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FH MAINZ – MSC. INTERNATIONAL BUSINESS
Effectiveness of Expatriate Management
Cross-Cultural Trainings and Selection Criteria
February Amelia Curry
Matrikel-Nr. 9037038
Prepared for: Prof. Dr. Susanne Rank
Due Date: December 15, 2009
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Table of Contents
I. Introduction ................................................................................................................................ 3
II. Critical Success Factors for Expatriation .................................................................................... 4
III. Selection Policy .......................................................................................................................... 6
IV. Pre-Assignment Training ............................................................................................................ 9
V. Discussion .................................................................................................................................11
VI. Conclusion ................................................................................................................................13
Bibliography ..........................................................................................................................................15
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I. INTRODUCTION
Greater integration among nations corresponds to increased interconnection of economic and
business activities across frontiers. Dicken (2007) has suggested that foreign direct investment (FDI) is
one of the measures of interdependence in global economy. Since 1990s, we have witnessed increasing
FDI activities coupled with the growth of multinational enterprises (MNEs) at unprecedented
acceleration. On the other hand, human assets are one of the factors significant for competitive
advantage of global organizations. Therefore, the growth of globalization has necessitated better
understanding of human resource management aspects for business operating globally, namely the
staffing, training and selection policy.
One of the important issues of staffing for MNEs is expatriation. International assignments can
be seen as a part of international business strategies, in which expertise is seen as a competitive asset
and headquarter can assert better control of know-how transfer to its subsidiaries in host countries.
However, expatriation is not only costly and time-consuming; it also presents considerable risks to
business in the host country (Harris & Brewster, 1998). Some have suggested that the failure rate of
expatriation, in terms of premature return home or underperformance, is very high (Zeira & Banai,
1985); although it has also been challenged that there is a lack of empirical evidence to support the
notion of high expatriation failure rates when measured by the percentage of expatriates returning
home prematurely (Harzing A.-W. , 1995).
Ensuring the effectiveness of expatriations leads to questions such as the extent to which
international manager selection or pre-assignment cultural training increase the success rate. This paper
attempts to address this issue by identifying key critical success factor of international assignments.
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II. CRITICAL SUCCESS FACTORS FOR EXPATRIATION
According to Schuler (2000) human resource management (HRM) practices comprise of two
main categories: (1) the activities, policies and practices of people management which enable firms to
compete effectively and (2) the diverse and dynamic factors such as new competitors, new technology,
legal and social concerns, that need to be recognized and acknowledged by organizations in order to
ensure their sustainable competitive advantage.
Expatriate can be defined as someone who does not live in their own country (Cambridge, 2008).
In this paper, expatriates refer to executives and managers assigned to foreign subsidiaries. Due to the
costs and business risks involved, expatriation is a key subject in international human resource
management (IHRM), which essentially has the same functions as HRM albeit applied in international
aspects by taking into account the complexities of operating in different countries with different
regulations and cultures and dealing with employees of different nationalities (Schuler, 2000).
Variables that might influence successful expatriate management can be classified in four
general categories: technical competence, personality traits and related cross-cultural skills,
environmental variables, and family situations (Tung, 1981). Several literatures have argued that
technical competence is considered by the MNEs, the expatriates themselves, and by host country
nationals as the most important factor in recruiting and/or selecting expatriates (Suutari & Brewster,
2001); additionally this factor is usually accessible and measurable (Tung, 1981). Another reason why
many personnel administration might place heavy emphasis on the ability to perform the task being
considered is the so-called “minimax” decision strategy (Tung, 1981) in which the selectors minimizes his
own risks and prevents immediate failures.
The easiest way to determine whether someone has the right and superior competence for the
job overseas is to look at the domestic track record of the potential candidate. However, the pitfall of
this approach is to assume that the successful domestic performance will translate into the same level of
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performance overseas. Furthermore, this approach also assumes the universal nature of managerial skills
(Harris & Brewster, 1998) which may not be necessarily true in case of complex international
assignments.
