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Content
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12
Strategic Human Resource
Management of
International Assignments
Dr Marie Waxin
Objectives
Throughout this chapter, the student will be exposed to:
• The different approaches to staffing foreign operations
• The reasons for using international assignments: position filling, sharing
and transferring knowledge, developing employees, and controlling and
coordination of international activities
• The different categories of international personnel: parent country, host
country, and third country nationals, impatriates
• The different types of international assignment for parent country
nationals: expatriates, short-term assignees, international commuters
and frequent flyers, global managers, and high potentials.
• The different steps of the strategic management of international
assignments: strategic planning and job analysis, recruitment, selection, preparation to transfer, cross-cultural adjustment and organizational support, performance appraisal, compensation, repatriation, and
retention.
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Opening Case
Imagine that you are Stephen Grant, marketing manager in a large international company in London, United Kingdom. The following are some
personal facts.
• You are married to a financial analyst who works in a bank located in
the same city.
• You have two children—a boy, aged 10, and a girl, aged 8.
• You and your family are actively engaged in a variety of volunteer activities sponsored by your church, which include environmental activities
and providing food for the needy.
• You and your spouse enjoy sports activities together—you jog, play tennis, and golf on regular basis. You also enjoy cultural events together,
such as concerts and plays.
You have just received the following letter from your employer.
Dear Stephen,
We are pleased to inform you that you have been selected as a candidate for an overseas position in our subsidiary in Kenya. Please contact
M. Santerre, our international human resources manager, as soon as possible
to discuss this opportunity further.
Best regards
Graham White, International Marketing.
Question: Individually, consider this situation and how you would react
to it.
Identify your major concerns as well as reasons why you would want to
accept or decline such an offer.
Source: Compiled by Marie Waxin.1
International managers constitute valuable resources that organizations
do not always use to the best of their potential. Further, senior managers
assigned to positions in foreign subsidiaries do not always live up to their
bosses’ expectations. When they succeed in their international assignments,
they often leave the organization upon returning to their country of origin. Organizations can reverse this trend by encouraging managers’ international mobility, through better planning of assignments, better recruitment
and selection practices for international assignments, better pre-departure
preparation, better performance management, and better management of
the return of their international managers.
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Strategic Human Resource Management of International Assignments
The following challenges are associated with the strategic management
of international assignments:
• Assigning the right kind of international manager to the right position,
at the right time
• Designing international HR practices for balancing generic and local
needs on the one hand, and control, coordination, and autonomy needs
on the other
• Establishing balance between global competitiveness and reactiveness
to the local environment’s peculiarities
• Identifying the needs for international personnel with a high degree of
precision
• Strategic management of international assignments and of international
personnel at the lowest cost: what type of international employee must
be chosen, and to fulfill which position? Which type of contract must
be drafted?
In the following sections, we will first look at the different approaches
to international staffing, the reasons for using international assignments,
and the different types of international employees. Then, we will propose
a model for the strategic management of international assignments. Finally,
we will look at the role played by women in the global arena.
The Different Approaches to International Staffing
The international HRM (iHRM) literature uses four terms to describe MNE
approaches to managing and staffing their subsidiaries. These terms come
from Perlmutter2 who identified among international executives three different attitudes—ethnocentric, polycentric, and geocentric—toward building
a multinational enterprise. The distinctions are based on top management
assumptions upon which functional and geographical decisions about key
products are made. Perlmutter’s distinction between these three different
approaches was later refined by Heenan and Perlmutter,3 who added a fourth
attitude: regiocentric. To describe these four attitudes, the authors use the
concepts of complexity of organization, authority and decision-making, evaluation and control, rewards and punishments, communication processes,
geographical identification, basic HRM strategy and state of internationalization (Exhibit 12.1). These distinctions, now widely accepted, have been
used in various scholarly books on international human resource management. Heenan and Perlmutter’s3 attitudes are presented in Exhibit 12.1. We
will see how these four attitudes influence the degree of utilization of the
different categories of international personnel.
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Geocentrism
Complexity of
organization
Complex in home
country, simple in
subsidiaries
Varied and
independent
Highly interdependent on a
regional basis
Increasingly complex and
highly interdependent
on a worldwide basis
Authority and
decision-making
High in
headquarters (HQ)
Relatively low in
headquarters
High regional HQ and/or
high collaboration among
subsidiaries
Collaboration of HQ and
subsidiaries around the
world
Evaluation and
control
Home standards
applied for persons
and performance
Determined locally
Determined regionally
Standards which are
universal and local
Rewards and
punishments;
incentives
High in HQ; low in
subsidiaries
Wide variation; big
or small rewards
for subsidiary
performance
Rewards for contribution to
regional objectives
Rewards to international
and local executives for
reaching local and
worldwide objectives
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Polycentrism
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Ethnocentrism
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The Four Approaches to International Staffing
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Exhibit 12.1
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Both ways and among
subsidiaries around the
world
Geographical
identification
Nationality of
owner
Nationality of host
country
Regional company
Truly worldwide
company, but
identifying with national
interests
Basic HRM
strategy
People of home
country developed
for key positions
everywhere in the
world
People of local
nationality
developed for key
positions in their
own country
Regional people developed
for key positions anywhere
in the region
Best people everywhere
in the world developed
for key positions
everywhere in the world
State of internationalization
Early
Middle
Middle
Late
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Little to and from corporate
HQ, but may be high to and
from regional HQ and
among countries
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Little to and from
headquarters; little
among subsidiaries
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High volume of
orders, commands,
advice to
subsidiaries
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Communication
and information
flow
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Ethnocentric Approach. Strategic decisions are made at headquarters,
and foreign subsidiaries have little autonomy. Key jobs at both domestic
and foreign operations are held by headquarters management personnel and
subsidiaries are managed by expatriates from the home country. Head office
managers see expatriation as a way to accelerate the progression of their
career, since the competence development of expatriates is preferred to that
of local managers.
Polycentric Approach. In this case, expatriation is no longer at the center
of the international development strategy. The MNC treats each subsidiary
as a distinct national entity and empowers it with some decision-making
autonomy. Subsidiaries are usually managed by local nationals (HCNs), who
are seldom promoted to positions at headquarters. With this approach, the
MNC avoids the difficulties associated with expatriation and cross-cultural
adjustment. The control exercised by the head office is weak, and the diversity of the situations in which the subsidiaries find themselves complicates
the process of integrating the organization’s international activities.
Geocentric Approach. With this approach, the MNC designs its strategy
from an international standpoint right from the beginning. The organization favors ability and experience over nationality. Parent country nationals (PCNs), third country nationals (TCNs), and host country nationals
(HCNs) are thus equally mobile internationally. In order to be successful,
this approach to staffing without regard to nationality must be accompanied
by a worldwide, integrated business strategy.
Regiocentric Approach. The MNC that favors a regiocentric approach
adopts uniform practices for all managers within the same geographical
zone. Like the MNC that functions with a geocentric approach, it utilizes a
wider pool of managers but in a limited, regional way. Personnel may move
outside of their countries, but only within their particular geographic region.
For instance, European managers are mobile solely within Europe. Regional
managers may not be promoted to headquarters positions but they enjoy
considerable regional autonomy in decision-making (see Exhibit 12.1).
Functions of International Assignments
Why use international employees? Reasons vary from one multinational organization to the other, but an analysis of the literature suggests that international
employees fulfill five major roles. The first three roles are tactical in nature:
fulfilling a need for a certain type of personnel that is not available in the host
country, sharing and transferring information, and developing the capacities
and level of implication of managers within the organization. The other two
roles are strategic in nature: controlling and coordinating activities.
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Fulfilling a Specific Need for Personnel and
Know-how
The first role of international assignments is to fulfill the insufficient technical
and managerial competencies in certain countries where the market structure
is often characterized by a shortage of engineers, senior technicians, and
trained managers.
Sharing and Transferring Knowledge
Another reason for using international assignments is to share and exchange
information. A multinational organization can send an expatriate employee
in order to better understand a subsidiary’s activities in a particular context,
to share knowledge regarding a new type of equipment or a specific tool, or
to communicate elements of its organizational culture, processes, or competencies. Expatriation allows for a rapid and efficient transfer of know-how.
The need for such an assignment can arise, for instance, when setting up
an activity that does not exist in the host country. Expatriation then plays
a role in the training of the local personnel, until the subsidiaries enter a
growing phase, who then replace the expatriate employees in management
and supervision positions. It is important to note that the knowledge transfer does not only flow from the head office to the subsidiaries, but also
between the subsidiaries and from the subsidiaries toward the head office.
According to Black et al.,4 there are two unique aspects to expatriation
with regard to information exchange. First, the duration of the assignments,
between one and five years, allows the collection and transfer of complex information. Secondly, the information exchange takes place not only
during the expatriation, but also afterward. The organization can benefit
from the expatriate’s acquired knowledge concerning the foreign subsidiaries
and integrate that knowledge in the strategic planning and decision-making
processes.
The Development of Managers and their
Implication Toward the Organization
International assignments constitute a proven method for developing global
managers. Most senior managers have extensive international experience.
When the expatriate’s role comprises supervision functions, expatriation
can play a prominent role in developing managerial competencies and in
fostering loyalty toward the organization. Indeed, expatriation allows junior
managers or high-potential employees to face new situations, to develop new
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competencies, especially when it comes to acting autonomously and taking
risks, thus facilitating the development of abilities required for becoming
a senior manager. The managers’ various international experiences help in
developing a global understanding of the organization. Moreover, international transfers develop the individual’s commitment toward the organization, his orher feeling of belonging and his loyalty. Organizations that use
expatriation to improve their managers’ competencies, either formally or
not, associate expatriation with promotions. Organizations that use expatriation to improve their managers’ abilities associate international assignments
more or less formally with a promotion. This practice gets the message
through to expatriates that their international experience will be valued as an
asset.
Control of Activities. From an organizational standpoint, managers are generally expatriated in the early phase of the internalization process, in order
to control the subsidiaries’ activities. In an international context, the transfer
of managers constitutes an informal control mechanism, which can complement or replace more formal control measures such as the elaboration of
norms and procedures common to all subsidiaries. Expatriate employees are
also used to reduce the uncertainty stemming from the environment (political risk, cultural distance, legal environment, competition), which is also
a form of control. As these uncertainty factors increase in importance, the
role of the expatriate becomes increasingly managerial in nature. Similarly,
the higher the interdependence between the head office and the subsidiaries
and the more complex the activities, the more the expatriates’ function will
be control oriented.
Coordination of Activities. Expatriates as well as impatriates play an essential part in the coordination of subsidiaries’ activities. Through complex
dialectic processes (local/global, individual/collective), international assignments are aimed at reinforcing the integration of individual and organizational dynamics which contribute to the cohesion of the firm. International
assignments indeed allow for the creation and development of international
networks that reinforce the integration of activities. According to Janssens
and Brett,5 the coordination of a global organization relies on three elements:
centralization (decision-making by a core of senior managers), formalization
(decision-making following established rules and procedures), and socialization (decision-making following shared norms and values).
The various functions of international assignments demand different types
of international employees, with different profiles. For instance, if the main
purpose of an assignment is managerial development, the organization will
select a junior manager or a high-potential employee. If, on the other hand,
the main purpose of an assignment is to control a subsidiary’s activities, the
organization will select an experienced manager who is familiar with the
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head office’s values and managerial procedures. Finally, it must be noted that
the five functions of international assignments are not mutually exclusive
and can be combined.
Types of International Personnel
In this section, we will look at the main categories of international employees, discuss their respective advantages and disadvantages, and present the
various types of assignments for employees from the organization’s country
of origin.
The Different Categories of International Personnel
In the literature, four categories of international personnel have been identified, based on their country of origin and the location of their assignment.
These categories are parent PCNs, HCNs, TCNs, and impatriates.
The PCNs are employees from the multinational’s head-office (expatriate employees). For instance, a Japanese manager working in a Japanese
multinational’s French subsidiary is an expatriate, or a PCN.
The HCNs are employees from the host country (the subsidiary’s). For
instance, a French manager working in a Japanese multinational’s French
subsidiary is an HCN.
The TCNs are employees from countries other than that of the multinational’s head office and that of the subsidiary. For instance, a Belgian manager working in a Japanese multinational’s French subsidiary is a TCN. An
example of a multinational using these three types of international employees is Honda: working in Honda’s subsidiary in Dubai are one Japanese
manager, an expatriate from Honda JAPAN, the international head office,
one French expatriate from the European head office, and 35 HCNs (Indians
and Philippinos).
“Impatriates” (as opposed to expatriates) are HCNs sent to the head
office. The reasons most frequently cited to justify hiring HCNs for transfer
at the head office have to do with competence development of managers,
knowledge transfer, and subsidiary integration. Moreover, generating a flow
of impatriates toward the head office is an excellent way to trigger the process
of socializing NPHs. Through impatriation, HCNs develop a sense of belonging to the global organization. The reasons for using impatriation determine
the selection criteria for future impatriates. When the main goal is knowledge transfer and subsidiary integration, for example, communication skills
in the multinational’s official language as well as in the subsidiary’s language
are important criteria. Finally, it is worth noting that the duration of impatriations is generally shorter than that of expatriations. Many organizations
use impatriates in order to reduce, in the end, the number of expatriates.
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When a specific position needs to be filled, how should organizations
choose between the different categories of international employees? Usually,
the choice is partly determined by three elements: the general staffing policy
on key positions in headquarters and subsidiaries (ethnocentrism, polycentrism, geocentrism, and regiocentrism), the constraints imposed by the host
governments on hiring policies, and staff availabilities. Beyond these considerations, the advantages and disadvantages associated with PCNs, HCNs,
and TCNs, presented below, are considered.
Six criteria seem relevant to discuss the respective advantages and
disadvantages of these three categories of international employees.
1.
2.
3.
4.
5.
6.
Cost
Knowledge of the organization (products, organizational culture)
Cultural proximity
Knowledge of the local environment
Attitude of the foreign government
Promotability of local employees.
With regard to costs for the organization, hiring a PCN always costs
more than hiring an HCN. On average, an expatriate’s salary is two to
two and a half times that of a local employee or of a TCN. These costs
increase if the expatriate fails in his assignment. The high cost of expatriation
sometimes leads the organization to opt for other solutions, such as shortterm assignments.
The PCNs, however, present two advantages compared to the other
categories of international managers. First, their technical and managerial
competencies have been put to test in their previous positions, in the parent country, and have been recognized by the head office. Secondly, they
possess extensive knowledge of the organization: its products, its managers,
and the organizational culture. These two characteristics allow for efficient
communication with the head office.
As far as cultural proximity and knowledge of the local environment are
concerned, HCNs are obviously at an advantage. All things being equal,
a local employee who speaks the local language, understands the political
system and, often enough, is a member of the local elite, should prove
to be more efficient than a foreign manager. For local personnel, cultural
adjustment is not an issue. Training HCNs also seems simpler, from a
short-term point of view, than selecting high-potential employees from the
organization’s country of origin and spending resources in order for them
to adjust to the host country. Well-trained local managers thus constitute
first-rate candidates for organizations. On the other hand, local managers
are not familiar with the organization and with its culture. In addition, local
managers might be too deeply involved in the local community and have a
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hard time understanding the parent company’s global strategy, and few of
them might truly identify with the organization and its goals.
Local governments sometimes exert explicit or implicit pressure on multinational companies so that they develop and promote local managers to key
positions in order to “nationalize” the management or foreign subsidiaries.
Local legislation concerning working visas partly determines the subsidiary’s
capacity to hire TCNs. In some countries, such as Canada, companies may
hire TCNs only if they can prove that available “local” candidates were not
suitable for the position.
Finally, the constitution of a pool of international managers takes place
at the expense of the recruitment and promotion of local managers and vice
versa. Third country nationals can be closer to the country of origin’s culture
than HCNs, but they hinder local managers’ chances to get promoted. The
choice to hire TCNs must thus be made taking all these considerations into
account.
Selection between the three classic categories of managers will be influenced, beyond the vast differences in terms of advantages and disadvantages
of each, by the degree of internationalization of the company, its internationalization strategy, its iHRM approach, its international assignment policy,
and the specific needs of its subsidiaries. The more the head office wishes to
impose its nationalistic views (ethnocentric approach), the more it resorts to
expatriation, and the more the head office wishes to expose its geocentric
side without trying to impose the control methods used at the head-office,
the more it will select based on competence rather than nationality.
Exhibit 12.2 summarizes the advantages and disadvantages of the various
categories of international managers.
The Different Types of International Assignment
for PCNs
Within organizations, many types of assignments can be found for PCNs.
The duration of assignments distinguishes between expatriations and different kinds of short-term assignments. In addition, the role of international
assignments in an employee’s career distinguishes between global managers,
expatriates, and international junior managers.
Long-term Assignments, or Expatriations. An expatriation is an assignment
abroad, for a duration of one to five years, but generally three. The employee
and his family are relocated to the host country. At the end of his initial
contract, if the employee wishes to remain with the subsidiary, it will be
under a local contract. According to Harris,6 expatriations are mostly used
for strategic missions, and meet the needs of the control function (a function
that was mentioned by 62 percent of companies using expatriate employees),
knowledge transfer function (74%), and professional development function
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Host country nationals
(HCNs)
• Understand and know local laws,
culture, and economic conditions
• Cost is much lower
• Opportunity for development and
source of motivation
• Legal regulation of employment
• Cultural difficulties hindering recruitment and
training activities
• Lack of knowledge concerning the organization,
its products, and its services
• Communication problems with the head office
• May not be as familiar with the business culture and
practices
• Control and coordination of headquarters may be
impeded
Third country nationals
(TCNs)
• Costs are lower than those of PCNs
• Knowledge of the organization, of its
practices, of its management policies
• Culture close to that of the head office
• Legal restrictions imposed by many countries as to the
number of foreign employees that can be employed
• Hinders local employees’ chances to get promoted
• Lack of loyalty towards the organization
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• Lack of knowledge regarding country’s economic
development, culture, legal system, and political
process
• Very expensive to both relocate and maintain
(expatriates—people working and residing in their
non-native countries)
• Legal restrictions imposed by many countries as to the
number of foreign employees that can be employed
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• Control over the subsidiaries
• Share a common culture and
educational background
• Facilitate communication
and coordination with corporate
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Type of international
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The Advantages and Disadvantages of the Various Categories of International Managers
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(60%). Expatriations, however, are costly for companies. The main difficulties related to expatriate management concern dual career couples, lack of
candidates for assignments in less-attractive areas and repatriation. Organizations’ first concern is, however, the high cost associated with expatriations.
In order to avoid those costs and the difficulties associated with managing expatriates, more and more companies reduce the number of expatriate
employees, propose shorter-term assignments, localize their expatriates, offer
less generous compensation packages, and hire more local employees.
Avaya’s strategies to reduce the number of career expatriates
Avaya Inc., a provider of communication systems in Basking Ridge, New Jersey,
with 15,000 employees, keeps its number of expatriates low (currently at 15,
down from 90 two years ago) by using three strategies:
First, Avaya started sending more employees on short-term assignments in
2002. The short-term assignment, generally six months long, is treated more like
a business trip. The employee stays in a hotel or company apartment and is reimbursed for meals and trips to home every other month, eliminating the need to
pay pricey housing allowances and costs related to moving the employee’s family. The company is now tightening its policies for short-term assignments. “We
want to treat employees on a fair and equitable basis rather than basing it on
each person’s negotiating power or each manager’s willingness to say yes or no”.
Second, Avaya controls costs by hiring third country nationals. Avaya currently has 365 foreign nationals, about twice as many as it had two and a
half years ago. By hiring foreign nationals, the company saves because benefits
such as tax assistance, education for dependents and housing allowances are
offered only for a limited time. Also, foreign nationals aren’t paid a cost-of-living
adjustment, a hardship allowance or an expatriate premium. Foreign nationals
also typically don’t need as much time to acclimate because they don’t face the
cultural barriers that an American might. There’s no language problem and that
person is also in tune with the business style of the region.
And third, Avaya started localizing some of the expats. Once expatriates
are localized, Avaya phases out housing and schooling allowances after a year,
pays employees in the local currency, switches them to local health benefits and
doesn’t have to pay income tax in both countries. For an expatriate who earns
a salary of $100,000, the dual income taxes alone cost $140,000.
Source: Leslie Gross Klaff.7
Short-term Assignments (1–12 months). Employees sent on short-term
assignments stay in the host country between one and twelve months. Technically, the employee might be hired by the subsidiary, and receive a mobility
bonus. The employee’s family may go along but, in practice, this rarely
happens. Career management takes place at the head office and performance
evaluation is often shared between the head office and the host country.
According to Harris,6 short-term assignments can be used to compensate
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for the lack of mobility of dual-career couples. This type of assignment is
used mainly for knowledge transfer (69%) and for managerial development
(39%). Short-term assignments may prove stressful for employees. Indeed,
it becomes difficult to maintain a proper balance between work and private
life, because of the long work hours in the host country and because of
the distance between the employee and his social and family environments.
Organizations have a hard time establishing consistent policies and practices,
and managing taxation and compensation issues.
In addition, Harris6 identifies two other sub-categories of short-term
assignment: the “international commuters” and the “frequent flyers.” “International commuters” travel between their country of origin and the host
country once or twice per week, while their family remains in the country
of origin. “Frequent flyers” travel frequently for business, for periods of
thirty-one days or less, while remaining based in the country of origin. Usually, business trip and per diem policies apply to those trips. According to
Harris,6 “international commuters” and “frequent flyers” are used to carry
out operational assignments, but are also adequate for control and knowledge transfer functions, as well as replacement of local competencies and
coordination. These assignments often lead to problems with work/family
balance and excessive fatigue among employees. In addition, the impact of
cultural differences is often underestimated in these assignments and crosscultural training is generally nonexistent. Finally, organizations often lack
consistent policies regarding these assignments.
