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1. Introduction
Expansion into other markets is now the next logical step after success in the domestic market for multinationals. This requires an increasing amount of expatriates to undertake operations for their multinational employer. However, these international assignments are often fraught with complications – expatriates can leave their home country unaware of the challenges they will face in different cultural environments and how to overcome them, and organisations poorly equip their employees with the competencies they require to succeed.
Hence, this thesis will look at expatriation success from three perspectives: the individual level (personality and skill sets), the organisational level (selection, training, and support), and the national level (psychic distance and cross-cultural transitions).
Furthermore, expatriate retention is a problem for organisations and this means extra HR costs as well as lost sunk and opportunity costs. It has also been found previously that 59% of expatriates believe international assignments advance them within their firms (Stahl et al., 2002). However, it was also found that around 25% of expatriates want to leave their organisation upon return (Hammer, et al., 1998; Solomon, 1995), which shows a clear disparity in expectation and reality. Consequently, how organisations can retain their expatriates and the wealth of knowledge and skills they bring will also be reviewed within this thesis. There is a clear lack of research in expatriate retention and by examining the three levels of expatriation this thesis will determine how organisations can assure repatriation success.
The research question primarily concerns successful international assignments,
regarding how employees can prepare and how institutions can prepare their employees for
both expatriation and repatriation, as both parties’ interests are aligned in that of success. This
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interest alignment means both individuals and organisations can and should work together in determining how to achieve success expatriating and repatriating; the question is how.
Expatriate failure means there is a fault in the selection process for international assignments, or the pre-departure training, or both of these failures combined. Previous research in expatriation has found that the pre-selection methods and training have been inadequate (Harvey, 1998; Tung, 1981, 1982, 1987, 1988, 1990); furthermore, reviews of this literature have shown these inadequacies to be a primary reason of expatriate failure (Black and Mendenhall, 1990). Gertsen (1990) accomplished a review of existing cross-cultural competence literature of the time and concluded that many researchers have suggested a plethora of selection criteria that should be looked at, in particular, openness, self-confidence, optimism, good communication skills, and empathy. These values are reflected in Earley and Ang’s (2003) concept of CQ, which has become the dominant theory in cross-cultural competence literature today and will be discussed in detail in the next chapter of this thesis.
Tung’s study (1981) found that 5% of the multinational corporations (MNCs) examined
carried out testing to determine interpersonal skills and personality characteristics when
undertaking international assignments. Mendenhall, Punnett, and Ricks (1995) discovered
that such huge decisions were done informally with scant regard to the literature. MNCs were
found to have prioritised, and in some cases only considered, the technical competence of
candidates for expatriation (Dowling, et al., 1999). Furthermore, Mendenhall, Stahl, Ehnert,
Oddou, Kühlmann, and Osland (2004) found that models of expatriation and cross-cultural
competence are seldom used, and that optimal theories from researchers’ opinions are not
regarded in high esteem. It is clear that organisations do not utilise research when preparing
expatriates and thus have poor retention rates – this thesis will examine the literature and
collect relevant data in order to provide information to demonstrate how organisations can
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effectively prepare their expatriates and keep expatriate failure rates of retention to a minimum.
The term ‘expatriate’ is defined as a person who lives outside their native country, and commonly refers to a person sent by their organisation to operate similarly in another country. Expatriation is a vital and strategic role of human resource management (HRM) that is used when a organisation has a need of staff, and can lower the cost of value creation and better serve customer needs (Hill, 2013). Moreover, effective international HR strategies are a major determinant of international business success (Forster, 2005), therefore it is critical that expatriates are given the due attention they require (Farndale & Paauwe, 2007).
Organisations that exercise expatriation compose of two staffing policies: ethnocentric and geocentric. Organisations that apply ethnocentric staffing policies believe that there is a lack of qualified host country nationals to fill senior positions. Whilst this is the best way to keep a solidified corporate culture, it can also lead to ‘cultural myopia’ (Hill, 2013). Alternatively, a geocentric policy selects the best people for the job regardless of nationality (Wild et al., 2000), and is logical for firms pursuing transnational strategies; this is regarded as the only true global business (Perlmutter, 1969).
Expatriation has become more relevant every year with the increasing amount of
global mobilisation and digital age. This is further backed up by Saskia Sassen’s global city
(2001) theory, in which she argues that around the turn of the twenty-first century,
information technologies, along with privatisation, deregulations, and increased opening up
and participation of economies and national economic actors in global markets, have all
helped to increase flows of capital, labour, and goods into one big global city. Accelerated
networks and globalisation mean that more expatriates are needed for operations in another
country, and whilst the corporate culture may be similar, often the country’s cultural
environment is not. As a result of this and the ‘Information Age’ (Castells, 2000), synergies
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of knowledge and network executives who are culturally competent across several countries will inevitably occur (Sassen, 2001; Beaverstock, 2000) and therefore returns on investments (ROIs) have been used to evaluate expatriate effectiveness (McNulty & Tharenou, 2004) rather than costs. This gives rise to a vast array of potential problems and consequences (both short and long term), such as (but not limited to); emotional, motivational, and behavioural problems in employees, financial costs (direct and indirect) for institutions, and relationship failures. This thesis will explore these issues and answer the research question: How can organisations effectively prepare their employees for cross-cultural accomplishment so that they retain these expatriates and their benefits? Furthermore, the thesis will look at a younger generation of expatriates who are currently working in this globalising world.
2. Literature Review
This literature review will address expatriation at the three levels; individual,
organisational, and national, and identify factors of success at each level. Cross-cultural
models and theories will be probed as these will be used to analyse how individuals can
effectively transition across cultures. Expatriation literature will be scrutinised so that critical
issues are diagnosed at the organisational level. Psychic distance and language will be
examined so that both individuals and organisations can learn how to prepare for expatriation
as this can be problematic indeed. Expatriation is primarily the organisation’s responsibility
although there is still a lot proactive and self-motivated individuals can do to further their
chances of success. Psychic distance is positively correlated with cultural shock as an
individual has to adapt more. Finally, language has a crucial effect on communication and
self-identity, and thus how successful an expatriate will be in an alien cultural environment.
