University of Waterloo Mobility Package Clash Of Mobility Case Study

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YIWEN ZHANG
PENNY LAU
CLASH OF MOBILITY: MANAGING
EXPATRIATES IN A GLOBALIZING CHINESE
COMPANY
Jing Xiao, the human resources director at Yalia, put down the phone. It was another in a series
of phone calls she had made over the last few days as she tried to solve yet another crisis
regarding an overseas assignee. This time it was Kewen Fan, a senior-level employee posted to
Dubai, who threatened to cut short his assignment if the company did not raise his housing
budget. She knew that these kind of pushbacks were bound to happen again if the company
continued to approach mobility like an administrative task within human resources. With its
rate of global expansion, the Chinese technology company could no longer ignore its mobility
function. Yalia needed a better solution. Exhausted from having to manage mobility issues like
putting out fires as they occurred, she sat up in her chair and fired off a quick email to global
strategy director Hong Liu. Five minutes later, her inbox blinked with Hong’s reply.
From: Hong, Liu
To: Jing, Xiao
Re: Mobility program
Jing, I’m all for improving the process if that is what is needed for us to have someone
take up overseas assignments quickly. But let’s not rock the boat for now. The
assignees’ population is still manageable. All these things regarding mobility—setting
up a department, getting a vendor for mobility data, and reviewing the policy—let’s
talk about them when the time comes. Focus on managing this internally before we
decide to bring in outside experts. It shouldn’t be that hard to get employees to go on
assignments if we give them a bit more money.
For now, give Kewen the allowance he asked for to stop him from complaining. Keep
him happy. We need him to stay in Dubai in the longer term.
As expected, Hong was reluctant to take Jing’s advice, a newcomer who had only joined the
company six months ago. She was down to her last option as she waited to hear back from
Penny Lau prepared this case under the supervision of Dr. Yiwen Zhang for class discussion. This case is not intended to show
effective or ineffective handling of decision or business processes. The authors might have disguised certain information to protect
confidentiality. Cases are written in the past tense, this is not meant to imply that all practices, organizations, people, places or
fact mentioned in the case no longer occur, exist or apply.
© 2019 by The Asia Case Research Centre, The University of Hong Kong. No part of this publication may be digitized, photocopied
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Clash of Mobility: Managing Expatriates in a Globalizing Chinese Company
Jason Tang, a mobility vendor, who would give her information to help her determine Kewen’s
compensation levels. But that information could only take her so far, as she needed to figure
out a way to resolve this for Kewen and, more importantly, for Yalia’s mobility function.
Yalia’s Global Strategy
Founded in Beijing in the early 2000s, Yalia started as a basic business-to-business e-commerce
website connecting manufacturers and wholesalers. The company caught the wave of China’s
rise as a global manufacturing hub and stood out from other online marketplaces due to its userfriendly interface.
With its initial success, Yalia leveraged its understanding of Chinese users and built a retail site
that became one of China’s leading business-to-consumer e-commerce platforms. The
platform’s popularity fostered Yalia’s position as a leading tech company and a trusted name
in China. Over the following decade, Yalia matured into a tech company with capabilities to
develop world-class innovation and services, and expanded into overseas markets. Two years
earlier, it had gone global by opening three overseas offices to test out new business
opportunities. It had more than 16,000 employees.
While Yalia had its core capabilities in e-commerce, senior management quickly realized that
building a trustworthy platform takes time in new markets. Incumbent players often had a better
understanding of local consumption preferences and user preferences, and retailers were more
likely to trust local platforms. Because of this, mobile payment services, a relatively new area,
were determined to be a new global growth driver for Yalia and were expected to help it segue
into markets it had not reached before.
Yalia chose Dubai, given its geographical significance in the Middle East region and abundance
of high-quality IT talent, as one of the regional hubs. At the time, the Dubai government was
offering a host of tax benefits and incentives to attract multinationals. Yalia also received
additional support because Dubai’s sovereign wealth fund was one of its strategic investors. In
a few months, Yalia put together a team of 20 people in Dubai, with Hong, the only Chinese
assignee, in charge.
Switching to Cloud
Two years on, red tape and other unexpected regulatory issues slowed Yalia’s ambitious plan.
