Expatriate Assignments: Enhancing Success and Minimizing Failure

Expatriate Assignments: Enhancing Success and Minimizing Failure Author(s): Rosalie L. Tung Source: The Academy of Management Executive (1987-1989) , May, 1987, Vol. 1, No. 2 (May, 1987), pp. 117-125 Published by: Academy of Management Stable URL: http://www.jstor.com/stable/4164735 REFERENCES Linked references are available on JSTOR for this article: http://www.jstor.com/stable/4164735?seq=1&cid=pdfreference#references_tab_contents You may need to log in to JSTOR to access the linked references. JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at https://about.jstor.org/terms Academy of Management is collaborating with JSTOR to digitize, preserve and extend access to The Academy of Management Executive (1987-1989) This content downloaded from 35.154.245.7 on Sat, 04 Jul 2020 10:45:13 UTC All use subject to https://about.jstor.org/terms May, 1987 0Academy of Management EXECUTIVE, 1987, Vol.1 No.2, pp.117-126 Expatriate Assignments: Enhancing Success and Minimizing Failure Rosalie L. Tung University of Wisconsin, Milwaukee headquarters, it may take some time before they regain confidence in their own abilities. The unsettling experience for the person's family, both emotionally and physically, represents yet another consequence. A major U.S. food manufacturer was seeking someone from corporate staff to head its Japanese marketing division. Mr. X was selected because he was clearly one of the company's bright young talents; he had also demonstrated superior marketing skills in the home office. Those making the appointment did not assess his ability to relate to and work with Japanese because it was assumed that a good manager in the United States would be a good manager abroad. Prior to his 18-month assignment, Mr. X was given some literature pertaining to Japan's geography, climate, banking, and educational institutions and was asked to share this material with his family. However, during the initial six months in Japan, Mr. X was unable to devote much time to company activities because he was preoccupied with problems he and his family were having in adapting to the new environmental setting. Similarly, in the last six months, he often worried about his upcoming job change. He heard that a peer and rival at home had just been promoted to a position for which both men had aspirations. What must he do to get back into the race? While he was trying to strategize about this new assignment, his wife continually questioned him about their new West Coast relocation. The result: In the course of Mr. X's 18-month assignment to Japan, his company lost 98% of its existing market share to a major European competitor. What went wrong? Why was Mr. X, a person with a proven track record in corporate headquarters, such a dismal failure in his assignment to Japan? Mr. X's experience is not unique. In a questionnaire survey of expatriate assignments within 80 U.S. multinationals, it was found that more than half of the companies had failure rates of 10-20%. Some 7% of the respondent firms had recall rates of 30%.1 ("Failure" in the survey was defined as the inability of an expatriate to perform effectively in a foreign country and, hence, the need for the employee to be fired or recalled home.) These statistics are consistent with the findings of others that approximately 30% of overseas assignments within U.S. multinationals are mistakes. These "casualties" not only represent substantial costs to the companies, but also constitute a human resource waste since most of those who failed had a noteworthy track record in the home office prior to overseas assignment. Such failures often constitute a heavy personal blow to the expatriates' self-esteem and ego. Hence, even if they are accepted back by corporate Problems of U.S. Expatriates What are the causes of expatriate failure in U.S. multinationals? In the survey, the respondents were asked to indicate the most important reasons for expatriate failure. The reasons given, in descending order of importance, were: 1. Inability of the manager's spouse to adjust to a different physical or cultural environment; 2. The manager's inability to adapt to a different physical or cultural environment; 3. Other family-related problems; 4. The manager's personality or emotional immaturity; 5. The manager's inability to cope with the responsibilities posed by overseas work; 6. The manager's lack of technical competence; and 7.. The manager's lack of motivation to work overseas. These findings are consistent with other studies that show that the "family situation" and "relational abilities" factors are usually responsible for failure or poor performance abroad. In the case of Mr. X, we see that the family situation and lack of cultural awareness were largely responsible for his poor performance in Japan. Mr. X's problems were compounded by four other factors: (1) the short duration of his overseas assignment; (2) the expatriate's concern with repatriation; (3) overemphasis on the technical competence criterion to the disregard of other attributes necessary for effective performance abroad; and (4) lack of training for overseas assignment. Each of these compounding factors is discussed briefly below. Although most overseas assignments of U.S. multinationals are for two or three years, such short stints abroad are not conducive to high performance. The expatriate barely has time to adjust before transfer home or to another overseas location. In the case of Mr. X, there were only six months out of the 18 months in which he was contributing to the subsidiary's opera117 This content downloaded from 35.154.245.7 on Sat, 04 Jul 2020 10:45:13 UTC All use subject to https://about.jstor.org/terms Academy of Management EXECUTIVE was found that U.S. multinationals used local nationals more extensively at all levels of management in industrialized countries