Pre-departure management of expatriates - Effective enough to adjust overseas?

An expatriate view

Bachelor Thesis, 2007

64 Pages, Grade: First Class / 70%



Chapter 1 Introduction
1.1. Reason for choice of topic
1.2. Academic objectives of dissertation
1.3 Outline of chapters

Chapter 2 Literature Review
2.1 Introduction
2.1.1 The expatriate employee
2.1.2 Failure rate
2.2. Selection of expatriates
2.2.1 Selection process
2.2.2 Selection recommendations
2.3 Preparation
2.3.1 The need of cross-cultural competences
2.3.2 Training of expatriates
Figure 2.2: Cross-cultural training approach
2.4. Adjustment
2.4.1 Adjustment definition
2.4.2 Expatriate adjustment
2.4.3 Spouse adjustment
2.4.4 The U-curve theory

Chapter 3 Methodology
3.1 Introduction
3.2. Research purpose
3.3 Research philosophy
3.4 Research approach
3.5 Research strategy
3.6 The questionnaire
3.7 Limitation of using questionnaires
3.8 Ethical issues

Chapter 4 Findings and Analysis
4.1 Response rate
4.2 Selection of expatriates
4.3 Training of expatriates
4.4 Adjustment of expatriates

Chapter 5 Conclusions
5.1 Conclusion



Figure 2.1 Selection criteria of expatriates in international companies

Figure 2.2 Cross-cultural training approach

Figure 2.3 Percentage of expatriates receiving high performance ratings

Figure 2.4 Culture shock model

Figure 4.1 Response rate of expatriates from three different companies

Figure 4.2 Selection methods of expatriates

Figure 4.3 Selection criteria of expatriates in percent

Figure 4.4 Different types of training

Figure 4.5 Comparison of training methods in USA and China in percent

Figure 4.6 Length of training for expatriates

Figure 4.7 Adjustment duration of expatriates in USA and China

Figure 4.8 Dimensions of adjustment for responses from USA in percent

Figure 4.9 Dimensions of adjustment for responses from China in percent

Chapter 1 Introduction

1.1. Reason for choice of topic

The world economy has changed enduring since the 20th century so that new market conditions and globalisation trends are forcing companies to internationalise their activities (Kühlmann 2004). Those cross-border activities are more significant than a few years ago and more and more people from different cultural backgrounds with various ways of thinking and behaviour cooperate with one another.

As intercultural collaborations are becoming the key element of international operating organisations, companies need to send people abroad who conduct those cross-border activities. Cultural differences are of utmost attention as different behaviours and attitudes can lead to unforeseen problems and interpersonal conflicts. Consequently, expatriates, working with people from other societies, need to possess additional qualifications in order to cope with those cultural differences. Expatriates are acting as gateways to other cultures and they are directly affected by cultural disparities as they are the ones who live and work in the foreign society (Herbrand 2002).

Multinational companies need to develop a world or global manager who is the ideal type of a manager successfully working in other cultures. The globalisation forces the multinational companies not only to ensure growth and market share but also to certify the ability to be culturally successful in the international market place (Herbrand 2002).

As the lack of intercultural competences can lead to business pitfalls and the loss of relationships, the management of a company has to properly select and train its expatriates who show those required skills and abilities to work effectively and live with people from other cultural backgrounds.

In the past most multinationals ignored the necessary preparation methods for their expatriates and they are only gradually becoming aware of the essential change-management-process which is creating a new task for the human resource development. This means implementing adequate preparation procedures to create the basis for a successful adjustment of their expatriates abroad.

The course human resource management at ABW aroused the interest in the current researcher to deal in depth with expatriate management. Therefore, the dissertation was the best opportunity to gain a better understanding in this area of human resource management which seems to become more important in today’s internationally operating companies. The author is interested in gaining knowledge of how multinational companies select and prepare their expatriates for the forthcoming assignment in order to make their stay abroad successful and comfortable.

1.2. Academic objectives of dissertation

The underlying thesis presents an enhanced understanding of the requirement of adequate pre-departure management of expatriates and the importance of intercultural competences of global managers. Furthermore, it will be examined if the support from the family and the well-

being of the accompanying spouse is a key factor for an appropriate adjustment to the new environment and thus for a successful stay abroad.