Mobile payments had yet to become popular in the region, and Yalia’s online payment business
was not able to reach the intended scale. Senior management decided to switch course in Dubai
and make it the company’s cloud computing center instead.
Since Yalia lacked the technological capability to build its own world-class computing arm in
a short time, it acquired Cloudies, a US cloud solutions company, to boost this area of expertise
and to help reposition Dubai. With Cloudies, Dubai would host the company’s biggest data
center. It would become the test market for new products. Senior management was hoping that
cloud services could establish Yalia as the go-to service provider in the region, offering services
including network, applications, storage, and big data.
Kewen, who had experience in mobile payments, was sent to succeed Hong as head of Dubai.
But six months into his assignment, Kewen learned from Hong about the switch in business
focus.
Jing was surprised when she first heard about Kewen’s complaint to Hong about his package
the week before. Her impression of Kewen was that he was a gentlemen with an assured way
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of speaking. She remembered once seeing him in Beijing. They chatted about the usual smog,
the traffic, and his teenage son. As a single assignee, Kewen was in the middle of his three-year
assignment. And though Hong hadn’t mentioned anything yet, it was likely that Yalia wanted
to extend his assignment.
Cloudies
Cloudies was one of the many smaller enterprises Yalia acquired over a two-year buying spree.
Based in North Carolina, it was a prominent player in cloud solutions on the US East Coast.
Cloudies’ operations remained independent after the acquisition and was aiding Yalia’s cloud
business development like a strategic partner. It sent some of its cloud engineers and architects
to Yalia’s Beijing headquarters to help build cloud capability. Later, it sent Ryan Wang, a
promising midlevel cloud architect, to Dubai to lead the local initiative with a team of junior
cloud engineers [see Exhibit 1].
The two tech companies had many similarities. Both had fast-changing work environments.
Both offered competitive remuneration. But, essentially, the two companies came from very
different cultures. Some of Cloudies’ employees voiced difficulties about working in the
headquarters. Some said the fierce internal competition bogged down innovation and
collaboration. Others lamented the culture that prized overtime as a badge of honor and hard
work, it being common for people to work past midnight in the office.
Jing thought about this. After all, the two companies came from different cultural backgrounds
and had inherited ways of working that might be incompatible. She had experienced some
cultural adjustments since coming back to work in Beijing after three years in London at a UK
multinational company. Cloudies, which employed 300 employees, had created a cohesive
culture that put more emphasis on collaboration and less on competition. Operations were more
agile and flexible, and more importantly, company policies were more adapted to the individual.
It was therefore no surprise that their approaches to mobility planning also diverged.
Mobility at Yalia and Cloudies
Though only a midsized company, about a quarter of Cloudies’ employees were on various
types of mobility assignments, hosted across its six global offices. There were regular rotational
programs and long- or short-term assignments to facilitate knowledge exchange and employee
development. Employees were encouraged to take on assignments that were developmental.
Polices were designed so that assignments often accommodated the company’s business needs
and the employees’ individual goals.
In contrast, Yalia had only recently, due to expansion needs, sent employees on assignments to
manage new business operations as they happened. All of Yalia’s 25 expatriates were seniorlevel employees assigned to manage and oversee one of its seven global offices. The assignment
length was often unclear to both the company and the assignee, and the company had not yet
developed any repatriation policies.
Jing noticed that Yalia was always trying to catch up to changing business needs without
consideration for its mobility development. In the situation with Kewen, the senior management
team had decided to change Dubai’s business directions shortly after Kewen started working in
Dubai, leaving him in an awkward position as head of the Middle East office. Jing had
mentioned to Hong some ways to change this disorganized approach to mobility. But a largescale overhaul would need senior management support.
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Clash of Mobility: Managing Expatriates in a Globalizing Chinese Company
Kewen’s Mobility Package
Since Yalia did not have a mobility department, all issues relating to expatriates and overseas
assignments were handled by the compensation and benefits team [see Exhibit 2]. Jing recalled
her conversations with the team when she tried to understand how Kewen’s compensation
package was decided.
