Foreign executives in localorganisations

An exploration of differences to other typesof expatriates

Frithjof ArpDepartment of Management, Monash University, Melbourne, Australia

Kate HutchingsDepartment of Employment Relations and Human Resources,

Griffith University, Gold Coast, Australia, and

Wendy A. SmithDepartment of Management, Monash University, Melbourne, Australia

Abstract

Purpose – The purpose of this paper is to investigate foreign executives appointed into culturalcontexts distant from their country of origin and headquarters of organisations to which host-countrynationals (HCNs) they supervise and HCN superiors they report to attribute a “local” national identity.Significant differences of these foreign executives in local organisations (FELOs) from other forms ofexpatriation, including assigned and self-initiated expatriates, are identified and discussed.Design/methodology/approach – The research utilises a qualitative exploratory approach basedon triangulated multiple data sources. Data are sourced from in-depth semi-structured interviewswith foreign executives (n¼ 46) from 13 countries and their host-country peers (n¼ 25) inorganisations founded and headquartered in Malaysia. Dyadic data from the two sample groups areused to triangulate findings, while non-dyadic and socio-biographical data add further insight.Findings – The data analysis identifies issues surrounding allegiance, trust, and control, assumptionsabout income levels, and exposure to heightened local scrutiny as components of the distinct nature of theFELO experience.Research limitations/implications – Implications for future research on new types of internationalcross-cultural workplaces are discussed. While construct definitions for self-initiated expatriation (SIE) inthe wider mobility and migration literature are still in flux, international management research may be atrisk of neglecting local workplaces and perspectives.Practical implications – The FELO phenomenon differs significantly from expatriate assignmentsbetween headquarters and foreign subsidiaries of multinational corporations, and can be viewed as arare and specific form of SIE. Its occurrence indicates an increasingly global market for individualswith career capital and global mobility.Originality/value – The findings elucidate the situation of FELOs and provide comparisons to othertypes of expatriates. The research contributes to extant literature on global mobility as it explores aspecific cross-cultural phenomenon that has not been systematically investigated in the academicliterature, but is described in the media and executive search firm publications as “fairly new, highlyvisible, and sometimes controversial” with demand for FELOs “likely to continue”.

Keywords Cultural distance, Expatriates, Global mobility, Career capital, Differences,Foreign executives, Local organizations, Self-initiated expatriation

Paper type Research paper

The current issue and full text archive of this journal is available atwww.emeraldinsight.com/2049-8799.htm

Journal of Global MobilityVol. 1 No. 3, 2013pp. 312-335r Emerald Group Publishing Limited2049-8799DOI 10.1108/JGM-01-2013-0006

The contribution of anonymous reviewers to this paper is gratefully acknowledged. Theircriticism encouraged a better contextualisation of the FELO concept against existing theoreticalconcepts such as SIE, migration and corporate expatriation, the incorporation of the latest SIEresearch, and a deepened analysis and discussion involving implications for future research.

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IntroductionThis paper examines foreign executives in local organisations (FELOs) basedon research that identifies significant differences from various other forms of self-initiated expatriation (SIE) as well as organisational expatriate assignments(EAs) between headquarters and foreign subsidiaries of multinational corporations(MNC). The FELO phenomenon surfaces in isolated media reports andpractitioner publications. The Economist (2010), for example, describes Japaneseorganisations as an “insular lot”, but reports that several are hiring foreignexecutives, and theorises that Japan is “opening up”. A newspaper in Pakistanscrutinises foreign executives recruited by a local dairy industry organisation(The International News Islamabad, 2008), and several Americans have been appointedto executive positions in local organisations in India (Bloomberg, 2010). An internationalexecutive search firm (The Korn/Ferry Institute, 2009) discusses “highly visible”foreign executives in Korean and Chinese organisations whose appointments“can be controversial”, but notes that “the demand for these executives will likelycontinue”.

The media coverage of the phenomenon has several defining commonalities. First,the executives are prominently described as foreign. Second, the foreign individuals sodescribed work at the executive level; they hold managerial positions supervising host-country nationals (HCNs). Third, the organisations are described as local; a nationalidentity is attached to them by the reporting media and it is implied that significantcultural distance is involved in these affiliations between foreign executives andlocal organisations. Fourth, the positions reportedly filled by these foreign executivesare local positions; they are not positions in foreign subsidiaries of these localorganisations, but positions in the country where these organisations have theirheadquarters.

To highlight the significant differences between this phenomenon and establishedconceptualisations in the extant literature (as discussed below), the acronym FELO –for FELOs – is proposed and used in this article. Conceptually, FELOs can be viewedas part of the increasing globalisation of workplaces and border- and boundary-lessglobal careers (Arthur and Rousseau, 1996; Banai and Harry, 2004; Carr et al., 2005;Collings et al., 2007; Stahl et al., 2002; Suutari and Makela, 2007; Thomas et al., 2005).FELOs can also be seen as part of the larger phenomenon of self-initiated expatriates(Inkson et al., 1997; Suutari and Brewster, 2000; Vance, 2005) as they have proactively“made their own way” (to use the expression of Suutari and Brewster, 2000) to theirhost-country to seek career opportunities. However, data collected for this papershows that important differences to established conceptualisations exist (see Table Iand discussion below).

The research presented here is delimited to identifying and discussing significantdifferences between FELOs and other expatriates. The purpose is to elucidate thesituation of FELOs through empirical findings, with comparisons to other types ofexpatriates as a secondary objective. Hence, the broad research question for thisinductive research can be summarised as “What is the situation of foreign executivesappointed to headquarter positions of local organisations?” The paper begins with anoverview of organisational EAs and SIE. This is followed by a description of themethods utilised in this research. The paper then presents the findings and analysessocio-biographical information collected from participants to discuss key differencesbetween FELOs, EAs, and SIEs. The paper concludes with contributions to theory andsuggestions for further research.

313

Foreignexecutives

Stu

dy

and

acro

ny

m

use

d

Con

stru

ctd

efin

itio

nan

dm

ain

them

eS

amp

le,

met

hod

,se

ttin

gC

ult

ura

ld

ista

nce

?E

xec

uti

ve

lev

el?

Loc

alor

gan

isat

ion

?

(In

kso

net

al.,

1997

)

SIE

Sel

f-in

itia

ted

exp

atri

atio

n¼

trav

elli

ng

and

wor

kin

gab

road

for

over

seas

exp

erie

nce

;co

ntr

aste

dto

EA

s

Cas

est

ud

ies

of12

New

Zea

lan

der

sre

turn

edfr

om

Bri

tain

and

oth

erE

uro

pea

n

cou

ntr

ies

Lit

tle

No

For

eig

nM

NC

san

dlo

cal

org

anis

atio

ns

(Su

uta

rian

dB

rew

ster

,

2000

)

SF

E

Sel

f-in

itia

ted

exp

atri

ates

fin

din

gfo

reig

n(r

ath

erth

an

over

seas

)w

ork

Mix

ed-m

eth

od;

147

Fin

ns

wh

o

trav

elan

dw

ork

inE

uro

pe

(69%

),N

orth

-Am

eric

a(1

0%),

Asi

a(1

3%),

and

oth

erre

gio

ns

(8%

)ar

eco

mp

ared

to“c

lass

ic”

Fin

nis

hE

As

Som

eD

escr

ibed

as“l

ower

lev

elth

an

exp

atri

ates

”

54%

loca

lor

gan

isat

ion

s

acro

ssth

e6

SIE

cate

gor

ies

(In

kso

nan

dM

yer

s,

2003

)

SIE

Sel

f-in

itia

ted

trav

el(a

tle

ast

six

mon

ths)

and

care

er

dev

elop

men

t

Inte

rvie

wst

ud

yof

50S

IEs

bel

owth

eag

eof

40af

ter

thei

r

retu

rnto

New

Zea

lan

d

Lit

tle

No

Un

clea

r

(Mye

rsan

dP

rin

gle

,

2005

)

