A Theory based framework for the expatriate manager’s total rewards in times of economic uncertainty

While, expatriation has numerous well-documented benefits for organizations, it is often considered extremely costly and time consuming for MNCs. For this reason, when business conditions become hostile such as in times of economic uncertainty, the expatriate program in MNCs is typically targeted for cost saving. The ensuing outcome is argued to lead to a loss of trust with the MNC. Whilst in a crisis, costs need to be managed carefully and the pressure to increase the bottom line is unquestionably critical, we argue there is an additional need to judiciously explore ways to restructure the expatriate’s total rewards for work while limiting the loss of trust between the expatriate and the MNC. Real options theory is used to provide a theoretical framework to help understand how decisions can be made that encourage trust building between the expatriate and the MNC and at the same time focus on profit-maximization.