Because of the difficulties that expatriates face, some firms have begun a policy of “inpatriation” (a concept discussed further in the Debate section of chapter 13), whereby they relocate foreigners to the host country, with the expectation that after a period of time, they will replace expatriates. While this provides the MNE with a source of workers who do not face cultural obstacles, some significant problems remain. First, inpatriates, who are paid the going rate in the MNE’s home country, are often disappointed or upset when they go to the host country, where salaries are much lower. Second, many inpatriates are ineffective because of their ambiguous position. While the headquarters views inpatriates as “us” because of their time in the home country, other HCNs also view them as “us” because of their common ethnicity.
1.Given the pros and cons of expatriation and inpatriation, which do you feel is more effective for MNEs? Would certain situation call for one strategy over another? What could an MNE do to alleviate some of the difficulties of inpatriation?
2.MNEs operate in multiple locations, negotiating through a complicated web of formal and informal institutions that are different from country to country. An MNE is successful, in part, because of its ability to work within a complex network of laws and values to create a global, cross-cultural entity. The question is could labor unions do the same? While union presence is strong in some countries, it is nearly absent in others, so that workers in those countries have relative little protection from potentially unfair actions. What is the feasibility of establishing a global (or semiglobal) labor union to cover these countries? How would they overcome institutional obstacles presented by governments and by MNEs? What would be the pros and cons of such a movement?
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