Expatriate Adjustment.docx

1、Expatriate Adjustment“Critically analyse the HR actions that multinational corporations should take to facilitate expatriate adjustment”There has been tremendous growth in the international business activity in the last few decades. The growth in international business has been characterised by grow

2、ing interconnectedness within global economy and growth of transnational corporations. For instance, between 1950 to the end of the twentieth century total world merchandise grew twenty times however the world merchandise production grew six times only. This indicates the trend that more and more tr

3、ade is taking place across the national boundaries (Dicken, 2007). The growth in multinational corporations through foreign direct investments has implications for management of human resources on a global scale. It is argued that the international competition continues to intensify as MNCs are incr

4、easingly adopting global business strategy in their quest for new markets and geographical locations to access and develop sustainable competitive advantage (Harzing and Von Ruysseveldt, 2004). Consequently, a global business strategy requires a global human resources management capable of developin

5、g globally competent employees to manage overseas businesses. One of the widely used staffing strategies by MNCs to enhance their understating of international business is expatriation. Expatriation is the process of selection and employment of competent employees of an organisation for overseas ass

6、ignments. Although expatriation is considered as an attractive method to understand and manage foreign market operations, organisations face numerous challenges in selection and management of expats (Liu and Lee, 2008). The brief critically analyses the HR actions that MNCs should take to facilitate

7、 expatriate adjustments. First, the advantages and challenges related to expatriation have been discussed briefly. Following which the theories of expatriate adjustment have been looked at. In the subsequent section, the relevant HR actions have been advised to facilitate expatriate adjustment in th

8、e host country environment. In the end, the brief presents the concluding remark on the analysis.Expatriate is the home country employee of an organisation who works in the foreign subsidiaries of the company for a short to long term period (usually between 2-5 years) (Harzing and Von Ruysseveldt, 2

9、004). Expatriate development is increasingly becoming an important human resource management issue for multinationals (Osman-Gani and Rockstuhl, 2009). It has been argued by researchers that cultural adjustment in the host culture is one of the key determinants of expatriate performance during inter

10、national assignments over and above other factors such as poor selection, partner dissatisfaction, and family issues. For instance, previous studies reported that between 16 to 40 percent of all expat managers returned prematurely from their overseas assignments due to their inability to adjust in c

11、ross-cultural environment (Black and Mendenhall, 1991). Louis (1980) suggests that expatriates who are going on an international assignment require making sense of the political, economic, monetary system, cultural value, norms and behaviour in the host country besides the knowledge of new organisat

12、ional facility. The understanding of these factors helps the expatriate manager in management of cultural shock. Other issues with expatriation as reported by Black and Gregersen (1999) are. They are 2-3 times costly than the average domestic position. It is about 10-20 percentage early dismissals f

13、rom overseas assignment due to dissatisfaction and cultural problems. It is relatively lower performance than expected (around 30% of expatriates that remained overseas did not meet senior management expectations), the last reason for IHRM is the high attrition rate after return (over a quarter left

14、 company on return). Although expatriation throws many challenges for individuals and MNCs as briefly mentioned above, it also offers many advantages. For instance, Rosenzweig (1994) argued that expatriation facilitates inter-subsidiary communication and coordination as result of transfer of corpora

15、te philosophy and company vision with expatriate manager. Colakoglu and Caligiuri (2008) argued that expatriates are helpful in enhancing the performance of the subsidiaries as they serve as a channel for the transfer of knowledge, skills and practices. As far as disadvantages of the expatriation ar

16、e concerned, these are: high turnover, poor moral, reduced productivity, high cost of expatriate staffing and resultant loss due to long time required for adaptation and poor decisions (Harris et al, 2003). Expatriate adjustment has been widely investigated in literature. One of the early theories t

17、hat describe the cross-cultural adjustment of expatriates in host country environment is U-Curve Theory. It involves four stages of adjustments namely- honeymoon, culture shock, adjustment and mastery stages. Honeymoon stage is the first stage during which the expatriates are fascinated by the new p

18、lace and culture which changes in to second stage of culture shock (feeling of frustration and hostility towards host nation and its people) when newcomers start living in the new environment on a daily basis. This follows with the adjustment stage when expatriates begin to settle themselves in the

19、new norms and values through experiential learning. In the mastery stage they become effectively functional in the new environment (Liu and Lee, 2008). Based on the recent studies Liu and Lee (2008, p. 183) have identified five components of cross-cultural adjustment process of expatriates as follow

20、ings: The first one is pre-departure training. The second one is previous overseas experience; the third one is the selection mechanism. The forth one is the individual skills. The last one is non-work factors. Black et al (1991) suggested expatriate adjustment model (refer fugure-1) by utilising bo

21、th the domestic and international adjust literature citing that a more comprehensive understanding of international adjustment can be attained through integration. As they argued, that domestic adjustment literature focuses on pre and post entry adjustment variables such as organisation socialisatio

22、n, work role transition, career development and relocation whereas international adjustment literature focuses on individual and non-job variables.Figure-1: Framework for expatriate adjustment Source: Black et al, 1991 (adopted from Liu and Lee, 2008, p. 184)Considering the theories on expatriate ad

23、justments and other literature, it can be determined that successful expatriate management involves selection of suitable expatriates, pre-departure training and preparation for the assignment, providing overseas adjustment supports and reintegration on return. Therefore, multinational corporations

24、should adopt strategies to assist expatriate adjustment at these stages. The most important stage is the selection of expatriate managers for overseas assignment. As mentioned earlier this is one of the key determinants of the expatriate performance during an overseas assignment. MNCs should have co

25、mprehensive selection criteria based on firms management philosophy, requirement of overseas assignment and the host market conditions (Oddou, 1991). MNCs can look at certain factors while selecting expatriates such as adaptability of individual to change, degree of open-mindedness to behaviour and

26、attitudes different from his or her own, ability to meet new people and learning about them and their culture, degree of self-confidence and self-reliance of the individual, ability to deal with stress and extent to which the individual enjoy family support. The individual being selected for the ove

27、rseas assignment required to have these attributes in order to cope in the new environment. The individual adaptability to changes (expected and unexpected) in the domestic workplace ensure that the person will be able to cope with the stress resulting from the unexpected changes that are a prominen

28、t characteristics of the overseas assignment. For instance, the new foreign culture and language throws unexpected challenges for the expatriate manager that can cause major stress and if the person has been quick in adopting policy and procedural changes in the domestic environment he is more likel

29、y to adapt quickly to the new culture and business environment. Therefore, selection mechanism should not overlook this dimension. The selection process should also look at the fact as to how much open-minded the individual is to ideas and beliefs that different from his own. The effectiveness of em

30、ployees in dealing with the disagreement in business matter, with people of different gender and of various ethnic groups in the domestic environment can be analysed in order to assess his suitability for an overseas assignment. People who can deal effectively with colleagues with different ideas, a

31、ttitudes, beliefs and ethnicity are more likely to perform better in an international environment as compared to those who find it difficult to deal with such people. MNCs can also consider the socialisation habit of the potential employee during the selection process. For instance, it can be assess

32、ed that does the employee enjoy meeting new people and learning new cultures, and participate enthusiastically in social events. Research suggests that the outgoing nature of expatriates help them adapt better in the new culture as they have the strong desire to associate with others as well as a ke

33、en interest in learning about the new culture and people (Harris et al, 2003). It is also very important to consider that how self-confident and self-reliant is the person. This can be assessed from the performance of the employee in past assignment in the domestic environment. Theory suggests that one of the reasons of expatriate failure has been the inability of partn