Personality traits refers to “the ability of the individual to deal effectively with his superiors,
peers, subordinates, business associates and clients” (Tung, 1981) which in international assignment it
gains increased importance because it also include the adaptability to the diversity of value systems,
beliefs, customs, and ways of conducting business in the foreign subsidiaries. Specifically, some have
identified five traits perceived as foretelling in expatriation success and international assignment (Burke,
Watkins, & Guzman, 2009; Ones & Viswesvaran, 1999; Harvey & Novicevic, 2001): (1) extroversion or the
assertiveness of individuals and their ability to achieve relatively better reception in social context, (2)
agreeableness which can be defined as team player skills, (3) conscientiousness which is associated with
honesty and perseverance in order to enhance organizational performance, (4) emotional stability
primarily in coping with professional and personal stresses, and (5) open-mindedness and intellectual
ability to work effectively which will contribute to one’s ability to adapt to changing environments.
International adaptability is closely related to the cross-cultural communication competence,
which encompasses not only language skills but also the ability to grasp nuances and non-verbal clues
often inherent in some cultures. However, cross-cultural skills is not only limited to communication; it
also encompasses sensitivity to cultural differences and cross-culturally adventurous which may be
indicated by previous cultural adjustment experiences or extensive foreign travel (Harvey & Novicevic,
2001; Spreitzer, McCall Jr., & Mahoney, 1997; Cui & Awa, 1992).
The political, legal, social and economic systems of a host country may present challenges for
expatriates. Relocation to the macro environment which differs greatly from that of the home country
may lead to adjustment problems for the international executives (Tung, 1981). Additionally, cultural
distance appears to correlate inversely with the ability of expatriates to effectively contribute to
subsidiary operations (Harvey & Novicevic, 2001).
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The adjustment of living overseas is not only limited to the expatriates, but also to their families.
The ability of the families to deal with problems arising from living with and working among people of
different cultures also affect the effectiveness of expatriation.
III. SELECTION POLICY
Some literatures argued that personality traits and cross-cultural abilities may increase the
probability of successful expatriation considerably (Tung, 1981). Furthermore, it also has been proposed
that these personality factor and relationship skills, coupled with family factor, often found to be the
crucial sources of failure (Tung, 1981; Harvey & Novicevic, 2001). These personality factors are usually
determined by interview and other psychometric instruments (Tung, 1981); nevertheless, the selection
methods also bring about the distinctive problems: the limited formal testing for potential candidates
and the subjectivity generally viewed as embedded in cultural awareness and adaptability tests (Harris &
Brewster, 1998).
One of the selection frameworks, a competency-based perspective of expatriate selection,
acknowledges interconnectedness of input, managerial and transformation-based competencies which
include personal social capital, adaptability and learning skills ingrained in the expatriate managers
(Harvey & Novicevic, 2001). The following Figure 1 and Figure 2 illustrate the framework of selection and
the expatriate selection processes, respectively:
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Figure 1. Competency-Based Framework of Expatriate Selection (Harvey & Novicevic, 2001)
Figure 2. Expatriate Selection Processes (Harvey & Novicevic, 2001)
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Clearly, competency-based selection process emphasizes the importance of the right-fit of personality
traits to the task under consideration and external environment of the host country.
Furthermore, the nature of selection processes can be classified as following:
FORMAL INFORMAL
OPEN Clearly defined criteria
Clearly defined measures
Training for selectors
Open advertising of vacancy
(internal/external)
Panel discussions
Less defined criteria
Less defined measures
Limited training for selectors
No panel discussions
Open advertising of vacancy
Recommendation
CLOSED Clearly defined criteria
Clearly defined measures
Training for selectors
Panel discussion
Nominations only
(networking/reputation)
Selectors’ individual
preferences determine criteria
and measures
No panel discussions
Nominations only
(networking/reputation)
Table 1. Typology of International Manager-Selection Process (Harris & Brewster, 1998)
It appears that open and formal selection is the best system with distinctive advantages of
clearly defined criteria and measures, which is important to evaluate progress, bigger pool of potential
candidates, and relatively greater objectivity due to the consensus-based decision making among panel
selectors.
As a cautionary side note, in her survey to determine the causes of expatriation failures in U.S
multinationals, Tung (1987) concluded that the inability of the expatriates’ spouse to adjust is the main
source of failures, even more determining than the inability of the expatriates themselves to adapt.
Other family-related issues are also more important than the task-related competencies. Yet, in practice
the majority of organizations do not conduct interview for the spouse and/or family of the candidates
(Harris & Brewster, 1998; Tung, 1982).