This dissertation tries to find answers to whether and how expatriates are selected and how they are trained in order to acquire the necessary skills to work and live in the foreign culture. It will be investigated whether companies think that training is more significant for a proper pre-departure preparation than selection and what other factors are important for a successful stay abroad.

Besides, the researcher provides answers to whether the family is integrated in the pre-departure programme and how well the expatriate and the accompanying spouse adjust to the new culture. Furthermore, it will be explored if training is in fact an effective tool for adjustment as assumed so far or if other factors may play a more important role.

Existing theories on selection, training and adjustment of expatriates are reviewed. In order to draw a line between theory and practice, the researcher sent questionnaires to expatriates of three different companies – SAP, Siemens and Bosch – which are currently on an international assignment in order to highlight their perception of selection and training and how it improved their chances of adjustment.

1.3 Outline of chapters

The underlying dissertation is made up of five chapters. The first chapter presents the introductory section of the topic and identifies the objectives of the present work.

The second chapter reviews the most important literature concerning selection, cross-cultural training as well as adjustment of expatriates and the accompanying spouses.

The author will present models and theories in order to draw attention to the necessity of pre-departure management of expatriates for a successful adjustment and stay abroad.

The utilised research method is specified in the third chapter. It highlights the different research philosophies, approaches as well as strategies that have been used during the research project. It also discloses advantages and limitations of the applied research method.

The fourth chapter presents the findings from the questionnaires of expatriates of the companies SAP, Siemens and Bosch. The findings are then placed into the theoretical context highlighted in the literature review of chapter two.

The fifth chapter gives a conclusion and also reveals limitations of the current research and recommendations for further research in the field of expatriate management.

Chapter 2 Literature Review

2.1 Introduction

2.1.1 The expatriate employee

The increasing globalisation leads multinational companies to send their most appropriate and most skilled people abroad (Harvey and Wiese 1998).

Those skilled people are called expatriates who are employees working and temporarily residing in a foreign country (Dowling and Welch 2004).

Expatriates are “mostly middle- or high-level managers or technical experts...” (Huang et al. 2005:1660).

According to a survey carried out by GMAC Global Relocation Services (2002) the typical expatriate is a married male between 30-49 years and 86% of those expatriates are accompanied by their spouse. Forster (2000) stated that the figure of young and single expatriates will grow as they are more capable to learn in the foreign country and yet independent from family constraints.

A survey carried out by PriceWaterhouseCoopers (2001) stated that there is a clear trend that the number of people sent abroad will increase in the future whereas the number of female expatriates is still low with an overall proportion of only 9%. However, the GMAC survey (2002) indicated that there is a slow but continuous grow in the number of females taking international assignments. In addition, expatriate assignments will continuously increase in countries like China, Central and Eastern Europe and South East Asia (PriceWaterhouseCoopers 2005).

The reasons for sending expatriates abroad vary. Until the 1980s the international assignment was used to fill a job in the subsidiary but today the motives lay in enhancing the career opportunities as international experience is becoming a more important aspect in the career path of employees (Tung 1984, Harvey and Wiese 1998).

2.1.2 Failure rate

International assignments are not always as successful as one would expect and can thus lead to expatriate failure. Expatriate failure can be defined as “the premature return of an expatriate manager before the period of assignment is completed” (Tung 1984:139) and can thus indicate the grade of effectiveness of expatriate management (Shen and Edwards 2004).

However, this definition does not include underperformance of expatriates which also belongs to expatriate failure. The expatriate is not returning home, i.e. he or she stays on the assignment but fails to perform adequately. This results from difficulties to adapt properly to the new environment (Harzing 1995).

Besides, Harvey and Wiese (1998) stated that the reason for expatriate failure is that the expatriate as well as his /her family are not prepared enough to cope with the new environment. These are assignments from which expatriates had to be brought back home earlier than planned as a result of problems experienced by themselves or their families, or by problems they have created for the organisation (Brewster 1988).

As the literature indicates expatriate failure is a persistent and recurring problem and failure rates remain high (Shen and Edwards 2004:818).

2.2. Selection of expatriates

2.2.1 Selection process

Most multinational companies select their employees simply on the technical expertise and only minimal attention is paid to interpersonal skills (Mendenhall and Oddou 1985, Welch 1994, Anderson 2005). Welch (1994) pointed out that the disrespect for other selection criteria results from the complexity of creating reliable and also valid predictors of expatriate success.

