Master thesis
The effect of organizational culture
on performance and adjustment:
Findings from expatriate employees
Laura Cárdenas Mendoza 0603058 Student at the Faculty of Economics and Business Mcs Business Studies - International Management Track
University of Amsterdam Thesis supervisor:
Abstract
In this study expatriate performance and expatriate adjustment are linked to organizational culture. By introducing the concept of organizational culture to the concepts of expatriate adjustment and performance new insights have been gained. Responding to a call for a more integrated approach, organizational culture is also linked to organizational supporting practices. In a survey study reaching 103 expatriates, support was found for organizational culture as a means to increase expatriate success. Innovative culture was first found to be strongly linked to organizational support, as well as found to directly increase contextual performance. Competitive culture, adjustment and task performance are found to be strongly related. This indicates that culture can certainly play a positive role in enforcing expatriate success. Also placing importance on the relational and environmental aspects of an expatriate assignment is shown to be key, either directly through contextual performance or through adjustment and subsequent task performance.
Preface
Being internationally focused has always been a given for me as being both born and raised Dutch (known for their international focus) and being literally multicultural myself. Living in one of (if not the) most multicultural cities in the world, having an interest in the problems involving this is area not surprising.
Considering that I fully plan to work abroad and become an expatriate myself as well as the fact that many people in my direct social circle are expatriates, explains that the topic of this thesis is not that surprising.
I have linked this to another topic of my interests which is culture. While national culture is very interesting on its own, most of the problems I have personally encountered occurred in a work related environment. By looking at these areas I hope to show some new insights academically and managerially, as well as personally.
Table of Content
1 Introduction ... 1
1.1 The role of expatriates... 1
1.2 Expatriate success defined ... 2
1.3 Organizational culture defined ... 3
1.4 Relevance ... 4 1.5 Research question ... 5 2 Organizational culture ... 6 2.1 Cultural type ... 6 2.2 Cultural strength ... 8 3 Expatriates ... 8 3.1 Expatriate performance ... 9 3.2 Expatriate adjustment ... 10
4 The effect of organizational support on expatriates ... 11
4.1 The Framework of International Adjustment ... 11
5 Hypotheses and conceptual model ... 15
5.1 Retesting the effect of organizational support ... 15
5.2 Organizational support and organizational culture ... 16
5.3 The effect of organizational culture ... 18
5.4 The moderating role of cultural strength ... 20
5.5 Conceptual model ... 21
6 Research method ... 22
6.1 Sample ... 24
6.2 Constructs and measurements ... 24
7 Results ... 31
7.1 The effect of organizational support on adjustment and performance ... 31
7.2 Organizational support and organizational culture ... 33
7.3 Organizational culture, adjustment and performance ... 34
7.4 The moderating effect of cultural strength ... 36
8 Discussion ... 38
8.1 Conclusion ... 44
8.2 Implications ... 44
1 Introduction
Firms are increasingly operating on an international level as is shown by the steadily rising numbers on MNE’s conducting foreign direct investment (UNCTAD foreign direct investment statistics, 2013). With this expanding scope of globalization comes a growing need to understand the importance of international dynamics. How can employees thrive in an internationally focused environment and how can a firm aid in this process?
1.1 The role of expatriates
Key players concerning this topic are expatriates. Having international experiences in a career increases a global understanding and is often seen as a way for firms to create ‘global leaders’, which can be explained as managers with exceptional international experience and competences that can create competitive advantage (Howe-Walsh and Schyns, 2010; Jokinen, Brewster and Suutari, 2008).
Expatriates can be defined as “a voluntary, temporary migrant who resides abroad for a particular purpose and ultimately goes back to his or her home country” (Huang, Chi and Lawler, 2005, p. 1659) or are sometimes simply defined as “(employees) who work abroad” (Peng, 2011, p. 602).
Peltokorpi (2008) makes the further distinction between organizational expatriates (OE) and self initiated expatriates (SIE).
OE are employees and/or managers who are sent abroad for a period of time to fulfill an assignment for the company they were already working at (Peltokorpi 2008; Peng, 2011).
SIE are employees who have chosen for themselves to work abroad, at a local company and with a local contract (Liu and Ipe, 2010; Peltokorpi, 2008). These SIE seek employment on their own accord with no home country firm backing them and so choose to work in both an unfamiliar environment as well as a foreign firm.
Though OE and SIE have different reasons for going abroad, both kinds of expatriates add value to themselves (and thus the firm) as international and cross cultural human capital through international experiences (Howe-Walsh and Schyns, 2010; McDonnell and Boyle, 2012; Wu and Ang, 2011). Expatriate success however is shown to be notoriously low (Carraher, Sullivan and Crocitto, 2008; Fang et al., 2010; Malek and Budhwar, 2012; Templer, 2010).
1.2 Expatriate success defined
Success is a somewhat ambiguous and vague concept when explained in the literature and different definitions are often used and compared interchangeably. Also the term performance is often interpreted quite freely. However in a comprehensive meta analysis Caligiuri (1997) has brought together a large body of literature and defines three main forms of success.
First he mentions the completion of the foreign assignment which entails simply completing the intended stay in the foreign country. This measure however can be seen as a questionable indicator of success, because assignments do not always have a set time frame to measure success from. There are other factors that can result in an expat being pulled from the assignment prematurely. This is not necessarily linked to the performance of the expatriate, but can be the result of a variety of external environmental changes, such as a shift in institutional systems and policy changes.
The second measure mentioned is adjustment in the cross-cultural setting. One of the biggest challenges for an expat is settling into a new cultural environment, both on a business and a personal level. It is important to know how well an expat can integrate into the new foreign environment. The level of adjustment can be seen as an indicator of success. The third measure is performance on the foreign assignment. With this form of success actual job performance is measured. This indicates how well the job, the assignment, is done, looking at actual output. Although these three measures of success are often used interchangeably, Caligiuri (1997) stresses that these are indeed separate constructs.
When taking a broader perspective, it shows that these measures actually focus on two aspects of performance. The first and third forms can be seen as a more straightforward measure related to how the job gets done by measuring whether the job or task gets completed as well as the quality of the job. The second measure takes into account the cultural dimension and its effects, where the personal and relational aspects of an expatriate are considered as opposed to just considering task output.
Malek and Budhwar (2012) echo this in a very recent study where they make a distinction between contextual performance (performance in terms of relationships and
creating the optimum work environment) and task performance. So a distinction between an output oriented measure of success and a more relational approach are argued here as well.
The main challenges for success that expatriates experience then stem from a lack of adjustment to the new environment (Black and Stephens, 1989; Cheema, 2012; Kramer and Jaworski, 2001; Liu, 2010). So it would make sense for a firm to place importance on an environment that aids adjustment where expatriates can thrive as that seems to be a precursor for performance.