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IV. PRE-ASSIGNMENT TRAINING
Pre-assignment training is defined as “the educative processes used to improve intercultural
learning via the development of the cognitive, affective, and behavioural competencies needed for
successful interactions in diverse cultures” (Littrell, Salas, Hess, Paley, & Riedel, 2006). It is usually the
preferable approach to supplement expatriates with the necessary cross-cultural skills when the main
priority is placed on the technical competence (Tung, 1981). Although generally it is not considered to be
critical for the success of international assignment, the employers presume that proper training can
stimulate significant changes in attitude and mindset to better prepare the candidate for the cross-
cultural interaction abroad (Tung, 1981). Those who adopt this course anticipate that with sufficient
training and knowledge about cultural issues, the expatriates can adjust better and faster.
The training programs related to cross-cultural skills can be grouped into the following categories
(Tung, 1981): area studies program, culture assimilator, language training, sensitivity training, and field
experiences. Area studies programs constitutes of environmental and cultural orientation trainings
designed to provide the expatriates chosen with information regarding the geography, economic
development, cultural institutions and history of the host countries (Tung, 1981). The problem with this
program is the less defined measures of cultural differences between the home and host countries
(Tung, 1981).
Culture assimilator consists of 75 to 100 short episodes of intercultural circumstances and
suggested to be an effective method in assisting expatriates to adjust successfully with new cultures,
mostly when there is only a short time to prepare for departures (Tung, 1981). Two important
characteristics of culture assimilators are critical incidents and learning process (Bhawuk, 2001). It is
observed that culture assimilator has evolved to culture-theory-based framework (Bhawuk & Brislin,
2000) which is advantageous in preparing expatriates for assignment in various countries and applicable
for both individual and national levels (Bhawuk, 2001).
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Another form of pre-assignment programs which is very useful in helping expatriates to cope
with international assignment is language training; however it is time-consuming and poses a problem in
short-notice assignment. On the other hand, sensitivity training focuses on training cognitive behaviour
in affective level to develop flexibility and open-mindedness to different ways of doing things in different
culture (Tung, 1981). Lastly field experiences training can be divided into two categories: short-term
assignment to the host country and ‘simulation’ of the real condition in the host country by sending the
candidates to “microcultures” nearby to acclimatize the expatriates to similar living conditions they will
encounter in host countries (Tung, 1981).
The theoretical frameworks appropriated to cross-cultural trainings are summarized in the
following table:
Theoretical Framework Main Points
Social Learning Theory Experience and observed consequences of behaviour
shape learning
New behaviours maximized when individual observes
others performing the behaviours
Cross-Cultural Trainings viewed as social learning
process in which an expatriate acquires social skills
through observation and practice
U-Curve of Adjustment Theory Expatriate adjustment described as a function of time
Expatriate progresses from optimistic to confused to
near complete adjustment
Culture Shock Theory Four viewpoints regarding culture shock:
anthropological, psychoanalytic, behaviourist, and
phenomenological
CCT design enhanced if training approaches address
problems associated with all four culture-shock
viewpoints
Met expectations lead to higher job satisfaction,
commitment, adjustment and performance
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Unmet expectations may lead to job dissatisfaction and
turnover
CCT is seen as increasing the likelihood that expatriates
will develop accurate expectations
Sequential Model of Adjustment Training is a process
CCT should be structured to correspond to the cycle of
adjustment
Incorporates elements from pre-departure and post-
arrival training
Table 2. Theoretical Frameworks of Cross-Cultural Trainings (Littrell, Salas, Hess, Paley, & Riedel, 2006)
V. DISCUSSION
Cultural and relational abilities, unlike technical competence, are often difficult to be appraised
and evaluated in the forms of training. Frequently, despite the proper training, some people would not
benefit from it because of their inherently lack of cross-cultural competence. Furthermore, expatriate
trainings also suffer from subjectivity in compatibility expectations between home-country and host-
country organizations in respect to the individual effectiveness (Pazy & Zeira, 1985). Finally there is the
issue of superfluous exercise of training when applied in modality. Several forms of training, which are
fundamentally “class-trainings”, may not adequately simulate the real situation abroad, which could be
worsen if the assignment is to a significantly different macro-environment.
