Parent Country National Essay

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Parent country nationals (PCNs) are employees who are citizens of and are hired from the nation where an organization has its original and current  headquarters (the parent  country). PCNs are distinct from host country nationals (HCNs), who are staff hired from the country where the international subsidiary is operating (the host country). Third country nationals (TCNs) are citizens of neither the parent nor the host country. The role and function  of a PCN depends on the organization’s approach  to  international human  resource  management  and the needs of the overseas subsidiary where the  PCN is assigned. PCNs use different  adaptation strategies to cope with their overseas assignments, and there are both advantages and disadvantages in using PCNs to staff international subsidiaries.

The term  parent country national  usually is used only to identify an employee who is posted to an overseas country  as an expatriate  (overseas assignment of more than one year), as a worker on a short-term assignment  (less than  one year), or as a flexpatriate (several short-term overseas postings, sometimes referred to as commuter  assignments). The term became  widespread  in  the  business  world  in  the 1960s and 1970s, when it became apparent  that  the traditional employment dichotomy of expatriates and nationals  could  not  accommodate   employees  who were citizens of neither the host nor the parent country (TCNs). Researchers and organizations  replaced the dichotomy  by distinguishing  employees by parent, host, and third country citizenship.

Global  businesses  now  categorize  employees  by using frameworks  that  include  length  of assignment (expatriate,  short-term, and flexpatriate), direction  of assignment  (expatriate  vs. inpatriate),  and  nature  of assignment  (expatriation  vs. virtual assignment).  Virtual assignments are job assignments focused on projects within a particular country that rely on electronic communications  such  as  videoconferencing   rather than require the assignee to travel to the country itself. Inpatriates  are transfers of HCNs or TCNs to corporate headquarters for developmental purposes.

The role of PCNs in an international organization depends  on the organization’s approach  to international human resource management.  Those management approaches can be categorized as (1) exportive/ ethnocentric, (2) integrative/regiocentric and geocentric,  and (3) adaptive/polycentric. In the exportive/ethnocentric approach, PCN expatriates function in a control position, as this approach is characterized by a transfer of the parent company’s human resource management  system to the host country. PCNs also benefit from international developmental experience while they are on expatriate assignment. The integrative approach also allows for the employment of PCN expatriates;  however, human  resource  management policies and managerial practices are transfused  and adapted from host country to parent country, and vice versa. PCNs are learners in the adaptive approach, in which organizations focus on adopting and localizing the practices and policies of the international organization to the host country.

PCNs are used for overseas assignments  for several other  reasons, including filling an existing overseas position, developing managers in terms of global awareness and experience, fulfilling the role of organizational development, and problem solving. Researchers have found differences in the importance of the reasons for employing PCNs in subsidiaries, depending on the  organization’s headquarters country,  demonstrating  that  national  culture  can influence organizational reasons for expatriation. Japanese and European companies are more likely to use PCNs, whereas U.S. companies are more likely to use HCNs.

PCNs  tend  to  use  different  adaptation   strategies when on overseas assignment.  Researchers  have categorized PCN expatriates according to their degree of allegiance to the parent  or host country as being outcomes of adaptation. The categories are (1) free agents, who have low allegiance to both home and host countries; (2) “going native” expatriates, who have high allegiance to the host country and little to the home country; (3) “hearts at the parent” expatriates, who have high allegiance to the home  country  and little to the host country; and (4) dual citizens, who have high allegiance to both  countries.  The choice of adaptation  strategy appears to be linked to the personality of the PCN.

Advantages And Disadvantages

Several advantages result from employing PCNs who have experience in the organization rather than HCNs or TCNs. PCNs usually are considered by headquarters as being familiar with the organization’s goals, products,  services, technology,  policies, and  procedures. This familiarity may help facilitate coordination,  control, and development of organizational strategy.

The use of PCNs also has several disadvantages. Among  them:  (1) PCNs  may  impose  a  culturally inappropriate management style on the host country subsidiary; (2) using PCNs may limit the promotional opportunities of HCNs; and (3) the compensation for PCNs usually is greater than that received by HCN staff, which may cause a degree of resentment among HCN staff. PCNs also may take a long time to adapt to the host country, which is likely to affect their work performance.

Some researchers have questioned whether HCNs, TCNs, and inpatriates may be better equipped to deal with the cultural challenges of international management than are PCN expatriates. The use of PCNs in global organizations  appears to continue  to develop rather than diminish, however.

Bibliography: 

  1. René A. Belderbos and Mariëlle G. Heijltjes, “The Determinants of Expatriate Staffing by Japanese Multinationals in Asia: Control, Learning and Vertical Business Groups,” Journal of International Business Studies (v.36/3, 2005)
  2. ; David G. Collings and Hugh Scullion, “Global Staffing,” in  Handbook  of Research in  International  Human Resource Management, Günter K. Stahl and Ingmar Bjorkman, eds. (Edward Elgar, 2006);
  3. John D. Daniels, “The NonAmerican Manager, Especially as Third Country National, in U. S. Multinationals: A Separate but Equal Doctrine?” Journal of International Business Studies (v.5/2, 1974);
  4. Paul Evans, Vladimir Pucik, and Jean-Louis Barsoux, The Global Challenge: Frameworks for International Human  Resource Management  (McGraw-Hill Irwin, 2002);
  5. Michael G. Ha
  6. rvey, Milorad Novecevic, and  Cheri  Speier, “Strategic  Global  Human   Resource  Management:  The  Role of  Inpatriate   Managers,”  Human   Resource Management Review (v.10/2, 2000);
  7. Michael Harvey, Cheri  Speier, and Milorad  N. Novecevic, “A Theory-Based Framework for Strategic Global Human Resource Staffing Policies and Practices,” International Journal of Human  Resource Management  (v.12/6, 2001);
  8. Ann-Wil Harzing,  “An  Analysis of the Functions of International Transfer of Managers in MNCs,” Employee Relations (v.23/6, 2001);
  9. Ann-Wil Harzing, “Who’s in Charge: An Empirical Study of Executive Staffing Practices in Foreign Subsidiaries,” Human Resource Management  (v.40/2, 2001);
  10. Helene Mayerhofer, Linley C. Hartmann, Gabriela Michelitsch-Riedl, and Iris Kollinger, “Flexpatriate  Assignments: A Neglected  Issue in Global Staffing,” International  Journal of Human  Resource Management (v.15/8, 2004);
  11. Jan Pieter van Oudenhoven, Karen I. van der Zee, and Mariska van Kooten, “Successful Adaptation  Strategies According  to Expatriates,” International Journal  of Intercultural  Relations (v.25/5, 2001);
  12. Jan Selmer, “Psychological Barriers to Adjustment  and How They Affect Coping Strategies: Western  Business Expatriates in China,” International Journal of Human Resource Management (v.12/2, 2001).

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