1.3 Organizational culture defined
It is odd then that organizational culture has never been linked to expatriates. Organizational culture after all is explained as a shared context that emerges to aid adaptation, social integration and individual meaning (Denison, 1996; Denison and Mishra, 1995). These are concepts that overlap with the main problem of (the lack of) expatriate adjustment as discussed earlier. Organizational culture could therefore potentially be a key concept that should be considered when looking at expatriate adjustment.
Organizational culture in itself is not an old concept as such (Hatch, 1993). While the concept of ‘culture’ goes back centuries, this has only recently been applied to organizations specifically (Denison and Mishra, 1995).
While one can sometimes ‘perceive’ a salient organizational culture in companies such as Google or McDonalds, it proves to be an elusive concept still. Generally lacking consensus in defining the concept (Denison and Mishra, 1995), definitions vary from “(firms)… characterized by a strong set of core managerial values that define the ways they conduct business” (Barney, 1986, p. 3) to a more vague ‘the way they do things’ (Peng, 2011).
Denison and his colleagues describe organizational culture as the shared social context wherein employees have created shared values by collective adaptation (Denison, 1996; Denison and Mishra, 1995). Schein (1984) emphasizes in his article the importance of salience of an organizational culture, which he describes as ‘strong culture’.
Bringing this plethora of definitions together, it shows that organizational culture entails a bundle of shared norms, values and behavior shared within the collective group. This group (employees of a firm) should share a common ground and have a shared base of experiences as a connecting element.
Looking at the body of literature there are two main aspects of organizational culture that become apparent. First the strength of the culture is seen as an important factor (Evans, 1992; Schein, 1984). ‘Strong culture’ can be explained as (1) consisting of a cohesive and stable group and (2) having a lengthy and intense shared group experience (Schein, 1984). It has to do with the salience of an organizational culture and its embeddedness within the group (Evans, 1992; Schein, 1984). So the bond within the group should be strong and noticeably different from ‘outsiders’.
The other aspect that comes into play when looking at organizational culture is a more substantive look at the concept itself (Deshpandé, Farley and Webster, 1993; Ogbonna and Harris, 2000; Quinn and McGrath, 1985). A ‘strong culture’ in itself is still a vague notion, because the kind of culture is not taken into account. A culture that strongly enforces a conservative modus operandi is very different from a strongly flexible, ad hoc type of culture.
Also literature shows a link between organizational culture and overall organizational performance, where aspects are shown to have a positive effect (Barney, 1986; Chan, Shaffer and Snape, 2004; Denison and Mishra, 1995).
Specific types of organizational culture are shown to have a positive effect on performance, while others do not (Deshpandé, Farley and Webster, 1993). The strength of the organizational culture is also argued to play a role in enhancing performance (Evans, 1992).
This indicates that organizational culture can play an important role in facilitating expatriate adjustment as well as expatriate performance.
1.4 Relevance
This study can be seen as relevant from both an academic perspective by adding to expatriate literature and a more practice based managerial perspective.
1.4.1 Academic relevance
This study will try to fill a gap in expatriate literature by introducing the concept organizational culture to expatriate adjustment and performance.
The reasoning for this is based on another very similar and closely related link. There exists both a direct relation between organizational influences and expatriate performance
(e.g. Caligiuri, 1997) as well as a relationship mediated by expatriate adjustment (e.g. Cheema, 2012; Kraimer et al. 2001).
When looking at what organizational influences actually are, literature shows that these influences should be approached as a multifaceted, integrated concept incorporating as many aspects as possible (Black et al., 1991; Cheema, 2012; Combs et al., 2006; Huselid, 1995).
The question then rises, how can such an integrated approach be achieved? When looking at the body of literature it is shown that organizational culture is an important factor in how an organization operates. Sometimes even literally explained as ‘the way an organization does things’ (Peng, 2011).
So organizational culture can create an important base environment for implementing a support system (supporting practices). It would therefore also be likely that there exists a relation between organizational culture and expatriate adjustment and performance, similar to the relationship with organizational influences themselves.
1.4.2 Managerial relevance
Figures indeed show increasing numbers for organizational support to aid expatriates on adjusting to foreign assignments , for instance organizational expatriate training has risen from 30% in the 1980’s up to 70% about twenty years later (Caligiuri et al., 2001). This rise however has apparently not had the desired effect. There still exists a glaring discrepancy between organizational support (which is rising) and actual expatriate performance.
Also expatriates are costly investments when taking into account the extra expenses necessary such as relocation and training costs (Birdseye and Hill, 1995; Carraher, Sullivan and Crocitto, 2008; Kraimer, Wayne and Jaworski, 2001), as well as showing high turnover numbers (Birdseye and Hill, 1995). So getting a better understanding of expatriate adjustment and performance can decrease costs.
1.5 Research question
While there is a lot of potential value to be gained from expatriates, adjustment (and therefore performance) reality shows that this is not facilitated effectively. It is therefore important to get a better understanding on how organizations can contribute to better
expatriate (and subsequent firm) performance, by aiding adjustment through a supporting environment. This leads towards the following research question:
In what way can organizational culture contribute to facilitating expatriate support and subsequent adjustment and how does that affect expatriate performance?
2 Organizational culture
Both aspects of culture will be explored in the next paragraphs by first explaining the types of culture found in the body of literature and then by looking at the significance of cultural strength.
2.1 Cultural type
The type of culture is argued to be a strong predictor for firm performance (e.g. Deshpandé, Farley and Webster, 1993; Ogbonna and Harris, 2000). In an influential study Quinn and McGrath (1985) have developed an extensive model of organizational culture. This model takes a holistic approach to the topic of organizational culture and is much more elaborate than other simple definitions.
The model is based on a competing values perspective that consists of an integrated two by two matrix. One axis represents the discrepancy between change and stability. Firms can be open to change or they can prefer to maintain the status quo. The other axis represents the difference between internal and external integration. Some firms are more sensitive and attuned to their environment while others are more concerned with internal cohesiveness. The difference is that they do not necessarily identify ‘strong’ or ‘weak’ culture, but rather outline the four different aspects of organizational culture that the matrix generates.
Adaptability (1) means an organizations ability to pick up and interpret environmental signals and react to them accordingly. Involvement (2) can be seen as the level of personal responsibility an employee feels within the organization, which can increase organizational commitment and (a feeling of) autonomy. Consistency (3) has to do with a uniformity and integration within a company that can hold up under contrasting circumstances. The employee conforms to set rules and conduct. Mission (4) gives
simultaneously meaning to what the organization is doing as well as a direction an organization should follow.
So when opposing the axes, consistency embodies stability, while adaptability is an indicator for the ability to change. Mission and adaptability have a broader and externally focused aim. Involvement and consistency are both focused on mind sets and processes directed within the organization. This model provides a dynamic concept of organizational culture; a culture shows levels of both key axes and so create a specific culture.
