Foreign executives in local organisations (FELOs)

2016-12-05T05:16:11Z (GMT) by Arp, Frithjof
Foreign executives in local organisations (FELOs) of culturally distant countries are a rare international management phenomenon that differs significantly from expatriate assignments in the subsidiaries of multinational organisations. The phenomenon has not been systematically researched, although media reports and executive search firm publications see it as ‘fairly new, highly visible, and sometimes controversial’ with demand for FELOs in Asia ‘likely to continue’. The purpose of this research is to address the gap in the literature through a systematic investigation of the FELO phenomenon. It adopts a qualitative approach to examine what and when foreign executives contribute to local organisations, why they are appointed, and how cultural distance is bridged. To achieve its purpose, the study analyses data from in-depth semi-structured interviews with foreign executives (n=46) from 13 countries and their local colleagues (n=25) from various cultural backgrounds, in organisations founded and headquartered in Malaysia. Dyadic data is used for the triangulation of findings, while non-dyadic data, socio-biographical data, as well as ‘between’ and ‘within’ group analysis, adds to the richness of the findings and is utilised to establish typologies. The research setting allows the exploration of organisational and individual perspectives across multiple cross-cultural boundaries in a single language common to all participants. Utilising this heterogeneity of perspectives, the study identifies differences between FELOs and other phenomena (such as expatriate assignments), and distinguishes country-specific influences from those that are generalisable to FELO workplaces in other settings. The key findings of the research include that FELOs are initially appointed for temporary roles and their hard skills, and to help open foreign markets, enhance organisational reputation and portray internationalisation. Assumptions about the remuneration of FELOs are a potential source of resentment from host-country nationals, although many FELOs are learning- and experience-driven rather than motivated purely by income. The research further suggests that some FELOs remain in their positions due to their soft skills, progress with the internationalisation of the local organisations for which they work, and because of a unique ‘in/out group’-status that has developed based on their host-country involvement. For many FELOs, this involvement includes engagement in local industry associations, private relationships with host-country nationals, and bridging roles between groups of local colleagues. The originality, theoretical contribution and significance of this research lie in its exploration and analysis of an international cross-cultural workplace phenomenon that has been overlooked by research primarily focused on expatriate assignments. In distinguishing between individual (that is, psychological) and collective (that is, socio-cultural) distance, the study helps to explain how cultural distance can be asymmetric and contingent on direction. It generates new insight on the theoretical constructs of ‘degree of internationalisation’ and the ‘global mindset’ of management teams. The study also holds important practical implications, as it elucidates the career-paths and career-capital of the individuals involved in the FELO phenomenon, and the contribution these individuals make to local organisations through leverage of their unique ‘in/out group’-status. Table of contents released for public access by author.