SIE

and

SF

E

SIE¼

you

ng

peo

ple

;m

inim

al

pla

nn

ing

;ca

reer

not

thei

r

pri

mar

yfo

cus;

du

rati

onlo

ng

er

than

ato

uri

stex

curs

ion

Gen

der

edan

aly

sis

ofa

pre

vio

us

stu

dy

sam

ple

(In

kso

nan

d

Mye

rs,

2003

)of

50re

turn

ed

SIE

sfr

omN

ewZ

eala

nd

Lit

tle

No

Un

clea

r

(Van

ce,

2005

)

SIE

SIE¼

self

-in

itia

ted

and

pla

nn

ed

exp

atri

atio

n

Mai

nth

eme

ofth

est

ud

yis

pre

-

inte

rnat

ion

alca

reer

pre

par

atio

n

Fie

ldin

terv

iew

sw

ith

48

Am

eric

anex

pat

riat

esin

Hon

gK

ong

,T

aip

ei,

Bei

jin

g,

Tok

yo,

and

Seo

ul

(sam

ple

incl

ud

es8

Asi

an-

Am

eric

ans)

Lit

tle

Am

eric

ans

wor

kin

gin

one

Sw

iss,

two

Ger

man

,an

d35

Am

eric

anM

NC

s,an

dla

rge

loca

lor

gan

isat

ion

s

des

crib

edas

“ver

ysi

mil

ar”

Un

clea

r10 (t

wo

SIE

sh

ave

chan

ged

from

pre

vio

us

EA

sw

ith

US

firm

s;u

ncl

ear

wh

eth

erth

e

rem

ain

ing

8lo

cal

org

anis

atio

ns

emp

loy

the

8

Asi

an-A

mer

ican

sin

the

sam

ple

)

(Lee

,20

05)

SIE

SIE¼

ind

ivid

ual

sh

ired

ona

con

trac

tual

bas

isan

dn

ot

tran

sfer

red

over

seas

by

par

ent

org

anis

atio

ns

Su

rvey

of30

2S

IEs

in39

org

anis

atio

ns

inS

ing

apor

e;

app

aren

tly

man

yof

them

“gu

est

wor

ker

s”fr

om

nei

gh

bou

rin

gco

un

trie

s

Som

e

(sam

ple

incl

ud

es15

%fr

om

nei

gh

bou

rin

gM

alay

sia)

Un

clea

rF

orei

gn

MN

Cs

and

loca

l

org

anis

atio

ns

(con

tinu

ed)

Table I.Overview of somekey studies utilisingthe SIE construct

314

JGM1,3

Stu

dy

and

acro

ny

m

use

d

Con

stru

ctd

efin

itio

nan

dm

ain

them

eS

amp

le,

met

hod

,se

ttin

gC

ult

ura

ld

ista

nce

?E

xec

uti

ve

lev

el?

Loc

alor

gan

isat

ion

?

(Ric

har

dso

nan

d

Mal

lon

,20

05)

SD

E

SD

E¼

self

-dir

ecte

d

exp

atri

atio

n

In-d

epth

inte

rvie

ws

wit

h

pre

dom

inan

tly

you

ng

Bri

tish

acad

emic

sin

New

Zea

lan

d,

Sin

gap

ore,

Tu

rkey

,an

dth

e

Un

ited

Ara

bE

mir

ates

Som

eU

ncl

ear

Un

clea

r

(Boz

ion

elos

,20

09)

SIE

SIE¼

ind

ivid

ual

sw

ho

bec

ome

exp

atri

ates

onth

eir

own

init

iati

ve

and

outs

ide

the

bou

nd

arie

sof

mu

ltin

atio

nal

corp

orat

ion

s

Su

rvey

of46

mid

dle

-ag

ed,

exp

erie

nce

dn

urs

esin

aS

aud

i

hos

pit

al.

Job

sati

sfac

tion

as

afu

nct

ion

ofm

ente

e/p

rote

ge

exp

erie

nce

Sig

nif

ican

tfo

rth

en

on-

Ara

bsa

mp

lesu

b-g

rou

p(4

6

non

-Sau

di

Ara

ban

d16

0

non

-Ara

bn

urs

es)

No

Yes

(Bie

man

nan

d

An

dre

sen

,20

10)

SE

SE

s¼

self

-in

itia

ted

exp

atri

ates

vs

AE

s¼

assi

gn

edex

pat

riat

es

Su

rvey

of15

9G

erm

an-

spea

kin

gm

anag

ers

(40

SE

s

and

119

AE

s)in

33co

un

trie

s

incl

ud

ing

Ch

ina

(30)

,In

dia

(20)

,

Ru

ssia

(sev

en),

and

the

UK

(sev

en)

Pre

sum

ably

,b

ut

un

clea

r

du

eto

sam

ple

sele

ctio

n

met

hod

Un

clea

rd

ue

to

sam

ple

sele

ctio

n

met

hod

Un

clea

r

(Pel

tok

orp

ian

d

Fro

ese,

2009

)

SIE

SIE

sco

ntr

aste

dto

EA

sS

urv

eyan

dco

mp

aris

onof

mos

tly

you

ng

SIE

s(n¼

124)

toE

As

(n¼

55)

inJa

pan

(sam

ple

incl

ud

es13

SIE

sfr

om

Asi

anco

un

trie

s)

Mos

tco

min

gfr

om

sig

nif

ican

tcu

ltu

rald

ista

nce

37of

124

wor

k

inm

anag

eria

l

pos

itio

ns

67of

124

SIE

sin

loca

l

org

anis

atio

ns

(Fro

ese,

2012

)

SIE

SIE¼

hig

hly

qu

alif

ied

peo

ple

wh

oca

nw

ork

inal

mos

tan

y

cou

ntr

yth

eyd

esir

e

Inte

rvie

ws

wit

h30

SIE

acad

emic

sin

Sou

thK

orea

mot

ivat

edto

exp

atri

ate

by

ad

esir

efo

rin

tern

atio

nal

exp

erie

nce

,at

trac

tiv

ejo

b

con

dit

ion

s,fa

mil

yti

es,a

nd

poo

r

lab

our

mar

ket

sin

thei

rh

ome

cou

ntr

ies

Yes

No

Yes

Table I.

315

Foreignexecutives

Literature reviewEAsMuch of the expatriation literature takes an organisational perspective, as the initiativefor international assignments typically comes from employers (Suutari and Brewster,2000). Literature on the strategic use of EAs (e.g. Collings and Scullion, 2006; Harveyet al., 2001; Harzing, 2001b) discusses the relative merit of staffing MNC subsidiarieswith parent-country nationals (PCNs), HCNs, or third-country nationals (TCNs).It considers the transfer of executives from MNC headquarters to foreign subsidiaries(expatriates), from one foreign subsidiary to another foreign subsidiary (transpatriates),and from foreign subsidiaries to MNC headquarters (inpatriates). As its main proponentsdefine “inpatriation” as “the relocation of foreign employees/managers to the parentcountry of the organization” (Harvey et al., 2011, p. 1, emphasis added), this relocation ofexisting employees occurring within an MNC differs from the appointment of FELOsas described above. In addition, the inpatriation literature predominantly focuses ontemporary reassignments for the purpose of further expansion of globalised MNCsinto the country of origin of the inpatriate: “the emerging market that the organization isattempting to penetrate” (Harvey et al., 1999, p. 41). Further, the term “inpatriate” hasadded a modicum of confusion surrounding the definition of expatriates, as its proponentsdefine HCNs as inpatriates. However, HCNs only become inpatriates when they aretransferred into the MNC’s parent-country operations as expatriates, and it is thereforequestionable “whether the term ‘inpatriate’ adds enough value to justify its use” (Dowlinget al., 2008, p. 4).