“I think someone did some search online and decided that USD50,000 a year will be enough of
a supplement to support someone to live in Dubai. They set the rental subsidy at USD40,000
and the rest was allocated as cost-of-living allowance,” one of the managers told Jing. “Kewen
didn’t bargain at all at the time and happily took the assignment. The only thing he asked for
was multiple trips home. He didn’t really get a raise, but everyone knows overseas assignments
are a way to boost income. You get a bigger check at the end of each month!” another payroll
manager said, shrugging her shoulders.
Sitting at her desk, Jing flipped through a flimsy folder; under its plastic cover was the title
“Document on Managing Overseas Employees.”
This mobility protocol at Yalia had not been updated for two years. Jing read through the first
few pages. It was a simple 10-page document without much detail on how to plan and execute
assignments [see Exhibit 3]. Back then, when the company had just begun its overseas
operations, top executives prioritized centralized control of these “remote operations.”
Jing was dismayed. She could not find anything in this document to help guide decisions on
Kewen’s package. The lack of any ongoing incentives in his policy was baffling to her. The
mobility policy was vague and top-down. Assignment objectives were not clearly laid out.
Assignments often became quick bait to get employees to the assignment location, and projects
ended without due consideration of the effectiveness of an assignment.
She wanted to introduce some structure. But first, she wanted to see if understanding Cloudies’
approach could help her engineer the needed solution. That afternoon, she arranged a call with
Mary Jones, global mobility director at Cloudies.
Cloudies Policy
Mary Jones had managed mobility programs for much of her 30-year career. She was well
versed in global mobility protocols and understood the rationale behind having a
comprehensive policy.
“I’m at a crossroad here, Mary,” Jing said, as soon as she explained the matter. “I wanted to
make Yalia’s policy workable for everyone. But I needed advice on how to fix this. Or at least
for now, fix this for Kewen.”
“Every company can have a different mobility policy with vastly different policy provisions.
But it should be detailed enough so that everyone knows what to do. More importantly, it should
help the company retain the talent it needs while achieving the necessary business goals,” Mary
told Jing. “That’s the greater goal. But let me tell you how Ryan’s package worked so that you
can come up with something for Kewen,” she continued.
Mary gave her some rough guidance on Cloudies’s policy terms in case she needed reference.
Cloudies’ policy terms were quite generous among average companies but standard among tech
companies, according to Mary [see Exhibits 4 and 5].
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“At the end of the day, whichever policy you decide to follow, the most important thing is to
explain each component clearly, the whys and the hows, to the assignee. Communicating to and
convincing the assignee is probably the most fun and hardest part of our job,” Mary told Jing.
After the hourlong phone call, Jing started to have some idea of how to proceed. Cloudies had
adopted a comprehensive mobility policy with clear guidelines and defined policy types, and
had well-defined processes and goals for the whole assignment process—from talent selection,
preparation for expatriation, pre-arrival logistics, communication during the assignment, to the
final repatriation, and even post-repatriation protocols. The policy accounted for most common
scenarios. It was clear to all stakeholders how the decision on each policy component should
be weighed and made.
Jing also found it easy to break down Ryan’s package [see Exhibit 6] and understand its
components. It had all the classic elements of a well-thought-out compensation package—the
on-assignment compensation to make sure the assignee was not worse off financially in the host
location, the on-assignment benefits to keep the assignment manageable as housing and
children’s education were taken care of, and the relocation benefits to allow the assignment to
start off smoothly.
She looked again at Kewen’s package. The line items did not match Ryan’s. The basics were
there: the cost-of-living allowance and the housing subsidy. But that was it. They were put in
place just to make it look like there was something offered. She could barely call it a package.
There was almost no consideration for the assignee’s family situation.
She thought about what to say to Kewen during the call the following day. She couldn’t just
promise him any increase in budget or add-ons to his package at this moment.
“I must figure out what he wants. We can’t afford to lose him,” Jing said to herself.
Was it just a matter of a small housing budget? Or was it a status quo issue? She decided to get
to the root of the problem.
Kewen’s Requests
The next day, at 2 p.m., Jing picked up the phone and called Kewen. After a few polite
exchanges, she broached the subject of Kewen’s discontent.
“So, Kewen, I would really like to solve this for everyone, and I want to make your assignment
as smooth as possible,” Jing said.
