managerial career patterns in transnational corporations: an organizational capability approach

European Mana,yement Journal Vol. 11, No. 2, pp. 248-257, 1993. 0263-2373193 $6.00 + 0.00. Printed in Great Britain. 3 1993 Pergamon Press Ltd.

Managerial Career Patterns in Tmnsnational Corporations: An Organizational Capability Approach TUOMO PELTONEN, Senior Research Fellow, Helsinki School of Economics and Business Administration, Helsinki, Finland

Managerial careers across borders have been treated as a cross-cultural phenomenon in most research. Within a transnational corporation, however, managerial mobility patterns should be taken seriously as an element of organizational capability. Follow- ing this theme, the article proposes a new approach to managerial work experience patterns in complex multinational corporations. Tuomo Peltonen suggests a typology of generic career patterns which is based on a view of different situational career step contexts. Implications for management development and general human resource management are discussed.

Introduction: International Business Experience of Managers in the MNCs - An Organizational Capability View This article is aimed at proposing a new way of thinking about managers’ careers in the complex international business environment. My view is based on individual objective managerial careers; i.e., I try to look at international careers concentrating on individual managerial mobility from the viewpoint of the organization. This positioning is not only interesting to academics, but also might help the HRh4 professionals to think in new terms about international careers of managers.

The approach I take here to careers is perhaps most of all an organizational capability approach. That refers to emphasizing competence and especially the potential knowledge acquired by experience that managers have gained during their professional business careers. We are not interested in the personal characteristics, educa-

tional or socio-economical background of managers because these characteristics cannot be ‘developed’ and, anyway, they are more interesting from the point of view of managerial selection. Also, we are not dealing with the career as subjectively ‘perceived’ and ‘felt’ movements in the hierarchy of a firm.

The main challenge of the management of modern multinational corporations (MNCs) is argued not to be the strategic complexity but the necessary organizational capability in order to implement well-developed global strategies (Bartlett and Ghoshal1989, 1990). Organiza- tional capability is mainly a question of developing the knowledge and attitudes of individual managers (Doz and Prahalad 1991, p. 159). A central way to strengthen and develop the organizational capability in multinational corporations is career and mobility management (Doz and Prahalad 1986, p. 66; Bartlett and Ghoshall990, p. 143; Evans 1991, pp. 20-27). Despite the importance of ‘cognitive transnationality’ of managers resulting from different assignments during their careers in MNCs, there are only implicit theoretical constructions of how the international managerial careers in MNCs should be described and explained from the organizational capability point of view.

In this paper I am arguing, firstly, that international careers of managers are not just cross-national changes in managerial posts. Instead, they are chains of different managerial experience and a distinct type of knowledge base accumulating and developing from different business and organizational subunit experiences. Secondly, I am arguing that different business contexts of experiences can be described as industry characteristics which can be analysed along global integration-local responsiveness dimensions. Further- more, the different organizational contexts of managerial

248 EUROPEAN MANAGEMENT JOURNAL Vol 11 No 2 June 1993

MANAGERIAL CAREER PAlTERNS IN TRANSNATIONAL CORPORATIONS

‘HOME’

(1) Recruitment, selection

(5) Reentry

(4) Assig

, Adapted from: Adler (1966) and Borg (1988)

Figure 1 Overseas Assignment Career Cycle

experiences are differentiated roles of subunits in the structure of an MNC described as an inter-organizational n&work.

Previous Ways to Analyse international Careers of Managers Previous research has mainly approached international managerial careers with the overseas assignment career cycle as the unit of analysis, The cycle of a cross-national tr‘tnsition consists of recruitment and selection, training and briefing, adjustment and performance, assignment closing and re-entry phases (Figure 1). The research on expatriate career cycle has been dominated mainly by the cultural adjustment view (Mendenhall, Dunbar and Oddou 1987; Black, Mender&all and Oddou 1991). Based on psychology and social psychology, this approach has emphasized an individual cross-cultural transition phenomenon and its impact on different parts of the career cycle (Borg 1988, p. 30).

From a fifth chronological phase of an overseas assign- mcbnt career cycle comes one way of describing an individual manager’s international career: career is the position of a manager upon return from an assignment (Tnng 1988). In that way, international careers of m<magers are equivalent to cross-national mobility. That is, while working at one’s home country, managerial career can be described in ‘domestic’ ways. Career is also viewed in ethnocentric terms from this perspective; i.e., transfers usually occur to outside one’s home country and include a return to the same country.

