Introduction to Expatriate
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The era of globalization has reinstated the importance of the human resources management (HRM) in playing a significant role to help business organizations achieving a global core competency. Given the importance, there have been voluminous studies and researches conducted in the area of international human resource management (IHRM). Those studies were conducted mainly to understand the human resource practices in an international context and how it can affect the organizations.
Despite the subject has attracted a lot of interest for the past few years, there is still much room for better understanding of successful HRM practices in an international context (Mendenhall and Oddou, 1991; Dowling et. al., 1994). One of the most common and important parts of IHRM literature relates to expatriation (Suutari and Brewster, 2001). There have been a lot of studies done in the area, which include the recruitment and selection criteria (Lanier, 1979; Tung, 1981, 1982; Zeira and Banai, 1984), the adjustment issues (Black and Stephen, 1989; Black et. al., 1991; Brewster, 1993; Suutari and Brewster, 1998), Training (Tung, 1982; Black and Mendenhall, 1990; Brewster, 1991; Suutari and Brewster, 1998) and Repatriation (Harvey, 1989; Grehersen, 1995; Pickard and Brewster, 1995) among others.
The area of expatriation is very crucial, especially for all the organizations that operate internationally. The successful implementation of international and global strategies depends on getting the right people with the right skills, at right time, which typically requires the movement of people across the border (Adler and Bartholomew, 1992; Porter, 1990). Since organizations with international business operations need a work force that is available for international assignments, international firms regard it as a strategic imperative to try to develop internationally mobile expatriates, especially expatriate managers (Downes and Thomas, 1997; Shackleton and Newell, 1997; Selmer, 1999)The studies on expatriation also have highlighted the significant impact it has to organizations.
The practice of expatriation is very costly for any organizations that implement it. For a start, it has been reported that this group of employee represent a major investment for multinational corporations (MNCs). According to a study by Wederspahn (1992), the estimation of the first-year costs of sending expatriates on foreign assignment are at least three times the base salaries of their domestic counterparts. The figure is considered well spent if the assignments succeed. However, in the case of failures the lost will be staggering. And subsequently those failures will affect both expatriates and the organizations. It will be much worst, if the reputation of the organization is at stake (Zeira and Banai, 1984).
According to Bodur and Yavas (1999), finding the right people for these assignments and making them stay there for the duration of their assignments, however, are challenging tasks. This is because expatriates working in a foreign environment with very different political, cultural and economic conditions often face both job-related and personal problems (Birdseye and Hills, 1995). If ignored, these problems result in stress and dissatisfaction inside and outside of an expatriate’s professional life and may lead to turnover. Hence, it is very important to select and assign the right people with relevant competencies and characteristics as well as monitoring the factors and elements that can influence their performance for international assignment in order to ensure the success of the foreign assignments.
Another reason of why IHRM is an important area to study is due to the fact that different people from different part of the world will act differently. This is due to the different in political, socio-culture and economical factors that influenced the behavior. A study by Tung (1982) has shown in her findings the different views of Japanese and American expatriates in determining factors that can influence expatriate failure rate. And according to Suutari and Brewster (2001), the ability of a person to be successful in one environment does not necessarily imply that the person will be successful in all circumstance.
In Malaysian context, IHRM has also becoming more and more important as Malaysia has been involved in the international business extensively for the past decades. International trade has been synonymously linked with Malaysia for many years. It has contributed to the substantial growth and prosperity of Malaysian economy. This can be traced back in the mid 1980s where there was a significant inflow of foreign direct investment (FDI) into the country that has spurred the economics growth. The FDIs that worth billions US dollars have contributed 15 percent of fixed capital formation between 1987 to 1997 in Malaysia and it also has contributed 18 percent growth to the economy in the same period (Fan and Dickie, 2000). Malaysia global trade also has tripled in the last decade, from RM158 billion in 1990 to RM570 billion in 1999 . This has shown that international trade has been very important to Malaysia. In addition to that, the number of Malaysian owned companies operating at international level also have increased. Few of Malaysian companies like Petronas, Telekom and Proton have had foreign subsidiaries. Thus, the scenario has indicated that the IHRM has becoming more and more important in Malaysian context.