From an organisational perspective, retaining control of foreign subsidiaries is aparamount aspect of EAs. While other strategic purposes include managementdevelopment (Edstrom and Galbraith, 1977a), the transfer of knowledge to (Hockinget al., 2004, 2007), and the shaping of organisational culture in foreign subsidiaries(Bonache and Brewster, 2001), issues of allegiance, trust, and control feature prominently.Executives trust other executives with the same nationality more than those with adifferent nationality – not only in nationally homogeneous organisations but also innationally heterogeneous organisations (Banai and Reisel, 1999). Although MNCs moveto fill executive positions in subsidiaries with HCNs (localization), many positions inculturally or geographically distant countries continue to be filled with PCNs – despite thehigh cost of EAs to organisations (Edstrom and Galbraith, 1977b; Harzing, 2001a).Organisations typically have to provide expatriates with their country of origin standardof living, and offer an additional premium to motivate employees to accept assignments inculturally distant host-countries. Therefore, expatriate compensation packages typicallyinclude various kinds of allowances, premiums, and insurance (Dowling et al., 1999).This high cost to organisations of allowing managers to maintain their country of originstandard of living could be expected to be relevant to the FELO phenomenon, too.Local organisations in emerging economies may be less tolerant of the high costassociated with appointing foreign executives, and this may help explain a relative rarityof FELO appointments. In essence, such concerns may add to a possible “liabilityof foreignness” at the individual level observed elsewhere (Fang et al., 2013). Yet,international appointments involving the high costs of maintaining country of originliving standards are not the only form of expatriation.

SIEWhile the initiative for expatriation to distant countries typically comes fromemployers, it can also originate with individuals. Inkson et al. (1997, p. 358) established

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the SIE construct to describe non-organisational forms of expatriation, noting that“every year thousands of young people head overseas for a prolonged period of travel,work, and tourism”. They find that SIEs often aim for personal development andcultural enrichment, in contrast to organisational expatriates who may have acceptedassignments to distant countries primarily for financial rewards. Motives other thanfinancial rewards might be relevant to the FELO phenomenon, too, as takingon positions in headquarters of culturally and geographically distant localorganisations could be based on “developmental or learning-driven” motivations(cf. Stahl et al., 2009).

The SIE construct is used in studies on a very wide variety of internationalworkplaces. Studies of SIEs include academics teaching in Northern Europe,New Zealand, Singapore, South Korea, Turkey, and the United Arab Emirates (Froese,2012; Richardson and Mallon, 2005; Selmer and Lauring, 2010, 2011, 2012), youngtravellers that work abroad for overseas experience (Inkson et al., 1997; Inkson andMyers, 2003; Myers and Pringle, 2005; Peltokorpi and Froese, 2009), contract workersfrom neighbouring countries in Singapore (Lee, 2005), and Finnish engineeringunion members in fear of unemployment that seek jobs in other European countries(Suutari and Brewster, 2000). The frequency of studies on SIE academics appears to bemotivated by a desire of these individuals to investigate themselves, as “manyprominent authors writing on SIEs are either living in a country other than their homecountry or have spent considerable periods living and working outside their homecountry” (Doherty et al., 2013, p. 103). The utility of such studies to management theorymay be limited: Froese (2012) notes that the work of academics is relativelyautonomous, can be conducted in a similar fashion across different countries, and that“SIEs with other types of jobs that require more interaction with locals and knowledgeof the local context may experience more work adjustment problems than the membersof the academic profession” (Froese, 2012, p. 1110). Geographical and cultural distanceis also very limited in many of the workplaces described in SIE studies, and Suutariand Brewster (2000) therefore use the expression self-initiated foreign experience (SFE)in neighbouring countries, rather than self-initiated overseas experience in culturallyand geographically distant countries, noting that “almost everyone can work in othercountries without crossing a sea” (Suutari and Brewster, 2000, p. 435).

As the SIE construct has been positioned in a variety of different ways, there areprobably too many sub-groups for a single SIE construct and a lack of data about each.Richardson and Mallon (2005), for example, describe self-initiated or self-directedexpatriation as an increasingly common career choice of British academics in the contextof the internationalisation of higher education. The vast number of teachers of English asa foreign language worldwide also falls into the SIE category, and the SIE construct canbe further extended to describe individuals in many other fields including the healthcare,food and hospitality industries, or even seasonal harvest workers and professional sportstrainers. Lee (2005), for example, surveys underemployment in a sample of 302 SIEs in 39organisations (both local and foreign) in Singapore. “Most of them were working in amanagerial capacity”, Lee writes, but the high ratio of SIEs per organisation (an averageof eight) probably indicates, on average, roles other than those of executives. In addition,only 5.1 per cent of the sample was above 50 years of age, 13.1 per cent were teachers,25 per cent professors, and 10.6 per cent were in other non-managerial positions.Further, that sample includes individuals from neighbouring Malaysia (approximately15 per cent). Malaysia and Singapore only became separate countries in 1965, andcontinue to share many commonalities. It could be argued that Malaysians working in

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Foreignexecutives

Singapore are only technically ex patria, that their cultural distance to Singaporeans isminimal, and that grouping them together with the other SIEs in the sample (originatingfrom the UK, the USA, Australia, and India) could be viewed as a farfetched interpretationof overseas experience. In a migration literature context, many individuals in that andother samples might well be referred to as “guest workers”. Bozionelos (2009), forexample, researches self-initiated expatriate nurses in Saudi Arabia (22.3 per cent ofwhich were from neighbouring Arab countries) and points out that the SIE constructincludes individuals who “view expatriation primarily as a means, sometimes the onlyone, to maintain their professional status and earn a living” (Bozionelos, 2009, p. 114).

This observation adds a different connotation to the “initiative” component of theSIE construct, as the motivation to expatriate can simply be a lack of choice (also seeFroese, 2012, p. 1102) or serendipity (see e.g. Richardson and Mallon, 2005, p. 412)rather than agency and deliberate initiative. Vance (2005), in turn, reports on a sampleof 48 American and Asian-American SIEs in Beijing, Hong Kong, Taipei, Seoul, andTokyo. He finds that the majority work in the international subsidiaries of large foreignMNOs, and only ten of them work in local organisations. However, it is unclear whetherthese ten SIEs in local organisations include those described as Asian-American, andwhat positions they hold. Once again, cultural distance, “foreignness” and ex patriacontexts might be minimal.

A very valuable study in this regard is Suutari and Brewster’s (2000) investigationof 147 SIEs and their 301 organisational expatriate assignee countrymen (all of themFinnish engineering union members). The authors provide an initial categorisation ofSIEs from their comparative report, but emphasise that no clearly differentiatingcharacteristics could be identified about some sub-categories because of the diversityand small size of sub-groups. A few SIEs in that sample do work for local organisations,but primarily in near-by countries. Most work in European countries (69 per cent), andonly a minority on distant shores (North America 10 per cent, Asia 13 per cent, and others8 per cent). Thus, a meta-analysis of samples in studies utilising the SIE constructindicates that only very few individuals in these studies have all the definingcharacteristics of FELOs (work at executive level, in local organisations, in distantcountries), and that the SIE construct is therefore too loosely defined to describe theFELO phenomenon. Overall, the preoccupation with the SIE construct is not quiteunderstandable, as clearly “both SIEs and corporate expatriates belong to the broadergrouping of “expatriates” defined as individuals who are living outside of their homecountry on what they expect to be a temporary basis” (Doherty et al., 2013, p. 103). Somestudies of SIEs and other expatriates (Peltokorpi and Froese, 2009) are apparently even“repackaged” for publication elsewhere, with the SIE moniker dropped and both samplegroups then indistinctly described as expatriates (Peltokorpi and Froese, 2012).