The research on re-entry phenomenon has described repatriation as a career risk, especially for the managerial high potential (Gomez-Meija and Balkin 1987; Oddou and Mendenhall 1991). Along with career issues, the re-entry studies have reported on personal and professional inconveniences associated with integrating the employee back to the home organization, and different aspects of the returnee and his/her organization on the effectiveness of the returning individual (Adler 1980). Thtl research on repatriation has not touched deeper the question about the expatriate learning process and the integration of new competence into the competence and knowledge base of the home organization. Also, it

would be interesting to find out what kinds of knowledge those managers do possess who have been selected for the assignment. The background competence, by which I mainly mean skills and knowledge acquired by experience, has only been treated implicitly in expatriate selection studies.

In some cases, international careers have been seen as quantity of assignment cycles. These studies have examined the number, duration and rough functional content of overseas assignments. There has been rela- tively little attention, for example, to how different foreign and domestic posts are interrelated and why they are found to interrelate as they do. In this sense, previous research on international managerial careers has taken a more traditional personnel management or staffing perspective, which means that operative problems associated especially with transfers of managers have been the focus of the academic interest.

For example, the aim of Malcolm Borg (1988) was to give insights into personal characteristics of managers associated with distinct international career outcomes in terms of cross-national mobility and national destination of career. His basic argument was that, for the purpose of managerial control by socialization in MNCs, the ideal career type would be a manager whose international career includes high cross-national mobility and finally a settling down to his original home country.

Borg’s work is without doubt a pioneer empirical study on international careers of managers in multinational corporations. There is still room for some constructive criticism. First of all, Borg’s work does not discuss the context of the phenomenon at all, i.e. multinational corporations. In that sense, his approach is universal, although this was obviously the only methodological solution, because the description of contexts would have required a huge amount of additional data and would have been difficult because of the time dimension involved.

Secondly, his analysis does not show explicitly what kind of experience they have gained in different posts, both abroad and in the home country. He has mainly used rather trivial individual characteristics such as age,

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MANAGERIAL CAREER PATTERNS IN TRANSNATIONAL CORPORATIONS

seniority, basic education and the length of the first assignment. In that way, his analysis is interesting for those who want to know about geographical mobility of managers and characteristics associated to the mobility.

For the purposes of this paper, an overseas assignment is seen as part of a long-term accumulation of managerial competence for international business. Therefore, we need a new way of looking at the international careers of managers for two reasons: we need to identify the present standing of international managers in terms of knowledge base acquired by experience, and we are also interested in having some rough alternative development paths to be considered when managing the career development of international managers in multinational corporations. In the latter case, transfer of managers across borders is one way to deal with the developmental needs, but it is analysed firstly through our industry orientation-corporate subunit context framework and only secondly according to the socio-cultural logic.

The Evolution of Multinational Corporations, the Challenge of Managing Global Integration and Local Responsiveness in Modern MNCs Our aim is to specify the situational contexts of managerial experience in multinational corporations. We are especially interested in the modern, complex global corporations as career ‘arenas’ and therefore in the evolution of MNCs and the features of ‘transnational’ solutions are summarized.

In his classical work, Howard Perlmutter (1969) described the evolutionary phases of multinational corporations according to the cognitive orientations of their managers. Ethnocentrism illustrated the first ‘level’ of international- ization: the firm is managed by home country people and home country orientation. The flows of people take place between headquarters and subsidiaries in that direction. The quantity of transfers is high and the motive for transfers is mainly control. In the Polycentric phase there is less rotation, and transfers and subsidiaries operate quite independently. The transaction mode is closer to the market. The third stage in the evolution of an MNC is called the Geocentric phase, where the firm moves to a global strategy. This means, above all, that complexity flows in all directions. Transfers of managers are increased and also third country nationals are now used (Hedlund 1986; Ondrack 1985).