In addition, growing numbers of foreign companies had hired Malaysian for international assignment and the same goes for Malaysian multinationals. There is a need for a study in identifying the right characteristics and competencies that an effective expatriate should possessed, particularly in the context of Malaysian. This is because, given the numerous lists of the traits and skills needed for a successful overseas posting from previous study on foreign expatriates, the perception might be different for Malaysian expatriates. Thus it is necessary to identify the right traits and competencies that can best suit Malaysian expatriate.
EXPATRIATE’S TRAITS AND COMPETENCIESVarious studies have been conducted to identify the right traits and competencies for expatriate to be successful in their assignment. The researches on this area usually relates to the selection and recruitment process of the expatriates, in which, criterion for the decision were identified. Much of the early works on expatriation were concerned with this issue. This is because, scholars had identified that one of the main reasons put forward for a purported high failure rate among expatriate employees are the ‘inadequate’ selection criteria used by many MNCs (Adler, 1986; Black and Mendenhall, 1990; Dumaine, 1995)The identification of the right candidate is very crucial, particularly in avoiding the failure, as expatriation practice can be risky to the organizations. This is due to:i.Expatriation is a costly practiceii.
Adaptation to any new task or job in a new environment is a difficult task, and not everyone is successful at that (Selmer, 1999)iii.Human and financial costs of failure in international business arena are considerably more severe than in domestic business (Dowling and Schuler, 1990; Forster, 1997)iv.Many companies have underestimate the complex nature of HRM problems involved in international operations and that business failures in the international arena may often linked to poor management of expatriates (Tung, 1984; Brewster and Scullion, 1997)(Suutari and Brewster, 2001)Given of the importance for having to know the right traits and skills in selecting the most suitable candidate for overseas assignment, a lot of researches have been done on the issue.
Baliga and Baker (1985) has identified a few selection criteria that include the employee’s technical skills, empathy managerial skills, sense of mission, political awareness, language skills, cultural sensitivity, ability to work with local nationals, good judgement, creativity, responsibility, alertness, initiative, self-confidence and willingness to change. Gertsen (1992), in a review of the literature on inter-cultural competence, found that researchers have put forward a whole range of different personality traits that the international employee ‘should’ possess in order to successfully complete a foreign assignment. These include empathy, openness, flexibility, tolerance, self-confidence, optimism, independence, good communication skills, initiative and intelligence.
In most of the literature discussing the characteristics of expatriate, the competencies always being combined with the personal attributes required in order to ensure the successful performance. As Heller (1980) puts it:…a flexible personality, with broad intellectual horizons, attitudinal values of cultural empathy, general friendliness, patience and prudence, impeccable educational and professional (or technical) credentials- all topped off with immaculate health, creative resourcefulness, and respect for peers. If the family is equally well endowed, all the better.
According to Jordan and Cartwright (1998), for an expatriate to be successful, they are expected to have following personal attributes:Openness to ExperienceIt is seems that this characteristic to be a constant recurring personality variable that is positively linked to successful performance in an international environment. The importance of this characteristic is to have the broadmindedness in accepting the differences between people so that ones can appreciate cultural and work environment differences. Borrman (1968) described adaptability, cultural empathy and emotional stability as critical factor for success.
ExtroversionIt refers to the tendency to experience positive emotions and moods and to feel good about oneself and the rest of the world. It is included in the big five personality traits. Extrovert managers usually tend to be sociable, affectionate, outgoing and friendly. Hence, they are most likely to be successful in managing in foreign countries. This is supported by the study on Canadian expatriates by Hawes and Kealey (1981) which showed that the overall single most consistent predictor of adjustment in expatriates was interpersonal skills. It is made up of; a respect for others, listening skills, relation building and sensitivity to the host country issues, a constellation that is indicative of participative warm-hearted usually associated with extroversion. Another reason why extroversion is important in foreign assignment is based on the finding by Mendenhall et. al. (1987) that proposed competencies for dealing with the relational aspect of expatriation include a “willingness to communicate”, suggesting a social boldness typically found in extroverts.
