small, minority-owned subsidiaries that are much ‘lower’ in the corporate reporting
hierarchy. Finally, control of the subsidiary will also be more important when a
subsidiary is under-performing, and direct headquarters intervention by means of
a parent country expatriate is necessary.
3 MOTIVES FOR INTERNATIONAL TRANSFERS
Now that we have established the advantages and disadvantages of using dif-
ferent groups of managers and have reviewed the factors influencing the choice
between HCNs and PCNs, we will take a closer look at the motives that MNCs
have to send out expatriates to their foreign subsidiaries. In this section, we will
first discuss the classification by Edström and Galbraith (1977) and will show
that the results of German studies largely confirm this classification. We will
then investigate whether the different motives for international transfers are
more important in some circumstances than in others and will review one of
the motives for international transfers – control and coordination – in more
detail. A final subsection will discuss the alternatives to international transfers,
including the use of impatriation.
Edström and Galbraith’s typologyThere are few theoretical clarifications or concepts regarding the motives for
international transfers. At first sight, the study by Edström and Galbraith
(1977) is the only one that theoretically explains why international transfer of
managers occurs. They found three general company motives for making this
type of transfer. The first was to fill positions, which concerns the transfer of
technical and managerial knowledge. This motive is quite important for devel-
oping countries, where qualified local nationals might not be available, but
specific knowledge transfer might be necessary to subsidiaries in developed
countries as well. Expatriates can be seen as the key bearers of tacit knowledge.
The second major motive is management development. The transfer gives the
manager international experience and develops him/her for future important
tasks in subsidiaries abroad or with the parent company. This kind of transfer
would be carried out even if qualified host-country nationals were available.
For the third motive for international transfers, the final goal is not individual
development but organisation development. This motive consists of two ele-
ments: socialisation of both expatriate and local managers into the corporate
culture and the creation of a verbal information network that provides links
between subsidiaries and headquarters.
The classification of Edström and Galbraith is well accepted in the litera-
ture on international transfers. Virtually every publication that deals with this
Composing an International Staff 259