FELO cases in Korea and China

The systematic analysis of evidence collected about the FELO phenomenon is relevant to a wide range of cases in Korea and China. In both countries, the phenomenon involves companies and individuals that can be categorised according to the typologies established elsewhere.

As in other countries, however, the popular media coverage typically draws attention to only one type of FELO appointments: those where the relationship quickly soured. This may create the (false) impression that there are no successful long-term FELO affiliations.

International Executive Search Consultants

Evidence for this includes a publication by an international executive search firm about “highly visible” foreign executives in Korean and Chinese organisations, whose appointments “can be controversial” (The Korn/Ferry Institute, 2009). The phenomenon is described in that publication as a fairly new but growing trend, with demand for FELOs likely to continue. Korn/Ferry Institute (2009) describe their sample as a small cadre of foreign executives at the senior level of very large MNOs (revenues > US$ 5 billion) with “distinctly Asian corporate culture”. It is noted that, although all the foreign executives have management experience outside of Asia, and the majority are fluent in at least two languages, most “don’t speak the local language and many have never worked in Korea or China”. They are hired for functional roles “to globalise”, and organisational expectations of their performance are different from those of their local colleagues’ performance. These executives “need to adapt to the local environment, show humility and cultural sensitivity, avoid political or cultural miscalculations, and relate well to all kinds of people”. The report ominously states that “internal challenges remain”.

However, the Korn/Ferry (2009) publication only presents a vignette of a category of global executives that is hired through executive search consultants for temporary functional roles. Not all foreign executives are hired through executive search firms, and local organisations hiring FELOs directly need to be considered. Academic FELO research takes a systematic and broad approach to the phenomenon.

FELO research provides insight

The popular media coverage suggests that there is substantial public interest in the FELO phenomenon. However, those reports lack the depth and rigour of a systematic academic investigation. Hence, there was a rationale for academic research to systematically investigate and analyse the phenomenon. The research provides typologies of FELOs and the local organisations for which they work, allowing to determine which combinations are successful (and which are likely to fail).

Korean chaebol (business conglomerates), in particular, are increasingly hiring FELOs solely for the purpose of international market expansion. Such appointments often involve international executives from high-profile ‘Western’ competitors, but interviews with FELOs suggest significant difficulties within these cross-cultural workplaces. Further, many of the cases appear to involve an astounding level of naivety (on both sides!) and disregard for candidate/organisation fit. An April 2011 article in the Harvard Business Review focuses on one such case. The resulting difficulties for both parties could have been avoided by the in-depth insights derived from systematic FELO research.

Increasingly, it is also Chinese companies that appoint foreign managers from significant cultural distance. One company, car manufacturer Qoros, has appointed a top management team comprising almost exclusively foreign executives. In many cases, the strategy is to replicate the products, services and management methods of organisations elsewhere in the world. Many of these local organisations attempt to leapfrog or at least compete with established multinational competitors. High-profile examples include Xiaomi’s recruitment of former Google Android Vice President Hugo Barra. Xiaomi aspires to become “China’s answer to Apple”.

Additional relevant media reports include:

==>   Interview: Dr Linda Myers at SK Group

==>   Google Android’s Hugo Barra joins Xiaomi

==>   General Electric’s Steve Fludder joins Samsung

==>   Interview with Didier Chenneveau at LG Electronics

==> Qoros – a Chinese car manufacturer built with foreign executives

Primary focus of FELO research

Beyond the cases surfacing in the popular media, FELO research is particularly interested in successful, ongoing FELO affiliations, as much can be learned from these intriguing cross-cultural workplaces.

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