Definition of Expatriate Failure and How to Minimize Expatriate Failure Risks

Understanding the meaning of the term expatriate failure is a crucial step that enables multinational companies to devise the appropriate ways of minimizing it so as not to be affected adversely by its effects. For effective performance in the competitive world markets, multinational companies should be able to predict and deal with possible sources of risks and failures in their lines of business. This aspect is of great necessity to them since it gives them an unquestionable competitive advantage in the world market where they may be able to assume a substantial presence.

One of the possible sources of risks is expatriate failure, which is in essence a risk itself. Multinational companies, in an effort to keep itself at far with its competitors, should try to minimize this risk by applying all possible means. However, to achieve this goal they should first define the scope and nature of expatriate failure so as to understand its meaning in its deep context. In this essay, therefore, we shall discuss the meaning of expatriate failure and identify possible ways to minimize it.

Definition of Expatriate Failure

First, we identify expatriate failure as a risk that affects multinational companies in regional integration process. It is defined differently by different scholars, by different corporations and in different contexts. Expatriate failure risk can be minimized through the following ways: proper planning of repatriation from the time of expatriate selection, looking closely into all factors contributing to expatriate adjustment difficulties in foreign countries, using very strict training programs in order to prepare expatriates adequately for overseas operations and imposing restrictions on job mobility.

Expatriate failure in simple terms is defined as ‘premature return’ (Simeon and Fujies 2000). This definition, however, is very narrow and has attracted a lot of interest for a better definition by many scholars. Bruning and McCaughey (2005) argue that “an expatriate’s premature return from the international assignment or underperformance whilst conducting the assignment” The main flaw of this definition is the implication that the expatriate’s assignment becomes successful throughout his stay in the host nation.

Briscoe, Schuler and Claus (2009) define expatriate failure in terms of ‘early return home or termination’. They also suggest that the word can be defined in terms of poor performance quality in foreign assignment, inadequate utilization of employee during foreign assignment, expatriate’s personal and family dissatisfaction with the assignments experience, inability to adjust to host conditions, non-acceptance by the host nationals, and eviction immediately after repatriation and inability to use experience in assignment after repatriation. The causal factors in this context include duration of the assignment, the level of concern in respect to repatriation, too much emphasis in skills and technical competence to inconsideration of other necessary traits and the amount of training for foreign assignment.

Harzing (2004) suggests that a premature return before the expiry of the assignment may not necessarily be the damaging part of the exercise. Expatriates who stay for the whole period of an assignment but produce substandard results are presumably more unlikely to contribute positively the company than those who return home before the end of the assignment (Yuen 2003). The expatriates who come home before the end of the assignment are considered to have failed to achieve the objectives of the company. On the other hand, expatriates who remain for the planned period of the assignment are regarded as failures, if they also become unsuccessful in achieving the desired objectives of the company.

Mechanisms of Reducing the Risks of Expatriate Failure

In order for multinational companies to reduce the risk of expatriate failure, it should include the above broad definition in their plan so as to understand what foreign assignment really entails in terms of expatriation. By doing so, they may find solutions to problems associated with the phenomenon. However, they should be very careful in implementing its policies regarding expatriate failure. This is because any flaws in formulation and implementation of policies may further cause expatriate crisis rather than minimizing it.

Planning and Preparation for the Expatriate Exercise

One important step that a multinational company can take in order to reduce the incidence of expatriate failure is to plan for its repatriation carefully, from the time of selecting an expatriate to the time of the assignment exercise. Chew (2004) argues that suitable Human Resource policies and procedures should be put in place so that the company can efficiently and effectively manage its human resource internationally. She says this step signifies the company’s support for expatriates and may contribute to the success of the employee in the foreign assignment that he/she is called to undertake. This early step of preparation indicates increased chances of a successfully managed expatriate failure risk situation because duties and responsibilities are clarified in advance.

Proper Management

In any macro and micro economic theory of management, it is always postulated that success of a company and its ability to deal with internal problems lies within the hands of the management. This means that formulation and implementation of policies as the main role of the management should be done in the best way possible.

Proactive and Preventive Measures

Chew (2004), in her study, maintains the argument that every multinational company should strive to prevent any a crisis of any nature from occurring. Expatriate management crisis may undermine a company’s performance and undermine its abilities especially to the eyes of the host nation. A high number of repatriates is also costly and substantially negates the company’s investment returns.

Therefore, Chew (2004) holds that a proactive and responsibly managed action towards an expatriate crisis should be formulated and implemented. This step not only improves the company’s cost minimization but also aids in retention of the company’s employees and prevents the company’s public image from being ruined by the crisis.

The Five Classifications of Attributes of Success

The five classifications of attributes of success: Job factors, relational dimensions, motivational state, family situation and language skills should be adhered to in expatriate selection. Selecting an expatriate should more specifically consider his/her relational dimension. The individual selected should be able to relate well with people in the foreign land and have good communication skills. Furthermore, there should be an adoption of long-term orientation in every expatriate assignment. Studies claim that minimizing expatriate failure may also require provision of support mechanisms at corporation’s headquarters.

