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.
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