International Human Resource Management Practices

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INTERNATIONAL HUMANRESOURCE MANAGEMENT

PRACTICES:THE CHALLENGE OF

EXPATRIATION

Maali H. Ashamalla

Business is no longer limited bynational boundaries. The majority of theworld's large corporations perform asignificant portion of their activities nowoutside their home countries. As many U.S.firms continue to establish and strengthentheir presence overseas, they are also

experiencing high failure rates among theirinternational managers. According to anumber of recent studies, the rate of failureamong American expatriates ranges from 25percent to 40 percent depending on thelocation of assignment (Fortune, 1995;McDonald, 1993, and Ralston, Terpstra,Cunniff & Gustafson, 1995). These rates arequite high, particularly when compared tofailure rates experienced by European andJapanese international corporations.

Failed international assignmentrepresents substantial costs to both thecorporation involved and the individualexpatriate. Respondents to a surveyconducted by the National Foreign TradeCouncil in 1994 estimated the cost of a poorinternational staffing decision to range from$200,000 to $1.2 million (Swaak, 1995).Actually, the figures can be higher since theestimate includes only the identifiable costsassociated with relocation, compensation and

termination. There are however ,unidentifiable costs such as lost businessopportunities, damaged company reputationand weakened relationships with customers,suppliers and government officials in the hostcountry. The sum of the two types of costscan be considerable and can have a strikingimpact on the company. Furthermore, the

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individual expatriate and his/her family canendure major career and emotional setbacks.

Expatriate failure occurs when amanager returns to the home country beforecompleting the originally intended duration ofthe assignment. In addition to the premature

termination of assignment, many managersendure to the end of their term abroad, butperform at levels far below their capacitiesand the company's expectations (Tu andSullivan, 1994). An example is the expatriatewho, after three years of his overseasassignment, remarked that he is only able towork at 30 percent of his effectiveness in theoverseas position in comparison to theprevious home country position (Murray andMurray, 1986). There are many of thesehidden failure cases all over the world costingtheir firms dearly in both money andreputation.

Competitiveness of u.S. globalcorporations depends largely on theeffectiveness of their overseas operations. Inlight of the current high rates of expatriatefailure and the increasing need for managerswho can function successfully abroad, theneed for sound international human resource(lHR) management practices presents itselfwith urgency. IHR management activities thatcontribute to failed expatriate assignments, asprovided in the literature, includeinappropriate selection and pre-departurepreparation, inadequate support duringassignment, and improper repatriation aftercompletion of assignment.

This paper addresses some of theseIHR practices that are related to expatriates'failure and provides suggestions for

strengthening these practices. Expatriation ishere perceived as a three-phase processincluding the pre-departure phase, the duringassignment phase, and the after completion ofassignment phase.

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for example, has set up a successful plan forrecruiting foreign talents. Top graduatebusiness students from prestigious localuniversities are sought and recruited byGillette's' subsidiaries in various foreigncountries. These individuals are given

training in the subsidiary for six months thenare sent to the headquarters in Boston for anadditional eighteen months of comprehensivetraining that covers most aspects of thebusiness. During this latter training, eachtrainee is paired with a company's executivewho becomes a mentor and oversees his/herdevelopment. Successful trainees arepermanently hired, assigned to entry-levelmanagerial positions and sent on assignmentsto the company's subsidiaries in their homecountries (Laabs, 1991). The Coca-ColaCompany also has established an internshipprogram for international students thatprovides the company with a pool of potentialforeign employees. During the internshipterm, international students work in teams onchallenging business projects and report ontheir successes and failures to operationmanagers. From observing interns duringtheir work and evaluating final project reportspresented upon completion of projects,managers have a chance to assess and sourcefuture talent. About 60% of internationalstudents accepted in this internship programare hired permanently after completion of theprogram term.