Perlmutter’s categorization was hardly improved until the emergence of the ideas of the modern MNC (also known as the process school of MNC management research). Presented by Hedlund, Prahalad and Doz, and Bartlett and Ghoshal, this new metaphorical direction has extended the Perlmutter typology of evolution of MNCs by presenting the trunsnational (heterarchial, multifocal) type of multinational corporation (Doz and

Prahalad 1991). The core ideas behind the transnational MNC discussion are its strategic multifocalism and a differentiated network organization. Strategic multifocalism refers to the characteristics of the industry forces of global efficiency or local differentiation and, furthermore, to the multinational corporation’s strategic and organizational focus to aim at global integration, or to operate sensitively in each national surroundings or, thirdly, to use a (possibly differentiated) blending of these two extremes. Network organization emphasizes the ‘fuzzy boundaries’ of the complex multinational corporation and the differentiated roles of the subunits of a corporation.

Transnational corporation is the solution to the chal- lenges of complexity and diversity which the management of a multinational corporation will meet in the future. Therefore, in order to understand the quality of experiences of international managers during their careers, this paper follows the critical contextual and situational themes presented by the multinational management stream of research.

Integration - Responsiveness Contexts of Businesses There are two major dimensions of industry orientations from the global point of view if we follow the categorization of researchers of the modern MNCs. We might classify these dimensions roughly as global integration local responsiveness. For example, consumer electronics represents a business context in which forces for local responsiveness are high and forces for global integration are low. This orientation is called ‘multinational’, which means an MNC’s need to build strong local presence through sensitivity and responsiveness to national differences. Accordingly, business with low local responsiveness and high global integration is called ‘global’, which means that it is suited to building cost advantages through centralized global scale operations. The business contexts with low local responsiveness and low global integration create, in turn, an ‘international’ industry orientation.

Though there are different views regarding industry- specific knowledge and its relevance as a competence dimension of an individual manager (Gunz 1989, pp. 15-18), in this paper I will argue that knowledge concerning the industry’s global strategic orientation is another critical element of managerial knowledge acquired by experience.

The simultaneous forces of local responsiveness and global integration might also have differing responses to different key functions. Therefore I argue that knowledge orientations in each post are affected not only by underlying business characteristics but also as to how the function itself is oriented in a multinational setting.

The knowledge from different underlying business characteristics might be called the general element between different managerial posts because its

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High

Strategic Importance of Local Environment

Low

Source: Bartlett & Ghoshal (1989)

BLACK HOLE

IMPLEMENTER

Low

STRATEGIC LEADER

CONTRIBUTOR

High

Level of Local Resources and Capabilities

Exhibit 1 Subsidiary Types

theoretical use does not call for corporate contextual used (a) the competence of the focal subsidiary and (b) considerations. In other words, the global business the strategic importance of local environment to the orientation of each career step of a manager is not company’s global strategy to create a four-cell matrix dependent on the contextual characteristics of the multi- for different strategic roles of national subsidiaries ndtional corporation. (Exhibit 1).

Accumulation of Organizational Knowledge Element Elaborated through the Differentiated Subunit Roles in Network-metaphor Another main theme for modern MNCs is looking at themselves as holistic systems of different flows constituting a differentiated interorganizational network. Within this perspective we are now interested mainly in the roles of different subsidiaries in the network from the corporate governance perspective. My intention is to use a classification of subsidiaries to describe the amount and quality of managerial knowledge that is possible to be gained from the particular organizational unit.

Black hole is the subsidiary with low own competence but important environment. Strategic leader has a lot of competence and is located in a valuable or interesting environment. Contributor does not operate on an important environment but is highly capable. Implementer lacks both own competence and local critical environment. These subsidiaries include all subunits of the corporation which means home country units (where the HQ is located) are taken into account. The network of an MNC also has a centre which is its headquarters.

The network metaphor underlines the organizational structure of MNC described by different exchange relationships. These exchange relationships include, acc,ording to different writers, capital, goods, people, information, knowledge or power. The network approach illustrates the different and differing roles of organizational subunits. Each subunit is, in turn, attached to an external network of customers, suppliers, regulators, etc. The headquarters is usually the main centre of the network, but not the only centre. Sub- sidiaries might build some features, typically resources, and become more important for the corporation as the whole and in a way they turn into new subcentres creating clusters in a network (Ghoshal and Bartlett 1989, 1990). Bartlett and Ghoshal(1989) have used two dimensions when classifying subsidiaries. They have

In terms of knowledge dimension of work experience from different organizational units there is both external and internal knowledge. As far as subsidiaries are concerned, experience from the subunits with a high level of importance is equivalent to the potential external type of knowledge from different organizational contexts of careers. Experience from different contexts in terms of headquarters-subsidiary-relationships builds the internal element of the organizational knowledge base. In the case of the headquarters, the amount of internal knowledge from experience is higher than in most subsidiaries. Yet, the external knowledge gain potential might be low if the HQ is located in small markets or in a stagnating economy.