According to Harris,6 organizations are not monitoring these alternatives
to long-term expatriation closely enough, often having little idea of their
number, how much they cost them, and how cost-effective they might be.
Global Managers. As opposed to the expatriate manager, who spends
between one and five years abroad and then returns to the head office, the
global manager strings together multiple expatriations for the duration of
his or her career. Global managers have an international career, have shown
their ability to survive and work efficiently in various cultures, have great
communication skills, and an open mind. The international life style is a
true motivation for them, and the management of their career is centralized
at the head office.7
International Junior Managers. International junior managers are sent
abroad to develop their managerial abilities. They are young managers,
mostly high-potential employees.
In conclusion, organizations use global managers and expatriates
for strategic assignments, short-term assignments for tactical missions,
commuters and frequent flyers for operational missions, and international
junior managers for managerial development. These distinctions between the
various types of international assignments for PCNs give organizations the
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flexibility to react to the different problems they encounter at the lowest possible cost. In expatriation policies, specific sections can be found concerning
the different types of contracts.
Strategic Management of International Assignments
Many companies are sending employees and managers abroad to implement their global strategies and to control or coordinate their far-flung
subsidiaries.9 But sending managers abroad is very expensive. Black and
Gregersen10 showed that expatriates cost two to three times what they
would in an equivalent position back home. Moreover, between 10 and
20 percent of the expatriates come back before the end of their contract
because they could not adjust to the job or to the country. Among those
who stay in their position abroad, one-third do not perform up to their
supervisor’s expectations.10 International managers constitute a crucial and
competitive resource for multinationals, a resource that needs to be managed and developed. Value created by international assignments depends
on the way they are planned and managed. Basing themselves on the literature and on interviews with international HR managers, Waxin et al.11
propose a model for the strategic management of international assignments.
This model comprises eight steps: (1) strategic planning and job analysis, (2)
recruitment, (3) selection, (4) preparation for the transfer, (5) adjustment
and organizational support, (6) evaluation and performance management,
(7) Compensation and (8) repatriation and retention (Exhibit 12.3).
Strategic Planning and Job Analysis
According to Waxin et al.,11 the first step consists in establishing, for each
international assignment (1) the goals, (2) the job description, (3) the job
specification and (4) the ownership for the responsibility of managing the
full expatriation/repatriation cycle.
Firstly, the goals of each international assignment must be specified,
and their strategic value must be determined with regard to the organization’s strategic objectives. What are the assignment’s goals? (increase the
organizational performance, train local employees, transfer the head office’s
organizational culture toward a subsidiary, solve a technical problem, launch
a new product, etc.). Which of these objectives are directly linked with
the organization’s strategic objectives? Dowling and Welch12 distinguish
between hard, soft and contextual job goals. Hard goals are objective, quantifiable, and can be directly measured (e.g., return on investment, or market
share). Soft goals tend to be relationship- or trait–based, like leadership
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Exhibit 12.3
A Model for the Strategic Management of International Assignments
Strategic
planning and
job analysis
Repatriation
and retention
Recruitment
Compensation
Selection
Performance
appraisal
Preparation
Adjustment
Source: Waxin et al.11
style or interpersonal skills. Contextual goals attempt to take into consideration factors that result from the situation in which performance occurs, like
arbitrary transfer pricing or other financial tools for transactions between
subsidiaries to minimize foreign risk exposure. Job goals will be translated
later on into performance appraisal criteria so specificity and measurability
are essential. However, there are considerable differences in the way the
goal-setting process is handled in different countries. Tahvanainen13 found
that in Sweden and Germany, for example, it is normal for managers to
participate in the setting of job goals, whereas setting job goals is the priority
of senior managers in the USA.
The job analysis, which comprises of the job description and the competency profile, must then be carried out. The job description contains general
information on the position, the goals to be met, a list of tasks in order
of importance, the particular conditions, the context of the position, the
duration of the contract, the date of review, and the date of approval. In the
context of an international assignment, the job’s context must be described
in great detail; the main characteristics of the subsidiary’s organizational
culture must be identified, as well as those of the host country. Harvey14
suggests that job analysis must generate criteria that adequately capture the
nature of international work as opposed to the domestic context, in order
to provide valid appraisal information.
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The job specification states the required knowledge, abilities (know-how)
and experience, and personal characteristics for the job. The profile must be
objective and realistic. In order for such a profile to be drawn, the competencies required to complete each task of the job description must be identified
and weighed. In the context of an international assignment, it is important
to include in the profile cultural competencies and personal characteristics,
such as a social orientation, cultural flexibility, stress resistance, and so on
that are required.15 Ideally, the job specification will be used again as a basis
for the choice of the evaluation criteria.
Finally, ownership for the responsibility of the management of the full
expatriation/repatriation cycle must be determined. Will the expatriate refer
to their home- or host-country HR manager during their assignment? This
is where collaboration between home and host HR and line management is
essential. Confusion will only make communication between the expatriate
and HR more difficult, and will make the expatriate feel less supported.
This first step helps determine the ideal type of international manager
for the position (PCN, TCN, HCN, other type of international employee).
The objectives of the position, the job description and specification, and
the details about the management of the expatriation/repatriation processes
should be explained to the candidate by the end of the selection process. In
any case, the expatriate should know the exact purposes of his assignment
before the beginning of his assignment.
Recruitment of International Employees
The main objectives of international recruitment are (1) elaborating ways
and techniques which will allow the organization to attract a sufficient
number of motivated and qualified international candidates, (2) identifying
candidates susceptible to filling foreign positions at the lowest possible cost,
and (3) increasing the pool of international candidates at the lowest possible
cost, anticipating for the organization’s future needs in personnel. The major
decisions at this step regard the sources and the methods of recruitment.
Recruitment Sources. The first decision to be made is whether to recruit internally or externally. In spite of the external recruitment possibility, it is well
documented that the majority of firms depend almost exclusively on internal
recruitment for foreign positions, especially for their expatriate’s positions.
This preferred recruitment option can be found even in local markets where
there is plenty of skilled labor. Why is there not a greater emphasis on
external recruitment? The answer has to do with the strategic value of the
international assignment. Internal recruitment is justified if the strategic purpose of the assignment is coordination or control of operations. However,
in the case of learning units, for example when the subsidiary acquires and
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develops new resources that may be later exported to other parts of the
organization, recruiting from the external market can be more appropriate.
Recruitment Methods. The second decision to be made regards the choice of
the recruitment methods. The major internal recruitment methods for international positions are (international) job posting and utilization of internal
databases. To enable the company to identify suitable internal expatriates
candidates, HR departments need to build global databases that include data
on potential candidates, their work experience, performance, skills, availability, and their preferences regarding a potential international assignment:
where he or she would be interested in working, in what capacity, and on
what sort of projects.16 For example, Tetra pack developed their “Management Planning and Development” centralized database which contains the
profile of over thousands high potential employees and which is updated
once a year. This database is consultable by the HR directors’ community
and can be used to support the expatriates’ recruitment process.8
The Danone Group’s Career recruitment site, for internal
and external recruitment
The Danone Group has opted for daily posting all vacant positions on the
Danone Career website, which is accessible from the outside as well as from
inside the company. To apply, candidates must find positions that correspond to
their profile. The site is the fastest and most efficient way to obtain information
regarding vacant positions within the Group, from anywhere in the world. To
apply for a position, candidates must:
1 Conduct a search, specifying their level of experience (student
seeking an internship, junior (1–2 years of experience), senior
(2 years + of experience), or director/executive), their field of specialization and the geographical area where they wish to work.
2 Select a job offer within the search results
3 Study the job descriptions and apply.
After having filled out his or her personal information on a form, the candidate can attach his or her CV and cover letter. Within 72 hours of applying,
the candidate will get a receipt notification.
The English language is preferred throughout the recruitment process. The
Group searches for candidates with an international profile, and proficiency in
English is highly valued. The candidate may, however, use the language of his
or her choice in the free-text fields or in the attached documents.
The progressive opening of the Careers website to foreigners will help facilitate the internationalization of the recruitment process. Fifteen countries currently use the website, and the international development continues.
Source: Danone.fr
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When suitable candidates cannot be found internally, companies turn to
the external market. External recruitment methods for international positions include using the Internet, launching campaigns in international media,
using the services of recruitment agencies and/or international head-hunters,
and establishing relationships with learning institutions.
Selection of International Employees
The main objectives of the selection process are (1) enabling the company
and the employee to determine whether the candidate possesses the competencies and motivation to successfully accomplish his or her international
assignment, (2) minimizing the risk of assignment failure and the related
costs, and (3) assigning candidates to suitable positions, thus maximizing
the organization’s and the candidate’s benefit. Because of the specificity and
implications of the task the expatriate will have to perform, multinational
companies should ensure that they have an appropriate selection process for
international assignments. We will now take a closer look at the selection
criteria, the choice of the evaluators and the selection methods.
Selection Criteria. In theory, the choice of selection criteria for international
employees is based on an analysis of the characteristics of the multinational,
those of the subsidiary, the host country, and the position to fill.11
Depending on the results of this analysis, the ideal candidate’s profile
varies from one international assignment to the other (Exhibit 12.4).17
Given the considerable diversity of potential positions and host countries, it is not possible to draw a list of key competencies for expatriates.18
Unfortunately, organizations tend, when selecting expatriates, not to look
far beyond technical expertise and previous performance in the country
of origin. However, in the context of an international assignment, criteria
related to the cross-cultural competencies and individual characteristics of
the candidate, such as social orientation, will to communicate, good stress
resistance, and open-mindedness, should be considered.15 Studies show that
individuals who seek challenges, new experiences, and who enjoy learning
are more likely to approach an international assignment in a positive and
creative way, and are also more likely to succeed as expatriates. If the job
analysis has been done properly, the selection criteria will be based on the
international assignment’s competency profile.
Choice of Evaluators. Black et al.4 recommend forming an expatriate selection team which includes managers from the country of origin and managers
from the host country, as well as a representative from the iHRM department. Harris and Brewster16 note, however, that most of the time, the iHRM
specialist’s role is limited to that of an advisor, while the actual decision is
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Exhibit 12.4
Determinants of the Selection Criteria for International Employees
Multinational’s characteristics
Stage of internationalization
Industrial sector
Business strategy
HRM orientation
iHRM policies
Organizational culture
Subsidiary’s characteristics
Legal form/ownership mode
Localization
Selection criteria
- Type of international manager
- Education
- Experience
- Professional competencies
- Personal characteristics
- Cultural competencies
Host country’s characteristics
National culture
Labor laws and regulations
Position’s characteristics
Function of the international assignment
Job description and specification
Contract duration
Hardness of communication
Source: Waxin et al.11
taken by the managers alone. Marchon8 states that when the expatriation
is requested by a subsidiary, the selection process is more transparent: the
subsidiary, responsible for the selection, will make a final selection among
several candidates it has chosen. However, when the expatriation is deemed
necessary by the head office, the subsidiary’s role is often limited to approving or rejecting the final choice of the candidate.
Selection Methods. Several methods are available, like interviews, psychological tests, assessment centers, work simulations or role plays, references,
biographical and background data and so on.
According to Linehan et al.,19 the interview is the most used and is still
regarded as the most effective method to select overseas assignees. It provides
a forum to understand the expectations and motivations of the candidate
and to inform him/her about the job.
The use of formal testing like psychological or relational tests is very limited in the practice but according to Harvey20 they are becoming used more
frequently. Finn and Morley21 cite that cultural awareness and adaptability
tests are almost never used because they are expensive, difficult to construct
and interpret, and their reliability is questioned. Forster and Johnsen22 mention that in an international context there are some enormous problems with
both suitability and comparability of tests for different national groups and
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cultures. Finally, the same authors note that the introduction of these tests
encounters resistance from the selectors because this could undermine their
power and prestige in terms of decision-making.
Assessment centers are considered costly and time-consuming, but they
regroup all the methods of evaluation in a single place within a few days.
They allow the assessment of the communication skills and the adaptability
of the candidates as well as their strategic competencies.
References, and biographical and background data are principally used
to ensure that the applicant has the necessary technical expertise to do the
job, and are so less decisive in the selection of an expatriate, even if they can
be useful to spot a particular candidate. According to the authors in iHRM,
the best thing to assess a candidate correctly is the use of several different
techniques and sources of data.
Expatriates selection process in a global fast-food multinational company
Tricon Restaurants International, based in Dallas, Texas, is the franchiser for
over 10,000 overseas Kentucky Fried Chicken, Pizza Hut, and Taco Bell Restaurants. The company has 100 expatriates; 20 are Americans working overseas.
Tricon has established a very formal selection process to staff its overseas
positions.
Selection Criteria. Rather than choosing candidates who are merely excited
about overseas assignment and who have the technical skills to perform the
job, Tricon is taking a closer look at whether the candidates have the necessary
personality characteristics, such as their empathy, their ability to adapt to different situations, their ability to interact with others (sociability), and the family
support needed to succeed in overseas assignments.
Selection Methods:
(1) To select candidates for overseas assignments, Tricon interviews
candidates about the positions, the country’s culture, and its
marketplace.
(2) If there is any doubt whether the candidate can make the adjustment, a consulting firm is hired to further assess whether the
candidate has the personality needed to succeed in an overseas
assignment.
(3) If candidates pass the interview, a 360-degree feedback survey,
which asks peers and their managers about their strengths and
weaknesses, is used to evaluate their skills.
(4) If the evaluation is positive, candidates and their families are
sent overseas for a one-week look-see trip. During the visit, local
(continued)
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managers evaluate the candidate while the family evaluates the
community. The family spends time touring local schools and
potential housing locations, and meeting with other expatriates
in the country who help them understand the local culture and
environment.
(5) If the local managers find the candidate acceptable, the candidate, with input from family, can accept or reject the
position.
Source: Based on C. Patton.23
Harris and Brewster16 propose a typology of selection methods for international managers, which comprises four categories, placing the various
selection methods on two axes: open/closed procedure and formal/informal
procedure.
First, the selection process can be open or closed. In an open system, all
vacancies are advertised and anyone with appropriate qualification and experience may apply. All the candidates are interviewed with greater or lesser
degrees of formalized testing. Selection decisions are taken by consensus
amongst selectors. In contrast, in a closed system, selectors at corporate headquarter choose or nominate through line managers the “suitable” candidates.
These candidates are informed only once agreement about acceptability has
been reached between headquarter personnel and the line manager. The
selection interview consists of a negotiation about the terms and conditions
of the assignment.
Then, the selection process can be formal or informal. In formal systems,
vacancies are advertised internally, selection criteria are made explicit and
are business focused, and directly related to the job description and job
specification. Psychometric testing is likely to be used, and selectors need to
agree among themselves about candidate match. In informal systems, there
is a lack of specificity between competencies and job description, criteria
are often not specified. Selectors assume that personality characteristics are
already known, and give a great importance to networking, reputation, and
team fit. There is an increasing likelihood that individual preferences of
selectors can predominate (Exhibit 12.5).
In practice, however, the majority of organizations operate predominantly
closed and informal selection systems, which are not that different from
the systems used for domestic assignments. Stahl24 states that 81 percent of
the 116 expatriates sampled in his study were recruited through an opaque
selection system, on the basis of nonstructured interviews. Only 19 percent of
the candidates went through a structured interview. None of the candidates
had had to pass a test, and in no case, at any moment during the selection
process, was the life-partner taken into account (Exhibit 12.6).
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Exhibit 12.5
Typology of Expatriates Selection Processes
Formal
Open
Informal
• Clearly defined criteria
• Less defined criteria
• Clearly defined measures
• Less defined measures
• Training for selectors
• Limited training for selectors
• Open advertising of vacancy
(Internal/external)
• No panel discussions
• Panel discussions
• Recommendations
• Clearly defined criteria
• Selectors’ individual preferences
determine criteria and measures
• Open advertising of vacancy
• Clearly defined measures
Closed
• No panel discussions
• Training for selectors
• Nominations only
(networking/reputation)
• Panel discussions
• Nominations only
(networking/reputation)
Source: Harris and Brewster.16
Exhibit 12.6
The Expatriates Selection Methods
N = 116 expatriates
90%
81%
80%
70%
60%
50%
40%
30%
19%
20%
10%
0%
Unstructured
Interview
Structured
Interview
0%
0%
0%
Psychological
Tests
Assessment
Center
Inclusion of
Partner
Source: Stahl.24
Closed and informal selection systems present at least three major
disadvantages.16 First, they limit the degree to which interpersonal and
intercultural skills are taken into account when selecting international managers. Secondly, they restrict the pool of potential candidates to the candidates who are appreciated by the selectors. This is particularly problematic
for women, given the fact that between 80 and 95 percent of international
managers are men. Within such an imbalanced selection context, it is all
the more important to ensure that an open/formal selection system prevents
potential discriminatory biases on the part of selectors. An open formal
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The expatriates selection processes in five Swiss multinational companies
(Credit Suisse, Nestle, Holcim, Tetra Pak, Novartis)
In each case the task of the selection falls to the host company, either through
the line manager or through the HR., with sometimes a possible involvement of
a central department. These persons have generally no particular international
experience and therefore do not emphasize the cultural dimension throughout
experience and therefore do not emphasize the cultural dimension throughout
the selection process. The selection criteria mainly used by these five companies
are based on technical and professional competencies, when the literature recommends relying firstly on crosscultural skills, without of course forgetting the
professional skills. For all five companies, the selection methods employed to
evaluate the competencies of the candidates are the references, the background
of the employee and an interview. The informal selection procedure mainly
leans on the personal contacts and the network of the selectors. An interview
is normally used to confirm the selection choice. None of the companies uses
any kind of formal testing to assess the cross cultural or relational skills of the
candidate. However, three out of the five companies say they are willing to
improve their selection processes in the near future by introducing some more
structured selection tools in the selection process.
Source: Marchon8 .
selection system forces the selectors to continually question their assumptions about women’s or other minorities’ suitability and their acceptability
in international management positions. Thirdly, they prevent the organization from managing international assignments strategically. The role of the
HR manager is limited to dealing with the financial, physical, and social
aspects of international selection, instead of having an input into which kind
of international manager is needed and what kind of assignment could be
optimal for that international manager.
In conclusion, although the researchers are unanimous about the significance of an effective selection system, there is a big gap between their
suggestions and the organizations’ practices. As we will see, the work accomplished during the selection is also useful for determining the preparation
needed by the selected candidate.
Preparation to Transfer
When an appropriate candidate has been selected for an international assignment, he or she must get prepared to face the challenges of the new position.
The purpose of the preparation step is to provide the expatriates with all
the necessary elements that will help them succeed during the international
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assignment by facilitating their adjustment in the host country and allowing them to work efficiently throughout the duration of their contract. The
options company can use include organizing preliminary visits, providing
practical assistance to the international employees, providing language and
cross-cultural training.
Preliminary Visits or Look-see Visits. This is a trip to the host country offered
to the assignee so that he or she can assess by himself the situation he or she
will have to face. This option is sometimes used at the end of the selection
process so that the candidate can confirm his or her acceptance of the
position. During this trip the expatriate will finalize the contract and settle
some issues like finding an accommodation or a school for the children. The
expatriate will also get an idea about the new work environment. Usually,
a preliminary visit includes the spouse, sometimes the children.
Practical Assistance. This aspect of the preparation is to make everything
ready for the transfer of the expatriate and his family in order to facilitate
the settling in. This consists in arranging for the visas, for the transportation, finding a new accommodation for the family, new schools for the
children, if it has not been done during the look-see trip, and so on. Many
multinationals now use the services of relocation specialists to provide this
practical assistance. Informing the expatriate on how the transfer will occur
and how life in the host country will be will reduce the stress related to the
uncertainty of the foreign assignment and facilitate the adjustment in the
new environment. The organization should give adequate notice of the new
posting given the professional and personal arrangements that the employee
will need to make before he leaves his home organization and country.
Language Training. The assignee is taught the language of the region where
he or she will be sent. According to Ashamalla,25 language ability facilitates
the adjustment in the local environment and enhances effectiveness in dealing
with foreign counterparts groups including government officials, bankers,
labor organizations, suppliers, and customers. The rigor of the training
should depend on the relational aspect of the expatriate’s job.
Cross-cultural Training. The objective of cross-cultural training is to teach
members of one culture to interact effectively with members of another culture,
and to predispose them to a rapid adjustment to their new positions. 26 Brislin,27
a cross-cultural psychologist, identifies three methods of cross-cultural training: cognitive, affective, and behavioral. The cognitive method corresponds
to a diffusion of information, using conferences or nonparticipative sessions,
in a foreign cultural environment. The affective method aims at provoking
individual reactions so the subject can learn to deal with critical cultural incidents. The behavioral method aims at improving participants’ capacity to
adapt to their communication style and to establish positive relationships
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with members of another culture. Management science researchers have
used Brislin’s model and have added to it the situational (hardness of the
culture and hardness of the communication, function and role of the manager, planned duration of expatriation) and individual variables (personal
learning objectives, degree of active participation). Tung28 suggests that the
training method should be chosen according to the type of assignment and
should be contingent to two determinant factors: the degree of similarity
between the culture of origin and the host culture (which is a synonym of
cultural distance) and the degree of interpersonal interaction between the
manager and the host country’s inhabitants, which would be linked, according to Black et al.,4 to the role and function of the manager. In conclusion,
the different models of cross-cultural training and their content are built
around three fundamental variables: the cultural distance between the country of origin and the host country, the manager’s level of integration with his
environment, and the duration of the overseas assignment (Exhibit 12.7).