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2.1. Individual level success factors: Cross-cultural competence literature
Cross-cultural competence literature has been a topic in research academia for over fifty years now, and seeks to address how an individual can integrate with minimal resistance in other cultural environments and function effectively. Cross-cultural competence academia attempts to explain why different cultural environments prove problematic and how to overcome this.
Oberg and the U-Curve Model
Oberg’s U-Curve Model (1960) is one of the most famous models. His term ‘culture
shock’ indicates that people will become anxious and confused, when faced with unfamiliar
cultural situations (Neuliep, 2003). It is a psychological process which can make those
affected feel homesick, irritable, and even depressed (Wild, et al., 2000). A common negative
effect of culture shock is bad job performance (Stone, 2005), and this is one of the main
reasons for expatriate failure (Chew, 2004). It is worth noting that whilst this model is
accepted by most researchers not every person is the same; indeed, expatriates experience
varying degrees of shock and adjustment; these processes also last for different time ranges
too (Mendenhall, et al., 1995). Moreover, the level of culture shock an individual
experiences is directly and positively related to the amount of effort an individual believes
they require to adjust to a new culture (Earley, 1987).
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U-Curve Model of Cross-Cultural Adjustment:
Figure 1: The U-Curve Model of Cross-Cultural Adjustment (Oberg, 1960).
As can be seen in Figure 1, the first stage is the ‘honeymoon’ period; a period of excitement and anticipation. This changes into ‘culture shock’, where cultural change is difficult for the individual to comprehend. The penultimate stage in this model is adjustment, whereby cultural shock subsides and an individual begins adaptation, with the final stage being mastery.
Earley and Ang and their concept of CQ
The concept of CQ (cultural intelligence) is the idea of Christopher Earley and Soon
Ang developed 2003. The original model used the ‘three sources of cultural intelligence’,
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these being: the heart (motivational component), which influences the head (cognitive component), which in turn shows its results in the body (behavioural component).
The heart alludes to the obstacles and setbacks which will inevitably occur when interacting in new environments and with new people from different cultural backgrounds;
these can only be overcome by individuals who believe in their own self-efficacy. Confidence is always deeply rooted into the mastery of a particular task or skill-set (Earley &
Mosakowski, 2004). Motivational CQ is therefore the determination to adapt to the unfamiliar environment which involves keeping focused on learning and functioning in different cultural situations. An individual with high levels of motivational CQ will have a greater desire to overcome frustrations from interacting in a different culture (Lin et al., 2012). Sub-components of motivational CQ are thought to include intrinsic interest, extrinsic interest, and self-efficacy to adjust (Van Dyne et al., 2012).
The head relates to the strategy one takes by utilising the information taken in and using it to form a learning strategy. An individual with high CQ would quickly notice consistencies in behaviour of individuals from a specific behaviour, and be able to adapt to this (Earley & Mosakowski, 2004). Sub-components of CQ that were developed after the initial model are cultural-general knowledge and cultural-specific knowledge (Van Dyne et al., 2012).
The body refers to the actions that an individual would take based on the devised strategies from the head. By showing individuals from a different culture that one can understand aspects of who are they are, rapport can be built which leads to a higher quality of education. Furthermore, by adopting these mannerisms and habits from certain cultures, the article argues that one eventually grasps how it is like to be from that culture (Earley &
Mosakowski, 2004). Behavioural CQ includes tones and gestures, and the recognition that in
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some situations action may not be appropriate (Thomas, 2006). Sub-components of behavioural CQ are thought to include verbal behaviour, non-verbal behaviour, and speech acts (Van Dyne, et al., 2012).
CQ covers not just cross-cultural competence but is applicable to adjustment in new environments. Concisely, it is an ability to contextualise unfamiliar environments through immersion to adapt. Since its inception it has become the dominant model and predictor of success in cross-cultural competence and adjustment to new and alien cultural environments (Adair, et al., 2013). However, it has been suggested that it is similar to that of a global mindset; indeed, the development of CQ encourages a more global rather than domestic mindset (Levy, et al., 2007). Moreover, a global mindset is useful for a world where cultures are interacting and overlapping more so than ever. There is still a lot of research and development to be undertaken in expatriate manager performance improvement (Hill, 2011), which shows that whilst CQ may be influential it still has a lot of work to do. Richard Lewis (2006) asserts that sincerity should be used to develop intercultural sensitivity. People dropping their assumptions allows problems can be alleviated, which encourages progress. If these paradoxes and cross-cultural conflicts in teams can be identified and expectations managed then the full benefits of cross-cultural teams can be realised, thus helping the team to achieve goals that otherwise would have been laborious within their organisation (Du Plessis, 2011).
CQ builds on Sternberg and Detterman’s (1986) integrative theoretical framework in
multiple loci of intelligence. The authors believe that meta-cognition, cognition, and
motivation are mental capabilities that take residence within the head, and that overt actions
are behavioural capabilities. Sternberg and Detterman make the distinction between that of a
mental (thought) capability and a behavioural (action) capability. Christopher Earley and
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Soon Ang took this development further relating these dimensions in direct relevance to capabilities in culturally diverse circumstances.
CQ is very specific in defining what it is and what it is not. CQ is a theoretical construct with psychometric scales for measurement to determine an individual’s CQ and is not cultural-specific – it transcends cultural boundaries. It is not personality traits or intelligence. Whilst it is true that a more determined individual in general is more likely to have a higher motivational CQ, it does not mean they will have a higher CQ as noted above, all dimensions are needed to be competent in CQ, and motivational CQ is focussed on cultural circumstances only. Likewise, an individual high in cognitive intelligence (solving problems) will not necessarily be high in cultural intelligence – the cognitive dimension of CQ focuses on culture and social behaviour in individuals and groups of people, rather than analytical thinking.
Ever since Ang, et al. (2007) published the first article regarding the measurement and predictive validity of in Management and Organization Review, there has been an explosion in interest in CQ and the article itself triggered exponential growth. As Van Dyne et al. (2012) acknowledge, CQ has been applied effectively to numerous fields, for example in linguistics (Rogers, 2008) military operations (Ang & Ng, 2005; Ng, et al., 2005;
Selmeski, 2007), United National peacekeeping operations (Seiler, 2007), international missionary work (Livermore, 2006, 2008), and mental health counselling (Goh, et al., 2008).
