Campus Newcastle
of Northumbria University

Expatriates’ pre-departure training
An investigation into the approach of two German-based MNCs

Dissertation submitted in partial fulfilment
of the requirements of the
BA (Hons) INTERNATIONAL BUSINESS MANAGEMENT

by Dennis Barbian
April 2006

Abstract

Increasing globalisation of business has led to a constant rise in the use of expatriate managers who are sent abroad for temporary assignments. Much of expatriates’ cross-cultural contact has, however, not been successful. In the majority of cases the high incidence of expatriates’ inability to adapt to foreign cultures originates from the neglect of crosscultural preparation which academics advocate as a means of facilitating this adaptation. A review of expatriates’ success rates and of cross-cultural training (CCT) literature is presented. A comparison between theoretic view and practical approach of two German-based multinational companies (MNCs) is drawn. It is determined that, given that cross-cultural training is regarded as very effective throughout extant literature, the MNCs in the case under consideration could improve their expatriates’ cross-cultural preparation.

Table of contents

Title Page ... i
Word Count ... ii
Abstract ... iii
Acknowledgments ... iv
Contents Page ... v
Glossary ... vii

1 Introduction ... 1
1.1 Chapter Introduction ... 1
1.2 The role of expatriates in multinational companies ... 1
1.3 Overview of the project ... 3
1.4 Project objectives: ... 3
1.5 Guide through this dissertation ... 3
1.5.1 Literature Review ... 3
1.5.2 Methodology ... 4
1.5.3 Findings and Results ... 4
1.5.4 Analysis and Discussion ... 4
1.5.5 Conclusion ... 4

2 Literature Review ... 5
2.1 Chapter Introduction ... 5
2.2 Reasons for expatriate assignments ... 5
2.3 Provided training and failure rates ... 5
2.4 Is there a rationale behind the neglect of expatriates’ training? ... 8
2.5 What kind of training is required or desirable to prepare an expatriate assignment sufficiently? ... 9
2.5.1 The scope of cross-cultural training ... 9
2.5.2 Training models and techniques – a categorisation ... 10
2.5.3 Training methods for CCT and their rigour ... 10
2.5.4 CCT methods at a glance ... 11
2.5.5 Cultural awareness and sensitivity training ... 14
2.5.6 But how should MNCs choose CCT-methods appropriate for their expatriates? ... 14
2.5.7 How much time should be spent on CCT? ... 17
2.5.8 Language Training ... 17
2.5.9 The use of repatriates as a means of CCT ... 18
2.5.10 Limitations of pre-departure CCT ... 18
2.5.11 Chapter conclusion and hypothesis ... 19

3 Methodology ... 20
3.1 Chapter introduction ... 20
3.2 Research strategy and aim ... 20
3.3 Procedure ... 20
3.4 Limitations ... 21
3.4.1 Data quality issues ... 22
3.5 Ethical issues in research involving human participants ... 22

4 Findings and results ... 24
4.1 Chapter introduction ... 24
4.2 BMW Group ... 24
4.2.1 What are the reasons for international assignments in the BMW Group? ... 24
4.2.2 What kind of pre-departure training do BMW’s expatriates receive? ... 25
4.2.3 Content of BMW’s CCT ... 26
4.2.4 Foreign language training ... 27
4.2.5 Is the BMW Group successful with its expatriate training? ... 27
4.2.6 Do BMW’s expatriates need more CCT? ... 28
4.3 Daimler Chrysler ... 29
4.3.1 Foreign language and cross-cultural training ... 29

5 Analysis and discussion ... 31
5.1 Chapter introduction ... 31
5.2 What is the MNC’s definition of an expatriate? ... 31
5.3 What are the MNC’s reasons for expatriate assignments? ... 32
5.4 How are CCT methods chosen and what kind of analysis is involved? ... 32
5.5 What kind of pre-departure training is provided? ... 33
5.6 What is the content of CCT provided? ... 34
5.7 Language Training ... 36
5.8 The use of repatriates as a method of CCT ... 37
5.9 How successful are the MNC’s overseas assignment and do expatriates need more training? ... 37
5.10 Spouse and family issues ... 38
5.11 Conclusion ... 38

6 Conclusion ... 40
6.1 Chapter introduction ... 40
6.2 Review of the objectives ... 40
6.3 Possible areas of future research ... 40
6.4 Concluding statement ... 41

References ... 42
Bibliography ... 52

Appendices
A Tung’s (1981) list of reasons for expatriate failure ... 54
B Brief company descriptions ... 55
C Learning Outcomes ... 56
D Transcribed telephone interviews ... 57

Last Page ... 65

1 Introduction

1.1 Chapter Introduction

This chapter sets the scene by introducing the topic, explaining the reasons for this research and providing a guide through this paper.
 