Gertsen30 proposes a typology of training methods encompassing four
categories. First, she identifies two kinds of training: conventional training, where the information is transmitted through a unidirectional communication, as is the case in schools and universities, and experimental training, where the trainer gets the trainees to participate by simulating real-life
situations. Then, she identifies two possible orientations: either the training
Exhibit 12.7
Cross-Cultural Training Model
Length
of training
Level of
difficulty
1–2 months
High
1–4
weeks
Cross-cultural training method and content
Moderate
Cognitive approach
Conferences
Films/books
Language (basic level)
Less than
1 week
Affective approach
Role plays
Case studies
Critical incidents
Stress reduction
Language
(intermediate level)
Intensive approach,
or immersion
Evaluation centre
Field experiences
Simulations
Language
(advanced level)
Low
Level of
integration
Length of
expatriation
Moderate
Low
1 month or less
2–12 months
High
1–3 years
Source: Adapted from Mendenhall, Dunbar and Oddou.29
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Exhibit 12.8
Types of Training Methods
Experimental
training
General
experimental
training
Specific
experimental
training
General
culture
Specific
culture
General
conventional
training
Specific
conventional
training
Conventional
training
Source: Gertsen’s typology of cross-cultural training.30
focuses on the notion of culture in general and aims at sensitizing participants to the notion of culture, or it focuses on one specific culture and aims
at making participants more competent in that particular culture. According
to Gertsen,30 the combination of these two dimensions reveals four types of
training, as represented in Exhibit 12.8. In our research, we use these four
types of training.
Pre-departure Cross-cultural Training
Effectiveness
Studies in the fields of cross-cultural psychology and management demonstrate the beneficial impact of cross-cultural training on expatriates’
cross-cultural adjustment.31 Their findings can be summarized in three
conclusions: cross-cultural training is associated with (1) feelings of wellbeing and self-confidence, (2) development of appropriate behaviors in the
context of the foreign culture, and (3) improvement of the relationships
with host country’s inhabitants. In 2005, Waxin and Panaccio32 studied the
impact of the four types of pre-departure cross-cultural training identified by
Gertsen30 on the three facets of cross-cultural adjustment (work adjustment,
interaction adjustment, and general adjustment) for French, German, Scandinavian, and Korean expatriates working in India. In summary, the findings
of their research confirm the view expressed by researchers over the last
twenty years that pre-move cultural training has a positive effect on adaptation to international assignments. The authors further contribute to the
literature in three different ways. First, their study shows that experimental
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types of training are the most effective ones. Secondly, their results show
that the larger the cultural distance between the country of origin and the
host country, the more pronounced are the effects of cross-cultural training.
Thirdly, the authors show that efficacy of inter-cultural training is clearly
influenced by the magnitude of expatriate’s prior international experience.
Cross-cultural training’s effectiveness is indeed stronger for managers with
less international experience.
Pre-departure preparation thus appears to be an important factor for
adjustment. However, in most multinationals, cross-cultural preparation for
expatriates is superficial, incomplete or simply nonexistent.32 The fact that
decision-makers often have no international experience might, among other
reasons, explain this state of affairs (see Box below).
Pre-departure preparation at Novartis, Switzerland
Before formally accepting the overseas position, expatriates at Novartis are
offered a look-see trip to the host country.
English courses may be offered to the expatriate if needed, English being the
official language of the company. Furthermore, if it is considered as essential that
the assignee and his spouse have basic knowledge of the host country language,
the company can pay for such a language tuition.
Novartis invites then the assignee and the spouse to a pre-assignment briefing
to coordinate the arrangements for the transfer, to explain the compensation
package and to answer any question about the host country.
Moreover, a cross cultural training is offered, consisting of a country briefing
and a course about managing in the host country, communication and negotiation skills useful for the country of assignment. This training is provided by a
native of the host country. Even if it lasts only 2 days, this preparation allows a
better adjustment and expatriates are globally satisfied with it. A pre assignment
check list is also given to the expatriate in order for him/her not to forget any
important issue before leaving.
Source: Marchon.8
As an alternative to pre-departure training, cross-cultural training in the
host country could also be envisaged.33 Mendenhall and Stahl34 mention
in-country real-time training as one of the three new tendencies that are
emerging for HR managers who work in the international HR area, alongside
with global mindset training and CD-ROM/Internet-based training. Further,
corporations should provide cross-cultural training to expatriates’ spouses,
since a lack of adjustment on their part could have negative repercussions
on the adjustment of the expatriate himself. Finally, Harris35 notes that
corporations would benefit from using their former expatriates as trainers
for the new expatriates. Indeed, usage of the newly acquired competencies
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of expatriates is often neglected, and cross-cultural training constitutes an
area where those competencies could easily be put to contribution.
Adjustment of the Expatriate Manager:
Organization Support upon Arrival and during
the Assignment
Once the expatriate lands in the location of assignment, he or she needs
further support from the company to adjust as quickly and smoothly as
possible in the new job and in the new environment. Also, since the expatriate
is supposed to come back to the home country after the realization of
his mission, the company must also keep links with the expatriate so that
the employee does not suffer from the out-of-sight, out-of-mind syndrome.
Furthermore, maybe even more than the expatriate, the spouse needs also
support. First, we will define the notion of adjustment and present the
adjustment model and the expatriates’ adjustment factors. We will then see
how the organization can support the expatriate employee, upon arrival and
throughout the assignment.
The Process of Cross-cultural Adjustment
Expatriates’ adjustment to their new role and environment is of great significance, both to the organization and to the managers themselves. From
the organization’s perspective, expatriates’ degree of adjustment partially
predicts performance and completion of the mission.36 From the managers’
perspective, adjustment is a factor of job satisfaction and psychological
well-being.37 As a result, there has been a burgeoning academic and practical interest in understanding and measuring the adjustment process and its
antecedents. Black38 defined intercultural adjustment as “the degree of an
individual’s psychological comfort with various aspects of a host country.”
The first conceptions of expatriate adjustment correspond to socioaffective conceptions of the cross-cultural adjustment process, which has
been conceived for the last decades as following a U-shaped curve over
time.39 The curve’s shape corresponds to the various stages which the individual goes through. Black and Mendenhall40 summarize the curve’s four
steps in the following manner:
1. The first stage of expatriate adjustment is referred to as the “honeymoon” period. During that stage, the employee is fascinated, excited,
and smitten with the host country’s culture. At this stage, the employee
has only superficial contacts with his or her environment.
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2. The second stage, characterized by disillusionment and frustration,
is that of the culture shock. The expatriate cannot understand the
behavior of the people that surround him/her and realizes that his or
her own behavior does not produce the expected consequences. During
this stage, the expatriate doubts his or her own ability to face this new
situation and temporarily adopts a negative attitude toward his or her
new environment. This stage, which corresponds to the bottom part
of the U-shaped curve, takes place approximately six months after the
arrival in the host country. If the crisis lasts too long, the remainder
of the adjustment process can be jeopardized.
3. The third stage is characterized by a gradual adjustment to the new context. During this stage, the expatriate becomes increasingly efficient.
4. The fourth stage, “mastery,” is characterized by a regular improvement
in the individual’s ability to function efficiently in the new culture
(Exhibit 12.9).
Black and Mendenhall40 presented a critical review of the 18 studies based
on the U-shaped curve theory. The results of these studies are difficult to
interpret, and the U-shaped curve model remains imperfectly validated. In
these studies, adjustment was measured through concepts operationalized in
different ways, such as morale, psychological mood, favorable opinion of
HCNs, satisfaction, comfort, and difficulties experienced in the new environment. Results of the various studies highlight the existence of individual
differences, which suggest that different forms of adjustment may exist, with
Exhibit 12.9
The U-shaped Curve Model
Adjustment degree
7
6
Mastery
Honeymoon
5
4
3
Adjustment
2
1
Culture shock
0
1
2
3
4
5
6
7
8
Months in the foreign culture
Source: Black and Mendenhall.40
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curves that are not always U-shaped. Some expatriates do not experience a
culture shock while some international managers who are considered very
efficient in their jobs suffer from profound culture shock. The U-shaped
curve theory and the concept of culture shock hide the multi-dimensional
character of the adjustment process.
Black38 conceptualized and demonstrated that intercultural adjustment
contains three related but conceptually distinct facets: work adjustment,
which concerns responsibilities and performance, interaction adjustment,
which concerns relationships with nationals of the host country, and general
adjustment, which concerns adjustment to host country’s living conditions,
such as housing, food, leisure activities, and medical services. This typology has been validated by the works of Black and Stephens41 and Black
and Gregersen,42 and is currently used in numerous studies. While they
do correlate, work, interaction, and general adjustment do not follow the
same curves. Studies show that the adjustment facets, despite having some
common elements, are explained by distinct factors.
The Integrated Cross-cultural Adjustment Model
Black et al.43 introduced the concept of “anticipation” in the cross-cultural
adjustment model. These authors underline the importance of the anticipated
adjustment phase, which takes place before the adjustment phase in the
host country. Among the components of this anticipated adjustment phase,
the previous international experience and the cross-cultural training or the
preparation for the expatriation play a major part in explaining adjustment
in the host country. Indeed, they allow the individual to build more realistic
expectations toward his or her future work context, which reduces the
occurrence and the magnitude of “surprises” while facilitating adjustment.44
Most studies on expatriate adjustment following that of Black et al.43
use their model, (Exhibit 12.10) studying in great detail the impact of the
different variables on the cross-cultural adjustment process.45
Waxin (2006b) focuses on the in-country adjustment process. She studied
the impact of culture of origin on the three facets of expatriates’ adjustment
(work, interaction and general) and their antecedents.46 47 Her research
model integrates organizational, individual, and contextual variables and
introduces culture of origin as a direct and a moderator variable. She used
self-administered questionnaire data from French, German, Korean, and
Scandinavian expatriated managers in India, and multiple regressions with
moderator variable. The results establish that culture of origin has a direct
effect on the three facets of expatriate adjustment and a moderator effect on
their antecedents. In the following text, we briefly comment on the major
factors of adjustment. The summary of her research findings is presented in
Exhibit 12.11.
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Exhibit 12.10
Cross-cultural Adjustment Model
Individual
characteristics
Individual
Prior
International
Experience
Training
Work
variables
In-country
adjustment
Anticipatory
Adjustment
Organizational
variables
Contextual
variables
Organization
Selection process
Source: Black et al.43
Exhibit 12.11
The Integrative Model of Cross-cultural Adjustment
Organizational variables
Role clarity (H1)
Role discretion (H2)
Social supervisory support (H3a)
Social coworkers support (H3b)
Social home organization support (H3b)
Moderator
variable
Culture of origin
Logistical support (H4)
Intercultural preparation (H5)
Organizational similarity (H6)
Indirect effect
Direct effect
Individual variables
Technical competencies (H7a)
Substitution capacity (H7b)
Social orientation (H7c)
Willingness to communicate (H7d)
Openness capacity (H7e)
Active stress resistance (H7f)
Work adjustment
Interaction adjustment
General adjustment
International experience (H8)
Contextual variable
Partner support (H9)
Time spent in host country (H10)
Source: Waxin (2006b).
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There are three major categories of variables influencing expatriates’
adjustment following expatriation: organizational, individual, and contextual variables.
Organizational antecedents of expatriate’s adjustment comprise two jobrelated variables (role clarity and role discretion), three social support
factors (supervisory, coworker(s), and home-country organizational support), logistical support, expatriation training, and organizational culture
similarity.
• Job-related Factors. Job-related factors of adjustment encompass role
clarity and role autonomy. Ideally, before the departure of the expatriate, his or her supervisors in the home and host countries should agree
on the precise definition of the role of the expatriate and on the degree
of autonomy he or she will have in this position.
• Organizational Social Support. This encompasses supervisory, coworkers, and home-country organizational social support. Social support
provides expatriates with information about what is acceptable and
unacceptable in the new work context. Organizational social support
has been shown to reduce the time to proficiency of expatriates and to
be positively related to the three facets of adjustment.
• Logistical Support. Organizational logistical support can include a
career assistance service for the spouse or a relocation service, which
helps to reinstall the transferee’s family. If these services do not directly
help the individual to adapt to his new post, they at least help to
diminish the fear of the unknown.
• Intercultural Training. Much of the literature suggests that training
enhances expatriates adjustment.32 48
• Organizational Similarity. Perceived dissimilarity between homecountry and host-country organizations is a source of uncertainty and
stress and thus relate negatively to expats adjustment.
Individual antecedents of expatriates’ interaction adjustment are the six
dimensions of expatriates’ adjustability and prior international experience.
• Adjustability. Based on the works of Mendenhall and Oddou49 and
Black50 , recent studies15 51 have identified six dimensions of the expatriate’s adjustability, each one being measured by a battery of items. The
dimensions are confidence in their own technical competencies, social
orientation, willingness to communicate, substitution capacity, cultural
openness, and stress resistance. All these adjustability dimensions are
positively correlated to adjustment.
• Prior International Experience. Theoretical discussions have, for a long
time, included previous international experience as relevant for the
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adjustment process. Theoretically and intuitively, it makes sense to
assume that international experience allows a quicker and more complete adjustment. Waxin (2006b) found that prior international experience was positively correlated with adjustment.
Finally, contextual antecedents encompass partner’s social support, time
spent in the host country, and culture of origin.
• Partner’s Social Support. Partner’s social support is viewed in the literature as an important influence on the worker abroad. Partner’s social
support reduces the stress generated by the new work environment and
thus facilitates expatriates’ adjustment.
• Length of Time Spent in Host Country. Adjustment is a time-related
process. Individuals need time to get accustomed to their new environment and learn the host country culture and appropriate and acceptable
behaviors. Time spent in the host country is positively related to expatriates’s adjustment.
• Culture of Origin. Research suggests that the more different the host
culture is from the home culture, the more demanding the adjustment
will be. This phenomenon is known variously as the effect of cultural
distance or culture. There is a further point arising out of the cultural
differences literature. Different cultures may be more or less effective
as expatriates in certain countries. Waxin (2004, 2006b) contributes
to the literature in two different ways. First, she showed that expatriates’ adjustment degree varies significantly according to their culture of
origin. This is termed the direct effect of country of origin on the adjustment degree. Secondly, she showed that the antecedents of adjustment
vary according to the specificities of expatriate’s culture of origin. This
is termed the moderator effect of culture of origin.
The results of this research have important implications for the management of expatriates, especially in the fields of recruitment, intercultural
training, and support management policies. As far as expatriate recruitment
is concerned, technical expertise and domestic track record are by far the
dominant selection criteria. Our results show that different facets of adjustability are crucial to the adjustment process. Crucially, knowledge that culture
of origin/cultural distance is a significant predictor of adjustment suggests
that organizations may need to revise their international staffing policies.
If culture of origin is critical then selecting TCNs for whom the country
of assignment is not that different culturally from their own may be a sensible policy. Cross-cultural training appears to be an important factor of
adjustment, especially when it comes to interaction and general adjustment.
The training must be in accordance with the hardness of the culture of the
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host country. The more different that culture is from that of the country of
origin, the more important and necessary is the use of cross-cultural training
programs. Finally, managers might use the results of this study to facilitate
the adjustment of expatriates to their new position abroad. Antecedents of
adjustment are not the same across the national groups of expatriates. Our
results suggest that management may be well advised to implement policies
and practices to provide effective support and encouragement to expatriates,
which take account of cultural and personal needs.
Support on place at the point of arrival. The first support the expatriate
will need after arrival on location should focus on resolving the immediate
living problems, as where to register to the local authorities, where to go
shopping, and how do the phone system works.
• The company could grant the expatriates leave for the first critical days,
or at least allow him/her flexitime during the first week.
• Providing help to the expatriate to fix his or her administrative and
practical duties will allow him or her to quickly concentrate on the
job-related issues of the assignment. The company can also resort to an
external provider to counsel the expatriate during the first days of his
or her assignment.
• Moreover, to assist the expatriate in his or her early adjustment, the
company should also provide him/her with local information about the
social events happening in the region and the different social clubs.
• Furthermore, the support on arrival should also take into account the
work environment. The expatriate should be properly introduced to his
colleagues and the employees he will work with. Selmer52 notes that a
job overlap is not always possible and is relatively expensive, but very
helpful. The predecessor could also assume the role of a temporary
personal coach of the successor.
• Finally, continuing an on-site cross-cultural training during the early
stages of the assignment will also prove useful to accelerate the expatriate’s adjustment process.
Ongoing Support. Hippler53 (in Linehan et al.19 , p. 180) writes that in the
ideal case the on-arrival support with regard to social integration has proven
successful to an extent that the expatriate needs no further formal assistance,
social support being normal.
• The host company should design a local coach to whom the expatriate
can turn whenever he or she experiences sudden difficulties.
• The home company could also formally or informally appoint the
expatriate with a sponsor/mentor based in the home organization,
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responsible of informing the expatriate about the important issues and
changes. The contact should be via regular e-mails and phone calls
while the expatriate is in the host location, and the expatriate should
meet with the mentor in the home office when possible. The sponsor/mentor will also play an important role at the repatriation step.
A mentor can also keep the expatriate “visible” by communicating
an expatriate’s accomplishments across the organization via articles in
company newsletters or reports on the Intranet. In any case, the expatriates should do his or her best to keep formal and informal contacts
with former collaborators in the home organization.
• The home company should also stay in contact with the expatriate
throughout the assignment, to keep him/her updated about the changes
in the domestic operations, the evolution of the organizational policies, the ongoing projects, and the staffing changes. Multiple means of
communication are available: visits of head offices managers, homecoming of the expatriate, telephone communications, video conferences,
e-mails, letters, company newsletters, and so on.
• Finally, the expatriate should keep in touch not only with his or her
home company, but also with his or her family and friends,19 because
being separated from relatives and friends is one of the worst aspects
mentioned by the expatriates about their international assignment.
According to Katz and Seifer54 (p. 42), in-post support systems should
be established and coordinated between repatriated staff, senior expatriated
staff, and new expatriates. However, the practices in the organizations do
not correspond to the suggestions in the literature. The establishment of mentorship programs in the home company is not much developed. Marchon8
studies expatriation practices in five Swiss multinationals. He found that
only one company, Holcim, organizes formal contacts between expatriates
and the HR department of the home country, twice a year. Otherwise, the
relations an expatriate could have with his or her former subsidiary are
generally left to the initiative of the employee.
Support for the Family. The spouse is the most likeliest person to suffer as
a consequence of an international assignment, especially if he or she gave
up his or her work to follow the assignee and is not reemployed in the new
location.
So the company should help the spouse to develop his or her personal
network. For example, the company could bring the spouses of expatriates
together or encourage the spouses of other employees to take an interest in the newly relocated spouse and provide him/her with information
about the neighborhood, the local activities, and serve as a source of new
friendship.
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• Language courses should be provided for the spouses during the assignment, since they will have frequent contacts with the local population
when accomplishing the basic tasks of household, going shopping, or
dealing with the school. Shaffer and Harrison (Bauer and Taylor55 ,
p. 136) established that language skills is the factor that most influence
the ability of the spouse to rebuild a personal sense of identity and, as
a result, achieve greater adjustment.
• The organization should also provide a support for the spouses who
want to work in the country of assignment, for example by providing a
briefing about the local employment conditions and the way to apply. If
no job is found, the spouse could be given the opportunity to continue
education.
• Finally, the children’s adjustment and education are critical issues in the
mind of most expatriated parents. The company must make sure that
the children will be able to attend a school providing a good teaching.
In many areas, only private, international, or even boarding schools
can be considered and the company should take the costs in charge.
Performance Appraisal
The evaluation serves several purposes: development, evaluation of the
employee’s contribution, give grounds to administrative decisions regarding,
for instance, compensation and promotions. Individual performance management involves a formal process of goal setting, performance appraisal,
and feedback. When designing a performance appraisal system, at least
four elements should be taken into account: the objectives of the organization, the staffing perspective, the internationalization strategies, and the
particularities of the local context. The difficulties and specificities of performance appraisal in an international context come from the possible conflict
between global and subsidiary objectives, the problem of noncomparability
of data between subsidiaries, the volatility of the international market, and
the variable levels of market maturity. Further, it is important to reconcile
the tension between the need for universal appraisal standards with specific
objectives in local units, and to recognize that more time may be needed to
achieve results in markets which enjoy little supporting infrastructure from
the parent company.56 The principal challenges related to the performance
evaluation of the expatriates are the determination of the evaluation criteria, the choice of the evaluators, and the delivery of timely and culturally
sensitive feedback.