than in the less developed regions. This is logical, as one would expect the more developed nations to have a larger pool of personnel who possess the necessary manpower and technical skills to staff management-level positions. This practice of employing local nationals, however, does not resolve all the problems of international human resource management for at least three reasons. First, local nationals may have problems relating to organizational members in the head office because of nonfamiliarity with corporate culture. As such, many multinational companies perceive the need to use expatriates to serve as an interface between corporate head office and the local subsidiary. This was a reason behind IBM's decision in early 1985 to expatriate some 250 American families to Japan as part of their restructuring efforts in checking Fujitsu's growing market share in that country. Second, companies need to send expatriates (or other alternative sources of manpower) to the less developed nations because of the lack of talent in these countries. In most instances, these are the countries that pose the major problems of adjustment for expatriates. Third, given the increasing globalization of industries and business activities, international experience in strategic markets (Japan being one of them) should be considered an integral part of any high flyer's career development program. While Japan is a highly industrialized country, its widely divergent cultural norms and practices are a major source of adjustment problems for Westerners. According to Seward, nine out of ten expatriates were significantly less productive in Japan than they were back home. This was consistent with an earlier finding by Adams and Kobayashi." tion. Research has shown that when expatriates are exempted from active managerial responsibilities in the first several months of foreign assignment, particularly to countries with great cultural differences, "This will ease their acculturation and help prevent mistakes they tend to make during this period [which are] usually detrimental to both the expatriate and his organization."2 However, extending the overseas assignment can lead to the second factor, namely, concern by the employee about repatriation. Since the "plum" positions in U.S. multinationals are back home, expatriates are understandably reluctant to accept extended periods of overseas assignments because of their concerns about being forgotten and hence passed up for promotion. These fears are to a large extent justified, as a result of the revolving door policy at the top management level in U.S. corporations. An expatriate who has been away for a number of years may find himself or herself a stranger to members of the board. This was apparently Mr. X's principal concern-he learned that while he was away from center stage his rival had been promoted over him. The third compounding factor is overemphasis on the technical competence criterion to the disregard of other important attributes. In the case of Mr. X, technical competence was used as the sole criterion for selection and no assessment was made of his ability to relate to and work with the Japanese. According to E. L. Miller, this practice is fairly common among U.S. multinationals and stems from two primary causes: the difficulty of identifying and measuring attitudes appropriate for cross-cultural interaction and the self-interest of the selectors. Since technical competence almost always prevents immediate failure on the job, particularly in high pressure situations, the selectors play safe by placing a heavy emphasis on technical qualifications and little on the individual's ability to adapt to a foreign environment.3 There is abundant research to show that while technical competence is an important factor in the overall determination of success, relational abilities appear to increase the probability of successful performance considerably.4 Lack of relational abilities, i.e., the inability of the individual to deal effectively with one's clients, business associates, superiors, peers, and subordinates was found to be a principal cause of failure. However, the relational skills criterion is seldom emphasized in the selection decision.5 The fourth factor that often compounds the problem is inadequate training for overseas assignments. In the case of Mr. X, he was presented with the most basic factual information about Japan. These are commonly referred to as environmental briefing programs. When used alone, the environmental briefing is inadequate in preparing trainees for assignments that require extensive contact with the local community, as was the case with Mr. X as head of marketing in Japan. One apparent solution to the problem of high expatriate failure is the use of host country nationals, which is already an extensive practice. In the survey, it Given the continued need to use expatriate staff, what should companies do to redress the situation? To shed light on the issue, let us examine how the European and Japanese multinationals are faring in this regard. European and Japanese multinationals represent interesting study and comparative analysis cases for several reasons. First, multinationals from these countries assign very high priority to their international market because of the smaller size of their domestic markets. Second, there is a significantly longer history of overseas operations and expatriation among European multinationals. Third, while the Japanese as a result of culture and history do not readily mix with gaigins (foreigners), they have performed extremely well in foreign markets within the short span of two or three decades. The Japanese who were sent abroad to establish foreign subsidiaries have succeeded in making Japan a formidable economic power. A questionnaire survey similar to the one administered to U.S. multinationals was given to 29 West European and 35 Japanese multinationals. For both the Europeans and the Japanese, failure rates were lower than the Americans'. Fifty-nine percent of the West European firms had recall rates of under 5%o, 38% had recall rates of 6-10%, and only 3% had failure rates of 118 This content downloaded from 35.154.245.7 on Sat, 04 Jul 2020 10:45:13 UTC All use subject to https://about.jstor.org/terms May, 1987 the family. The common denominators to success in both European and Japanese multinationals will be examined first. 