Global careers: a social capital paradox

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Global careers: a social capital paradoxKristina Mäkelä a & Vesa Suutari ba Department of Management and Organization , Hanken, Swedish School of Economics andBusiness Administration , Helsinki, Finlandb Faculty of Business Studies , University of Vaasa , Vaasa, FinlandPublished online: 28 May 2009.

To cite this article: Kristina Mäkelä & Vesa Suutari (2009) Global careers: a social capital paradox, The International Journalof Human Resource Management, 20:5, 992-1008, DOI: 10.1080/09585190902850216

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Global careers: a social capital paradox

Kristina Makelaa* and Vesa Suutarib

aDepartment of Management and Organization, Hanken, Swedish School of Economics and BusinessAdministration, Helsinki, Finland; bFaculty of Business Studies, University of Vaasa, Vaasa,

Finland

Global careers, typically defined as involving multiple international relocationsincluding various positions and assignments in several countries, have recentlyreceived increasing research attention. This interest is driven by a growing corporateneed for managers who are able to deal with global integration and co-ordination inlarge multinational corporations. An important aspect of the competency of a globalmanager is his or her social capital, i.e. the network relationships he or she possesses.However, while the concept of social capital has been widely used in a number ofresearch fields recently, it has received relatively little attention thus far in the IHRMcontext. This paper contributes to this research gap, and seeks to answer the empiricalresearch question of how multiple international relocations affect the social capital of amanager. Our qualitative interviews of 20 Finnish MNC managers with global careersidentified that such careers represent a ‘social capital paradox’. Global careers arecharacterized by a broad and diverse network of both internal and external ties. Thisbreadth and diversity relate to (1) the managers’ internal contact networks of weak ties(2) their internal support networks of strong ties and (3) their external networks of bothstrong and weak ties. These typical characteristics represent three major social capitalparadoxes in the sense that they carry both significant social–capital-related benefits aswell as potential risks.

Keywords: expatriation; global careers; social capital

1. Introduction

The globalization of careers has received increasing research attention recently (e.g.,

Suutari 2003; Mayrhofer et al. 2004; Stahl and Cerdin 2004; Cappellen and Janssens 2005)

as a consequence of a growing corporate need for managers who are able to deal with

global integration and co-ordination work in large multinational corporations (Bartlett and

Ghoshal 1992). In fact, obtaining and keeping managers who are able to operate

internationally has been ranked as one of the most important human resource management

priorities for firms (Harvey, Speier and Novicevic 1999; Gregersen, Morrison and Black

1998). As a result, issues related to global careers have been put firmly on the International

Human Resource Management research agenda. Although research findings are still

limited, recent work has started to consider global careers from the perspectives of

leadership development (Seibert, Hall and Kram 1995; Gregersen et al. 1998; Roberts,

Kossek and Ozeki 1998; Carpenter, Sanders and Gregersen 2000; Oddou, Mendenhall and

Ritchie 2000), and career capital from a resource-based view (Cappellen and Janssens 2005;

Jokinen, Brewster and Suutari 2005; Suutari and Makela 2007). These perspectives have

ISSN 0958-5192 print/ISSN 1466-4399 online

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DOI: 10.1080/09585190902850216

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*Corresponding author. Email: [email protected]

The International Journal of Human Resource Management,

Vol. 20, No. 5, May 2009, 992–1008

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highlighted the importance of looking at global careers not only in terms of traditional up-the-

ladder career management, but also more holistically from a competence building perspective

(DeFillippi and Arthur 1994; Inkson and Arthur 2001; Suutari and Makela 2007).

An important aspect of the competency of a manager is his or her social capital,

referring to assets embedded in his or her network relationships (Nahapiet and Ghoshal

1998; Adler and Kwon 2002). Social capital enables managers to do their work more

effectively, as it facilitates access to knowledge and opportunities (Burt 1992, 1997; Lin

2001). Moreover, individual social capital can also enhance organizational social capital

(Kostova and Roth 2003) by facilitating collaboration and resource exchange in large

multinational organizations, for example (Tsai and Ghoshal 1998). As Brass et al. (2004,

p. 801) point out, ‘When two individuals interact, they not only represent an interpersonal

tie, but they also represent the groups of which they are members. Thus, inter-unit ties are

often a function of interpersonal ties, and the centralities of units are a function of their

members’ connections.’ Finally, there is tentative evidence that social capital explains

variations in performance (Cross and Cummings 2004; Raider and Burt 1996) and career

advancement (Lin 2001; Kim 2002) among managers.

However, despite its relevance for managers pursuing careers in multinational

organizations, the concept of social capital has only recently emerged as a key issue in the

field of International Human Resource Management (Taylor 2006, 2007). This paper

contributes to filling this research gap, addressing the empirical research question of how

multiple international relocations affect the social capital of a manager. The rest of the

paper is structured as follows. The nature of global careers involving multiple international

relocations is briefly discussed in Section 2. Section 3 gives a review of the different

approaches of social capital theory, first generally and then specifically related to global

careers. The methodology used in the study, qualitative interviews with 20 managers

with global careers, is then introduced, and finally, the results of the study are presented

followed by conclusions and theoretical and practical implications.