The Evaluation Criteria. The criteria must be relevant to the context of the
assignment. Black et al.4 (p. 166) mention that, in the case of an expatriate, the criteria which are seen as factors of success in the home country
may make no sense in a foreign setting. The real factors of success of an
international assignment can be totally different from the ones in the parent
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company. For example, for an expatriation in China, developing good relationships with the local government, diffusing a good image of the company,
and establishing good working relationships with the suppliers may be much
better for the long-term success of the firm than the immediate maximal
profits. To determine the proper evaluation criteria, the evaluators should
refer to the job description and specification, where the important goals
and tasks of the position are defined. Hard, soft, and contextual goals tend
to be translated into performance appraisal criteria. Dowling and Welch12
mention that financial results for any subsidiary do not always reflect accurately its contribution to the achievements of the whole corporation and
that, therefore, these should not be used as a primary input in performance
appraisal. Janssens and Brett5 mention that performance appraisal of subsidiary managers against hard criteria is often complemented by frequent
visits by headquarter staff and meetings with executives from the parent
company. Soft criteria are used to complement the hard ones and take into
account arrears that are difficult to quantify like leadership or communication skills. However, in an international context, the evaluation of these
soft criteria is somewhat subjective and more complicated due to cultural
biases. An appraisal system using multiple hard, soft, and contextual criteria
is strongly recommended in the relevant literature. Lindholm et al.57 mention that European firms are more likely to pay close attention on long-term
goals rather that the short-term measures used by US companies. In part,
this reflects the growing use of international assignments for developmental
purposes in European MNEs and the greater integration of expatriation into
the overall career development process in European firms.58
The Evaluators. As in any evaluation, the raters must have the competencies
and the experience necessary to assess correctly the performance of the expatriate, be given regular opportunities to directly observe the performance,
and be motivated to do so.
Theoretically, the evaluators can be a manager from the home country
organization or from the regional headquarter, the immediate superior of
the expatriate in the host country if there is one, peer managers, clients,
and the expatriate himself. Black et al.4 (p. 175) suggest that a team of
organization members should be involved in the performance appraisal of
global managers: the team coordinator should be a senior HRM manager
and would have to collect and analyze the feedback from the other team
members: the expatriate’s on-site superior, peer managers, subordinates,
clients, and the expatriate himself. The authors suggest to rely on several
rater’s evaluations to avoid possible biases.
Several studies have focused on the expatriates’ evaluation practices in
MNE, in US and in Europe. In practice, the local supervisor is the most
likely possibility to assess the expatriate performance. Gregersen et al.59
surveyed HR directors in 58 US multinationals. They report that in the USA
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the most common rater is the expatriate’s immediate supervisor, either from
the host country (74%) or from the home country (39%). Moreover, they
found that 81 percent of the firms used more than one rater when assessing
expatriate performance. The immediate supervisor (in either the home or
the host country), the expatriate as self-rater, and the HR manager (either
home or host country based) were commonly used as multiple evaluators
of expatriate performance. Half of the expatriate group (51%) were on
performance-based bonus systems linked to the outcome of the evaluation.
The majority of the firms reported annual appraisal practices.
Suutari and Brewster60 studied the management practices among 170
Finnish expatriates. In Finnish MNE, most commonly, the expats’ evaluation
is carried out by a foreign supervisor (36%) or by a Finnish supervisor (22%),
but other forms like evaluation by the managing directors or area/country
managers, who were not direct supervisors of the expatriates, were also
common. Of these firms, 76 percent used the same standardized appraisal
forms for the expatriate appraisal.
Finally, Marchon8 studied the evaluation practices in five Swiss multinationals. In all the five studied multinationals (Tetra Pak, Holcim, Novartis,
Credit Suisse, and Nestlé), the work of the expatriate is evaluated by the
direct supervisor in the host country. At Tetra Pak, Credit Suisse, and Novartis, any assignee is evaluated by his or her direct supervisor, who sets the
objectives, assesses the performance, as it is the case for any other employee.
At Holcim, the expatriates are also evaluated by the direct local supervisor
but using a standardized form developed by the headquarters for the assessment of international assignees. Surprisingly, only one company, Nestlé, has
put into place a process by which the home company receives the evaluation
of the expatriate’s work. The evaluation system is standardized within the
group, and is the same for the expatriate and the local employees, but in the
case of the expatriate, a report on his performance is sent once a year to his
or her home company. In none of the five organizations, a formal team is
created for the evaluation of the expatriates.
The performance Feedback. Provision of timely and regular feedback is an
important element of an appraisal system in terms of meeting and revising
goals, and in motivating work effort. Most of the expatriates are evaluated
once a year and sometimes by a geographically distant evaluator, which
makes it difficult for them to get timely and regular feedback on anything else
than hard criteria. Another difficulty is that sometimes the evaluator is not
from the same culture, and that giving feedback must be done in a culturally
sensitive manner. People from different cultures give and take appraisal feedback in very different ways. At Pepsi-Cola International, instant feedback is
one of the five elements of their standardized performance appraisal system,
along with coaching, accountability-based performance appraisals, development feedback, and HR plan.56 The common system provides guidelines for
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each of these practices but allow for cultural adaptation of these practices.
For example, the instant feedback practice is based on the principle that any
idea about any employee’s performance is raised appropriately and discussed
in a sensitive manner. The “how it is done” is locally adjusted to the different cultures. In Asian cultures, feedback can be tough and direct but never
given in public; Indian employees expect some great extent of specificity and
precision, Latins can argue very strongly in case of disagreement. Pepsi-Cola
International managed to balance the imperative of standardization with the
other imperative of cultural sensitivity.
Compensation of International Employees
The objectives of an effective compensation system are to attract and retain
quality people for global assignments and to motivate them to an acceptable
and ever-improving standard of performance.
Total pay packages have four components: the base salary, taxes, benefits, and allowances. Three standard methods are regularly utilized by
multinational companies to determine the base salary of their international
employees: the balance sheet (or home based) approach, the local market
(or host based) approach and the international approach. Then, different
kinds of allowances are meant to compensate particular troubles related to
the relocation. Finally, taxes and benefits have to be fixed.
1. Three methods to determine the base salary
a. Balance Sheet Approach. This is the most commonly used
approach. It entails developing a total compensation package
that equalizes the purchasing power of the expatriate with that
of employees in similar positions in the home country and provides incentives to offset the inconveniences of the relocation.
The employee starts with a set of costs for taxes, housing, goods
and services, and saving (reserve) in the home country. In the
host country, these costs are higher. The company must then
make up for the difference between costs in the home and costs
in the host country. On top of this, the company must provide
a premium/incentive for the employee to go through the trouble of the relocation. This approach is particularly recommended
when expatriates come back home directly after their assignment
and works well when expatriates originate from the same home
country.
b. Host-based Approach. The host-based approach calculates the
base salary relating to the host-country standards. Typical
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allowances will also be added in order to create a fair compensation package. This method reduces the inequality between
expatriates coming from different locations and working in the
same area, as well as the inequity between local employees and
expatriates. But such system is only effective if the country of
destination have relatively high wages, because it is easier to convince individuals to accept pay scales that are greater than what
they would have otherwise. This approach is principally used by
companies which have little need for expatriation.
c. International Approach. The international approach tries to create an equitable system among all international employees. This
method begins with a common point of reference for expatriates
who receive equivalent pay and benefits regardless of their country of destination. This approach is more easily applicable when
the international employees are career internationalists and move
from one foreign assignment to another. This approach is often
more costly and is used by companies needing as small number
of global managers.
2. Tax equalization allowances
Tax equalization allowances are necessary because of the countries’
different taxation systems. Under most tax equalization programs,
the company withholds the amount of tax to be paid in the home
country and pays all of the supplementary taxes accrued in the host
country.
3. Benefits
Most of the difficulties encountered at this place relate to the transportability of the pension plans and the heath care coverage. Here are
examples of the questions raised: If an expatriate contributing to the
home country pension plan is transferred abroad, should he take a
new pension plan in the host country or should he continue contributing to the home country plan? How can the company ensure that the
expatriate will have equal health care coverage than their colleagues
back home?
4. Allowances
Finally, all kinds of allowances are offered to make the expatriate assignment less unattractive. The allowances can be offered in
nature or in cash. They can be paid in a lump sum or throughout
the assignment as a part of the monthly compensation. The amount
usually depends on the employee’s position, family size, and area of
destination.
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• Cost of living allowances are payments that offset the differences
in expenditures on day-to-day necessities between the host country
and the parent country.
• Housing allowances ensure that the expatriate can maintain the
same home country housing standard.
• Education allowances cover the educational costs of the children
of the expatriate, when they have to be placed in private home
country language schools.
• Relocation allowances usually cover the costs of the moving.
• Home-leave allowance consists in air fare between the countries
of assignment and origin for the expatriate and his or her family.
Repatriation and Retention
The repatriation is the activity of bringing the expatriate back to the
home organization. Although it is now widely recognized by managers and
academics that repatriation needs careful managing, this step is generally
neglected. In this section, we will examine the different problems faced by
repatriates, then we will discuss some retention issues and finally we will see
how organizations could build an effective repatriation system.
Potential Problems Faced by the Expatriates
Although the expatriate and his or her family reintegrate their culture of
origin, a several-year experience in a foreign culture makes the rehabilitation
difficult. After living abroad for years, the expatriate and his or her family
have changed, the home country and the home organization also.
So, when returning home, the expatriate and the whole family may face a
“reverse culture shock.” If nothing is undertaken to minimize its impact, the
employee will suffer from maladjustment, which could lead to job underperformance and job dissatisfaction. The other problems associated with
re-entry into the home organization include loss of status, loss of autonomy,
loss of career direction, loss of income, and a feeling that their international experience is undervalued by the company.61 Interestingly, concern
over re-entry was cited as a significant reason affecting expatriate performance in European MNEs.62 For many European MNEs, this problem has
become more acute in recent years because expansion of foreign operations
has often taken place at the same time as rationalization of domestic operations, and fewer unfilled positions are available to returning expatriates in
most companies.61
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The family may also face important challenges during the repatriation. The spouse may encounter difficulties to reintegrate into the domestic
employment market, especially if he or she has not worked during the assignment. The children may come back to a country where they have been out
of touch with the latest events and fashion styles, and may have difficulties
to adjust to a new educational system.
Moreover, after years abroad, expatriates return to an organization that
may have undergone significant changes in strategy, structure, information
and assessment systems, and in formal and informal processes. If the communication during the assignment was insufficient, the expatriate may feel
a loss of connection with the home office, which can enhance an impression
of isolation and encourage the repatriate to leave the company. In the next
paragraphs, we will examine how to build an effective repatriation system.
Building an Effective Repatriation Process
The company must anticipate the repatriation problems and plan actions
to facilitate the reintegration of its international employees and their family. Most of the methods used to facilitate the adjustment process before
the transfer can also be used for the repatriation process. In the next paragraphs, we will examine the steps of an effective repatriation process, which
starts during the assignment and extends after the coming back home. The
authors in the field recommend generally three steps in the preparation of
the repatriation process.
1. Determination of Ownership for the Repatriation Activities. Normally, this should have been clarified before the departure. Black
et al.4 propose the creation of a repatriation team, consisting of an HR
department representative and the expatriate’s supervisor in the home
country, or his sponsor/mentor. The role of this team is to initiate the
preparation for the return and to take responsibility for identifying an
appropriate return position for the expatriate. Collaboration between
home and host HR and line management is essential when it comes to
the managing of the international assignments. Confusion will make
communication between the expatriate and the HR more difficult, and
will make the expatriate feel less supported.
2. Pre-return Preparation. The repatriation should be planned much
before the effective home-coming, and should ideally start at least six
months before the end of the international assignment.63
• The company should give the expatriate sufficient time between the
warning of the repatriation and the effective transfer to allow the
expatriate and his or her family to make anticipatory adjustment
before returning to the home country. Several information sources
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should be made available to the expatriate and his or her family
to help them develop accurate expectations about the return.
• The company should inquire about the expectations of the expatriate regarding his or her expected return job and his or her career
goals and initiate an internal search to find a suitable position.
In the ideal case, expectations about re-entry should have been
already set up at the end of the selection process. Even if a specific job at the end of the assignment cannot be guaranteed, the
assignee should at least know what opportunities are available in
the company and how they can be considered for them.
• The organization should appoint an organizational sponsor/mentor, who could be an accurate source of information
about the company-related changes. The sponsor should have himself/herself experienced expatriation and have sufficient influence
to act as a supporter for the expatriate
• Periodical visits to the home country just prior to the repatriation
give the expatriate the opportunity to develop accurate expectations about what is happening in the home country and in the
organization.
• The company should also provide pre-return training and orientation. Essential information about the repatriation process can be
provided in a workshop/training program, including such matters as
housing, financial compensation packages, school system, and so on.
• Finally, the company should provide assistance to the expatriate
family to find a suitable accommodation back home.
3. Post-return adjustment. Black et al.4 note that the most pivotal component of successful repatriation for expatriates is the selection of a return
job assignment, taking into account the expats’ skills, competencies,
and the new interests developed during the international assignment.
In order to avoid potential problems between the expatriate and his
or her colleagues and supervisor, they could also attend training or
an orientation program. The company could also organize a collective
debriefing about the expats’ international experience. Finally, in order
to allow the expatriate to make the transition quietly, the organization
should leave time for the expatriate, and give him one week off to
settle down, or allow him/her to have reduced working hours during
the first days.25
Exhibit 12.12 rates the effectiveness of different ways to reduce expatriate
turnover, from high, medium to low effectiveness. The results are consistent
with many past surveys. Survey respondents included both small and large
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Exhibit 12.12
Methods of Reducing Expatriate Turnover and their Effectiveness
Method
High
Chance to use experience
Recognition
Position choices upon return
Repatriation career support
Response to security issues
Improve performance evaluation
Family repatriation support
Medium
62%
60
59
31
26
25
22
32%
34
33
52
51
51
48
Low
6%
6
8
17
23
24
30
Source: GMAC Relocation Services.64
organizations; for 79 percent of the respondents, the company headquarters
was in the United States. In most cases, respondents were senior HR professionals and/or managers of international relocation programs.
Retention. Many expatriates leave their company on return60 with the
consequent loss of investment and expertise. Moreover, the departure of
high-potential repatriates is not only a loss for the company, but may give
an advantage to competitors that could attract them and take advantage of
their international experience.
Lazagrova and Caligiuri65 (p. 395) note that most activities that ensure
high retention after repatriation happen during rather than after the assignment. According to the 1999 Global Relocation Trends Report (cited by
Lazagrova and Caligiuri65 (p. 390), 12 percent of the expatriates leave their
company within a year after returning home and 13 percent leave within the
following year, for a total of 25 percent of international managers leaving
their company within two years after repatriation. Vermond66 (pp. 31–32)
put forward the fact that many companies, between 25 and 33 percent of
the respondents in her survey, do not know the rate of assignees leaving the
organization within the twelve months. These statistics show that companies
have not yet understood the importance of the retention of their expatriates
and do not consider expatriation as an investment.
Women in the Global Arena
The number of female expatriates is low in relation to the overall size of
the qualified labor pool.67 However, the proportion of females is increasing
clearly and steadily, from only 5 percent in the ORC 1992 survey to 14
percent in the ORC 2002 survey, and even 18 percent in the GMACRelocation Survey 2002.
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Several recent studies challenge the usual beliefs regarding the low suitability of females for international assignments.
Caligiuri and Tung68 studied the performance of male and female expatriates in US-based multinationals. They found that females can perform
equally as well as males regardless of a country’s attitude toward women in
managerial positions.
Stroh et al.69 found that US and Canadian women are interested in and
likely to accept international assignments. The authors note that the women
in their study tended to believe that their employers were reluctant to propose
an international assignment to them, although their supervisors did not
think so.
Fishlmayr70 studied the external and the self-established barriers to
Australian females taking international assignments. The author found three
major external barriers: HR managers reluctant to select female candidates,
culturally tough locations preclude female expatriates, and those selecting
expatriates have stereotypes in their minds that influence the decisions. The
major self-established barriers were the following: some women have limited willingness, the dual-career couple, and the fact that women are often
a barrier to their own careers by behaving according to gender-based roles.
The author concludes that women are partly responsible for their underrepresentation.
Mayrhofer and Scullion71 studied the experiences of male and female
expatriates in the German clothing industry in different countries, including the Muslim ones. They found few differences in the experiences of
both groups. However, female expatriates put more values on integration of
spouse/family issues before and during the assignment than did their male
counterparts in their sample.
Finally, Napier and Taylor72 studied female expatriates from different
countries, Japan, China, and Turkey, distinguishing between traditional
expatriates, trailers (spouses of males expatriates), and self-selected expatriates. The authors found that the main challenge of these women was gaining
credibility with local clients. Accommodating cultural differences and maintaining an active social life and appropriate interpersonal skills were factors
of successes in their missions. Being foreign women granted them higher
visibility, and so was an advantage in terms of getting access to key local
persons.
To conclude, the predictors of success of women expatriates are the
same as for their male counterparts. The differences between both genders
are the degree of importance granted to the different factors of adjustment/performance, the value placed on intercultural training issues, and the
fact that dual career issues are a greater barrier for female mobility as males
are more reluctant to follow their spouse overseas.
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Companies that are serious in encouraging women to work as expats
will develop a distinct competitive advantage: by stimulating and actively
supporting female expat careers, the pool of talent for top management positions gets filled with a larger number of qualified individuals. This increases
the chance of appointing the right person for the right top job. With more
women becoming expats, it can be expected that traditional assumptions
and the related questions will gradually disappear.73
Chapter Summary
Throughout this chapter, we have studied five topics related to iHRM.
First, we have examined the four major approaches to staffing foreign operations: ethnocentric, polycentric, geocentric, and regiocentric. Secondly, we have examined the reasons for using international assignments:
position filling, sharing and transferring knowledge, developing employees,
controlling and coordination of international activities. Thirdly, we have
detailed the different categories of international personnel: PCNs, HCNs,
and TCNs, and impatriates. We have also presented the different types of
international assignment for PCNs: expatriates, short-term assignees, international commuters and frequent flyers, global managers, and high potentials. Fourthly, we presented the different steps of Waxin (2007) model
for strategic management of international assignments. The model consists
of eight steps: strategic planning and job analysis, recruitment, selection,
preparation to transfer, cross-cultural adjustment and organizational support, performance appraisal, compensation, and repatriation and retention.
Finally, we have examined the position of women in the global arena today.
Closing Case
A Dilemma
In this UAE MNE, top management at HQ believes local markets are very
distinct and local management has a high degree of autonomy. International
communication, co-ordination and control are low—the most important
monitoring mechanisms are the yearly budgets and the financial objectives
for foreign subsidiaries. You are Mohammad, the HRM manager at the
head office, in Sharjah, UAE.
In the German subsidiary (250 employees), in Munich, Jürgen, the HR
Manager fell ill shortly after his assistant Thomas left for personal reasons. The director will not come back before 5 weeks. The German HRM
department is totally disorganized.
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The German managing director of the subsidiary, who is clueless, ask you
to help them: They urgently need to recruit one high potential manager to
replace Thomas, the assistant. This person will help the HR manager in all
his activities and specifically be responsible for TQM, Career Development
and Training activities in the German subsidiary.
Question: What kind of international employee do you prefer to recruit?
Briefly describe the job content, job requirements, and job context of this
position.
If you employ a PCN employee, how will you prepare him/her for this
international assignment?
Source: Marie Waxin.1
Review and Discussion Questions
1. What are the different approaches to international staffing? Outline their
main characteristics.
2. What are the functions of international assignments?
3. What are the reasons for using international assignments?
4. What are the positive and negative aspects of a Parent Country National?
5. Discuss the statement that most expatriate selection decisions are made
informally.
6. What are the challenges faced in training expatriate managers?
7. What organizational factors have an impact on expatriate’s cross-cultural
adjustment?
8. What are the main objectives of a multinational Company’s compensation
policy?
9. Describe the main differences between the different methods used to
determine the expatriate’s base salary.
10. What elements would you include in a repatriation program?
Endnotes
1. Waxin, M.-F., Strategic Management of International Assignments, unpublished document, 2006.
2. Perlmutter H., “The tortuous evolution of the multinational corporation”. Columbia
Journal of World Business, 1969, pp. 9–18.
3. Heenan, D. A. and Perlmutter, H, Multinational Organization Development (Reading,
MA: Addison-Wesley, 1979), pp. 18–19.
4. Black J. S., Gregersen H. B. and Mendenhall M. (eds), Global Assignments:
Successfully Expatriating and Repatriating International Managers, (San Francisco:
Jossey-Bass, 1992).
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5. Janssens M. and Brett J. M., “Coordinating global companies: the effects of electronic
communication, organizational commitment, and a multi-cultural managerial workforce”. Trend in Organizational Behavior, Vol. 1, 1994, pp. 31–46.
6. Harris H. (ed.), “Strategic management of international workers”, Innovations in international HR, Vol. 28(1), Winter 2002, pp. 1–5, Organizational resource consellors,
London, 2002.
7. Leslie Gross Klaff, “Thinning the ranks of the ‘career expats’ at Avaya”, Workforce
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8. Marchon J. (ed.), 2004, “Expatriation management: Theoretical principles and practices
in Swiss-based multinational companies” (Master’s thesis, Economics and Social Sciences
Faculty, University of Fribourg, Switzerland), 2004.
9. Harris, H. and Holden, L., “Between autonomy and control: expatriate managers and
strategic IHRM in SME”. Thunderbird International Review, Vol. 43(1), 2001, pp.
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10. Black, J. S. and Gregersen, H. B., “The right way to manage expats”. Harvard Business
Review, March–April 1999, pp. 52–60.
11. Waxin, M.-F., Davoine, E. and Barmeyer, C. “Gestion des Resources Humaines Internationales” (Paris: Les Editions de Liaisons, 2007).
12. Dowling Peter J. and Denice E. Welch (eds), International Human Resource Management:
Managing People in Multinational Context (London: Thomson Learning, 2004).
13. Tahvanainen, M. (ed.), “Expatriate performance management: The case of Nokia
Telecommunications”, Acta Universitatis Oeconomicae Helsingiensis A-134, Helsinki
School of Economics and Business Administration, Helsinki, 1998.