The organizational context dimension of the managerial experience in MNCs is clearly more context-specific than business-context. In other words, what subunit has an important environment and what subunit is resourceful and competent is determined by contextual characteristics like the size, growth rate and evolution path



ORIENTATION

Global Interaction

International

Local Responsiveness

ORGANIZATIONAL SUBCONTEXT WITHIN MNC

Exhibit 2 A Framework for Mapping Individual Managerial Careers in Transnational Corporations

of the corporation as well as by the degree and nature of diversification and the home country of the multinational corporation.

Towards a Typology In the sections above, the situational dimensions of experiences within managerial careers in multinational corporations were presented. To be precise, those two dimensions presented are not independent in relation to each other but are interrelated to some degree. Managerial realities faced in those organizational units of a multinational corporation with strong contribution to the rest of the corporation, namely headquarters and strategic leader subunits, are apparently to become more oriented towards standardization and rationalization, that is, towards global integration. On the other hand local subsidiary managers in general are more sensitive to the need for differentiated responses to local conditions.

The framework in Exhibit 2 illustrates the managerial career ‘space’ which was built from concepts of multinational management research.

The managerial career paths that occur within these situational dimensions are further analysed along the variety, quality and quantity and the duration of experiences. The knowledge base that has accumulated and developed as a result of the career path pattern is the unit of the proposed typology. In that sense, the typology is an outcome of managerial career paths mapped with the help of the framework above.

The Presence of the Cultural Dimension All the time we should be able to sense and ‘measure’ the third dimension of our framework, which is the cultural distance from an individual’s own home cul- ture. However, as the issue of cultural experiences is not the focus of this article, we ignore it and discuss the patterns of experience from a realist perspective.

Explicitly illustrated, this implies that in our framework the mobile manager does not have to necessarily experience any cross-cultural transitions. Through domestic subunit changes within an MNC or through company changes in his own home country he has gained different business context knowledge and also several differing positions in the context of a differentiated network structure.

The Typology The context of each managerial assignment develops different kinds of knowledge. In the sections below the logic behind a suggested knowledge base classification for each experience dimension is presented and analysed. Further, each cell of the typology is set down along with an argument of two alternative development paths within the typology.

Industry Dimension The basic idea behind I-R (integration-responsiveness) framework is that it explicitly recognizes the challenge of managing trade-off situations and the process towards the balance between conflicting forces of MNC management. My argument concerning managerial careers is that the more different underlying business orientations a manager has experienced the better he is intellectually and attitudinally prepared for facing new business situations or the changing dynamics of his/her present industry context.

In other words, a manager with several long assignments within differing global businesses is a generalist from the perspective of a diversified multinational corporation. Similarly, a manager with one dominant business experience within his managerial career is a specialist. The possible short-term experiences of a specialist in other businesses are not taken here as widening his/her narrow knowledge base.

The basis for our analysis on international careers of managers is the accumulation of knowledge. In the case



THE SCOPE OF KNOWLEDGE FROM DIFFERENT BUSINESS ORIENTATIONS

KNOWLEDGE BASE CONTENT FROM DIFFERENT ORGANIZATIONAL SUBCONTEXT EXPERIENCES

Exhibit 3 A Typology of Managerial Career Patterns in MNCs

ot industry dimension knowledge it is argued as developing in a linear way, i.e. additional industry experiences form a new ‘layer’ of experience on top of old ones.

The underlying business orientation might also be &ssified as a more tacit knowledge than the organizational dimension, because it is seldom explicitly recognized among managers of an MNC. The widespread use of the I-R framework is, however, increasing the recognition of these underlying forces of the MNC management.

Organizational Context Dimension Organizational situations during managerial careers are a source for two kinds of knowledge which I call here external and internal knowledge base.