“Well, Jing,” Kewen responded, “I’m sure you’ve talked to Hong. Everyone here in the office
knows that I’ve been working hard for the past 18 months since I came to Dubai. I’ve worked
days and nights. I worked on most holidays. It just takes forever to get things done here! You
don’t understand how difficult it is to work with non-Chinese. They don’t take instructions
well!”
Jing was listening intently, although the first thing he brought up did not seem to relate to his
compensation package.
“I’m getting frustrated here,” he continued. “I’m doing all my best at work, and is this what I
get in return for leaving my family behind, coming all the way to live in this brutal weather,
and working so hard? I don’t think your department is doing the best job here to support all the
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hard work we overseas assignees do. I think it’s ridiculous that Ryan is getting so much more
than I am!”
Jing was a bit confused. How did he know about Ryan’s package? What did he know?
“Can you tell me more about this?” she asked.
“You think I didn’t know? Ryan invited me to his apartment last Sunday, and only then did I
realize they are staying in a two-bedroom apartment at the Apex, the nicest compound in the
area close to the office. And what am I getting? A one one-bedroom apartment in a modest
compound with my meager budget,” he said.
“Okay, I see. Well, please understand that Ryan’s package is based on . . . ,” Jing tried to explain,
but he cut her short and said, “see, I am sent from the headquarters to lead the Middle East
operations, and he’s just a tech guy! We can replace him any minute with someone from Beijing.
If my subordinates knew he was staying at a compound nicer than mine, what would they think?”
Jing, sensing his rage, tried to appease him. “Sure. We can double-check the numbers to see if
the current budget is fair and in line with market rentals. But please also understand that Ryan’s
housing budget is based on a family size of three . . .”
“So are you telling me that I voluntarily opt out of a higher budget because I was considerate
enough to not bring my wife and son to Dubai?” Kewen said, irritated.
“No . . . no . . . not at all,” Jing said. “There are different components to your package, and
we’re open to negotiate any of those. Hong is fully supportive, and we want to make sure you
are well compensated. We understand that currently you’re not receiving any on-assignment
incentives, and we can consider adding that.”
“Yeah, that reminds of another thing. Ryan’s son goes to some private school sponsored by the
company, and his wife gets some kind of allowance, too. Yalia should give me enough to live
a comfortable life here, and my package should be higher than his, given my seniority.
Whatever that is, all I’m asking for is fairness, and you should fix this,” he said sternly.
“Definitely,” said Jing, “we understand that. I will look into the issue myself and call you back
in a few days.”
“Okay, fine. I expect to see at least some upgrades to my package next time we talk; otherwise
I will tell Hong that I’m moving back to Beijing.” He put down the phone as soon as he finished
the sentence.
She slumped into her chair. This was the classic case of a raging employee who was clueless
about his own package, yet deduced that he was worse off based on one aspect of someone
else’s incentives. It would take a bit of work to educate the expatriates at Yalia.
The good thing was that she knew a bit more about Kewen’s situation. She needed more context
to understand the bigger picture. She wrote to Hong and Amir, the office manager in Dubai, to
try and understand Kewen’s life and work in Dubai. Was he adjusting well? Were there any
signs?
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Kewen and His Year in Dubai
From: Hong, Liu
To: Jing, Xiao
Re: Kewen’s work in recent months
So far, his work has been great. But as we’re transitioning into redefining our Dubai
center into a cloud computing hub, he seems to be less active in giving suggestions and
comments. I don’t know what it is. He seems a bit less enthusiastic these days. I don’t
think Dubai is the issue. I was there for two years too, and he should be able to handle
it just fine. Maybe he isn’t as confident in cloud computing and B2B enterprise
solutions, as his background is in mobile payments. It is something that I had on my
mind recently. Maybe we need to give him some training on that or have someone help
him out.
From: Amir, Hadi
To: Jing, Xiao
Re: Kewen’s work in recent months
Thanks for raising this, Jing. I’ve seen Kewen working late into the evening, when most
people have gone home. I’ve spoken with him on a few occasions, and here’s what I’ve
gathered from him:
?
?
?
?
He hasn’t really developed a suitable lifestyle for himself here. The oppressive
heat is driving him indoors. He doesn’t go anywhere, even on the weekends. And
without the family time that he was used to having, he told me he doesn’t want to
go back to an empty apartment.