Deshpandé, Farley and Webster (1993) have built on this competing values model and identify four types of organizational culture: (1) Market, (2) Adhocracy, (3) Clan and (4) Hierarchical. Ogbonna and Harris (2000) appropriately rename these four types as
competitive culture, innovative culture, community culture and bureaucratic culture
respectively which will be used in this study as well. They can be explained as follows.
Firms with a competitive culture are at the cutting edge of the market environment and are always striving for performance. Emphasis is placed on competitive advantage and market superiority. This form of culture is quite obviously positively related to performance, as that is seen as the end goal.
Innovative culture has an external focus as well, but is more interested in innovation.
This is positively related to performance because it can enhance risk taking and entrepreneurship. Firms with this kind of culture will recognize and grasp chances and so gain a competitive edge on say community culture or bureaucratic culture.
Bureaucratic cultures for instance are not focused on changing environments and
opportunities and are even wary of changing. Their focus is internally driven and set on maintaining the status quo. They place importance on things running smoothly, though this does not necessarily mean it happens in the most effective way.
Community cultures place high value on relational aspects. Loyalty, tradition and
ensuring internal harmony are seen as very important.
A test of the model shows that customer oriented but more especially innovative cultures are key determents of firm performance. Ogbonna and Harris (2000) reaffirm this in their retest of the model.
2.2 Cultural strength
The other important element that needs to be considered when looking at organizational culture is cultural strength. A strong organizational culture has been linked to performance in several ways, such as increased financial performance (Barney, 1986) and firm effectiveness (Denison and Mishra, 1995). Examples show that organizational culture has a direct effect on performance (Chan, Shaffer and Snape, 2004) and acts as a mediator between leadership style and firm performance (Ogbonna and Harris, 2000). Evans (1992) contributes to this by suggesting that organizations can benefit greatly from cohesion and integration by applying ‘glue technology’.
Glue technology is explained as a system and practices that can facilitate bottom up and top down integration capabilities. This ‘glue’ links the actors in an organization together and can therefore enhance integration. Evans (1992) likens this to the concept of ‘strong organizational culture’, where both concepts involve ways of unifying people in an organization and linking them together.
It is important however to note that this glue (or organizational culture) must not be too strong because (1) the flexibility of an organization can be compromised and (2) the focus must remain on functional glue technologies. Pointless glue technology (for example excessive face-to-face meetings with no clear purpose) can damage credibility of the system and motivation. Similarly when an organization is too ‘glued together’, holding on too much onto the established culture, it becomes rigid and unable to react to environmental changes. This is especially relevant in an international context where environments are diverse and ever changing. Quinn and McGrath (1985) have argued the same in their competing values model, where they argue that the key to success in this model is balance. While the aspects on the axes seem contradictory, excess in one of the aspects is detrimental to a healthy organizational culture.
3 Expatriates
When looking at the literature on expatriates, studies often start with reiterating the notion that the expatriate success rate is shown to be subpar (Carraher, Sullivan and Crocitto, 2008; Fang et al., 2010; Malek and Budhwar, 2012; Templer, 2010). Research also shows
significantly higher numbers for expatriate turnover than regular employee turnover (Birdseye and Hill, 1995; Liu and Ipe, 2010).
3.1 Expatriate performance
There are various ways expatriates and performance can be related. Some studies look at direct effects on expatriate performance (Heijden, Van Engen and Paauwe, 2009; Lazarova and Caligiuri, 2001; Templer, 2010). Most studies however look at a type of mediating model to explain expatriate performance (e.g. Carraher et al., 2008; Kraimer, Wayne and Jaworski, 2001; Lee and Sukoco, 2010).
Expatriate adjustment stands as the main mediator through which success can be achieved for both these topics. Emphasis on just the assignment (task performance), in itself is far less prevalent. This indicates that in literature the relational, non output factors (contextual performance) are deemed more important.
In reality however, expatriates are usually selected primarily on their job knowledge (Templer, 2010). At the same time it is argued that just having the relevant job knowledge is by no means a sufficient standard (Black, Mendenhall and Oddoe, 1991; Templer, 2010).
So on the one hand adjustment is sometimes seen as the end goal, an actual measure of performance. On the other hand adjustment can be a facilitator of more straightforward task performance. It is the difference in what is considered to be actual performance, but adjustment is important part for both measures.
When looking at direct effects on expatriate performance Van der Heijden, Van Engen and Paauwe (2009) use perceptions of career support (PCS) to measure expatriate performance, as do Lazarova and Caligiuri (2001). They found no relationship between PCS and task performance, but did find PCS to be a significant predictor of contextual performance. This echoes the findings by Feldman and Thomas (1992) that show that expatriates seek social integration (the effort it takes to connect with the host country culture) and psychological reappraisal (see the positive in the culture/assignment).
Task help is far less used as a coping mechanism to gain effectiveness. While firms are shown to be more focused on the task related aspects of the expatriate assignment, studies show that expatriates are more focused on the relational and contextual (adjustment) aspect.
Expatriate adjustment and its relation to expatriate performance will be further explored in the next paragraph.
3.2 Expatriate adjustment
While adjustment is shown to be an important part of understanding expatriate success, it can have an at times confusing relationship with expatriate performance. Caligiuri (1997) defines adjustment as being one of the main measurements of expatriate success. At the same time expatriate adjustment is approached as a mediating factor between several constructs and eventual expatriate performance in several studies (e.g. Carraher et al., 2008; Lee and Sukoco, 2010).
It can be assumed that in these studies, expatriate adjustment is not considered an end goal as such, like Caligiuri (1997) argues, but rather that adjustment facilitates a more output related measure of performance.
It can also be argued that performance defined in these studies as a non task related measure, is highly related to contextual performance.
Black and his colleagues define three specific types of adjustment (Black, 1988; Black and Stephens, 1989; Black and Gregersen, 1991). Expatriate work adjustment (1) indicates “adjustment to work responsibilities” (Black, 1988, p. 284). Interaction adjustment (2) involves interaction with the host country. General adjustment (3) describes “adjustment to general living conditions and everyday life” (Black, 1988, p. 284).
Expatriates not only come in contact with differing cultures, but are also pulled (presumably) out of their comfort zone where the dominant culture is not their own. Not only is this personally challenging for the expatriate in question, it also leads to being at a disadvantage. This disadvantage is often referred to as the liability of foreignness (Peng, 2011).
A foreigner in an unknown culture is at an inherent disadvantage because the foreigner does not know ‘how they do things there’, while locals, obviously, do (Peng, 2011). This can manifest in obvious problems such as not knowing the language or not knowing the institutional rules. However it is often the seemingly smaller things that are the hardest to overcome. Cultural differences are oftentimes subtle and not necessarily immediately noticeable, which makes it hard for a foreigner to integrate. Cultures for instance might be too polite to point out a faux pas, or can be deeply imbedded in strong
relational, or even familial ties that are difficult, if not impossible, to become a part of. To overcome this liability of foreignness they need to learn the new status quo and adjust.
There are several ways in which an organization can aid expatriate adjustment. They will be discussed in the next paragraph.
