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Expatriates

Expatriates

An expatriate is an employee sent by his or her employer to work in a foreign country. The firm is normally referred to as the parent company, while the country of employment is known as the host country. If General Motors sent one of its U.S. executives to oversee a new development in Brazil, the executive would be an expatriate, General Motors would be the parent company, and Brazil would be the host country. Equally, if an employee from Brazil was sent to the U.S. or an employee from Canada was sent to the People's Republic of China, they would be expatriates.

Many corporations are sending expatriates to their overseas operations, particularly as more firms face global competition and require internationally competent managers. Organizations need to understand the dynamic relationships between staffing and outcomes, and how these relationships change over time.

Expatriates provide a number of benefits for companies, including greater parent control and particular expertise. International experience is also seen as providing opportunities for personal and professional development and career advancement. Expatriates are very expensive, however, and this can discourage extensive use of expatriates. Many companies have also experienced relatively high failure rates, with failure often being attributed to the family's inability to adapt.

Surprisingly, given the high costs and potential for failure, companies often make these expensive commitments without preparing their employee for a cross-cultural transition. Expatriate success and job performance is closely related to intercultural adjustment and the same is true of families.

Given this, it is critical that companies use a rigorous selection process to identify which employees would likely succeed as expatriates. The selection process should also include consideration of the family.

Exhibit 1 Types of Allowances Given to Expatriates

Foreign Service Premiums- This is a sum of money that is simply a reward for being willing to move one's family to a new country. The sum is generally a percentage of one's base salary-usually between 10 to 25 percent.

Hardship Allowance- The hardship allowance is actually another foreign service premium added to the original one. It is based on not just having to go overseas, but where you go overseas. Hardship allowances are greatest when the expatriate is sent to places having poor living conditions, a vastly different culture, less access to good health care, etc.

Cost of Living Allowances- Cost of living allowances (COLAs) enable expatriates to maintain their standard of living. COLAs are given when the cost of living in the host country is greater than that in the United States.

Housing Allowances- The cost of housing in various parts of the world is much higher than it is in the United States. Large apartments in Tokyo or Hong Kong, for instance, can go for upwards of $10,000 a month. Housing allowances compensate expatriates for these higher costs.

Utility Allowances- Some companies give expatriates a fixed sum of money above their base salary to pay their utilities bills; other companies try to ascertain the difference in utility bills between the home and the host countries, and give an allowance based on that difference.

Furnishing Allowances- Some companies offer to ship all of the expatriate's furnishings overseas. A second approach is to pay for the lease or purchase of furnishings overseas by expatriates. A third approach is to just give the expatriate a fixed sum of money (usually between $8,000 to $10,000) to buy furnishings.

Education Allowances- Most expatriates send their children to private school overseas. Companies often pay the full cost of tuition, books, and supplies.

Home Leave Allowances- Companies usually provide expatriates and their families with round-trip, business-class airfare to visit the home country at least once a year.

Relocation Allowances- The allowance makes up for any mistakes made in any of the other allowances for unforeseen complications. Expatriates receive about one month's salary.

Medical Allowances- Companies usually pay for all medical expenses. In hardship countries where medical facilities are inadequate, this includes emergency trips to other countries to receive medical care.

Car and Driver Allowances- Most companies offer expatriate managers a car allowance. This enables the expatriate to lease, buy, or rent a car in the host country. In some cases, the expatriate is given funds to hire a chauffeur.

Club Membership Allowances- In some countries the only way an expatriate can gain access to recreational facilities (e.g., tennis courts, swimming pools, country clubs) is by joining clubs. Also, in many cultures these facilities are important places in which to develop contacts and conduct business. This type of allowance is usually made on a case-by-case basis.

Taxes- Many companies reimburse expatriates for taxes they pay in excess of what they would have paid had they remained in the United States.

Several characteristics determine an expatriate's expected level of success: job skills, motivational state, language skills, relationship skills, and family situation. Technical competency is most often used as the selection criteria for expatriates, but that is rarely the best selection technique. An expatriate is likely to make more progress at the overseas location if he or she has effective managerial skills and administrative competencies. Strong relationships with the host country and headquarters' operations also make the expatriate's assignment more productive. Conflict resolution skills are also important to the expatriate. Expatriates must also have a strong belief in the assignment if it is to be a success, and they must believe that the assignment will be advantageous to their careers.

Motivation is likely to be higher if the person has an interest in the specific host country culture as well as in an overseas experience. To be successful the expatriate must be willing to acquire new behavior patterns and attitudes. The most successful expatriates enjoy the challenge of forging their way through new situations and are comfortable networking and initiating new social contacts. These are also critical for the families of expatriates. Training for expatriates and their families is therefore as important as proper selection.

To reduce the likelihood of premature termination of the assignment, companies should choose expatriates who have well-developed relationship skills. Some characteristics are crucial for a successful expatriate: tolerance for ambiguity, behavioral flexibility, strong interpersonal skills, and a nonjudgmental disposition. In addition, an effective expatriate would have high cultural empathy. Ethnocentrism is the belief that one's culture is superior. Ethnocentric expatriates are likely to have problems adjusting to a new culture, and the local people are likely to perceive them negatively. Communication is also key.

