Research reveals that a supportive organizational structure is key to facilitating expatriate manager success, driving business outcomes, and minimizing the risks associated with global expansion.
The Role of Organizational Structures in Supporting Expatriate Managers
Research suggests that companies’ organizational structures play a significant role in supporting expatriate managers, rather than relying solely on the personal traits of individual employees. A study of 192 expatriate general managers found that high decentralization, formalization, and global knowledge integration were key elements that contributed to employee success.
Organizational structure refers to the hierarchy of relationships between different departments, teams, and employees within an organization.
It outlines the lines of authority, communication, and decision-making processes.
Common types include hierarchical, matrix, functional, divisional, and flat structures.
Each type has its advantages and disadvantages, with factors such as size, complexity, and industry influencing the choice.
Effective organizational structure enables efficient operations, clear roles, and better collaboration among team members.
The Challenges of Expatriate Management
For multinational enterprises (MNEs), expatriate managers are crucial for implementing strategy and driving success in global markets. However, high turnover and incomplete assignments among expatriates remain persistent challenges. These failures can result in significant costs, including drained productivity, rehiring expenses, and strained stakeholder relationships.
The Importance of Organizational Support
Conventional wisdom suggests that success hinges on selecting the “right” expatriates – those with extensive international experience and high cultural intelligence. While this approach has its merits, research highlights the importance of organizational support in facilitating employee success. Organizations that provide their expatriate managers with a supportive structure, including high decentralization, formalization, and global knowledge integration, are more likely to see positive outcomes.
Organizational support refers to the resources and assistance provided by an organization to its employees.
This can include training programs, equipment, and facilities that facilitate job performance.
Research has shown that organizational support is a critical factor in employee motivation and job satisfaction.
According to a study by Eisenberger et al. (1986), employees who perceive their organization as supportive tend to have higher levels of commitment and productivity.
Effective organizational support can also lead to reduced turnover rates and improved overall well-being.
The Key Elements of Organizational Support
The study found that three key elements were essential for supporting expatriate managers: high decentralization, formalization, and global knowledge integration. Decentralization empowers local managers to make decisions, promoting autonomy and adaptability. Formalization provides clear guidelines and policies, ensuring consistency and reducing confusion. Global knowledge integration enables cross-border collaboration, facilitating the sharing of best practices and expertise.
Global knowledge integration refers to the process of combining and sharing knowledge from diverse sources, cultures, and disciplines.
This approach fosters innovation by identifying connections between seemingly unrelated concepts.
Studies show that integrated knowledge leads to improved decision-making, enhanced creativity, and increased productivity.
According to a report by the World Bank, countries with high levels of knowledge integration tend to experience faster economic growth and better social outcomes.
The Benefits of Organizational Support
Those employees whose companies possessed all three elements were the most likely to successfully complete their assignment and reported the highest levels of commitment to their organization. This suggests that organizations that invest in creating a supportive structure for expatriate managers are more likely to reap the benefits of this investment. By providing their employees with the tools and systems they need to succeed, organizations can drive success in global markets and minimize the risks associated with expatriate management.
Conclusion
In conclusion, research highlights the critical role that organizational structures play in supporting expatriate managers. By investing in high decentralization, formalization, and global knowledge integration, organizations can create a supportive environment that facilitates employee success and drives business outcomes. As MNEs continue to expand their global presence, it is essential that they prioritize the development of this type of organizational support.