2. The global career as a new form of career development

Recent literature has widely recognized the fact that the nature of careers is in transition,

given the changing relationship between individuals and organizations (DeFillippi and

Arthur 1994; Sullivan 1999; Hall 2002). These changes have led to the development of the

notion of boundaryless careers, which means that employees take charge of their own

career development (Hall 1996; Yan, Zhu and Hall 2002; Banai and Wes 2004), as

opposed to following more traditional company-led, up-the-ladder career paths.

According to the boundaryless paradigm, individuals seek employment that enables

them to achieve personal goals and to develop a level of professional excellence that gives

them enough flexibility to manage their own career progression. Individual managers

make sure that they are being trained and developed so that their skills are transferable, and

they are ready to work for a series of organizations that need their skills (Banai and Wes

2004). Success is measured in terms of psychologically meaningful work (Sullivan 1999),

and career progression comes from inter-company self-development rather than

hierarchical advancement within one company (Parker and Inkson 1999).

These changes in the nature of employer–employee relationships have been

particularly prominent in the context of international careers (Tung 1998; Stahl and

Cerdin 2004). Evidence of this is provided by research findings indicating that the major

motives for going abroad are internal, such as personal development and learning, the

search for new experiences, and a personal interest in the international environment

The International Journal of Human Resource Management 993

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(Suutari and Brewster 2000; Stahl, Miller and Tung 2002), rather than externally

derived. International assignments have been associated with a high perceived level of

personal development and a belief that they result in enhanced career potential. On the

other hand, the inability of companies to offer challenging assignments on repatriation

has made international assignees realize that the jobs in which they can best utilize

their newly acquired competencies often reside outside their present employer (Stroh,

Gregersen and Black 1998; Selmer 1999; Stahl et al. 2002). This is reflected in high turnover

rates among repatriates (Black and Gregersen 1999; Caligiuri and Lazarova 2001). Indeed,

international careers appear to have increasingly boundaryless characteristics, transcending

organizational membership and consisting of sequences of experiences across both

organizations and positions within them (Eby, Butts and Lockwood 2003).

As a consequence of these changes, a considerable interest in ‘global careers’ has

recently emerged both in academia and in corporate practice. However, there still seems to

be significant confusion in the literature concerning what is meant by a global career. For

example, Mayrhofer et al. (2004) consider whether it makes sense to differentiate between

international and global careers in terms of a dichotomy, or whether it is rather a

continuum from local/national careers at one end to global careers at the other.

Nevertheless, there seem to be at least two approaches in the literature to the idea of what

makes a career ‘global’. The first derives from the notion of organizational responsibilities, i.e.

the global aspect of careers is to do with having worldwide responsibilities within an

organization (see e.g., Cappellen and Janssens 2005), as many MNC management positions

with overall responsibility for a certain function do. Such an approach is evident in

the literature on global leadership, for example, which typically focuses on the

specific competencies people with worldwide responsibilities require (see e.g., Gregersen

et al. 1998).

The second approach, and the one to which we subscribe, is derived from a logic

connected not so much to the specific tasks an individual has at a specific stage of his/her

career, but rather to the centrality of the international element in his or her internal career

over the longer term (Suutari and Taka 2004). In practice, this would mean that managers

with global careers have a career track involving multiple international relocations

encompassing various positions and assignments in several countries. Existing research on

the specifics of global careers from this internal and long term perspective is currently very

limited, as the overwhelming focus of the literature has been on the single international

assignment as a once-in-a-lifetime experience (Suutari 2003). However, the nature of

international careers is under change, and a group of global managers with a more

permanent commitment to working in an international context has emerged. What is

more, their number is on the increase. Indeed, given the central role of globally competent

managers in the successful running of MNCs, there is a need to understand the specifics of

global careers from the organizational perspective as well as from the point of view

of the managers themselves. This is even more important given that international

assignments have been considered the most efficient method of developing global

leaders (Gregersen et al. 1998), and that the most in-depth learning takes place among those

who have had multiple international relocations in the course of their working lives (Roberts

et al. 1998).

We will now move on to discussing social capital, which according to Taylor (2007,

p. 337) is a key concern for IHRM as ‘the identification, development and retention of

managers, particularly those crossing geographic and cultural boundaries, who can

successfully develop social capital in multiple cultural settings’ is a central element in

the successful management of an MNC.

K. Makela and V. Suutari994

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3. Social capital and global careers

Social capital, referring to assets embedded in relationships, has recently become an

increasingly popular framework in a number of research fields within the social sciences

(Adler and Kwon 2002). The origins of the concept lie at the beginning of the twentieth

century, but the first widely recognized work was carried out by Bourdieu (1983), who

differentiated between economic, cultural and social capital. Other key contributors

include Coleman (1988), who argued for the contribution of social capital (in the form of

cohesive social ties) in the creation of human capital; Burt (1992, 1997), who introduced

the concept of structural holes by rethinking Granovetter’s (1973) classic notion of weak

ties; and Putnam (1995), who focused on social capital at the society level.

