The Role of Family inInternational AssignmentsIBUS 618Chris CheeDiego HernandezKen LeeEugenia PawBilinc Yurtseven
Presentation Outlineo Introduction: Diego Hernandezo Cultural Differences: Chris Cheeo Problems : Bilinc Yurtseveno Recommendations: Eugenia Pawo IHRM Policies: Ken Leeo Oracle & Conclusion : Chris Chee
Expatriate Failure • Returning Home before the period of assignment is completed • Underperforming on assignment as a result of difficulties in adapting to their new lives
The Role of Family inInternational Assignments Expatriation Process: “Today’s workers are less willing to sacrifice their own and their family’s lifestyle without a clear understanding of the benefits to them.” (Leong, K. 2003) Repatriation Process: The longer the person is away from the home country, the more likely there will be readjustment problems upon return.
Factors ModeratingPerformance • Inability to Adjust to Foreign culture • Length of Assignment • Willingness to move • Work-Related Factors
Personal ExperienceGoing Abroad to Ecuador:• Willingness to Move: Spouse Career, Children’s Education• Length of Assignment: Affected by unhappy spouse• Inability to Adjust: Frustration which led to failure
Costs of FailureDirect:• Airfares• Relocation Expenses• Salaries• TrainingsIndirect:• Loss of market share• Difficulties with Host government officials• Brand image
Repatriation• Staff Availability• Return On Investment: “US Multinationals spend around 1 million dollars on each expatriate”• Knowledge of Transfer
USA• Punctuality is important• Low context culture• Individualistic• Relationship Build up - Task orientation• Explicit Communication Style & Time Orientation• Persuasion - Instrumental orientation• Long work days, little vacation time• Disagreements are common and acceptable
Japan• High context culture• Gesture-free body language• Personal interrelation is a traditional feature of Japanese society• Importance of saving face• Punctuality is essential• Long negotiations process• Long periods of silence during negotiation process• Women’s roles: managing household and care of children• Long-term relationships are positively encouraged
United Kingdom• Low context society• Polite and courteous• Formal and detached when faced with difficult situations• Punctuality is important• Decision-making is often a slow and systematic process due to rules• Teamwork is important with strong sense of individuality
Expatriate Failure Survey A survey for United States MNCs revealed thatEuropean and Japanese multinationalcorporations (MNCs), identified significantexpatriate failure in U.S. companies for fourreasons: •The spouses inability to adjust to a different physical or cultural environment •Spouses Social Life •Children’s education •The employees inability to adjust. (The employees personal or emotional immaturity) •Other family problems
Important issues to cover whenscreening the family are• * Level of marital stability• * Responsibilities for aging parents• * Chemical dependencies on the part of anyone in the household• * Existence of learning disabilities in a child• * Behavioral problems in teenagers• * Emotional stability of family members• * Strength of family ties to the community or to other family members not going overseas• * Strength of childrens attachment to extracurricular activities• * Family cohesiveness• (Avoid expatriate culture shock HR Magazine, July, 1993 by Marvina Shilling)
The role of the spouse…(Case of Japan)• A study of Japanese expatriates found that family related problems were the most important issues in expatriate failure ( Fukuda & Chu 1994)o Adjusting to foreign cultureo Concerns about their mate’s performance at worko Children’s educationo Stage of the family life-cycleo Government restrictions on their employmento Financial Concerns ( Dual Career Couples)
Children & Education• Japanese executives indicate that children’s education is the main problem• Spouses and children had to return to Japan• 64.7% American, 56.3% British expatriates in Japan, send their children to International schools.• Small number send their children to Japanese schools. ( 12.5% UK, 2.9% USA)
Satisfaction With Life Abroad• American and British expatriates and their families were asked 8 items related to satisfaction with life in Japan.
Recommendations• Select the right person• Offer Pre-departure training programs• Provide Support services• Short-term assignments
Select the Right Person…• Assess skills, competencies, and international experience• Assess individual and his/her family’s ability to adapt
Pre-departure TrainingPrograms…• Cultural awareness programs – Level of interaction (High or Low) – Degree of similarity (High or Low) – Training methods• Preliminary visits – Provide a preview – Introduction to the business
Pre-departure TrainingPrograms Cont.• Language training – Key to adjustment – Gain access to social support structures – Important in terms of task performance and cultural adjustment
Support Services• Spousal career assistance – Job search assistance – Inter-company networking – Career counseling and support• Finding suitable schools• Additional orientation programs – Language training
Short-term assignments• Extended business trips – Range from several months to one year• Commuter expatriate assignments – Commute from home country on a regular basis• Virtual expatriate assignments – Manages from home-base
U.S. Multinational CorporationStaffing Policies• Used parent-country nationals (PCNs) for some control functions – Finance; Accounting• Used local or third country nationals (TCNs) served for market-sensitive functions – Marketing; Advertising• Used host-country nationals (HCNs) for greater extent of all levels of management – Management Level
British MultinationalCorporation Cont.Expatriate Policies• Selection – Informal Interview * – Formal Interview – Psychometric Testing• Training – Informal Briefing – Language Training – Cultural Orientation• Repatriation – Sink or Swim Attitude * Informal interview is more reliable because it can avoid potential candidates intentionally concealing family concerns and issues
British MultinationalCorporation• Staffing Policies• Use of parent-country nationals expatriates to run foreign subsidiaries – Management Development – Objective of control of local operations• Intention to employ more third-country nationals (TCNs)• Ex. Imperial Chemical Industries Ltd. (ICI), Britain’s largest industrial is one of the surveyed companies, and it employed 250 TCNs out of 550 expatriates.
U.S. Multinational CorporationCont.Expatriate Policies• Selection – Performance Record – Psychological Tests – Interviews with both candidate and spouse • Interviewing both candidate and spouse benefits both the company and the candidate’s family• Training 2/3 of the respondents didn’t have pre-departure training programs • Trend of employing local nationals • Short-term nature of such assignments • Doubt over the effectiveness of such training program and lack of time • Fear that employees may leave the company• Repatriation Lack of clear repatriation policies and comprehensive planning
Japanese MultinationalCorporation Staffing Policies • Used PCNs more extensively in their top and middle management positions in their oversea operations • North American operations were relatively more important to Japanese MNCs • Japanese MNCs prefer to send older and more experienced managers for international assignments
Japanese MultinationalCorporation Cont.Expatriate Policies• Selection – Managerial talent was the most important criteria for selecting candidates of CEO – Gender of candidate was being considered in the selection – Usually women would not be assigned as expatriates• Training – Provide more rigorous training programs – Stress the importance of language training• Repatriation – Closer communication with headquarters and exchange of information – Japanese expatriates have certain planned career paths at headquarters • Well planned repatriation policies and benefits can reduce family problems, especially spouse’s dissatisfaction for international assignments.
Work Family RelationshipsOracleCompany Profile – Based in Redwood City – Founded in 1977 – 40,000+ employees in 1977 – Enterprise software giant provides a range of tools for managing business data, supporting business operations, and facilitating collaboration and application development.
Oracle ExpatriateWork/Family Relationships• Expatriate benefits – Work Relocation reimbursement of up to $20,000 – All phone calls to parent country are reimbursed – Club memberships – 4 trips back to parent country per year – Schools are paid for – Flexible work schedule, 3 months at host country, 3 months at home country – Employee Assistance Program (EAP) – LifeWorks Family Resource and Referral Program