More and more Western executives can be found in local Eastern organisations according to new research conducted by Dr Frithjof Arp from Monash University.
The phenomenon of foreign executives in local organisations (FELOs) not only concerns aspiring multinationals, as expected, but also local organisations with an exclusively domestic market focus. FELO appointments are not to be confused with expatriate assignments. The cultural distance is implicitly greater. They are typically the only foreigners in their workplace and need to demonstrate their loyalty to local interests. FELOs have found themselves the subject of intense local scrutiny.
Dr Arp explained, “Not unexpectedly, FELO appointments were initially aimed at temporary roles and the grooming of local successors.” Initial appointment reasons include a variety of hard skills. Firstly, the soft skills of FELOs, their people-management style, host country involvement, and progress with the internationalisation of the local organisation often make the ‘successor issue’ redundant. The ‘graduation date’ is postponed while awareness grows of the need for long-term capability building.
Secondly, while the study does not suggest that FELOs are better managers than their local peers, their unique in/out group status has given them a range of options that local colleagues do not have. Thirdly, appointments of foreign executives could bring an image—or reputation—gain to local organisations in both domestic and foreign markets.
With more international experience and ostensibly better formal qualifications than their local peers, FELOs are seen as aiding local organisations in their portrayal of being ‘internationalised’—adopting international standards of corporate governance and business practice.
Paul Arkwright
Publisher
