Expatriate failure

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Expatriate failure

  1. 1. StudsPlanet Leading Education consultant in India www.StudsPlanet.com
  2. 2. Expatriate Failure  Premature return of an expatriate  Under-performance during an international assignment
  3. 3. International Assignment Failure International assignment failure can cost hundreds of thousands of euros Why International Assignments fail?  Personality  Person’s intentions  Family pressures  Lack of cultural skills  Other non-work conditions like living and housing conditions, and health care
  4. 4. Improving Failure Rates/ Solutions  Provide realistic previews  Have a careful screening process  Improve orientation  Provide good benefits  Test employees fairly  Shorten assignment length
  5. 5. Expatriate Failure Rates IBUS 618 Dr. Yang Recall Rate Percent Percent of Companies US Multinationals 20 - 40% 7% 10 - 20% 69 < 10 24 European Multinationals 11 - 15% 3% 6 - 10 38 < 5 59 Japanese Multinationals 11 - 19% 14% 6 - 10 10 < 5 76
  6. 6. Expatriate selection  Reduce expatriate failure rates by improving selection procedures  An executive’s domestic performance does not (necessarily) equate his/her overseas performance potential  Employees need to be selected not solely on technical expertise but also on cross-cultural fluency
  7. 7. Four attributes that predict success  Self-Orientation  Possessing high self-esteem, self-confidence and mental well-being  Others-Orientation  Ability to develop relationships with host-country nationals  Willingness to communicate  Perceptual Ability  The ability to understand why people of other countries behave the way they do  Being nonjudgmental and being flexible in management style  Cultural Toughness  Relationship between country of assignment and the expatriate’s adjustment to it
  8. 8. Reason for Expatriate Failure  US Firms Inability of spouse to adjust Manager’s inability to adjust Other family problems Manager’s personal or emotional immaturity Inability to cope with larger overseas responsibilities  Japanese Firms  Inability to cope with larger overseas responsibilities  Difficulties with the new environment  Personal or emotional problems  Lack of technical competence  Inability of spouse to adjust
  9. 9. Costs of Expatriate Failure  Direct costs:  Airfares  Associated relocation expenses  Salary and benefits  Training and development  Costs vary according to:  Level of position  Country of destination  Exchange rates  Whether ‘failed’ manager is replaced by another expatriate
  10. 10. Indirect Cost of Expatriate Failure  Damaged relationships with key stakeholders in the foreign location  Negative effects on local staff  Poor labor relations  Negative effects on expatriate concerned  Family relationships may be affected  Loss of market share
  11. 11. MANAGING EXPATRIATE FAILURE  Design a job that maximise role clarity,  minimises role conflict with proper selection of candidate.  Provide opportunity for languages lessons.  Provide all information & equipment pertinent to the role/work of the employee.  Provide proper organisational support systems from supervisors & co-workers in the host country.  Include spouse in any trainning & support programmes
  12. 12. The Employment Relationship  The nature of the employment relationship  Relational: broad, open-ended and long-term obligations  Transactional: specific short-term monetized obligations  The condition of the relationship  Intact: when employee considers there has been fair treatment, reciprocal trust  Violated: provoked by belief organization has not fulfilled its obligations
  13. 13. Likelihood of Exit
  14. 14. Training and development Training: Obtaining skills for a particular foreign posting  Cultural training : Seeks to foster an appreciation of the host-country’s culture  Language training : Can improve expatriate’s effectiveness, aids in relating more easily to foreign culture and fosters a better firm image  Practical training: Ease into day-to-day life of the host country
  15. 15. Organizational Commitment  Affective component  Employee’s emotional attachment to, identification with and involvement in, the organization  Continuance component  Based on assessed costs associated with exiting the organization  Normative component  Employee’s feelings of obligation to remain
  16. 16. Why consider the psychological contract?  Nature, location and duration of an international assignment may provoke intense, individual reactions to perceived violations  Expatriates tend to have broad, elaborate, employment relationships with greater emphasis on relational nature  Expectations and promises underpin this relationship
  17. 17. Harris and Brewster’s Selection Typology Formal Informal Open  Clearly defined criteria  Clearly defined measures  Training for selectors  Open advertising of vacancy (internal/external)  Panel discussions  Less defined criteria  Less defined measures  Limited training for selectors  Open advertising of vacancy  Recommendations  No panel discussions Closed  Clearly defined criteria  Clearly defined measures  Training for selectors  Panel discussions  Nominations only (networking/reputation)  Selector’s individual preferences determine selection criteria and measures  No panel discussions  Nominations only (networking/reputation)

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