Expatriate Adjustment.docx
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Expatriate Adjustment.docx
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ExpatriateAdjustment
“CriticallyanalysetheHRactionsthatmultinationalcorporationsshouldtaketofacilitateexpatriateadjustment”
Therehasbeentremendousgrowthintheinternationalbusinessactivityinthelastfewdecades.Thegrowthininternationalbusinesshasbeencharacterisedbygrowinginterconnectednesswithinglobaleconomyandgrowthoftransnationalcorporations.Forinstance,between1950totheendofthetwentiethcenturytotalworldmerchandisegrewtwentytimeshowevertheworldmerchandiseproductiongrewsixtimesonly.Thisindicatesthetrendthatmoreandmoretradeistakingplaceacrossthenationalboundaries(Dicken,2007).Thegrowthinmultinationalcorporationsthroughforeigndirectinvestmentshasimplicationsformanagementofhumanresourcesonaglobalscale.ItisarguedthattheinternationalcompetitioncontinuestointensifyasMNCsareincreasinglyadoptingglobalbusinessstrategyintheirquestfornewmarketsandgeographicallocationstoaccessanddevelopsustainablecompetitiveadvantage(HarzingandVonRuysseveldt,2004).Consequently,aglobalbusinessstrategyrequiresaglobalhumanresourcesmanagementcapableofdevelopinggloballycompetentemployeestomanageoverseasbusinesses.OneofthewidelyusedstaffingstrategiesbyMNCstoenhancetheirunderstatingofinternationalbusinessisexpatriation.Expatriationistheprocessofselectionandemploymentofcompetentemployeesofanorganisationforoverseasassignments.Althoughexpatriationisconsideredasanattractivemethodtounderstandandmanageforeignmarketoperations,organisationsfacenumerouschallengesinselectionandmanagementofexpats(LiuandLee,2008).ThebriefcriticallyanalysestheHRactionsthatMNCsshouldtaketofacilitateexpatriateadjustments.First,theadvantagesandchallengesrelatedtoexpatriationhavebeendiscussedbriefly.Followingwhichthetheoriesofexpatriateadjustmenthavebeenlookedat.Inthesubsequentsection,therelevantHRactionshavebeenadvisedtofacilitateexpatriateadjustmentinthehostcountryenvironment.Intheend,thebriefpresentstheconcludingremarkontheanalysis.
Expatriateisthehomecountryemployeeofanorganisationwhoworksintheforeignsubsidiariesofthecompanyforashorttolongtermperiod(usuallybetween2-5years)(HarzingandVonRuysseveldt,2004).Expatriatedevelopmentisincreasinglybecominganimportanthumanresourcemanagementissueformultinationals(Osman-GaniandRockstuhl,2009).Ithasbeenarguedbyresearchersthatculturaladjustmentinthehostcultureisoneofthekeydeterminantsofexpatriateperformanceduringinternationalassignmentsoverandaboveotherfactorssuchaspoorselection,partnerdissatisfaction,andfamilyissues.Forinstance,previousstudiesreportedthatbetween16to40percentofallexpatmanagersreturnedprematurelyfromtheiroverseasassignmentsduetotheirinabilitytoadjustincross-culturalenvironment(BlackandMendenhall,1991).Louis(1980)suggeststhatexpatriateswhoaregoingonaninternationalassignmentrequiremakingsenseofthepolitical,economic,monetarysystem,culturalvalue,normsandbehaviourinthehostcountrybesidestheknowledgeofneworganisationalfacility.Theunderstandingofthesefactorshelpstheexpatriatemanagerinmanagementofculturalshock.OtherissueswithexpatriationasreportedbyBlackandGregersen(1999)are.Theyare2-3timescostlythantheaveragedomesticposition.Itisabout10-20percentageearlydismissalsfromoverseasassignmentduetodissatisfactionandculturalproblems.Itisrelativelylowerperformancethanexpected(around30%ofexpatriatesthatremainedoverseasdidnotmeetseniormanagementexpectations),thelastreasonforIHRMisthehighattritionrateafterreturn(overaquarterleftcompanyonreturn).AlthoughexpatriationthrowsmanychallengesforindividualsandMNCsasbrieflymentionedabove,italsooffersmanyadvantages.Forinstance,Rosenzweig(1994)arguedthatexpatriationfacilitatesinter-subsidiarycommunicationandcoordinationasresultoftransferofcorporatephilosophyandcompanyvisionwithexpatriatemanager.ColakogluandCaligiuri(2008)arguedthatexpatriatesarehelpfulinenhancingtheperformanceofthesubsidiariesastheyserveasachannelforthetransferofknowledge,skillsandpractices.Asfarasdisadvantagesoftheexpatriationareconcerned,theseare:
highturnover,poormoral,reducedproductivity,highcostofexpatriatestaffingandresultantlossduetolongtimerequiredforadaptationandpoordecisions(Harrisetal,2003).
