatriated to headquarters) (Reiche,

2011; Tharenou & Harvey, 2006). It has also been

Introduction

Over the past decade, an increasing num-

ber of studies have highlighted the role

of international assignees as carriers of

knowledge across units of multinational

corporations (MNCs; Chang, Gong, &

Peng, 2012; Fang, Jiang, Makino, & Beamish,

2010; Mäkelä & Brewster, 2009). Evidence further

THE BRIDGING ROLE OF

EXPATRIATES AND INPATRIATES

IN KNOWLEDGE TRANSFER IN

MULTINATIONAL CORPORATIONS

ANNE-WIL HARZING, MARKUS PUDELKO,

AND B. SEBASTIAN REICHE

Drawing on the knowledge-based view of the fi rm, this article provides the fi rst

empirical study that explicitly investigates the relationship between different

categories of international assignees and knowledge transfer in multinational

corporations (MNCs). Specifi cally, we examine (1) the extent to which expatriate

presence in different functional areas is related to knowledge transfer from and

to headquarters in these functions and (2) the extent to which different categories

of international assignees (expatriates vs. inpatriates) contribute to knowledge

transfer from and to headquarters. We base our investigation on a large-scale

survey, encompassing data from more than 800 subsidiaries of MNCs in 13 coun-

tries. By disaggregating the role of knowledge transfer across management func-

tions, directions of knowledge transfer, and type of international assignees, we

fi nd that (1) expatriate presence generally increases function-specifi c knowledge

transfer from and, to a lesser extent, to headquarters; and that (2) the relevance

of expatriates and former inpatriates varies for knowledge fl ows between head-

quarters and subsidiaries. Additionally, we discuss implications for research and

practice, in particular regarding different management functions and different

forms of international assignments, and provide suggestions for future research.

© 2015 Wiley Periodicals, Inc.

Keywords: international HRM, international management

680 HUMAN RESOURCE MANAGEMENT, JULY–AUGUST 2016

Human Resource Management DOI: 10.1002/hrm

Although a few

previous studies

have compared the

use of PCNs, TCNs,

and inpatriates, we

know little about

how the use of these

different assignment

types affects MNC

knowledge transfer

from and to HQ.

knowledge transfer from and to HQ in this area.

Second, we compare the extent to which expatri-

ates and former inpatriates contribute to MNC

knowledge flows, thereby integrating what have

been thus far largely separate research samples

(e.g., Mäkelä & Brewster, 2009; Reiche, 2011).

Although a few previous studies have compared

the use of PCNs, TCNs, and inpatriates (Collings

etal., 2010; Peterson, 2003; Shaffer, Harrison, &

Gilley, 1999), we know little about how the use

of these different assignment types affects MNC

knowledge transfer from and to HQ.

In sum, our study provides a much more

differentiated approach to studying knowledge

transfer than previous research has been able to

offer, by disaggregating the role of knowledge

transfer across management functions, directions

of knowledge transfer, and type of international

assignees. Furthermore, as our empirical data were

drawn from a large and varied range of home and

host countries, we are also able to show how vari-

able staffing patterns are across national boundar-

ies, highlighting the relevance of local context.

Theory and Hypothesis Development

The knowledge-based view of the firm conceptu-

alizes MNCs as differentiated networks of glob-

ally dispersed knowledge resources (Grant, 1996;

Kogut & Zander, 1993), which makes the transfer

of valuable knowledge from one unit to the other

an important condition for sustained success

(Gupta & Govindarajan, 2000; Jensen & Szulanski,

2004). Whereas these conceptualizations com-

monly view knowledge to reside at the firm, schol-

ars increasingly highlight the role of individual

heterogeneity and individuals’ nonrandom dis-

tribution even within organizational units, which

requires individual actors to diffuse, allocate, and

assimilate knowledge (Felin & Hesterly, 2007; Foss

& Pedersen, 2004; Lenox & King, 2004). In the

context of cross-unit knowledge transfer in MNCs,

we can distinguish the following actors at the

subsidiary level: local managers who have always

worked in their domestic context, local managers

with previous inpatriate experience at HQ (hence-

forth, former inpatriates), PCN expatriates, and

TCN expatriates. All except the first group can

be subsumed under the category of international

assignees. It has been suggested that such assign-

ees serve as important knowledge agents because

they can transfer both tacit and explicit knowledge

types and may support the necessary adaptation of

knowledge from one context to the other (Argote

& Ingram, 2000; Hocking etal., 2007).

Knowledge transfer through international

staff may also occur through different channels

(Fang etal., 2010; Reiche etal., 2009). Specifically,

argued that international assignees not only influ-

ence cross-unit knowledge transfer through their

own direct, personal contact but also by linking

previously unconnected actors and their knowl-

edge across MNC units (Kostova & Roth, 2003;

Reiche, Harzing, & Kraimer, 2009).

Although knowledge transfer is commonly

viewed as the primary motive for relocating staff

abroad (e.g., Harzing, 2001a), it is remarkable that

research that examines the relative importance

of the various types of international staff identi-

fied (PCNs, TCNs, and inpatriates) for cross-unit

knowledge transfer is practically nonexistent. This

is an important shortcoming for two reasons. First,

initial evidence suggests that global staffing prac-

tices are changing (Collings, Scullion, & Morley,

2007) and that organizations are increasingly

using a portfolio of international assignees (e.g.,

Collings, McDonnell, Gunnigle, &

Lavelle, 2010). However, we know

little about how these changing

patterns relate to knowledge trans-

fer, even when comparing assign-

ment types of similar duration and

hence similar opportunities for

knowledge transfer, such as long-

term PCNs, TCNs, and inpatriates.

Second, research implicitly assumes

that these three forms of interna-

tional assignees carry similar types

of knowledge given that they are

all in the position, either during

or after their assignments, to dif-

fuse knowledge from the corporate

headquarters (HQ) to its subsidiar-

ies, and from subsidiaries to the HQ.

However, this may not necessarily

be true, for example, due to moti-

vational reasons of the individual

assignee (Lazarova & Tarique, 2005) or the MNC

unit (Mudambi & Navarra, 2004), therefore call-

ing for a more explicit test of that assumption. In

addition, previous research has tended to examine

international assignees’ roles as knowledge agents

at an aggregate level without explicitly studying

potential differences on the level of functional

areas. However, a recent study by Fang et al.

(2010) has shown that the use of expatriates may

have distinct effects on the transfer of technologi-

cal and marketing knowledge to subsidiaries.

The current study draws on the knowl-

edge-based view of the firm (Felin & Hesterly,

2007; Grant, 1996) to address these gaps in our

understanding and make the following two con-

tributions. First, our study comprehensively inves-

tigates the extent to which having expatriates

heading up specific functional areas is linked to