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Expatriates Effects on Job Performance

Info: 5255 words (21 pages) Example Literature Review
Published: 6th Dec 2019

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Tagged: Employment

2.0 Introduction

Business’ today have opportunities to compete globally than ever before due to the rise and influence of free trade agreements such as North-American Free Trade Agreement (NAFTA) that does not only eliminate barriers for goods and services across borders but also know-how and the mobility of factors of production which includes expatriates among member countries. In conjunction, globalisation calls attention for an increasing need of expatriates so as companies that have established their firms in other parts of the world through joint venture, foreign direct investment, and what note could be managed, coordinated and controlled effectively as in the home country. In addition, transferring knowledge, ability and skills across units due to the host country experiencing shortage of labour or less qualified candidates is also a reason to an increase of expatriates, for instance, in China where they face the problem of shortage of labor due to the above reasons, they offer attractive contracts to expatriates due to their special skills (Peris et al., 2006).

An individual in Malaysia owning products made from Korea, China or Middle East is the simplest form of explanation of globalisation. However, many have attempted to define globalisation, nevertheless according to Hill (2009, p.6) ‘globalization refers to the shift towards a more integrated and interdependent world economy’.

People from different cultural background differ in business conducts and as claimed by Plum et al., (2008) cited in Karma and Vedina (2009), often most people face problems in adjusting their business conducts in international assignments since they take their culture practices as approved and a natural and right way to behave and think without taking into consideration the existence of cultural differences. Hence, the challenge arises among multinational co-operation in managing cultural diversity in which it is highly important for an expatriate to be able to work beyond their cultural boundaries and adjust or tolerate cultural differences in host countries cultural or organisational practices. Expatriates are defined as employees who are working and temporarily residing in a foreign location (Simeon and Fujiu, 2000).

As globalisation is being widely accepted and practised, it is practically inevitable. For this reason, the purpose of this study is to critically analyse the possible factors that contribute to the success and failure of expatriates in performing international assignments and its impact to their performance. Moreover, the importance of cultural intelligence (CQ) as a key success factor in the global business environment.

Cultural issues are increasing becoming important due to the fact that it partially determine the success of conducting business internationally due to the interaction of diverse people. The above claim is further supported by Rose and Subramaniam (2008) that cultural intelligence role is highly significant in predicting the cross cultural performance of expatriates and CQ is basically defined as ‘a person’s capability to adapt effectively to new cultural contexts’.

According to Avril and Magnini (2007) failure of expatriates can cost organisation to incur both direct and indirect costs, where by direct costs include remuneration package of the expatriate, relocation and compensation of the expatriate’s replacement and for indirect cost; unstable corporate image and misguided employees and so on. The above authors further added that the term failure of expatriates can generally mean that an expatriate have adjustment problems, low performance or ended an international assignment before the contract expired.

Research objective

The main purpose of this research paper is

  • To critically examine whether there is a direct relationship between cultural intelligence and the success of expatriate’s in international assignments
  • To assess the significant reasons which results to the success and failure of expatriates
  • To evaluate the impact of the success and failure of an expatriates job performance
  • To analyse the importance of CQ.

In a pace of globalisation and several individuals’ high degree of interest and initiative to study this particular subject which is new to a certain extent and rapidly growing, an increasing number of expatriate’s worldwide and a huge number of failure of expatriates, it is worth studying to acknowledge the potential role of cultural intelligence in cross cultural context. This paper theoretically explores the significance of expatriates characterised with CQ and it is highly contributed with familiar secondary data in a new method.

4.0 Research Questions

Does CQ play a significant role to the success of expatriates?

Does tolerance of cultural diversity play an importance to the success of expatriates?

Can a well managed cultural diversity lead to the success of expatriates?

Is there are link between expatriates spouse or family`s inability to adjust and expatriates performance?

5.0 Hypothesis

There is a correlation between the expatriates and spouse or family adjustment to the host country.

The reason for failure of expatriates is the variance between the culture of expatriates and the host country.

There is a positive impact between CQ and the success of expatriates.

6.0 Theoretical framework







Literature review

As reported by Sims and Schraeder (2004) cited in Pires et al., (2006), 16 to 70 per cent of expatriate’s assignments have a probability to fail, in addition, according to (Shay and Tracy, 1997) Cited in Luthans and Farner (2002) failure rates are between 25 to 40 per cent when expatriates are assigned to developed countries and 70 per cent when expatriates are sent on international assignments to still-developing countries. In the contrary, Harzing and Christensen (2004) argue that the failure rates are not as high as they are predicted to be. Many have attempted to analyse the reasons behind the above reported percentage of failure rates and the factors that contribute to the success of other expatriates hence, the following report will examine the factors that influence the success, failure and ways to overcome the failure of expatriates.