Due to its wide usage, the concept of social capital has been defined in a number of

different ways (see Adler and Kwon 2002 for a summary). On the one hand, it is portrayed

as either a private good of an individual or a group (e.g., Burt 1992; Lin 2001), or as a

public asset of a social entity (e.g., Coleman 1988; Putnam 1995; Woolcock 1998). Other

approaches, on the other hand, include the ‘bonding’ (focusing on cohesive within-group

ties) and ‘bridging’ (focusing on between-group linkages) schools (Adler and Kwon 2002;

Burt 2000). This paper focuses on the individual level, and follows Nahapiet and

Ghoshal’s (1998, p. 243) definition of social capital as ‘the sum of actual and potential

resources embedded within, available through, and derived from the network of

relationships possessed by an individual or social unit. Social capital thus comprises both

the network and the assets that may be mobilized through that network’. This definition

refers to network ties encompassing both the bridging and bonding elements, and is widely

recognized in international business research. The bonding and bridging types of social

capital are discussed in more detail below, and their relevance to global careers is assessed.

Bonding social capital is characterized as belonging to a group, whether it is a small

cohesive group with personal ties, or a larger social entity (Coleman 1988). It has been

argued to have a number of positive, but also some potentially negative consequences. On

the positive side it implies a willingness and an ability among the networked actors to

subordinate individual goals to the collective goals, benefits and obligations arising from

mutual recognition, trust or gratitude, and social status, reputation or institutional rights

derived from membership (Nahapiet and Ghoshal 1998; Leana and Van Buren 1999). On

the other hand, strong coherent ties may also become a source of rigidity that hinders the

accomplishment of complex organizational tasks and adaptation to change (Gargiulo and

Benassi 2000).

Bridging social capital, in turn, refers to benefits stemming from providing linkages

between otherwise disconnected social groups (Burt 1992; Granovetter 1973). More

specifically, Burt (1992) discusses bridging social capital in the organizational context as

the ability to bridge ‘structural holes’, or disconnections, between organizational units.

These structural holes, Burt (1992; 1997) argues, develop as a natural consequence of

specialization and differentiation in the tasks of large, multi-unit organizations. He

describes the benefits of bridging social capital as information benefits such as access

(to more and different information), timing (earlier access to information) and referrals

(positive remarks to third parties leading to further connections and a better reputation).

As Burt (1997, p. 341) argues, ‘a structural hole indicates that the people on either side of

the hole circulate in different flows of information. A manager who spans the structural

hole, by having strong relations with contacts on both sides of the hole, has access to

both information flows. The more holes spanned, the richer the information benefits

of the network.’


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Furthermore, network relationships may be both strong and weak, as argued by

Granovetter (1973) in his seminal work on ‘the strength of weak ties’. Strong ties refer to

ties that have an emotional content, while weak ties are acquaintance relationships that do

not have a specific emotional element. Granovetter’s original insight was that weak ties,

i.e. acquaintance relationships, have the benefit of providing bridges between diverse

social groups. Further work by Burt (2000), Hansen (1999) and Reagans and McEvily

(2003) suggests that while bonding ties are typically strong and bridging ties are weak,

both are associated with important knowledge exchange in the organizational context.

While social capital has received considerable attention in other areas of international

business, such as in assessing the linkages between organizational social capital and

knowledge or value creation within the MNC (e.g., Nahapiet and Ghoshal 1998; Tsai and

Ghoshal 1998; Kostova and Roth 2003), there has been relatively little related research in

the IHRM field thus far, with only the most recent studies starting to explore the issue

(Taylor 2006, 2007). More relevant work has been carried out from a sociological

perspective on the value of networks for obtaining jobs and promotions (e.g., Boxman, De

Graaf and Flap 1991; Lin 2001; Kim 2002). Weak between-group ties in particular have

been associated with career-related social capital. For example, Raider and Burt (1996)

linked the concept of social capital to boundaryless careers, arguing that differences in

social networks account for performance differences among otherwise similar managers.

They suggest that social network structures that link to diverse and disconnected social

groups are more beneficial than other more cohesive network structures, leading to higher

social capital and more advantageous positions for job seeking and career attainment.

Although job seeking and career advancement are well researched topics in sociology,

scholarly work on the social capital aspects of international mobility is scarce. Due to their

mobility, managers with global careers encounter a significant number of people in

different contexts, both within and outside of their firms. These network relationships

present a wide range of contacts geographically, culturally, professionally and socially,

which should foster a significant boundary-spanning capability. While it has been argued

that the importance of social capital increases with the extent of boundarylessness

(Sturges, Guest and Mackenzie 2000), empirical evidence in the international setting is

lacking. Existing research on related topics indicates, however, that social capital may

have a significant influence on the course of global careers. For example, Antal (2000)

found in her study of two German MNCs that expatriates significantly expanded their

networks of professionally relevant contacts during their assignments, both in the

assignment country as well as with headquarters senior management. Furthermore,

Makela (2007) suggests that managers with expatriate experience possess considerably

more social capital than managers in similar positions but with only domestic experience.

Compared to the research described above, this explorative study takes a more holistic

perspective and looks at both the benefits and the risks of global careers in terms of

individual social capital. More specifically, we see global careers as a social capital

paradox, according to which the positive aspects all have their potential downsides. In the

following we discuss the social capital consequences of global careers based on a

qualitative case study of 20 managers on such a career path. First we review the

methodology used, then we discuss the paradoxes in the light of the empirical data.