This growth has been attributed to the sound theoretical foundation of the CQ construct, as well as the Cultural Intelligence Scale (Ang et al., 2007; Van Dyne, et al., 2008).
Globalisation and the second unbundling (Baldwin, 2006) has led to more cultural exchange
than ever before and with the technological developments of the internet this is exponentially
increasing (Crystal, 2001). The cultural tension that resulted after the historic events of
September 11
thin 2001 are also acknowledged (Ang, et al., 2011).
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2.2. Organisational level success factors: Expatriation literature
Expatriation literature predominantly looks at expatriate failure and effects of expatriation. Failure can have detrimental effects on an expatriate both emotionally, affecting confidence and belief in technical abilities (this can be seen in the data), and career-wise, as setbacks in one’s career are another negative effect of expatriate failure (Ashamalla, 1998).
Expatriate failure is a costly situation financially, both directly and indirectly. Many studies have been undertaken to explore this, concluding that expatriate failure rates are at very high levels (Shaffer & Harrison, 1998; Simeon & Fujiu, 2000). Tung (1981) found these to be between 5-15%. It is not unlikely for expatriation of a family to cost anything between
$250,000 to $1,250,000 (US), a heavy investment that in business terms is regarded as a sunk cost (Cole, 2011; Ferraro, 2002; McNulty and Tharenou, 2005). Tung’s studies (1981) also take the failure of expatriates to be defined as premature return as stated by Harzing, 1995;
however, the reality is expatriate failure is a lot broader than this that cannot be measured by just using quantitative factors. Indirect costs include but are not limited to: opportunity costs, costs to the organisation in terms of reputation, market share, and a breakdown in rapport between various national arms/ subsidiaries of the organisation, therefore it is of paramount importance that expatriation is appropriately addressed at all three levels.
The definition of expatriate failure that will be used in this thesis is
‘the inability of [an] expatriate to perform according to the expectations of the
organisation’ (Harzing & Christensen, 2004, p. 7),
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which includes premature return but also a failure to perform adequately and as effectively as expected, as well as a failure to adjust to a new cultural environment. It is not enough to define expatriate failure purely on premature return (Lee, 2007).
Repatriation is often overlooked as it is expected that previously competent employees will return to the home environment without impediment. In reality, the expatriate has to readjust in their organisation and culture (Forster, 1994) and can potentially bring unexpected and exasperating challenges. Repatriation programs are necessary because without this support it is possible that an organisation will be unable to retain expatriates (Bossard & Peterson, 2005; Downes & Thomas, 1999), as well as the benefits they bring – an international assignment is considered an excellent opportunity to gain a global mindset (Lovvorn & Chen, 2011; Yurkiewicz & Rosen, 1995). As well as not capitalising on employee benefits, when organisations have poor expatriate retention rates this lessens their appeal to future potential expatriates seeking international careers (Bolino, 2007).
Expatriation and relocation
Rosalie Tung has dominated this academic field and in 1987 concluded with seven reasons of expatriate failure after interviewing expatriates and their spouses (Tung, 1987).
This was significant in that it was the first academic study to consider not just the expatriate in a foreign environment, but looked at other factors that affected this cultural transition also.
The first two reasons for expatriate failure are because of inabilities to adjust in
different physical or cultural environments – the spouse’s inability came before the
expatriate’s inability showing that the adjustment of the spouse has a significant leveraging
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effect on the success of the expatriate. Following this were other family-related problems, showing again that the family is crucial, with the manager’s personality or emotional immaturity being the fourth reason for expatriate failure. Fifth is the manager’s inability to cope with overseas responsibility, and it is only reason six that lack of technical competence is acknowledged for expatriate failure. Lack of motivation is the last reason; however, motivation is also an important part of CQ (K. Y. et al., 2012) which has a direct effect on problems 1, 2, and 3, and will be discussed later in this literature review. Another important note is that expatriate adjustment is different to spousal adjustment, as typically, it is spouses that engage with the local community more (Bauer & Taylor, 2001). Therefore, what works best for the expatriate is not necessarily similar for the spouse. Shaffer and Harrison (2001) concluded that spouse adjustment consists of three dimensions: how well the spouse builds relationships with host country nationals, how well the spouse adjusts to local customs and culture in general, and the extent to which the spouse feels at home in the foreign country.
They are also of the opinion that successful competence in all three dimensions depends on the spouse’s capability of re-establishing his or her identity in the new cultural environment, and the interviews also showed that foreign language skill was the most influential factor in rebuilding a personal sense of identity and therefore achieving greater adjustment (Shaffer &
Harrison, 2001). Indeed, Adler and Kwon (2002) found that the ability to speak the local language was instrumental in establishing trust with local employees. This study was for expatriates and not the spouse, but a culture of trust and tolerance is recognised as a facilitator of social capital (Adler & Kwon, 2002).
Expatriation training and pre-selection methods
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In 1984 Tung published her book on Japan, in which she hypothesised that Japan’s success in world economics can be attributed to the care and detailed attention the country reserves for developing its people for operating in a global context (Tung, 1984). Japan has a history of imitation and adaption since its opening to the West in 1854 and the Iwakura Mission (Gordon, 2009) – therefore it is no surprise that they are able to grasp new concepts and cultures exceptionally well. Tung’s book was far-reaching as its research noted the difference in preparation for employees embarking on international assignments. Japan send their staff to be a trainee in a foreign subsidiary with the primary aim of learning about the organisation’s foreign operations and as much as possible about the foreign country, but US MNCs (at the time of print) preferred a hasty crash course in a foreign language. These findings helped to understand the differences in success rates between Japanese and USA expatriates. It allowed for others to research the consequences of USA organisational methods, and it was found that they resulted in expatriates being exposed to nuances and subtleties of a language unlike the Japanese who had time to learn this. As Molinsky (2005) found out, language fluency has a contingent effect on the evaluation of culturally inappropriate behaviour. The higher an individual’s language skill, the higher the expectancy to conform; when an individual has never been exposed to a culture and only the language, their mistakes will be judged more harshly (Molinsky, 2005). This finding along with Tung’s work emphasises the importance of proper preparation for international assignments.
