Executive Migration and the Transnational Concept: A Fundamental Contradiction?
If management has been diligent in creating a value chain that is optimally configured, it hardly seems likely that a sudden, significant change in that value chain would be necessary or, for that matter, wise. In this regard, a firm that has created a value chain with a demonstrated ability to grow significant value for shareholders would be unlikely to realize significant gains in value added through the wholesale migration of its managerial talent among its centers of excellence. Such a strategy would, in fact, have the firm uprooting what is perhaps its most critical and fragile asset; the very people who make centers of excellence what they are and who, because of their familiarity with local market conditions, language and culture, and close business and family ties extending over generations, contribute much of the synergy that helps make the firm’s global value chain worth so much in terms of incremental economic value. Correspondingly, if such a strategy were likely to contribute to the generation of significant improvements in value added, it is hard to imagine that investors would not have come to this realization long ago and imposed the same kind of strategic changes on a majority of global companies. It is this fundamental contradiction that the research undertaken here addresses. In so doing, this research reviews both the theoretical and empirical literature related to the challenges of international relocation, drawing as well on what is relevant from the literature on the challenges of domestic relocation. As part of this effort the research makes a clear distinction between “executive migration” and the more traditional strategy of relocating managers on a selective basis and for limited periods of time. Subsequently, the research looks at the transnational concept, its relevance and appeal among growth oriented global companies, and the extent to which it limits, at least in theory, a firm’s options where the use and allocation of human capital is concerned. Finally, a conceptual model is derived that infuses the transnational concept with best relocation practices and this model is used to evaluate the growing investment by global companies in the practice of executive migration and the extent to which it contradicts the transnational approach to organizational management and strategy. As part of this evaluation process, particular attention is paid to Cisco System’s recently announced (January, 2007) plan to shift 20 percent of its senior managers to a newly proposed Globalization Center in Bangalore, India by 2010.
Keywords: Transnational Strategy, Executive Migration, Value Chain
Dr. Darryl Waldron
Professor of Business Administration, Department of Business Administration, Trinity University