Low Anxiety/ NeuroticismFurnham (1990) has characterized expatriation by high level of stress as individuals move through the process of relocation and culture shock. Terminology given by Krug and John (1986) has outlined the composite personality profile that necessary for successful performance in high-risk and stressful occupations. According to them, the composite profile would represent a pattern of moderate extroversion, low anxiety, high tough poise and moderate independence;……emotional stability may be considered as the ability to withstand and recover from “short, sharp shocks” and it may be viewed as the inverse neuroticism. A stable person is able to cope with distractions, is rarely lethargic and lacking in energy.
Therefore it is very important for the future expatriates to have low (traits) anxiety in order for them to manage effectively.
Besides those traits, another two widely mentioned attributes are self-confidence and flexibility (Gertsen, 1992; Black, et. al., 1991). And out of those traits, extroversion, self confidence and openness to experience have been constantly ranked high in few studies (Hays, 1974; Sieveking et. al., 1981; Tung, 1981)Apart from the personal attributes that have been discussed, the expatriates also are expected to have several competencies to ensure their successful performance. In the international environment it is difficult to specify competencies for each job, and for each geographical region of the globe, makes it impossible not to rely on core competencies in the selection of the international managers.
As with personality variables, the multitude of existing competencies are characterized by minor semantic differences of a much smaller number of core competencies that would deliver successful behavior in an international environment over and above those that would normally be included in organizationally specific selection decisions. In determining the competency criteria, Jordan and Cartwright (1998) has outlined four important competencies that expatriates should have:Relational AbilitiesIt refer to the one’s ability to interact with host country nationals, managing first impressions, active listening and maintaining a positive regard for other circumstances that are outside one’s own experience are considered crucial by practitioners. (Coyle and Shorthand, 1992).
In expatriation, success can be defined as successful cultural adjustment that leads to personal growth as much as it can be defined as high performance at work. (Jordan and Cartwright, 1998)Cultural SensitivityThis is also another critical competence that needs to be seriously considered by the expatriates. Since the expatriate manager will be managing in environment with totally different cultures (in most of the cases), their sensitivity and understanding of the culture is important for them to managing effectively. And according to Bochner (1981), effective multi-cultural performance abroad is achieved by being able to switch effectively into whichever host culture one is in.
Linguistic AbilityLinguistic ability is perhaps a competence that is automatically accepted as critical for success at least on an intuitive level. This linguistic ability is important in order to establish multicultural communicative competence. Even though English has been established as the language for international business, however, there is need for conversing in foreign language in order to understand better the culture of the non-English speaking trade partners.
Ability to Handle StressRecent developments within the expatriate literature (Furnham, 1990) confirm earlier indications of the prevalence of stress both during pre-departure and during the transition period of acculturation. This overwhelming indication is that a worrying prevalence of stress outcomes result from working abroad, providing conclusive evidence for the inclusion of a further competence of the expatriate managers- an ability to handle stress. This is basically interrelated with the character of low anxiety and neuroticism.
The four competencies outlined above are basically the minimum criteria that should be included in assessing for suitable candidates to go for international assignment. Obviously, there are other competencies that can influence whether the expatriate will be successful or not in their assignments. And one of the most prominent ones that consistently appeared in findings of many researches was the work competency. These work competency elements include the technical skill, management skill and learning skill (Tung, 1981, 1982; Zeira and Banai, 1984, 1985).
