Factors Maximizing Expatriate Success

Expatriate Success determines the success of the MNC’s objectives and goals. With the completion of a successful overseas assignment, the company get one step near in achieving its goal and targets. So here goes the factors that positively affect the success of an international; assignment and leads to expatriate success.

International Management, Part 2
Assignment
On
International Management
(Word Count from chapter 1 to chapter 4 =1842)
Table of Contents
Executive Summary 3
Chapter 01 Introduction 4
Chapter 02 Evidence about Expatriate Failure and Factors Maximizing Expatriate
Success 5
Chapter 03 Factors Contributing to the Notion of a Globalized Economy 9
Chapter 04 Conclusion 13
References ………………………………………………………………………………………………………..13
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International Management, Part 2
Executive Summary
In this competitive world, the competition is increasing gradually and so businesses are also
applying new strategies to go forward from others and trying to be the better version of
themselves. Many companies are becoming multinational companies with the expansion of their
businesses. In the expansion process, there come new challenges and new adaptation
requirements for both the company and the employees. To train the employees and to help them
adapting to the global environment of business, multinational companies (MNCs) often assign
international assignment to their employees and send them to other branches across the country.
Many time expatriate failure occurs. Factors like: cultural adjustment, family issues, stress,
emotional breakdown, physical breakdown and more play role behind expatriate failure. To get
expatriate success factors like emotional intelligence, stress tolerance, managerial skill, proper
training etc. factors should be considered by the MNCs.
A globalized economy is the integrated economic activities of the whole world taking place
among countries. Containerization, increasing number of global brands and companies,
application of advanced technology, FDI and M&A, communication and IT etc. are some factors
that have contributed to the notion of a globalized economy. Many ethical issues emerge with the
globalized economy concept. To mitigate the issues, corporations, governments and other related
parties have developed policies and agreements. Many global brands like, Coca-Cola, Walmart,
Sony Enterprise etc. have already started some ethical practices which are mentionable and other
companies must follow these type of ethic code.
Chapter: 01 Introduction
International management is the management of business operations in an organization serving
markets and operating in more than one country (Grundy, 2014). With the application of
management theories and proper management strategies, it needs skills and thought process to
successfully manage such business. MNCs take new challenges and send their employees on
international assignment to skill them up and male them company’s greatest assets to achieve
company’s goal ultimately. Sometimes, these assignments become great success and sometimes
fail.
MNCs get benefited from a globalized economy much. Some of the benefits include:
accessibility to new markets, cheaper labor costs, cost minimization through FDIs and M&A s,
tax benefits etc.
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Chapter: 02
Evidence about Expatriate Failure and
FactorsMaximizing Expatriate Success
Generally, Expatriate refers to a person who resides in a country leaving his motherland for work
reasons. This residing period is often temporarily and depends on the completion of the assigned
tasks given to him. Sometimes, the assignee prematurely return to his country and sometimes his
performance level become so low his company faces a huge loss. So, there a question arises,
“Why does the expatriate prematurely return to his own country and why does his performance
level become low? In MNCs, it is called “Expatriate Failure”.
2.01 Evidence about Expatriate Failure:
There are many factors to be considered as the core reasons of expatriate failure. After discussing
these factors, we can get a clear picture of why this “expatriate failure” happens.
These factors are given below:
 Cultural Issues
 Family Adjustment Issues
 Increased Responsibility
 Immature Emotional Acts
 Disconnection from Friends and Family
 Homesickness
 Insufficient Training (Training for cross-cultural
communication, mental preparation, adaptation to new
environment)
 Inadequate Local Support
 Bad Selection by HR Team
These factors be it the cultural issues or inadequate local support and family adjustment issues,
directly or indirectly affects the performance of the assignee or create mental pressure and
depression which leads to expatriate failure.