11-15%. For the Japanese sample, 76% of the firms had failure rates of below 5%, 10% had recall rates of 6-10%, and 14% had failure rates of 11-19%7. A cursory review of these statistics would suggest one of two possible explanations for the lower failure rates among European and Japanese multinationals. West Europeans and Japanese expatriates are by nature, selection, and training more adept at living and working in a foreign environment. Also, European and Japanese multinationals use different criteria for judging whether a person could work effectively in a foreign country. In the case of Japan, this may arise from the more paternalistic role assumed by the firm and the practice of life-time employment among the career staff from which the expatriate population is drawn. To gain a better understanding of the reasons for the lower expatriate failure rate among European and Japanese firms, in-depth interviews were conducted with another sample of 17 European and Japanese multinationals in diverse industries. On the average, two senior executives responsible for expatriate assignments were interviewed from each of these multinationals. The failure rates for the European and Japanese multinationals interviewed were under 6 and 5%, respectively. These studies provide insights into the human resource management programs in European and Japanese multinationals, particularly as they relate to overseas assignments. The highlights of this study follow.8 Long-term Orientation with Regard to Overall Planning and Performance Evaluation U.S. multinationals generally possess a short-term orientation with regard to planning and assessment of performance. In contrast, European and Japanese multinationals espouse a long-term orientation in their human resource management practices. This is shown in several ways. First, the rate of turnover among managerial personnel is very low. Mid-career changes are rare since most companies espouse a policy of promotion from within. This "cradle to grave" philosophy implies certain obligations and responsibilities on the part of the employer and the employee. In Europe and Japan, employers are generally more tolerant of circumstances that may temporarily affect a person's performance. Consequently, they tend to make allowances for performance that is less than average in the initial period of assignment abroad. Some of the European multinationals interviewed allowed an adjustment period of up to one year. In the case of Japanese multinationals, many indicated they did not expect the expatriate to perform to full capacity until the third year of assignment. A second implication of this long-term orientation among European and Japanese multinationals is a greater willingness to invest large sums of money in career development programs, particularly in the case of Japanese multinationals. These will be discussed later. A third way in which this long-term orientation affects international human resource management practices is the extended periods of overseas assignments. Except for overseas postings that are strictly for career development purposes, expatriate assignments in European multinationals average five years or more. Similarly in Japanese multinationals, the average duration of an overseas assignment is five years.9 This is consistent with a 1982 survey by the Japan Economic News on 612 expatriates, which found that the average duration of an overseas assignment was 4.67 years. This longer duration of overseas assignment is possible because "plum" positions may be abroad rather than at domestic headquarters. Companies also provide a comprehensive support system to allay expatriate concerns about repatriation. The longer durations of overseas assignments allow the individual more time to adjust. In addition, these firms provide greater incentive for the expatriate to learn and adapt to local circumstances. A fourth implication of the long-term orientation among European and Japanese multinationals is the tendency to place equal, if not heavier, emphasis on a person's potential (as opposed to actual performance) Reasons for Lower Failure Rates Among European and Japanese Multinationals Based on the interviews, there appear to be several common denominators to successful performance among European and Japanese multinationals. These are: 1. Their long-term orientation regarding overall planning and performance assessment; 2. Use of more rigorous training programs to prepare candidates for overses assignments, particularly by Japanese multinationals; 3. Provision of a comprehensive expatriate support system; 4. Overall qualification of candidates for overseas assignments; and 5. Restricted job mobility. In the European multinationals, there are three additional factors that may account for their greater successes with expatriation. These include their * international orientation, * longer history of overseas operations, and * language capability. In the case of Japanese multinationals, two factors may also account for low rates of expatriate failure: selection for overseas assignments and the role of 119 This content downloaded from 35.154.245.7 on Sat, 04 Jul 2020 10:45:13 UTC All use subject to https://about.jstor.org/terms Academy of Management EXECUTIVE Western Europe. The objective is "To help the individual adjust, in a very practical way, to the work environment and the personal situation," to quote