Additionally, some have attributed inadequate selection criteria as the decisive factor in failure
rates of expatriation (Forster, 2000) and consequently heavy emphasis is placed on variety of criteria to
achieve sound selection process which is viewed to play an important role for effective international
performance (Kealey & Protheroe, 1996; Baliga & Baker, 1985). However, pre-assignment trainings
should not be dismissed as irrelevant to the current expatriate management. They are still helpful in the
case of high-risk operations abroad where high emphasis is placed on technical and managerial
qualifications (Harris & Brewster, 1998). Furthermore, cross-cultural training which gradually exposes the
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candidates into a new culture and develops their familiarity and comfort also permits individual to adjust
promptly to the new culture and correspondingly to perform effectively in their new assignment (Black &
Mendenhall, 1990). The positive effects of intercultural trainings on cultural adjustment and managerial
performance overseas are due to reduction of perceived intensity of cultural adjustment, improvement
of global outlook, and increasing self-efficacy (Osman-Gani & Rockstuhl, 2009; Deshpande &
Viswesvaran, 1992; Black & Mendenhall, 1990; Earley, 1987).
Empirically, it is found that U.S multinationals tend to employ pre-assignment trainings less
frequently than the European and Japanese firms (Suutari & Brewster, 2001; Tung, 1982). It may or may
not be related to the higher failure rates among American expatriates compared to those of West
Europeans and Japanese expatriates (Harzing A.-W. , 1995), however it is suffice to say that combination
of pre-assignment trainings with proper selection criteria and procedures, such as the contingency
framework developed by systematically analyzing variations in degrees of contact with local cultures,
duration of stay, and the cultural differences between home and host countries (Black & Mendenhall,
1990; Tung, 1981) is still a robust tool in assisting expatriates and their families to adapt and adjust to
the new cultures.
In analyzing the performance of cross-cultural training (CCT), it is suggested that its effectiveness
is greatly influenced by factors such as the length of notice prior to departure, the country of
assignment, and family relationship (Forster, 2000), the different critical factor requirements and
priorities for cultural adjustment and effective job performance (Cui & Awa, 1992), and the gap between
individual’s expectation and the reality on-the-job (Caligiuri, Phillips, Lazarova, Tarique, & Buergi, 2001;
Oddou, 1991). To increase the potential benefits of such trainings, some studies have advised the
application of sequential training over various training period (Selmer, Torbiorn, & de Leon, 1998), a
multidimensional program using different goals, contents and approaches (Bennett, 1986), a cross-
cultural program that is tailored as close as possible to the circumstance in the host country in order to
produce maximum relevance (Caligiuri, Phillips, Lazarova, Tarique, & Buergi, 2001), a built-in evaluation
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system pertaining to pre-departure and post-arrivals (Morris & Robie, 2002; Grove & Torbiorn, 1985),
and finally an on-site socialization support by the headquarter and foreign subsidiaries such as assigned
mentors and social networks for expatriate families (Lee, 2007; Oddou, 1991; Katz & Seifer, 1986).
VI. CONCLUSION
Exceptional and well-prepared expatriate management can help to reduce costs and eliminate
other risks associated with international assignments and at the same time also optimizing the benefits
of such assignment for the organizations, the expatriates and the host countries. To achieve this goal,
clearly defined selection criteria customized to different circumstances in terms of the nature of the job
under consideration, duration and the country of assignment are critical to expatriation success. To
ensure the right-fit of the expatriates to the job abroad and the environment in the host country, the
right pre-departure and post-arrival trainings are viewed by many as effective complementary tools to
assist the expatriates in cultural adjustment and task performance.
Another issue that commands further studies is the family-related problems of couples with
dual-career. This issue is of increasing importance and imposes additional complexity on expatriation
management (Baruch, Steele, & Quantrill, 2002). It has been suggested that dual-career couples are
more likely to require paternalistic integration response by the headquarter post-arrival, such as
mentoring (Harvey, Buckley, Novicevic, & Wiese, 1999). However, there is a lack of theoretical
framework to understand the complications entailed in expatriation of dual-career couples.
Furthermore, expatriation has other aspects of importance for further research and worth of
consideration for a more holistic and comprehensive international human resource management
practices such as contract and remuneration package, performance appraisal and reward, and
repatriation (Harzing & Christensen, 2004). Most notable issue with repatriate management is the high
turnover rate once the individual is re-assigned back to home country (Baruch, Steele, & Quantrill, 2002).
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It has suggested that this effect is most likely due to the disappointment of repatriates when they realize
that their international assignments were not integrated into a career path development (Baruch, Steele,
& Quantrill, 2002).
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