4 The effect of organizational support on expatriates
Organizations can provide supporting practices to help an expatriate adjust and therefore increase performance (e.g. Caligiuri et al., 2001; Carraher et al., 2008; Lee and Sukoco, 2010). Also the way an organization operates is imbedded in the organizational culture, which is important for providing the environment that can facilitate these modes of adjustment (e.g. Deshpandé, Farley and Webster, 1993; Ogbonna and Harris, 2000; Peng, 2011; Quinn and McGrath, 1985). It is therefore logical to link these two concepts together. 4.1 The Framework of International Adjustment
To understand how international (cross cultural) adjustment can be achieved a broad perspective should be applied. Black et al. (1991) conducted an influential meta analysis where they propose a Framework of International Adjustment (FIA) containing five distinct modes of influence.
They describe that (1) individual characteristics perceptions, relational skills and self efficacy are positively related to adjustment. The (2) aspects of the job itself can influence adjustment as well. They describe job clarity, job discretion, job novelty, and job conflict as the important aspects. The degree of difference between host and parent culture can have an effect on adjustment as well, (3) the novelty of the new culture can be influenced by social and logistical support from the host organization. Also (4) socialization tactics and content (both institutional and informal) have to do with learning and being taught how one should behave in the new work context. It can facilitate learning in the host company to reduce uncertainty and therefore increase adjustment. The last factor that can influence adjustment has to do with (5) the novelty of the host country and whether non work related factors are easily adjustable such as family or a spouse.
With the FIA they move away from static and linear adjustment models and approach it as a multifaceted concept. Adjustment must be seen as a complex construct, not meant to be explained by singular aspects (Black et al.; 1991).
That said however, a critical look at the model reveals that the five modes actually relate to three specific areas where adjustment can take place; (1) the organizational supportive environment, (2) non work related circumstances and (3) personal traits.
In line with the aim of this thesis only organizational influences and non work related circumstances will be further studied because this is where an organization can be of influence. Personal traits (mode 1 and 2) on the other hand are intrinsic to the expat himself and are not relevant for this thesis at this point.
Organizational supportive environment can have a distinct mode of influence on
adjustment. Both social and logistic support systems (3) as well as the ability the organization offers to learn to adjust to the new culture (4) are indicators of this. This concept involves a deeper form of organizational influence where a supportive environment is created that in turn can facilitate individual support practices.
When looking at the effect of organizational culture the organizational influences mode is especially relevant. Organizational support practices are shown to be related to expatriate adjustment and performance and motivational cultural intelligence has a positive moderating effect on this link (Wu and Ang, 2011).
It is interesting then that Feldman and Thomas (1992) find that most expatriates do not seek host country help. So while a positive relation is shown, expatriates are in reality hesitant to seek out this support. This can be either because it can be perceived as a weakness or because it is perceived that the host country does not have the needed knowledge to be of help.
This did not hold for expatriates in Saudi Arabia, who preferred to remain in the expat bubble because the culture clashed too much with their own. This could be due to the fact that only OE were used in this study. SIE might have had different results as they usually show an interest and intrinsic motivation for going abroad, which can reduce the perceived cultural distance (Peltokorpi, 2008).
This is supported through a similar notion by Peltokorpi (2008) who shows that cultural distance is negatively related to expatriate adjustment, while language proficiency, an important means of reducing distance (Peltokorpi, 2008; Shaffer and David, 2001) influences adjustment positively.
Templer (2010) finds evidence that highlights the importance of organizational support. By looking at host (local) subordinates he shows that a higher degree of
ethnocentricity (the degree to which the own culture is preferred) hinders expatriate adjustment. This is not a surprising find; a hostile environment that is not accepting will surely not facilitate easy adjustment. A study by Florkowski and Fogel (1999) shows comparable results. Perceptions of local ethnocentrism have a negative impact on work adjustment. This shows that integration is important for achieving expatriate adjustment.
Organizational influences also have a positive effect on adjustment when looking at more specific practices. Caligiuri et al. (2001) show that good training and preparation have a positive effect on expatriate adjustment. Carraher et al. (2008) study the influence of mentors on the adjustment process. They find that while host country mentors had a beneficial effect, home country mentors actually had a detrimental effect on organization identification and on job satisfaction (though not on organizational knowledge, job performance and promotability).
This might seem at odds with other literature that suggests that organizational support has a positive effect on adjustment (Kraimer et al. 2001), firm commitment (Liu, 2009) and the importance of integration into the host environment for adjustment (Templer, 2010). But the difference is in the home and host mentoring aspects. Integration into the host country is seen as important for adjustment and subsequent performance (Templer, 2010), so having a home country mentor may impede this integration. After all, host country mentoring was shown to have a positive effect.
What is really shown in this research is that while the expatriate is away on an expatriate assignment the focus cannot be on the host and home country at the same time. Being completely immersed into the host country (through host country mentoring) has a positive effect on adjustment. Having a home country mentor might split the attention and focus of the expatriate between the parent and the subsidiary.
Another important note here is that these results show that there is often still a large gap between the parent and the host subsidiary, even though these are one and the same company.
These findings however do not necessarily result in lower firm commitment, as promotability, job performance and organizational knowledge are positively related (Carraher et al., 2008). This indicates a maintained strong bond with the home (parent) country which could be important for repatriation purposes (though this is not studied here).
Job satisfaction and organizational knowledge on the other hand suffer as a result of being divided, having to vacillate mentally between home and host country, again suggesting a divide between home and host country work experience (Carraher et al., 2008). Mezias and Scandura (2005) similarly argue that different stages and aspects of integration need different kinds of mentoring.
In contrast other studies show that perceived organizational support (POS) from both the parent company as well as the host subsidiary increases organizational commitment (Liu and Ipe, 2010) and work adjustment (Kraimer, Wayne and Jaworski, 2001). Organizational commitment however can be approached from both the home and host country as both are technically the same organization. An expatriate can perceive the organization as whole, or separate between home en host country organizations.
Secondly adjustment can be influenced by non work related circumstances (5), which usually consists of the personal environment of the expatriate. This is researched to a lesser extent and center predominantly on spousal and familial aspects.
Brown (2008) reports in his study on stressors in expatriate couples that the employee and the spouse experience both identical and different kind of stressors. For both the employee and the spouse the lack of time spent together was the most important reason for stress.
Additionally employees are reported to experience predominantly relational stress. While the spouse experiences stress because of lower self worth, isolation through a loss of confidants and contacts and stress from local pressures because they tend to have more unmediated contact with the host country (Brown, 2008). Stress is negatively related to performance (Brown, 2008), so reducing stress would be important.
Findings from Arthur and Bennet (1995) contribute to this. Their study shows that family situation was perceived as the most important factor for success. This does not mean however that family situation is actually the most important.
Studies show for example that spousal support was found to have no effect on either adjustment or task performance (Kraimer et al. 2001). But when expatriates perceive it as important it can turn into a source of either stress or satisfaction, potentially resulting in lower and higher performance respectively.
