How do expatriates experience institutional distance in their host countries and what mechanism do they implement to respond to the distance

Abstract

The increase in the internationalisation of multinational corporations has resulted in the increased reliance on expatriation as one of the important levers for managing international subsidiaries. Expatriates are assigned for several reasons, which include co-ordination of international subsidiaries, knowledge transfer and socialisation of the subsidiaries. The assignments expose expatiate to complex institutional environments of host countries, whose characteristics include the differences between the institutional structures in host and home countries, institutional distance. A lot is known about institutions and expatriation, respectively, however little is known about the how expatriates experience the institutional distances and measures they implement to manage the effect of the differences between their home and host country. This primary aim of this study is to contribute toward closing this gap by exploring the expatriates’ experiences of the institutional distance and establish what measures they are implementing to navigate them. The study is conducted through an exploratory, qualitative research process that involves semistructured interviews with participants on international assignments in several host countries of a global automotive manufacturer. It is an inductive study that will provide valuable contribution towards expatriation and institution theories as well as insights that business could use to enhance their expatriation efforts.