Expatriate return on investment in the Asia Pacific: An empirical study of individual ROI versus corporate ROI

Summary

The research paper "Expatriate return on investment in the Asia Pacific: An empirical study of individual ROI versus corporate ROI" by McNulty, De Cieri, and Hutchings (2013) investigates the often-overlooked dimension of individual return on investment (ROI) within expatriate assignments and its crucial role in driving corporate ROI, particularly in the Asia Pacific region. The study fills a notable gap in existing literature, which has largely focused on the organizational perspective of expatriate ROI without adequately exploring the benefits accruing to individuals. The methodology involved an empirical qualitative study based on interviews with 31 long-term expatriates working across 10 Asian countries. This approach allowed for a deeper exploration of the expatriates' experiences and perceptions of their assignments. The researchers utilized psychological contract theory as a framework to understand the reciprocal obligations and expectations between expatriates and their organizations. This theoretical lens helped in examining how the fulfillment of individual expectations and motivations (individual ROI) directly influences an expatriate's commitment, performance, and ultimately, the value they bring back to the corporation (corporate ROI). The findings underscore that "individual ROI" is a significant driver of "corporate ROI." Expatriates' psychological contracts were found to encompass both transactional and relational obligations, relating to aspects like compensation, career progression, and family support during the assignment. The study implicitly suggests that when individual needs and expectations are met, expatriates are more likely to be engaged and perform effectively, thereby enhancing corporate returns. Conversely, a lack of perceived individual benefit can undermine corporate ROI. The authors also highlight that organizations frequently lack formal processes to measure expatriate ROI, often relying on informal practices. This makes it challenging to strategically link assignment purpose to overall global strategy and to effectively track the diverse costs and benefits. Furthermore, the research indicates that the realization of expected corporate returns on investment is contingent upon an organization's ability to effectively leverage the new knowledge and skills that repatriating expatriates acquire. Expatriates may also strategically avoid utilizing company flexibility options, such as those for family needs, to uphold their reputation and justify the corporate investment, ensuring professional continuity post-repatriation.