Hence, FELOs can be viewed as SIEs or, more generally, expatriates. However, onlyvery few SIEs (Inkson et al., 1997) and migrants (Al Ariss and Crowley-Henry, 2013),international itinerants (Banai and Harry, 2004), immigrant professionals (Fang et al.,2009), global nomads (Glanz, 2003), independent internationally mobile professionals(McKenna and Richardson, 2007) or expatriates by any other name are FELOs.The present study is the first to report significant differences of FELOs from otherforms of expatriation, as perceived by both sides (foreign and local) of this internationalcross-cultural phenomenon.

Table I provides an overview of SIE studies and highlights where there is somereference in their samples to aspects which comprise the FELO phenomenon. Studiesthat do not report empirical findings from research populations, are purely conceptual

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in nature, or do not in some other way have relevance to the present study have beenleft out. By investigating a particular group of: individuals at the managerial level;positions in local organisations rather than subsidiaries of foreign multinationals;and affiliations involving significant cultural distance, the present study focuses onimportant managerial, international and cross-cultural aspects of workplace research.The subsequent section outlines the methods applied in this research.

MethodsMalaysia was chosen as the research setting for an investigation of the FELOphenomenon for three reasons. First, English is a language commonly used in Malaysianorganisations by both host-country nationals and foreigners. This facilitated conductingresearch in one language with all participants (both foreign and local). Second, Malaysiahas a large population of foreign executives from various countries. This provided theperspectives of a reasonable number of foreign participants from a variety of culturalbackgrounds. Third, Malaysia’s population comprises large heterogeneous groups(although typically categorised as Chinese, Indian, and Malay “ethnicities”) which allowedfor perspectives of local participants from various cultural backgrounds. Characteristicsof the FELO phenomenon were described in the same way (and distinguished from otherforms of expatriation) by these locals and are likely to reflect characteristics specific andunique to the FELO phenomenon. Thus, although the data may have a Malaysiancharacter, this research setting provides a basis from which theory may be generatedabout the FELO phenomenon for comparisons in other settings (see “pattern matching” inYin, 2003).

ApproachAn exploratory theory-building approach was chosen to achieve a betterunderstanding of the research topic, and to develop (rather than test) theory.Interviews are considered a means of accessing unquantifiable facts, allowing theresearcher to “share in the understandings and perceptions of others” (Berg, 2007).While interviews can also assist in the analysis of quantitative data, their mainpurpose is theory construction (Bryman, 2008). Following recommendations in theliterature (e.g. Minichiello et al., 2008), in-depth interviews were selected in order toobtain rich and substantive insights into the FELO phenomenon from the perceptionsof both foreign and local participants. Hence, this research can be viewed as followingthe triangulated multiple data source approach advocated by Al Ariss and Crowley-Henry (2013, p. 86) in their recommendations for future SIE research directions. Dyadicdata from the two sample groups are used to triangulate findings, while non-dyadicand socio-biographical data add further insight.

SampleThe two sample groups comprised FELOs and their local peers in some of Malaysia’slargest groups of companies listed on Bursa Malaysia (formerly the Kuala LumpurStock Exchange (KLSE)), government-linked and non-government-linked organisations,as well as privately held Malaysian small- and medium-sized enterprises (SMEs). TheFELO cases represent a comprehensive cross-section of organisations founded andheadquartered in Malaysia, and a wide range of manufacturing and service industries.Table II provides an overview of nationalities and gender in the FELO sample group.

The 25 host-country interviewees are labelled LOCAL in capital letters here.The LOCAL sample group comprised colleagues of FELOs, board members, senior

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staff members, chairpersons, and family members as well as business analysts andexecutive search consultants who were familiar with local organisations’ FELOappointment practices. It included participants who had been bestowed with honorificnon-hereditary Malaysian titles, such as Tan Sri, Dato’, and Datuk. These denote highawards that higher echelon identities in the corporate sector are frequently bestowedwith for their contribution to Malaysia’s economy, and bearers of such titles aregenerally recognised by the public as important business people. Overall, the LOCALsample group consisted of well educated, often highly influential Malaysianindividuals. Table III provides information about the LOCAL interviewees accordingto Malaysia’s ubiquitous tri-ethnic schema of categorisation.

Sample selection. The selection of potential interviewees was undertaken byresearching a database of 13,318 Malaysian corporate directors (MINT online databaseBureau Van Dijk Online Publishing, 2008), as well as annual reports, corporatedocuments, and regulatory stock-market filings. Only organisations founded andheadquartered in Malaysia were considered, and the “major shareholder analysis” sectionin the annual reports was used for this purpose. For institutional shareholders acting astrustees or nominees, the classification of the Malaysian share-market operator as eitherlocal (tempatan) or foreign (asing) was taken into account. Annual reports and corporatedocuments were obtained from the KLSE web site (Bursa Malaysia, www.klse.com.my)and other public records. A total of 136 names of foreign individuals (i.e. potential FELOparticipants) were identified by this method. In addition, snowball sampling was utilisedwhen contacting potential foreign and local participants already identified, and duringdata collection in Malaysia. This involved asking foreign and local interviewees to suggestother FELOs and their local peers. The final sample size reflects the rare occurrence of theFELO phenomenon in Malaysia. An indication of this was that the snowball samplingsoon yielded the same suggestions for potential foreign participants.

Access to sample. Using the selection criteria described above, participants (bothforeign and local) were approached to participate in this study through e-mail andformal letters of invitation. Obtaining the direct personal contact details of potentialparticipants proved to be the biggest challenge. To comply with research ethicsguidelines of an Australian university, the following sequential steps were taken toestablish contact and gain permission for the interviews.

First, a “Request for Contact Details” was e-mailed to organisations if the individuale-mail addresses of potential participants was not known and only an organisational

Nationality Gender

German 17 Male 41British 8 Female 5Australian 6Ten other nationalities (no5 each) 15

Table II.Foreign sample group

Ethnic group Gender

Chinese 14 Male 14Malay 7 Female 11Indian 4

Table III.Host-countrysample group

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e-mail address was available. If individual e-mail addresses were known, or upon replyfrom organisations, a “Request for Participation in Management Research Project” wasthen e-mailed to the individuals or their personal assistants if the individuals did notrespond themselves. This request had a formal “Explanatory Statement” as requiredby the research ethics guidelines. On occasion, the response was an expressionof organisational consent to participate (i.e. the response confirmed participation ofdyadic (foreign and local) interviewees. However, in most cases the individualsresponded separately if they were interested in the research topic. A large number ofindividuals (primarily prospective local participants) did not respond at all or declinedto participate. Among those who responded in the negative, some cited workloadcommitments while others expressed concerns about privacy and confidentiality.Positive responses to the requests for participation were followed up with a message ofthanks, in combination with suggestions for meeting dates and times. In some cases,positive responses included the offer to assist with the snowball sampling.

Sample size. The 46 FELOs interviewed represent a third of the 136 potential FELOparticipants identified in Malaysia. This sample size was thought to be more thanappropriate since “the validity, meaningfulness, and insights generated from qualitativeinquiry have more to do with the information-richness of the cases selected and theobservational/analytical capabilities of the researcher than with sample size” (Patton,2002, p. 245). Table IV provides comparative information about the age and positionof both sample groups, and the organisations for which they work.