Therefore, most companies only take the technical competences and international experience into account when selecting a candidate. Companies are aware of the fact that personality traits and other intercultural skills are important for the success of an expatriate but those are not easy to measure. Consequently, the inter-cultural ability of the candidate is mostly based on his or her supervisor’s judgement of the person.

Furthermore, Shilling (1993) stated that expatriates are often selected in an ad hoc reaction to fill a job in a foreign country. Although the selection process should be carried out by a trainer or human resource professional, it is all too often top management which decides whom to send abroad. Therefore, they often choose the person with the best technical knowledge referring to the principle that ‘domestic equals overseas performance’ (Mendenhall and Oddou 1985). Managers assume that a person that is successful at home will be also successful in the foreign country regardless of cultural differences. The human resources department plays only a little role in the selection process as mostly managers decide whom to send.

Furthermore the family situation of the expatriate is often disregarded in the selection process (GMAC Global Relocation Services 2002) although spouses have such an enormous impact on expatriates performance and adjustment abroad.

A table of selection criteria from Gertsen (1990), seen below, also indicates that no or only minimal attention is paid to family issues while the selection process.

illustration not visible in this excerpt

Figure 2.1: Selection criteria of expatriates in international companies

Source: adapted from Gertsen (1990)

Caligiuri and di Santo (2001) found that some personality traits, although they are preferable, cannot be developed through international assignments. This means that the suitable person with the appropriate skills and traits needs to be selected.

2.2.2 Selection recommendations

Tung (1981) pointed out that there is no one best selection criteria that can be used for every job. She categorised the key factors of success into four clusters which are:

- Technical competence on the job
- Personality traits / relational abilities
- Environmental variables as an understanding of governmental, economic as well as cultural systems in the new country
- Family situation referring to the family’s ability to adjust.

Different selection criteria should be applied for different jobs, i.e. chief executive officer, trouble shooter, structure reproducer /functional head and operational element since jobs in those categories involve varying degrees of interaction with the local workforce (Tung 1982). Kühlmann (2004) also highlighted the importance of creating job specifications according to the particular country and task (controller, trainee, manager etc.).

As personality traits are consistent and therefore not changeable, companies need to identify those employees with the appropriate characteristics (Caligiuri and di Santo 2001) and therefore, the assignee needs to be inclined to the international assignment in the first place.

This can be done through a realistic job preview or orientation workshops (Kühlmann 2004) during the selection process in order to give the employee and the spouse information on topics like career enhancement, political conditions in the country, difficulty of spouse adjustment, quality of life and so forth.

Structured interviews by several observers and psychological tests concentrating on the big five personality traits – extroversion, agreeableness, conscientiousness, neuroticism and openness to experience – are a good way to find the right person (O’Sullivan et al. 2002).

Caligiuri (2000a) supported the importance of the big five personality traits as they are useful and universal predictors of an expatriate success. However, the problem is the measurement of the big five characteristics in comparison to other individual characteristics.

Further selection criteria which should be included in the selection procedure are “technical skills, empathy, managerial skills, sense of mission, political awareness, language skills, cultural sensitivity, ability to work with local nationals, good judgement, creativity, responsibility, alertness, initiative, self-confidence and, willingness to change” (Forster 2000:63).

Selmer (2001) added that it is not only appropriate to find a suitable candidate but also someone who is willing to depart. This means that expatriates are more cautious when taking an international assignment with regard to job interruption of the spouse and growing concern about children’s education in the foreign country. The spouse often influences the candidate’s willingness to go abroad and thus companies need to include the spouse in the decision-making process.

Tung (1981) stated that companies which included the spouse in the selection process recognised a better adjustment of the family in the new culture. She found that approximately 50% of the companies conducted interviews with the expatriate and the spouse as well as psychological tests were conducted although mostly in the European countries.

In contrast, Wirth (1992) found that companies conducted interviews only with the expatriate and not with the spouse.

Unstructured interviews and performance reviews will remain the most common way to identify a suitable candidate. Multimodal interviews, psychological tests and assessment centres also supported by Mendenhall et al. (1987) are still in the testing phase (Kühlmann 2004).

2.3 Preparation

2.3.1 The need of cross-cultural competences

The expatriate’s skills and knowledge are important in the entire expatriate management process as they assist in finding the right person for the international assignment and help the expatriate to adjust to the new environment. Expatriates who are selected only on technical competences can improve their cross-cultural skills through cross-cultural training (Tung 1982).

