POSTING ABROAD OR LOCAL RECRUITMENT
The question, however, whether personnel with special knowledge or experience should better be recruited via the internal or the external labour market, is not yet conclusively answered by this. It surfaces again, when the company has to cope with the unknown conditions of a foreign market. The company could indeed deal with these unknown conditions by foreign posting, but also by local recruitment of management staff and specialists. Several factors play a role in this decision: obviously above all the significance of market sensitivity (securing the knowledge of management staff about the local market and their ability to cope with the cultural conditions of the foreign market), the importance of company integration (tying management staff and experts in with the superior strategy and the cultural system of the company), as well as the philosophy which a company pursues with respect to its international orientation. Considerations of costs, on the other hand, seem to rank second when deciding on the posting of management staff and specialists (Taggart, McDermott 1993 p 141, referring to Boyacigiller (1990). With view to this all authors agree that a posting of domestic management staff and experts abroad (thus also to a joint venture) is considerably more expensive than the recruitment of local personnel (Bartlett, Ghoshal 1990 p 210; Domsch, Lichtenberger 1992; Taggart, McDermott 1993 p 141; Kammel, Teichelmann 1994 p 32). This is not even due to a maybe relatively lower income level in the country to which the staff is posted, but above all to the costs caused by the posting itself (cf. Taggart, McDermott 1993 p 142; Kammel, Teichelmann 1994 p 89- 102).
Compared to this the question of market sensitivity versus company integration is much more intensively discussed. These considerations make use of the theoretical instruments which were first presented by Heenen and Perlmutter (1979); according to these the advantages and disadvantages of posting versus local recruitment can be discussed in the form of four approaches. These are usually termed the ethnocentric, the polycentric, the regiocentric and the geocentric approach (Bartlett, Ghoshal 1990 pp 73-82; Braun 1991 pp 342-70; Domsch, Lichtenberger 1992; Taggert, McDerott 1993 pp 139-44).
The ethnocentric approach consists in the exclusive posting of management staff from the parent company. It ensures the transfer of the technological and managing competence of the parent company and the commitment of the decision-makers in a company abroad or an international joint venture to the posting company, but it is expensive, basically prone to conflicts, and bears the risk of insufficient market sensitivity. The polycentric approach consists in the exclusively local recruitment of management staff and thus carries all the advantages and disadvantages opposite to the ethnocentric approach: lower costs, high market sensitivity, good access to the environment of the company, but less possibilities or bigger difficulties to really realize the strategic decisions of the parent company. The regiocentric approach is a combination of the two and tries to combine the advantages of posting and local recruitment by mixing the management staff. The geocentric approach finally consists in filling managing posts regardless of a company's nationality and origin. This approach, of course, can much more easily be linked to the goal of a transnational company as described by Bartlett and Ghoshal.
There seems, however, to exist the assumption that more often than not the availability of suitable staff represents a bottleneck factor for the success of a company's foreign engagement or for a joint venture (Kammel, Teichelmann 1994 p 24). Zielke (1992 pp 233-5) analyses this on the basis of empirical results, coming to the conclusion that the composition of nationalities of any managing team and the organisational origin of its members are of much less consequence for the success of an international joint venture than the individual qualification of each manager for employment in the international business. Braun (1991 p 345) draws attention to the danger inherent in the common practice of entrusting successful management staff of the parent company with managing tasks in the international field, since a success in the home country does not automatically qualify for an international assignment. Rather such staff will have to receive additional training, especially for language acquisition and for enabling them to orientate themselves in an unknown cultural environment.
At this point one also has to note that a company's decision to choose such an approach and the motives of the managers to enlist for such an assignment abroad might be quite different. Domsch and Lichtenberger point out that under these conditions the professional competence of a manager turns into a mere basic prerequisite, whereas his intercultural ability will play the decisive role; intercultural ability here also implies the capability to avoid any excessive adaptation to a culturally new environment and to motivate multinational staff to actions which conform to the targets of the parent company. Kammel and Teichelmann (1994 pp 65-6) distinguish between different types of personalities interested in going abroad: the legionnaire, who is mainly looking for financial advantages, independence and an increase in power; the career-seeker, who is attracted by promotion prospects; the refugee, who tends to run away from occupational and private problems at home; and the global player, who - due to his family background - has already grown up with a cosmopolitan orientation and is not familiar with having strong ties with one single cultural background. According to this characteristic, however, the possibility mentioned by Pinder (1990 p 77) that companies might also make use of the offer to get active abroad in order to be attractive to out-standing applicants, would only be in the interest of a company with regard to a certain part of the interested applicants. Bartlett and Ghoshal (1990 p 234), by the way, point out that not in every company culture is a foreign assignment regarded as positive for a career. On the contrary, in some companies this is even held to hamper the promotion.