Many studies advocate the use of cross-cultural training to facilitate adjustment to
new cultural environments and believe it to have a significant effect on the expatriate success
rate (Black & Mendenhall 1990; Earley, 1987), but in fact training that took place was not
very thorough (Black & Mendenhall, 1992). Jonathon Beaverstock found that some
organisations outsource the training of expatriates to outside firms (2001), but these firms had
very limited expatriation policies and did not adequately provide expatriate households with
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adjustment training or assistance with spouses, both of which are the two most important reasons for expatriate failure (Tung, 1987). They also had no programme for repatriation which has also been seen to be a factor in expatriate retention rates.
Beaverstock also explored expatriation with a series of in-depth interviews. In 2000 he found that for expatriation within London based transnational organisations (TNCs), 90%
of them selected staff in an open and formal process based on their technical ability to undertake the assignment. However, in 1999 it was concluded that expatriate selection was an informal process via a ‘coffee machine system’ – networks within the organisation that would lead to the informal selection of candidates either by an urgent shortage of staff and knowledge of an employee’s technical competence, or volunteering (Harris & Brewster, 1999). Following this, organisational processes were used to make official formally an informal decision already decided. Despite the contrast in selection techniques, both methods reinforce the assertion that pre-selection is based on technical competence. This goes against the idea that cross-cultural competence should be turned into a competitive advantage (Egan,
& Bendick, 2008). Furthermore, adjustment training was done in situ (unlike the Japanese multinationals researched by Tung), and no repatriation provisions were made for returning employees (Beaverstock, 2000). In interviews with repatriated staff in London, they believed they had enhanced their professional and personal development; however, minimum cross- cultural training had been received and insufficient adjustment time in their international assignment. One of the most important findings was that they felt isolated, as their home institution was in little contact, and the repatriates confirmed that they interacted outside the workplace within expatriate networks and other Anglophones (Beaverstock, 2000).
2.3. National level factors of success: Psychic distance and language literature
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Psychic distance will be used to analyse expatriation at the national level. It is the perception of differences between the home and foreign country which often relate to cultural and business differences (Evans & Mavondo, 2002).
Language is important for all three levels of expatriation – it is needed by the expatriate to communicate, taught by the organisation, and a part of psychic distance.
Psychic distance
Psychic distance was first coined in 1956 (Beckerman, 1956) and since has been used to determine the level of comfort one national feels in dealing with another culturally different national. It has become an important concept of understanding in the globalising world. In addition, this is increasingly being used by organisations to predict their success when operating in other countries (Gurung & Prater, 2006); however, this concerns organisation adjustment and this is not used for expatriate adjustment.
Other inclusions in items of psychic distance include language, education, and political systems (Chetty & Campbell-Hunt, 2004). This concept is strikingly useful; the higher the psychic distance, the more adaptable an expatriate will have to be if they are to succeed. The differences between the UK and Amsterdam, or Sweden and Norway, are noticeably more similar than those of Germany and Africa, or France and China.
Language
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There is ample academic literature on language, enough for the topic to make it its own significant field, despite language playing a part in the dimension of behavioural CQ.
Academic discussions of language and cultural values have developed separately within international management literature even with their dual impact on intercultural communication (Peltokorpi, 2010). Culture and language are linked interdependently;
therefore it is hard to understand why language has been neglected in international management literature. It is aphoristic to assert that cultural values as well as language influence communication across cultures, yet language has consistently been spurned or considered supplementary to cultural values (Peltokorpi, 2010). Language is deemed sufficiently important enough to warrant a more focussed regard within international management literature (Welch, et al., 2005).
Language is unquestionably a part of culture; social mores and nuances that are spoken can be used inappropriately (Ang et al., 2007), and culture is undoubtedly a part of cross-cultural competence. Culture is defined as:
‘a cultural group’s characteristic way of perceiving the man-made part of its environment’ (Triandis, 1972, p. 4).
This is generally accepted however Hofstede describes culture more concisely,
describing it as the collective programming of the human mind that differentiates one group
of humans to a human of another group (Hofstede, 1980). Under this definition, it would be
difficult for language to not be inextricably linked to culture as it is an obvious barrier in
communication if one individual cannot speak the same language as another. Furthermore,
Samovar et al. (1981) describes international communication as creating, sending, and
interpreting messages both verbally and non-verbally between different national cultures.
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Harzing & Feely (2008) suggest that language has not been the subject of intense scrutiny because of English as a business lingua franca. Others (astonishingly) regard language as a minor technical issue that can easily be solved by translators, translation software, and linguistically competent employees. Baldwin and Hunt (2002) argue that intercultural communication researchers tend to focus on communicative encounters amongst two or more people where people often speak in a language that is not their own, and suggest that languages have been overlooked because interlocutors are assumed to be fully bilingual or share a common language.
It is clear that language and culture are not independent components; rather, they are interdependently linked as two sides of the same coin. Indeed, a shared foreign language does not guarantee error-free understanding because cultural values are often encoded in the nuances of a language; this can act negatively in regards to translation of a language and meaning, including perception, analysis, and the decoding of explicit and implicit meanings and messages (Henderson, 2005). Moreover, Giles and Johnson (1981) argue that language is a stronger determination of social categorisation because of the functional and psychological barriers that they impose not only on individuals but on social interaction. These have been explored further, as Henderson and Louhiala-Salminen (2011) found that building trust between individuals who use English as a common working language in the multilingual environment of multinational organisations is a challenge.
San Antonio (1987) found that language is a strong and salient determinant of identity
which can and does separate local employees and expatriates in foreign subsidiaries. The
concept of language nodes (Du-Babcock & Babcock, 1996) refers to individuals who use
language to create links between others in MNCs. When there are two or more languages, a
language bridge can be created by the person who is able to converse competently in both and
furthers their own social capital (Marschan-Piekkari et al., 1999). Reversely, an individual
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can also choose to be a language gatekeeper, and restrict information flows and manipulate this to their own advantage. This can have a negative effect on rapport and team performance.