4. Methodology

We adopted an qualitative research design based on semi-structured interviews with 20

Finnish MNC managers with global careers (Eisenhardt 1989; Yin 2003). In line with


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previous literature (Suutari and Taka 2004), we defined such managers as having had

three or more international assignments during the course of their careers in two or more

countries. Furthermore, we focused on assigned expatriates rather than self-initiated

international mobility.

The sample was derived from a quantitative survey of Finnish business graduates

currently on expatriate assignment. From this larger sample of 112 expatriates we

identified those who mentioned three or more international assignments, and contacted

them. The total number of such managers was 19. We were able to reach 13 of these, of

which 12 were eligible. We then used the snowballing method to increase the sample size

until a data saturation point was reached. This brought the number of interviews to 20.

The supplementary snowballing procedure was deemed appropriate because all the

interviewees fulfilled the pre-assigned criteria, and the sampling method resulted in

considerable within-frame variation (Ezzy 2002). Furthermore, the sampling frame was

kept constant in that all the interviewees were Finnish with a business or technical MSc

degree. As expected, all with the exception of one were male. The interviewees were from

17 different MNCs across a variety of industries, and the assignment locations covered all

six continents. At the time of the interview 17 of the interviewees were based abroad. Half

of them had been employed by the same company throughout their career and the other

half had worked for two or more companies, which allowed us to explore the impact of

social capital on changes in employment. A summary of the interviewee characteristics is

given in Table 1.

The interview data consisted of semi-structured personal and telephone interviews.

The interviewees currently based in Finland (n ¼ 3) were interviewed personally, and

Table 1. Key sample characteristics.

Interviewee Employers Current location Previous Assignments

# 1 Several Hungary Germany (2)# 2 Several China Sweden, Japan, Estonia# 3 One Finland UK, Singapore, Hong-Kong, Sweden# 4 Several Switzerland France, US# 5 Several Germany Australia, Singapore# 6 One France France, Switzerland, UK# 7 Several Chile Vietnam, Africa, US# 8 One Finland Japan, South Korea (2), Saudi Arabia, Chile# 9 One Germany Germany, Poland# 10 One Germany South Africa, Australia, Japan# 11 Several Russia Switzerland, Hong-Kong, Singapore,

Sweden, Poland# 12 One Austria Denmark, The Netherlands# 13 One Turkey Poland, Turkey# 14 One Hong Kong Switzerland, Singapore, Hong Kong# 15 Several Finland Switzerland, China, Hong Kong# 16 One Chile Germany, Canada# 17 One Germany Germany, Singapore# 18 Several Guatemala US (2)# 19 Several US Germany, Czech Republic# 20 Several Pakistan China, Hong Kong, Russia

Note: Multiple separate assignments in one country are indicated in parentheses, e.g. (2). This was a typicalpattern characterizing global careers: successful managers were often sent back to countries in which they haddone good work earlier, but in more demanding general management positions.


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telephone interviews were carried out with those currently on international assignment

(n ¼ 17). The interviews lasted between 30 and 90 minutes, and were all transcribed word-

by-word for the analysis. They were all conducted in Finnish, the verbatim quotations

being translated into English by the authors. All company and individual identities have

been anonymized.

The interviewees were first asked to take the researcher through their working careers,

with an emphasis on their international assignments. The interview questions that

followed focused on the perceived impact of multiple expatriate experiences on their

capabilities and career development. In order to allow notions of social capital to emerge

naturally, we purposely started with very generic questions such as: How has your

international work experience developed/benefited you? Have there been any negative

consequences? Has your international career changed you – and if so, how? Only when

the interviewees themselves came up with social capital related topics did we ask further

questions in order to dig deeper into issues of interest. Particular attention was paid to

the development and usage of interpersonal networks established during multiple

expatriate assignments.

As the nature of this study is explorative, we approached the data inductively. In the

analysis process, both authors separately first carefully re-read and reflected on the data

several times in order to allow deep familiarization with it. Second, we coded the

data according to observations and insights arising during the fieldwork and analysis

processes, and formed tentative categories of the different patterns that emerged. Finally,

when the empirical insights started to emerge, we systematically compared the data from

the different managers in order to evaluate the regularities and the differences. This

process resulted in a typology of the different types of relationships typically experienced

by managers with global careers, and the identification of three social capital paradoxes.

A number of measures were used to ensure the validity and reliability of the study.

First, we constantly cross-checked the data both against previous research and also across

the multiple interviews, thereby increasing the internal validity (Ritchie and Lewis 2003).

Second, the construct validity of the study was enhanced via researcher triangulation, i.e.

both authors analysed the raw data independently (Eisenhardt 1989; Ritchie and Lewis

2003). Third, in terms of external validity, the study aimed for theoretical rather than

statistical generalization based on the in-depth qualitative evidence; thus the sample size is

evaluated based on data saturation rather than size (Gummesson 1991; Ezzy 2002).

Finally, in terms of reliability we followed a pre-tested semi-structured interview guide

and recorded all the interviews, thereby creating a retrievable database that maintained a

chain of evidence (Yin 2003).

5. Findings: The social capital paradox of global careers

In this section we present our insights into the social capital paradox of global careers as it

emerged from the data. We start by looking at whether there were any commonalities

between the different types or patterns of network relationships our case individuals had.