However, O´Sullivan (1999) found that there are stable and dynamic competences and therefore the expatriate already needs to possess stable competences in order to obtain the more dynamic competences like knowledge about the new culture and new type of job. Consequently, those stable competences need to be taken into account when selecting an expatriate so that cross-cultural training leads to the development of other skills necessary for the international assignment.

2.3.2 Training of expatriates

In order to adjust properly the expatriate needs to be aware of norms and behaviours of the host country. Cross-cultural training is a way to look at how cultural differences can affect work relationships, viewing the ways in which understanding differences can lead to teamwork and productivity, and finally reviewing values and assumptions in order to compare these values to the ones of the host country (Ashamalla 1998). This can reduce cultural conflicts and unexpected situations in unfamiliar cultures and thus helps to cope with unforeseen events (Black and Mendenhall 1990). Through cross-cultural training the expatriate learns new work-related behaviours and new non-work behaviours in order to better understand the other culture in terms of decision-making within the company, work rules, how to give gifts and receive gifts as well as how to behave in the public, for example (Black and Mendenhall 1990).

Brislin and Yoshida (1994:5) stated that ”cross-cultural training programmes should be viewed as one of several contributions designed to assist people who cross cultural boundaries and not a ‘cure-all’ programme that guarantees cultural adjustment.” Nevertheless, as Eschbach et al. (2001) stated cross-cultural training can help to shorten the time of adjustment as this may take a year and a half and may also reduce the impacts of a cultural shock in the new environment.

Tung´s model (1981) showed that cross-cultural training consists of five major categories and depending on the relevant task to be carried out abroad a different type of training may be appropriate:

- Area studies programmes or environmental briefing to provide the expatriate with factual information about the relevant country, geography, climate
- Culture assimilation training consisting of brief intercultural incidents to be resolved by the expatriate
- Language training
- Sensitivity training to develop attitudinal flexibility of the individual
- Field experiences as to send the trainee to the country of assignment to get a first impression of the people and the culture and to undergo some emotional stress.

There is no training method that can be used in any occasion and the company has to identify the degree of interaction required in the host country as well as the similarity or dissimilarity between the expatriate’s culture and the host culture. Depending on the job to be carried out and the country of the assignment the trainee should undergo one to several of these programmes.

This means that when the interaction between the expatriates and the locals is low and the cultures of both are similar then the training should focus on job-related issues and the rigor necessary for the training should be low. In case there is a high level of interaction with the locals and the cultures diverge significantly, the training should focus more on the new culture and thus on cross-cultural skill development and the task to be carried out. The level of rigor of the training should be moderate to high.

In addition, Caligiuri (forthcoming, cited in Harzing and Ruysseveldt 2004) pointed out that the company has to classify the global assignments into technical, functional, developmental and strategic /executive categories in order to determine the relevant and specific training programme.

Mendenhall and Oddou (1986) developed a model that builds on Tung´s model from 1981, which was subsequently refined by Mendenhall et al.

(1987, figure 2.2 on next page). Their framework is based on three dimensions: training methods, levels of training rigor and duration of training with regard to the degree of interaction and culture novelty.

illustration not visible in this excerpt

Figure 2.2: Cross-cultural training approach

Source: Mendenhall et al. (1987)

There are four different types of preparation for the expatriate designed by Thomas and Hagemann (1992). The first refers to an information-orientated preparation, i.e. giving information and facts about the job to be carried out, living conditions in the new culture and norms.

The second and third methods refer to a cultural awareness programme and experimental cultural learning programme whereby the expatriate becomes more sensible to the host culture. This can be conducted by role plays as well as look-and-see trips. The expatriate and the spouse are visiting the new country prior to the actual move to meet future colleagues and subordinates and to familiarise with the new work and living environment (Kühlmann 2004). Also Brewster and Pickard (1994) found that look-and-see trips which are similar to Tung’s field experience become more widespread in companies.


Excerpt out of 64 pages


Pre-departure management of expatriates - Effective enough to adjust overseas?
An expatriate view
University of Cooperative Education Mannheim  (Akademie für Betriebswirtschaft und Welthandelssprachen)
First Class / 70%
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ISBN (eBook)
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Pre-departure, Effective
Quote paper
Sabrina Hoffstädte (Author), 2007, Pre-departure management of expatriates - Effective enough to adjust overseas?, Munich, GRIN Verlag,


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