EXPATRIATE FAILURES ” The internationalization of business has proceeded at a rapid pace as the world has become a global economy.” (Mathis, Jackson 2000) This is the very reason why companies now have the need for international executives. As all aspects of a business spread worldwide, so must the employees. An expatriate by definition is a home-county national, usually an employee of the firm, who is sent abroad to manage a foreign subsidiary. (Rodrigues, 2001) A successful expatriate generally requires an extensive amount of time and money, however, a failed expatriate can be even more costly for an organization.
A study of multinational corporations showed that 69% (of the firms surveyed) had recall rates of expatriates between 10 to 20 percent. Compared to Japan and their figures, (86% of firms had less than 5% recall rate) the United States has room for improvement. (Tung, 1981) There are many reason for expatriates to fail and many differences between Japan and United States’ human resource management planning. One of the main reasons why expatriates fail is due to the social and physical environments of the foreign country. Adaptation problems can effect the on-the-job effectiveness of the expatriate. Different value systems and living habits are a main cause of adaptation problems and the inability to communicate only worsens the problem.
Lack of communication verbally and non verbally can affect every aspect of a persons career and person life. If someone can’t communicate, imagine the difficulty of going to the bank, dealing with customers, and even going grocery shopping. In addition to the new surrounding environments, if the expatiates family can not accompany them or is not happy with the new living arrangements then it could result in separation anxiety. Humans need to feel secure in their environments and with all of these downfalls it is extremely difficult to accomplish.
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When an expatiate is not happy with their situation, it will reflect on their job performance. Some other reasons for expatriates to fail are differences in the managerial and organizational principles. If a foreign country has different principles than the home-country than implementation can be very difficult. This also applies to objectives and policies. With such differences the expatriate may need to conform to the local situation. “If the expatriate manager’s authority is visibly constrained, his or her opportunity to establish and maintain an effective relationship with local associates is diminished.” (Rodrigues, 2001) An expatriate’s authority can appear constrained if the home office over centralizes the decision making.
In locations such as the Middle East, Japan and Latin America there is a cultural bias against women. With this fact known, there is a resistance to expatriate women managers. “Subordinates in such host-country subsidiaries may interpret the assignment of a woman executive to mean that the central headquarters has low regard for its business with that subsidiary.” (Rodrigues, 2001) They may also believe that a woman may not have the authority to make decisions and has no “pull” with headquarters. On the other hand, many males in foreign countries distinguish between local women and foreign professional women. “In a survey of female expatriate, many of the respondents indicated that they were viewed by locals as foreigner who happened to be women; they also said that the added visibility of being the first female manager in the region gave them greater access to clients because of the curiosity factor.” (Rodrigues, 2001) In addition, women tend to cope with new environments and cultures better than men. Another factor in the failure of expatriates is the length of the assignment.
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The average length of foreign assignment in Japanese corporation is 4. 67 years while the average U. S. assignment is less than 3 years. Short assignments generally do not allow sufficient time to adapt to the new environments and can result in low job performance. Adaptation times have been estimated at six months and consist of four phases.
(Gullahorn & Gullahorn, 1963) The initial phase is directly after arrival in the new country. The newness of the culture and environment is exciting for the expatriate. The disillusionment phase takes place after about two months. This is when the newness wears off and the day to day inconveniences are realized, such as communication. The third phase, the lowest of the phases, is the culture shock phase and happens after approximately another two months.
This is when the expatriate is ready to go home. The last phase is the positive adjustment phase. This is when adaptation begins and a more positive feeling about the assignment occurs. Up until this point the expatriate will not have good job productivity or performance and evaluations are unreasonable. Repatriation, the reassigning of the expatriate back home, is another overlooked problem of expatriates.
Many companies do not a “repatriation policy” to help with the employees readjustments. While the skills the expatriate left with may not have been useful in the host country, the skills they learned may not be useful in the home country. This can put an expatriate back at square one. In addition, the expatriate may have missed job opportunities while they were away. Their once co-workers could now be superiors. The expatriate and his or her family can also experience reverse culture shock, which would be a result of large differences between their home before they left and their home now.
“Some returnees complained about losing social and professional prestige.” (Rodrigues, 2001) This can happen when an expatriate receives a pay raise for taking the foreign assignment and then moving to an area where the cost of living is lower than their home town. When they then return home the luxuries they might have gotten used to abroad may now be too costly. This experience can seem like a pay cut or a demotion. Overall, the numerous problems that can occur with the use of an expatriate can be minimized with the use of good human resource planning. Human resource managers need to play a more active role in the overall planning process and functions. They need to use specifically appropriate selection criteria for expatriate personnel.
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One area that is not taken into consideration enough is the expatriate’s family. If they are not happy, the expatriate has a greater chance of not being happy. To get around this, interviews should be conducted with not just the expatriate, but the whole family. In the interviews, the expatriates expectations, as well as his or her family’s expectations, should be examined and made sure that they are reasonable. Once an expatriate is selected an extensive training process needs to be implemented.
The pre-departure orientation and training consists of language, culture, history, and living conditions. (Mathis & Jackson, 2000) With proper training in these areas, the adaptation process for the expatriate can be minimized and less painful. The cross-cultural adjustment process consists of three areas: work adjustment, interaction adjustment and general adjustment. By extensively training on language (verbal and nonverbal), culture (morals and beliefs, geography, government), history (customs), and living conditions (climate, housing, medical) all three areas of adjustments can be reached. After arrival in the new country, the training should still continue.
Now the focus can be moved the details of the assignment, training for broadening skills, career planning and corporate development programs. (Mathis & Jackson, 2000) In addition, assistance should be offered for the settling in process of the family. The same process should be done upon repatriation. The entire expatriate process has many details and each are important to the success of the expatriate. A successful expatriate can move readily from country to country and perform effectively wherever they are. A successful expatriate is an asset for a global company and can be extremely profitable for a corporation.
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BIBLIOGRAPHY Mathis, R. , Jackson, J. (2000), Human Resource Management, South-Western College Publishing Rodrigues, Carl (2001), International Management, South-Western college Publishing.