the Center's in assessing his or her overall contribution to the organization. Given the practice of life-time employment among most managerial personnel, the company can afford to take such an approach. director. For example, if the target region is the Middle East, the course will examine "What Islam means in the way that people actually behave, and in their attitudes toward each other, their families, age, education, women and, most important, expatriates or foreigners who come to live among them." Training for Cross-Cultural Encounters As noted earlier, a principal reason for expatriate failure in U.S. multinationals is a lack of relational abilities. Despite this recognition, most U.S. multinationals do not provide formal training to prepare expatriates for cross-cultural encounters. This reluctance to invest large sums of money in training stems from the fear that employees may leave the company. This fear is justified, to a large extent, because of the high mobility of the U.S. workforce. The information is conveyed through a mix of lectures, audiovisual presentations, and discussions with outside speakers. The latter includes returned expatriates and foreign nationals. The Center has recently begun to offer courses to fit the specific needs of a firm. The second type of residential program, the cultural awareness program, does not focus on a specific region of the world per se. Rather, the purpose is to broaden an individual's understanding of and sensitivity to other countries through lectures and experiential exercises. The Center trains about 1,000 people every year, with slightly more than half the candidates coming from the United Kingdom and the remainder from continental Europe. Virtually all British multinationals interviewed for this study used the Center's facilities, and a number of Swiss and Italian firms currently enroll or propose to enroll their candidates. In comparison, given the very low turnover rates among management personnel in European and Japanese multinationals, these companies feel safe investing in an employee's future by spending large sums of money to develop overall management skills. Since international experience is considered an integral part of one's overall career development, most European companies provide some programs to prepare candidates for assignments to locations outside Western Europe, North America, and Australasia. Similarly, 70% of the 267 largest companies in Japan offer some preparatory courses for their expatriates (1982 survey by Japan Economic News). While the programs differ in content and emphasis, they often consist of the following Besides Farnham Castle, other cross-cultural training facilities used by the European multinationals studied include the Tropen Institute (the Netherlands), the Carl Duisberg Center, and Evangelische Akademie (both Federal Republic of Germany). components: Most European multinationals, in addition, provide ample opportunities for outgoing families to discuss their overseas assignments with expatriates who have returned. Since most of the European multinationals included in the study have a longer history of overseas operations, there is usually a fairly large contingent of resident experts, either located in corporate headquarters or abroad, who can brief expatriates and their spouses about the overseas situation. Japanese companies typically provide a more comprehensive and rigorous training program to prepare their expatriates for cross-cultural encounters. Besides language training, a typical program would include: * Field experience. Many of the Japanese multinationals surveyed select members of their current staff to their overseas offices to serve as trainees for one year. As trainees, their primary mission is to observe closely and, hence, learn about the company's foreign operations. * Graduate programs abroad. Every year, many of the Japanese multinationals surveyed send 10 to 20 career staff members to attend graduate business, law, and engineering programs overseas. The company will pay tuition and all expenses, in addition to the employee's regular salary. While attending graduate school, the Japanese employee is exposed to foreign principles of management, which will pepare him for eventual overseas assignment. Furthermore, during the two-year program, the Japanese employee gains a bet- * Language training. Most employees of European multinationals have studied a second or third language in school. Consequently, refresher courses like those conducted by Berlitz are often sufficient. While the majority of European multinationals studied did not offer training in exotic languages such as Japanese, Chinese, or Arabic, some did. Almost all the Japanese companies interviewed sponsored intensive language training programs, ranging from three months to one year in duration. To promote fluency in a foreign language, many Japanese companies invite Caucasians to share the same dormitories to provide their trainees ample opportunity to practice their language skills and to gain a better understanding of the foreign country. * Cross-cultural training. Many of the European multinationals studied used a training facility known as the Center for International Briefing at Farnham Castle in the United Kingdom. The Center offers two types of residential programs: a four-day regional program and a week-long cultural awareness program. These programs are generally attended by both husband and wife. The regional program, as its name suggests, focuses on the specific region or country to which the individual is sent. Over the course of the four-day program, the trainee is exposed to factual information about the historical, political, religious, and economic factors that shape the mentality of the people in a given region, and how these factors differ from those in 120 This content downloaded from 35.154.245.7 on Sat, 04 Jul 2020 10:45:13 UTC