Factors that contribute to the success of expatriate

Selection Process

Before an organisation selects a candidate for an international assignment, it is critical to analyse the candidates resume. According to Peterson (2002), the level of language fluency that the candidate has with the host country is an important element, without the candidate being able to communicate and express him or herself clearly and effectively with the new and different staff; it is unlikely for the work to be delegated and communicated successfully.

Moreover, Tye and Chen (2005) added that international experience and technical competency can also be determined in a resume. International experience technically trains an individual to inhabit the ability to generate suitable strategies in order to easily adapt in unfamiliar environment or situation and diverse people in which it is highly needed for an expatriate. In addition, if the resume includes that the examined candidate has specific skills to perform a task which the particular expatriate is required to carry out, it informs that the individual has technical competency in which it will build up the confidence that the expatriate has a potential to succeed.


Apart from the above, resume`s can only help to a certain extent in screening out unqualified candidates, however, examining personality as a factor that plays part in determining the success of an expatriate is necessary. Avril and Magnini (2007) claims that an applicant needs the following personal characteristics to succeed in the international assignment; the ability to adapt to different norms and modes of behaviour, high tolerance of ambiguity which usually results to stress if it cannot be controlled, communicativeness and emotional intelligence and so on. Such personal characteristics can be accessed through behaviour interviewing by hypothetical scenario`s and past behaviour questions.

However, on the other hand, Holopainen and Bjorkman (2005) further argued that it is practically normal for an individual to experience stress due to the environmental changes which eventually provoke stress factors such as ambiguity however, through their findings, they have concluded that high tolerance of ambiguity does not have a direct relation to the success of expatriates but communicativeness is necessary since the expatriate can communicate and express him/herself clearly. Research by Kumar et al., (2008) further supports by stating that ‘Expatriate personality has significant influence on job performance’


Goal orientation theory (Dweck, 1986; Dweck & Leggett, 1988) cited in Gong and Fan (2006) has been claimed to have provided a set of categorized system which points out the strength and weaknesses of individuals goal differences by differentiating there characters when faced with a set back by either a learning or performance orientation.

Focusing on learning oriented individual, an expatriate who is characterized as a learning oriented individual tends to attribute failure as his or her less inefficient strategies and foresee that increase effort will lead to success, in addition, he/she experiences less stress by perceiving feedback as suggestion in improving and not as criticism and lastly but the least, he/she continues to pursue challenging goals, implement different strategies and persist in improving the outcome of the failed task (Dweck, 1986) cited in Gong and Fan (2006). Therefore, such an individual experience less stress, frustration and anxiety which leads to a competent expatriate targeting in succeeding the assigned international assignment which will eventually reflect to his/her job performance.

Driving factors of expatriates failure and possible strategies to conquer expatriates failure.

In ability of spouse to adjust

An expatriate needs to spend ample of time at work to adjust and understand the business conducts of the new environment and his/her overall responsibilities while the family particularly the spouse who use to also busy with his/her career before being posted to another country is home alone with no friends or family and even if the spouse decides to tour around the new place, he/she has no clue concerning the direction plus he or she experiences language barrier and so on.

As a result, spouse fails to settle which eventually stresses up the expatriate and finally, it will directly affect the expatriate’s job performance. According to Webb and Wright (1996), many companies avoid confronting the issue of family during the selection of expatriates however; he further argued that if the expatriate’s family smoothly adjusts to the host country, it greatly enhances the expatriates productivity, morale and performance.

However, the spouse can be helped to adjust in the new environment to avoid the cost that might lead to failure of expatriates by helping the potential expatriates in searching for a job opportunity for the spouse so as to avoid the loneliness and the consequences of the spouse not being able to adjust. Moore (2002) claims that 52 per cent of dual-career expatriates found adjusting to life overseas easy compare to 55 per cent of single expatriates. With that being said, Black and Gregersen (1991) argue that the adjustment of the expatriates spouse is critical determinant of whether or not the expatriate can complete and perform in the foreign assignment cited in Selmer and Leung (2003).