This indicates that adjustment of the family might play an equally important role. Shaffer and David (2001) have studied this comprehensively with both quantitative as well as
qualitative methods. They show that spousal adjustment is related to several factors. Important factors that influence adjustment are (1) receiving adjustment training (they name language skills) similar as to what an expatriate might receive from their parent company and (2) familial factors.
These findings on spousal adjustment are important because Shaffer and Harrison (2001) argue a reciprocal relation between expatriate adjustment and spousal adjustment. So enhancing one can influence the other, either negatively or positively.
5 Hypotheses and conceptual model
The aim of this study is to examine in what way organizational culture can affect expatriate adjustment and performance. The approach to answering the research question is twofold. First the relation on which the model that is used in this thesis is based, between organizational influences and expatriate adjustment and performance, will be retested to see if this holds in this study.
Secondly the research question will be directly answered through several hypotheses. First by testing in what way organizational culture and the aforementioned organizational influences are related to each other. And then the link between organizational culture, expatriate adjustment and performance will be studied.
5.1 Retesting the effect of organizational support
Looking at the literature, it can be understood that organizational support practices are a possible indicator of a strong supportive culture (Chatman et al., 1998; Florkowski and Fogel, 1999; Templer, 2010).
Studies have shown that the stand alone practices are directly positively related to expatriate performance (e.g. Carraher et al., 2008) and adjustment (Caligiuri et al.; 2001) as well as being positively mediated by expatriate adjustment (Black et al., 1991).
When looking at actual support practices the FIA model (Black et al., 1991) identifies five influences on adjustment, which are refined to three in this study. The point of this further distinction is not to discredit the FIA, but to achieve a higher level of integration of the constructs, as Black et al. (1991) themselves suggest. The different aspects encompassed in the modes of adjustment mentioned in FIA have been researched many times in the following literature, however usually they are studied as isolated constructs that are in some
form related to the five constructs mentioned, therefore often dismissing the level of integration within the constructs suggested by Black et al. (1991).
This thesis will thus attempt to take a step towards further integrating the concepts by looking at a more complete set of organizational influences that can have an effect on expatriate adjustment and performance. It is shown after all that when trying to understand organizational support, it is important to look at integrated concepts and not just single out certain aspects of the concept, different constructs must be approached in a holistic way (Black et al., 2001; Wu and Ang, 2011).
Employees can be supported in their adjustment by coaching (mentoring), by being given the tools needed to cope in a foreign environment (training) and by aiding in a steady environment that can serve as an anchor when adjustment is necessary (familial support).
Although organizations are often not technically responsible for facilitating non work related adjustment such as familial support, they can take on this responsibility (Huang, Rode and Schroeder, 2011; Ogbonna and Harris, 2000) and so stimulate adjustment.
Both the direct as well as the mediated effect will first be retested in this study to see if such a relation can be duplicated as a base for the rest of the study, resulting in the following hypotheses:
H1a: Organizational support (including mentoring, training and familial support) and expatriate performance are positively related.
H1b: Organizational support (including mentoring, training and familial support) and expatriate performance are positively mediated by expatriate adjustment.
5.2 Organizational support and organizational culture
In the second step the concept of organizational culture and supporting practices will be linked to each other. First organizational culture will be tested as the overarching concept of organizational influences.
At first glance organizational support practices and organizational culture may seem to overlap. The point is however that having expatriate support practices in place does not mean that a firm has a strong organizational culture, or that an expatriate is truly well supported.
Organizational culture can have the potential to be an overarching concept that transcends stand alone support practices. It can create the environment necessary for facilitating support systems as opposed to just practices. Instead of being locked away in a peripheral HR department, it needs to be approached from a more strategic, firm wide perspective (Combs et al., 2006; Huselid, 1995).
Most research is focused on either singular aspects like personality characteristics or the use of specific tools a firm can use to increase expatriate performance such as training (i.e. Caligiuri et al., 2001) or mentoring (i.e. Carraher, Sullivan and Crocitto, 2008).
Other studies however show that a more comprehensive approach to adjustment should be advocated, including several levels of support and training (Cheema, 2012). Similarly strategic HRM literature shows that a holistic, integrated system of organizational support yields the best results (Combs et al., 2006; Huselid, 1995).
So while HR might give expatriates access to tools for integration such as language or cross cultural training (Cheema, 2012), if the company does not have the culture to back up this support expatriates can still feel lost. For instance HR can facilitate several support practices, however if the underlying firm assumption is that having expatriate experience and a diverse (international) work force have little to do with their goals on firm performance, little importance will be placed on them (Combs et al., 2006; Huselid, 1995), thus wasting the potential expatriate assignments have
This view is in line with similar findings from other disciplines that show high performance work practice systems (HPWP) to be superior to individual HPWP that are not backed by the firm on a strategic level (Combs et al., 2006). Using a more comprehensive approach is then preferable to focusing on individual HPWP and by doing so missing interaction effects between the different HPWP.
The concept of support should be entrenched in all layers of the firm as an overarching concept in which singular individual support practices are embedded, as well as facilitating a supportive environment to successfully implement and use these practices (Combs et al., 2006; Huselid, 1995). Organizational culture can create and implement this environment for organizational support.
And in a similar rationale, supporting practices will be more prevalent in a culture that facilitates these practices, because organizational culture can provide a stimulating environment, where supportive practices are integrated. This is most likely in a culture that
is open to adaptation and in tune with the environment. A type of culture described by Ogbonna and Harris (2000) as innovative culture. Also community type culture is likely to have a positive relation because this kind of culture is heavily focused on the personal aspect and ensuring internal harmony (Ogbonna and Harris, 2000).
Other types are less likely to have a positive effect because they are either not in tune with the environment such as a bureaucratic culture that is somewhat resistant to change. Or the culture may be too much focused on the end results which is the case with a competitive culture.
It is therefore likely that:
H2: Organizational culture is correlated with organizational support, where innovative and community culture will have a positive relationship, whereas competitive and bureaucratic culture will have a negative relationship.
5.3 The effect of organizational culture
Next organizational culture will be linked to adjustment and performance.
Organizational culture is often directly linked to performance (e.g. Evans, 1992; Quinn and McGrath, 1985). Studies show that cultures that are open, flexible and accepting of diversity are the most effective and have a positive effect on performance (e.g. Quinn and McGrath, 1985). These open, flexible and accepting characteristics are in turn positively linked to adjustment (Florkowski and Fogel, 1999; Templer, 2010), which would make it likely that a link with adjustment exists as well.
When looking at performance literature shows two types of performance, output focused task performance and contextual performance which is more focused on soft skills and the foreign environment (Black, 1988; Black and Stephens, 1989; Black and Gregersen, 1991; Malek and Budhwar, 2012).