14. Harvey M., “Focusing the international personnel performance appraisal process”.
Human Resource Development Quarterly, Vol. 8(1), 1997, pp. 41–62.
15. Waxin, M.-F. “The adjustability of the expatriate manager: Proposal of an improved
measurement scale”, 20th Workshop on Strategic Human Resource Management, Brussels, April 28–29, 2005.
16. Harris, H. and Brewster, C. “The coffee-machine system: How international selection
really works”. The International Journal of Human Resource Management, Vol. 10 (3),
1999, pp. 488–500.
17. Harvey, M. and Novicevic, M, “Selecting expatriates for increasingly complex global
assignments”. Career Development International, Vol. 6(2), 2001, pp. 69–86.
18. Jordan, J. and Cartwright, S, “Selecting expatriate managers: Key traits and competencies”. Leadership and Organization Development Journal, Vol. 19(2), 1998, pp. 89–96.
19. Linehan, M., Morley, M. and Walsh, J. (eds): International Human Resource
Management and Expatriate Tranfers: Irish Experiences (Dublin: Blackhall, 2002),
pp. 108–109.
20. Harvey, M, “The selection of managers for foreign assignments: A planning perspective”.
Columbia Journal of World Business, Vol. 31(4), 1996, pp. 102–118.
21. Finn, L. and Morley, M. (2002) in Linehan, M., Morley, M. and Walsh, J. (eds), “International Human Resource Management and Expatriate Transfers”. Irish Experiences
(Dublin: Blackhall, 2000), p. 102.
22. Forster, N. and Johnsen M, “Expatriate management policies in UK companies new to
the international scene”. The International Journal of Human Resource Management,
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23. Patton C, “Match Game”. Human Resource Executive, 2001, pp. 36–41.
24. Stahl, “Between ethnocentrism and assimilation: Challenges and coping strategies of
expatriate managers”. Academy of Management Proceedings, IM: E1-E6, 2000.
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and managerial implications”. SAM advanced Management Journal, Vol. 69(2), 2004,
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from a US-based multinational company”. International Journal of Human Resource
Management, Vol. 10(5), 1999, pp. 763–82.
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70. Fischlmayr, I. C., “Female self-perception as barrier to international careers?” International Journal of Human Resource Management, Vol. 13(5), 2002, pp. 773–783.
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12
Strategic Human Resource
Management of
International Assignments
Dr Marie Waxin
Objectives
Throughout this chapter, the student will be exposed to:
• The different approaches to staffing foreign operations
• The reasons for using international assignments: position filling, sharing
and transferring knowledge, developing employees, and controlling and
coordination of international activities
• The different categories of international personnel: parent country, host
country, and third country nationals, impatriates
• The different types of international assignment for parent country
nationals: expatriates, short-term assignees, international commuters
and frequent flyers, global managers, and high potentials.
• The different steps of the strategic management of international
assignments: strategic planning and job analysis, recruitment, selection, preparation to transfer, cross-cultural adjustment and organizational support, performance appraisal, compensation, repatriation, and
retention.
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Opening Case
Imagine that you are Stephen Grant, marketing manager in a large international company in London, United Kingdom. The following are some
personal facts.
• You are married to a financial analyst who works in a bank located in
the same city.
• You have two children—a boy, aged 10, and a girl, aged 8.
• You and your family are actively engaged in a variety of volunteer activities sponsored by your church, which include environmental activities
and providing food for the needy.
• You and your spouse enjoy sports activities together—you jog, play tennis, and golf on regular basis. You also enjoy cultural events together,
such as concerts and plays.
You have just received the following letter from your employer.
Dear Stephen,
We are pleased to inform you that you have been selected as a candidate for an overseas position in our subsidiary in Kenya. Please contact
M. Santerre, our international human resources manager, as soon as possible
to discuss this opportunity further.
Best regards
Graham White, International Marketing.
Question: Individually, consider this situation and how you would react
to it.
Identify your major concerns as well as reasons why you would want to
accept or decline such an offer.
Source: Compiled by Marie Waxin.1
International managers constitute valuable resources that organizations
do not always use to the best of their potential. Further, senior managers
assigned to positions in foreign subsidiaries do not always live up to their
bosses’ expectations. When they succeed in their international assignments,
they often leave the organization upon returning to their country of origin. Organizations can reverse this trend by encouraging managers’ international mobility, through better planning of assignments, better recruitment
and selection practices for international assignments, better pre-departure
preparation, better performance management, and better management of
the return of their international managers.
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Strategic Human Resource Management of International Assignments
The following challenges are associated with the strategic management
of international assignments:
• Assigning the right kind of international manager to the right position,
at the right time
• Designing international HR practices for balancing generic and local
needs on the one hand, and control, coordination, and autonomy needs
on the other
• Establishing balance between global competitiveness and reactiveness
to the local environment’s peculiarities
• Identifying the needs for international personnel with a high degree of
precision
• Strategic management of international assignments and of international
personnel at the lowest cost: what type of international employee must
be chosen, and to fulfill which position? Which type of contract must
be drafted?
In the following sections, we will first look at the different approaches
to international staffing, the reasons for using international assignments,
and the different types of international employees. Then, we will propose
a model for the strategic management of international assignments. Finally,
we will look at the role played by women in the global arena.
The Different Approaches to International Staffing
The international HRM (iHRM) literature uses four terms to describe MNE
approaches to managing and staffing their subsidiaries. These terms come
from Perlmutter2 who identified among international executives three different attitudes—ethnocentric, polycentric, and geocentric—toward building
a multinational enterprise. The distinctions are based on top management
assumptions upon which functional and geographical decisions about key
products are made. Perlmutter’s distinction between these three different
approaches was later refined by Heenan and Perlmutter,3 who added a fourth
attitude: regiocentric. To describe these four attitudes, the authors use the
concepts of complexity of organization, authority and decision-making, evaluation and control, rewards and punishments, communication processes,
geographical identification, basic HRM strategy and state of internationalization (Exhibit 12.1). These distinctions, now widely accepted, have been
used in various scholarly books on international human resource management. Heenan and Perlmutter’s3 attitudes are presented in Exhibit 12.1. We
will see how these four attitudes influence the degree of utilization of the
different categories of international personnel.
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Geocentrism
Complexity of
organization
Complex in home
country, simple in
subsidiaries
Varied and
independent
Highly interdependent on a
regional basis
Increasingly complex and
highly interdependent
on a worldwide basis
Authority and
decision-making
High in
headquarters (HQ)
Relatively low in
headquarters
High regional HQ and/or
high collaboration among
subsidiaries
Collaboration of HQ and
subsidiaries around the
world
Evaluation and
control
Home standards
applied for persons
and performance
Determined locally
Determined regionally
Standards which are
universal and local
Rewards and
punishments;
incentives
High in HQ; low in
subsidiaries
Wide variation; big
or small rewards
for subsidiary
performance
Rewards for contribution to
regional objectives
Rewards to international
and local executives for
reaching local and
worldwide objectives
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Polycentrism
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The Four Approaches to International Staffing
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Exhibit 12.1
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Both ways and among
subsidiaries around the
world
Geographical
identification
Nationality of
owner
Nationality of host
country
Regional company
Truly worldwide
company, but
identifying with national
interests
Basic HRM
strategy
People of home
country developed
for key positions
everywhere in the
world
People of local
nationality
developed for key
positions in their
own country
Regional people developed
for key positions anywhere
in the region
Best people everywhere
in the world developed
for key positions
everywhere in the world
State of internationalization
Early
Middle
Middle
Late
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Little to and from corporate
HQ, but may be high to and
from regional HQ and
among countries
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Little to and from
headquarters; little
among subsidiaries
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High volume of
orders, commands,
advice to
subsidiaries
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Communication
and information
flow
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Ethnocentric Approach. Strategic decisions are made at headquarters,
and foreign subsidiaries have little autonomy. Key jobs at both domestic
and foreign operations are held by headquarters management personnel and
subsidiaries are managed by expatriates from the home country. Head office
managers see expatriation as a way to accelerate the progression of their
career, since the competence development of expatriates is preferred to that
of local managers.
Polycentric Approach. In this case, expatriation is no longer at the center
of the international development strategy. The MNC treats each subsidiary
as a distinct national entity and empowers it with some decision-making
autonomy. Subsidiaries are usually managed by local nationals (HCNs), who
are seldom promoted to positions at headquarters. With this approach, the
MNC avoids the difficulties associated with expatriation and cross-cultural
adjustment. The control exercised by the head office is weak, and the diversity of the situations in which the subsidiaries find themselves complicates
the process of integrating the organization’s international activities.
Geocentric Approach. With this approach, the MNC designs its strategy
from an international standpoint right from the beginning. The organization favors ability and experience over nationality. Parent country nationals (PCNs), third country nationals (TCNs), and host country nationals
(HCNs) are thus equally mobile internationally. In order to be successful,
this approach to staffing without regard to nationality must be accompanied
by a worldwide, integrated business strategy.
Regiocentric Approach. The MNC that favors a regiocentric approach
adopts uniform practices for all managers within the same geographical
zone. Like the MNC that functions with a geocentric approach, it utilizes a
wider pool of managers but in a limited, regional way. Personnel may move
outside of their countries, but only within their particular geographic region.
For instance, European managers are mobile solely within Europe. Regional
managers may not be promoted to headquarters positions but they enjoy
considerable regional autonomy in decision-making (see Exhibit 12.1).
Functions of International Assignments
Why use international employees? Reasons vary from one multinational organization to the other, but an analysis of the literature suggests that international
employees fulfill five major roles. The first three roles are tactical in nature:
fulfilling a need for a certain type of personnel that is not available in the host
country, sharing and transferring information, and developing the capacities
and level of implication of managers within the organization. The other two
roles are strategic in nature: controlling and coordinating activities.
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Fulfilling a Specific Need for Personnel and
Know-how
The first role of international assignments is to fulfill the insufficient technical
and managerial competencies in certain countries where the market structure
is often characterized by a shortage of engineers, senior technicians, and
trained managers.
Sharing and Transferring Knowledge
Another reason for using international assignments is to share and exchange
information. A multinational organization can send an expatriate employee
in order to better understand a subsidiary’s activities in a particular context,
to share knowledge regarding a new type of equipment or a specific tool, or
to communicate elements of its organizational culture, processes, or competencies. Expatriation allows for a rapid and efficient transfer of know-how.
The need for such an assignment can arise, for instance, when setting up
an activity that does not exist in the host country. Expatriation then plays
a role in the training of the local personnel, until the subsidiaries enter a
growing phase, who then replace the expatriate employees in management
and supervision positions. It is important to note that the knowledge transfer does not only flow from the head office to the subsidiaries, but also
between the subsidiaries and from the subsidiaries toward the head office.
According to Black et al.,4 there are two unique aspects to expatriation
with regard to information exchange. First, the duration of the assignments,
between one and five years, allows the collection and transfer of complex information. Secondly, the information exchange takes place not only
during the expatriation, but also afterward. The organization can benefit
from the expatriate’s acquired knowledge concerning the foreign subsidiaries
and integrate that knowledge in the strategic planning and decision-making
processes.
The Development of Managers and their
Implication Toward the Organization
International assignments constitute a proven method for developing global
managers. Most senior managers have extensive international experience.
When the expatriate’s role comprises supervision functions, expatriation
can play a prominent role in developing managerial competencies and in
fostering loyalty toward the organization. Indeed, expatriation allows junior
managers or high-potential employees to face new situations, to develop new
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competencies, especially when it comes to acting autonomously and taking
risks, thus facilitating the development of abilities required for becoming
a senior manager. The managers’ various international experiences help in
developing a global understanding of the organization. Moreover, international transfers develop the individual’s commitment toward the organization, his orher feeling of belonging and his loyalty. Organizations that use
expatriation to improve their managers’ competencies, either formally or
not, associate expatriation with promotions. Organizations that use expatriation to improve their managers’ abilities associate international assignments
more or less formally with a promotion. This practice gets the message
through to expatriates that their international experience will be valued as an
asset.
Control of Activities. From an organizational standpoint, managers are generally expatriated in the early phase of the internalization process, in order
to control the subsidiaries’ activities. In an international context, the transfer
of managers constitutes an informal control mechanism, which can complement or replace more formal control measures such as the elaboration of
norms and procedures common to all subsidiaries. Expatriate employees are
also used to reduce the uncertainty stemming from the environment (political risk, cultural distance, legal environment, competition), which is also
a form of control. As these uncertainty factors increase in importance, the
role of the expatriate becomes increasingly managerial in nature. Similarly,
the higher the interdependence between the head office and the subsidiaries
and the more complex the activities, the more the expatriates’ function will
be control oriented.
Coordination of Activities. Expatriates as well as impatriates play an essential part in the coordination of subsidiaries’ activities. Through complex
dialectic processes (local/global, individual/collective), international assignments are aimed at reinforcing the integration of individual and organizational dynamics which contribute to the cohesion of the firm. International
assignments indeed allow for the creation and development of international
networks that reinforce the integration of activities. According to Janssens
and Brett,5 the coordination of a global organization relies on three elements:
centralization (decision-making by a core of senior managers), formalization
(decision-making following established rules and procedures), and socialization (decision-making following shared norms and values).
The various functions of international assignments demand different types
of international employees, with different profiles. For instance, if the main
purpose of an assignment is managerial development, the organization will
select a junior manager or a high-potential employee. If, on the other hand,
the main purpose of an assignment is to control a subsidiary’s activities, the
organization will select an experienced manager who is familiar with the
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head office’s values and managerial procedures. Finally, it must be noted that
the five functions of international assignments are not mutually exclusive
and can be combined.
Types of International Personnel
In this section, we will look at the main categories of international employees, discuss their respective advantages and disadvantages, and present the
various types of assignments for employees from the organization’s country
of origin.
The Different Categories of International Personnel
In the literature, four categories of international personnel have been identified, based on their country of origin and the location of their assignment.
These categories are parent PCNs, HCNs, TCNs, and impatriates.
The PCNs are employees from the multinational’s head-office (expatriate employees). For instance, a Japanese manager working in a Japanese
multinational’s French subsidiary is an expatriate, or a PCN.
The HCNs are employees from the host country (the subsidiary’s). For
instance, a French manager working in a Japanese multinational’s French
subsidiary is an HCN.
The TCNs are employees from countries other than that of the multinational’s head office and that of the subsidiary. For instance, a Belgian manager working in a Japanese multinational’s French subsidiary is a TCN. An
example of a multinational using these three types of international employees is Honda: working in Honda’s subsidiary in Dubai are one Japanese
manager, an expatriate from Honda JAPAN, the international head office,
one French expatriate from the European head office, and 35 HCNs (Indians
and Philippinos).
“Impatriates” (as opposed to expatriates) are HCNs sent to the head
office. The reasons most frequently cited to justify hiring HCNs for transfer
at the head office have to do with competence development of managers,
knowledge transfer, and subsidiary integration. Moreover, generating a flow
of impatriates toward the head office is an excellent way to trigger the process
of socializing NPHs. Through impatriation, HCNs develop a sense of belonging to the global organization. The reasons for using impatriation determine
the selection criteria for future impatriates. When the main goal is knowledge transfer and subsidiary integration, for example, communication skills
in the multinational’s official language as well as in the subsidiary’s language
are important criteria. Finally, it is worth noting that the duration of impatriations is generally shorter than that of expatriations. Many organizations
use impatriates in order to reduce, in the end, the number of expatriates.
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When a specific position needs to be filled, how should organizations
choose between the different categories of international employees? Usually,
the choice is partly determined by three elements: the general staffing policy
on key positions in headquarters and subsidiaries (ethnocentrism, polycentrism, geocentrism, and regiocentrism), the constraints imposed by the host
governments on hiring policies, and staff availabilities. Beyond these considerations, the advantages and disadvantages associated with PCNs, HCNs,
and TCNs, presented below, are considered.
Six criteria seem relevant to discuss the respective advantages and
disadvantages of these three categories of international employees.
1.
2.
3.
4.
5.
6.
Cost
Knowledge of the organization (products, organizational culture)
Cultural proximity
Knowledge of the local environment
Attitude of the foreign government
Promotability of local employees.
With regard to costs for the organization, hiring a PCN always costs
more than hiring an HCN. On average, an expatriate’s salary is two to
two and a half times that of a local employee or of a TCN. These costs
increase if the expatriate fails in his assignment. The high cost of expatriation
sometimes leads the organization to opt for other solutions, such as shortterm assignments.
The PCNs, however, present two advantages compared to the other
categories of international managers. First, their technical and managerial
competencies have been put to test in their previous positions, in the parent country, and have been recognized by the head office. Secondly, they
possess extensive knowledge of the organization: its products, its managers,
and the organizational culture. These two characteristics allow for efficient
communication with the head office.
As far as cultural proximity and knowledge of the local environment are
concerned, HCNs are obviously at an advantage. All things being equal,
a local employee who speaks the local language, understands the political
system and, often enough, is a member of the local elite, should prove
to be more efficient than a foreign manager. For local personnel, cultural
adjustment is not an issue. Training HCNs also seems simpler, from a
short-term point of view, than selecting high-potential employees from the
organization’s country of origin and spending resources in order for them
to adjust to the host country. Well-trained local managers thus constitute
first-rate candidates for organizations. On the other hand, local managers
are not familiar with the organization and with its culture. In addition, local
managers might be too deeply involved in the local community and have a
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hard time understanding the parent company’s global strategy, and few of
them might truly identify with the organization and its goals.
Local governments sometimes exert explicit or implicit pressure on multinational companies so that they develop and promote local managers to key
positions in order to “nationalize” the management or foreign subsidiaries.
Local legislation concerning working visas partly determines the subsidiary’s
capacity to hire TCNs. In some countries, such as Canada, companies may
hire TCNs only if they can prove that available “local” candidates were not
suitable for the position.
Finally, the constitution of a pool of international managers takes place
at the expense of the recruitment and promotion of local managers and vice
versa. Third country nationals can be closer to the country of origin’s culture
than HCNs, but they hinder local managers’ chances to get promoted. The
choice to hire TCNs must thus be made taking all these considerations into
account.
Selection between the three classic categories of managers will be influenced, beyond the vast differences in terms of advantages and disadvantages
of each, by the degree of internationalization of the company, its internationalization strategy, its iHRM approach, its international assignment policy,
and the specific needs of its subsidiaries. The more the head office wishes to
impose its nationalistic views (ethnocentric approach), the more it resorts to
expatriation, and the more the head office wishes to expose its geocentric
side without trying to impose the control methods used at the head-office,
the more it will select based on competence rather than nationality.
Exhibit 12.2 summarizes the advantages and disadvantages of the various
categories of international managers.
The Different Types of International Assignment
for PCNs
Within organizations, many types of assignments can be found for PCNs.
The duration of assignments distinguishes between expatriations and different kinds of short-term assignments. In addition, the role of international
assignments in an employee’s career distinguishes between global managers,
expatriates, and international junior managers.
Long-term Assignments, or Expatriations. An expatriation is an assignment
abroad, for a duration of one to five years, but generally three. The employee
and his family are relocated to the host country. At the end of his initial
contract, if the employee wishes to remain with the subsidiary, it will be
under a local contract. According to Harris,6 expatriations are mostly used
for strategic missions, and meet the needs of the control function (a function
that was mentioned by 62 percent of companies using expatriate employees),
knowledge transfer function (74%), and professional development function
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Host country nationals
(HCNs)
• Understand and know local laws,
culture, and economic conditions
• Cost is much lower
• Opportunity for development and
source of motivation
• Legal regulation of employment
• Cultural difficulties hindering recruitment and
training activities
• Lack of knowledge concerning the organization,
its products, and its services
• Communication problems with the head office
• May not be as familiar with the business culture and
practices
• Control and coordination of headquarters may be
impeded
Third country nationals
(TCNs)
• Costs are lower than those of PCNs
• Knowledge of the organization, of its
practices, of its management policies
• Culture close to that of the head office
• Legal restrictions imposed by many countries as to the
number of foreign employees that can be employed
• Hinders local employees’ chances to get promoted
• Lack of loyalty towards the organization
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• Lack of knowledge regarding country’s economic
development, culture, legal system, and political
process
• Very expensive to both relocate and maintain
(expatriates—people working and residing in their
non-native countries)
• Legal restrictions imposed by many countries as to the
number of foreign employees that can be employed
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• Control over the subsidiaries
• Share a common culture and
educational background
• Facilitate communication
and coordination with corporate
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(60%). Expatriations, however, are costly for companies. The main difficulties related to expatriate management concern dual career couples, lack of
candidates for assignments in less-attractive areas and repatriation. Organizations’ first concern is, however, the high cost associated with expatriations.
In order to avoid those costs and the difficulties associated with managing expatriates, more and more companies reduce the number of expatriate
employees, propose shorter-term assignments, localize their expatriates, offer
less generous compensation packages, and hire more local employees.
Avaya’s strategies to reduce the number of career expatriates
Avaya Inc., a provider of communication systems in Basking Ridge, New Jersey,
with 15,000 employees, keeps its number of expatriates low (currently at 15,
down from 90 two years ago) by using three strategies:
First, Avaya started sending more employees on short-term assignments in
2002. The short-term assignment, generally six months long, is treated more like
a business trip. The employee stays in a hotel or company apartment and is reimbursed for meals and trips to home every other month, eliminating the need to
pay pricey housing allowances and costs related to moving the employee’s family. The company is now tightening its policies for short-term assignments. “We
want to treat employees on a fair and equitable basis rather than basing it on
each person’s negotiating power or each manager’s willingness to say yes or no”.