A rigorous selection program shouldalso include the following considerations:(1) The utilization of appropriate selectiondevices. A battery of instruments and testscoupled with interviews and assessment center

evaluation can be used in order to betterpredict the likelihood of successful placement(McDonald, 1993). Where possibleevaluations by peer repatriates who have justreturned from an overseas post could behelpful in assessment of the candidate'ssuitability for the opened position.(2) Consideration of the candidate's self-evaluation is also important. One major

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outcome of a good selection procedure is theself-decision of the expatriate candidate toproceed with the assignment or opt out.(3) Time devoted for the selection processesmust be adequate. Oftentimes expatriates areselected spontaneously because of an urgent

staffing need in an overseas operation(Mendenhall and Oddou, 1985).(4) Strategic evaluations of the overseasoperations on a frequent basis, forecast oflHRneeds months in advance, long-term planningand recruitment schemes, all should be part ofthe selection efforts.

The selection plan should also includethe expatriate family. Inability of the spouseand children to adjust to the environment ofthe host country has been identified as one ofthe leading reasons for expatriate failure(Black, 1988; Solomon, 1995). This stronglypoints to the need for screening theadaptability potential of the spouse andchildren. Such screening should be an integralfeature of the selection effort for internationalposts (Dowling and Schuler, 1990; Guzzo,Noonan and Elron, 1994). However, it hasbeen reported that only 40-52 percent of U.S.corporations have included the spouse in theselection process (Mendenhall, Dunbar &Oddou, 1987). Among these corporations is3M. Part of the selection process at 3M is acareful assessment of the expatriate's family.The purpose is to make sure that the family isquite willing to take the overseas assignment,and that all family members perceive it as anopportunity to grow professionally andpersonally (Engen, 1995).

Current selection practices of someU.S. firms appear to still be inadequate.

Findings of a survey of 52 corporationsconducted in 1995 by the National ForeignTrade Council (NFTC) and the SelectionResearch International (SRI) point to thefollowing:

Only 25 percent of the respondentcorporations have a global talent poolcombined with talent development andsuccession planning.

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96 percent rated the technical skills asthe most important selection criteria forinternational assignments.

Just over 50 percent have consideredthe candidate's personal qualities such ascultural empathy, interpersonal skills andother qualities that contribute to the success ofinternational assignment.

60 percent considered the candidate'spersonality characteristics and ability toadjust, butthey placed the spouse's career andother family issues low on the list of selectionpriorities.

56 percent depended basically on linemanagers in assessing the suitability ofcandidates and used their judgement in

making the final selection decisions foroverseas assignments. IHR professionalswere hardly involved in the selection process.

81 percent said an urgent need to fillan international position resulted in selectionof an accessible candidate rather than aglobally qualified candidate. This is becauseforecast of international posts and availabilityof globally groomed individuals were notproficient (Swaak, 1995).

A selection approach proposed by

Tung (1988) merits attention because itincorporates several of the variables thatcontribute to expatriate success. According toTung, the selection approach should involvethe following aspects. First, clearidentification of the nature of the job and anassessment of the qualities and attitudesrequired by the expatriate who will beassigned to that job. Second, adequateinformation concerning the differencesbetween the political, legal, social, andcultural forces of the home country and thecountry of foreign assignment. Third,evaluation of the candidate's willingness toserve in the foreign operation, actualpreparation to do so, and the ability to serveeffectively in what could be a greatly differentculture. Fourth, assessment of the candidateand family's ability and willingness to liveabroad. Finally, for some of the overseas

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jobs, local nationals should be considered,given they have adequate qualities and theprofessional competence required for the job.

Second - PreparationResearch findings indicate that pre-

departure preparation is positively related togeneral adjustment and effectual functioningof expatriates in their new environments(McDonald, 1993). Findings also show thatmany U.S. firms still adopt the shortsightedview that intensive preparation is notwarranted for the temporary assignment ofexpatriates. Reasons cited include thefollowing: (a) skepticism about theeffectiveness of pre-departure preparation, (b)limitation of time between selection anddeparture, c) impracticality, since the selectedexpatriate is a manager who has a provendomestic record and is well vested in thenature of the job and d) cost ineffectiveness,because expatriates generally go out one at atime and stay abroad for a relatively short time(Dowling and Schuler, 1990; Hogan andGoodson, 1990; Mendenhall, et. al., 1987; andMurray & Murray, 1986).

In contrast to the above argument,

facts indicate that with an overseasassignment, the manager is not only changingjobs but also a way oflife. The new demandsplaced on him/her and family members mustbe adequately addressed in the preparationphase. Suitable preparation is, thus, crucialand should extend beyond just a realistic jobpreview. It is here suggested that pre-departure preparation efforts extend to includeadequate briefing, cross cultural training,foreign language training, and orientation forthe family.