It might seem frivolous at first glance to see adjustment and subsequent integration into the foreign environment as a measure of success. It is important however to keep the initial aim of the expatriate job in mind. There are many reasons for using expatriates. One of which is enhancing cross cultural competences of the employee, such as being able to adjust to a new environment, the ability to work with different cultures and flexibility. These
are important skills to have when working in a multinational enterprise and will enhance cross cultural human capital (Wu and Ang, 2011), creating global leaders (Howe-Walsh and Schyns, 2010; Jokinen et al., 2008).
It is important to note however that while the term ‘adjustment’ is used haphazardly, it is not exactly the same as contextual performance. Adjustment is exactly that, adjusting to a new environment whereas contextual performance is a broader concept also including interacting and successfully working within that foreign environment (Malek and Budhwar, 2012).
Looking at organizational culture earlier research usually yielded a list of different cultures that displayed differing characteristics but no real of way of showing the importance for performance besides ‘all kinds of cultures have varying effects’ (Denison and Mishra, 1995; Ogbonna and Harris, 2000). Deshpandé, Farley and Webster (1993) and Ogbonna and Harris (2000) on the other hand show that some cultures are actually better than others in terms of performance.
Innovative culture had the strongest direct positive effect, while competitive culture had both a direct as well as an indirect positive effect on performance. Community and bureaucratic cultures on the other hand show indirect and small effects, where bureaucratic culture is actually negatively indirectly related to performance.
Related to this are the findings Chatman, Polzer, Barsade and Neale (1998). They find in their experiment that positive effects of demographic diversity were more likely to emerge when the organization was acceptant and encouraging of this diversity.
This implies that the organizational culture should be geared towards being accepting and encouraging of diversity (by way of expatriates for example) to let them thrive. This aligns with the aforementioned findings, as they are very similar to the characteristics of an innovative culture, which is flexible and embraces the new (foreign).
Even though organizational culture is usually studied in relation to firm level performance, it is useful to apply this to expatriate adjustment as well. Adjustment can be important in two ways, taking into account the two different dimensions of performance task performance and contextual performance.
First expatriate adjustment is shown to be a strong mediator for higher expatriate performance (e.g. Malek and Budhwar, 2012; Caligiuri, 1997) defined as task performance. So through better adjustment, higher task performance is achieved.
Secondly characteristics that define expatriate adjustment overlap theoretically with the characteristics that define contextual performance where both have to involve interaction with the foreign environment (Black, 1988; Caligiuri et al., 2001). It is therefore likely that a similar mediated relationship exists between adjustment and contextual performance as well.
Pothukuchi et al. (2002) for instance find that negative effects of cultural distance come increasingly from organizational culture as opposed to national culture.
Cultural distance has in turn been shown to be negatively related to expatriate adjustment and subsequent expatriate performance (Pothukuchi et al., 2002) which shows that minimizing the cultural distance by adjusting is an important step in achieving expatriate success and that organizational culture might play a key role.
Chatman, Polzer, Barsade and Neale (1998) show in a similar rationale that open, accepting and encouraging organizations have a positive effect on demographic diversity (i.e. expatriates). While Deshpandé et al. (1993) and Ogbonna and Harris (2000) also show the importance of similar flexible and responsive cultures on success.
Organizational cultures that are innovative and competitive are usually open and adaptable as well as in search of opportunity, which will aid adjustment. Adjustment in turn is an important predictor for performance. This leads to the following hypothesis:
H3: Expatriate adjustment mediates the relationship between organizational culture and expatriate performance.
5.4 The moderating role of cultural strength
When examining organizational culture however cultural strength is also argued to play an important role. Looking at the literature, it can be concluded that organizational culture has to be mostly innovative and competitive (Deshpandé et al., 1993; Ogbonna and Harris, 2000), while having a ‘strong culture’ to maintain and enforce this (Evans, 1992).
This might seem at odds with the findings that advocate just a specific kind culture to be superior (Barney, 1986; Denison and Mishra, 1995), however a closer inspection shows that this is not the case. Applied to an international (or expatriate) perspective for example
this means that while adaptability is important to adjust to new situations and environments, consistency is also important to keep the system in itself strong.
Evans (1992) finds that a firms culture must be flexible and open to be successful, which closely resembles the innovative culture described by Quinn and McGrath (1985), Deshpandé, Farley and Webster (1993) and Ogbonna and Harris (2000), which are shown to be most effective. However the culture must also be appropriately focused, or ‘strong’.
It is important to look at the combination of maintaining organizational integration (strength) of a culture and the type of culture that is promoted. If the organizational culture is very ‘strong’ in being rigid and resisting toward change, this will only be enforced more. This will very likely not yield favorable outcomes. However when a sensitivity to change and adaptability are enforced in a strong culture, competitive advantage can be achieved. In addition a strong culture to maintain these ‘right kind of characteristics’ can be expected to create increased success for expatriates as well, thus resulting in the following hypotheses:
H4a: Cultural strength will positively moderate the relationship between expatriate adjustment and both an innovative and competitive culture.
H4b: Cultural strength will negatively moderate the relationship between expatriate adjustment and both a community culture and a bureaucratic culture.
5.5 Conceptual model
The model used in this study is loosely based on the model used by Malek and Budhwar (2012). They propose a mediated model to explain expatriate adjustment and expatriate performance. Following several other studies as well (e.g. Carraher et al., 2008; Kraimer, Wayne and Jaworski, 2001; Lee and Sukoco, 2010) a mediated model will be used in this study as well.
This study adds to this model however by considering an integrated approach to organizational culture as an predicting variable. Subsequently organizational culture is linked to expatriate adjustment and performance, leading to the model shown in figure 1.
The left side of the model explains the reciprocal relation between organizational influencers (training, mentoring, and familial support) and organizational culture. The right
side on the other hand explains the relations between organizational culture, adjustment and performance as well as the moderating role of cultural strength.
Figure 1 The conceptual model
Key:
ORGSUP: Organizational support; ORGCTYPE: Organizational culture type; ORGCSTR: Organizational culture strength; EXPADJ: Expatriate Adjustment; EXPPERF: Expatriate Performance.
6 Research method
To answer the research question and subsequent hypotheses stated above web surveys have been used to collect data (see appendix 1, questionnaire). A large enough quantity of comparable data could be acquired this way. This is important because this study focuses on the hypothesized link between three constructs. Qualitative methods might not have yielded enough relevant data, or data that cannot be compared.
The survey focuses on the main topics of this study, namely organizational influences, organizational culture (type and strength), expatriate adjustment and expatriate performance. The aim was to find data on the perceptions of the respondents on these topics. While it is also important to have the actual unbiased data, in this case the perceived notions are more relevant.
For example top management might pride themselves on having an organization with a strong organizational culture. However if this does not resonate with the employees (expatriates) the point is moot. It is far more relevant in this case if the expatriate experiences a strong organizational culture, or not.
