Module 2

Global integration means centralized control over key resources and operations that are strategic in the value chain.

Business advantages/ strategic drivers of Global Integration 1. Economies of scale 2. Value chain linkages 3. Serving global customer 4. Global branding 5. Leveraging capabilities 6. World class standardization 7. Competitive platforms 8. Information advantages

Five ways of exercising control 1. Centralization or personal control 2. Formalized control through standardization of work rules, procedures and processes 3. Output control through performance contracting 4. Normative control through socialization

Three ways: 1. Alignment of decision-making to ensure that local decisions reflect a global perspective, particularly through personal control exercised by expatriates 2. The standardization of processes to achieve desired efficiencies and uniform behavior, using formalized control. 3. Socialization

Mastering Expatriation Motives for expatriation 1. Fill technical/ managerial position 2. Management development- acquiring international experience 3. Organisation development- control and coordination

Set of phases 1. Selecting expatriates 2. Preparing and orienting them 3. Adjusting to the expatriate role 4. Managing the performance 5. Compensation 6. Repatriation

However, as companies pursue internationalization the inevitable tensions of expatriation become apparent. These tensions, together with the changing demographics of the expatriate populationthe growing number of women, third country nationals (TCNs), and younger expatriates, and the added need to adjust to dual careersare changing the way in which companies approach international assignments.

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Home/ host tension: The presence of expatriates may generate tensions with the local workforce for a number of reasons -insensitive to local cultural norms, high std of living, costly.. Global/ local tensions: When top positions in a subsidiary are continuously occupied by rotating expatriates, many of the capable local managers become discouraged. as foreign operations increase in size, an intimate knowledge of local operations becomes as or more important than communication and coordination with the parent head office

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Short term/ long term tensions: Expatriates are often criticized for taking short-term decisions from a perspective limited by the duration of their assignment. . Expatriates may shrink from taking necessary actions if the benefits are long term but the cost or risks are immediate. Cost and investment tensions: the need to reduce the costs of expatriation is often one of the major drivers of localization. Yet while companies can benefit from smarter management of expatriate costs, the expense of expatriation can be seen as an essential investment in building the linkages necessary for managing a transnational firm and in learning across organizational boundaries. Demand/ supply tensions