External knowledge stems from the criticality of the external environment of the organizational subunit (headquarters or subsidiary) in question. The more important local markets, customers, suppliers or competitors are, the more external knowledge is about to be accumulated. Managers holding external knowledge are called interface managers because the knowledge accumulates through an interface assignment position of a manager between an MNC local subunit and an important environment.

Internal knowledge develops processually through experience in different organizational contexts. It means, most of all, understanding the dynamics of HQ- subsidiary relationships in different subunit contexts (Ghoshal and Nohria, 1989). The logic behind the different roles of subsidiaries is that these differences reflect in a mixture of formal and informal control mechanisms (Gupta and Govindarajan 1991, Ghoshal and Nohria 1989). In this way, a manager is about to learn from different types of contexts both from the corporate and subsidiary level management point of view. In addition

to that, different capabilities of subunits increase knowledge and skills of autonomous operative management. The internal knowledge element is given the name corporate career type because it increases the understanding of mechanisms of strategic control both across different subunits as well as different periods.

Managerial careers with both external and internal knowledge from organizational contexts create a comprehensive knowledge base. Within this knowledge base-type, a manager has developed both internal and external types of knowledge. Comprehensive knowledge base is labelled below as trunsnational career outcome after the themes of Bartlett and Ghoshal (1989). They describe the transnational manager as one who ‘knows it makes little sense to base organizational decisions on gross generalizations’. Instead they base their management on fine-tuned situational and task-specific judge- ments in which professional knowledge and the right ‘state of mind’ play a crucial role.

An Interface Generalist holds a remarkable storage of information on business dynamics both in terms of different industry characteristics and location-specific environmental knowledge of markets, customers, suppliers and competitors. He has not, however, developed an understanding on the different internal dynamics of the MNC because his career path has not consisted of a variety of organizational contexts of different levels, both bad and good (Exhibit 3).

An Interface Specialist has a deep knowledge on different local environments through his experience of markets and ‘external networks’ (Ghoshal and Bartlett 1991) important for overall MNC strategy. This high potential knowledge is not only contrasted by his weak internal understanding of the MNC management but the external knowledge might also be difficult to apply to wider contexts because of the narrow global industry orientation experience from one dominant business during his managerial career.



A Corporate Generalist has experienced very different kinds of tensions both in subunit as well as in headquarters positions. From the wide variety of subunit managerial contexts, both pleasant and hard for a manager himself, and from simultaneous lessons from varying global business orientations his potential knowledge on overall corporate management is rich and real. What he lacks are career experiences and knowledge from different dynamics of local environments: What are the institutional frames of the important national markets of the MNC? How might the competitors influence as local subunit stakeholders versus a unitary competitive force in the corporate level? What are the possibilities to learn from the customers or suppliers in different countries?

A Corporate Specialist might perhaps be called the most ‘narrow-minded’ career type of all. His industry knowledge is concentrated around one dominant industry and organizational experiences have resulted in him learning mostly from the internal functioning of the corporation and its subunits. Yet the internal focus combined with perhaps a long experience gives him a powerful tool to understand the limits of the organizational transformation and learning of his corporation Also having followed primarily just one business, the career type has an intensive knowledge base about the changes of industry’s competitive dynamics.

A Transnational Specialist has faced different organizational contexts within one dominant business. His knowledge base is rich but lacks perhaps the ability to relate the complexity of the MNC management into the complex world of different global industries. It could be seen, though, that his transition towards Transnational Generalist is rather painless because of the awareness of different local subunit markets.

A Transnational Generalist has the widest and richest knowledge base. His career has passed through varying businesses as well as through varying units with critical environments. He has also been exposed to different kinds of tensions and forms of control between headquarters and subsidiaries. After the managerial career experiences, the manager so far has grown sensitive to multidimensional factors of MNC management and in complex strategic situations can stretch his mind ‘wider’ and ‘longer’ than the other types.

What are the alternative development tracks of managers within the career typology? The approach in this paper is based on long-term accumulation of individual competence during managerial careers in MNCs. This kind of long, almost life development type 3f perspective suggests that once a wide knowledge base, both in terms of business and corporate dimen- <ion is achieved, it does not ‘vanish’, i.e. in this respect knowledge from experience is argued not to be .mlearned or dismantled iater in the career. Following this, we may present distinctive developmental direc- :ions from one career type to another within the :ypology.