Expatriates can also learn a host country’s language without being exposed to host country culture; this can be problematic because of the link between the two. When language level is not so proficient, expatriates can be excluded or protected from criticism as it signals a lack of knowledge and understanding in host country cultural values (Molinsky &
Perunovic, 2008). An increase in language proficiency means that expatriate employees can be judged more harshly if they make a cultural faux pas. Therefore, there is a pressure to adopt host cultural norms as judgement can be a result of this violation (Babcock & Du- Babcock, 2001). This is an example of the expectation of a positive correlation between language proficiency and cultural knowledge, but an increase in one does not always necessarily mean an increase in the other. Higher language proficiency does not mean expectance but brings the burden of expectation to conform.
Furthermore, Vaara et al. (2005) found that language skills are linked with perceptions of professional competence from others in MNCs. Language research is neglected in the literature on cultural values and this is further limited by the unbundling of cultural values and the assumption that language is either a unifier or a divider in foreign subsidiaries and intercultural interactions. This is made even more difficult because individuals have varying language and cultural competencies, and use a plethora of tactics with which to communicate their meanings and messages to others from a different culture and / or language from their own. Moreover, language skills can affect an individual’s own perceptions of confidence.
Peltokorpi (2010) developed a theoretical concept, the Three Communication Zones
Theory, which suggests that the communication channels and tactics of expatriates’ are
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linked with their host country language and cultural competencies. This particular theory contributes to the literature of cross-cultural management, language, and culture, as it shows that cultural values and cross-cultural competencies are important. Furthermore, it argues that language proficiency in general, and different proficiency levels of language, influence intercultural communication. Language and cultural competencies are not always perfectly aligned (Peltokorpi & Schneider, 2009), but this concept acknowledges the link between the two.
The interviews in Peltokorpi’s (2007) study showed that host country language skills did not guarantee acceptance by local employees, and that Zone Two expatriates had problems capturing cultural nuances in intercultural interactions. This contrasts to the linear adaption-acceptance package presented typically in cross-cultural competence literature (Earley & Ang, 2003; Gertsen, 1990). Cultural competence and behavioural adaptations were less important for efficient intercultural communication in this study, as language was the main focus for getting messages across. Between cultures that have a high psychic distance, culturally congruent behaviour can be demanding mentally as behaving in a way in which one is not accustomed to and contradicts aspects of one’s culture and identity is likely to elicit personal distress (Molinsky, 2007). This was seen in a series of interviews conducted by Poster (2007), where Indian call centre workers pose as Americans for US-outsourced firms.
Indeed, Sanchez et al. (2000) argue that a failure to accept that two cultural identities are not
mutually exclusive leads to a source of internal conflict in expatriates. The paper suggests
that the formation of a multicultural identity is necessary to buffer the stress provoked by an
international assignment. CQ would help to also alleviate the stress that so many expatriates
suffer from, as it was found that relocated expatriate executives revealed an alarming increase
in the hormone prolactin, reduced mental health, and an increase in alcohol and cigarette
consumption during the first year abroad (Anderzen, I., & Arnetz, B. B. 1997).
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Zone Three individuals were found to sometimes have an advantage in cross-cultural circumstances as they were not bound to a specific culture – ‘gaijin’ (outsiders in Japanese) were regarded in this specific study (Peltokorpi, 2010) as being able to do things that Japanese could not do, because they were able to mix their language skills and culturally congruent competencies. They were able to take the best of both cultures and use this to their own success, which is evidence of the formulation of a multicultural identity (Sanchez et al., 2000).
Increasing language skills have been shown to have a positive correlation with cultural competence; however, the correlation is not completely linear. Low language skilled individuals are shielded from cultural faux pas. When their language skills increase, so does the expectation to conform to cultural values, and they can be judged more harshly when violating these. However, when an individual is able to communicate fluently and is culturally congruent, they can reap the benefits of adapting between their home and host cultures and excel in alien environments. This is important, because although Peltokorpi’s findings contrast Earley and Ang (2003), and Gertsen (1990), by showing that cultural competence and behavioural adaptations were less important for efficient intercultural communications, the results do show that mastery of language and mastery of culture allows an individual to do things mono-cultural individuals cannot do. This is hugely significant because it demonstrates the difference between competent (in a sense of being able to carry out the task given) and brilliance (being able to complete the task to an excellent standard).
2.4. Literature review and research gap
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The literature has shown on an individual level that expatriates need to overcome the adjustment phase in Oberg’s U-Curve model, otherwise they will not succeed in an alien environment. Therefore, expatriate success is critically determined at this point – if adjustment cannot be completed then mastery will not occur and the individual will be stuck in a culture that they cannot adapt. The concept of CQ is exceedingly useful as both individuals and organisations can see how thoughts and actions influence integration, and CQ can be used to identify success at the individual level. It should be the responsibility of the organisation to provide cross-cultural training but if not given, individuals can use this theory to learn how to maximise their chances of success, as there is a robust scale used to determine an individual’s cultural intelligence.
Tung’s research on expatriation has been useful for organisations as she has shown the importance of an effective expatriation programme, as well as spousal adjustment, showing that the organisation must ensure a smooth transition as well as include a sensible repatriation programme to retain these expatriates and their benefits. If the organisation cannot get this right then expatriation will fail. Beaverstock has shown that organisation pre- selection and training methods of preparation should be focussed dynamically. It is insufficient to compose selection methods with technical competence as the focus point;
cross-cultural training must be given pre-departure and not in situ as this does not yield maximum returns. Organisational contact was lacking and this is a success factor as communication is necessary.
Success at the national level is dependent on overcoming the psychic distance and
being able to converse competently with host country nationals. However, language alone
will not be enough to guarantee rapport and lead to a successful cross-cultural assignment.
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There is a gap in the literature of expatriation as a lot of the studies are dated and none of the studies focus on young professionals. This thesis looks at success factors of
expatriation over three levels, which has not been done before; however, the emphasis is on the youth of the professionals and several older expatriates will be used to contrast against this.
