This document discusses international assignment failure and expatriates. It provides statistics on failure rates for US, European, and Japanese multinationals. Common reasons for failure include inability to adjust to the new culture or environment, family problems, lack of skills, and short assignment lengths. Failure can be costly and is reduced through careful screening, orientation, cultural training, and support for expatriates and their families. Qualities like cultural flexibility and relationships skills predict success for international assignments.

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2. Expatriate Failure
 Premature return of an expatriate
 Under-performance during an international
assignment

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. Improving Failure Rates/ Solutions
 Provide realistic previews
 Have a careful screening process
 Improve orientation
 Provide good benefits
 Test employees fairly
 Shorten assignment length

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. 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. 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. 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. 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. 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. 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. 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. Likelihood of Exit

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. 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. 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. 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)