From this analysis we concluded that while there was considerable variety in the

individual network patterns driven by different assignment locations and varied

professional and functional backgrounds, all our case managers had large and diverse

networks. These were developed as a side effect of the variety and breadth of geo-

graphical and functional responsibility areas in which they functioned during their

international careers.


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Moreover, we could see a clear typology emerging from the variety of relationships

our interviewees reported. On one level, they typically had a variety of both internal (intra-

company) and external (outside their employer) relationships. Second, their networks

included a variety of both professional and social relationships. Third, these relationships

extended to the home country, to their multiple host countries, as well as to third countries

when their fellow expatriate colleagues and friends moved back to their respective home

countries or on to further assignments. A typology of these different types of network

relationships is presented in Table 2.

The network relationships of the case managers typically covered most if not all of the

categories below, and although our data did not include comparative cases of managers

with domestic experience only, we would certainly expect their networks to be

significantly wider than those of an average domestic manager. The company-internal

networks of relationships of those who had stayed with one employer were typically larger

and broader than those of the managers who had multiple employers, reflecting the time

spent in one company. Differences in company-external networks seemed to be more

attributable to individual differences (such as social networking skills and an outward

orientation) than to having had one or multiple employers during their international

careers: ‘I have always been an active person – when I was in the Czech Republic I was a

founding member of the Finn–Czech Chamber of Commerce, then back in Finland I

became a founding member of the Finn–Austria Business Guild, and now here in Texas

we’ve been active in founding the Texas branch of the Finnish American Business Guild.’

However, several interviewees who had had multiple employers during their careers

seemed to be particularly active in managing their external relationship network, so our

evidence is not fully conclusive.

Having established the different types of relationships our case managers had, we then

examined the different patterns of social capital arising from the rich qualitative descriptions

in our data. This led us to conclude that inherent in global careers are three major paradoxes

to do with social capital, which has typical characteristics that carry significant benefits as

well as very clear risks. Table 3 gives a summary of the paradoxes. We then discuss each of

them in more detail and provide some illustrative empirical examples.

Internal networks of weak ties

The first paradox is related to the number and variety of intra-company weak ties

(Granovetter 1973; Burt 1992; Hansen 1999, 2002). These refer to contacts within the

company with whom there is no particular emotional involvement (Granovetter 1973).

Table 2. The typology of relationships found in the study.

Internal External

Professional Social Professional SocialHomecountry

Internal-Professional-Home country

Internal-Social-Home country

External-Professional-Home country

External-Social-Homecountry

Hostcountry

Internal-Professional-Host country

Internal-Social-Host country

External-Professional-Hostcountry

External-Social-Hostcountry

Thirdcountry

Internal-Professional-Third country

Internal-Social-Third country

External-Professional-Third country

External-Social-Thirdcountry


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They are to be found in all of the ‘internal’ categories in the typology presented in Table 2,

but they typically include more professional than social ties. The managers in our study

had very broad internal networks of weak ties (i.e. contacts within their respective

companies) bridging a number of different geographies and functions. This breadth and

diversity were driven by two factors. First, the frequent relocations and different roles

had provided the managers with a large number of different contacts. Second, they had

typically had wide general management-type responsibilities in their assignment

countries, which required interaction with a broad range of people. One of the

interviewees reflected on this as follows: ‘I have worked both at headquarters and in

the field (foreign subsidiaries), and then again at HQ and now I’m back in the field. If

I think about it, I have a really good network within the company. There are finance

people . . . controllers . . . people from the buying organization . . . from logistics . . . from

global sourcing . . . and now when I’m back doing a general management job, I have good

relationships with the CEOs of the other units.’

The benefit of a broad network of weak ties is that it leads to better access to

information, i.e. access to more and more diverse information, and quicker access to it

(Burt 1992, 1997, 2000; Hansen 1999, 2002). This benefit was particularly evident in the

case data, most interviewees referring to major information benefits: ‘You can get things

done much easier and quicker. You know who to talk to when you need information.’

Furthermore, these benefits may be significant: ‘The benefit of your network is that you

can find things out in a day that would normally take months.’

Table 3. The social capital paradox of global careers: a classification of benefits and risks.

Paradox

Typical featuresassociated withglobal careers

Benefits associated withglobal careers

Risks associated with globalcareers

Internalnetworkof weakties

A large number ofweak ties acrossdifferent geogra-phies and functions

Access to information: Issues related to time andgeographical distance oftenlead to the weakening of tiesin the home country. Due todistance, often missingimportant informal infor-mation at the HQ/homeorganization. May weakenpossibilities for successfulrepatriation and affectretention

- More informationsources

- More diverse infor-mation

- Quicker access to infor-mation

Internalnetworkof strongties

A diverse internalsupport network

Network can be used toobtain help or advice:

You are often on your own, asthe network does not under-stand your local businessenvironment

- Often influential andhigh level

- Diversity enables helpand advice from moresources and perspectives

Externalnetworkof Strongand weakties

A diverse externalnetwork spreadingacross geographies.Membership in the‘expatriate circles’

External network can pro-vide help and support onboth professional and per-sonal matters:

Risk of not being embeddedin the home-countryin-groups/acquaintancenetworks

- Information benefits- Referrals to third parties- Career advancement


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On the other hand, there are some very relevant social capital risks related to global

careers. First, due to the limitations of time, there is a trade-off between the number of ties

one can have and their strength. In particular, issues related to time and geographical

distance may lead to the weakening of ties in the home organization. As one of the

interviewees noted, ‘As time passes, people change at HQ. People you know leave

the company or move on. Relationships get weaker day by day.’ One of the downsides of

being away from the home organization for long periods of time is that one misses the

important information that is exchanged in informal and chance encounters such as at

the coffee machine or when bumping into someone in the corridor. Indeed, physical

proximity serves an important purpose in knowledge exchange within organizations

(Nonaka and Takeuchi 1995). One of the case managers put it well: ‘It just is so that

whenever the distance is greater than the distance you can carry a cup of coffee,

communication weakens. When you’re abroad you don’t get the information you would if

you were at headquarters. These discussions over a cup of coffee or in the corridor, they’re

a form of informal communication that is of major importance.’

Another very real risk was the effect of weakening home-country relationships on

getting a good position upon repatriation. As the old saying goes, ‘out of sight, out of

mind’: ‘The handicap of having been abroad most of your career is that you don’t know

headquarters that well . . . it does help your future if they know your face!’ This can

lead to assignees being ‘forgotten’ at the home organization, especially if they have

been away for longer periods of time or in a geographically distant location: ‘When

you’re far from headquarters that has an effect. You can’t be sure whether people other

than your immediate contacts know what you have done and achieved.’ Indeed, the

observations of our interviewees were in line with repatriation problems reported in

previous studies (Black 1992; Solomon 1995; Black and Gregersen 1999; Caligiuri and

Lazarova 2001; Suutari and Brewster 2003; Stahl and Cerdin 2004): ‘When you’re

away from the home office people may not take any notice even if you do your job

well. Reorganizations inevitably happen in the home country, and you are easily

forgotten. When you return, you’re lucky to get your old job back. Often expatriates

return to the same job; an international assignment doesn’t bring automatic promotion.

You have to be careful about where to go and what to do, and make sure that you have

somewhere to return to. There may be bitter disappointments.’ On the other hand,

assignees often recognize that career opportunities that best utilize their newly acquired

competencies often reside outside the present employer organization; this is reflected in

an interest in external job markets and may lead to increasing career boundarylessness

(Eby et al. 2003): ‘There are lots of interesting possibilities. In terms of my career

development it has always been important to me that I continuously face new

challenges – that’s how I stay motivated. One option is to move to a leadership position

in a smaller company, or then to stay in a larger organization and focus on a specific

area. I have so many opportunities that it’s quite enjoyable really. One becomes the

master of one’s own life.’

Internal networks of strong ties

The second paradox concerns internal networks of strong ties, i.e. intra-company ties that

involve an emotional element, which may derive from a close working relationship in the

past, a mentoring relationship, or a personal friendship. Strong internal ties are to be found

in all of the ‘internal’ categories presented in Table 2, but they typically incorporate a

significant social dimension. They may be used to give and obtain help through mentoring,


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acting as a ‘sounding board’ or giving favors. The case managers typically had very

diverse support networks: ‘Whatever the problem, I always have a group I can process

things with. It’s so important for the daily work to have people who provide a sounding

board for you.’ In addition to being diverse, these support networks may also reach high

hierarchical levels. The following quote illustrates this well: ‘You learn to know the high-

level people really well. Our CEO comes here (a foreign subsidiary) twice a year.

I wouldn’t be able to book him for myself for 18 hours in one go at HQ, but here I spend

two whole days with him. We sit in the same car, we stay at the same hotel, we eat dinner

together – we get to know each other very well. I can call him anytime I want to, and not

everyone can do that. It’s a great advantage!’ These networks of strong ties may be very

effective, as reflected by one of the case managers: ‘There are two ways of doing things;

the correct formal routes and then the effective ones. If one route doesn’t work, you use the

one that you know does work, even if it may not be formally correct . . . you call someone

who is your old friend – when you know someone can sort things out, you tend to use

that channel.’

However, there are also downsides to global mobility in terms of having a support

network. First, the network may be limited due to the gradual weakening of ties in the

home organization, as discussed above. In addition, even if you have a strong support

network at the home organization, you may not be able to draw on it: ‘When I was setting

up our business in Eastern Europe, I knew that if I encountered a problem there was no

point in asking my boss, our CEO, for help. If I didn’t know what to do, I knew that he

wouldn’t have a clue. You just had to sort things out by yourself.’ In fact, many

interviewees noted that people at headquarters were often not of much help as many had a

limited understanding of the realities of international markets if they only had domestic

experience: ‘Even with people who have high-level responsibilities in the organization, if

they have never worked outside the head office, you tend to have very different points of

view about things. You cannot explain the realities of these (emerging) markets to

someone who has no experience. However smart the guy, if he has no experience then

dealing with him is always difficult’.

