A Study On Expatriate Failures Management Essay

Introduction

With the growing globalization trends, Multinational Companies are increasingly sending employees for international assignments. International assignments are needed for a variety of reasons. Some of which are to establish presence in a business quickly in response to market developments, to provide skills that are not available in a particular country, to transfer technical knowledge as well as company culture and policy after mergers and acquisitions, and to allow employees to gain international experience as part of company management development programs (Boon, 2001).

In recent years, multinational enterprises (MNEs) have increasingly come to realize the importance of international human resource development due to the rapid growth of business activity. This is especially true when domestic human resource development takes on international dimensions as it deals more with a multicultural workforce.

However, such long-term assignments are multifaceted and will cause disruption to employees. Employers must give consideration to housing, transportation, children’s education, taxation, health insurance, retirement plans, dual career implications, as well as to the possibility and cost of failed assignments due to various factors (Peppas, 2004). Therefore, effective preparation, support, and training are essential factors to consider, ensuring successful expatriation in their assignments.

Expatriate failure has become one of the most prominent issues in international human resource management (Hill, 2005; Shaffer & Harrison, 1998). Reason for premature return of expatriate to his or her home country may vary in degree. The various factors that lead to expatriate failure include adjustment problems, neglecting the needs of expatriate’s family, lack of training as well as incompetency of expatriates. Even in the U.S., companies that do provide cross-cultural training may tend to ignore the needs of the expatriate’s family (Mcenery and Desharnais, 1990). The failure of family members to adapt to the new environment could be a major contributing factor to expatriate failure. A company may have several reasons for not offering preparation for the employee’s family. For example, it could be due to the belief that such training is not effective, a lack of time before the expatriate departs, the duration of the assignment and the perception of top management that such preparation is not necessary (Mcenery and Desharnais, 1990).

Expatriates who remain on the assignment but psychologically withdraw themselves may incur indirect losses like losses from reduction in productivity, market share, competitive position, as well as damaged relations with staff, customer and supplier, and a discredited corporate image and reputation for their companies (Shaffer & Harrison, 1998; Black, 1988).

With reference to the managers of international human resources at a major electronics company, the cost of training employees to work internationally is inconsequential, compared to the risk of sending inexperienced or untrained people (Mcenery and Desharnais, 1990). The estimated cost of failed expatriate assignments ranges from US$250,000 to US$1 million. A failed assignment also indirectly costs implication for a Multinational Enterprise as it can lead to damaged relations with the host country government. Causing a diminished worldwide reputation of the Multinational Enterprise as well as negatively influencing the moral of employees in both the home and host country operations of a Multinational Enterprise (Chowanec & Newstrom, 1991; Deresky, 2002).

In order to address the problem of expatriates’ failures, success in the international assignment can be ensured if effective preparation, support, and training are provided to the expatriate (Fontaine, 1997).

Another important factor that will be focused on is communication. Communication is influenced by culture across the globe. Culture refers to the norms, beliefs, customs, ethics, codes, traditions, values, sentiments, behaviour and attitudes of individuals in a society. Culture is a way of life (Kumar, Chakravarthi, 2009). As a blue collar worker, executive or a global manager, one has to come out of one’s own culture and try to get to know others and their culture. Today’s managers have to work in cross-cultural teams or virtual teams and having members from various countries and backgrounds. Sometimes, one also has to lead or receive assignments.

Learning to understand people whose background is diverse from our own is not an easy assignment. That challenge is to become an effective and successful intercultural communicator as we communicate with “neighbours” who might speak a “strange” language (Chitakornkijsil, 2010). When a person works within an “alien” culture, the environment beyond the job becomes critical. The culture affects all components of the work environment. Regardless of functional ability, an employee may be ineffective because of an inability or an unwillingness to work in an unfamiliar culture (Mcenery and Desharnais, 1990). According to Chitakornkijsil (2010), to be successful in communicating with the thousands of others we should face the new global economy; communicate with people whose entire backgrounds, whose very method of viewing the world and doing things, may be different from us. The functioning of this new world refers to intercultural communication or cross-cultural communication.