In a research that conducted by Suutari and Brewster (2001), they have found out that, in accordance to previous studies, the important competencies that used as selection criteria of expatriates were ranked based on their importance as follows:i.Work related competenceii.Language skillsiii.Relational skilliv.Cultural sensitivityGiven the importance of the outcome from those studies, it was definitely assisting global HR managers in recruiting the right person for expatriation task. However, this might not be the case since most of these studies have been carried out in the western world, by looking at the MNCs that come from developed countries like US and UK (Suutari and Brewster, 2001). Hence, it is questionable how far the lessons learnt may apply elsewhere. The point has been supported with the study done by Suutari and Brewster (2001) on Finnish expatriates, which has identified a slight different in the finding compared to the earlier work in US and UK. Other than that, Tung (1981, 1982) also has identified the different view of American and Japanese expatriate manager on the reason of expatriate failures.
Considering those probable differences and supported by the fact that there has been lack of literature in this region (Asia), thus this study is seemed important in identifying the differences and bridging the gap of literature.
THE STUDYThe purpose of the study is to find the answers on what it takes to be successful in overseas posting. The emphasis is to look at the right traits and competencies that an expatriate should possess in order to be successful in their foreign assignments. The study is important since it will look at the issue from Malaysian point of view. Thus, one of the most important objectives is to look at the applicability of previous studies that have been conducted in other countries to Malaysian context. Besides, the study also tries to identify the qualities and competencies needed for a successful overseas assignment perceived by Malaysian expatriates.
In this study, personal interviews as well as questionnaires were employed as primary data search tools. The framework of previous studies have been adopted in looking at the main characteristics and competencies need for successful overseas posting. At the initial stage, after the theoretical background of the study has been gathered from the secondary data search, a few interviews were conducted with two human resource (HR) executives and one expatriate. The reason was to see the relevance of the issues surveyed in Malaysian context. It was also adopted to fine-tune the subject under study. At this stage, the interviews were conducted using open-ended questions. This is to prevent the respondents to be influenced by existing findings from other literature. The questionnaires then were reconstructed into close-ended version and it was tested with two more expatriates. This pilot study was to look at the relevancy of the questions and the clarity of the question instructions.
The second stage of primary data collection involved the distributions of questionnaires that have been constructed based on the interviews and pilot study. The survey questionnaires were then sent to the HR managers of selected MNCs and other organizations that have expatriate staffs. The companies’ chosen were local MNCs and the selection was based on non-probability judgment sampling. The purposive sampling also has been adopted since it helps in locating the right sampling frame for the purpose of the study. This is due to the fact that not every company employs expatriates in their organization.
The sampling unit of this study consists of the Malaysian expatriates that were expected to have at least one year of international experience to be qualified and being accepted as respondentsTHE FINDINGSA total of 105 questionnaires have been distributed to the selected respondents. Out of the total number, only 35 questionnaires were returned back. However, one respond was invalid, since HR executive has filled it up. Therefore the total returned questionnaires that can be used were 34, which made up 32 percent from the total sample.
In earlier study, traits or personality has been considered as an important factor that can influence a performance in foreign assignment (Harris, 1973). It was even considered to be more important than the technical competence. Scholars like Hays (1974), Tung (1981), Mischel (1984), Baliga and Baker (1985) and Gertsen (1992) have identified various kind of personalities or traits that purportedly ideal for an expatriate. Out of those traits, extroversion, self-confidence and openness to experience have been constantly ranked high in number of studies (Hays, 1974; Sieveking et. al., 1981; Tung, 1981).
Table 1: The Perceived Traits That Should Be Possessed By An ExpatriateRankTraitsMean1Self-confidence4.822Flexibility4.473Openness to experience4.444Low anxiety3.855Extroversion3.74In the case of Malaysian expatriates, the results in table 1 showed that, self-confidence (mean: 4.82) has been perceived as the most important trait that an expatriate should have to be successful. It followed by flexibility and openness to experience. What is interesting about this finding is that Malaysian respondents have considered extroversion, unlike previous findings that consistently rated it as one of the most important traits, less important.
The different view on extroversion may be due the different culture, norm and behavior of Malaysian in general, compared to the westerners, where the previous studies were based on. This was supported by the Tung (1981) in her study, where she suggested that extroversion is more important in some cultures than the others. And from the finding, it is quite obvious, based on the perception of this group of respondents, extroversion is not perceived important in Malaysian culture.