Lack of training

Training expatriates and their family members seems to be a logical strategy by many Multinational companies which post their employees to other countries; nevertheless, according to Forster (2000), training specifically pre-departure training and cross-cultural briefings are now widely accepted by both academic researchers and human resources practitioners, as it helps expatriates to adapt to the living and working conditions of the new environments, moreover Tung (1981) identifies five different training programs namely; didactic training, culture assimilator, language training, sensitivity training and field experience as cited in Waxin and Panaccio (2005). While Hurn (2007), adds up other forms of pre-departure training such as cross-cultural awareness, specific country/region briefing, business etiquette and procedures, international negotiating skills, and repatriation. Tung (1981) further suggests that the training method should be chosen according to the type of assignment and should be contingent to two determinant factors, in the contrary Black et al. (1992) suggests that the method of training should be conducted according to the role and function of the expatriate cited in Waxin and Panaccio (2005).

Therefore, without pre-training it is difficult for an expatriate to be able to adjust well in a short period of time as also claimed by Black (1988) who further states that the experience of a prior exposure of expatriates lowers the difficulties related to work adjustment, but not those related to general adjustment. On the contrary, Parker and McEvoy (1993) argue against Black by saying that prior international experience or exposure is significantly correlated only with general adjustment and not work adjustment as cited in Waxin and Panaccio (2005).

In conclusion, Pre-departure training ensures that the expatriate encounters fewer difficulties and is prepared for the worst when abroad which will avoid a poor performance due to the inability to adjust to the new environment in a short period of time. Additionally, organizations should ensure that expatriates are well informed of the environmental surroundings, their roles and responsibilities so as to avoid shock or role conflict respectively and they should also be given regular feedback regarding their performance so that the expatriate has the opportunity to improve.

Financial problems

Moving to a new place ignoring the difficulties of adjusting to a new working environment, expatriates have to deal with particulars and pressures that might results to stress and frustrations in which they include disposing or renting their house, cars and all their belongings in their home country and purchasing or renting a house and car in the posted country. Initially, it involves a lump sum of financial burden especially when the cost of living in the home country is less compared to the host country as the expatriate has to bear more living expenses compared to the current/past expenses.

Besides, the real financial problems arise when the spouse of the expatriate fails to get a job at the posted country especially for dual-career couples, the loss of income for one of the couples may downgrade the living standard and life style of the expatriate’s family (Selmer and Leung, 2003). In addition, the authors further claim that most of the time expatriates accept the job offer with the hope that their spouse will also be able to find a job at the posted country. Unfortunately, according to Harvey (1995) approximately 20-25 per cent of expatriate’s spouses fail to get jobs in the host location which may lead them to experience a loss of power, identity and self worth (Ammons et al., 1982) which will directly impact the expatriates job performance due to the ongoing of unemployment stress from the spouse Harvey (1995) cited in Selmer and Leung (2003).

With the above claim made by Harvey (1995), Pellico and Stroh (1997) states that reasons of unemployment of the spouse could be due to the following reasons; failure to get a work permit or visa and if such strict obstacles exists, language barrier, lack of suitable jobs or even unrecognised education credentials cited in Selmer and Leung (2003).

Therefore, companies that decide to employ expatriates, they should consider assisting them financially by providing household, transportation, employment opportunities to the spouse and lastly but not the least health coverage so as to ease the financial stress of moving to new environment.

Lack of support during the assignment

Organisation mostly think they are only obliged to prepare programs in preparing the expatriate for an international assignment which include cross cultural knowledge and the expatriates overall responsibility while overlooking the importance of an ongoing long run programs that help expatriate to adjust and increase performance. According to Avril and Magnini (2007) there are three stages in training which are, training in the home country, training upon arrival in the host country and real time training. All the above training programs are equally important for the success of an expatriate and not just the first two training programs.

Furthermore, according to Yavas and Bodur (1999), expatriates report to feel abandon by the home firm when they reach to the posted location as they were no longer included in the business communication of the company.

With the above situation, firms should provide a helping hand to an expatriate apart from cross-cultural adjustment programs so as to encourage communication of the expatriate to its respective firm in order to overcome any unsatisfied issue, Webb and Wright (1996), further support that in order to develop an adequate process for discussion of problems and future plans, the respective firms should ensure that there is regular communication between their workers.

Cross-cultural Inability to adjust in a cross-cultural environment

Hofstede (2001, p. 9) cited in Stedham and Yamamura (2004) defined culture as ‘the collective programming of the mind that distinguishes the members of one group or category of people from another’, all too often multinationals see that cultural diversity within their operations as an area of difficulty rather than as an opportunity to build competitive advantage (Higgs, 1996) however, cultural diversity is inevitable due to the existence of globalisation and often cultures can clash when individuals place themselves on opposite ends of an issue (Estienne, 1997).