Second, Avaya controls costs by hiring third country nationals. Avaya currently has 365 foreign nationals, about twice as many as it had two and a
half years ago. By hiring foreign nationals, the company saves because benefits
such as tax assistance, education for dependents and housing allowances are
offered only for a limited time. Also, foreign nationals aren’t paid a cost-of-living
adjustment, a hardship allowance or an expatriate premium. Foreign nationals
also typically don’t need as much time to acclimate because they don’t face the
cultural barriers that an American might. There’s no language problem and that
person is also in tune with the business style of the region.
And third, Avaya started localizing some of the expats. Once expatriates
are localized, Avaya phases out housing and schooling allowances after a year,
pays employees in the local currency, switches them to local health benefits and
doesn’t have to pay income tax in both countries. For an expatriate who earns
a salary of $100,000, the dual income taxes alone cost $140,000.
Source: Leslie Gross Klaff.7
Short-term Assignments (1–12 months). Employees sent on short-term
assignments stay in the host country between one and twelve months. Technically, the employee might be hired by the subsidiary, and receive a mobility
bonus. The employee’s family may go along but, in practice, this rarely
happens. Career management takes place at the head office and performance
evaluation is often shared between the head office and the host country.
According to Harris,6 short-term assignments can be used to compensate
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for the lack of mobility of dual-career couples. This type of assignment is
used mainly for knowledge transfer (69%) and for managerial development
(39%). Short-term assignments may prove stressful for employees. Indeed,
it becomes difficult to maintain a proper balance between work and private
life, because of the long work hours in the host country and because of
the distance between the employee and his social and family environments.
Organizations have a hard time establishing consistent policies and practices,
and managing taxation and compensation issues.
In addition, Harris6 identifies two other sub-categories of short-term
assignment: the “international commuters” and the “frequent flyers.” “International commuters” travel between their country of origin and the host
country once or twice per week, while their family remains in the country
of origin. “Frequent flyers” travel frequently for business, for periods of
thirty-one days or less, while remaining based in the country of origin. Usually, business trip and per diem policies apply to those trips. According to
Harris,6 “international commuters” and “frequent flyers” are used to carry
out operational assignments, but are also adequate for control and knowledge transfer functions, as well as replacement of local competencies and
coordination. These assignments often lead to problems with work/family
balance and excessive fatigue among employees. In addition, the impact of
cultural differences is often underestimated in these assignments and crosscultural training is generally nonexistent. Finally, organizations often lack
consistent policies regarding these assignments.
According to Harris,6 organizations are not monitoring these alternatives
to long-term expatriation closely enough, often having little idea of their
number, how much they cost them, and how cost-effective they might be.
Global Managers. As opposed to the expatriate manager, who spends
between one and five years abroad and then returns to the head office, the
global manager strings together multiple expatriations for the duration of
his or her career. Global managers have an international career, have shown
their ability to survive and work efficiently in various cultures, have great
communication skills, and an open mind. The international life style is a
true motivation for them, and the management of their career is centralized
at the head office.7
International Junior Managers. International junior managers are sent
abroad to develop their managerial abilities. They are young managers,
mostly high-potential employees.
In conclusion, organizations use global managers and expatriates
for strategic assignments, short-term assignments for tactical missions,
commuters and frequent flyers for operational missions, and international
junior managers for managerial development. These distinctions between the
various types of international assignments for PCNs give organizations the
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flexibility to react to the different problems they encounter at the lowest possible cost. In expatriation policies, specific sections can be found concerning
the different types of contracts.
Strategic Management of International Assignments
Many companies are sending employees and managers abroad to implement their global strategies and to control or coordinate their far-flung
subsidiaries.9 But sending managers abroad is very expensive. Black and
Gregersen10 showed that expatriates cost two to three times what they
would in an equivalent position back home. Moreover, between 10 and
20 percent of the expatriates come back before the end of their contract
because they could not adjust to the job or to the country. Among those
who stay in their position abroad, one-third do not perform up to their
supervisor’s expectations.10 International managers constitute a crucial and
competitive resource for multinationals, a resource that needs to be managed and developed. Value created by international assignments depends
on the way they are planned and managed. Basing themselves on the literature and on interviews with international HR managers, Waxin et al.11
propose a model for the strategic management of international assignments.
This model comprises eight steps: (1) strategic planning and job analysis, (2)
recruitment, (3) selection, (4) preparation for the transfer, (5) adjustment
and organizational support, (6) evaluation and performance management,
(7) Compensation and (8) repatriation and retention (Exhibit 12.3).
Strategic Planning and Job Analysis
According to Waxin et al.,11 the first step consists in establishing, for each
international assignment (1) the goals, (2) the job description, (3) the job
specification and (4) the ownership for the responsibility of managing the
full expatriation/repatriation cycle.
Firstly, the goals of each international assignment must be specified,
and their strategic value must be determined with regard to the organization’s strategic objectives. What are the assignment’s goals? (increase the
organizational performance, train local employees, transfer the head office’s
organizational culture toward a subsidiary, solve a technical problem, launch
a new product, etc.). Which of these objectives are directly linked with
the organization’s strategic objectives? Dowling and Welch12 distinguish
between hard, soft and contextual job goals. Hard goals are objective, quantifiable, and can be directly measured (e.g., return on investment, or market
share). Soft goals tend to be relationship- or trait–based, like leadership
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Exhibit 12.3
A Model for the Strategic Management of International Assignments
Strategic
planning and
job analysis
Repatriation
and retention
Recruitment
Compensation
Selection
Performance
appraisal
Preparation
Adjustment
Source: Waxin et al.11
style or interpersonal skills. Contextual goals attempt to take into consideration factors that result from the situation in which performance occurs, like
arbitrary transfer pricing or other financial tools for transactions between
subsidiaries to minimize foreign risk exposure. Job goals will be translated
later on into performance appraisal criteria so specificity and measurability
are essential. However, there are considerable differences in the way the
goal-setting process is handled in different countries. Tahvanainen13 found
that in Sweden and Germany, for example, it is normal for managers to
participate in the setting of job goals, whereas setting job goals is the priority
of senior managers in the USA.
The job analysis, which comprises of the job description and the competency profile, must then be carried out. The job description contains general
information on the position, the goals to be met, a list of tasks in order
of importance, the particular conditions, the context of the position, the
duration of the contract, the date of review, and the date of approval. In the
context of an international assignment, the job’s context must be described
in great detail; the main characteristics of the subsidiary’s organizational
culture must be identified, as well as those of the host country. Harvey14
suggests that job analysis must generate criteria that adequately capture the
nature of international work as opposed to the domestic context, in order
to provide valid appraisal information.
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The job specification states the required knowledge, abilities (know-how)
and experience, and personal characteristics for the job. The profile must be
objective and realistic. In order for such a profile to be drawn, the competencies required to complete each task of the job description must be identified
and weighed. In the context of an international assignment, it is important
to include in the profile cultural competencies and personal characteristics,
such as a social orientation, cultural flexibility, stress resistance, and so on
that are required.15 Ideally, the job specification will be used again as a basis
for the choice of the evaluation criteria.
Finally, ownership for the responsibility of the management of the full
expatriation/repatriation cycle must be determined. Will the expatriate refer
to their home- or host-country HR manager during their assignment? This
is where collaboration between home and host HR and line management is
essential. Confusion will only make communication between the expatriate
and HR more difficult, and will make the expatriate feel less supported.
This first step helps determine the ideal type of international manager
for the position (PCN, TCN, HCN, other type of international employee).
The objectives of the position, the job description and specification, and
the details about the management of the expatriation/repatriation processes
should be explained to the candidate by the end of the selection process. In
any case, the expatriate should know the exact purposes of his assignment
before the beginning of his assignment.
Recruitment of International Employees
The main objectives of international recruitment are (1) elaborating ways
and techniques which will allow the organization to attract a sufficient
number of motivated and qualified international candidates, (2) identifying
candidates susceptible to filling foreign positions at the lowest possible cost,
and (3) increasing the pool of international candidates at the lowest possible
cost, anticipating for the organization’s future needs in personnel. The major
decisions at this step regard the sources and the methods of recruitment.
Recruitment Sources. The first decision to be made is whether to recruit internally or externally. In spite of the external recruitment possibility, it is well
documented that the majority of firms depend almost exclusively on internal
recruitment for foreign positions, especially for their expatriate’s positions.
This preferred recruitment option can be found even in local markets where
there is plenty of skilled labor. Why is there not a greater emphasis on
external recruitment? The answer has to do with the strategic value of the
international assignment. Internal recruitment is justified if the strategic purpose of the assignment is coordination or control of operations. However,
in the case of learning units, for example when the subsidiary acquires and
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develops new resources that may be later exported to other parts of the
organization, recruiting from the external market can be more appropriate.
Recruitment Methods. The second decision to be made regards the choice of
the recruitment methods. The major internal recruitment methods for international positions are (international) job posting and utilization of internal
databases. To enable the company to identify suitable internal expatriates
candidates, HR departments need to build global databases that include data
on potential candidates, their work experience, performance, skills, availability, and their preferences regarding a potential international assignment:
where he or she would be interested in working, in what capacity, and on
what sort of projects.16 For example, Tetra pack developed their “Management Planning and Development” centralized database which contains the
profile of over thousands high potential employees and which is updated
once a year. This database is consultable by the HR directors’ community
and can be used to support the expatriates’ recruitment process.8
The Danone Group’s Career recruitment site, for internal
and external recruitment
The Danone Group has opted for daily posting all vacant positions on the
Danone Career website, which is accessible from the outside as well as from
inside the company. To apply, candidates must find positions that correspond to
their profile. The site is the fastest and most efficient way to obtain information
regarding vacant positions within the Group, from anywhere in the world. To
apply for a position, candidates must:
1 Conduct a search, specifying their level of experience (student
seeking an internship, junior (1–2 years of experience), senior
(2 years + of experience), or director/executive), their field of specialization and the geographical area where they wish to work.
2 Select a job offer within the search results
3 Study the job descriptions and apply.
After having filled out his or her personal information on a form, the candidate can attach his or her CV and cover letter. Within 72 hours of applying,
the candidate will get a receipt notification.
The English language is preferred throughout the recruitment process. The
Group searches for candidates with an international profile, and proficiency in
English is highly valued. The candidate may, however, use the language of his
or her choice in the free-text fields or in the attached documents.
The progressive opening of the Careers website to foreigners will help facilitate the internationalization of the recruitment process. Fifteen countries currently use the website, and the international development continues.
Source: Danone.fr
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When suitable candidates cannot be found internally, companies turn to
the external market. External recruitment methods for international positions include using the Internet, launching campaigns in international media,
using the services of recruitment agencies and/or international head-hunters,
and establishing relationships with learning institutions.
Selection of International Employees
The main objectives of the selection process are (1) enabling the company
and the employee to determine whether the candidate possesses the competencies and motivation to successfully accomplish his or her international
assignment, (2) minimizing the risk of assignment failure and the related
costs, and (3) assigning candidates to suitable positions, thus maximizing
the organization’s and the candidate’s benefit. Because of the specificity and
implications of the task the expatriate will have to perform, multinational
companies should ensure that they have an appropriate selection process for
international assignments. We will now take a closer look at the selection
criteria, the choice of the evaluators and the selection methods.
Selection Criteria. In theory, the choice of selection criteria for international
employees is based on an analysis of the characteristics of the multinational,
those of the subsidiary, the host country, and the position to fill.11
Depending on the results of this analysis, the ideal candidate’s profile
varies from one international assignment to the other (Exhibit 12.4).17
Given the considerable diversity of potential positions and host countries, it is not possible to draw a list of key competencies for expatriates.18
Unfortunately, organizations tend, when selecting expatriates, not to look
far beyond technical expertise and previous performance in the country
of origin. However, in the context of an international assignment, criteria
related to the cross-cultural competencies and individual characteristics of
the candidate, such as social orientation, will to communicate, good stress
resistance, and open-mindedness, should be considered.15 Studies show that
individuals who seek challenges, new experiences, and who enjoy learning
are more likely to approach an international assignment in a positive and
creative way, and are also more likely to succeed as expatriates. If the job
analysis has been done properly, the selection criteria will be based on the
international assignment’s competency profile.
Choice of Evaluators. Black et al.4 recommend forming an expatriate selection team which includes managers from the country of origin and managers
from the host country, as well as a representative from the iHRM department. Harris and Brewster16 note, however, that most of the time, the iHRM
specialist’s role is limited to that of an advisor, while the actual decision is
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Exhibit 12.4
Determinants of the Selection Criteria for International Employees
Multinational’s characteristics
Stage of internationalization
Industrial sector
Business strategy
HRM orientation
iHRM policies
Organizational culture
Subsidiary’s characteristics
Legal form/ownership mode
Localization
Selection criteria
- Type of international manager
- Education
- Experience
- Professional competencies
- Personal characteristics
- Cultural competencies
Host country’s characteristics
National culture
Labor laws and regulations
Position’s characteristics
Function of the international assignment
Job description and specification
Contract duration
Hardness of communication
Source: Waxin et al.11
taken by the managers alone. Marchon8 states that when the expatriation
is requested by a subsidiary, the selection process is more transparent: the
subsidiary, responsible for the selection, will make a final selection among
several candidates it has chosen. However, when the expatriation is deemed
necessary by the head office, the subsidiary’s role is often limited to approving or rejecting the final choice of the candidate.
Selection Methods. Several methods are available, like interviews, psychological tests, assessment centers, work simulations or role plays, references,
biographical and background data and so on.
According to Linehan et al.,19 the interview is the most used and is still
regarded as the most effective method to select overseas assignees. It provides
a forum to understand the expectations and motivations of the candidate
and to inform him/her about the job.
The use of formal testing like psychological or relational tests is very limited in the practice but according to Harvey20 they are becoming used more
frequently. Finn and Morley21 cite that cultural awareness and adaptability
tests are almost never used because they are expensive, difficult to construct
and interpret, and their reliability is questioned. Forster and Johnsen22 mention that in an international context there are some enormous problems with
both suitability and comparability of tests for different national groups and
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cultures. Finally, the same authors note that the introduction of these tests
encounters resistance from the selectors because this could undermine their
power and prestige in terms of decision-making.
Assessment centers are considered costly and time-consuming, but they
regroup all the methods of evaluation in a single place within a few days.
They allow the assessment of the communication skills and the adaptability
of the candidates as well as their strategic competencies.
References, and biographical and background data are principally used
to ensure that the applicant has the necessary technical expertise to do the
job, and are so less decisive in the selection of an expatriate, even if they can
be useful to spot a particular candidate. According to the authors in iHRM,
the best thing to assess a candidate correctly is the use of several different
techniques and sources of data.
Expatriates selection process in a global fast-food multinational company
Tricon Restaurants International, based in Dallas, Texas, is the franchiser for
over 10,000 overseas Kentucky Fried Chicken, Pizza Hut, and Taco Bell Restaurants. The company has 100 expatriates; 20 are Americans working overseas.
Tricon has established a very formal selection process to staff its overseas
positions.
Selection Criteria. Rather than choosing candidates who are merely excited
about overseas assignment and who have the technical skills to perform the
job, Tricon is taking a closer look at whether the candidates have the necessary
personality characteristics, such as their empathy, their ability to adapt to different situations, their ability to interact with others (sociability), and the family
support needed to succeed in overseas assignments.
Selection Methods:
(1) To select candidates for overseas assignments, Tricon interviews
candidates about the positions, the country’s culture, and its
marketplace.
(2) If there is any doubt whether the candidate can make the adjustment, a consulting firm is hired to further assess whether the
candidate has the personality needed to succeed in an overseas
assignment.
(3) If candidates pass the interview, a 360-degree feedback survey,
which asks peers and their managers about their strengths and
weaknesses, is used to evaluate their skills.
(4) If the evaluation is positive, candidates and their families are
sent overseas for a one-week look-see trip. During the visit, local
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managers evaluate the candidate while the family evaluates the
community. The family spends time touring local schools and
potential housing locations, and meeting with other expatriates
in the country who help them understand the local culture and
environment.
(5) If the local managers find the candidate acceptable, the candidate, with input from family, can accept or reject the
position.
Source: Based on C. Patton.23
Harris and Brewster16 propose a typology of selection methods for international managers, which comprises four categories, placing the various
selection methods on two axes: open/closed procedure and formal/informal
procedure.
First, the selection process can be open or closed. In an open system, all
vacancies are advertised and anyone with appropriate qualification and experience may apply. All the candidates are interviewed with greater or lesser
degrees of formalized testing. Selection decisions are taken by consensus
amongst selectors. In contrast, in a closed system, selectors at corporate headquarter choose or nominate through line managers the “suitable” candidates.
These candidates are informed only once agreement about acceptability has
been reached between headquarter personnel and the line manager. The
selection interview consists of a negotiation about the terms and conditions
of the assignment.
Then, the selection process can be formal or informal. In formal systems,
vacancies are advertised internally, selection criteria are made explicit and
are business focused, and directly related to the job description and job
specification. Psychometric testing is likely to be used, and selectors need to
agree among themselves about candidate match. In informal systems, there
is a lack of specificity between competencies and job description, criteria
are often not specified. Selectors assume that personality characteristics are
already known, and give a great importance to networking, reputation, and
team fit. There is an increasing likelihood that individual preferences of
selectors can predominate (Exhibit 12.5).
In practice, however, the majority of organizations operate predominantly
closed and informal selection systems, which are not that different from
the systems used for domestic assignments. Stahl24 states that 81 percent of
the 116 expatriates sampled in his study were recruited through an opaque
selection system, on the basis of nonstructured interviews. Only 19 percent of
the candidates went through a structured interview. None of the candidates
had had to pass a test, and in no case, at any moment during the selection
process, was the life-partner taken into account (Exhibit 12.6).
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Exhibit 12.5
Typology of Expatriates Selection Processes
Formal
Open
Informal
• Clearly defined criteria
• Less defined criteria
• Clearly defined measures
• Less defined measures
• Training for selectors
• Limited training for selectors
• Open advertising of vacancy
(Internal/external)
• No panel discussions
• Panel discussions
• Recommendations
• Clearly defined criteria
• Selectors’ individual preferences
determine criteria and measures
• Open advertising of vacancy
• Clearly defined measures
Closed
• No panel discussions
• Training for selectors
• Nominations only
(networking/reputation)
• Panel discussions
• Nominations only
(networking/reputation)
Source: Harris and Brewster.16
Exhibit 12.6
The Expatriates Selection Methods
N = 116 expatriates
90%
81%
80%
70%
60%
50%
40%
30%
19%
20%
10%
0%
Unstructured
Interview
Structured
Interview
0%
0%
0%
Psychological
Tests
Assessment
Center
Inclusion of
Partner
Source: Stahl.24
Closed and informal selection systems present at least three major
disadvantages.16 First, they limit the degree to which interpersonal and
intercultural skills are taken into account when selecting international managers. Secondly, they restrict the pool of potential candidates to the candidates who are appreciated by the selectors. This is particularly problematic
for women, given the fact that between 80 and 95 percent of international
managers are men. Within such an imbalanced selection context, it is all
the more important to ensure that an open/formal selection system prevents
potential discriminatory biases on the part of selectors. An open formal
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The expatriates selection processes in five Swiss multinational companies
(Credit Suisse, Nestle, Holcim, Tetra Pak, Novartis)
In each case the task of the selection falls to the host company, either through
the line manager or through the HR., with sometimes a possible involvement of
a central department. These persons have generally no particular international
experience and therefore do not emphasize the cultural dimension throughout
experience and therefore do not emphasize the cultural dimension throughout
the selection process. The selection criteria mainly used by these five companies
are based on technical and professional competencies, when the literature recommends relying firstly on crosscultural skills, without of course forgetting the
professional skills. For all five companies, the selection methods employed to
evaluate the competencies of the candidates are the references, the background
of the employee and an interview. The informal selection procedure mainly
leans on the personal contacts and the network of the selectors. An interview
is normally used to confirm the selection choice. None of the companies uses
any kind of formal testing to assess the cross cultural or relational skills of the
candidate. However, three out of the five companies say they are willing to
improve their selection processes in the near future by introducing some more
structured selection tools in the selection process.
Source: Marchon8 .
selection system forces the selectors to continually question their assumptions about women’s or other minorities’ suitability and their acceptability
in international management positions. Thirdly, they prevent the organization from managing international assignments strategically. The role of the
HR manager is limited to dealing with the financial, physical, and social
aspects of international selection, instead of having an input into which kind
of international manager is needed and what kind of assignment could be
optimal for that international manager.
In conclusion, although the researchers are unanimous about the significance of an effective selection system, there is a big gap between their
suggestions and the organizations’ practices. As we will see, the work accomplished during the selection is also useful for determining the preparation
needed by the selected candidate.
Preparation to Transfer
When an appropriate candidate has been selected for an international assignment, he or she must get prepared to face the challenges of the new position.
The purpose of the preparation step is to provide the expatriates with all
the necessary elements that will help them succeed during the international
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assignment by facilitating their adjustment in the host country and allowing them to work efficiently throughout the duration of their contract. The
options company can use include organizing preliminary visits, providing
practical assistance to the international employees, providing language and
cross-cultural training.
Preliminary Visits or Look-see Visits. This is a trip to the host country offered
to the assignee so that he or she can assess by himself the situation he or she
will have to face. This option is sometimes used at the end of the selection
process so that the candidate can confirm his or her acceptance of the
position. During this trip the expatriate will finalize the contract and settle
some issues like finding an accommodation or a school for the children. The
expatriate will also get an idea about the new work environment. Usually,
a preliminary visit includes the spouse, sometimes the children.