3. Methodology
This chapter concerns all decisions taken for data collection and analysis of findings and their reasoning. Research criterions for the thesis are also included.
A case study research was employed as the thesis is explorative in nature; therefore it is highly beneficial to gain individual perceptions and research. The thesis fills the research gap of looking at a new generation of young professional expatriates in a rapidly globalising world and by gaining a wealth of information the data can be analysed for new findings and conclusions.
3.1. Research Question
How can organisations effectively select, prepare, and manage their employees for
cross-cultural accomplishment so that they retain these expatriates and their benefits?
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As has been seen in the introduction, expatriation is and will increasingly continue to be an important strategic role of HRM in the global workplace. The new generation of expatriates are technologically literate, having grown up with web technology and communication. Many have studied abroad with the popular ERASMUS program which increases the propensity for working abroad (Oosterbeek & Webbink, 2011); travelling is also a lot more viable, especially within the EU. Organisations which are actively seeking individuals with global mindsets would do well to recruit this niche sector of potential expatriates in ever increasing numbers (Forster, 2005). There has been no literature which has looked at this young and new generation of expatriates who are not restricted by family or fear; hence, this thesis will contribute academic literature by determining what makes expatriates successful by examining factors of success in three levels: the individual, the organisation, and in national level factors.
The literature also highlighted expatriation is still a problem for organisations as it requires meticulous planning which does not appear to be undertaken. As a result, failure rates are still common and expatriate retention is a problem for organisations, which does not yield returns on investments.
One objective of this research is to gain a thorough understanding of expatriates’
experiences and how their organisations supported them, and to use the literature to contextualise this data. Once this task has been completed, suggestions will be made based on logical reasoning with both the data and literature on how organisations can prepare their future expatriates. Thus, this thesis makes a positive contribution to the field of expatriation with useful application in the real world.
3.2. Conceptual model
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The Three Levels of Expatriation
Figure 2: The Three Levels of Expatriation Model, depicting how to achieve expatriate success (Taylor, 2015).
There are three levels of expatriation, of which the organisation is responsible for all three. When the needs of each separate component are met, together they will result in successful international assignments. The thesis will probe the levels separately to identify factors of success at each specific level to determine how organisations can prepare and manage expatriates and assure expatriation and repatriation success.
3.3. Data collection and sample
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The data was collected by contacting the researcher’s own network of expatriates, and expatriates known to the people in the researcher’s network. Some of these interviews were conducted face-to-face and where this was not possible a Skype was arranged for a convenient and unrestricted time limit. Twenty interviews were started with pre-set questions and then carried on unscripted, so as to allow for qualitative data to be collected with prompts on responses. These interviews lasted from between half an hour to over an hour, with the interviews recorded using voice recording hardware and then transcribed by the researcher onto an encrypted storage device. Grammatical errors and dialect were changed in transcriptions only where this was necessary to be understood, with the goal of remaining as true as possible to the participant’s speech.
Closed questions were used to start with in order to determine and confirm age, nationality, and occupation. Participants were asked how they would describe their dominant traits, with questions regarding challenges and solutions asked to ascertain examples of these traits indirectly. Questions were open because knowledge gathering was the purpose in this qualitative thesis. Closed questions were used sparingly when necessary and only when required to systematically quantify information.
The literature reviewed allowed the researcher to understand the predicament challenges and complexities that faced expatriates, and thus participants were asked about the expatriate selection and training processes, packages their organisations offered, repatriation programmes and how they felt at each different stage of expatriation (pre and post departure, mid-point, pre and post repatriation), as well as their feelings towards their organisation.
Questions were asked about their experiences of intercultural communication, success and
failures of the international assignment, and general thoughts on the subject of their
experience. Prompts and further questions were asked to explore interesting points and
anecdotes made by the participants to allow a wealth of knowledge to be collected.
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The thesis aimed to focus on expatriates to find out how organisations currently prepare their employees for expatriation; therefore random sampling was ineffective as this would not have suited the thesis’s research objective. Therefore, purposive sampling allowed the opportunity to approach participants who fitted accordingly with the objectives (Saunders et al., 2003). No industry or business was preferred, as all expatriates have to overcome the same obstacle of interacting in a new cultural environment (though the specifics of those obstacles may have been different for different participants). Each participant worked for a different organisation and once this organisation was in the data, the researcher did not accept any more participants from that specific organisation. This allowed for a greater variety of circumstances to be collected, rather than including several participants from the same company or same network. Participants were required to be less than thirty years of age to target a specific demographic which in this case was the younger generation of expatriates.
Three participants from a different generation of expatriates were included to accentuate the contrasts between the two generations and to highlight the need for this research to fill the gap in the literature.
Sample
Participant 1: English male, 24, Investment analyst
Worked for a UK-based financial with operations in China, and looked at other companies’ financial documents to supply his own company with a report. Studied abroad in the Netherlands and believed himself to be confident, a great communicator, and ambitious.
Participant 2: Danish male, 27, Media analytical director
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Worked for a Danish media firm where he analysed traffic in order to provide suggestions based on this data to his team. Undertook an exchange in Canada during school and has completed several international assignments to Ghana. Claimed he was an extravert and that he is curious when it comes to learning about other cultures.
Participant 3: German male, 59, International credit officer
Worked in a variety of countries including Mexico for three years, Indonesia for three years, and eight years in Thailand. Chosen because of technical competence and has been chosen because each assignment has been successful since. He believed himself to be well-organised and open-minded.
Participant 4: Dutch male, 23, Operations manager
Completed an assignment in Germany where he worked in procurement and supply chain. Studied abroad previously in Germany.
Participant 5: English male, 29, Minerals researcher
Researched minerals and evaluates their worth, was sent to the Netherlands for a period of several months to oversee a project. Believed himself to be an introvert and very studious.
Participant 6: Dutch female, 26, Recruitment consultant
Used a variety of resources to locate and place individuals in other jobs. Claimed she is positive thinking, independent, and loves to travel. Aruban born but studied and works in the Netherlands (Aruba is a Caribbean island but a constituent of the Kingdom of the Netherlands). Participant 6 has previously completed international internships in South Africa and Curacao.
