Contribution of Expatriates in the Management of Subsidiaries to the Corporate Governance of International Firms: the Case of Vale

Abstract

In the current context of globalization, where firms are increasingly operating in networks of relationships with international subsidiaries, the relevance of their corporate governance has become evident. By the same token, the contribution to corporate governance of expatriates in these subsidiaries has become an important topic of discussion. The literature is not unanimous in recognizing the contribution of expatriates. However, the question as to whether the participation of expatriates in the management of international firms’ subsidiaries is a critical success factor for their corporate governance has not been fully analyzed. This article presents the results of a study of a leading international firm - Vale - that investigated this question from a network perspective, with a view to narrowing this gap. The case study method was adopted and data collected from various sources - documental investigation, structured questionnaires and interviews. The results suggested that expatriates can contribute to the success of corporate governance, especially through informal elements pertinent to social mechanisms of governance, such as commitment, communication, flexibility, trust and interdependence. The study thus provided insights for both managers of international firms and academics on corporate governance from a network perspective.

Keywords

• corporate governance
• international management
• expatriates
• network organizations.