Training expatriates - crucial components in preparing for overseas assignments

Table of Contents

Index of Figures

Index of Tables

1. Increasing Globalisation

2. Expatriation

3. Reasons for Overseas Assignments

4. When is the Overseas Assignment failed?

5. Culture
5.1. Culture in General
5.2. Cultural Barriers in Communication
5.3. The Cultural Aspect according to Hofstede

6. Training for Overseas Assignment
6.1. Skills of Efficient Expatriates
6.2. Intercultural Training
6.2.1. Informative Training
6.2.1.1. Culture-General Informative Training
6.2.1.2. Culture-Specific Informative Training
6.2.2. Interactive Training
6.2.2.1. Culture-General Interactive Training
6.2.2.2. Culture-Specific Interactive Training
6.2.3. Language Training
6.2.4. Problems with Intercultural Training

7. Importance of the Family

8. Integration in the Overseas Subsidiary

9. Reintegration

10. Limitation and Importance of Intercultural Training

Bibliography

Index of Figures

Figure 1: Reasons for Overseas Assignments

Figure 2: International Management

Index of Tables

Table 1: Failed Overseas Assignments because of Early Returns

Table 2: Uncertainty Avoidance (UA) Scores

Table 3: Power Distance (PD) Scores

Table 4: Individualism (IDV) Scores

Table 5: Masculinity (MAS) Scores

Table 6: Company Preparations for Overseas Assignments

Table 7: Critical Family Challenges

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

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 locations, 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 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

illustration not visible in this excerpt

Source: Krippl et al. 1993:158

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 know-how 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 know-how. 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 company the development of top managers is a very important aspect. Top managers have to provide good technical knowledge in combination with personality and leading qualities. All these skills can be acquired very efficiently abroad, where the scope of possible actions is generally larger than in the local headquarters (Krippl et al. 1993:159). The career motives for the employees are most often the higher remuneration as well as the gained experience.

4. When is the Overseas Assignment failed?

In most books a failed overseas assignment is defined by an early return of the expatriate (Kraimer et al. 2001, see Table 1). They create extremely high costs for the company without contributing the expected advantages of a highly qualified manager. The early repatriates are very likely to be frustrated and unmotivated and might need time to find their self-confidence again.

Table 1: Failed Overseas Assignments because of Early Returns

illustration not visible in this excerpt

Source: Rada et al. 2003:5

Despite the failed overseas assignments because of early returns it should also be mentioned that there might be other reactions of the expatriates that could disturb the positive outcome of the expatriation. According to Copeland and Griggs (1985) a large portion of expatriates who do complete their overseas assignments are only marginally effective or even ineffective in their job performance, because of an insufficient adaptation to the host culture.

Last but not least it is to mention that there are also a great number of expatriates who leave the company after a “successful” overseas assignment. This can be an effect of inappropriate relations to the parent company or bad reintegration in the native country, which will be mentioned later in my seminar paper (Krippl et al. 1993:178, Löw-Jasny 2001:75). Even though the overseas assignment is accomplished we cannot speak about a successful one. The former expats will take all their new developed knowledge and leave the company, which could be regarded as almost the worst case of failed expatriation.

5. Culture

5.1. Culture in General

It is crucial to understand the meaning of culture in general to be aware of the problems expatriates will face in the new country. As Harris & Morgan stated in 1991, “one must understand the concept of culture and its characteristics before a manager can fully benefit by the study of cultural specifics and a foreign language.”

Culture can be defined as a system of values, beliefs, customs, behaviours and artefacts that the members of a society share with one another and that are passed on from generation to generation. It represents the total body of tradition in a certain society, including the respective ways of ordering the world and makes it understandable (Hoecktin 1995:80).

“Culture is a set of mechanisms for survival, but it provides us also with a definition of reality. It is the matrix into which we are born; it is the anvil upon which our persons and destinies are forged" (Murphy 1986).

5.2. Cultural Barriers in Communication

Not only different languages can disturb communication between people from different countries. To know the same words is the basis to communicate, but to fully understand each other it is important to attach the same meaning to the words (Götz et al. 2000:13). Therefore communication between people from different cultures is especially difficult as their respective backgrounds provide them with various ways of thinking, hearing and interpreting the world. So the same words can mean different things to people from different cultures, even when they talk the same language.

Stella Ting-Toomey (2003) describes in her book “Cultural Barriers to Effective Communication” about three ways in which culture affects effective communication. She calls the first way in which culture can interfere with cross-cultural understanding “cognitive constraints”. These are the different world views of the different cultures that provide the background of our thinking. All new information is inserted in our knowledge of the world and compared to what we already know. Ting-Toomey’s second factor is the “behaviour constraints”. The verbal and nonverbal communication of each culture is effected by its own rules about the appropriate behaviour in respective situations. For example, whether people have high or low personal space or if they talk more implicit or explicit when they communicate, are outcomes of this constraint (Van der Horst 2003). The third factor is called the “emotional constraint” and refers to the display of emotions in different cultures. In some cultures it is normal to get very emotional while debating. It is normal to cry, yell, show anger, fear or frustration openly. Other cultures like especially the Japanese prefer to keep their emotions hidden and appreciate only “rational” behaviour.

If all the people involved are not aware of the communication barriers this can lead to misunderstandings, unintentional insults and the breaking of cultural taboos in social as well as in business life. The interlocutors start to feel irritated and insecure and start to emotionally refuse their opponent. In the worst case they even start to refuse a whole society (Götz et al. 2000:14). Nevertheless it takes more than bare awareness to overcome these problems and communicate effectively across cultures (Ting-Toomey 2003).

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^[1] see Proctor & Gamble, in Lomax 2001, page 5