In-depth semi-structured interviews were conducted in and around Kuala Lumpur,Malaysia from 27 April to 23 September 2009. Given the novelty of the topic and theexploratory nature of the study, only a preliminary semi-structured interview guidewas used. The interviews commenced with a series of questions concerningsocio-biographical data including age, education, number of years in the organisation,and marital status. Following this, the interviews moved to broad, open-endedquestions such as “How would you describe your position and role in thisorganisation?” Interviewees were allowed, indeed invited, to elaborate on variousaspects that they believed to be significant: “Please feel free to elaborate and describeyour career, how you came to this country, how you came to the position you now workin, and what you do in this position”. Probing questions were asked whenever

FELOs LOCALs

Age of intervieweesRange 28-68 29-74Median 52 48Average 51 50Interquartile range 44-60 44-57Executive positionBoard director 13 8CEO, COO or MD 21 8Employed executive 12 9Type of organisationPrivate enterprise 26 14Public-listed company 16 9Government- or state-controlled/NGOs/non-profit sector 4 2

Table IV.Interviewee age, position,and type of organisation

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appropriate to clarify details, resolve contradictions, or extract further explanations ashas been suggested in the literature on research interviews (Minichiello et al., 2008).

The data analysis utilised NVIVO (version 8) software that provides contentanalysis tools for large amounts of interview data and the systematic identification andcoding of themes that are common both within and across sample groups. Interviewswere transcribed and text segments coded into themes. The coding process startedwith a large number of “free nodes” which was gradually reduced and sorted into amore hierarchical “tree node” structure, with sub-nodes reflecting more nuanced sub-themes (Richards, 2005). While this tiered structure emerged naturally from the data,it resembles a first-, second- and third-order scheme becoming increasingly prevalentfor inductive research (Gioia et al., 2013, p. 25). Within this tree node structure, thesecond-order node named “Distinct nature, rarity, and depth of the FELO experience”along with six third-order sub-nodes emerged and will be utilised herein (see Table V).Themes emerging from the interviews showed a high level of consistency after about25 interviews, in line with figures frequently cited in the literature (Denzin and Lincoln,2008; Guest et al., 2006). The data are presented here in the form of verbatim quotes aswell as frequency tables for themes that were of sufficient note to interviewees to bearticulated in detail. Phrases highlighted in bold within the verbatim quotes were usedfor coding of sub-nodes in NVIVO. These sub-nodes identify mention of issues specificto the FELO phenomenon or points that differentiate FELOs from expatriates.The frequency tables detail both the number of comments made by FELOs in respect toeach theme and the number of FELOs mentioning the theme as well as the numberof comments made by LOCALs in respect to each theme and the number of LOCALsmentioning each theme. Themes in the tables are ordered by descending FELOcomment frequency.

FindingsA large number of relatively unspecific interview comments (335 from FELOs and 82from LOCALs) are broadly associated with the distinct nature, rarity, and depth of theFELO phenomenon. These general comments illustrate and support the argument thatthe FELO phenomenon is quite distinct from EAs. Allegiance, trust, and control, forexample, are at the core of both phenomena but affect FELOs and EAs in opposingdirections. While allegiance, trust, and control explain the frequency of MNCs utilisingPCNs for EAs involving PCNs, they limit the occurrence of the FELO phenomenonbecause, in the words of one interviewee, owners of local organisations “risk havingsome of the advantages they have as controlling shareholders cut off [y] So there isstill that fear of loss of control. That’s what you experience” (FELO No. 17).

Sub-theme Comments FELOs Comments LOCALs

Assumptions about FELO income levels as a potentialsource of resentment 126 44 90 25FELOs are not in the country “just for the money” butfor the experience 91 39 23 15FELOs are exposed to heightened local scrutiny 70 30 26 14The long host-country work experience of FELOs 65 30 43 22FELOs do not have the safety-net of expatriates 42 25 9 7Glass ceiling for FELOs and top jobs reserved for locals 27 18 11 10

Table V.Distinct nature, rarity,and depth of theFELO experience

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Broad theme: distinct nature, rarity, and depth of the FELO experienceComments from all participants indicated that FELOs are a rare phenomenon, whichresulted in some FELOs being quite interested in this study and one responding to theinitial interview request with: “Thank you for your interest in this rather exotic groupof people” (FELO No. 6; e-mail 18 Feb 2009). The rarity of FELOs adds to theirdistinctness from other international positions, as noted:

I’m the only non-Malaysian in this organisation, the only non-Malaysian! In the whole[deleted] group. [y] I think most foreigners are in JVs [joint ventures], partnerships andthe like, where they run business on behalf of the foreign partner. [y] So I’m a bitunique, I suppose, somewhat (FELO No. 4).

Even within my group [of companies] I’m still special after all those years [y] – in agroup that has 10,000 employees (FELO No. 10).

LOCALs were agreed on the rarity, “You don’t see a lot. And if you’re talking aboutlocal ‘private limited’ companies, there’s hardly a single foreigner” (LOCAL No. 23),but were divided over whether the FELO phenomenon is an increasing or diminishingtrend:

It’s still rare for foreigners to work in local organisations. Still rare. In financialservices maybe more than any other [y] [y] Communications maybe, increasingly more(LOCAL No. 1; seeing an increase in the FELO phenomenon).

There’s not many [FELOs] around anymore, actually ‘cause people are movingaway [from appointing FELOs] (LOCAL No. 12; seeing the FELO phenomenondiminishing).

Comments on more specific themes elucidated the differences between the FELOphenomenon and EAs. Table V lists these sub-themes, ranked by the frequency ofFELO comments and discussed in the following section.

Assumptions about income levels, in the country for the experience, and exposure toheightened local scrutinyThe consensus of interviewees was that FELOs generally earn substantially less thanexpatriates, and do not receive housing allowances, school fees for children, or annualfamily trip tickets that often comprise the “expatriate compensation package”.The remuneration of FELOs was reported to be the same or slightly higher than that ofhost-country colleagues. Some FELOs claimed that their remuneration was lower thanthat of local peers in similar positions. LOCALs familiar with actual income levelsconfirmed that many FELOs work for the cross-cultural experience rather thanfinancial gain. Both groups of interviewees reported that HCN colleagues generallyassume the remuneration of FELOs to be equivalent to that of typical expatriates, andthat this can be a potential source of resentment:

However transparent you are about [remuneration] packages and stuff like that, there’salways going to be this [perception]: “You pay him more; more perks, more allowances.And why is he better? Only because he’s foreign?” (LOCAL No. 10).

FELOs are generally exposed to heightened local scrutiny:

I was the only [nationality deleted] sitting there among a group of 200 Chinese. [y] I felt veryinsecure because everybody’s eyes were on me: “Why is he here? Is he so good that he’shere?” (FELO No. 2).

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I think, we begin with a bit of resentment: “Why is this person here? I could have donethat job! You didn’t ask me!” and I think that’s hard, I think emotionally that’s really hard onthe foreign guys coming here (LOCAL No. 10).

On occasion, that exposure to scrutiny and resentment includes a nationalistic biasfrom the local media, or “finger-pointing” from peers, colleagues, and staff:

I’ve been blasted in the Malaysian media because we had some [y] issues here.“How can we have a ‘mat salleh’ {i.e. Caucasian} running the nation’s icon?” Berita Harian{a Malaysian newspaper} absolutely smashed me (FELO No. 4).

And I am very conscious about the fact that there is nobody else on the board to whom theypossibly could point the finger (FELO No. 7).

The long host-country work experience of FELOsThe host-country work experience of FELOs was mentioned relatively more often byLOCAL interviewees than by FELOs, suggesting that HCNs attach significantimportance to this theme. Both sample groups typically contrasted the long host-country work experience of FELOs to that of expatriates:

I think many of the typical expats; they have a very limited timeframe, a verylimited horizon. They say: “Ok, I do another three years, then I go to the next secondment.”And this is – from my point of view – the biggest difference (FELO No. 19).

