SOAS Research Online

Abstract

China has been developing fast in the international business stage, both as a market for incoming foreign direct investment (FDI) as a source of globally directed FDI. Some foreign investments or projects require support for management or technology from the parent (headquarter) company. In response, selecting and dispatching expatriate managers ('expats') has become an inevitable and growing trend, which can be a great challenge to the companies. A review of international business and management literature suggests a comparatively high failure rate – an outcome that causes both direct and indirect financial loss to the companies and potential threats to health and safety of the expatriates themselves. Thus, sending out the right people and applying prevention methods toward the possible risks is a strategic necessity. Much literature focuses on the challenges of expat selection from the perspective of large companies, focusing on Western-based multinational enterprises (MNEs). This research is significant in that it focuses on the challenges faced by small- and medium-sized enterprises based in China as they select expat managers in order to add value to their investments abroad. Drawing on data from in-depth interviews with Chinese managers and owners of SMEs, this research offers recommendations to both managers and researchers facing challenges of expat manager selection.