External networks of strong and weak ties

The third paradox relates to the diverse and geographically broad external network

characteristic of managers with global careers. One case manager summarized it well:

‘I know a person to call to in most countries . . . You know so many people from different

encounters over the years: trade associations, clubs, business colleagues, customer

relationships . . . You’d never be able to create such a network in Finland – that’s 100%

sure.’ This external network includes a mixture of both weak and strong ties in all of the

‘external’ categories presented in Table 1, and the relationships are both business-driven

and also typically social and personal, involving memberships in expatriate in-groups. One

of the case managers gave an example of this: ‘It’s interesting how the boundaries between

work and leisure get blurred. Our customers are typically also expatriates . . . They are my

customers, but I also play squash and tennis and ice-hockey with them; we have joint

parties; my wife socializes with their wives etcetera.’ These relationships create both

strong and weak ties and spread effectively to third countries when fellow expatriates

move on.

The benefit of broad and diverse external networks is that they provide information,

referrals to third parties, support, and even opportunities for career advancement (Boxman

et al. 1991; Lin 2001; Kim 2002). While the role of the internal network might be more


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important as a general rule, the external network grows in significance as one’s career

advances: ‘The higher one climbs in one’s career, the more important the external network

becomes. The CEO position is like musical chairs – you never know when the chair you

are sitting on will be pulled away, and when it happens you don’t survive if you don’t have

a network.’

Indeed, external networks seemed to play a significant role in increasing awareness

of career opportunities outside one’s own organization, and therefore reinforcing the

boundaryless character of global careers. While this is certainly also true in domestic

settings, the global aspect greatly amplifies the effect. This awareness seemed to apply

similarly to the interviewees who had stayed with their respective companies as well as

those who had had several employers during their careers: the propensity to change

seemed to be driven by other factors, such as particular opportunities or disappointments.

As one interviewee noted: ‘If I had the interest and the need to move on from [my current

company], my international experience would certainly improve my chances to advance

my career . . . what has changed is that there is no threshold to move on to a non-Finnish

employer. You’ve met people who work in several different firms, and you have a better

picture of the HR policies and career opportunities within different firms, as well as

their business situations. You see different opportunities better both in other firms and

outside Finland.’

On the other hand, the downside of having a global career is that one may be less

embedded in the in-groups and acquaintance networks within the home country, such as

old school friends or university alumni, which play an important role in the social capital

of an individual. This alienation may be both physical, i.e. driven by absence, and also

psychological, i.e. driven by different career paths, aspirations and experiences. One of

the case managers reflected on this as follows: ‘After my Asian experience I noticed [a

change in the relationship] with my Finnish friends, with whom I had been really close

and with whom I had grown up. You’ve lived abroad for 10 years, and you just tell them a

story about something that happened to you the other day – such as “when I was in Bali

and this-and-that happened” – and they’re like “oh, so you were in Bali, I see”. But you

didn’t say it because you wanted to boast about having been in Bali, the incident simply

just happened to take place in Bali. Then you realize that it’s much better just to say that

once this happened to me, and leave all the other details out. It’s so much more difficult to

keep in touch with these people than with the people I’ve met abroad – they accept me

and you don’t have to justify yourself.’ These may, in addition to their obvious social

effects, also have an ‘out-of-sight, out-of-mind’ impact in terms of missed external

opportunities that is similar to the repatriation problems reported earlier, when company-

external home-country contacts may not think about their expatriate friends and

acquaintances when filling relevant positions in their companies or hearing about relevant

career opportunities.

Finally, the number and breadth of internal and external ties was influenced not only by

the movements of the interviewees, but also by whether people in their networks changed

companies, assignments or countries: these effects may be significant even if random

(Makela (2007)). These third-party effects may both broaden one’s network further or

alternatively weaken ties with previous assignment countries: ‘People change places.

There are some people left [in my previous assignment country], but many have moved

on . . . people are now everywhere around the world. My colleague who I worked with . . .

is now responsible for the Americas and I’m responsible for Asia Pacific – we are in fact

colleagues again. Other people are sales managers or such in Europe, and I don’t have

anything to do with them.’


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6. Conclusions

The above discussion has provided insights into the social capital implications of global

careers, referring to careers involving three or more international relocations. There are

several characteristic implications as far as the individual is concerned. First, global

careers are characterized by a broad and diverse network of both internal and external ties.

Second, this breadth and diversity relate to: (1) internal contact networks of weak ties;

(2) internal support networks of strong ties; and (3) external networks of both strong and

weak ties. These typical characteristics give rise to three major social capital paradoxes

in that they carry both significant social capital benefits as well as potential risks, as

demonstrated in Table 3.

These findings highlight the relevance of a social capital approach to global careers.

As Minzberg (1973) observed early on, interpersonal interaction between managers is

a fundamental mechanism for conducting the daily work of any organization. In fact,

Borgatti and Cross (2003) and Cross et al. (2001) found interpersonal interaction to be the

most important channel through which MNC managers sought and shared knowledge, as

compared to other means, such as the company intranet or written documents. Therefore,

social capital related aspects may greatly benefit or hinder the effectiveness of a manager

doing his or her work. Within multinational corporations, operations are scattered across

multiple geographical and cultural boundaries, and managers with global careers can use

their social capital to bridge these boundaries. At best, these managers can become what

Taylor (2007, p. 339) calls ‘high value boundary spanners’, managers who ‘span

geographical and cultural boundaries’ and ‘are high value added contributors to both the

coordination process and the knowledge sharing and creation process’. Furthermore,

individual social capital may also be beneficial at the organizational level, as boundary-

spanning interpersonal relationships have the potential to be effective conduits of

knowledge sharing within multinationals (Kostova and Roth 2003; Makela 2007). Lastly,

aspects of social capital can also influence career opportunities and advancement (Lin

2001; Kim 2002).