Kumar and Chakravarthi (2009) states that proper knowledge of cross-cultural communication is imparted by the process of acculturation (the process of adopting the cultural traits or social patterns of another group) or enculturation (the process whereby individuals learn their group’s culture, through experience, observation, and instruction) to enable an individual to operate in a positive ambience and not in a negative one.

Background

There are various issues when living or working in a foreign environment (Chitakornkijsil, 2010). A critical impact of business globalization is the development of the type of workers. Many managers believe that international expertise can be learned only through experience. They see business travel and overseas assignments as the only important factors; other preparation, such as training programs and formal education, are not considered relevant. For example, at one company, a professional who was being interviewed for an international assignment did not even think of mentioning that he had a doctorate; he did not consider it important (Mcenery and Desharnais, 1990). Effective global enterprise communication skills are the backbone that supports the transaction of business around the world. Managers working in global businesses develop cross-cultural skills and fluency cultural-sensitive communication tools. The development of such skills and tools is challenging as management can be viewed differently from culture to culture.

Unfortunately, many global organizations do not provide enough cross-cultural and language training to their future global assignees. A major problem in preparation of individuals for international work is the lack of research into the kinds of preparation that increase international success. Some research supports the premise that international knowledge does facilitate adaption (Mcenery and Desharnais, 1990). Such training programs can help global managers to understand their own culturally determined stereotypes and communication preferences in attempt to make them more accepting and understanding (Chitakornkijsil, 2010).

The more culturally different the receiver’s culture is from that of the communicator’s, the more likely misinterpretation will happen as the “Global Focus” issues are especially essential when virtual team members are from diverse cultures and spread out geographically (Chitakornkijsil, 2010). The following factors may be important when working in an unfamiliar culture or working with people from an unfamiliar culture; technical competence, personal characteristics, language skills, knowledge of the host culture, family and personal issues. When there are cultural differences, there will be a high possibility that communication will be very difficult and sometimes impossible. Culture strongly affects views, beliefs behaviour, language, values and relationship with others.

Globalisation has caused the mobility of the workforce, allowing companies and employees to now operate and work internationally (Dewald and Self, 2008). However, this flexibility brings out challenges with regards to the management of managers – when a manager from one culture manages employees from outside their home country (Groh and Allen, 1998). Peter J. Dowling (2008) states that misguided beliefs and ignorance have created culturally insensitive attitudes and behaviors in work environments. First research by Lysgard (1995), expatriates must go through a four stage process (Fig. 1, below) to adapt to the host country’s culture.

3 : Adjustment

Exiting

4 : Mastery

2 : Culture Shock

1 : Tourist

Figure 1 : 4 phases of cross cultural adaptation

These stages include tourist (honeymoon) stage, culture shock stage, adjustment stage and finally, mastery stage – managers can function effectively in the host culture. However, it is often the case whereby there is insufficient cross cultural training for managers that thus causes job dissatisfaction which may ultimately lead to failure. Therefore, instead of having to go through phase 3 (Adjustment), managers will undergo a negative emotional state on his job and thus, job dissatisfaction, at phase 2 (Culture shock).

Therefore, Cross cultural training not only develops cultural empathy, but also, the language ability, positivity, emotional stability and maturity needed in managers to take on international assignments (Tung, 1981). Components of cross cultural training vary according to the nature of the international assignment given.

A Global Relocation Trends Survey report in 2004 which was provided by GMAC Global Relocation Services showed that over two thirds of respondents (expatriates as well as locals) indicated that cross cultural training is vital.

Aims and objective

The aim of this study is to identify the the reason for

To successfully achieve this aim, the following objectives are to:

Review secondary literature on cross-cultural training.

Explain the need for an effective cross-cultural training

Explain the importance for cross-cultural communication

Research on the reason behind expatriates failing their cross-cultural training