An Emerging Conceptual Framework to Assess Expatriates' Return on Investment

Expatriation represents a strategically valuable and widespread practice among multinational corporations (MNCs) for the direct management of their international operations. In an era characterized by pressures for maximum efficiency, hyper-competition and turbulent circumstances, like those generated by the recent COVID-19 pandemic, tracing costs and returns associated with international assignments by assessing the expatriate Return on Investment (eROI) becomes especially compelling for international firms. Such assessment, however, encounters several critical issues due to the difficulty of identifying the multiple dimensions associated with both costs and returns. This paper therefore offers a conceptual framework on eROI that disentangles the manifold drivers of value creation from expatriation projects and identifies the psychological contract as key to overcome the traditional tension between organizational and individual objectives. Mainly designed for traditional medium- and long-term expatriation projects, our framework can also be extended to recently surfacing types of assignments, e.g. virtual assignments.