Third Country Nationals

The internationalization of business has created a pool of third country nationals (TCNs) expatriates from their own countries working for a foreign company in a third country. TCNs are a group whose nationality has little to do with where they work or for whom. An example would be a German working in Argentina for a US company. Historically few expatriates or TCNs spent the majority of their careers abroad, but now a truly global executive has begun to emerge. The recently appointed chairman of a division of a major Netherlands company is a Norwegian who gained that post after stints in the United States where he was the US subsidiary’s chairman, and in Brazil, where he held the position of general manager. At one time Burroughs Corporation’s Italian subsidiary was run by a Frenchman the Swiss subsidiary by a Dane, the German subsidiary by an Englishman, the French subsidiary by a Swiss, the Venezuelan subsidiary by an Argentinean and the Danish subsidiary by a Dutchman.

American companies often seek TCNs from other English speaking countries to avoid the double taxation costs of their American managers. Americans working in Spain, for example must pay both Spanish and US income taxes, and most American firms’ compensation packages for expatriates are adjusted accordingly. So, given the same pay and benefits it is cheaper for an American firm to post a British executive in Spain than an American.

Overall, the development of TCN executives reflects not only a growing internationalization of business but also an acknowledgement that personal skills and motivation are not the exclusive property of one nation. TCNs often are sought because they speak several languages and know an industry or foreign country well. More and more companies feel that talent should flow to opportunity regardless of one’s home country.

Host country restrictions:

The host government’s attitudes toward foreign workers often complicate selecting expatriate US nationals over locals. Concerns about foreign corporate domination, local unemployment and other issues cause some countries to restrict the number of non nationals allowed to work within the country. Most countries have specific rules limiting work permits for foreigners to positions that cannot be filled by a national. Further, the law often limits such permits to periods just long enough to train a local for a specific position. Such restrictions mean that MNCs have fewer opportunities for sending home country to management positions abroad.

In earlier years, personnel gained foreign country experience by being sent to lower management positions to gain the necessary training before eventually assuming top level foreign assignments. Most countries, including the United States control the number of foreigners allowed to work or train within their bodies. Since September 11, 2001 US immigration authorities have clamped down even harder on the issuance of all kinds of work visas.

Selecting sales and marketing personnel

To select personnel for international marketing positions effectively management must define precisely what is expected of its people. A formal job description can aid management in expressing long range need as well as current needs. In addition to descriptions for each marketing positions the criteria should include special requirements indigenous to various countries.

People operating in the home country need only the attributes of effective salesperson whereas a transnational management position can require skills and attitudes that would challenge a diplomat. International personnel requirements and preferences vary considerably. However, some basic requisites leading to effective performance should be considered because effective executives and salespeople regardless of what foreign country they are operating in share personal characteristics, skills, orientations.

Maturity is a prime requisite for expatriate and third country personnel. Managers and sales personnel working abroad typically must work more independently than their domestic counterparts. The company must have confidence in their ability to, make ethical decisions and commitments without constant recourse to the home office or they cannot be individually effective.