1.2 The role of expatriates in multinational companies

“In today’s highly competitive global business environment, multinational companies (MNCs) recognize that human resources play a necessary role in developing and sustaining a competitive advantage” (cited from Caligiuri et al., 2001b). “The international arena can provide lucrative opportunity for expansion” (cited from Puccino, 2005). “Untapped markets, resources, technology, customers and partners could potentially boost an organization′s competitive advantage and profitability” (cited from Puccino, 2005). As companies move toward a more global operating model, it becomes increasingly necessary to focus attention on developing appropriate training methods which improve employees’ global, or cross-cultural, competence which in turn enables them to work effectively across borders and work with those from diverse cultures (Caligiuri et al., 2001b). With the rapid globalisation the number of expatriate employees, defined as employees residing and working outside of their home country, continues to rise (Puccino, 2005). PricewaterhouseCoopers International Assignment Global Policy and Practice Survey 2005 underpins this argument and indicates that despite predictions that the number of expatriates will decrease over the next years, due to a struggling world economy and the increasing popularity of alternatives to expatriation such as frequent flying or Euro-commuting (Forster, 2000; Petrovic et al., 2000 in Brewster and Scullion, 2001), the vast majority of participants in the PWC survey expect a growth in the number of international assignments. As Harris and Brewster (1999, in Beaverstock, 2001) observe, “the rapid globalisation of business has led to an ever increasing need to ′internationalize′ managers within organizations”. Beaverstock (2001) states that it is now readily acknowledged in the human resource management literature that one of the major implications of the ever increasing globalisation of firms is the steady growth in the magnitude, importance and complexity of expatriation (e.g. Bartlett and Ghoshal, 1992; Brewster, 1991; Forster 2000; Koser and Salt, 1998; Welch, 1994). Successful expatriate assignments are indispensable to MNCs for both developmental and functional reasons (Adler, 1983; Brake et al., 1994; Dowling et al., 1998; Mendenhall and Oddou, 1985; Stroh and Caligiuri, 1998; Tung and Miller, 1990; in Caliguiri et al., 2001a). “The global business environment makes expatriate assignments a necessary, but risky proposition” (cited from Jack and Stage, 2005).

Success on a global assignment is greatly influenced by an expatriate’s cross-cultural adjustment to the host country (Black and Mendenhall, 1990; Caligiuri, 1997; Kealey and Protheroe, 1996; Sappinen, 1993, in Caliguiri et al., 2001a ). For example, cross-cultural adjustment is positively related to performance on the assignment and negatively related to the premature termination of the assignment (Black, 1988; Caligiuri, 1997; Tung, 1981, in Caliguiri et al., 2001a ). “For these reasons, research examining ways to predict and improve cross-cultural adjustment have received much attention in the recent past” (cited from Caliguiri et al, 2001, who name the following: Aycan, 1997; Aryee and Stone, 1996; Black and Gregersen, 1991; Black et al., 1991; Kealey, 1989; McEvoy and Parker, 1995; Morley et al., 1999; Robie and Ryan, 1996; Schneider and Asakawa, 1995). However, the most common criticism on HRM practices in multinational companies still is the lack of sufficient expatriate training. Studies, such as those of Mendenhall and Oddou (1985, in Linehan and Walsh, 1999) and Dowling et al. (1994 in Linehan and Walsh, 1999) reveal that merely a small number of companies offer any kind of pre-departure training, and if, it reflects hardly any recommendations arising from research.
 

1.3 Overview of the project

This study will look at the research examining ways to predict and improve cross-cultural adjustment of expatriates, in particular at the role pre-departure training plays in the cross-cultural adjustment of expatriates. Furthermore, this study will examine to which extent selected German-based MNCs make use of cognitions attained from the abundance of studies in the field of expatriate training. The writer will explore the current stance on expatriates’ training through the work of academics and professionals and will compare the theoretic view with the approach of selected companies. The research into two MNCs will be undertaken to explore to what extent these organisations apply the theory of expatriate training to their personnel and whether they are successful with their approaches.
 

1.4 Project objectives:

The key objectives of this project are:

• To identify the extant academic theories regarding expatriate failure and pre-departure training.
• To compare the approach of expatriate pre-departure training of two German-based MNCs with the existing literature.

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