All use subject to https://about.jstor.org/terms May, 1987 about the situation at home, and has the responsibility of finding a position for the expatriate upon his return. Since the turnover rate at the senior management level in most European and Japanese firms is virtually nonexistent, the expatriate can feel secure that the sponsor will be there when he returns. In the words of a British petroleum executive, even though the sponsor may have taken up a new position elsewhere in the company, "The personal link is the vital thing, not the link by way of the role the general manager was at when the expatriates went out." This sentiment was echoed ter understanding of the broad functioning of foreign societies. * In-house training programs. Beside3 language training, the expatriates take courses in international finance and international economics, and are exposed to environmental briefings about the country of assignment. Many Japanese companies now realize the impor- tance of developing the management skills of expatriates to prepare them for the added responsibilities of overseas work. One study found that a principal reason for expatriate failure among Japanese multinationals was their inability to cope with the larger responsibilites of overseas work.10 The situation arises because in a foreign assignment, the Japanese expatriate has to operate largely on his own, without the kind of close interaction he was accustomed to at home. To a Japanese who has been used to working in a group, this may pose a major problem of adjustment. Outside agencies. Besides in-house training pro- by a Japanese expatriate: "My boss will continue to be my boss for a long time. I know he will take care of me." Where there is no sponsor-expatriate pairing, most companies have separate departments or divisions that are responsible for overseeing the material well-being and career path of expatriates. The expatriate is required to talk to personnel from these departments on his home leave, which is usually once a year. In addition, some companies have a senior manager in their overseas subsidiaries who has a "part time responsibility as a career manager or godfather." The expatriate community in foreign countries also plays a major role in reinforcing the support mechanisms provided by corporate headquarters. Given the longer history of overseas operations of European multinationals, their foreign subsidiaries are generally well established with a relatively large expatriate community. As such, the new arrivals are "fairly well looked after." In the case of Japanese multinationals, the "early settlers" will provide assistance to the new arrivals because of their commitment to a strong group orientation. gram, there are a number of institutes in Japan that prepare expatriates for overseas assignments. One such agency is the Institute for International Studies and Training, which was established under the auspices of the Ministry of International Trade and Industry. The Institute offers two types of residential programs: three-month and one-year. The Institute annually graduates 150-200 trainees, with the average attendee having six years of work experience in industry or government. The three-month program is designed for specialists and covers courses in English and international business transactions. The one-year program is designed to "foster generalists and internationally minded businessmen." Trainees enrolled in this program have to master English plus one other foreign language and receive intensive training in area studies. Classes are held from 9:00 a.m. to 4:00 p.m.. In the evening, there are seminars given by ambassadors, ministers, foreign businessmen, and overseas reseachers living in Japan. Besides the use of visiting professors Qualification of Candidates Given the importance assigned to the international market, both European and Japanese multinationals tend to send abroad their best people. In the words of a British executive, "We won't have any hope from foreign countries, there is an exchange program so of acceptance in the host country unless [the expatrithat students from other nations can share dormitories ate] is visibly and perceptibly better than the local with Japanese trainees, thus facilitating the acquisition people." This theme was echoed by numerous execuof foreign language skills and knowledge of foreign tives from the United Kingdom, Italy, Switzerland, and ways of life. The Institute has formal exchange proJapan. grams with INSEAD (France), American University and American Graduate School of Management (United States), and Euro-Japanese Exchange FoundaRestricted Job Mobility tion (United Kingdom). Because of the smaller size of domestic markets in Europe, each country can generally support a limited Support Systems in Corporate number of firms in a given industry. This restricts job Headquarters mobility, with the result that employees are generally more dedicated to organizational goals. In general, both European and Japanese multinaIn Japan, this is reinforced by the traditional loytionals provide a more comprehensive support system alty to one's company. According to many Japanese exto help allay expatriate concerns about problems of repatriates, one "has to endure" and do his best even if patriation. One such mechanism is "parenting" or he does not like the overseas assignment. Under the "mentoring," whereby an expatriate is paired to a susystem of life-time employment, a Japanese career staff perior in corporate headquarters who takes on the role member knows he must not disrupt the foreign operaof sponsor. The sponsor, who is usually a member of tion because it will hurt his future career in the senior management, apprises the expatriate regularly company. 