The logic presented above implies that a generalist can no longer ‘develop’ into a specialist. Neither can a transnational knowledge base turn into an interface or a corporate career type. It is also impossible for an interface manager to move into corporate career type or vice versa,

The developmental direction in the typology flows from the most ‘narrow-minded’ career types (Interface Specialist, Corporate Specialist) towards the richest and most comprehensive knowledge base type (Trans- national Generalist). The development path from the lower right hand corner to the upper left hand corner of Exhibit 3 can follow two different logics.

In the former, a career path which develops global business knowledge further and leads to generalist competence is favoured first. In the latter, a developmental track facilitating corporate subcontext and local environmental knowledge accumulation is the primary aim of management development of high potentials.

The generalist-logic finds its support in the argument that business knowledge and skills of general managers are more valuable in the longer run (Gupta and Taylor, 1990, pp. 24-25) and are, respectively, the ones to be developed further.

The corporate knowledge-logic might attract those worrying about losing their high-potentials to other companies. By preferring company-specific knowledge building the fear of losing managers might decline because this kind of knowledge base is less transferable and is, respectively, less valuable in external labour markets.

Conclusions Previous ways to describe and analyse international careers have been based mostly on the so-called socio- cultural logic (Evans and Lorange 1989). That refers to seeing the MNC as an organization operating at a variety of social, legislative and, most of all, cultural environments. This view has led the previous research to emphasize cross-cultural transitions of managers, i.e. overseas assignments as the ‘unit of analysis’. The socio- cultural approach on international careers has concentrated on managerial careers either before or after overseas assignment and has typically had a strong individualistic positioning.

The main argument of this article is that international careers of managers should not be viewed just as cross- national mobility. Given the notion of orga~i~tiQna1 capability as a critical long-term competitive element of multinational corporations, a consistent approach for managerial mobility in MNCs is to focus on careers as chaitrs of experience which serve as different business and corporate contexts for accumulation of individual managerial knowledge. The outcome of different experience patterns is knowledge on diversity of different contexts within an MNC, on conflicting strategic



forces and on a process towards a solution between different trade-offs. The line of approach followed here is relevant for current or potential general managers in multinational corporations.

According to my argument in this paper, accumulation L)J managerial knowledge during careers in MNCS occurs along two dimensions: business and organizational context. Business context knowledge is a more general, tacit and transferable element of knowledge than organizational knowledge, which is, in turn, more corporation-specific, open and connected to its company context.

M’ithin the two dimensional career ‘space’, careers of managers were further summarized to career archetypes according to the assumed extensiveness and quality of the accumulated managerial knowledge base from different assignment contexts. The business orientation dimension was categorized by an extensive and narrow knowledge base and organizational knowledge was clas- sified as dominating external, internal or comprehensive knowledge base types. These two dimensions were used to create a six-cell typology for different managerial career archetypes.

This paper does not explicitly discuss the issues of upward mobility, i.e. career success of managers. In doing so, the position taken here is perhaps closer to the European career concept as compared to the North A tnerican assumption of career success as the main sub- jeitive outcome of long-term managerial job experience. It should be noted, however, that implicitly I refer in this paper to the most comprehensive career archetype as an ideal general managerial career path with its w tdest opportunities for learning from experience. This might lead one to think that 1 am arguing that managerial joi) experience from a variety of different structural contexts (business and organizational contexts) would explain the upward career mobility in multinational corporations. This is not, however, my argument in this paper but, instead, I am trying to elaborate an approach of how careers affect managerial knowledge and orientation.

One of the main assumptions of this paper is that international companies could be conceptualized according to the process school of multinational corporation m‘lnagement. MNCs are in this ‘paradigm’ seen as holistic organizations or even as an inter-institutional network of different subunits of the corporation. This metaphor is, however, best suited for complex ‘mature’ &bal corporations. Though some scholars argue that a ’ transnational solution’ is emerging and in the future an increasing form of MNC, there are still many more corporations that could be described as ethnocentric or polycentric or alternatively as international or multi- domestic firms. Given this, it would be appropriate to slrL>ss that this paper is tightly aimed at proposing a certain framework for so-called fransnational corporations only.

