The Management of Chinese MNEs’ Expatriates: The Challenges for Chinese Outward Foreign Direct Investment

The management of expatriates is a popular topic in international human resource management (IHRM), as expatriates play a critical role in the success or failure of a firm’s international business operations (Dunning & Lundan, 2008; Hocking, Brown & Harzing, 2007). Existing studies, however, often focus on expatriates from developed countries, including their recruitment and selection (Selmer & Lauring, 2011; Stone, 2010), training and
310
career development (Selmer, 2006; Shen & Darby, 2006), compensation and performance management (Ghebregiorgis & Karsten,2007; Shen, 2004; Wood & Mansour, 2010), and knowledge transfer from their home to host countries (Hocking et al., 2007). These studies try to help multinational enterprises (MNEs) identify, employ and prepare expatriates to address challenges that developed country MNEs may face in other countries (Cooke, 2009; Dowling, Festing & Engle, 2013). With rapid development of emerging economies and mushrooming MNEs from those markets, how developing country MNEs manage their expatriates when conducting business through their outward foreign direct investment (FDI) is under studied (Zhu, Thomson, Hutchings & De Cieri, 2011). This study aims to address this research gap by examining Chinese expatriates working for Chinese MNEs so as to see the challenges Chinese MNEs are facing to manage their expatriates when conducting outward FDI.
The reason to select Chinese MNEs and their expatriates is because China’s unprecedented speed of internationalisation since its re-entrance to the WTO in 2001 (Fan, Zhu & Nyland, 2012; Wang, Freeman & Zhu, 2013).
This study is guided by a theoretical framework that consists of Western developed staffing policies and approaches, expatriate selection criteria, training and development process (Dowling et al,2013; Peng & Meyer, 2011). As researchers have increasingly emphasised the importance of context (Dewettinck & Remue, 2011; Martin-Alcazar, Romero-Fernandez, Sanchez-Gardey, 2005), the applicability of these theories/models in non-Western and emerging market context lacks empirical evidence. This study is exploratory oriented and aims to address the topic by investigating the following research questions based on an extensive literature review.
Research Question 1: What type of expatriates do Chinese MNEs have, i.e., PCNs, HCNs or TCNs? What are the reasons to consider different types of expatriates?
Research Question 2: What are the main features of expatriate policies and practices used by Chinese MNEs?
Research Question 3: Do Chinese MNEs have specific policies on expatriate selection and recruitment? If yes, what selection criteria are used?
Research Question 4: Do Chinese MNEs have special programs for their expatriate training and development? If yes, what are the main features of these programs?
Research Question 5: What roles are Chinese expatriates playing in terms of knowledge transfer between host and home countries?
This study adopts an exploratory approach by conducting a qualitative case study at both organization and individual level. A multiple case study design is used as it will enable researchers to replicate cases to overcome the restrictions of generalization from a single case (Yin, 2003). Moreover, multiple cases will also create more elaborate theory because specific propositions are more deeply grounded in the empirical evidence so as to obtain in-depth information to address each of the research questions raised (Eisenhardt & Graebner, 2007). The empirical data are collected from four Chinese firms who have invested overseas as Eisenhardt (1989) claims that it is often hard to produce theory including much complexity and convincing empirical grounding with fewer than four cases. The number of expatriates interviewed is flexible from four to six in each of the case firms. Apart from interviews, each MNE’s relevant archival documents will also be reviewed, which will help
311
to understand the impact of industry type, cultural and institutional context, company structure and strategies and relevant HR policies on the management of their expatriates.
The data collection method is using semi-structured interviews with senior executives and HR managers from headquarters as well as expatriates. The study will ensure confidentiality to protect both case firms and participants, which will also help obtain candid opinions. In addition, interviews will be recorded via notes or digital devices with agreements of the participants, which are used for in-depth research on the content that provided by interviewees.
An editing approach is used for data analysis since it occurs simultaneously with data collection while the researcher analyzes the data and edits the questions so as to fit better with interviewees (Tharenou, Donohue & Cooper, 2007). Furthermore, the data analysis contains examination, categorization and combination of all evidences to response to each research question. Moreover, each case study analysis is compared in regards to the research questions and followed by a cross- case analysis to identify emerging patterns along with similarities and differences. As a result, this cross-case analysis can be used to induce a more general theory and raise applicability to each case (Eisenhardt & Graebner, 2007 & Yin, 2003).
This study will make theoretical contributions by addressing an under-researched area, i.e., how emerging market MNEs manage their expatriates and the role of these expatriates play in their outward FDI. The empirical evidence obtained will examine the applicability of Western-developed theories in an emerging market, which may help theory-building. Some useful implications can also be drawn for research and practice, e.g., the areas for further study and how Chinese MNEs can further improve their management of expatriates.