LOCALs in particular saw this long tenure as a positive difference to expatriates,and reported that it leads to better integration in the local organisation and thehost-country society at large:

If your view is more long-term, they {i.e. HCNs} will invest more in a relationship withyou. If you’re a foreigner and they generally sense that you’re not long-term, why wouldthey build a relationship with you? (LOCAL No. 1).

They [FELOs] have more of an investment, if you like – emotional and all the rest of it – withthe country. Whereas a typical expat just sees it as an opportunity, you know, to [y] forcareer development; three years [y] There isn’t that sense of connection and ownershipwith the country (LOCAL No. 16).

FELOs do not have the safety-net of expatriatesA majority of FELOs felt that they lacked the “safety net” enjoyed by expatriates. Onlya few LOCALs mentioned this theme (see Table V), likely indicating that they may findit difficult to empathise with feelings of being a foreigner in a foreign country, giventhat few have lived and worked internationally:

It’s a bit like a high wire act without a safety-net underneath you. [y] The supportmechanism isn’t there as it is in an international company. I mean, you can stuff upfor various reasons with an international company. But whatever happens, the companywill probably put you back into your home country and make sure thatyou’re taken care of. I mean, there’s all sort of legal implications and influences there(FELO No. 31).

I have a local contract, with local rules. The difference to an expatriate is: theexpatriate has a “home base”. In normal cases he has a contract for four or five years, when hegets back he gets a position there. If you work for a local company, that’s all gone.As you’re “local”, of course the safety of the multinational is not there, the safety-net.So, if something goes wrong, you’re on your own. If something goes wrong with an expatriate,you let the company [take care of you]. That’s the difference (FELO No. 35).

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Glass ceiling for FELOs and top jobs reserved for localsWhile expatriates are often posted to the top-position in the host-country hierarchy,FELOs report to a local boss, a board of local directors, shareholders, or businesspartners. Top positions are unlikely to be available to FELOs:

Unless it’s a multinational company, then it’s ok, but if it is a Malaysian company, I thinkthey would make sure there’s always a Malaysian on top (FELO No. 16).

Of course they allow you to run [the company] and to do all that work, but in public,they will have a “Datuk” or “Tan Sri” – a Malay guy {“Datuk” and “Tan Sri” are Malaysiannon-hereditary titles}. [y] But there will come a time when the limit becomesapparent to where I can go in this group. Can I become the Group CEO? I do not see that(FELO No. 10).

While MNCs typically provide merit-based career-paths for their executives, FELOsare aware that a “glass ceiling” exists for them, and that many senior positions arefilled without regard to merit. Both sample groups agreed that a foreigner at the top ofa local organisation is often untenable for political reasons:

The higher up you go, I think, the messier the politics are going to become. Because thereare people in the organisation who will be in their positions only for the fact thatthey are Malaysian and may be not particularly good at their jobs. But as a foreignermoves up through the ranks, you realise you are not going to be able to outperformthat individual, to get his job, or move beyond them. [y] I think the navigationthrough an organisation chart [y] it’s difficult for a foreigner. A lot of nationals staystatic in their position for a long, long time – regardless of performance, good or bad. [y]There always is going to be somebody, somebody else sitting in that chair(FELO No. 27).

Because, you know, politically they cannot allow a foreigner to be at the helm of suchkey organisations. So it’s no way that you would ever have a foreigner at the helm of[that local organisation] or, you know, a local bank. I mean, it just [y] it just wouldn’t happen;it’s just politically untenable I think (LOCAL No. 16).

Similar sentiments may block the ascent of FELOs in family-operated organisations:

They’re a public-listed company – the position that the father wants to leave whenhe retires, he wants his son to take over the place and [y] [y] He’ll do the Harvard-thing, he’ll do whatever, and then come back and walk in and, at twenty-seven, be theCEO or International Sales Manager [y]. Rather than someone else. If they need expertisefrom the outside [y] but they’re not going to put [a foreigner] into such a high position(LOCAL No. 12).

Is it possible for him, that one day he’ll be the chairman of that [company]? The answer is“yes”. Why, because they’re not an owner-managed business. That’s the difference.So, even for me, if I was to join an owner-managed business outside, chances are [y] thatthere’s a glass-ceiling (LOCAL No. 9).

In such cases, FELOs often maintain a low profile, work behind the scenes, and take abackseat in the public eye behind local colleagues:

Oh, because I’m not after the top job! [y] I like to be very influential, but my job hasalways been to advise behind the scenes, help people re-think, have an independent idea.But I don’t have to be there at the time when [y]. I don’t have to give the interviews andthe press conferences. [y] And I’m vice-president of [deleted] but I will never bepresident of [deleted] (FELO No. 8).

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DiscussionSignificant differences are apparent between EAs, most SIEs researched to date, andthe distinct nature, rarity, and depth of the FELO phenomenon. The first andmost obvious difference is the relative frequency of these international positions.As expected from the review of literature, issues of allegiance, trust, and controlmake FELOs a rare phenomenon. The findings clearly indicate that owners of localorganisations generally doubt the allegiance of foreigners, distrust expatriates, trustexecutives of their own nationality more, and wish to retain control of their operations:the hiring of foreign executives remains controversial and rare. Nevertheless, theobvious theory emerging from these findings is that global competition has apparentlyreached a level at which local organisations in emerging economies, despite concernsabout allegiance, trust and control, are joining the marketplace for global managerialtalent. The notion of “career capital” that characterises much of the SIE literature(Jokinen et al., 2008; Suutari and Makela, 2007), and that is probably the single mostimportant aspect distinguishing SIE from more general migration research (Al Arissand Crowley-Henry, 2013, p. 83), is the key “product” traded in this internationalmarket. The value of this product (i.e. career capital) can outweigh the “liability offoreignness” at the individual level (Fang et al., 2013) that many FELOs in the presentstudy describe.

Second, most expatriates in the subsidiaries of multinationals are of the samenationality as the headquarter staff of their employer. In contrast, FELOs are typicallythe only foreign individual in the organisations for which they work. While expatriatesin MNC subsidiaries (PCNs and TCNs) are likely to report to other PCNs or TCNs,FELOs report to HCN superiors. Expatriate chief executive officers (CEOs) or managingdirectors (MDs) of MNC subsidiaries usually report to PCN superiors in distantheadquarter offices that often know little about the subsidiary’s country of operation, andrarely get involved in day-to-day operations. In contrast, FELOs in CEO or MD positionsreport to HCN superiors who are well informed about the country of operations and oftenhave significant influence on operational decisions. From the perspective of managementtheory, this raises interesting questions. Do FELOs need to have better managerial skillsthan expatriate managers in the subsidiaries of MNCs and even managers of a typicalMNC headquarter? FELOs have to work under a level of scrutiny akin to that of a highlyinvolved and very critical chairman/supervisory board at home (as good CEOs have todo). In addition, FELOs have to work in a culturally different environment (as expatriateshave to do). The ability to perform under both of these pressures is likely to be scarce andprobably another reason for the rarity of the FELO phenomenon.

This emerging theory also has implications for the hiring practices of establishedMNCs. These organisations may benefit from hiring more executives who have workedin local organisations. Indeed, FELOs may provide advantage as (a) “local hires” inforeign subsidiaries, (b) transpatriates for subsidiaries in other countries, and (c)in headquarter positions. In respect to (a), the involvement with local organisations islike to have increased their country-specific experience, knowledge, and understandingbeyond that of assigned expatriates in the same host country (Ceteris paribus).For example, FELOs may understand the inner workings of local joint-venturepartners better than assigned expatriates, have a good reputation to loose, and be moreacceptable to host-country colleagues due to their previous service to local employers.They may therefore be seen as inclined to work towards outcomes that serve both theirhost-country and the foreign multinational operating in it. Regarding (b), the insiderinvolvement with local organisations in one culturally and geographically distant

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country is likely to better prepare FELOs to understand organisations, colleagues, andmarkets in other countries. This would make them suitable expatriates/transpatriatesfor MNC elsewhere. Finally (c), FELOs’ understanding of the perspectives of localorganisations and colleagues in culturally different environments, combined with theexperience of working under heightened scrutiny, may prepare these individuals wellfor headquarter positions in multinational organisations. In essence, established MNCsmay be able to gain back “career capital” from the global marketplace by appointingformer FELOs.