Practical Assistance. This aspect of the preparation is to make everything
ready for the transfer of the expatriate and his family in order to facilitate
the settling in. This consists in arranging for the visas, for the transportation, finding a new accommodation for the family, new schools for the
children, if it has not been done during the look-see trip, and so on. Many
multinationals now use the services of relocation specialists to provide this
practical assistance. Informing the expatriate on how the transfer will occur
and how life in the host country will be will reduce the stress related to the
uncertainty of the foreign assignment and facilitate the adjustment in the
new environment. The organization should give adequate notice of the new
posting given the professional and personal arrangements that the employee
will need to make before he leaves his home organization and country.
Language Training. The assignee is taught the language of the region where
he or she will be sent. According to Ashamalla,25 language ability facilitates
the adjustment in the local environment and enhances effectiveness in dealing
with foreign counterparts groups including government officials, bankers,
labor organizations, suppliers, and customers. The rigor of the training
should depend on the relational aspect of the expatriate’s job.
Cross-cultural Training. The objective of cross-cultural training is to teach
members of one culture to interact effectively with members of another culture,
and to predispose them to a rapid adjustment to their new positions. 26 Brislin,27
a cross-cultural psychologist, identifies three methods of cross-cultural training: cognitive, affective, and behavioral. The cognitive method corresponds
to a diffusion of information, using conferences or nonparticipative sessions,
in a foreign cultural environment. The affective method aims at provoking
individual reactions so the subject can learn to deal with critical cultural incidents. The behavioral method aims at improving participants’ capacity to
adapt to their communication style and to establish positive relationships
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with members of another culture. Management science researchers have
used Brislin’s model and have added to it the situational (hardness of the
culture and hardness of the communication, function and role of the manager, planned duration of expatriation) and individual variables (personal
learning objectives, degree of active participation). Tung28 suggests that the
training method should be chosen according to the type of assignment and
should be contingent to two determinant factors: the degree of similarity
between the culture of origin and the host culture (which is a synonym of
cultural distance) and the degree of interpersonal interaction between the
manager and the host country’s inhabitants, which would be linked, according to Black et al.,4 to the role and function of the manager. In conclusion,
the different models of cross-cultural training and their content are built
around three fundamental variables: the cultural distance between the country of origin and the host country, the manager’s level of integration with his
environment, and the duration of the overseas assignment (Exhibit 12.7).
Gertsen30 proposes a typology of training methods encompassing four
categories. First, she identifies two kinds of training: conventional training, where the information is transmitted through a unidirectional communication, as is the case in schools and universities, and experimental training, where the trainer gets the trainees to participate by simulating real-life
situations. Then, she identifies two possible orientations: either the training
Exhibit 12.7
Cross-Cultural Training Model
Length
of training
Level of
difficulty
1–2 months
High
1–4
weeks
Cross-cultural training method and content
Moderate
Cognitive approach
Conferences
Films/books
Language (basic level)
Less than
1 week
Affective approach
Role plays
Case studies
Critical incidents
Stress reduction
Language
(intermediate level)
Intensive approach,
or immersion
Evaluation centre
Field experiences
Simulations
Language
(advanced level)
Low
Level of
integration
Length of
expatriation
Moderate
Low
1 month or less
2–12 months
High
1–3 years
Source: Adapted from Mendenhall, Dunbar and Oddou.29
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Exhibit 12.8
Types of Training Methods
Experimental
training
General
experimental
training
Specific
experimental
training
General
culture
Specific
culture
General
conventional
training
Specific
conventional
training
Conventional
training
Source: Gertsen’s typology of cross-cultural training.30
focuses on the notion of culture in general and aims at sensitizing participants to the notion of culture, or it focuses on one specific culture and aims
at making participants more competent in that particular culture. According
to Gertsen,30 the combination of these two dimensions reveals four types of
training, as represented in Exhibit 12.8. In our research, we use these four
types of training.
Pre-departure Cross-cultural Training
Effectiveness
Studies in the fields of cross-cultural psychology and management demonstrate the beneficial impact of cross-cultural training on expatriates’
cross-cultural adjustment.31 Their findings can be summarized in three
conclusions: cross-cultural training is associated with (1) feelings of wellbeing and self-confidence, (2) development of appropriate behaviors in the
context of the foreign culture, and (3) improvement of the relationships
with host country’s inhabitants. In 2005, Waxin and Panaccio32 studied the
impact of the four types of pre-departure cross-cultural training identified by
Gertsen30 on the three facets of cross-cultural adjustment (work adjustment,
interaction adjustment, and general adjustment) for French, German, Scandinavian, and Korean expatriates working in India. In summary, the findings
of their research confirm the view expressed by researchers over the last
twenty years that pre-move cultural training has a positive effect on adaptation to international assignments. The authors further contribute to the
literature in three different ways. First, their study shows that experimental
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types of training are the most effective ones. Secondly, their results show
that the larger the cultural distance between the country of origin and the
host country, the more pronounced are the effects of cross-cultural training.
Thirdly, the authors show that efficacy of inter-cultural training is clearly
influenced by the magnitude of expatriate’s prior international experience.
Cross-cultural training’s effectiveness is indeed stronger for managers with
less international experience.
Pre-departure preparation thus appears to be an important factor for
adjustment. However, in most multinationals, cross-cultural preparation for
expatriates is superficial, incomplete or simply nonexistent.32 The fact that
decision-makers often have no international experience might, among other
reasons, explain this state of affairs (see Box below).
Pre-departure preparation at Novartis, Switzerland
Before formally accepting the overseas position, expatriates at Novartis are
offered a look-see trip to the host country.
English courses may be offered to the expatriate if needed, English being the
official language of the company. Furthermore, if it is considered as essential that
the assignee and his spouse have basic knowledge of the host country language,
the company can pay for such a language tuition.
Novartis invites then the assignee and the spouse to a pre-assignment briefing
to coordinate the arrangements for the transfer, to explain the compensation
package and to answer any question about the host country.
Moreover, a cross cultural training is offered, consisting of a country briefing
and a course about managing in the host country, communication and negotiation skills useful for the country of assignment. This training is provided by a
native of the host country. Even if it lasts only 2 days, this preparation allows a
better adjustment and expatriates are globally satisfied with it. A pre assignment
check list is also given to the expatriate in order for him/her not to forget any
important issue before leaving.
Source: Marchon.8
As an alternative to pre-departure training, cross-cultural training in the
host country could also be envisaged.33 Mendenhall and Stahl34 mention
in-country real-time training as one of the three new tendencies that are
emerging for HR managers who work in the international HR area, alongside
with global mindset training and CD-ROM/Internet-based training. Further,
corporations should provide cross-cultural training to expatriates’ spouses,
since a lack of adjustment on their part could have negative repercussions
on the adjustment of the expatriate himself. Finally, Harris35 notes that
corporations would benefit from using their former expatriates as trainers
for the new expatriates. Indeed, usage of the newly acquired competencies
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of expatriates is often neglected, and cross-cultural training constitutes an
area where those competencies could easily be put to contribution.
Adjustment of the Expatriate Manager:
Organization Support upon Arrival and during
the Assignment
Once the expatriate lands in the location of assignment, he or she needs
further support from the company to adjust as quickly and smoothly as
possible in the new job and in the new environment. Also, since the expatriate
is supposed to come back to the home country after the realization of
his mission, the company must also keep links with the expatriate so that
the employee does not suffer from the out-of-sight, out-of-mind syndrome.
Furthermore, maybe even more than the expatriate, the spouse needs also
support. First, we will define the notion of adjustment and present the
adjustment model and the expatriates’ adjustment factors. We will then see
how the organization can support the expatriate employee, upon arrival and
throughout the assignment.
The Process of Cross-cultural Adjustment
Expatriates’ adjustment to their new role and environment is of great significance, both to the organization and to the managers themselves. From
the organization’s perspective, expatriates’ degree of adjustment partially
predicts performance and completion of the mission.36 From the managers’
perspective, adjustment is a factor of job satisfaction and psychological
well-being.37 As a result, there has been a burgeoning academic and practical interest in understanding and measuring the adjustment process and its
antecedents. Black38 defined intercultural adjustment as “the degree of an
individual’s psychological comfort with various aspects of a host country.”
The first conceptions of expatriate adjustment correspond to socioaffective conceptions of the cross-cultural adjustment process, which has
been conceived for the last decades as following a U-shaped curve over
time.39 The curve’s shape corresponds to the various stages which the individual goes through. Black and Mendenhall40 summarize the curve’s four
steps in the following manner:
1. The first stage of expatriate adjustment is referred to as the “honeymoon” period. During that stage, the employee is fascinated, excited,
and smitten with the host country’s culture. At this stage, the employee
has only superficial contacts with his or her environment.
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2. The second stage, characterized by disillusionment and frustration,
is that of the culture shock. The expatriate cannot understand the
behavior of the people that surround him/her and realizes that his or
her own behavior does not produce the expected consequences. During
this stage, the expatriate doubts his or her own ability to face this new
situation and temporarily adopts a negative attitude toward his or her
new environment. This stage, which corresponds to the bottom part
of the U-shaped curve, takes place approximately six months after the
arrival in the host country. If the crisis lasts too long, the remainder
of the adjustment process can be jeopardized.
3. The third stage is characterized by a gradual adjustment to the new context. During this stage, the expatriate becomes increasingly efficient.
4. The fourth stage, “mastery,” is characterized by a regular improvement
in the individual’s ability to function efficiently in the new culture
(Exhibit 12.9).
Black and Mendenhall40 presented a critical review of the 18 studies based
on the U-shaped curve theory. The results of these studies are difficult to
interpret, and the U-shaped curve model remains imperfectly validated. In
these studies, adjustment was measured through concepts operationalized in
different ways, such as morale, psychological mood, favorable opinion of
HCNs, satisfaction, comfort, and difficulties experienced in the new environment. Results of the various studies highlight the existence of individual
differences, which suggest that different forms of adjustment may exist, with
Exhibit 12.9
The U-shaped Curve Model
Adjustment degree
7
6
Mastery
Honeymoon
5
4
3
Adjustment
2
1
Culture shock
0
1
2
3
4
5
6
7
8
Months in the foreign culture
Source: Black and Mendenhall.40
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curves that are not always U-shaped. Some expatriates do not experience a
culture shock while some international managers who are considered very
efficient in their jobs suffer from profound culture shock. The U-shaped
curve theory and the concept of culture shock hide the multi-dimensional
character of the adjustment process.
Black38 conceptualized and demonstrated that intercultural adjustment
contains three related but conceptually distinct facets: work adjustment,
which concerns responsibilities and performance, interaction adjustment,
which concerns relationships with nationals of the host country, and general
adjustment, which concerns adjustment to host country’s living conditions,
such as housing, food, leisure activities, and medical services. This typology has been validated by the works of Black and Stephens41 and Black
and Gregersen,42 and is currently used in numerous studies. While they
do correlate, work, interaction, and general adjustment do not follow the
same curves. Studies show that the adjustment facets, despite having some
common elements, are explained by distinct factors.
The Integrated Cross-cultural Adjustment Model
Black et al.43 introduced the concept of “anticipation” in the cross-cultural
adjustment model. These authors underline the importance of the anticipated
adjustment phase, which takes place before the adjustment phase in the
host country. Among the components of this anticipated adjustment phase,
the previous international experience and the cross-cultural training or the
preparation for the expatriation play a major part in explaining adjustment
in the host country. Indeed, they allow the individual to build more realistic
expectations toward his or her future work context, which reduces the
occurrence and the magnitude of “surprises” while facilitating adjustment.44
Most studies on expatriate adjustment following that of Black et al.43
use their model, (Exhibit 12.10) studying in great detail the impact of the
different variables on the cross-cultural adjustment process.45
Waxin (2006b) focuses on the in-country adjustment process. She studied
the impact of culture of origin on the three facets of expatriates’ adjustment
(work, interaction and general) and their antecedents.46 47 Her research
model integrates organizational, individual, and contextual variables and
introduces culture of origin as a direct and a moderator variable. She used
self-administered questionnaire data from French, German, Korean, and
Scandinavian expatriated managers in India, and multiple regressions with
moderator variable. The results establish that culture of origin has a direct
effect on the three facets of expatriate adjustment and a moderator effect on
their antecedents. In the following text, we briefly comment on the major
factors of adjustment. The summary of her research findings is presented in
Exhibit 12.11.
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Exhibit 12.10
Cross-cultural Adjustment Model
Individual
characteristics
Individual
Prior
International
Experience
Training
Work
variables
In-country
adjustment
Anticipatory
Adjustment
Organizational
variables
Contextual
variables
Organization
Selection process
Source: Black et al.43
Exhibit 12.11
The Integrative Model of Cross-cultural Adjustment
Organizational variables
Role clarity (H1)
Role discretion (H2)
Social supervisory support (H3a)
Social coworkers support (H3b)
Social home organization support (H3b)
Moderator
variable
Culture of origin
Logistical support (H4)
Intercultural preparation (H5)
Organizational similarity (H6)
Indirect effect
Direct effect
Individual variables
Technical competencies (H7a)
Substitution capacity (H7b)
Social orientation (H7c)
Willingness to communicate (H7d)
Openness capacity (H7e)
Active stress resistance (H7f)
Work adjustment
Interaction adjustment
General adjustment
International experience (H8)
Contextual variable
Partner support (H9)
Time spent in host country (H10)
Source: Waxin (2006b).
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There are three major categories of variables influencing expatriates’
adjustment following expatriation: organizational, individual, and contextual variables.
Organizational antecedents of expatriate’s adjustment comprise two jobrelated variables (role clarity and role discretion), three social support
factors (supervisory, coworker(s), and home-country organizational support), logistical support, expatriation training, and organizational culture
similarity.
• Job-related Factors. Job-related factors of adjustment encompass role
clarity and role autonomy. Ideally, before the departure of the expatriate, his or her supervisors in the home and host countries should agree
on the precise definition of the role of the expatriate and on the degree
of autonomy he or she will have in this position.
• Organizational Social Support. This encompasses supervisory, coworkers, and home-country organizational social support. Social support
provides expatriates with information about what is acceptable and
unacceptable in the new work context. Organizational social support
has been shown to reduce the time to proficiency of expatriates and to
be positively related to the three facets of adjustment.
• Logistical Support. Organizational logistical support can include a
career assistance service for the spouse or a relocation service, which
helps to reinstall the transferee’s family. If these services do not directly
help the individual to adapt to his new post, they at least help to
diminish the fear of the unknown.
• Intercultural Training. Much of the literature suggests that training
enhances expatriates adjustment.32 48
• Organizational Similarity. Perceived dissimilarity between homecountry and host-country organizations is a source of uncertainty and
stress and thus relate negatively to expats adjustment.
Individual antecedents of expatriates’ interaction adjustment are the six
dimensions of expatriates’ adjustability and prior international experience.
• Adjustability. Based on the works of Mendenhall and Oddou49 and
Black50 , recent studies15 51 have identified six dimensions of the expatriate’s adjustability, each one being measured by a battery of items. The
dimensions are confidence in their own technical competencies, social
orientation, willingness to communicate, substitution capacity, cultural
openness, and stress resistance. All these adjustability dimensions are
positively correlated to adjustment.
• Prior International Experience. Theoretical discussions have, for a long
time, included previous international experience as relevant for the
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adjustment process. Theoretically and intuitively, it makes sense to
assume that international experience allows a quicker and more complete adjustment. Waxin (2006b) found that prior international experience was positively correlated with adjustment.
Finally, contextual antecedents encompass partner’s social support, time
spent in the host country, and culture of origin.
• Partner’s Social Support. Partner’s social support is viewed in the literature as an important influence on the worker abroad. Partner’s social
support reduces the stress generated by the new work environment and
thus facilitates expatriates’ adjustment.
• Length of Time Spent in Host Country. Adjustment is a time-related
process. Individuals need time to get accustomed to their new environment and learn the host country culture and appropriate and acceptable
behaviors. Time spent in the host country is positively related to expatriates’s adjustment.
• Culture of Origin. Research suggests that the more different the host
culture is from the home culture, the more demanding the adjustment
will be. This phenomenon is known variously as the effect of cultural
distance or culture. There is a further point arising out of the cultural
differences literature. Different cultures may be more or less effective
as expatriates in certain countries. Waxin (2004, 2006b) contributes
to the literature in two different ways. First, she showed that expatriates’ adjustment degree varies significantly according to their culture of
origin. This is termed the direct effect of country of origin on the adjustment degree. Secondly, she showed that the antecedents of adjustment
vary according to the specificities of expatriate’s culture of origin. This
is termed the moderator effect of culture of origin.
The results of this research have important implications for the management of expatriates, especially in the fields of recruitment, intercultural
training, and support management policies. As far as expatriate recruitment
is concerned, technical expertise and domestic track record are by far the
dominant selection criteria. Our results show that different facets of adjustability are crucial to the adjustment process. Crucially, knowledge that culture
of origin/cultural distance is a significant predictor of adjustment suggests
that organizations may need to revise their international staffing policies.
If culture of origin is critical then selecting TCNs for whom the country
of assignment is not that different culturally from their own may be a sensible policy. Cross-cultural training appears to be an important factor of
adjustment, especially when it comes to interaction and general adjustment.
The training must be in accordance with the hardness of the culture of the
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host country. The more different that culture is from that of the country of
origin, the more important and necessary is the use of cross-cultural training
programs. Finally, managers might use the results of this study to facilitate
the adjustment of expatriates to their new position abroad. Antecedents of
adjustment are not the same across the national groups of expatriates. Our
results suggest that management may be well advised to implement policies
and practices to provide effective support and encouragement to expatriates,
which take account of cultural and personal needs.
Support on place at the point of arrival. The first support the expatriate
will need after arrival on location should focus on resolving the immediate
living problems, as where to register to the local authorities, where to go
shopping, and how do the phone system works.
• The company could grant the expatriates leave for the first critical days,
or at least allow him/her flexitime during the first week.
• Providing help to the expatriate to fix his or her administrative and
practical duties will allow him or her to quickly concentrate on the
job-related issues of the assignment. The company can also resort to an
external provider to counsel the expatriate during the first days of his
or her assignment.
• Moreover, to assist the expatriate in his or her early adjustment, the
company should also provide him/her with local information about the
social events happening in the region and the different social clubs.
• Furthermore, the support on arrival should also take into account the
work environment. The expatriate should be properly introduced to his
colleagues and the employees he will work with. Selmer52 notes that a
job overlap is not always possible and is relatively expensive, but very
helpful. The predecessor could also assume the role of a temporary
personal coach of the successor.
• Finally, continuing an on-site cross-cultural training during the early
stages of the assignment will also prove useful to accelerate the expatriate’s adjustment process.
Ongoing Support. Hippler53 (in Linehan et al.19 , p. 180) writes that in the
ideal case the on-arrival support with regard to social integration has proven
successful to an extent that the expatriate needs no further formal assistance,
social support being normal.
• The host company should design a local coach to whom the expatriate
can turn whenever he or she experiences sudden difficulties.
• The home company could also formally or informally appoint the
expatriate with a sponsor/mentor based in the home organization,
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responsible of informing the expatriate about the important issues and
changes. The contact should be via regular e-mails and phone calls
while the expatriate is in the host location, and the expatriate should
meet with the mentor in the home office when possible. The sponsor/mentor will also play an important role at the repatriation step.
A mentor can also keep the expatriate “visible” by communicating
an expatriate’s accomplishments across the organization via articles in
company newsletters or reports on the Intranet. In any case, the expatriates should do his or her best to keep formal and informal contacts
with former collaborators in the home organization.
• The home company should also stay in contact with the expatriate
throughout the assignment, to keep him/her updated about the changes
in the domestic operations, the evolution of the organizational policies, the ongoing projects, and the staffing changes. Multiple means of
communication are available: visits of head offices managers, homecoming of the expatriate, telephone communications, video conferences,
e-mails, letters, company newsletters, and so on.
• Finally, the expatriate should keep in touch not only with his or her
home company, but also with his or her family and friends,19 because
being separated from relatives and friends is one of the worst aspects
mentioned by the expatriates about their international assignment.
According to Katz and Seifer54 (p. 42), in-post support systems should
be established and coordinated between repatriated staff, senior expatriated
staff, and new expatriates. However, the practices in the organizations do
not correspond to the suggestions in the literature. The establishment of mentorship programs in the home company is not much developed. Marchon8
studies expatriation practices in five Swiss multinationals. He found that
only one company, Holcim, organizes formal contacts between expatriates
and the HR department of the home country, twice a year. Otherwise, the
relations an expatriate could have with his or her former subsidiary are
generally left to the initiative of the employee.
Support for the Family. The spouse is the most likeliest person to suffer as
a consequence of an international assignment, especially if he or she gave
up his or her work to follow the assignee and is not reemployed in the new
location.
So the company should help the spouse to develop his or her personal
network. For example, the company could bring the spouses of expatriates
together or encourage the spouses of other employees to take an interest in the newly relocated spouse and provide him/her with information
about the neighborhood, the local activities, and serve as a source of new
friendship.
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• Language courses should be provided for the spouses during the assignment, since they will have frequent contacts with the local population
when accomplishing the basic tasks of household, going shopping, or
dealing with the school. Shaffer and Harrison (Bauer and Taylor55 ,
p. 136) established that language skills is the factor that most influence
the ability of the spouse to rebuild a personal sense of identity and, as
a result, achieve greater adjustment.