Briefing. An early activity in the pre-departure efforts should be a briefing programdesigned to provide the expatriate with basicinformation about work-related as well asliving-related issues of concern. Suchinformation should cover: company's transferpolicy, compensation and benefit package,

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taxes, travel, housing and schools in the hostcountry, vacation and home leave, andrepatriation after completion of assignment.In addition, information should include dataconcerning living conditions, socio-economiccircumstances, cultural values, and acceptable

business and social norms in the country ofassignment.

Methods recommended for briefingvary and can include audio-videopresentations, meeting with area advisors,sessions with former expatriates who haveserved in the same region, and even a visit tothe country of assignment by the expatriateand spouse before the final transfer (Blocklyn,1989). Knowledge obtained through thebriefing program can assist the expatriate indeveloping reasonable ideas about realitiesand difficulties of the assignment. It couldalso be essential in setting realisticexpectations about working and living in thenew environment. Moreover, such knowledgecan be instrumental in helping the candidate toaccurately assess his/her suitability orunsuitability for the specific assignment(Raffael, 1982).

Training. To be cost effective, the pre-departure preparation effort has to go beyondbriefing to also include training that targetsthe specific needs of the expatriate. Despitethe importance of the expatriate position andthe costs associated with failure, it is still thecase that many U.S. corporations do not offeradequate formal training for their expatriatesbefore relocation. Evidence indicate that U.S.corporations need to consider putting moreemphasis on pre-departure training reflecting

their commitment to expatriate success(McDonald,1993).

Cross-cultural training and foreignlanguage training are two forms ofinterventions that are suggested to be crucialin the pre-departure preparation phase. Suchtraining help in equipping the expatriate withknowledge, skills and attitudes necessary tocope with the cultural shock that usually takes

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place soon after arrival to the country ofassignment. Then in the months after arrivalwhen adjustment to the new environmentbecomes the issue, cultural and languageknowledge can be instrumental in rapid andcomplete adjustment. Cultural and language

efficiency also foster an appreciation of thesocial norms as well as the business andethical standards of the region which helps theexpatriate in avoiding embarrassing mistakesand in earning respect and trust of localpartners.

With respect to cross-cultural training,probably one of its major outcomes is culturalawareness which facilities working withpeople who have different social values andbehavioral patterns. Some may still assumethat a manager who proved to be effective inthe corporate main offices is going to be aseffective in the company's subsidiaryoverseas. This is a myth. Technical skills areimportant, but, the ability to work withindividuals and groups who are diverse andare functioning according to different businessnorms is particularly salient for expatriates(McDonald, 1993).

There is no single methodology for

cultural training to be recommended inhelping companies in trammg theirexpatriates. Some content matters, however,could be useful if considered. These include:1.) Looking at the ways in which cultureaffects work relationships. 2.) Viewing theways in which understanding differences canlead to teamwork and productivity. 3.)Reviewing American values and assumptions,c o n c e r n i n g i s s u e s s u c h a s

individualism/collectivism, power/distance,

communications and identity and how thesevalues and assumptions compare to those ofthe host country. 4.) A cultural trainingprogram can also provide a forum forexpatriates to appreciate their own roles intheir firm's globalization processes. 5.) Inaddition, a cultural training program providesbasic information concerning the hostcountry's history, heritage, religion, social

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norms, political ideology, economicconditions, demographics, customs and livingconditions.

Cross-cultural training should becoupled with foreign language training. Theposition advanced here is that knowledge of

the language of the host country is vital tosuccessful living and working in that country.Language ability facilitates fast and smoothadjustment to the local environment. Foreignlanguage skills also augment effectiveness indealing directly with foreign counterpartgroups including government officials,bankers, labor organizations, suppliers andcustomers. It reduces the potential formiscommunications and promotes accuracyand speed in business negotiations.Furthermore, knowing the languagedemonstrates interest in the culture, it alsohelps in understanding the world perspectiveof the people with whom one will be workingand living. In general, foreign languagefacility for both the expatriate and family isessential for a pleasant and productiveexperience abroad. (Hogan & Goodson,1990).