Third, the extent to which FELOs have to take host-country sensitivities intoaccount, and the nature of FELOs’ interactions with colleagues, staff members, andother stakeholders of the local organisation differs from EAs. Expatriates typicallyhave a clear mandate to pursue the parent-company’s corporate strategy andinterests – which may conflict with local views. Locals likely explain and grudginglyaccept expatriate income levels as the price that foreign organisations are willing topay for “one of their own” to exercise foreign control. In contrast, FELO remunerationis subject to intense scrutiny, as it is perceived to be “coming out of local coffers”, and tobe paid to “one of them” by “one of ours”. While expatriates generally have the backingand support of their parent-country headquarters, FELOs do not have such a sourceof power.

Fourth, FELOs are apparently trusted only after long periods of host-countryexperience, and a level of involvement that exceeds typical EA periods. Significanthost-country experience of FELOs is likely to be an important element in reducing thepotential for resentment that results from HCN assumptions about FELO incomelevels. As Table VI illustrates, the organisational tenure of FELOs in this study isnearly as long as that of their LOCAL counterparts. Compared to typical expatriates,the median host-country experience of FELOs (a median of 15 years), combined with amedian organisational tenure of seven years is very significant. The FELOs had alsogenerally had prior international experience. In contrast, only 10 per cent of typicalexpatriates are reported to have had previous international experience when assigned.Most EAs (65 per cent) are expected to be between one and four years, and 59 per centof assignments are completed on time (GRTS, 2010).

Fifth, the nature of the FELO experience includes the perception that the “expatriatesafety-net” is lacking. In addition, FELOs may not have the merit-based career-advancement opportunities of other expatriates. Instead, they are subject to nepotismin organisations that may give preference to political, ethnic, or family affiliation.

Theory emerging from the aggregated second, third, fourth, and fifth discussionpoints above is that successful (i.e. “surviving”) FELOs will primarily be matureindividuals with significant international and host-country experience, and willing towork without much backing or a safety net in a cultural environment different from

Number of countries livedin longer than one year Years in Malaysia Years in local organisation

FELOs FELOs FELOs LOCALs

IQR 2-5 9-19 4-12 5-18Range 2-8 2-44 2-24 2-30Median 4 15 7 10Average 4 15 9 12

Table VI.International experience,host-country experience,

and organisational tenure

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their own – the ultimate experienced trapeze artists. This theory is strengthened by themedian age (52 years) and interquartile range (44-60 years) of the FELO sample in thisstudy (see Table IV). In light of this, the motivation of FELOs for taking up and stayingin their positions requires discussion. The characteristic that FELOs have in commonwith other types of SIEs appears to be a risk-tolerant career mobility started at a youngage. Biemann and Andresen (2010), for example, analyse differences in the reasonsfor international work between assigned expatriates and self-initiated expatriates inmiddle, executive, and top management positions (albeit from a small sample). Theyfound that SIEs start their international careers at a younger age, have higherorganisational mobility, and expect higher benefits from international experiences fortheir future careers. Their career orientation appears to remain stable over different agegroups, whereas it declines with increasing age for expatriates on assignment. It islikely, therefore, that individuals who have started expatriate careers at an early agewill form a disproportionately large percentage in studies of SIEs and, by extension,FELOs. This theory would also agree with the distinction that Stahl et al. (2009)make between developmental (or learning driven) and functional (demand driven)expatriates. The former are described as more likely to do well in internationalpositions and to view their expatriation as a career stepping-stone to positions in otherorganisations (and thus, probably, become FELOs).

Sixth, the motivation of local organisations warrants further discussion andexploration beyond the scope of the present paper. Why foreign executives fromsignificant cultural distance are appointed to local headquarter positions and whythese positions are not filled with local executives must be examined in a comprehensivefashion (Arp, 2013a). As organisational motivations vary (Arp, 2012), this leads to anorganisational typology (Arp, 2013b). The present study nevertheless illustrates that localorganisations do appoint foreign executives despite concerns about allegiance, trust, andcontrol. However, the composition of the sample (mostly FELOs with very significanthost-country involvement) also indicates a “survivorship-bias” in this cross-sectionalstudy (a static picture of a dynamic phenomenon): only those foreign executives thatare perceived to be significantly different from typical expatriates continue to hold theirpositions in local organisations. Table VII provides an overview of key differencesbetween typical expatriates and FELOs.

Implications for future researchThomas et al. (2005) had reasoned that research on new types of international cross-cultural workplaces is at an early stage of development in which construct definitionsare just emerging. The present study can be viewed as an example for thisdevelopment, with implications for the way in which future research should change.Recent reviews of a wide range of studies (Al Ariss and Crowley-Henry, 2013; Dohertyet al., 2013) indicate that definitions, at least for the SIE construct, are still in flux.Indeed, Al Ariss and Crowley-Henry (2013, p. 90) conclude from their analysis of theSIE and wider migration literature that “Rather than postulating a narrow focus onSIE [y] the theoretical weaknesses concerning this topic could be better addressedthrough a research agenda that is more inclusive in nature”. The findings of the presentstudy demonstrate that perceptions about expatriates (their own and those of theirlocal colleagues) are crucial for research into new international workplace phenomena,as categorisations may depend on who expatriates work for. Local scrutiny variesbetween expatriate categories, and perceptions about loyalty and control can havesignificant effect.

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arte

rof

fice

sw

ho

ofte

nk

now

litt

leab

out

the

sub

sid

iary

’s

cou

ntr

yof

oper

atio

n

Ex

pat

riat

esar

ese

enb

yH

CN

sas

rep

rese

nti

ng

fore

ign

inte

rest

s

Ex

pat

riat

esty

pic

ally

hav

eth

eb

ack

ing

and

sup

por

tof

thei

rp

aren

t-co

un

try

hea

dq

uar

ter

FE

LO

sar

ety

pic

ally

the

only

fore

ign

ind

ivid

ual

inth

e

org

anis

atio

ns

for

wh

ich

they

wor

k

FE

LO

sre

por

tto

loca

l(i

.e.

HC

N)

sup

erio

rs.

FE

LO

sin

CE

Oor

MD

pos

itio

ns

rep

ort

toch

airp

erso

ns,

rep

rese

nta

tiv

esof

fam

ily

-ow

ner

s,or

dom

inan

tsh

areh

old

ers.