Of all the factors, cultural issue is a special factor that plays important role in the expatriate
failure. Culture varies from country to country. In a country, having beer and alcohol openly may
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seem normal whereas in another country it may not be supported in the religious context. For an
assignee, the new environment of workplace and cultural differences may seem difficult to adapt
and this often causes premature return of the assignee. Here if we give an example: an American
who has been sent to Asia for an international assignment may find it unusual and sometime
unprofessional if some staffs don’t show up for 2-3 days or after discussing all the issues and
agreeing someone spend hours in talking. He may face difficulties in the social context as
well.As a result, it leads to expatriate failure.
In Figure: 01, Dr. Yang (cited in Slideshare by StudsPlanet.com (2013)) has shown a
comparative picture of expatriate failure rates in US MNCs, European MNCs and Japanese
MNCs.
Figure: 01 Expatriate Failure Rates of US, Japanese and European MNCs
In Figure: 02, Dr. Yang (cited in San Francisco State University Online Library, IHRM, Chapter
4) also shown a chart describing the cultural adjustment. The chart is given below:
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International Management, Part 2
Figure: 02 Phases of Cultural Adjustment
So, we can see that in the whole process of cultural adjustment, Phase 2 is the crucial phase of
all. At this phase, the assignee can get the cultural shock that may lasts two weeks to even two
months or more. In this time, if the employee can’t adjust himself with the new environment and
embrace the culture of the host country then he decides to return before his returning period.
Again, his performance can become so worst because of the new environment and cultural issue
that it can also affect badly in achieving the ultimate goal of the company and obviously
company can face huge loss. So, it is finally evident that expatriate failure happens and the
factors behind this are very crucial and need to be properly considered before sending the
employees to overseas assignment so that employees can achieve competencies and MNCs can
fulfil their ultimate goal.
2.02 Factors Maximizing Expatriate Success
Expatriate success determines the success of the MNC’s objectives and goals. With the
completion of a successful overseas assignment, the company get one step near in achieving its
goal and targets. So here goes the factors that positively affect the success of an international;
assignment and leads to expatriate success:
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International Management, Part 2 Stress tolerance Managerial skills Ability to adapt in new environment easily Proper training for the assignee before the departure (Communication
training, adaptation, managerial training, preparing mentally, emotional
intelligence etc.) Ensuring sufficient local support and facilities Additional training for the family members ( Mental preparation,
motivation, adjustment training) Motivation Good control over emotion Proper selection by HR team Personality traits (Curious, adventure-lover) Challenge-taking mentality Well-structured planning by the company Pre-departure preparation by the assignee
Stress tolerance is an important key factor in getting expatriate success. In a new environment
and different cultural views, with more employees reporting, it become stressful for an expatriate
to handle all the things and manage a bigger team than before. Besides, the expatriate needs
proper managerial skills, ability of adaptation motivation, and a curious and adventurous mind.
The company also need to plan a well-structured plan, provide proper communication and other
necessary training along with additional training for the family as they also need to adjust to the
environment. The HR team has to properly select the employee as well. All of these factors
together brings success to an overseas assignment.
Chapter: 03 Factors Contributing to the Notion of a
Globalized Economy
As Shangquan (2000) said, “Economic globalization refers to the increasing interdependence of
world economies as a result of the growing scale of cross-border trade of commodities and
services, flow of international capital and wide and rapid spread of technologies” (Shangquan,
2000, p01). The present shape of globalization has not been so finely structured overnight. Many
types of factors played and still playing important and significant role in the whole globalization
process. Some of the factors are technological, some are economic and others are social,
financial and political.
Some factors are described below:
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International Management, Part 2
1. Transportation System: Containerization has affected the freight charges positively and
lowered the costs as well. Homayounnejad said, “Over the last 25 years, sea transport unit costs
have fallen by over 70%, while air-freight costs have fallen by 3-4% year-on-year. The result has
been a boost in trade flows, as transport costs are now less likely to cancel out the gains from
comparative advantage” (Homayounnejad). That’s how it boost up the trade flows among
countries and contributed greatly to the path of globalization.
Figure: 01 Transportation and communication costs
2. Rising Number of MNCs: With the expansion of MNCs businesses and brands, they
invest a lot of money leading to a globalized economy. With their successful business ideas,
strategies and quality service they are serving globally.