ORGCULT ORGSUP Mentoring Familial support Training ORGCSTR EXPADJ EXPPERF
The questions asked in the survey are all answered with a 7 point Likert scale, with the exceptions for general information such as age and nationality. The validity and reliability of the main constructs was tested by using factor analysis and Cronbach’s alpha. To test the hypotheses a correlation analyses was done first to test the linkages between the constructs. Then to test the actual hypotheses hierarchical multiple regression analysis was used.
Furthermore there are both moderated and mediated relationships that were tested in this study. To test both the mediated as well as the moderated relationships the methods used by Baron and Kenny (1986) were copied, also used by Caligiuri et al. (2001) for example. The method testing mediation is based on three sequential steps to determine whether mediation takes place.
In step one the mediator (expatriate adjustment) is regressed on the independent variable (expatriate performance). This regression should be significant in order to proceed with step two.
In the second step the dependant variable (organizational culture) will be regressed on the independent variable (expatriate performance). This requires having a significant beta weight to follow to the last step.
In the third step the dependent variable (expat performance) is regressed on both the independent variable (organizational culture) as well as the mediator (expatriate adjustment). When the mediator remains statistically significant while the independent variable lowers to non significant, a valid mediation is shown (Baron and Kenny, 1986).
A moderated relation describes the interaction effect of the moderator on the relationship between an independent and dependent variable (Baron and Kenny, 1986). This relation will be tested by measuring both the effect of the independent variable and the moderator. As well as testing the interaction between the moderator and independent variable (independent x moderator) on the dependent variable. The interaction path should be significant for a moderation to hold. It is also desirable that the moderator does not correlate with either the independent variable or the dependent variable (Baron and Kenny, 1986).
6.1 Sample
The population used in this study is expatriates in multinational companies. Since this study uses the perceived data for the three main constructs there was no need to for limitation to one organization. There was also no restriction for country or region. Both OE and SIE are used for this study. The questionnaire used to gather the necessary data was
The respondents targeted were members of three expat forums expatforum.com, SmartShanghai.com and Telegraph.co.uk. In addition, respondents were approached via the AIESEC network of which I am a member as well as via my own social circle, where a lot of people are expatriates.
Respondents were approached via email and were asked to complete the online survey and return it again via email. This yielded survey data from 104 respondents coming from 20 different countries, spread out in expatriate assignments over 18 countries. Limiting this number to usable surveys by excluding one empty questionnaire results in a sample of 103 respondents.
The ages of the respondents ranged from 24 to 42 year old, with a mean of 29 years old (Mean= 29,04, SD=3,258). There were more men in the sample as is reflective of other studies concerning expatriates (Birdseye and Hill, 1995; Black and Stephens, 1989; Caligiuri et al., 2001; Feldman and Thomas, 1992). The group of respondents consisted of 62,7% men and 34,3% women. There were a little more self initiated expatriates than organizational expatriates, with 53,9% SIE and 46,1% OE.
6.2 Constructs and measurements
The aim of this study is to see if the strength of the organizational culture has an influence on expatriate adjustment and expatriate performance.
To conduct this study in a sound way first the different variables must be defined and conceptualized. The variables used in this study consist of the five main constructs of the model as well as control variables.
6.2.1 Organizational support
Organizational influences can be seen as comparable to organizational support practices. This study conceptualizes organizational influences with three measurements: training (1) of the expatriate, mentoring (2) and familial support (3).
The point in identifying these three measures is to show the relationship with the overarching concept of organizational culture.
Training, mentoring and familial support are measured using simple, straightforward measurement items. On all items respondents were asked ‘to what extent do you feel like you have had sufficient support from the organization’ followed by the several items reflecting training, mentoring and familial support explained below.
Answers were given using a 7 point Likert scale, ranging from (1) strongly disagree to (7) strongly agree. The scale was found to be very reliable at α=.83 over all the items. The mean of the scale is 5.11 (SD=1.275).
Training was measured by two items loosely based on two distinctions made by Caligiuri et al. (2001) concerning the area of focus of the training.
The first distinction reflects the training of the business aspect. Respondents were asked: “I have had sufficient training from the organization to do the job expected of me.” The second distinction reflects training on personal aspects of expatriation. Respondents were asked: “I have had sufficient training on living in this country from the organization.”
While this might appear a logical measure for OE, they are neither at odds with SIE. Training does not necessarily have to take place before arrival, but can also be provided on site. The scale measuring training however had a mediocre, but still acceptable reliability with α=.40. The mean of the scale was 5,17 (SD= 1,277).
Mentoring was measured using two variables partly based on Feldman and Thomas
(1992). Respondents were asked if they felt they had access to “a mentor who is looking out for
my best interests while abroad” and “help being available when I have a problem”. This scale
had a mean of 5.13 (SD= 1.244) and was found to be very reliable with α= .89.
Familial support was measured using two items. Expatriates were asked if a firm was sufficiently helpful in “allowing me to spend enough time with family” and in being able to “reduce problems in familial relations” with a mean of 4,98 (SD= 1,349). This scale was found to be very reliable as well with α=.91.
To create the variable for organizational support, the three areas of support were added together.
6.2.2 Organizational culture
To test the construct of organizational culture, this study looks at both the nature and the strength of culture. So respondents were asked about their perceptions on nature of the culture they are currently in and the cultural strength.
Organizational culture type
The items used have been based mostly on the works of Quinn and McGrath (1985), Ogbonna and Harris (2000) and the adjusted version of the Deshpandé et al. (1993) model of organizational culture measurement.
Measures based on elements of Denison and Mishra (1995) and the definitions of ‘strong’ culture by Schein (1984) have been added as well.
Responses were measured on a 7 point Likert scale with differing ranges. They vary, using (1) strongly disagree to (7) strongly agree, (1) not at all to (7) a very great extent and (1) very true to (7) very false were used.
The respondents were asked 16 questions pertaining to the type of organizational culture. These questions focused on company emphases and leadership styles of the manager among others.
The scale is retested to be reliable with α=.831, consistent over all variables. This is not surprising for an extensively tested model.
What is surprising however is that factor analysis shows that the measure loads on three constructs (see figure 2), as opposed to the four suggested by Black and his colleagues (Black, 1988; Black and Stephens, 1989; Black and Gregersen, 1991).
It appears the respondents were not able to make a distinction between the (admittedly subtle) differences between bureaucratic and community culture.
In face of such overwhelming evidence, merging bureaucratic and community culture seems apt. Something can be said for putting these two types together as both have a strong internal focus. Hence the new factor, called ‘internally focused culture’ in this study, will be used onwards.
Figure 2. Factor Analysis Organizational Culture Type Component 1 2 3 q4 -,195 -,068 ,811 q5 -,195 ,960 -,003 q6 ,958 ,112 ,107 q7 ,963 ,121 ,053 q8 -,240 ,012 ,615 q9 -,241 ,899 -,042 q10 ,940 ,114 ,103 q11 ,945 ,095 ,100 q12 -,176 ,000 ,920 q13 -,247 ,917 ,065 q14 ,921 ,114 ,089 q15 ,958 ,109 ,014 q16 ,943 ,094 ,067 q17 ,956 ,110 ,074 q18 -,105 -,051 ,934 q19 -,221 ,942 ,010
All three measurements were found highly reliable with Cronbach’s alpha α=.859 for
innovative culture, α=.969 for competitive culture and α=.935 for internally focused culture.