A discussion of the four approaches contributed to the debate by Heenen and Perlmutter also makes clear that the criteria by which one can decide on the achievement of the two goals, market sensitivity and company integration, cannot be delineated by one single variable or on a homogeneous continuum. Thus they can only be assessed in qualitative contrast. Recommendations on this basis are consequently divided three ways. Either the establishing of mixed systems (more or less along the lines of a regiocentric approach) is suggested, or trust is placed in the integrational achievement of individual persons (establishing a staff that is anchored in the parent company and internationally assignable management staff and experts (cf. Bartlett, Ghoshal 1990 pp 233-4; Taggart, McDermott 1993 p 139). Thirdly contingent decision procedures are proposed, in which the decision is made dependent on a differentiated consideration and evaluation of single factors of influence (cf. Domsch, Lichtenberger 1992).
The descriptions by Goldenberg (1988) of a great number of international joint ventures, especially of companies from the East-Asian region and the U.S.A., may anyhow lead to the conclusion that posting mainly serves to ensure a transfer of management systems from the posting country (U.S.A.) to the receiving one (Japan before 1960, China). In a counter-move, however, an adaptation in the reverse direction becomes necessary as far as the forms of behaviour with considerable importance for the market entry are concerned.
Summing now up these considerations of foreign posting or local recruitment of managers and experts with view to international joint ventures in construction projects the recommendations clearly favour posting. There are several reasons for this. First, some important arguments against the posting of managing staff and experts do not appertain to joint ventures in construction projects, or are of less importance. One is the argument of costs. It is true that in this case, too, a posting is probably more expensive than local recruitment. Yet especially because of the limitation of the stay in the host country, and because of the construction-site specific, rather time-intensive work a considerable part of the costs which are otherwise connected to a posting becomes irrelevant. This concerns above all the costs which would elsewhere arise from the removal of the families. Apart from that the costs for the posted managing staff and the experts - due to their relatively low number - should as a rule be rather low in relation to the overall costs of a construction project.
The second are language problems and the adaptation to the cultural environment. Among the employees of both the foreign and the local joint-venture partners at international construction sites there obviously prevails a version of the English language which is massively determined by construction terminology but strongly simplified in its remaining structure, yet seems to secure communication. On top of that the cultural environment of the construction site and office is much rather stamped by certain construction-specific social and behavioural forms than by characteristics of the region where it is situated. Apart from that especially big construction sites of infra-structure projects are often far away from any settlements, thus rather forming their own kind of cultural environment.
The third is the significance of the joint venture for the realisation of a construction project for market entry. Once a joint venture has started work on project, a considerable part of the market entry has already been completed. It is correct that consolidation of the market entry will not be independent from the way in which the project is carried out and from the way in which the relationship between posted managing staff and the representatives of the clients or the local joint venture partners are fashioned. Mistakes at this point might well impair a company's market-entry chances. But at least as important will finally be the question whether the project has been completed to the satisfaction of the client. The participating companies will be more sure of this if they make their best people available to the joint venture.
Decisive for the recommendation to favour posting is therefore mainly the argument of transfer of knowledge and skills. For the realisation of construction projects the full availability of all the technological and organisational assets of a company is absolutely necessary. In the end, however, this can only be guaranteed by the company's own management staff and experts. Therefore often not only the evidence of reference projects, but also the promise to employ the same personnel for another project as well will bring a market advantage when bidding for a new order.
Thus in other industrial sectors for instance the posting of management staff and experts from the parent company is recommended above all for the implementation phase of a joint venture. Furthermore it is usually regarded as indispensable, when special problems occur and have to be solved abroad (Taggart, McDermott 1993 p 138-9; cf. also Goldenberg 1988). For the reasons mentioned above, construction projects can be regarded as enterprises the state of which continuously resembles an implementation phase. Furthermore they regularly operate under considerable time pressure and more or less continuously confront the personnel with the necessity to react to changes in a flexible way. Therefore the staff has to be able to make decisions even under this pressure without each time having to seek backing from a superior head office. For this a group of managers is needed that is completely familiar with a company's targets. Since construction projects are and have to be independent of the head office, they require a managing staff which is completely and safely tied in with the company's culture (cf. Taggart, McDermott 1993 p 176-8).