Th

ese

HC

Ns

are

ver

y

wel

lin

form

edab

out

the

cou

ntr

yof

oper

atio

ns,

and

ofte

nh

ave

sig

nif

ican

tin

flu

ence

onop

erat

ion

ald

ecis

ion

s

FE

LO

sn

eed

tod

emon

stra

teth

eir

loy

alty

tolo

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inte

rest

s

FE

LO

sn

eith

erh

ave

the

“saf

ety

-net

”of

exp

atri

ates

nor

exte

rnal

sup

po

rt

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me

lev

elE

xp

atri

ate

rem

un

erat

ion

typ

ical

lyai

ms

toco

mp

ensa

tefo

rth

eh

ard

ship

ofte

mp

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y

assi

gn

men

tsto

dis

tan

th

ost-

cou

ntr

ies

FE

LO

inco

mes

are

bro

adly

inli

ne

wit

hth

ose

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pee

rs,b

ut

are

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erth

eles

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esu

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mp

tion

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yH

CN

wh

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can

lead

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sen

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t

Hos

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try

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erie

nce

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pat

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ten

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en

op

rev

iou

sex

per

ien

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nh

ave

ver

ysi

gn

ific

ant

lev

els

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y

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erie

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us

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kin

oth

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calo

rgan

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in

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es

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t-co

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try

inv

olv

emen

t

Th

e“t

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ing

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ses”

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pat

riat

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ety

pic

ally

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ign

nat

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als

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pat

riat

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mil

ies

are

typ

ical

lyp

art

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itie

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ten

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ated

from

thei

rh

ost-

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y

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ed

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gg

leto

fin

dem

plo

ym

ent

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ilin

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ouse

s”

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rge

nu

mb

erof

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sis

mar

ried

tolo

cal

spou

ses

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yF

EL

Os

are

inv

olv

edw

ith

hos

t-co

un

try

soci

ety

toa

sig

nif

ican

td

egre

e(o

ften

thro

ug

hth

eir

loca

lsp

ouse

s)

FE

LO

du

al-c

aree

rco

up

les

(wh

ere

spou

ses

are

loca

l)d

on

ot

usu

ally

face

dif

ficu

ltie

sof

fin

din

gsp

ouse

emp

loy

men

t

Min

dse

tO

ften

“hea

rts

ath

ome”

or“d

ual

alle

gia

nce

”m

ind

set

(Gre

ger

sen

and

Bla

ck,1

992;

also

see

Hu

tch

ing

s,20

04)

Lon

g-t

erm

exp

atri

ates

ofte

nd

evel

opd

ual

alle

gia

nce

toth

eir

hos

t-co

un

try

coll

eag

ues

and

dis

tan

tp

aren

t-co

un

try

hea

dq

uar

ters

Inst

ead

ofa

“hea

rts

ath

ome”

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t,a

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bal

min

dse

t”is

des

crib

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sh

ave

no

nee

dto

bri

dg

ea

div

ide

bet

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eir

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try

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reig

nh

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qu

arte

rs.T

hei

r

alle

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nce

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stb

esh

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r

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eT

yp

ical

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atri

ates

(72%

)ar

efr

om30

to49

year

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d(G

RT

S,

2010

)T

yp

ical

FE

LO

sin

the

pre

sen

tst

ud

y(m

edia

nag

e¼

52ye

ars;

IQR¼

44to

60ye

ars)

are

som

ewh

atol

der

than

typ

ical

exp

atri

ates

Table VII.Key differences between

typical expatriatesand FELOs

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International management research may be at risk of neglecting local positions andperspectives. Indeed, Gelfand et al. (2007, p. 479) write that this is a critical challengefor cross-cultural research, and emphasise the importance of “taking indigenous[i.e. local] perspectives seriously, and moving beyond intracultural comparisons tounderstand the dynamics of cross-cultural interfaces”. Expatriate categorisations aresubject to meaning attached by the individuals involved (both foreign and local).Conceiving of scholarly categorisations and constructs in isolation (i.e. without firstcollecting observations from both groups of individuals) may not aid the explorationof new phenomena. For example, individuals described by some academics with thepreconceived, semantically, and etymologically confused term “inpatriate” (if meant tobe antonymic to the term expatriate as import is to export, it would have to beimpatriate) are likely to think of themselves simply as expatriates (ex patria¼ out ofthe fatherland). Preconceived concepts and constructs may also lead to the inflationand conflation of concepts that the SIE literature appears to suffer from. The problemmay be exacerbated by the frequency of studies on SIE academics by SIE academics.For example, academics that have self-initiated their work in a culturally andgeographically distant foreign country may all categorise themselves as SIEs. However,their local colleagues may distinguish between positions in local universities vs thesubsidiary campus of a foreign university. In the latter, SIE academics may be perceived asvery similar to expatriate academics assigned from the headquarters. Local colleagues aswell as the public may assume (and probably grudgingly accept) such academics toreceive a higher salary than local colleagues. In contrast, SIE academics working for alocal university may well be perceived as somewhat unusual and exposed to heightenedlocal scrutiny not unlike FELOs. A similar example can be given for the meaning ofconcepts and terminology. The term “localization” has a specific meaning for managementscholars (i.e. multinationals increasingly filling subsidiary positions with host-countrynationals). However, local participants in the present study attached a different meaning:the increasing adaptation of foreigners to local ways. Scholarly commitment to “takingindigenous/local perspectives seriously” (Gelfand et al., 2007, p. 479) may involve thequestioning of established concepts and terminology in the literature. If local people preferto call themselves “local people” rather than “host country nationals”, inductive informant-centric scholarship should probably reflect that. Local people think of the research settingas their country, not a “host country” as etic-minded researchers may do. Similarly, ifestablished terminology in the academic literature (such as “localization” or “localized”)connotes different meaning for local people, research should report this accordingly.Local people may never quite see how “localization” can be initiated by a foreignorganisation (that fills positions in its subsidiary with host-country nationals), but insteadmay feel that any localisation originates from their country (and that is its culturalinfluence on foreigners). In sum, implications from the present research highlight the needfor more primary (grounded) research.

ConclusionThe present study addresses a gap in the extant international management literatureby exploring a type of affiliation that has not been previously examined. The findingsextend knowledge on the career capital derived by “developmental or learning driven”individuals (Stahl et al., 2009) from boundary-less careers ( Jokinen et al., 2008; Stahlet al., 2002; Suutari and Makela, 2007) and new forms of international phenomenaincluding SIE (e.g. Inkson et al., 1997; Peltokorpi and Froese, 2009; Suutari and Brewster,2000). Providing an important step towards understanding the FELO phenomenon, the

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research extends theory about international positions in the international human resourcemanagement literature. In triangulating data from two interviewee groups, thisstudy maintains rigour and robustness while recognising the subjective nature of theexperiences of research participants (as advocated for future SIE studies by Al Ariss andCrowley-Henry, 2013, p. 89). By investigating both foreign and local perspectives in depthand through qualitative methods, this research augments quantitative research (e.g. Banaiand Reisel, 1999) on the role of trust among executives from different countries andcultures, and experimental research (e.g. Joardar et al., 2007; Thomas and Ravlin, 1995) onthe acceptance of foreign newcomers within cross-cultural workgroups.

However, there are significant limitations and a need for further research. The scopeof this paper is limited to exploring the situation of FELOs and reporting differencesto various other expatriates. Why foreign executives from significant cultural distanceare appointed to local headquarter positions, what they contribute, and why thesepositions are not filled with local executives is examined elsewhere (Arp, 2013a).Future case study and longitudinal research will be needed to provide a full picture ofall aspects of the FELO phenomenon over time. In addition, the present study exploresthe FELO phenomenon in a single broad dimension: the FELO participants areindividuals perceived as “Western” in an “Eastern” environment. The terms “Western”and “Eastern” create a superficial dichotomy that does not reflect the complexity andheterogeneity within either construct. Globally, the FELO phenomenon could berepresented by “Eastern” executives holding headquarter positions in “Western”organisations (or the reverse) as well as by African or Latin-American executives in theheadquarters of European organisations (or the reverse). Indeed, the FELO phenomenoncould also be represented by “Eastern” individuals in the “Eastern” setting chosen forthis study (for instance, Korean or Japanese executives in local Malaysian organisations).However, because of its investigation of multiple cross-cultural interfaces (comprisingFELOs from 13 countries and their local peers from various cultural backgrounds), thepresent study is not narrowly mono-dimensional but describes a pattern for comparisonsin other settings (cf. Yin, 2003). It is the first study that examines the situation of FELOsand the distinct nature and depth of their experience. Accordingly, its key findingsprovide some initial grounded theory and a basis for further theory generation on theFELO phenomenon in other settings.

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Corresponding authorDr Frithjof Arp can be contacted at: frithjof.arp@gmail.com

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