• The organization should also provide a support for the spouses who
want to work in the country of assignment, for example by providing a
briefing about the local employment conditions and the way to apply. If
no job is found, the spouse could be given the opportunity to continue
education.
• Finally, the children’s adjustment and education are critical issues in the
mind of most expatriated parents. The company must make sure that
the children will be able to attend a school providing a good teaching.
In many areas, only private, international, or even boarding schools
can be considered and the company should take the costs in charge.
Performance Appraisal
The evaluation serves several purposes: development, evaluation of the
employee’s contribution, give grounds to administrative decisions regarding,
for instance, compensation and promotions. Individual performance management involves a formal process of goal setting, performance appraisal,
and feedback. When designing a performance appraisal system, at least
four elements should be taken into account: the objectives of the organization, the staffing perspective, the internationalization strategies, and the
particularities of the local context. The difficulties and specificities of performance appraisal in an international context come from the possible conflict
between global and subsidiary objectives, the problem of noncomparability
of data between subsidiaries, the volatility of the international market, and
the variable levels of market maturity. Further, it is important to reconcile
the tension between the need for universal appraisal standards with specific
objectives in local units, and to recognize that more time may be needed to
achieve results in markets which enjoy little supporting infrastructure from
the parent company.56 The principal challenges related to the performance
evaluation of the expatriates are the determination of the evaluation criteria, the choice of the evaluators, and the delivery of timely and culturally
sensitive feedback.
The Evaluation Criteria. The criteria must be relevant to the context of the
assignment. Black et al.4 (p. 166) mention that, in the case of an expatriate, the criteria which are seen as factors of success in the home country
may make no sense in a foreign setting. The real factors of success of an
international assignment can be totally different from the ones in the parent
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company. For example, for an expatriation in China, developing good relationships with the local government, diffusing a good image of the company,
and establishing good working relationships with the suppliers may be much
better for the long-term success of the firm than the immediate maximal
profits. To determine the proper evaluation criteria, the evaluators should
refer to the job description and specification, where the important goals
and tasks of the position are defined. Hard, soft, and contextual goals tend
to be translated into performance appraisal criteria. Dowling and Welch12
mention that financial results for any subsidiary do not always reflect accurately its contribution to the achievements of the whole corporation and
that, therefore, these should not be used as a primary input in performance
appraisal. Janssens and Brett5 mention that performance appraisal of subsidiary managers against hard criteria is often complemented by frequent
visits by headquarter staff and meetings with executives from the parent
company. Soft criteria are used to complement the hard ones and take into
account arrears that are difficult to quantify like leadership or communication skills. However, in an international context, the evaluation of these
soft criteria is somewhat subjective and more complicated due to cultural
biases. An appraisal system using multiple hard, soft, and contextual criteria
is strongly recommended in the relevant literature. Lindholm et al.57 mention that European firms are more likely to pay close attention on long-term
goals rather that the short-term measures used by US companies. In part,
this reflects the growing use of international assignments for developmental
purposes in European MNEs and the greater integration of expatriation into
the overall career development process in European firms.58
The Evaluators. As in any evaluation, the raters must have the competencies
and the experience necessary to assess correctly the performance of the expatriate, be given regular opportunities to directly observe the performance,
and be motivated to do so.
Theoretically, the evaluators can be a manager from the home country
organization or from the regional headquarter, the immediate superior of
the expatriate in the host country if there is one, peer managers, clients,
and the expatriate himself. Black et al.4 (p. 175) suggest that a team of
organization members should be involved in the performance appraisal of
global managers: the team coordinator should be a senior HRM manager
and would have to collect and analyze the feedback from the other team
members: the expatriate’s on-site superior, peer managers, subordinates,
clients, and the expatriate himself. The authors suggest to rely on several
rater’s evaluations to avoid possible biases.
Several studies have focused on the expatriates’ evaluation practices in
MNE, in US and in Europe. In practice, the local supervisor is the most
likely possibility to assess the expatriate performance. Gregersen et al.59
surveyed HR directors in 58 US multinationals. They report that in the USA
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the most common rater is the expatriate’s immediate supervisor, either from
the host country (74%) or from the home country (39%). Moreover, they
found that 81 percent of the firms used more than one rater when assessing
expatriate performance. The immediate supervisor (in either the home or
the host country), the expatriate as self-rater, and the HR manager (either
home or host country based) were commonly used as multiple evaluators
of expatriate performance. Half of the expatriate group (51%) were on
performance-based bonus systems linked to the outcome of the evaluation.
The majority of the firms reported annual appraisal practices.
Suutari and Brewster60 studied the management practices among 170
Finnish expatriates. In Finnish MNE, most commonly, the expats’ evaluation
is carried out by a foreign supervisor (36%) or by a Finnish supervisor (22%),
but other forms like evaluation by the managing directors or area/country
managers, who were not direct supervisors of the expatriates, were also
common. Of these firms, 76 percent used the same standardized appraisal
forms for the expatriate appraisal.
Finally, Marchon8 studied the evaluation practices in five Swiss multinationals. In all the five studied multinationals (Tetra Pak, Holcim, Novartis,
Credit Suisse, and Nestlé), the work of the expatriate is evaluated by the
direct supervisor in the host country. At Tetra Pak, Credit Suisse, and Novartis, any assignee is evaluated by his or her direct supervisor, who sets the
objectives, assesses the performance, as it is the case for any other employee.
At Holcim, the expatriates are also evaluated by the direct local supervisor
but using a standardized form developed by the headquarters for the assessment of international assignees. Surprisingly, only one company, Nestlé, has
put into place a process by which the home company receives the evaluation
of the expatriate’s work. The evaluation system is standardized within the
group, and is the same for the expatriate and the local employees, but in the
case of the expatriate, a report on his performance is sent once a year to his
or her home company. In none of the five organizations, a formal team is
created for the evaluation of the expatriates.
The performance Feedback. Provision of timely and regular feedback is an
important element of an appraisal system in terms of meeting and revising
goals, and in motivating work effort. Most of the expatriates are evaluated
once a year and sometimes by a geographically distant evaluator, which
makes it difficult for them to get timely and regular feedback on anything else
than hard criteria. Another difficulty is that sometimes the evaluator is not
from the same culture, and that giving feedback must be done in a culturally
sensitive manner. People from different cultures give and take appraisal feedback in very different ways. At Pepsi-Cola International, instant feedback is
one of the five elements of their standardized performance appraisal system,
along with coaching, accountability-based performance appraisals, development feedback, and HR plan.56 The common system provides guidelines for
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each of these practices but allow for cultural adaptation of these practices.
For example, the instant feedback practice is based on the principle that any
idea about any employee’s performance is raised appropriately and discussed
in a sensitive manner. The “how it is done” is locally adjusted to the different cultures. In Asian cultures, feedback can be tough and direct but never
given in public; Indian employees expect some great extent of specificity and
precision, Latins can argue very strongly in case of disagreement. Pepsi-Cola
International managed to balance the imperative of standardization with the
other imperative of cultural sensitivity.
Compensation of International Employees
The objectives of an effective compensation system are to attract and retain
quality people for global assignments and to motivate them to an acceptable
and ever-improving standard of performance.
Total pay packages have four components: the base salary, taxes, benefits, and allowances. Three standard methods are regularly utilized by
multinational companies to determine the base salary of their international
employees: the balance sheet (or home based) approach, the local market
(or host based) approach and the international approach. Then, different
kinds of allowances are meant to compensate particular troubles related to
the relocation. Finally, taxes and benefits have to be fixed.
1. Three methods to determine the base salary
a. Balance Sheet Approach. This is the most commonly used
approach. It entails developing a total compensation package
that equalizes the purchasing power of the expatriate with that
of employees in similar positions in the home country and provides incentives to offset the inconveniences of the relocation.
The employee starts with a set of costs for taxes, housing, goods
and services, and saving (reserve) in the home country. In the
host country, these costs are higher. The company must then
make up for the difference between costs in the home and costs
in the host country. On top of this, the company must provide
a premium/incentive for the employee to go through the trouble of the relocation. This approach is particularly recommended
when expatriates come back home directly after their assignment
and works well when expatriates originate from the same home
country.
b. Host-based Approach. The host-based approach calculates the
base salary relating to the host-country standards. Typical
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allowances will also be added in order to create a fair compensation package. This method reduces the inequality between
expatriates coming from different locations and working in the
same area, as well as the inequity between local employees and
expatriates. But such system is only effective if the country of
destination have relatively high wages, because it is easier to convince individuals to accept pay scales that are greater than what
they would have otherwise. This approach is principally used by
companies which have little need for expatriation.
c. International Approach. The international approach tries to create an equitable system among all international employees. This
method begins with a common point of reference for expatriates
who receive equivalent pay and benefits regardless of their country of destination. This approach is more easily applicable when
the international employees are career internationalists and move
from one foreign assignment to another. This approach is often
more costly and is used by companies needing as small number
of global managers.
2. Tax equalization allowances
Tax equalization allowances are necessary because of the countries’
different taxation systems. Under most tax equalization programs,
the company withholds the amount of tax to be paid in the home
country and pays all of the supplementary taxes accrued in the host
country.
3. Benefits
Most of the difficulties encountered at this place relate to the transportability of the pension plans and the heath care coverage. Here are
examples of the questions raised: If an expatriate contributing to the
home country pension plan is transferred abroad, should he take a
new pension plan in the host country or should he continue contributing to the home country plan? How can the company ensure that the
expatriate will have equal health care coverage than their colleagues
back home?
4. Allowances
Finally, all kinds of allowances are offered to make the expatriate assignment less unattractive. The allowances can be offered in
nature or in cash. They can be paid in a lump sum or throughout
the assignment as a part of the monthly compensation. The amount
usually depends on the employee’s position, family size, and area of
destination.
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• Cost of living allowances are payments that offset the differences
in expenditures on day-to-day necessities between the host country
and the parent country.
• Housing allowances ensure that the expatriate can maintain the
same home country housing standard.
• Education allowances cover the educational costs of the children
of the expatriate, when they have to be placed in private home
country language schools.
• Relocation allowances usually cover the costs of the moving.
• Home-leave allowance consists in air fare between the countries
of assignment and origin for the expatriate and his or her family.
Repatriation and Retention
The repatriation is the activity of bringing the expatriate back to the
home organization. Although it is now widely recognized by managers and
academics that repatriation needs careful managing, this step is generally
neglected. In this section, we will examine the different problems faced by
repatriates, then we will discuss some retention issues and finally we will see
how organizations could build an effective repatriation system.
Potential Problems Faced by the Expatriates
Although the expatriate and his or her family reintegrate their culture of
origin, a several-year experience in a foreign culture makes the rehabilitation
difficult. After living abroad for years, the expatriate and his or her family
have changed, the home country and the home organization also.
So, when returning home, the expatriate and the whole family may face a
“reverse culture shock.” If nothing is undertaken to minimize its impact, the
employee will suffer from maladjustment, which could lead to job underperformance and job dissatisfaction. The other problems associated with
re-entry into the home organization include loss of status, loss of autonomy,
loss of career direction, loss of income, and a feeling that their international experience is undervalued by the company.61 Interestingly, concern
over re-entry was cited as a significant reason affecting expatriate performance in European MNEs.62 For many European MNEs, this problem has
become more acute in recent years because expansion of foreign operations
has often taken place at the same time as rationalization of domestic operations, and fewer unfilled positions are available to returning expatriates in
most companies.61
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The family may also face important challenges during the repatriation. The spouse may encounter difficulties to reintegrate into the domestic
employment market, especially if he or she has not worked during the assignment. The children may come back to a country where they have been out
of touch with the latest events and fashion styles, and may have difficulties
to adjust to a new educational system.
Moreover, after years abroad, expatriates return to an organization that
may have undergone significant changes in strategy, structure, information
and assessment systems, and in formal and informal processes. If the communication during the assignment was insufficient, the expatriate may feel
a loss of connection with the home office, which can enhance an impression
of isolation and encourage the repatriate to leave the company. In the next
paragraphs, we will examine how to build an effective repatriation system.
Building an Effective Repatriation Process
The company must anticipate the repatriation problems and plan actions
to facilitate the reintegration of its international employees and their family. Most of the methods used to facilitate the adjustment process before
the transfer can also be used for the repatriation process. In the next paragraphs, we will examine the steps of an effective repatriation process, which
starts during the assignment and extends after the coming back home. The
authors in the field recommend generally three steps in the preparation of
the repatriation process.
1. Determination of Ownership for the Repatriation Activities. Normally, this should have been clarified before the departure. Black
et al.4 propose the creation of a repatriation team, consisting of an HR
department representative and the expatriate’s supervisor in the home
country, or his sponsor/mentor. The role of this team is to initiate the
preparation for the return and to take responsibility for identifying an
appropriate return position for the expatriate. Collaboration between
home and host HR and line management is essential when it comes to
the managing of the international assignments. Confusion will make
communication between the expatriate and the HR more difficult, and
will make the expatriate feel less supported.
2. Pre-return Preparation. The repatriation should be planned much
before the effective home-coming, and should ideally start at least six
months before the end of the international assignment.63
• The company should give the expatriate sufficient time between the
warning of the repatriation and the effective transfer to allow the
expatriate and his or her family to make anticipatory adjustment
before returning to the home country. Several information sources
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should be made available to the expatriate and his or her family
to help them develop accurate expectations about the return.
• The company should inquire about the expectations of the expatriate regarding his or her expected return job and his or her career
goals and initiate an internal search to find a suitable position.
In the ideal case, expectations about re-entry should have been
already set up at the end of the selection process. Even if a specific job at the end of the assignment cannot be guaranteed, the
assignee should at least know what opportunities are available in
the company and how they can be considered for them.
• The organization should appoint an organizational sponsor/mentor, who could be an accurate source of information
about the company-related changes. The sponsor should have himself/herself experienced expatriation and have sufficient influence
to act as a supporter for the expatriate
• Periodical visits to the home country just prior to the repatriation
give the expatriate the opportunity to develop accurate expectations about what is happening in the home country and in the
organization.
• The company should also provide pre-return training and orientation. Essential information about the repatriation process can be
provided in a workshop/training program, including such matters as
housing, financial compensation packages, school system, and so on.
• Finally, the company should provide assistance to the expatriate
family to find a suitable accommodation back home.
3. Post-return adjustment. Black et al.4 note that the most pivotal component of successful repatriation for expatriates is the selection of a return
job assignment, taking into account the expats’ skills, competencies,
and the new interests developed during the international assignment.
In order to avoid potential problems between the expatriate and his
or her colleagues and supervisor, they could also attend training or
an orientation program. The company could also organize a collective
debriefing about the expats’ international experience. Finally, in order
to allow the expatriate to make the transition quietly, the organization
should leave time for the expatriate, and give him one week off to
settle down, or allow him/her to have reduced working hours during
the first days.25
Exhibit 12.12 rates the effectiveness of different ways to reduce expatriate
turnover, from high, medium to low effectiveness. The results are consistent
with many past surveys. Survey respondents included both small and large
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Exhibit 12.12
Methods of Reducing Expatriate Turnover and their Effectiveness
Method
High
Chance to use experience
Recognition
Position choices upon return
Repatriation career support
Response to security issues
Improve performance evaluation
Family repatriation support
Medium
62%
60
59
31
26
25
22
32%
34
33
52
51
51
48
Low
6%
6
8
17
23
24
30
Source: GMAC Relocation Services.64
organizations; for 79 percent of the respondents, the company headquarters
was in the United States. In most cases, respondents were senior HR professionals and/or managers of international relocation programs.
Retention. Many expatriates leave their company on return60 with the
consequent loss of investment and expertise. Moreover, the departure of
high-potential repatriates is not only a loss for the company, but may give
an advantage to competitors that could attract them and take advantage of
their international experience.
Lazagrova and Caligiuri65 (p. 395) note that most activities that ensure
high retention after repatriation happen during rather than after the assignment. According to the 1999 Global Relocation Trends Report (cited by
Lazagrova and Caligiuri65 (p. 390), 12 percent of the expatriates leave their
company within a year after returning home and 13 percent leave within the
following year, for a total of 25 percent of international managers leaving
their company within two years after repatriation. Vermond66 (pp. 31–32)
put forward the fact that many companies, between 25 and 33 percent of
the respondents in her survey, do not know the rate of assignees leaving the
organization within the twelve months. These statistics show that companies
have not yet understood the importance of the retention of their expatriates
and do not consider expatriation as an investment.
Women in the Global Arena
The number of female expatriates is low in relation to the overall size of
the qualified labor pool.67 However, the proportion of females is increasing
clearly and steadily, from only 5 percent in the ORC 1992 survey to 14
percent in the ORC 2002 survey, and even 18 percent in the GMACRelocation Survey 2002.
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Several recent studies challenge the usual beliefs regarding the low suitability of females for international assignments.
Caligiuri and Tung68 studied the performance of male and female expatriates in US-based multinationals. They found that females can perform
equally as well as males regardless of a country’s attitude toward women in
managerial positions.
Stroh et al.69 found that US and Canadian women are interested in and
likely to accept international assignments. The authors note that the women
in their study tended to believe that their employers were reluctant to propose
an international assignment to them, although their supervisors did not
think so.
Fishlmayr70 studied the external and the self-established barriers to
Australian females taking international assignments. The author found three
major external barriers: HR managers reluctant to select female candidates,
culturally tough locations preclude female expatriates, and those selecting
expatriates have stereotypes in their minds that influence the decisions. The
major self-established barriers were the following: some women have limited willingness, the dual-career couple, and the fact that women are often
a barrier to their own careers by behaving according to gender-based roles.
The author concludes that women are partly responsible for their underrepresentation.
Mayrhofer and Scullion71 studied the experiences of male and female
expatriates in the German clothing industry in different countries, including the Muslim ones. They found few differences in the experiences of
both groups. However, female expatriates put more values on integration of
spouse/family issues before and during the assignment than did their male
counterparts in their sample.
Finally, Napier and Taylor72 studied female expatriates from different
countries, Japan, China, and Turkey, distinguishing between traditional
expatriates, trailers (spouses of males expatriates), and self-selected expatriates. The authors found that the main challenge of these women was gaining
credibility with local clients. Accommodating cultural differences and maintaining an active social life and appropriate interpersonal skills were factors
of successes in their missions. Being foreign women granted them higher
visibility, and so was an advantage in terms of getting access to key local
persons.
To conclude, the predictors of success of women expatriates are the
same as for their male counterparts. The differences between both genders
are the degree of importance granted to the different factors of adjustment/performance, the value placed on intercultural training issues, and the
fact that dual career issues are a greater barrier for female mobility as males
are more reluctant to follow their spouse overseas.
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Companies that are serious in encouraging women to work as expats
will develop a distinct competitive advantage: by stimulating and actively
supporting female expat careers, the pool of talent for top management positions gets filled with a larger number of qualified individuals. This increases
the chance of appointing the right person for the right top job. With more
women becoming expats, it can be expected that traditional assumptions
and the related questions will gradually disappear.73
Chapter Summary
Throughout this chapter, we have studied five topics related to iHRM.
First, we have examined the four major approaches to staffing foreign operations: ethnocentric, polycentric, geocentric, and regiocentric. Secondly, we have examined the reasons for using international assignments:
position filling, sharing and transferring knowledge, developing employees,
controlling and coordination of international activities. Thirdly, we have
detailed the different categories of international personnel: PCNs, HCNs,
and TCNs, and impatriates. We have also presented the different types of
international assignment for PCNs: expatriates, short-term assignees, international commuters and frequent flyers, global managers, and high potentials. Fourthly, we presented the different steps of Waxin (2007) model
for strategic management of international assignments. The model consists
of eight steps: strategic planning and job analysis, recruitment, selection,
preparation to transfer, cross-cultural adjustment and organizational support, performance appraisal, compensation, and repatriation and retention.
Finally, we have examined the position of women in the global arena today.
Closing Case
A Dilemma
In this UAE MNE, top management at HQ believes local markets are very
distinct and local management has a high degree of autonomy. International
communication, co-ordination and control are low—the most important
monitoring mechanisms are the yearly budgets and the financial objectives
for foreign subsidiaries. You are Mohammad, the HRM manager at the
head office, in Sharjah, UAE.
In the German subsidiary (250 employees), in Munich, Jürgen, the HR
Manager fell ill shortly after his assistant Thomas left for personal reasons. The director will not come back before 5 weeks. The German HRM
department is totally disorganized.
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The German managing director of the subsidiary, who is clueless, ask you
to help them: They urgently need to recruit one high potential manager to
replace Thomas, the assistant. This person will help the HR manager in all
his activities and specifically be responsible for TQM, Career Development
and Training activities in the German subsidiary.
Question: What kind of international employee do you prefer to recruit?
Briefly describe the job content, job requirements, and job context of this
position.
If you employ a PCN employee, how will you prepare him/her for this
international assignment?
Source: Marie Waxin.1
Review and Discussion Questions
1. What are the different approaches to international staffing? Outline their
main characteristics.
2. What are the functions of international assignments?
3. What are the reasons for using international assignments?
4. What are the positive and negative aspects of a Parent Country National?
5. Discuss the statement that most expatriate selection decisions are made
informally.
6. What are the challenges faced in training expatriate managers?
7. What organizational factors have an impact on expatriate’s cross-cultural
adjustment?
8. What are the main objectives of a multinational Company’s compensation
policy?
9. Describe the main differences between the different methods used to
determine the expatriate’s base salary.
10. What elements would you include in a repatriation program?
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