Stereotypes as Strategic Assets: How Expatriates Navigate Discrimination to Build Advantage

Foreigners are often subject to stereotyping and discrimination, challenges typically associated with negative outcomes in the literature. In contrast, this study explores the potential benefits of such experiences for expatriates. Using an abductive approach, informed by self-categorization theory and impression management theory, we draw on interviews with 102 German expatriates in China, Korea, and Japan to examine 1) the stereotyping and resulting preferential discrimination expatriates experience abroad and 2) how expatriates strategically utilize stereotypes to their advantage. Our findings reveal that both positive and negative stereotypes can lead to preferential discrimination. Expatriates may benefit from immediate trust, privileged access to decision-makers, and what is often referred to as a “foreigner bonus.” Rather than passively accepting stereotyping, expatriates actively leveraged it through three strategies—trustworthy actor, powerful messenger, cultural clueless foreigner—to gain individual and organizational benefits. These strategic performances were often encouraged by local colleagues and superiors. By uncovering how expatriates engage in stereotypical behavior to enhance outcomes, this study reframes foreignness as a valuable asset that can be performed situationally and relationally. This perspective offers valuable managerial implications and advances theoretical understanding of cross-cultural interactions.