Even though the potential benefits ofcross cultural traming is stronglyacknowledged, this type of training is not yetwell provided by many U.S. corporations. Asurvey conducted on Fortune 500 firms showthat only 30-45 percent of respondent firmsoffers some form of cross-cultural training totheir managers before relocation abroad. Inaddition, most of the corporations who offersuch training tend to confine their efforts to anarrow briefing, which provides limitedinformation on the host country's political,

economic and general living conditions.(Dunbar and Katchen, 1990). As far as theforeign language training, there is a widespread assumption that there is no need for itsince an American manager can conductbusiness in any part of the world usingEnglish as the language for communication.

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Family Orientation. A third necessaryactivity in the pre-departure phase has to bedirected at the expatriate's family. Mountingevidence indicates that a key to success ofexpatriates is how well the family adjusts inthe new environment (Engen, 1995; Solomon,

1995; Solomon, 1996; Thornton andThornton, 1995). As mentioned before,inability of the family to adapt to the foreignenvironment has been found to be one of thetwo leading reasons for failure of Americanexpatriate assignments. However, studies thatlooked at the family issue reported that only afew companies offer any kind of pre-departuretraining or orientation programs to theexpatriate's spouse and children (Von Glinowand Milliman, 1990). Family members areusually more susceptible to a cultural shockthan the expatriate. While the expatriatebecomes involved in his/her new assignment,it is the family that faces the difficult processof coping with the social and culturalunfamiliarity (Baliga and Baker, 1995). Thespouse (the wife, since it is men who are oftenoffered international assignments) usuallypays the price of overseas relocation. She hasto deal with the disruption of children'seducation, loss of close contacts with relativesand friends, and maybe even a loss of self-worth and identity. The situation can be morestressful if she had to leave behind her job andinterrupt her career.

Fortunately, many of the problemsrelated to the family adaptability can besubstantially reduced through the use of well-thought-out pre-departure preparationprograms (Harvey, 1985). Preparing thefamily for overseas living through cross-

cultural and foreign language training, otherorientation efforts, and even a pre-visit to thenew assignment sight is essential. Intensivepre-departure preparation can be costly, butthe costs of failure to the corporation are alsovery high. It has been noted that the directcost of only one prematurely returned familyfrom an overseas assignment can cover thecost of establishing a comprehensive pre-

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departure preparation program that can benefitthe corporation in many of its futureinternational assignments (Harvey, 1985).

As emphasized by some researchers,no matter how time-consuming and costly itis, pre-departure preparation of expatriate

managers and their families is a prerequisitefor success overseas (cited in Baliga andBaker, 1995). Comprehensive preparationactivities, including briefing, cross-culturaltraining, language training, and familyorientation can ease transition and help todevelop productive expatriation. These effortscan also reduce high failure rates and highcosts associated with failure. For a firm thathas hundreds of expatriate personnelworldwide, such costs can easily reach intothe tens of millions of dollars. Total costs toU.S. corporations from failed expatriateassignments have been estimated at $2.5billion a year and this does not include theunidentifiable costs (Thornton & Thornton,1995).

The During Assignment PhaseSupport during the assignment is

believed to be essential for moral andpsychological sustenance as well as forperformance effectiveness of internationalmanagers. Superiors and HR professionals inthe home office need to give adequateconsideration to the importance of keeping inclose touch with their expatriates andproviding them and their families with theneeded support (Croft, 1995). A major sourceof concern for the manager while abroad isloss of visibility to those in the home office.Graduates from seven prestigious international

MBA programs view expatriation as apotentially risky career, they fear the out-of-sight out-of-mind phenomenon (Adler, 1987).Sense of isolation from the domestic realitiesof the firm and feelings of being away fromthe corporate centers of power are othersources of concern for managers while onoverseas assignments. These concerns and

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others resulting from relocation can have amajor impact on the expatriate level ofeffectiveness.