He has complained to me about people on his team not taking action promptly
enough and following his instructions properly (I believe his experience is mostly
working with Chinese, but not people from different cultural backgrounds).
I think he misses his family. Dubai is four hours behind Beijing, and that means
catching up with family is impossible during the weekday because by the time he
gets off at 8 p.m., it’s already midnight at home. Sunday is a working day here, so
he can only call his family on Saturday.
His wife is actually nagging him a bit to be back home more often. I heard this
more than once from him.
Jing thought about Kewen’s family situation. His 14-year-old son was being raised by his wife
and parents in Beijing. Most Chinese expatriates didn’t want to uproot their families and tended
not to take family on assignments. Yalia didn’t state this in its policy, but most Chinese
companies also opted out on education subsidies due to high costs. No wonder Kewen, who
saw that Ryan was able to bring his family over, while he was left alone missing his family,
thought his sacrifice was unappreciated.
But to be fair, Ryan’s situation was different. There was no Chinese grandmother to take care
of his six-year-old son back in Raleigh. Private schooling was provided because his son didn’t
speak Arabic, and the tuition was only partially subsidized. His wife needed assistance in
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getting a new job because she quit her job in the US in order to go on this assignment to take
care of their son with Ryan. As much as Kewen thought he sacrificed his family time in Beijing,
would his wife quit her stable government job to come to Dubai? And would his teenage son,
who had never studied abroad, fit into an English-speaking school environment in Dubai? She
had no answer to these questions. And she could not simply compare the two side by side.
Redoing the Math
Jing went back to check both assignees’ compensation breakdown to see if she could make it
seem fair, at least to Kewen.
Whether or not she decided to increase Kewen’s allowance, she needed policy support.
Otherwise, this would be a return to the way things had been, when special requests were always
granted and every policy element was considered on a case-by-case basis. It always came down
to how urgently the business head needed that employee and how willing the employee was.
But, for now, she wanted to know what would be fair if Kewen and Ryan were on the same
policy. She reached out to an old acquaintance, Jason Tang, a consultant at mobility data and
advisory service provider AIRINC whom she knew from her London days.
“Sure, Jing. I can run some simulations and get you some cost-of-living data and housing
allowance reference points for Kewen based on Cloudies’ policy. That could help in gauging
how far off Kewen’s current package is from what people at Cloudies are getting,” Jason said.
He added, “And if we determined that Kewen’s current housing budget is appropriate, we could
look into the finer things, such as location and number of bedrooms. Some companies do
provide two-bedroom units to senior single assignees . . . but from what you described, it
seemed to me that the housing budget isn’t the real problem.”
“Well, yes,” Jing sighed. “In the ideal world, every assignee is happy with the package. But
thanks, Jason. Let me know as soon as you have the numbers.”
Two hours later, Jing received the numbers from Jason [see Exhibit 7].
Mobility As Needed or Mobility As Planned?
Looking at the data points from Jason, Jing wanted to use this chance to again raise with Hong
the issue of overhauling Yalia’s mobility protocols. She quickly wrote him an email with some
suggestions on ways to improve mobility management at Yalia. Five minutes later, she received
Hong’s response, and he was not keen. He still thought shoving money at whoever was
complaining and having the rest receive the same total amount was the way to go. But Yalia
was no longer a local company. As much as she wanted to let this go and focus on just this one
complaint, she knew more needed to be done.
What should she tell Kewen next week? How could she manage Chinese assignees and global
assignees on separate policies?
With resistance from Hong, what could she do to enhance the mobility function at Yalia?
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EXHIBIT 1: ORGANIZATIONAL CHARTS OF YALIA AND CLOUDIES
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EXHIBIT 2: YALIA’S HUMAN RESOURCES ORGANIZATIONAL CHART
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EXHIBIT 3: EXCERPTS FROM YALIA’S POLICY
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EXHIBIT 4: EXCERPTS FROM CLOUDIES’ POLICY
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EXHIBIT 5: CLOUDIES COMPENSATION LEVELS BY ASSIGNMENT TYPE AND LENGTH
Levels of compensation: Basic, comfortable and generous
Types of assignment length: Short-term, medium-term, long-term and local plus
Levels of employees: Junior-level (developmental), mid-level(developmental/strategic), senior level (strategic)
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