Participant 7: English male, 24, Auditor
Worked for an international audit firm that conducts operations globally in the Netherlands. Previously studied in the Netherlands but aside from this has limited international experience. Described himself as very open- minded and willing to challenge his beliefs.
Participant 8: German male, 24, Marketing officer
Worked for a small marking company in Germany which has small offices across Europe only. Claimed he is an extravert and loves to travel.
28 Participant 9: German male, 58, Political consultant
Extensive international experience – two years in Latin American countries, studied in Mexico for doctorate dissertation, and has been a political consultant in Africa for nearly twenty-five years, responsible for over fifteen different countries.
Participant 10: German female, 28, Marketing director
Worked for a large global firm in their marketing department and is responsible for a team. Has little international experience aside from lots of travelling and believes herself to be non-judgemental.
Participant 11: German female, 24, HR manager
Completed a high school year in West Virginia and has studied in England for a period of a year. Worked in the UK for a large organisation.
Participant 12: Dutch male, 21, Corporate social responsibility officer
Studied abroad in Denmark and also ended up expatriating to Denmark. Works on a small team for corporate social responsibility.
Participant 13: English male, 25, Journalist
Worked as reporter for an online food ingredients website and had to relocate to the Netherlands. Has no international experience aside from travelling and claimed he was friendly and non-judgemental.
Participant 14: Finnish male, 24, Account manager
Worked for a large auditing firm with a global presence, and relocated to New York city for an international assignment. Previously studied in the Netherlands and believes himself to be adaptable.
Participant 15: Italian female, 23, Auditor
Worked for a large auditing firm with a global presence, and relocated to London for an international assignment. Previously studied in Germany and believed herself to always be looking for a new challenge and a way to improve herself.
Participant 16: German female, 21, Teacher
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Works for a large schooling company who placed her in a French school because of her language skills. Has no international experience and described herself as kind and ambitious.
Participant 17: Spanish female, 25, IT infrastructure manager
Worked for a large professional services firm with a global presence. Has studied in England for a period of a year and believed herself to be an achiever.
Participant 18: Dutch male, 23, Business advisor
Claimed to be very international orientated, and has studied in England for a period of a year and has completed an international assignment in Kenya with a large presence in the resources and minerals sector.
Participant 19: English male, 50, Reliability engineer
Extensive international experience and was sent by his company to instruct other teams using the same equipment how to use it effectively. Previous assignments have seen him go for a period of several weeks to Belgium, Spain, France, Switzerland, Germany, Malaysia, American, Italy, Malaysia, Japan, and others.
Worked for a global multinational manufacturer.
Participant 20: English female, 24, Charity worker
Worked for a large company specialising in aid resources and deployment, and has previously been to Africa and India on international assignments. Has no international experience apart from travelling.
3.4. Research criteria
Validity concerns the relationship of the findings with reality. Moreover, it seeks to examine if there is a causal link between two variables (Saunders et al., 2003), which in this thesis, the organisation and how it can influence the outcome of expatriation.
Generalisability is the extent to which the research findings can be applied to a larger
scope of the population by inferring from specific cases. The sample size is not in proportion
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to the demographics of the population because this is a qualitative thesis, and this decision allowed the range of nationalities and size of organisations to capture a vast array of problems and potential challenges. This is one of the strengths of the thesis as organisations can use this research to identify expatriate factors of success at all three levels and prepare appropriately and responsibly.
Reliability refers to the same and consistent results when the data is re-collected (Saunders, et al., 2003). This thesis is qualitative and included a wealth of nationalities and small start-ups to large MNCs. Therefore, the results are be reliable as expatriates face the same cultural challenges and there was no specific catchment meaning the range of results will prove reliable.
Participant bias is a threat to reliability. Some participants were in the researchers own network, so may have felt the urge to lie (though they were assured of complete anonymity unless in the unlikely event the thesis is used as evidence in a court of law). To negate this, participants were briefed before and after the interview clearly and concisely what the purpose of the interview was for, and they were made aware they could rescind their data at any point. The pre-briefing contained the types of questions and topics that the participants would be asked, and sensitive issues that were not going to be discussed or used in the data.
This meant that all participants knew what the aims of the thesis were and how they were
going to be achieved, and were asked if they were happy to proceed. Some participants were
from an extended network and as such, do not know the researcher and were not affected by
this urge to lie; however, they were extended the same treatment as other participants in the
interests of fairness.
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Observer error is another potential error but any misunderstandings were followed up on in the interviews immediately to ensure accuracy of interpretation through prompts and further questions.
4. Data Analysis
In this section the data will be analysed at the three levels of expatriation: the individual level, the organisational level, and the national level.
4.1. Individual level success factors
The first level that will be looked at will be the individual level – the expatriate’s mindset, previous experiences, and cultural competencies. From the literature this level is deemed important; however, without organisational support even the most adaptable and self- motivated individual can struggle. The literature focuses primarily on the concept of CQ (Early and Ang, 2003), the data will be analysed to see what forms an individual’s mindset and self-perceived skills, and how this knowledge can be used effectively.
4.1.1. Success factors in personality
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Certain and similar personality traits often kept occurring when participants answered how they would describe themselves, the most common being an openness to learning and the confidence to do this (Quotes 1, 3, 7, 10, 13, 14). Many of these traits were not said in words, but were evident in their answers as they explained how they decided to learn about the culture (self-motivation and motivational component of CQ), recognised cultural differences (cognitive component of CQ), and used this to act accordingly (behavioural component of CQ).
Self-motivation
Self-motivation is crucial when evaluating an individual’s likelihood of success in an alien environment.
Participant 14: Finnish male, 24, Account manager
“I would not be the same person without my experience abroad. It allowed me to take home all of the things I enjoyed in other cultures and make them my own... It was funny though, at my first business meeting, I had no clue about what was discussed at the table. Luckily I was able to pick up quickly on the advanced vocabulary by writing down notes and studying it on the job”
The creation of this identity means he is constantly learning new languages, cultures, as well as sports and music, and is adapting to whichever new cultural environment he is in.