The expatriate needs to have some working knowledge of the host language, but it may be more important that the expatriate have outstanding nonverbal communication skills and an understanding that nonverbal communication varies between cultures. He or she should become familiar with common nonverbal protocol in the new culture.

Most expatriates take their families with them to the foreign country, and their family situation is one of the most critical factors in the successful completion of an overseas assignment. Family transition must be taken very seriously. An expatriate must be comfortable on a personal level. Major stress can be caused for the entire family by something as seemingly trivial as the transportation of a family pet. An expatriate's spouse must have a very strong willingness to live abroad. The spouse must be supportive as well as adaptive. Many firms have had expatriates' assignments terminated early because the spouse was unwilling or unable to make the necessary adjustments to the host country.

Predeparture training for the expatriate greatly increases the likelihood of success. The extent of training can depend on a variety of variables: previous overseas experience (if applicable), time until departure, and novelty of the new country. Cross-cultural training must be meaningful for the expatriate and family. Training should, at the minimum,

inform the expatriate about the new country, and at the best, it would immerse the expatriate into the new culture.

Low-interaction training is focused on information distribution. It generally takes the form of lectures, videos, and readings. The material should include general area studies and a company operational overview. Low-intensity training would be appropriate for someone who has been on an expatriate assignment before or someone familiar with the host country. Unfortunately, this is often the only training received by most expatriates whether they have previous experience or not. This lack of training is usually due to last-minute selection or no training budget.

Medium- to high-intensity training should have a duration of one to two months. This training provides affective learning and cultural immersion. Medium-intensity training takes the intercultural experience workshop approach, offering cultural simulations, role plays, and case studies. Skill development can be culture-general or culture-specific. High-intensity training, most necessary for inexperienced expatriates entering a very different culture, provides sensitivity training and includes communication workshops and field exercises that focus on self awareness, listening skills, open-mindedness, and communication skills.

Prior to 2001, there were relatively few female expatriates (Stroh, Varma, Valy-Durbin, 2000), but a 2006 study by Mercer Human Resource Consulting showed an enormous increase in women being sent out on international assignments. This was particularly true for the Asia-Pacific region, which saw a sixteen-fold increase in female expatriates. The female expatriates in this study were far less likely than their male counterparts to be accompanied by a partner on the assignment. Although the companies surveyed did not have different policies for male and female assignees, it was clear that male and female expatriates were treated differently in certain respects. For example, 15 percent of the companies surveyed said they would not send a female employee to high-risk locations such as the Middle East.

Given that expatriates are very expensive, it is in a firm's interest to make sure the assignment is successful. Proper expatriate selection and training, as well as attention to the needs of the family, can be a productive investment.

SEE ALSO Human Resource Management; International Business; International Management; Organizational Culture

BIBLIOGRAPHY

Ali, A., K. Van der Zee, and G. Sanders. Determinants of Intercultural Adjustment Among Expatriate Spouses. International Journal of Intercultural Relations 27, no. 5 (2003): 563580.

Big rise in number of female expats. Management Issues 12 October 2006. Available from: http://www.management-issues.com/2006/10/12/research/big-rise-in-number-of-female-expats.asp.

Cullen, Lisa Takeuchi. The New Expatriates. Time.com 11 October 2007. Available from: http://www.time.com/time/magazine/article/0,9171,1670516,00.html.

Gong, Y. Towards a Dynamic Process Model of Staffing Composition and Subsidiary Outcomes in Multinational Enterprises. Journal of Management 29, no. 2 (2003): 259280.

Hess, Melissa Brayer and Patricia Linderman. The Expert Expat, Revised Edition: Your Guide to Successful Relocation Abroad. London: Nicholas Brealey Publishing, 2007.

Punnett, B.J. International Perspectives of Organizational Behavior and Human Resource Management. Armonk, NY: M.E. Sharpe, 2004.

Schuler, R.S., P.S. Budhwar, and G.W. Florkowski. International Human Resource Management. In Handbook for International Management Research ed. B.J. Punnett and O. Shenkar. Ann Arbor, MI: University of Michigan Press, 2004.

Stahl, G.K., E.L. Miller and R.L. Tung. Toward the Boundaryless Career: A Closer Look at the Expatriate Career Concept and the Perceived Implications of an International Assignment. Journal of World Business 37, no. 3 (2002): 216227.

Stroh, L.K., A. Varma, and S.J. Valy-Durbin. Why Are Women Left at Home: Are They Unwilling to Go on International Assignments? Journal of World Business 35, no. 3 (2000): 241255.

Tucker, M.F., R. Bonial, and K. Lahti. The Definition, Measurement and Prediction of Intercultural Adjustment and Job Performance Among Corporate Expatriates. International Journal of Intercultural Relations 28, no. 3-4 (2004): 221251.

