The performance challenges of expatriate supplier teams: a multi-firm case study

Abstract

The article departs from the existing research treatment of expatriation as an individual-level phenomenon, and looks at the expatriation of work teams. We examine the performance management of expatriate teams brought in from 17 independent organizations to work on a new-product development project. We find that the teams faced diverse stakeholder expectations and that these stakeholders' expectations were a source of tension for the teams. The teams responded by adopting performance management strategies that tended to prioritize their respective home organizations' expectations. We discuss the vulnerability of contextual performance and the relative insignificance of national cultural differences in this expatriation context. We propose practical considerations and an agenda for further international human resource management (IHRM) research on expatriate teams.

Keywords:

• contextual performance
• expatriate teams
• innovation
• outsourcing

Notes

 1. The project was organized in terms of the classic ‘waterfall’ approach. This is a multi-phase approach to sequentially organizing the product-development process. It takes the form of episodes of advance specification of design outputs for each of the phases, iteration around the development work in that phase, closing out the work of that phase through ‘exit reviews’, and revising advance specifications for subsequent phases.

 2. We use the terms ‘performance requirements’ and ‘performance expectations’ inter-changeably. The former is commonly used in the literature but, as will become evident, ‘requirement’ seems too strong a term to apply to contextual performance in our empirical context and especially to contextual performance expected by one supplier team of another.

 3. The many design choices made in these two phases were informally estimated by AeroCo to determine 80% of production costs, and hence greatly influenced the overall returns from the project.

 4. The negotiation and coordination of such rework imposes costs on all parties involved, and not just the party who ends up having to bear the direct costs. Our follow-up inquiries after project completion revealed that while the time between project launch and first delivery was significantly improved compared to earlier projects, time-to-market estimated from the beginning of Phase 1 was actually several months longer than anticipated. Engineering change orders (i.e. design changes after Phase 2) were also significantly higher than anticipated.

 5. ‘Partner’ was a term used to denote that the suppliers were assuming the cost and risk of design work for their subsystems. A similar series of questions, appropriately re-worded, was put to the AeroCo liaisons for each supplier.