The Importance of Expatriates in Organizations

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Expatriates help organizations improve the accuracy and precision of their export efforts.
Expatriates help organizations improve the accuracy and precision of their export efforts. (Image: Olivier Le Moal/iStock/Getty Images)

Expatriates are employees of organizations in one country who are assigned to work in other countries on long- or short-term business projects. They help their companies establish operations in other countries, enter overseas markets or transfer skills and knowledge to their companies’ business partners. The experience helps organizations develop their management skills base and their ability to succeed in a global marketplace.

Improve Local Market Knowledge

By living and working in export territories, expatriates gain a deeper understanding of local market conditions, business practices and cultural factors than employees who try to conduct overseas business from headquarters. This local understanding and awareness help organizations reduce risk and avoid mistakes that could limit market success.

Instill Company Culture

Expatriates work closely with overseas subsidiaries, distributors, agents and joint venture partners to ensure they understand the parent companies’ culture, standards and values. They also use their understanding of cultural differences to modify any of those factors in line with local business practices. By instilling parent company culture and practices, expatriates ensure customers receive a consistent standard of service in all export territories.

Transfer Knowledge

Expatriates transfer knowledge and skills to overseas partners. If they are setting up manufacturing operations, for example, expatriates can help partners implement corporate working practices and quality standards or use techniques and technologies developed in the parent company. Expatriates working with local distributors or agents can provide partners with product and market knowledge and develop joint programs to improve market penetration.

Increase Local Control

By appointing expatriates to manage business in export territories, organizations can increase business and financial control over local operations. They establish financial and operational targets with business partners, work with them to achieve targets and monitor performance. They provide headquarters with accurate reports and are in a position to take remedial action if partners are not able to meet targets. Expatriates also ensure that local partners comply with policies and procedures and quality and customer service standards.

Develop Management Talent

Appointing employees to overseas assignments helps organizations develop their management skills and competencies. Expatriates learn to recognize and understand the diversity of local market conditions in different territories, giving them a broader perspective on marketing. They also develop the leadership and interpersonal skills to manage or collaborate with multicultural teams. Developing management talent through expatriate assignments helps organizations develop the skills to succeed in global markets.

Changing Role

While expatriates make an important contribution to helping their organizations develop export markets, their role is changing, according to TLNT, a website dedicated to talent management and human resources. Organizations increasingly recognize the value of developing local talent in export markets as a way of meeting the needs of individual markets. Rather than sending a succession of expatriates to run local operations, they encourage expatriates to develop local successors who can take over responsibility.

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