The point in time were Participant 14 faces a problem in the meeting is critical – self-
motivation is a significant success factor at the individual level and he overcomes this
problem by addressing it appropriately, rather than admitting defeat. This was different in one
member of the older generation of expatriates:
33 Participant 19: English male, 50, Reliability engineer
“Most countries in Europe have a similar culture, however Asia has a very different culture. It was on my many visits to Malaysia that I discovered it was best not to try and understand their culture, but just to accept it for what it is”
A lack of cultural motivation (CQ) can be seen here and Participant 19 stopped attempting to understand the culture. Ergo, he could not adapt and become cross-culturally competent as he was not willing to take the effort to learn.
Emotional intelligence and openness
Less emotionally intelligent people did not register excellence. CQ takes emotional intelligence further and therefore it can be stipulated that those who do not have high emotional intelligence will not record high levels of CQ or adapt effectively. Mindset is part of one component of CQ and it can be hypothesised that participants who did not believe they were emotionally intelligent would lack this competency.
Participant 19: English male, 50, Reliability engineer
“I’m not very emotionally intelligent and sometimes find [international] assignments stressful... Once I politely refused to eat fish eye curry, it was exactly what it said on the tin! This may be a delicacy in Malaysia but not befitting for an English palette”
This lack of open-mindedness, whether conscious or unconscious, is why an
individual will not adapt to a new culture. Participant 19’s parochial mindset is evident and it
is clear that self-motivation and openness are factors of success at the individual level.
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It was found that participants who were open were often predisposed to success.
Regarding CQ, the head component determines the behavioural aspect, and as such those who described themselves in this way had successful international experiences. Therefore, how a person honestly describes themselves should be factored in pre-selecting candidates for expatriation. This finding is backed by McNulty and Tharanou’s research (2004) who argue that firms should consider picking individuals based on CQ.
Self-identity
The data revealed unquestionably that language affects self-identity and that some language skills are necessary to be able to perform the tasks expected, otherwise communication is very difficult (Quotes 1-18). Language gatekeeping (Peltokorpi, 2007) was a common situation among those who did not speak the native language. As language is a part of identity, a lack of these skills can make an individual feel like an outsider as they are not a member of the in-group.
It was very common of the young generation of expatriates to speak at least two languages, or to know the importance of learning other languages (Quotes 1-18). This can be seen in Participant 1’s experience:
Participant 1: English male, 24, Investment analyst
“Given that my co-workers often spoke in Chinese I couldn’t understand anything and I felt that I wasn’t valued. This made me question just how much use I actually was because I found that I couldn’t contribute and as I couldn’t contribute I couldn’t participate... I made my best efforts to learn and this had some success, but I realised I had come vastly unprepared not knowing any Mandarin”
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Participant 1 shows a learning loop as he realises the problem and actively attempts to engage this. He also demonstrates learning as he knows he has come unprepared and will take this into account on his next international assignment. This starkly contrasts to a member of the older generation:
Participant 19: English male, 50, Reliability engineer
“The biggest challenge is being understood in a different country as I don’t speak any other languages, just English. You learn to adapt and use sign language to order food and stuff... Although we speak a different language in another country, we all make product the same way, so we have a common understanding of the difficulties encountered in manufacturing this produce, and can share easily the various solutions to problems we have all tried... I’ve experienced this in foreign countries, where people who can all speak English, have chosen to have separate discussions in their native tongue. Therefore excluding you from the discussion, and on occasions when the foreign workers have been talking for over ten minutes, they summarise what they were discussing in one sentence... Sometimes it made me wonder why I’d been sent out to where I was because there was no point if I couldn’t understand what the hell they were talking about!”
It has never occurred to Participant 19 to undertake language training despite completing international assignments for several years and often in the same countries. The difference is because of the awareness in the younger generation of the rapidly globalising world who know that language is important for now and the future. Participant 19 has experienced many international assignments and completed his job in a satisfactory manner, but an increase in his language skills would only benefit his experience. Participant 1 acknowledged this and proactively started to learn Mandarin and admits that he had arrived unprepared.
Language is sometimes not essential to do a good job as seen by Participant 19, but Participant 17 (Quote 16) described the confident effect of fluent in a language and this shows that in order to excel with confidence one must be able to communicate competently.
This is a hugely significant finding as it relates to Peltokorpi’s Three Communication Zones
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theory (2010) that those who are able to permeate into two cultures can have an advantage in the global arena. Clearly, this shows that the necessity of language can be dependent on the occupation. Peltokorpi (2010) found that engineers gifted in their task domain were in a disadvantageous position due to their poor English skills. Participant 19 also explained how the primary focus is engineering, and if engineers are able to communicate the basics they can do the rest together – a sentiment echoed by Louhiala-Salminen et al. (2005) who assert that the job’s needs must be prioritised, not the language that they use to carry this out. In this sense, the job is emphasized and this takes priority. Concerning this attitude, organisations must consider language proficiency when pre-selecting candidates. It is necessary for basic competency with a few exceptions, but more importantly, a high fluency in language skills would allow the candidate to excel at their job with high confidence. This decision is the responsibility of the organisation.
Receptivity was found to be increased in when participants made an effort to communicate in the native language (Quotes 1, 3, 7, 13-15). This shows that rapport and trust-building can occur when an outsider makes an effort. Language also affects perceptions of identity, as can be seen from Participant 6 who remarked with amusement:
Participant 6: Dutch female, 26, Recruitment consultant
“In the Netherlands, for instance, although I am Dutch and I speak fluent Dutch, I still have an
‘accent’ (Participant 6 lives in Aruba in the Caribbean, which is part of the Kingdom of the Netherlands and as such she is a Dutch citizen with Dutch the official language), thus I do not sound like a native, and therefore in some cases people, mostly shopkeepers, tend to think that I do not understand the language. Thus, because my accent sounds different they would just switch over in English because they are plainly assuming that I am not fully able to speak and understand Dutch. It was funny because students and classmates were impressed that my Dutch was so fluent, mostly because people tend to not know that an Aruban born person is actually Dutch”
