Beyond expatriation: How inpatriation supports subsidiary growth and performance

Telling the story of the background, motivation, and key findings of our study on inpatriation, subsidiary growth and performance

‘Mobility of individuals’ is a powerful mechanism for facilitating knowledge transfer in MNCs, and expatriation has featured prominently in this discussion. More recently, as scholars have turned their attention to the diversification of global work arrangements, inpatriation (the international assignment of employees from an MNC’s foreign subsidiary to its headquarters) has received increasing attention.

While there has been emerging research on the role of inpatriates as knowledge agents, we lack a clear understanding of whether and how inpatriates provide value to their subsidiaries after returning from headquarters. Therefore, our study was the first to explicitly show how inpatriation contributes to subsidiary performance. In this blogpost I explain how this study came about and discuss its key results.

Questions from my fieldwork in Japanese MNCs

In the books and papers that I had studied, HQ managers and expatriates were described as the primary knowledge actors in MNCs. However, while doing fieldwork in Asian subsidiaries of Japanese MNCs around 2010, I started to think that this taken-for-granted assumption might not be always true. In other words, HQ managers and expatriates might not be the best knowledge agents in certain situations.

This was especially noticeable in R&D units. While local managers needed knowledge from HQs to solve issues in their local markets where speed was critical, HQ managers and expatriates appeared to be resistant to share knowledge. Local managers in R&D units complained that “people in HQs are very reluctant to share information”, “responses are always late”, and “expatriates care too much about what HQs think”. On the other hand, HQ managers in Japan complained that “local people do engage in job hopping too often”, and “their [the locals’] priority is only getting a higher salary”.

Meanwhile, Japanese MNCs struggling to devise an emerging market strategy increasingly turned to inpatriation, where local managers and engineers spent significant time working at HQ. In those cases, local managers/engineers are the primary knowledge actors to bridge HQs’ knowledge resources and the local market. I became more and more interested in the roles of inpatriates in knowledge transfer, as it appeared to present a novel approach of knowledge transfer in MNCs. Therefore, in 2013, I started a project to explore how inpatriates transfer knowledge and whether and why it is effective and creates value.

How and why inpatriates contribute to subsidiary growth and performance

As “revelatory cases” of inpatriates’ knowledge transfer role, I selected two Korean subsidiaries of two Japanese MNCs for in-depth analysis. The two subsidiaries (A-Sub and B-Sub in our paper) had started inpatriation from the very early stages of their establishment (around 2000), sending 317 and 433 inpatriates respectively to Japanese HQs in total. Also, the subsidiary managers and HQ managers of the two MNCs believed that this long-term and successive practice of inpatriation enabled A-Sub and B-Sub to experience an unprecedented growth.

Thus, we focused our investigation on how inpatriation functions and in turn, how it benefits the entire subsidiary. Our findings disentangle the explanatory mechanisms through which short-term functions of inpatriation (the acquisition of task knowledge, language/cultural knowledge, and relational knowledge) develop into long-term functions (building subsidiary absorptive capability, and maintaining access to information), which in turn result in subsidiary capability building and subsidiary evolution.

Our analysis also illuminates why inpatriation has been found to be a superior way to transfer knowledge. Individual interaction is the key to knowledge transfer and knowledge creation. Because inpatriates share the same background with other subsidiary members in terms of culture, language and business context, their interactions with team members are likely to be more extensive, effective, and in-depth when compared to foreign expatriates. Additionally, inpatriates tend to be lower or middle managers who sustain a wider range of interactions with subsidiary members, while expatriates are typically higher-level managers who tend to have more limited interactions with them.

Based on these findings on how and why inpatriation is effective in knowledge transfer, we argue that inpatriation is not merely a staffing method that is complementary to expatriation, but a key practice in its own right to support subsidiaries’ growth and performance.

An academic inpatriate to Middlesex University London

Our paper was an outcome of my own inpatriation to MDX in 2019 (See: Sabbatical at Middlesex University London: a story of swans and unicorns). As Japan has maintained a unique academic culture that is quite different from Western academia (see CYGNA: Internationalisation of Japanese academia), my initial purpose was to see and understand ‘what and how researchers do research out there’.

Frankly speaking, I had two negative preconceptions about Western academia at that time. First, I was quite skeptical about the publishing game that pushes researchers to produce papers, rather than following their genuine interests and motivation. Second, I wondered why so many advised me that the best way to publish in good journals was to find coauthors who have publishing experience in a target journal. I thought it was a real shame if an independent researcher could not publish alone. In Japan, single-authored papers or books are likely to be evaluated higher than co-authored ones. 

Coauthoring this paper with Sebastian and Anne-Wil, my first experience of coauthoring, reversed my preconceptions. First, I got to understand how challenging it is to publish a paper in a top journal. It was an extremely intensive training session to build up my thinking and writing skills that I have never experienced elsewhere. Now I fully understand that publishing in top journals and keeping a genuine research motivation are not necessarily a trade-off.

Second, I got to know why coauthoring is essential to absorb the necessary knowhow on how to publish, especially for those who have no prior experience like me. The paper development process is full of context (research)-specific tacit knowledge. Thus, only through intensive interactions among coauthors, can each other’s tacit knowledge be shared to create new knowledge, namely the paper output in question. I also realized that this widespread coauthoring practice in Western academia is a very effective knowledge-sharing and knowledge transfer mechanism between senior and junior researchers.

Throughout the coauthoring process, Sebastian and Anne-Wil’s absolute professionalism impressed and enlightened me very much, especially in the following three points:

  1. They have a strong readers’ perspective. They pay consistent attention to making our communication as clear as possible for potential readers.
  2. They pay attention to every detail of the paper and ensure they never leave even the smallest detail to be confusing or imperfect.
  3. They truly love thinking. They never get tired of thinking how to improve the paper over and over again, allowing us to gain much more depth in our interpretations.

The same three points are emphasised in the twice-yearly writing bootcamp that Anne-Wil organises at Middlesex University. Here is a picture of a dedicated writing bootcamp for our CYGNA women's network (see: CYGNA's 5 year anniversary: MDX writing boot-camp).

In sum

In this blogpost, I explained the background, motivation, and key findings of our study. We believe that inpatriates have huge potential as knowledge agents in MNCs, bridging HQs’ technical and managerial knowledge with that of local markets and customers.

Writing up this paper with my coauthors was a process in which I had to keep asking myself whether I was really confident to argue the value of inpatriation with convincing evidence. Please refer to my following blogpost (From little seed to full-grown tree: a paper development journey) for more information about the journey.

A challenge that is still lying ahead of me is to share what I’ve learned in this process with junior colleagues in Japan. That would be the long-term function of my academic inpatriation :-).

Related blogposts

Related video