The means for the scales were 5.28 (SD=1.056), 4.90 (SD=1.309) and 3.31 (SD=1.309) respectively.
Organizational culture strength
In addition to types of cultures, the strength of the culture was measured. This was done by using four items.
Respondents answered to statements like “Sharing and group experiences are important in this company’” or “There is a high level of agreement about the way that we do things in this company.” The answers were measured on a 7 point Likert scale ranging from (1) strongly disagree to (7) strongly agree.
Reliability for this measure was high α=.83 and it loaded consistently high on one component. The mean of this scale was 4.18 (SD=1.315).
6.2.3 Expatriate adjustment
Black and colleagues have perfected a measure for expatriates in several studies (Black, 1988; Black and Stephens, 1989; Black and Gregersen, 1991) which will be used for this study.
They report three types of adjustments: work adjustment, general adjustment and interaction adjustment.
Respondents were asked to indicate the degrees to which they feel are adjusted on
14 items. All questions were asked in a “To what extent do you feel like you have adjusted to …”,
format. Black and Stephens, 1989 measure the items with a 7 point Likert scale, ranging from
(1) not adjusted at all to (7) very well adjusted.
Work adjustment is originally measured with three items, however in this study supervisory abilities are left out. Not all expatriates can be expected to have supervisor functions, so that leaves only two items pertaining to “specific job responsibilities” and “performance standard and expectations”.
General adjustment is measured by seven items; examples are “health care facilities” and “housing conditions”.
Interaction adjustment is measured by four items and has to do with interacting and socializing with locals.
Testing the scale showed that while it was very reliable with α=.92, the items only loaded on one factor (see figure 2). These findings seem to disregard the notion of any types of different adjustment. It found in fact only ‘adjustment’. Though there was some very slight coherence in the other two factors, these were discountable when taking into account the variance explained.
This is a disappointing find because the diversification in the scale can in no good conscience be adopted without any statistical backing in this study. Adjustment will be measured as a single construct, consisting only of the items highlighted in the first factor loading in figure 3. The mean of this scale is 4,69 (SD=1.156).
Figure 3. Factor analysis expatriate adjustment Component 1 2 3 q24 ,924 ,046 -,139 q25 ,926 -,190 ,197 q26 ,830 ,034 -,196 q27 ,923 ,046 -,123 q28 ,108 ,661 ,678 q29 ,890 ,060 -,203 q30 ,854 -,193 ,268 q31 ,844 ,114 ,148 q32 ,934 ,041 -,181 q33 ,913 ,062 -,203 q34 ,891 -,191 ,247 q35 ,324 ,727 -,321 q36 ,869 -,177 ,248 % of Variance 68,138 8,733 7,729 6.2.4 Expatriate performance
To test expatriate performance more than one aspect of this concept are taken into account in its measurement. Because earlier findings (see paragraph 3.1) and findings from Malek and Budhwar (2012) on the measurement of expatriate performance overlap significantly, the more widely accepted terms task performance and contextual performance will be used in this study. This way of measuring is widespread in literature as well (i.e. Malek and Budhwar, 2012; Kraimer, Wayne and Jaworski, 2001).
The questions were partially derived from the questionnaire used by Feldman and Thomas (1992). Contextual performance is measured with their opinion on several statements like “I feel accepted by my colleagues” and “I feel my value as an expatriate is
appreciated”. Task performance is measured by questions as “I am able to complete my
tasks in the allotted timeframe” and “My performance as an expatriate has been lower than
before I came abroad”.
All the items were answered with a 7 point Likert scale, ranging from (1) strongly disagree to (7) strongly agree.
The scale reliability was acceptable with α= .56, climbing to a respectable α=.64 when the two items pertaining to ‘expectations” and “pre assignment performance” were deleted.
Factor analysis showed 2 components in congruence with task and contextual performance. Both factors explained a good portion of the variance with 56,8% and 34,5% for factor 1 and 2 respectively (see figure 4).
Figure 4. Factor analysis performance
Component 1 2 q43 ,911 -,328 q46 ,895 -,322 q48 ,879 -,237 q44 ,487 ,842 q47 ,446 ,865 % of Variance 56,78 34,48
The means of the scales measuring task and contextual performance respectively were 5,05 (SD=1.311) and 5,21 (SD=1.477).
6.2.5 Control variables
To control for possible discrepancies cultural distance is used in this study. The main idea behind the aspect of adjustment with expatriates is that they suffer a liability of foreignness (Peng, 2011). This means they experience a disadvantage because they have to operate in a foreign, unknown environment.
Indeed, the model and all constructs used in this study are based on the notion of overcoming the liability of foreignness to enhance adjustment and performance.
Perceived cultural distance was used to control for a possible discrepancy in being an expatriate but not necessarily experiencing a foreign environment (and thus a liability of foreignness). The country and culture might be already familiar for example through personal interest, travel or international relationships. Expatriates may have even lived in the host country before the expatriate assignment. In this case, operating in a seemingly foreign assignment, is not actually as foreign as it appears when looking solely at superficial data.
Cultural distance was measured using three items measured on a 7 point Likert scale, ranging from (1) not adjusted at all to (7) very well adjusted. The scale showed to be very
reliable with α=.81 and loaded consistently on one factor, explaining 84,8% of the variance. The mean for this scale was 4,660 (SD=1.703).
7 Results
There are three main constructs that will be linked in this study: expatriate adjustment, organizational culture and expatriate performance. The question that will be attempted to answer is how can an organizational culture aid adjustment and subsequent performance of expatriates.
The approach to answering the research question of this study was done in several steps. First organizational support was tested as a predictor for expatriate adjustment and performance, answering hypothesis one. Secondly the concept of organizational culture was introduced to the equation. First by testing the relationship between organizational support and organizational culture (which are theoretically overlapping concepts) in hypothesis 2. Then both aspects of organizational culture were linked to expatriate adjustment and expatriate performance, answering hypotheses three and four.
7.1 The effect of organizational support on adjustment and performance
In this section the relationship between organizational support, expatriate adjustment and performance will be studied. First a correlation analysis will be done to get a clearer picture of the relations between all the variables and test hypothesis 1a. This hypothesis proposes a positive relationship between organizational support and performance. The results for the overall correlation are shown in bold in Table 1.
Results of the correlation analysis show partial support for hypothesis 1a. Organizational support is significantly and positively correlated with contextual performance (r=.271, p<.001). There is no significant correlation found however between organizational support and task performance. Task performance is only correlated significantly with expatriate adjustment with r=.835, p<.001.