Managing people from different cultures is quite challenging as compared to a mono-cultural society. Cultural shock is often used as an excuse when an expatriate fails to complete the assigned international assignment (Newman et al., 1978) but many who successfully stay until completion also report according to (Cavusgil et al., 1992) that they struggle with cross cultural adjustment and at times leading to operate at a low capacity as cited in Jassawalla et al., (2004). Hence, the above claims results to lowered return on investment for the firm, and lowered self-esteem and slower career development for the expatriate which could be related due to the differences in culture, language, living conditions, uprooting spouses and families, and working harmoniously with co-workers with different cultural backgrounds (Yavas and Bodur, 1999).

Jassawalla et al., (2004) state that interpersonal conflict contributes to cross-cultural adaptation which is the difference in perceptions, norms, and practices. Focusing on the difference of perception mainly time, urgency, and implementation, American expatriates undergo frustrations when dealing with the Germans and United Kingdom as Americans are accustomed to working toward project deadlines, without much regard to the hours they devote and they are willing to start early and work well into the night to complete projects and expect others to do the same, while German`s and United kingdom’s business conducts take a length period of time for new ideas to gain acceptance, and for new policies to take effect in corporate.

Therefore, lack of cultural intelligence creates misunderstanding which ultimately leads to conflict between the expatriate and his/her new stuff or co-workers. Without cross-cultural intelligence, parties will habitually work and focus on different mission and vision of the organization hence defeating the noble ends of business. Plus ignoring and judging one’s culture may be a risk as humans appreciate to be treated with respect hence it may lead to failure and the inability for an expatriate to adjust in the new environment. Therefore, expatriates should try and ease the issues that may arise by treating the employees fairly without judging their culture. And as according to Gabel et al. (2005), expatriate failure may occur if there is an inability to adapt to the culture and norms of the host country due to low performance.

Cultural sensitivity

As globalisation open doors to invest worldwide, it is a necessity to have a work force that is confident in international arena (Selmer, 2004) hence, an expatriate is expected to be sensitive to cultural diversity (katrinli and Penbek, 2010). Intercultural sensitivity is defined as the ‘ability to reach the level of dual identity and enjoy the differences and attempting to defend their own world views, and moving to emphatic ability to accept and adapt cultural difference’ Chen and Starosta (2000).

Therefore, when an expatriate is non judgemental and open minded by accepting, respecting and understanding the cultural conduct of the host country, it simplifies the adjustment to the new environment. With such an attitude, an expatriate avoids being isolated with the people of the host country and as according to Aycan et al., 2007 isolation can trigger decrease efficiency, job satisfaction, motivation and performance which will eventually lead to the failure of the expatriate as cited in (katrinli and Penbek, 2010).

Therefore, apart from an expatriate being unable to understand the posted countries language, there is also a need to become accustomed with the hosted locations culture and practices.

An expatriate can be exposed in different training courses to overcome to ease the ability to adjust in different culture norms and practices as it will not only affect the expatriate job performance but the organization as a whole.

Research Design

8.0.1 Philosophy

This research proposal is an explanatory study as it critically analyses the core relationship between CQ and the success of expatriates; an explanatory study is basically a ‘research that focuses on studying a situation or a problem in order to explain the relationship between variables’ (Saunders et al., 2006). Moreover, since the research proposal at hand is an explanatory study, it is by design based as an epistemology philosophy specifically applying both direct and critical realism by using a deductive approach. Saunders et al., (2006) defines epistemology ‘as a branch of philosophy that studies the nature of knowledge and what constitutes acceptable knowledge in a field of study’.

8.0.2 Approach

It uses interpretivism approach as the participants involved in this particular research might mislead the research outcome as humans are bias and at times make mistakes which will lead to error therefore, using interpretivism helps to balance off the faults by interpreting along the line the results from the participants. In addition, this research proposal is claimed to be deductive since it is established by a foundation of a theory followed by hypothesis, observation and finally confirmation however, with the research proposal in hand it is possible outcomes instead.

8.0.3 Strategies and Method

Survey is going to be used in this particular research and the method which will be used to conduct the research will be mono method which is defined as a method that uses a single data collection technique whereby in this case is qualitative and also uses corresponding analysis procedures Saunders et al., (2006). Moreover, the study is going to use the following qualitative method which is going to comprise of semi-structured questionnaires and focus group interview so as to facilitate the analysis of different point of views about the research topic since the expatriates who are going to be participating have different experiences on their international assignment and are coming from different backgrounds.

