Expatriates in MNCs Corporate Governance and Management Centralization, Formalization and Financial Performance: The Case of the Czech Republic

One of the reasons why expatriates are engaged in MNCs is that they serve as one alternative of control and coordination system to reach goals and objectives of MNCs. Results of the empirical survey, which was carried out in 2011 with a sample of the 366 Czech subsidiaries of MNCs, indicates that there are significant differences not only in the extent of centralization of decision making within various areas of business functions (e. g. finance, human relation management, logistics, marketing) as well as several other issues important for business solely (product portfolio or choice of customers and suppliers) but also when comparing the level of involvement of expatriates in corporate governance and management in subsidiaries and the involvement of inpatriates through MNCs. The involvement is also associated to financial performance of subsidiaries (measured with the Return on Assets) and to the formalization of knowledge transfer. The findings lead to both theoretical and managerial implications. Future research could reveal a broader set of contextual influences and interconnections with other variables investigating the effect of various forms of expatriates' representation on centralization of decision making and the outcomes of the individual forms. Research on what happens in knowledge transfer when expatriates are engaged directly in management or in a governing body can also enrich current knowledge of the expatriates' role.