What constitute the success or failure of expatriates? An exploratory study.

• Author: Haile, Semere

1. INTRODUCTION

   The expansion of the global business and the realization of possible increased profits from global markets created the need for expatriates (expats). Expatriation which is defined as a none-native employee who works in a foreign country has become a relatively common practice among multinational corporations (MNCs). Thus, society has developed into a global environment and has provoked much debate as to how beneficial it is to employ expatriate managers or employees in global businesses.

   Belderbos & Heijltjes (2005) researched the general strategy that Japanese MNCs use to gain success when employing expatriate managers. They hypothesize that the strong cultural values embedded in Japanese managers may stifle their profitable operations overseas because they may attempt to force their values on workers who may have totally conflicting ways of getting the job done. As a result, the Japanese have relied on expatriates to manage foreign affiliates and to serve as spokespersons between headquarters and the local organization. Furthermore, Belderbos & Heijltjes estimate that intercontinental and inter-firm linkages, along with culture, contribute tremendously to decisions to implement expatriation practices. They noted the importance of the global socio-economic and political benefits of keeping those practices.

   Shay and Baack (2004) also assessed the reasoning behind MNCs' use for expatriates in a similar manner. They highlighted the fact that MNCs employ expatriates as a form of management control of their subsidiaries. They indicated that using expatriate managers assist in gaining additional knowledge to assist the business with idea generation and executive planning. In addition to this, Shay and Baack examined the performance of expatriate managers and the relative functions and contributions they made to the development of MNCs. They found that many of these expatriate managers eventually became dissatisfied with the new working environment in which they had to reacclimatize. As a result of this, the expected levels of sustained growth expected by these MNCs have taken unexpected nose dives and unforeseen discontinuity in business activity. In other words, Shay and Baack noted the relative failure rate of expatriate managers as they encounter difficulty and end up performing at a sub-standard level. Accordingly, there are three main reasons for an expatriate's assignment motives: (1) to fill positions, (2) for management development, and (3) for organizational development. Each of these motives provides different reasons for employing either parent country nationals (PCN) or host country nationals (HCN) to the success of MNCs. Finding good candidates is the key to a successful expatriation program(Jack & Stage, 2005). The decision is basically focused on the basis of whether it is in the best interest of the firm to appoint a person in an expatriate position to lead and manage the firm, specifically in Japan (Belderbos & Heijltjes, 2005).

2. WHAT FACTORS CONSTITUTE EXPATRIATE FAILURE?

   Can one superficially define expatriate failure as the premature return of appointed expatriates to their country? The most notable research on the subject of expatriate failure was done by Tung in 1982 which highlights premature return as a form of failure. Her study became a framework for analysis by other scholars thus undermining the credibility of more recent literature (Lee, 2007). Lee argues that the current literature is too misleading and simple. Hence, the use of this definition of expatriate failure does not allow for a true...