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expatriation

expatriation, loss of nationality. Such loss is usually, although not necessarily, voluntary. Generally it applies to those persons who have renounced nationality and citizenship in one country to become citizens or subjects of another. According to U.S. law, for example, a citizen who becomes naturalized in a foreign state is automatically expatriated. In addition, expatriation occurs when a naturalized citizen resides in his native land for two years or elsewhere outside the United States for five years, or when any citizen serves in the public employment or military of a foreign state. Prior to 1922 an American woman who married an alien was expatriated, but in that year the Cable Act nullified that provision and stipulated that a woman may retain her citizenship when marrying an alien "unless she makes a formal renunciation of her citizenship." The United States, in common with other countries, forbids voluntary expatriation in time of war. Expatriation may also occur involuntarily, as when a government chooses to renounce its obligations to individuals who desert in wartime. Such persons are stateless until naturalization under some other government takes place. A more general type of involuntary expatriation is the loss of nationality that occurs with the cession or conquest of a territory. The common law view that one's allegiance cannot be renounced without the state's permission prevailed until 1868 when the United States challenged this doctrine in order to protect its naturalized immigrants against the claims of their native states, which did not recognize the right of subjects to expatriate themselves. Congress declared voluntary expatriation to be "a natural and inherent right of all people," and announced that the United States would protect its naturalized citizens abroad, even in their native countries. Great Britain abandoned the common-law interpretation in 1870. Many other nations, however, including France and Russia, do not recognize expatriation. The United States at present has treaties operating with most European nations concerning that and other conflicting interpretations of citizenship.

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Expatriation

EXPATRIATION

EXPATRIATION is the right of a citizen or subject to transfer allegiance from one political state to another. Under English rule, this right could be exercised only with the government's consent, but in 1868 the U.S. Congress recognized that all persons possessed this right. Later legislation set conditions under which expatriation would occur, some of which called for loss of citizenship against the wishes of the individual citizen. The Supreme Court in the 1950s and 1960s declared unconstitutional a number of such provisions, so that expatriation is now basically voluntary and cannot be imposed against a citizen's wishes, particularly as punishment, although naturalization can be canceled for fraud.

BIBLIOGRAPHY

Roche, John P. "The Expatriation Decisions: A Study in Constitutional Improvisation and the Uses of History." American Political Science Review (1964).

Paul C.Bartholomew

ChristopherWells

See alsoCitizenship ; Naturalization .

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expatriate

ex·pa·tri·ate • n. / eksˈpātrēit/ a person who lives outside their native country: American expatriates in London. • adj. / eksˈpātrēit/ (of a person) living outside their native country: expatriate writers and artists. • v. / eksˈpātrēˌāt/ [intr.] settle oneself abroad: candidates should be willing to expatriate. DERIVATIVES: ex·pa·tri·a·tion / eksˌpātrēˈāshən/ n.

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expatriate

expatriate withdraw from one's native country. XVIII. f. medL. expatriāre, -āt-, f. EX-1 + patria native land.
Hence expatriate sb., expatriation XIX.

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Expatriation

EXPATRIATION

Thevoluntary actof abandoning or renouncing one's country and becoming the citizen or subject of another.

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expatriate

expatriate •labiate •irradiate, radiate •mediate • ideate • repudiate •palliate, retaliate •affiliate, ciliate, conciliate, humiliate •exfoliate, foliate •nucleate • permeate • delineate •calumniate • expiate •expatriate, repatriate •recreate • inebriate •aureate, excoriate •procreate •appropriate, expropriate, impropriate, misappropriate •infuriate, luxuriate •asphyxiate • nauseate •annunciate, enunciate •instantiate, substantiate, transubstantiate •differentiate, potentiate •expatiate, ingratiate, satiate •appreciate, depreciate •initiate, officiate, propitiate, vitiate •associate, dissociate, negotiate •excruciate • aviate •abbreviate, alleviate, deviate •obviate • exuviate • inchoate •actuate • perpetuate • effectuate •habituate • fluctuate • punctuate •graduate • individuate • menstruate •accentuate, eventuate •evacuate •evaluate, valuate •superannuate • infatuate •attenuate, extenuate •insinuate • situate •peart •immediate, intermediate •idiot •collegiate, intercollegiate •orgeat • Eliot • affiliate •foliate, trifoliate •aculeate, Juliet •Uniate • opiate •chariot, Harriet, Judas Iscariot, lariat, Marryat •compatriot, expatriate, patriot •heriot, Herriot •commissariat, lumpenproletariat, proletariat, salariat, secretariat, vicariate •inebriate • Cypriot •baccalaureate, laureate, professoriate •appropriate • licentiate • satiate •initiate, novitiate, patriciate •associate • cruciate • Cheviot • soviet •roseate •Byatt, diet, quiet, riot, ryot, Wyatt •inchoate •Ewart, Stewart •Verwoerd •graduate, undergraduate •attenuate • situate •abbot, Cabot •Albert • lambert • Egbert • Delbert •filbert, Gilbert •halibut • celibate • Robert • Osbert •Norbert •Hubert, Schubert •Humbert • Cuthbert •burbot, Herbert, sherbet, turbot •Frankfort • effort • comfort

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