An example of a support mechanismthat addresses some of the above-mentionedconcerns is that provided by the Coca-Cola

company to a group of its internationalemployees (Anfuso, 1994). Coca-Cola hasbusinesses in over 200 countries. Althoughfairly independent, human resource (HR)professionals working in the Coca-Colaoperations around the world receive centralsupport from a core HR group in theheadquarters in Atlanta. The core group holdsa two-week HR orientation in Atlanta twice ayear for the international HR staff. Thepurpose of the orientation is three-fold. First,to keep international HR practitionersinformed about HR philosophies, programsand policies that have been created in theheadquarters or by somebody in one part ofthe world and can be successfully adopted byothers in other parts of the world. Second, amajor benefit of this orientation is that itprovides a framework for an HR networkwithin the massive Coca-Cola system. Third,during the orientation, participants get abroader view of what the company is doing,not only in HR, but also in all other functionsof the business. Central support of this kindprovided to expatriates can help combat anysense of isolation they may experience, keepthem informed and put them at ease, thusallowing them to have a productiveinternational experience.

During the assignment, support mayinvolve a wide range of formal and informalactivities. The development of

communication channels, for example, iscrucial. On-going contacts with thedepartment in the headquarters, request forguidance and receiving of advice, frequentvisits to the home office, and getting in-fieldvisits by executives from the home office cancombat feelings of isolation and keep theexpatriate informed about realities in thecorporate headquarters. Use of today's

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advanced technology can facilitatecommunication and compact isolation.Electronic mail, video conferencing, on-lineinformation, and shared data bases are amongthe ways expatriates can remain linked to theirhome country and home offices (Croft, 1995).

The performance review process is anexcellent communication tool. As part of thereview process, original career plan can bereconsidered, changes in the objective of theoverseas assignment can be discussed, anddevelopments in the home office can bedelineated. Performance review should allowfor a two-way communication and could alsoserve as a motivational factor in that theexpatriate efforts abroad can be recognized(Croft, 1995).

A mentor/mentee program can alsoprovide the international manager with apersonal link to the headquarters. Keeping thefamily informed and connected to itsAmerican base is also crucial. Some of themultinational companies with experience ofsending managers to overseas locations havedeveloped formal methods of support toexpatriates' families. Examples includeproviding families with computers and access

to e-mail and the Internet so they can stay intouch with their families and friends; being onthe phone frequently with the spouse andfamily members; suggesting possibilities foremployee assistance programs bothinternationally or via phone; allowing forconvenience benefits such as use of thecorporate mail pouch for delivery of mail andsmall packages (Solomon, 1996). Globalcompanies like Intel, Eastman Chemical andAmgen, being aware ofthe stresses and strains

that relocation can impose on families, makeit necessary for HR to be in regular contactwith families overseas in order to minimizethe trauma of relocation.

Besides the formal support, informalsupport, particularly at the beginning of theassignment, can be very helpful. Informalsupport includes such activities asprofessional and social counseling provided to

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the new expatriate by peers who have alreadybeen in the country of assignment for sometime. It also includes assistance to the newlyarrived family by the expatriate families whohave been established in the new culture.Assisting the newcomer family with day-to-

day matters such as shopping, schooling, etc.facilitates the acculturation process. Having anetwork of relationships also assists inadjusting to the new surroundings. Harvey(1985) suggested that support networks maybe fostered by giving spouses who have beenin the host country for some time an officespace to work from as welcomers and later onas mentors for incoming spouses. Similarmethods may be applied for children to easethe transition to new schools and socialsystems. The idea here is to provide allpossible assistance and support to theexpatriate and family in order to facilitateacculturation during the internationalassignment period.

The Repatriation PhaseAn often neglected area in IHRM is

the repatriation process and the subsequentcareer path of the international manager after

the overseas assignment is concluded. Whilethe issues associated with expatriation aresignificant, those related to repatriation areequally important (Tung, 1988). Just as thenew environment can cause difficulties whenstarting a foreign assignment, so can theprofessional transition back into the homeoffice cause difficulties. Adler (1991 )contends that moving from one set oforganizational norms and behavior to anothercan be difficult and stressful. Most U.S. firms

are still doing little in terms of facilitatingexpatriate transition from the overseasoperation back to the home country office,probably because of the assumption that thistransition constitutes minimum problems.Evidence, however, indicate that repatriationis not simple, and that a repatriate managermay experience professional, as well aspersonal, re-entry problems.


