Introduction

The University of Twente’s minor ‘Innovation & Entrepreneurship Internship’ was conducted at a subsidiary of a big Oil & Gas company (hereafter Lateralus ). During the eight weeks as Summer Intern, a variety of tasks and training were provided to me to increase, not only my academic portfolio but also to have a more realistic overview of the working environment. I was able to closely work on projects such as the review of the Global Compensation Management Project, between Lateralus’ subsidiaries and the Tax Provider, for foreign tax credit modelling of expatriates; I took part in the Business Operation and Supplier Management, with one day at the Tax Provider UK’s headquarter to have a greater insight on the tax & social security challenges of Lateralus mobility company. I assisted Lateralus’ Internal Communication and Change Management department with the content analysis of their monthly newsletter, which has been published in the second week of August. I participated in the review of requirements for a new CRM software. Towards the end of my internship, I supported the project on the introduction of a new & enhanced retirement offering through its Pension Provider. It was during these eight weeks that I have realised that managing expatriate around the world is a challenging operation, whether you are an SME or an MNE, such as Lateralus’ mother company. When you have to manage people from different countries to complete an assignment in an another country, there are variables to be taken into consideration (i.e. Cost projections, relocation assistance, family support) and the literature does not present a single model that suits all organisations. As Olivier Meier said “Sending the right people, to the right place, at the right cost, and at the right time is more complex than ever. Global Mobility is changing, as companies increasingly look for smarter ways to manage expatriates.” ( Meier, 2014, p. 4).

In this Internship paper, which will present an introduction to the company, there will be a literature research by analysing the most efficient way of manage expatriates.

Company Introduction

Lateralus was set up in the first years of 2000 to meet the demand for international resources of the mother’s business. With more than 750 International Employees, from 66 different citizenship, and a programme of 240 new hires and reassignments, Lateralus provides a broad range of HR services to its stakeholders and employees. They seek to attract, mobilise, manage, advise, develop, engage and retain the best international talent in the oil and gas industry, to add value to the mother company’s projects around the world.

With 60 employees, Lateralus delivers services in Recruitment and employer branding; Global mobility, contract management and reassignment; Legal and Immigration; Finance, Tax and Payroll; Training and career development; Compensation and benefits.

As described in the book Organisational Theory (Robbins and Barnwell, 2006) Transnational strategy can be defined as companies striving to expand their global footprint in the selling of their goods, people, and services, while taking into account cultural and socioeconomic differences that shape consumers in their native environment. This strategy can also be found at Lateralus as the transfer of people, knowledge and development around the world is their core activity.

To further analyse a company, apart from a strategic point of view, different dimensions of organisation structure can be used. Complexity, formalisation, centralisation, and coordination of Lateralus will be elaborated to have a theoretical framework on its structure. A previous paper on an organisational study of another subsidiary conducted by Beyer, de Virgilio, and Degener (2015) is used to assess the methodology on the operationalisation of the structure of a subsidiary. (appendix A.).

The complexity will be analysed first, as it divides into the components: horizontal differentiation, vertical differentiation, and spatial dispersion. Lateralus is classified into seven departments: Compensation & Benefits; Finance; Global Resourcing; HSE & Health; HR Management, Internal Communication & Change Management, Tax & Payroll, and Training & Development, creating a high horizontal differentiation. With three hierarchical level per department divided into top (Managing Director), middle (Head of Department), and Team Leader, it is possible to assume that the vertical differentiation is low. In a context of spatial dispersion, the company is located in one building with all employees on one floor, though operates with 750 International employees in more than 36 countries increasing the complexity of spatial dispersion.

One of the key factors of the company’s reputation is its ability to conduct business with loyalty, transparency, fairness, honesty and integrity and in compliance with the laws, regulations, similar mandatory requirements, international norms and guidelines, both domestic and foreign, that apply to Lateralus’ business. The Management System Guidelines (MSGs), define the rules of conduct and the principles to be observed in the execution of the activities. It identifies the roles and responsibilities of the company’s employees. The Compliance & Regulatory System of the company contains Model 231 and Code of Ethics; Anti-Corruption; Anti-Trust; Market Abuse; Post-Award Contract Management; Internal Control System; Anti-Discrimination; Human Rights & Business. It is in the last point that the core business takes place. It is split into three main processes: Resourcing, Compensation, and Onboarding & Mobilisation. Concerning these macro processes, each of them is further articulated creating a frame of 13 steps that range from ‘Vacant position activation’ until ‘Hiring’. Taking into consideration all the points mentioned above, and also the joining the ISO 26000 Global Guidelines in November 2010, it can be stated that the company has a high Formalisation.

In the business, the day-to-day decisions are taken by the Managing Director, and any decisions that exceed £3 Mio will be passed to the CdA (Board of Directors).  Theory on this point would suggest a limited, decentralized approach as some decisions are delegated to the Managing Director.

Operating in a volatile environment such as the Oil & Gas one, the strategy should reflect a reacting attitude to the constant changing factors. For this reason, regular meetings with the first line managers are scheduled by the Managing Director to discuss the current situation. Situated on one floor the communication between departments is fluid and transparent, creating a high coordination level.

Through the operationalisation of Beyer, de Virgilio, and Degener (2015) ,and  the literature from Robbins and Barnwell (2006) it can be concluded that the structure that best relates to the afore presented data on Lateralus is a Divisional structure, which shows factors such as moderate complexity, high formalisation, low centralisation and a high coordination.

Research: Determinants of International Assignments and their impact on human resource practices in multinational enterprises: a literature study.

Introduction

The research, which is based on a literature study, will address the new challenges arising in a new globalising world, and the managing of an intangible asset as the International Assignees (IA). This subject was decided as Lateralus’ core business is managing expatriate, and because in the past four decades a review seems to be required to provide a theoretical framework for the evolving research on the expatriate and their impact on business performance. (Dabic et al., 2013)

The result of this research will present, in addition to a comparison to the management of expatriates at Lateralus, arguments and hypothesis striving to stimulate further research in Global Mobility. Dealing with such challenges means that most employers have had to develop HR policies and procedures just for handling global assignments.

At first, an introduction to the definition of what International Assignee is will be presented with the different approaches to International Assignment to create an encompassment of the research. Then an overview of the global HR challenges will be given through the use of theory. The issues regarding managing IA will be addressed to present a theoretical framework which will include a description of which possible procedures could be taken into account or are plausible in the environment of an Oil & Gas Company like Lateralus.

Theoretical Framework

International Assignee

The management of International Assignees, employees from the headquarter (HQ)  working in one of the company’s subsidiaries for a defined period, varying from 2 to 5 years, takes a dominant part in the context of International Human Resource Management. Research on the latter topic may be framed into two different but complementary research themes: human research management (HRM) and practices, and international business administration (IBA) ( Dabic et al., 2013).

To this end, the work of Perlmutter (1969) will be used to assess the different international orientations that MNEs use in expatriating their assignees. Perlmutter identified three distinct global directions of staffing policy (ethnocentric, polycentric, and geocentric). MNEs following the first, ethnocentric staffing policy, would, in the majority of the cases, appoint a high-rank position in their subsidiary by assigning a parent country national (PCNs). In opposition to this view, a more polycentric policy would assign a host country national (HCNs). In the juxtaposition of the latter ones, a geocentric view would choose the best candidate to appoint which could include a third country national (TCNs). A classification of inte