A closer examination of the relationship between individual experiences and new knowledge would be an interesting extension to this article. What is individual learning and is it different from imitation and evocation (Borum 1990)? Also a closer insight on individual vs. organizational learning would be useful. For example Levitt and March (1988) have argued that organizational learning as a process is not dependent on individuals but instead ‘lessons of experience are maintained and accumulated within (organizational) routines despite the turnover of personnel and passage of time’ (Levitt and March, 1988, p. 326).

While our focus has been on the cognitive side of outcomes of managerial careers in multinationals, an equally important capability is building integration through the social network (Evans 1991, pp. 23-24). Working in different social contexts forces people to interact and to establish ties. Although contacts do not tend to remain active long because of the proposed frequent mobility, the ties exist even when they are latent for some time. On the need for advice, latent ties can be activated successfully. The social network studies have shown how these kinds of weak ties in one’s network are crucial in gaining structural autonomy and as effective information fusion and diffusion as possible within the social structure of a corporation (Granovetter 1973, Burt 1992, pp. l-47).

Implications The literature on human resource management strongly favours career paths that lead to generalism in terms of suggested experience base from different functions, businesses and organizational contexts (Doz and Prahalad 1986, Evans and Lorange 1989, Evans 1990, Whitley 1989).

Given this, our simplest recommendation for strategic career path management would be to develop high potential individuals towards Transnational Generalist types of managers with a broad knowledge base of businesses, markets and organizations.

Following this policy implies most of all, frequent mobility on behalf of managers. Yet mobility has its own drawbacks. It leaves the implementation of new ideas and change much too open (Evans and Lorange 1989). It also creates a danger of cloning if career path management is exercised professionally. Some kinds of career paths and socialization patterns decrease the social and intellectual diversity of management. Developing ‘balanced individuals’ in an MNC might also prove difficult in practice because the boss, especially a local subsidiary manager is likely to hide his best people and to resist co-operation with a corporate HRM (Doz and Prahalad 1986, p. 66, Evans et al 1989, pp. 137-138).

A deeper resistance for providing balanced career paths might be found from the ‘single oriented’ history of the corporation which in turn has developed over time

EUllr3PEAN MANAGEMENT JOURNAL Vol 11 No 2 June 1993 255


individuals with ‘wrong’ attitudes and orientation con- sidering the present complexity of global business organizations. These individuals with the stamp of ‘administrative heritage’ in their career mobility patterns also usually make up the current top management of the firm (Doz and Prahalad, 1986).

In the managerial appointment or selection situation in a corporation a decision might be made to match a person’s characteristics with the strategy of the cor- responding business unit (Gupta 1986). On the other hand, selection can be based on other issues like inter- SBU coordination perspectives, internal promotion policy or management development plans (Gupta 1986). In other words, depending on the situational context, different strategies might ‘pull’ managers to evolutionary career paths instead of ‘pushed’ paths of management development logic.

As far as international transfers of managers are concerned, their relevance depends on two factors: (a) the career archetype in question and (b) the destination of transfer. If we take an organ~ational capability view, our aim is simply to give to managers an operating environment for potential extension of their knowledge base. In this simplistic view we assume that there are the necessary financial resources for the transfer, there is no considerable risk for assignment failure (Tung 1984) and furthermore that the individual is not resisting geographical mobility (Scullion 1992, p. 14).

Growing resistance especially to international mobility might develop into a severe barrier for developing ‘duality capability’ in a transnational organization (Scullion 1992). The negative attitude towards an offer to work abroad as an expatriate is most of all created by the widespread knowledge on dual career problems, educational discontinuities of children and re-entry risk. The trend implies that to an increasing extent the ability to accept future international mobility will constitute a considerable amount of the concept of managerial high potential in the context of multinational corporations.

Note An earlier version of this articie was presented at the EIASM Workshop on International Staffing and Expatriate Manage- ment, Cranfield, UK, September 21-22, 1992. Comments and suggestions of Kari Lilja and Risto Tainio are gratefully acknowledged.

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r TUOMO PELTONEN, Helsinki School of Economics and Business Administration, Centre for International Business Research, Runeberginkafu 14-16, SF-00100 Helsinki, Finland

Tuomo Peltonen is Senior Research Fellow at the Helsinki School of

Economics and Business Administration (Finland), Department of Management and Organization and the Cenfre for lnternafional Business Research. His research interests lie in the areas of international human resource management, organizational careers and strategic management of multinational corporations.

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managerial career patterns in transnational corporations: an organizational capability approach

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