Training expatriates - crucial components in preparing for overseas assignments

Table of  Contents  

Table of  Contents  I

  Index of Figures  II

  Index of Tables  III

1.  Increasing Globalisation  1

2.  Expatriation  2

3.  Reasons for Overseas Assignments  3

4.  When is the Overseas Assignment failed?  5

5.  Culture  6

5.1.  Culture in General  6

5.2.  Cultural Barriers in Communication  7

5.3.  The Cultural Aspect according to Hofstede  8

6.  Training for Overseas Assignment  13

6.1.  Skills of Efficient Expatriates  14

6.2.  Intercultural Training  15

6.2.1.  Informative Training  15

  Culture-General Informative Training  16

  6 2 1  1

  Culture-Specific Informative Training  16

  6 2 1  2

6.2.2.  Interactive Training  17

  Culture-General Interactive Training  17

  6 2 2  1

  Culture-Specific Interactive Training  17

  6 2 2  2

6.2.3.  Language Training  18

6.2.4.  Problems with Intercultural Training  18

7.  Importance of the Family  18

8.  Integration in the Overseas Subsidiary  19

9.  Reintegration  20

10.  Limitation and Importance of Intercultural Training  21

  Bibliography  23

I

Index of Figures

  Figure 1: Reasons for Overseas Assignments  3

  Figure 2: International Management  14

II

Index of Tables

Table 1:  Failed Overseas Assignments because of Early Returns  5

Table 2:  Uncertainty Avoidance (UA) Scores  9

Table 3:  Power Distance (PD) Scores  10

Table 4:  Individualism (IDV) Scores  11

Table 5:  Masculinity (MAS) Scores  12

Table 6:  Company Preparations for Overseas Assignments  13

Table 7:  Critical Family Challenges  19

III

Training expatriates – crucial components in preparing for overseas assignments

1. Increasing Globalisation

The increasing globalisation of the markets in our modern world creates more and more challenges for many companies. With Joint Ventures, Strategic Alliances or overseas subsidiaries they start to conquer foreign markets (Sangmoon et al. 2003:81).

Competent managers with enormous technical knowledge are not enough in these demanding times. Many companies have understood that with the increasing educational background of our modern society those technical skills cannot count as appropriate prerequisites for global workplaces (Krippl et al. 1993:159). More and more intercultural skills and international management qualities are searched for manager positions (Kepir Sinangil et al. 2001:424). As successful overseas assignments are good indicators of these skills, they obtain all the more on importance.

Companies are more and more forced and willing to send expatriates abroad to come up to the challenges of global markets. Already in the early 1980s, Adler surveyed multinational companies and found out that already 600 of them employed 13.338 expats. And this number increased considerably over in the last 20 years (Kepir Sinangil et al. 2001:424). Especially at the moment in uncertain economic times and unstable world events, it was very surprising for the Global Relocation Services to discover in their latest survey that more than three-in-four respondent companies said they anticipated their expatriate population would stay the same or even increase (Warren 2003).

Nevertheless it is very important not to underestimate the cultural differences of various countries. Just to send a qualified manager abroad and hope he will work as efficient as he did in the home country is in most cases not working and it will turn out to be a very expensive experiment for the

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Training expatriates – crucial components in preparing for overseas assignments

company ¹ . It is important to prepare the expatriates for the different cultures, the different living conditions, the different leading aspects and to bring them closer to the importance of cultural knowledge. As almost all companies face the challenge of sending expatriates abroad they should therefore consider the crucial components in preparing them efficiently for an overseas assignments (Hartl 2003:8).

Katharina Hartl (2003) explains in her book short and to the point that the uniqueness of an overseas assignment does not only lie in an individual having to leave his/her trusted environment, followed by the need to adjust to a new environment, but also in the fact that tasks have to be accomplished interacting with people with a different cultural programming.

2. Expatriation

“Expatriation involves the transfer of parent country nationals, host country nationals and third country nationals – and often their families – for work purposes between two country l ocations, and for a period of time that requires a change of address and some degree of semi-permanent adjustment to local conditions.” (Hartl 2003:8).

Whether the company chooses local employees or prefers expatriates depends on their business attitudes and strategic objectives. One way to categorise their behaviour can be found in an ethnocentric, polycentric, regiocentric and geocentric company philosophy (Hartl 2003:8).

When a company follows the ethnocentric orientation they are more likely to fill their overseas subsidiaries with parent country nationals. They regard their home country as superior over the rest of the world and think they will be successful with their home strategy all around the world. Polycentric companies on the other side respect the differences between various countries and consider every country as unique. The “assumption lays the

¹ see Proctor & Gamble, in Lomax 2001, page 5

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Training expatriates – crucial components in preparing for overseas assignments

groundwork for each subsidiary to develop its own unique business and marketing strategies in order to succeed” (Keegan et al. 1999:19). Therefore those companies tend to employ in their subsidiaries local staff rather than home country nationals. A regiocentric philosophy is based on the attempt to employ people from the local as well as from the home country, according to the nature of the business and product strategy. The last policy, the geocentrism, is found when the company select the employees without regarding the nationality. To sum it all up, it can be said that apart from the polycentric companies all firms face the problem of sending expatriates abroad and have therefore to deal with the challenge of preparing them efficiently for their overseas assignment (Hartl 2003:8).

3. Reasons for Overseas Assignments

When we look closer at the reasons why global companies send their employees abroad we find four main motives that are mentioned frequently in literature: the motive of compensation, the control and leading aspect, the development and career motive as well as the transfer of know-how (Krippl et al. 1993:158, see Figure 1).

Figure 1: Reasons for Overseas Assignments

Source: Krippl et al. 1993:158

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Training expatriates – crucial components in preparing for overseas assignments

The compensation motive is important if the respective country of the subsidiary doesn’t offer the qualified personal and the specialists needed. Especially in development countries companies are confronted with great problems to find qualified employees for managerial tasks. Therefore the parent company is forced to send personnel overseas. In high industrialised countries it is rather a question of the scope of duties and the company policy than a question of necessity. Nevertheless there might be a high concentration of competitors close to the overseas subsidiary, which makes it even in industrialised countries sometimes difficult to find appropriate local staff (Kiepe et al. 1984:9). The sending of expats to lead and control the subsidiary according to the company ideas and company aims helps to implement an overall company policy. Therefore the control and leading motive is the most crucial one for overseas assignments of ethnocentric oriented companies (Krippl et al. 1993:158).

For the majority of all companies the reason to send their employees overseas is the transfer of know-how. Christiana Djanani (2003) noted in her book “Entsendung von Arbeitnehmern deutscher Aktiengesellschafen ins Ausland” that 73,7% of all companies regard the transfer of know-how as the main reason for the expatriation. The know-how that is able to be transferred overseas can be divided into three different categories: The business knowhow of the company, which is important for the implementation of the tasks abroad, like, for example, knowledge about the market and relations to other companies. The know-how about information technology is important to ensure the transmission of information to the headquarters. To control and administer the tasks of the human resource department and the bookkeeping, companies do also need to transfer the administrative knowhow. All this three sorts of knowledge transfer are most often from the parent company to the subsidiary, but it can also happen vice versa (Kiepe et al. 1984:10).

The development and career motive can be seen from the perspective of the company as well as from the perspective of the employee. For the

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