121 This content downloaded from 35.154.245.7 on Sat, 04 Jul 2020 10:45:13 UTC All use subject to https://about.jstor.org/terms Academy of Management EXECUTIVE While the values of Japan's younger generation may be changing (reflected in the findings of a 1979 survey by the Public Opinion Research Institute, in which respondents voiced a greater need to distinguish between work and personal lives) many executives indicated these findings can be partly attributed to a greater willingness of the younger generation to vocalize opinions and comments. Another more compelling reason to believe this changing trend may not have a negative effect on future performance of Japanese organizations can be ascribed to the projections by the Japan Ministry of Labor. These projections indicate that senior management positions in Japanese companies will become more competitive in years ahead, particularly in light of the recent slowing down of the Japanese economy. Give the more limited chances of upward mobility and the overall competitiveness of the Japanese, it is unlikely this overall loyalty and commitment to their organizations will slacken as the younger generation matures. ment of their own limitations and adopt a "more realistic attitude overseas." In countries like Switzerland and Italy, where there is a history of emigration to improve one's fortunes, people have a more accepting attitude toward foreign lands. Fourth, there is the legacy of empire. In fact, many of the companies included in this study established their overseas operations during the height of European empire building. In the word of a British executive, "I suppose there is still a legacy of the empire on this side. It is a part of British culture to travel and work overseas. It is not unusual for many members of one's family to have been abroad or to know many people who have worked abroad." This theme was echoed by the executives in the German, Swiss, and Italian multinationals. This spirit of internationalism has affected the human resource management practices of European multinationals in several ways. First, a greater value is placed on international experience and overseas assignments. In most of the companies studied, international experience is considered an important prerequisite for promotion to top management. A second way in which this spirit of internationalism has affected human resource management practices in European firms is the recruitment of candidates for management level positions. Besides the criterion of technical competence, when recruiting candidates for management training programs many European companies seek "well traveled young graduates." A third implication for human resource management practices is the heterogeneity or multinational composition of a management team to ensure an international perspective in all aspects of the company's operations. In a large British petroleum company, for example, there is a system of cross-country rotation of management personnel. Under this system, while most employees join a local operating company, they must have two to three years' experience in another overseas operating company before promotion to management level. Furthermore, each management team should normally have a foreign national who is on assignment from an overseas sister affiliate. A fourth implication of the greater international orientation of Europeans is that spouses are typically more adaptive to foreign ways of life. Factors Unique to European Multinationals International Orientation Virtually all European executives interviewed for the study indicated that a primary reason for their success in expatriation is their employees' greater international orientation and outlook, compared with their U.S. counterparts. This accounts for the relative ease with which many European expatriates adapt to new cultural settings. This spirit of internationalism can be ascribed to several factors. First, here is the smaller size of the European multinationals' domestic markets. In the United Kingdom, for example, one-third of the country's GNP is exported. This export mentality is best characterized by the British slogan, "Export or die." A company -has to concentrate on overseas expansion to grow. For example, 98 % of sales for a large Swiss chemical manufacturer are generated from abroad. This export mentality and heavy dependence on the international market stand in stark contrast to the situation in the United States, where multinationals typically derive a sizable portion of their sales and revenues from domestic operations. Second, because of the relatively small size of a European country and its physical proximity to others, most Europeans have greater exposure to foreigners and foreign ways of life. Third, executives from several European multinationals contend that the military and economic strength of Longer History of Overseas Operations As noted previously, many European firms sur- veyed expanded overseas in the heyday of European imperialism. This longer history of overseas operations has facilitated international human resource manage- the United States has led Americans to be too complacent about their own culture, which often is interpreted as arrogance and creates resentment among local people. Some British executives note that since World War II, the balance of economic and military powers has migrated westward across the Atlantic. This "humbling or sobering" experience, to quote one British executive, forced most Britons to make a more pragmatic assess- ment in two important ways: First, the company has accumulated a wealth of experience in dealing with foreign nationals. Many companies have resident experts who can provide valuable advice, whether on a formal or informal basis, to the younger generation of expatriates. Second, foreign operations are generally already well established. Hence, in most cases, the expatriate moves into a developed operation abroad, which facilitates adaptation to the local environment. 