Foreign Executives in Local Organisations

Foreign Executives in Local Organisations (FELOs) are a rare international cross-cultural management phenomenon that differs significantly from expatriate assignments in the subsidiaries of multinational organisations.

The phenomenon surfaces in isolated media reports and practitioner publications. The Economist (2010), for example, describes Japanese organisations as an “insular lot”, but reports that several are hiring foreign executives, and theorises that Japan is “opening up”. A newspaper in Pakistan scrutinises foreign executives in a local dairy industry organisation (The International News Islamabad, 2008), and several Americans have been appointed to executive positions in local organisations in India (Bloomberg, 2010). An international executive search firm (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 likely continue”. Indeed, Chinese car manufacturer Qoros is built almost exclusively with foreign executives.

Media coverage of the FELO phenomenon

The media coverage of the FELO phenomenon has several defining commonalities. First, the executives are prominently described as foreign. Second, the foreign individuals so described work at the executive level; they hold managerial positions supervising host-country nationals. Third, the organisations are described as local; a national identity is attached to them by the reporting media and it is implied that significant cultural distance is involved in these workplace affiliations between foreign executives and local organisations. Finally, the positions reportedly filled by these foreign executives are local positions: not positions in any foreign subsidiaries but positions in the country where these organisations have their headquarters. To highlight the significant differences between this phenomenon and established conceptualisations (such as expatriation / inpatriation / transpatriation / repatriation) in the international human resource management (IHRM) literature, the acronym FELO — for Foreign Executives in Local Organisations — is used.

Research on foreign executives in local organisations

Academic research publications on FELOs can be found here. The figure below provides a conceptual framework of the FELO phenomenon, distinguishing FELOs from expatriates, inpatriates and transpatriates in the established subsidiary structures of global multinational organisations (MNOs).

Cannot see the figure in China? Affected by web censorship? See it here!

Conceptual distinction of FELOs vs. expatriates, inpatriates, transpatriates

Intriguingly, the FELO phenomenon is not limited (as may easily be assumed) to ’emerging giants’ or aspiring multinationals in emerging market economies, but also occurs in local organisations primarily active in the domestic market. FELOs can even be found in local organisations with an exclusively domestic market focus.

Literature on organisational strategy and market focus (e.g. Dawar and Frost, 1999) highlights that many local organisations, especially in emerging markets, face much larger, well-resourced MNO rivals with multiple sources of competitive advantage (financial and technological resources, seasoned management, and powerful brands). The hiring of foreign executives in local organisations is often linked to such defensive strategies.

Interested in foreign executives in local organisations?

The purpose of this website is to provide a platform for communication about foreign executives in local organisations, research findings, and future research.

FELO research explains why FELOs are appointed, what FELOs contribute to the local organisations for which they work, and how cultural distance is bridged in those workplaces. The findings from methodical fieldwork include typologies of FELOs and local organisations. These typologies assist in identifying which FELO combinations produce successful outcomes (and those which are likely to fail).

If you are a management researcher, have access to FELO cases or data, are interested in further research, or wish to discuss your research in this field, please write to:    FELO research @ gmail.com (without the spaces)

Internationalisation (a.k.a. Iñtërnâtiônàlizætiøn)