The idea of being more introverts to be successful in expatriation job also being shared by Eysenck (1967) and Smith (1989). According to them, introvert person would be more tune with the environment and consequently more aware of changing environment s than the extrovert. Thus, they will be more alert and adaptable to the different surrounding. Hence, that explained why they have rated flexibility as the second important trait in their view.
Nevertheless, there have no other findings on the matter in the Asian region to be compared and to derive into generalization. Therefore, the idea of Asian expatriates is more introvert is not justifiable unless further studies being conducted.
One of the reasons on why Malaysian expatriates perceived that work related skills were the most important criteria was because; the reason that they were sent for the overseas assignments was due to the lack of management and technical skills in the host countries. Thus it is very important for them to be equipped with the work related skills in order for them to run the foreign tasks smoothly.
Ability to handle stress also rated high in its importance by the Malaysian expatriates (mean of 4.41). This is due to the fact that, working and living in new environments can be a stressful experience for the expatriates. If the expatriates succumb to the problems and burden that they might face in the new environments they might fail in their assignments. According to Coyle and Shortland (1992), the ability to handle stress has become important since there were overwhelming indications from previous studies (Torbiorn, 1982 and Frnham, 1990) that there is a worrying prevalence of stress outcomes result from working abroad. Among the inevitable stress that the expatriates were expected to face usually related to culture shock and the mundane hassles of everyday expatriate life.
Another important skill perceived by the respondents was the relational ability. According to one of the expatriates that have been interviewed, he has pointed out that, relational skill is very important for expatriates to be accepted by the local society. By having a good rapport with the locals, the expatriates also can gain respect from them. This is very crucial for the foreign assignments to be successful, especially for tasks that need teamwork to achieve it.
In conclusion, conforming to other findings, Malaysian expatriates that had been surveyed, perceived that work related competence as the most crucial skills that need to be possessed in order for them to be successful.
SUMMARYBased on the analyses that have been made, it is quite obvious that Malaysian expatriates were more concerned about their work related issues when dealing with expatriation issues. These include the perceived most important skills needed to be successful, factors that can influence expatriate performance and the problems that commonly faced by them.
The results also suggest that, previous studies did have some applicability to Malaysian scenario despite the uniqueness that Malaysia has. As Levy-Leboyer (1994);”Although models used for selection of expatriates vary with the nationality of the organization, the core concepts have centered on functional capabilities and personal characteristics of potential candidates”Nevertheless, the outcome also has highlight the different perception of Malaysian expatriate on the traits needed in order to be successful. Unlike previous studies, the respondents in this study have not rated extroversion, as one of the most important traits should be possessed by expatriates to be successful.
Besides, there were also some similarities regarding the views of Malaysian and their Asian counterpart (Japanese) on the reasons for expatriate failure. This similarity has enabled some generalization to be made. However it would not be valid until being justified by another follow up studies.
RECOMMENDATIONS AND SUGGESTIONS FOR FUTURE RESEARCHESBased on the limitations that have been found in the study, a few recommendations are presented to improve the findings and its representation for generalization. It is suggested that;1.Further study should be done with larger sample, so that the findings will be more valid and enable for generalization to be made.
2.Future study should take into account the different countries that the expatriates being assigned to. This is due to the possible hypothesis, saying that the expatriate’s perception on the traits and skills needed will depend on which countries that they were assigned to.
Apart from that, other suggestions would include,1.The role of training as a determinant of successful expatriation exercise should be further studied, especially looking at Malaysian context.
2.As it has been identified that there were several traits and skills that expatriates should have to be successful and it was presumed that those traits and skills have a predictive power on the success of expatriates’ performance. Nevertheless the empirical research to fully support this position is somewhat lacking (Harvey and Novicevic, 2001). Hence, additional study must be conducted to look at the linkage of those traits and skills to the performance.
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