122 This content downloaded from 35.154.245.7 on Sat, 04 Jul 2020 10:45:13 UTC All use subject to https://about.jstor.org/terms May, 1987 Language Capability signments among a sample of European and Japanese multinationals, there appear to be common denominators to successful performance. Both European and Japanese multinationals benefit from the heavier emphasis placed on the international market and the adoption of long-term orientation with regard to overall planning in the area of international human resource management. These factors lead to a greater willingness to (1) sponsor rigorous programs preparing expatriates for cross-cultural encounters, (2) provide comprehensive support systems facilitating adaptation abroad, and (3) allay concerns about problems of repatriation. In addition, Europeans enjoy an inherent advantage of having been abroad longer, thus providing them with greater experience and a larger pool of inhouse talent and resources. To compensate for their relatively recent entry into the international economic arena, the Japanese multinationals have acquired advantage by embarking on meticulous programs to prepare their expatriates for the challenges of living and working abroad. U.S. multinationals, on the other hand, possess neither the inherent advantage of the Europeans nor the acquired advantage of the Japanese. Can this situation among U.S. multinationals be rectified? If so, how? Based on the foregoing analysis, at least three primary implications for U.S. firms can be drawn. First, U.S. multinationals should develop a longer-term orientation with regard to expatriate assignments, overall planning, and assessment of performance. While U.S. companies have traditionally espoused a short-term orientation, this strategy is incompatible with the evolving trend toward the globalization of industries, which necessitates greater international outlook among top management. This international perspective can be engendered through one or two tours of duty abroad. The solution, however, does not lie in short stints abroad. Even if the overseas assignment were undertaken primarily for career development purposes, it is doubtful that it would serve a useful purpose if the dismal performance abroad erodes the expatriate's self-confidence. Short stints abroad are not conducive to high performance because the expatriate barely has time to adjust before transfer home or to another location. To allay expatriate concerns that prolonged absence from corporate headquarters may negatively affect their chances of promotion within the corporate hierarchy, the implementation of some support mechanisms (similar to those found in European and Japanese multinationals) will help alleviate these fears. While individual mentoring may not be possible given the rapid turnover of American management personnel, multinationals might consider setting up separate departments or divisions whose sole function is to oversee the career paths of expatriates. A longer-term orientation among U.S. companies may also engender greater commitment and loyalty among employees and increased willingness to undergo temporary inconveniences to advance the company's overall goals. Furthermore, increased loyalty on the part of employees may lower the turnover rate, which Because of their close physical proximity to other European countries and the importance assigned to the international market, many Europeans are bilingual or even multilingual. Knowledge of a foreign language may not always guarantee effective performance abroad, but it does facilitate adaptation by enabling the expatriate to develop a better rapport with co-workers, customers, and other members of the local community. Factors Unique to Japanese Multinationals Selection for Overseas Assignments While a Japanese multinational may not administer specific tests to determine a candidate's adaptability prior to overseas assignment because of the unavailability of such tests in Japan, organization officials would carefully review every aspect of the employee's qualifications before making a final decision. This is possible because of the unique system of personnel management in Japan. The strong group orientation and the after-hours socializing among the mate career staff enables the immediate supervisor in a Japanese company to become thoroughly familiar with an individual's family background, general preferences, and qualifications. Given such knowledge, the Japanese supervisor generally would not make unreasonable recommendations. Most Japanese companies also keep very detailed personal inventories on their career staff. These are compiled from the annual or semiannual performance evaluations completed by the individual, his immediate supervisor, and the chief of the division. In addition, candidates who are considered for an overseas assignment (excluding those who have been selected to study abroad) typically have been with the company for ten years. Hence, the company has ample time to assess capabilities and qualifications. Role of the Family A principal reason for expatriate failures in U.S. and European multinationals is the family situation factor."' Japanese wives, however, are generally more "obedient and dependent" than their American or European counterparts. Given the greater emphasis on face saving, a Japanese woman would not want to "fail" in her role as a wife by complaining about the problems encountered living in a foreign country. Implications for U.S. Multinationals Based on the foregoing analysis of expatriate as123 This content downloaded from 35.154.245.7 on Sat, 04 Jul 2020 10:45:13 UTC All use subject to https://about.jstor.org/terms Academy of Management EXECUTIVE Briefing at Farnham Castle in England should certainly be feasible. It is clearly impossible to prepare expatriates for all the contingencies of living and working abroad within the course of a program that lasts only a week. An executive with a large European transnational