Supporting Expatriates and their Families

Another major issue that a multinational company needs to consider in its quest to minimize expatriate failure risk is the adjustment problems that expatriates and their spouses face in overseas countries. This is a common obstacle to foreign assignments in most multinational companies. Yuen (2003), in a pioneering study, noted that expatriate failure is caused by Expatriate’s inability to adjust or cope with the foreign country’s environment. He adds that the expatriate’s spouse may also experience the same problem. This may substantially affect the expatriate’s performance in the foreign assignment because expatriate’s performance depends to a large extent on his/her ability to adapt to new situations and responsibility.

Helping Expatriates in the Adjustment Process

Harzing (2004) suggests that dealing with expatriate’s failure involves putting into consideration the steps that help expatriates in making adjustments to their new environment. For instance, the multinational company should recognize that expatriate adjustment requires him/her to move into a new job, interact with the citizens of the host country and more so adapt the cultures and living styles of a foreign nation.

The multinational country should also adopt a more sophisticated approach of selection. It may select expatriates on the basis of cross-cultural competence and fluency in foreign languages or by use of any other technique selection technique that is aimed at reducing adjustment problems. In an attempt to reduce the problems associated with adjustment, a multinational company should also implement very strict organizational support system and provide desirable job design. The spouse may also be included in the company’s programs and training so as to enable him/her to adapt to the new systems.

Expatriate Training

Multinational companies can also use rigorous expatriate training in order to enhance efficiency in international assignments. Tung (1987) as cited by Yuen (2003) noted that the US experience expatriate failure is highly attributed to lack of good relations. That notwithstanding, the US does not provide enough training to prepare expatriates adequately for international assignments. However, Japanese and European multinational companies have dealt with this problem adequately. That is why expatriate failure is low in those nations. It is rewarding for multinational companies to invest in employees through training. Training enables multinational companies to develop management skills.

The programs used by European multinationals worked, and it can as well work for any other country provided it is done within the scope of international assignments. Some of the training programs that may bear fruits include language training, cross-cultural training, field experience and graduate programs in overseas countries. Multinational companies may opt to train its employees on foreign languages so as to enable them cope with foreign environments while in foreign assignments. This training can be further enhanced by engaging foreign nationals in the exercise as well as organizing cultural exchange programs with overseas nations.

Cross-Cultural Training

Cross-cultural training may also be applied so as to enhance expatriate’s easy adaptability and adjustments to overseas countries during an international assignment. According to a study cited by Bruning and McCaughey (2005), many European multinationals used a program known as the Center for International Briefing. This training facility included regional and cultural awareness program. The aim of these programs was to help employees adjust to the working environment in an international assignment. The process applied may involve lectures, audiovisuals, discussions and other relevant processes. The purpose of cross-cultural training is to enable expatriates to understand and be sensitive to other countries. This is enhanced through cultural lectures and learning by experience approach.

Field Experience Training

Another training program included in Yuen (2003) study is the use of field experience whereby he noted that Japanese multinationals select some of their staff members to go for a trainee program for one year or so. This enabled the trainees to observe the foreign country’s operations more closely and learn from the experience. Finally, multinational companies may also offer graduate programs abroad. This enables the expatriates to learn foreign management principles which will prepare them for foreign assignments. This, however, may be costly. Multinational companies should be ready to commit its funds in management training because it is for their own benefit in the long run.

Job Mobility Restrictions

Multinational companies may also impose restrictions on job mobility. Job mobility in this case refers to the movement of employees and staff from one job to another either within the same company or in other related or non-related company. By reducing movement from one job to another, multinational companies are able to restrict expatriates to the performance of specific duties. Expertise on such foreign duties through experience may enable the companies to increase its performance in foreign duties.

Conclusion

From this discussion, we can note a number of issues regarding expatriate failure. While it seems easy to define the term expatriate failure, studies, as earlier shown in this paper indicate that it is more reasonable to apply the term, not according to its narrow definition but in a broader sense. This means that it does matter how we define expatriate failure because this definition enables us to understand in depth what it entails, its causes, its effects and how it may be minimized. It is therefore crucial to consider all aspects in defining or giving the meaning of the term expatriate failure. Most people ignore this definition but a multinational company that is committed to performance and excellence will be more critical in analyzing its meaning in depth.

Once the term expatriate failure has been adequately defined, it is of great essence to take clear and well designed steps to minimize it. This follows closely with the understanding of the term. In simple terms, this means that minimizing expatriate failure risk is feasible. This, however, depends on the company’s commitment, ability and orientation to the global market. According to the studies carried out in the past and cited in this paper, multinational companies are capable of minimizing expatriate failure risks by taking appropriate measures. If this is done, expatriate failure no longer becomes a threat but a story of the past.

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