Expatriateadjustmenthasbeenwidelyinvestigatedinliterature.Oneoftheearlytheoriesthatdescribethecross-culturaladjustmentofexpatriatesinhostcountryenvironmentisU-CurveTheory.Itinvolvesfourstagesofadjustmentsnamely-honeymoon,cultureshock,adjustmentandmasterystages.Honeymoonstageisthefirststageduringwhichtheexpatriatesarefascinatedbythenewplaceandculturewhichchangesintosecondstageofcultureshock(feelingoffrustrationandhostilitytowardshostnationanditspeople)whennewcomersstartlivinginthenewenvironmentonadailybasis.Thisfollowswiththeadjustmentstagewhenexpatriatesbegintosettlethemselvesinthenewnormsandvaluesthroughexperientiallearning.Inthemasterystagetheybecomeeffectivelyfunctionalinthenewenvironment(LiuandLee,2008).BasedontherecentstudiesLiuandLee(2008,p.183)haveidentifiedfivecomponentsofcross-culturaladjustmentprocessofexpatriatesasfollowings:
Thefirstoneispre-departuretraining.Thesecondoneispreviousoverseasexperience;thethirdoneistheselectionmechanism.Theforthoneistheindividualskills.Thelastoneisnon-workfactors.
Blacketal(1991)suggestedexpatriateadjustmentmodel(referfugure-1)byutilisingboththedomesticandinternationaladjustliteraturecitingthatamorecomprehensiveunderstandingofinternationaladjustmentcanbeattainedthroughintegration.Astheyargued,thatdomesticadjustmentliteraturefocusesonpreandpostentryadjustmentvariablessuchasorganisationsocialisation,workroletransition,careerdevelopmentandrelocationwhereasinternationaladjustmentliteraturefocusesonindividualandnon-jobvariables.
Figure-1:
Frameworkforexpatriateadjustment
Source:
Blacketal,1991(adoptedfromLiuandLee,2008,p.184)
Consideringthetheoriesonexpatriateadjustmentsandotherliterature,itcanbedeterminedthatsuccessfulexpatriatemanagementinvolvesselectionofsuitableexpatriates,pre-departuretrainingandpreparationfortheassignment,providingoverseasadjustmentsupportsandreintegrationonreturn.Therefore,multinationalcorporationsshouldadoptstrategiestoassistexpatriateadjustmentatthesestages.Themostimportantstageistheselectionofexpatriatemanagersforoverseasassignment.Asmentionedearlierthisisoneofthekeydeterminantsoftheexpatriateperformanceduringanoverseasassignment.MNCsshouldhavecomprehensiveselectioncriteriabasedonfirm’smanagementphilosophy,requirementofoverseasassignmentandthehostmarketconditions(Oddou,1991).MNCscanlookatcertainfactorswhileselectingexpatriatessuchasadaptabilityofindividualtochange,degreeofopen-mindednesstobehaviourandattitudesdifferentfromhisorherown,abilitytomeetnewpeopleandlearningaboutthemandtheirculture,degreeofself-confidenceandself-relianceoftheindividual,abilitytodealwithstressandextenttowhichtheindividualenjoyfamilysupport.Theindividualbeingselectedfortheoverseasassignmentrequiredtohavetheseattributesinordertocopeinthenewenvironment.Theindividualadaptabilitytochanges(expectedandunexpected)inthedomesticworkplaceensurethatthepersonwillbeabletocopewiththestressresultingfromtheunexpectedchangesthatareaprominentcharacteristicsoftheoverseasassignment.Forinstance,thenewforeigncultureandlanguagethrowsunexpectedchallengesfortheexpatriatemanagerthatcancausemajorstressandifthepersonhasbeenquickinadoptingpolicyandproceduralchangesinthedomesticenvironmentheismorelikelytoadaptquicklytothenewcultureandbusinessenvironment.Therefore,selectionmechanismshouldnotoverlookthisdimension.Theselectionprocessshouldalsolookatthefactastohowmuchopen-mindedtheindividualistoideasandbeliefsthatdifferentfromhisown.Theeffectivenessofemployeesindealingwiththedisagreementinbusinessmatter,withpeopleofdifferentgenderandofvariousethnicgroupsinthedomesticenvironmentcanbeanalysedinordertoassesshissuitabilityforanoverseasassignment.Peoplewhocandealeffectivelywithcolleagueswithdifferentideas,attitudes,beliefsandethnicityaremorelikelytoperformbetterinaninternationalenvironmentascomparedtothosewhofinditdifficulttodealwithsuchpeople.MNCscanalsoconsiderthesocialisationhabitofthepotentialemployeeduringtheselectionprocess.Forinstance,itcanbeassessedthatdoestheemployeeenjoymeetingnewpeopleandlearningnewcultures,andparticipateenthusiasticallyinsocialevents.Researchsuggeststhattheoutgoingnatureofexpatriateshelpthemadaptbetterinthenewcultureastheyhavethestrongdesiretoassociatewithothersaswellasakeeninterestinlearningaboutthenewcultureandpeople(Harrisetal,2003).Itisalsoveryimportanttoconsiderthathowself-confidentandself-reliantistheperson.Thiscanbeassessedfromtheperformanceoftheemployeeinpastassignmentinthedomesticenvironment.Theorysuggeststhatoneofthereasonsofexpatriatefailurehasbeentheinabilityofpartn
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