corporation suggests that a program like the one at Farnham can "at least dent people's over-confidence" in the superiority of their own ways of thinking and operating. Such programs emphasize that things are different in other countries and there is. no way the expatriate can change that fact because it has been like that for centuries. By examining and then implementing the aforementioned changes, the dismal record of U.S. expatriate performance can begin to improve. U should result in a greater willingness by the company to invest in training programs. Second, U.S. multinationals and U.S. society at large must develop a more international orientation and outlook. Without a fundamental change of attitude in this regard, the international market will continue to be relegated to a secondary role in the company's overall planning. Under these circumstances, it is unrealistic to expect that the company will devote sufficient attention to the area of international human resource management. Because of the narrowing technological gap among the United States, Europe, and Japan, U.S. multinationals can no longer rely solely on technology to gain a competitive edge in international markets. The successful operation of a multinational is contingent on the availability of additional resources, such as capital, know-how, and manpower. It is argued that manpower is a key ingredient in the efficient operation of a multinational because other resources are not as effectively or efficiently allocated to subsidiaries by corporate headquarters in the absence of a highly developed pool of managerial talent with international orientation. Rosalie L. Tung (Ph.D., University of British Columbia) is professor of business administration and director of the International Business Center at the University of Wisconsin-Milwaukee. She has served on the faculties of the Wharton School, University of Oregon, University of California, Los Angeles, and the University of Manchester Institute of Science and Technology in England. Professor Tung is the author of six books: Management Practices in China in China-International Business Series (1980); U.S.-China Trade Negotiations (1982); Chinese Industrial Society After Mao (1982); Business Negotiations with the Japanese (1984); Key to Japan's Economic Strength: Human Power (1984); and Strategic Management in the United States and Japan: A Comparative Analysis (1986). She has also published widely on the subjects of international management and organizational theory in leading academic journals and her research has been cited in major national and international newspapers and news magazines. Professor Tung has lectured at leading universities throughout the world and is actively involved in worldwide management development and consulting activities. The international competitiveness of U.S. multinationals has to depend on the ingenuity of its workers and, more important, the workers sent overseas as representatives of corporate headquarters. There are encouraging signs that the United States has finally awakened to this need, evidenced by the burgeoning interest in international business and cross-cultural programs at academic institutions, particularly at the university level. This is just a beginning, however, and much needs to be done. Third, U.S. multinationals must provide more comprehensive training programs to prepare expatriates for cross-cultural encounters. Studies have shown that technical competence alone is a necessary but insufficient condition for successful operations abroad. Because of the greater mobility of the U.S. workforce, American multinationals may be reluctant to sponsor more rigorous programs such as those found in the Japanse multinationals. However, programs along the lines of those offered by the Center for International 124 This content downloaded from 35.154.245.7 on Sat, 04 Jul 2020 10:45:13 UTC All use subject to https://about.jstor.org/terms 5. For further information on this study, see R. L. Tung's "Selection and Training for Overseas Assignments," Columbia Journal of World Business, Spring 1981, 68-78. 6. J. Seward's "Speaking the Japanese Business Language," European Business, Winter 1975, 40-47, and T. E. M. Adams and N. Kobayashi's The World of Japanese Business, Tokyo: Kodnsha International, 1969, contain details of these findings. 7. See Tung (1982). 8. For a comprehensive description and analysis of the human resource management practices in Japanese and European multinationals, see R. L. Tung's Key to Japan's Economic Strength: Human Power, Lexington, Mass.: Lexington Books, D. C. Heath, 1984, and Managing Human Resources in the International Context, Cambridge, Mass.: Ballinger Publishers (in press). 9. See Tung (1982). 10. Ibid. 11. Ibid. ENDNOTES 1. For a more detailed discussion of the questionnaire survey of U.S., European, and Japanese multinationals, see R. L. Tung's "Selection and Training Procedures of U.S., European, and Japanese Multinationals," California Management Review, 1982, 25(1), 57-71. 2. E. Harrari and Y. Zeira's "Training Expatriates for Managerial Assignments in Japan," California Management Review, 1978, 20(4), 56-62, contains the details of this study. 3. For an elaboration on this argument, see E. L. Miller's "The Selection Decision for an International Assignment: A Study of the Decision Maker's Behavior," Journal of International Business Studies, 1972, 3, 49-65. 4. Details of these findings can be found in R. D. Hays's "Ascribed Behavioral Determinants of Success-Failure Among U.S. Expatriate Managers," Journal of International Business Studies, 1971, 2, 40-46, and C. G. Howard's "Model for the Design of a Selection Program for Multinational Executives," Public Personnel Management, March-April 1974, 138-145. 125 This content downloaded from 35.154.245.7 on Sat, 04 Jul 2020 10:45:13 UTC All use subject to https://about.jstor.org/terms