Direct and Indirect Forms of In-Country Support for Expatriates and Their Families as a Means of Reducing Premature Returns and Improving Job Performance

Abstract

Expatriate failures in foreign assignments are due primarily to an inability to adjust to foreign cultures. Business executives, however, often do not engage in special efforts for their expatriates. Research indicates, however, that successful assignments must begin with appropriate anticipatory adjustments in the form of screening and training. Further, there is an emerging body of evidence which points to the fact that expatriates and their families often will not succeed unless there is adequate follow through in the form of direct (organization-sponsored) and indirect (organization-encouraged) in-country support. This paper identifies some specific ways in which this support can be provided. Introduction Currently 80 percent of midsize and large companies send personnel abroad, and 45 percent plan to increase the number they have on assignment (Black & Gregersen, 1999). These expatriates must often function in significantly different political, economic and cultural milieus. As a result of these differences, many expatriates have not succeeded in their overseas assignments and early cross-industry studies estimated U.S. expatriate failure, defined as premature return from an overseas assignment, at between 25 and 40 percent when the expatriate is assigned to a developed country and as high as 70 percent when assigned to a still-developing country (Tung, 1982). Such failures are costly to business firms because of estimates that expatriate employees cost between three and five times as much as domestic employees (van Pelt & Woliansky, 1990). More recently, researchers have begun to question the notion that expatriate failure should be defined only in terms of a premature return from an overseas assignment and have begun to focus on the indirect (invisible) costs of failure associated with those expatriates who remain in their assignment, yet whose performance is judged as marginal or ineffective. Such indirect costs may take the form of loss of market share; and damaged relations with clients, local businesses and government officials. For the expatriates themselves these costs can include a loss of self-esteem, self-confidence, and prestige among their peers (Mendenhall & Oddou, 1985). Thus, it is possible that ineffective or marginally effective expatriates who complete their assignments might cost their firms more in the long run than those expatriates who return prematurely from an assignment. Indeed, a recent report indicates that nearly one-third of expatriate managers did not perform up to the expectations of their superiors (Black & Gregersen, 1999). Why do so many expatriates return prematurely or not succeed in their assignments? The major reason for such failures seems to be a continuing parochialism on the part of many U.S. business executives who hold to the incorrect myth that modern business practices are similar enough around the world that it is not necessary for them to engage in special efforts in selecting, training, supporting and repatriating expatriate employees and their families (Black & Gregersen, 1999). Firms tend, for example, to select expatriate managers almost exclusively on the basis of technical competence, often as demonstrated by past performance in the domestic setting (Tung, 1982). Though an important indicator of ultimate success, research evidence suggests that many managements skills do not transfer from one culture to another and that the major factor contributing to expatriate failure is an inability to adjust to the foreign culture rather than a lack of technical competence. A manager who performs well in the domestic setting, therefore, may not be able to adapt to managing in a different culture setting or living in intimate contact with members of a different culture. Predeparture Screening and Training: Anticipatory Adjustments Successful foreign assignments begin, of course, with appropriate anticipatory adjustments on the part of both individuals and the firm. …