Workers in multinational organizations can be divided into three basic types:

• Expatriate—An organization member who lives and works in a country where he or she does not have citizenship²⁶

• Host-country national—An organization member who is a citizen of the country in which the facility of a foreign-based organization is located²⁷

• Third-country national—An organization member who is a citizen of one country and works in another country for an organization headquartered in still another country

Organizations that operate globally may employ all three types of workers. The use of host-country nationals, however, is increasing because they are normally the least expensive to employ. Such employees, for example, do not need to be relocated or undergo training in the culture, language, or tax laws of the country where the organization is doing business. Both expatriates and third-country nationals, on the other hand, would have to be relocated and normally undergo such training.

Working for a multinational corporation requires more difficult adjustments than working in an organization that focuses primarily on domestic activities. Probably the two most difficult challenges, which pertain to expatriates and third-country nationals rather than to host-country nationals, are adjusting to a new culture and repatriation.²⁸

Upon arrival in a foreign country, many people experience confusion, anxiety, and stress related to the need to make cultural adjustments in their organizational and personal lives.²⁹ From a personal viewpoint, food, weather, and language may all be dramatically different, and driving may be done on the “wrong” side of the road. As an example of personal anxiety that can be caused by adjusting to a new culture, a U.S. expatriate working in São Paulo, Brazil, drove out of a parking lot by nudging his way into a terrible traffic jam. When a Brazilian woman allowed him to cut in front of her, the expatriate gave her the “OK” signal. To his personal dismay, he was later told that in the Brazilian culture, forming a circle with one’s first finger and thumb is considered vulgar.³⁰

From an organizational viewpoint, workers may encounter different attitudes toward work and different perceptions of time in the workplace. To illustrate, the Japanese are renowned for their hard-driving work ethic, but Americans have a slightly more relaxed attitude toward work. On the other hand, in many U.S. companies, working past quitting time is seen as exemplary, but in Germany, someone who works late is commonly criticized.

Members of multinational corporations usually have the formidable task of adjusting to a drastically new organizational situation. Managers must help these people adjust quickly and effortlessly so that they can begin contributing to organizational goal attainment as soon as possible.³¹

Repatriation is the process of bringing individuals who have been working abroad back to their home country and reintegrating them into the organization’s home-country operations.³² Repatriation has its own set of adjustment problems, especially for people who have lived abroad for a long time. Some individuals become so accustomed to the advantages of an overseas lifestyle that they greatly miss it when they return home. Others idealize their homeland so much while they are abroad that they become disappointed when it fails to live up to their fantasies when they return. Still others acquire foreign-based habits that are undesirable from the organization’s viewpoint and are hard to break.³³

Managers must be patient and understanding with repatriates. Some organizations provide repatriates with counseling so that they will be better prepared to handle readjustment problems. Others have found that providing employees, before they leave for foreign duty, with a written agreement specifying what their new duties and career paths will be when they return home reduces friction and facilitates the repatriate’s adjustment.

The advantages of having organization members participate in an international experience in business are well known and are increasing in number. Organization members who have succeeded in the global environment are valuable assets to their organizations. One of the significant challenges to organizations is retaining these highly sought-after individuals throughout a successful repatriation process and after they complete their overseas assignments.³⁴