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Repatriation problems are generallyaffected by such factors as the number ofyears spent abroad, the location of theassignment, the age and qualifications ofexpatriate, and the attitude of top managementtoward the international experience (Tung,

1988). The following are among the mostcommon problems faced in repatriation.First: Expatriation is too often thought of asa one way street. In most cases, a manager isselected to be sent on an overseas assignmentunder urgent circumstances and no deliberateattention is paid at this point in time to howthis person can best be repatriated, or whatassignment he/she will get upon returning.Therefore, when back to the home office, therepatriate is either put on hold until anappropriate position is found, or placed in apost where his/her expertise can not becapitalized on. This can be very demoralizingand can urge the repatriate to leave thecompany (McDonald 1993). One study foundthat 72% of U.S. expatriates have been placedin positions where they can not utilize the newskills and knowledge acquired overseas. Thestudy also showed that 20% of repatriatedmanagers left the firm within one year and 40-50% within three years (Schneider &Asakawa, 1995).Second: Because of inadequatecommunication during the overseasassignment, an expatriate loses touch withchanges that take place in the corporation. Anexpatriate can return, for example, to find thatthe company has changed beyond recognitionbecause of downsizing or restructuring. Thiscan render the expatriate a career disaster(Thornton & Thornton 1995).

Third: It appears that many U.S. global firmsdo not assign much value to the internationalexperience. This is in contrast to Europeanand Japanese global companies where there ismuch emphasis on the importance ofinternational expertise. Among the fewAmerican companies that place value on theexperience acquired by an employee whenrelocated overseas is Texas Instruments Inc.

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(TXI). HR managers of TXI maintain thatbefore a manager takes on serious seniormanagerial responsibilities, he/she shouldhave had an international exposure. Theyassert that one of their biggest commitments isto bring expatriates back to jobs where the

skills obtained overseas can be used (Engen,1995). If expatriate's loyalty and internationalskills are not acknowledged, the result isdissatisfaction with the company and highturnover (Shilling, 1993).Fourth: Expatriate expectations of upwardcareer advancement are not usually realized.While overseas, the expatriate is not likely tobe considered for promotion in the domesticoperation. When repatriated, he/she is alsoless likely to receive an upward move. This ismagnified in corporations that do not considerinternational experience an important criteriafor advancement to high-level managementpositions (Adler, 1991). Over half of therepatriated executives in the KornlFerry(1981) survey reported that their re-entry jobswere not satisfying. Autonomy in decisionmaking was the most missed element in re-entry jobs cited by over 90% of therespondents. Responsibility was the secondunsatisfying element cited by 80%, followedby authority 73%, and status 68%.Fifth: The expatriate and family membersmay also experience cultural shock in reverse;being in a different environment for severalyears, their home country environment is nolonger familiar to them (Dowling and Schuler,1990). The above mentioned problemsexperienced by repatriated managers couldcurtail the willingness of other managers toaccept future overseas assignments. About

57% of polled executives in the KornlFerry(1981) survey thought that knowledge of re-entry difficulties was a factor in discouragingothers from accepting overseas assignments.

To benefit from their investments onoverseas assignments, U.S global firms shouldestablish practices that facilitate effectiveprofessional and social repatriation.Repatriation should be prepared for in much

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the same way as expatriation is. At least sixmonths before repatriation, an internal searchshould be initiated on behalf of the expatriateto find a position that suits his/herqualifications after the overseas assignment(Richardson & Rullo, 1992). Debriefing and

reorientation programs as well as areorientation period of about a month shouldbe provided to the expatriate upon return tohelp himlher become reacquainted with thehome officeand the social environment beforetaking on responsibility for a new position.

Reorientation program should also beavailable for the family to facilitate theirreadapting to the novelty of the environment.Some firms such as Avon and Monsanto takeinternational human resource planningseriously and thus have operative plans forrepatriation (Engen, 1995). To these firms,how to bring back expatriates after successfulcompletion of international assignment andhow to effectively use their experiences isextremely important. They view the highcosts of expatriation as an investment forwhich some of the return occurs after themanager has returned to the home country.Theydo not take chances with the tremendous

loss if upon return the employee leaves thecompany to join the competitor.

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Maali Ashmalla is Associate Professor ofManagement at Indiana University ofPennsylvania.

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International Human Resource Management Practices