The findings of this study contribute to the literature on International Human Resource

Management (IHRM) as follows. First, this paper adds to our understanding of global

careers, an area of inquiry that is not only of increasing practical importance, but also is

only now starting to emerge as a subject of research. Second, it provides a social capital

perspective on the topic, which is an approach that has received only limited attention in

the IHRM literature (Taylor 2006, 2007) despite being increasingly insightful in other

areas of management inquiry (e.g., Kostova and Roth 2003; Nahapiet and Ghoshal 1998).

Third, the social capital approach has enabled us to identify important characteristics and

implications of global careers, providing a systematic analysis of the types social capital,

as well as their benefits and risks (Tables 2 and 3). As such, it contributes to the emerging

discussion on the competences required by ‘high value boundary spanners’ (Taylor 2007).

Notably, while previous literature has tended to emphasize the positive aspects of social

capital (Portes 1998), this paper considers both the positive consequences and also their

potential downsides. Finally, the sample, although fairly small, breaks new ground in

terms of providing a cross-sectional sample of managers with global careers – a group that

is very difficult to reach since they are still so few in number and, by definition, are spread

across the globe.

It is nevertheless important to acknowledge the limitations of this study. First, it

is worth noting that the nature of this study is explorative, and therefore the focus is

on building theory rather than on extensive empirical testing (Eisenhardt 1989).


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Consequently, verification of the findings requires more qualitative and quantitative

empirical work. Second, all the case managers were Finnish, and the results may not be

generalizable across managers coming from different national and cultural backgrounds.

Third, the scope of the study is limited to assigned global managers, i.e. those whose

international relocations have been company-driven expatriate assignments rather than

self-initiated foreign employment. It is noteworthy, however, that when global careers

progress, the boundaries between these two groups become blurred, as managers use their

international experience to obtain better jobs in other MNCs, which in turn are likely to

send them abroad. Lastly, the social capital of domestic managers may obviously display

some of the same characteristics and paradoxes as those presented in this study. However,

we would argue that managers with global careers have a significantly wider array of

different types of relationships spreading across many geographical areas than managers

with only domestic experience, often including relationships in all of the 12 categories

presented in Table 2. In addition, although the benefits and risks listed in Table 3 may

manifest themselves in domestic contexts as well, they are certainly amplified in the case

of global careers when the international dimension is added.

Finally, this work carries some important practical managerial implications. First,

managers who embark on global careers should be aware of the potential social capital

related benefits and pitfalls. The highly valuable boundary-spanning effect (Taylor 2007)

discussed earlier is valid for both internal and external networks, as illustrated by the

following interviewee: ‘We can become sort of hubs who know what everyone is up to. In

a way, our circumstances make us such hubs: we move from one place to another so often

that it’s natural for us to keep in contact with everyone.’ This, too, brings about a paradox.

In particular, one should invest time in looking after both internal and external

relationships in the home country. As the same interviewee continued: ‘On the other hand

(because of this very moving around), it is so incredibly important to keep in touch with

your friends. Those people who go abroad and turn their backs on the home country are

making life difficult for themselves.’ The risks can be managed, if one is aware of them,

although they are not likely to disappear altogether. Therefore, it is important to maintain a

balance between the significant benefits of a wide and diverse international network, and

still remain embedded in the important home-country networks.

Moreover, organizations that have an increasing need for globally competent

managers should be aware of the social capital implications of global careers. While such

careers are increasingly boundaryless (Arthur and Rousseau 1996), with individual

managers taking charge of their own advancement regardless of whether it is within the

context of company assignments or self-initiated foreign work, the individual social

capital benefits and pitfalls spill over and become benefits and pitfalls for the surrounding

organization (Kostova and Roth 2003). Importantly, managers with global careers use

their wide and diverse networks for the benefit of the whole organization by utilizing them

in order to do their work more effectively. It was very clear from the case evidence that the

needs of the organization constituted the primary reason why both internal and external

networks were used: ‘You use your network in your daily work. You find people to serve

as a sounding board for business issues; you use your network to enhance your company

image; you network within the industry, within industry associations and in Brussels.’

Of the potential pitfalls, the risk of not being embedded in the home organization,

especially if it is the headquarters of the company, is the most significant from the

company’s point of view. Both strong and weak ties are important for the flow of

knowledge in both directions, and they make the daily work of the MNC more effective.

Furthermore, isolation from headquarters may lower the commitment and motivation of


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these highly valuable boundary-spanning employees, and this may lead to repatriation

problems of the type reported above and in the previous literature (e.g., Black 1992;

Solomon 1995; Black and Gregersen 1999; Caligiuri and Lazarova 2001; Suutari and

Brewster 2003; Stahl and Cerdin 2004), including a major impact on retention rates. In

sum, managers with global careers are valuable employees whose social capital, if used

wisely, can provide important benefits for the whole of the organization.

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Global careers: a social capital paradox