8.0.4 Time Horizon

Furthermore, the selected time horizon is longitudinal study; the study of a particular phenomenon over an extended period of time Saunders et al., (2006). The reason behind the decision of using a longitudinal study ignoring the time constraint, is it would bring about a better result on the theory at hand and as further supported by Yee and Niemeier (1996) ‘the benefits of a longitudinal analysis over a repeated cross-sectional study include increased statistical power and the capability to estimate a greater range of conditional probabilities’. In addition, the questionnaires are going to be self administered through online in order to save costs as the research is going to long period of time.

8.0.5 Sampling

Sampling is basically gaining data from a subset of a larger group which is the population since it is costly and time consuming to gather information from all the individuals that are involved in the research topic. Moreover, the two significant key to an effective sampling is selecting the right people and the right number of people (EPA, 2002). Population

Under population, the research will target 5,000 participants who are currently expatriates and originally from three continents namely, Asia (China and United Arab Emirates), Africa (Nigeria and South Africa) and lastly America (Washington D.C and Missouri) so as to analyse whether there is a difference in difficulties of adjusting to the host country due to the cultural differences. Framework

It is understandable that the target population will all not be able to participate in the research since it will take an enormous amount of time as it is a longitudinal study, given that, most of the expatriates who will be involved might be busy with their work. Therefore, to discourage any delay on the research analysis, the research will narrow the population to 1000 participants. Size

From the population of 5000 participants narrowed down to a frame work of 1000 participants, the expected feedback is of 300 participants. Probability or non probability

Stratified Sampling Method (SSM) under probability sampling is going to be used, SSM is used ‘when representatives from each subgroup within the population needs to be represented in the sample’ (Westfall, 2009). And as the research is going to analyse expatriates from three different continents in the assumption that the expatriates from the three continents are going to be characterised with different result from different one another, hence, stratified sampling seems to be an appropriate sampling method. In addition, stratified probability is further divided into random or systematic samples based on mutually exclusive criteria (Westfall, 2009) however, under this research; random sampling is going to be used since the each sample in a population has equal chance/opportunity to be chosen.

Furthermore, quota sampling is going to be used; it is defined as ‘a non-probability procedure that ensures that the sample represents certain characteristics of the population chosen by the researcher’ Saunders et al., (2006). The certain characteristics for the research in hand are; performance record, if the expatriate is married, if the expatriates spouse had a career before postage and the rest of the successful and failure factors of expatriates. Reliability and Validity

‘The extent to which results are consistent over time and an accurate representation of the total population under study is referred to as reliability’ (Joppe, 2000) cited in Golafshani (2003). There is consisting questions which are going to be cyclically in order to see consistence in from participants and since the study is longitudinal I will ensure the accuracy which will bring about the maintenance of validity issue. Validity ‘determines whether the research truly measures that which it was intended to measure or how truthful the research results are’ (Joppe, 2000) cited in Golafshani (2003).

It is important for the research to have reliability and validity and so, to minimize the absence of reliability and validity, face validity is going to be used. Face validity is a small-scale study to test the questionnaires that are planned to be distributed for the survey so as to minimize the likelihood of respondent having problem answering the questions (Saunders et al., (2006).

possible results

There is a possibility that there is a positive impact between CQ and the success of expatriates which results to conducive job performance because without an expatriate having the capability to adjust in different businesses conducts which are highly influenced by individuals own culture it is impossible to be able to work at the same goal with people in the organisation who are characterised with different cultural background.

Conclusion/ Summary

After an organisation go through the selection process by examining the individuals resume and point out a potential individual who has a probability of succeeding in an international assignment and the potential expatriate is presented with the offer of being an expatriate. The individual and the organisation should not consider the offer as a light decision to be made as when an individual embark on the offer of leaving behind his/her co-workers, friends and family, many factors are suppose to be considered in determine the success of the expatriate apart from an impressive resume since reversing the decision after the expatriate dissatisfying the targeted performance is costly.

The factors that should be considered are the personality and whether an individual is learning oriented person, the ability of the potential expatriate and his/her family to adjust, financial risks, whether the organisation can afford to pay off the training courses that will support the expatriate to adjust to the new environment easily or not.

With many published books around the globe and multiple training courses offered to an expatriate relating to cross-cultural adjustment; which is the crucial factor for an expatriate to succeed an effort of change of attitude is highly needed no wonder it is said that a company should act globally but think locally and be culturally aware since it is important to understand businesses conducts that makes it possible for companies to succeed.

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