3. Application of Advanced Technology: With the phase of time, technology has
advanced more and more. As such, it has helped the production sector to grow and produce good
quality products and also increased the production capacity hugely. Technology has eased the
communication, transaction, financial activities also and connected the whole world and turn the
world into a global village.
4. Labor Migration: Some of the countries might not have the adequate labor supply
relevant to the demand. On the other hand some countries have more labor supply. So, labor
migration has helped in this regard to meet the demand of the labors. Moving labors from one
country to another and meeting up the demand are no doubt a clear sign of globalization. The hos
country to supply the labor gain foreign currency as remittance which helps to boost up the
economy of that country. Many people also migrate because of a hope of getting better facilities
and better lifestyle along with a better job.
5. Foreign Direct Investment:Chirilă - Donciustated in her research paper, “The dynamics
and structure of foreign direct investment (FDI) has contributed, along with other international
economic flows, to increased integration of national economies, to stress out the current
globalized character of the contemporary economy.” (Chirilă – Donciu)
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International Management, Part 2
Figure: 02 FDI chart
6. Communication and IT:Communication contributed greatly in developing the notion of
a globalized economy. Communication is the core part of globalization. Communication an IT
together which has helped people cross the borders and communicate with world which has a
huge role in production sector.
Ethical Issues on International Context and Globalization and
Proposed Solutions by the Practitioners:
The rapid growth of economy and expansion of companies in an international context leading to
globalization has also raised some ethical issues in the business arena. Gurnani discussed the
ethical influence of globalization in her report “Globalization and ethical challenges”which are
presented in Figure: 03:
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International Management, Part 2
Figure: 03 Ethical influence of Globalization on International Functional Areas(Reshmi M (2015).)
Because of the emergence and complexity of ethical influence in international context,
governments, related associations and corporations’ have developed many policies, law and
agreement as a reaction or response. In Figure: 04 Ast has shown the response in a brief. To
solve the ethical dilemmas like environment, labor standards, marketing, corruption and more,
the responses from the government, civil associations and corporations have been displayed here.
Governments of many countries have develops international policies and agreements to deal with
the ethical issues. Besides, corporations have created their own global ethic codes and developed
global agreements. The civil societies have also taken initiatives in this regard.
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International Management, Part 2
Figure: 04 Answers from practitioners to the moral dilemmas of global business.
Ethical Practice in Multinational Companies:
It’s very important for the multinational organizations which operate globally to understand the
values, laws, agreements, policies and ethics of the countries they are running their operations
on. A company having values and ethics must progress and get success which we can see from
global organizations like Walmart, Nike, and Coca-Cola and so on. To understand the
importance and applications of ethics and values we must see the applications of ethics in some
global organizations. Below, a figure (Gurnani, 2015) has been given to show the application of
ethics in big MNCs:
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International Management, Part 2
Figure: 05 Ethical Practices in Global Corporations (Gurnani, 2015)
Chapter: 04 Conclusion
International assignments are a very important for the development of cross cultural
communication skill and leadership skill for an employee and by assigning this type of
assignment and sending the employees overseas, companies train their employees to be more
valuable and skillful. But expatriate failure is such a thing for which a company faces huge loss.
In this report, the evidence of expatriate failure and the factors contributing to expatriate success
have been discussed in chapter 2. In chapter 3, factors that greatly contribute to the notion of a
globalized economy have been discussed critically and also an awareness of ethically sound
international policies has been tried to be demonstrated.
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International Management, Part 2
References:
1. StudsPlanet.com (2013). Slideshare [online]. Slide no. 05. Available at:
https://www.slideshare.net/studsplanet/expatriate-failure-27105933
2. San Francisco State University Online Library, Chapter-4 Recruiting and Selecting Staff for
International Assignments (ppt file) [online] Slide No. 16. Available at:
http://online.sfsu.edu/nyang/IBUS%20618/pptnotes.htm
3. Shangquan, Gao, 2000.Economic Globalization: Trends, Risks and Risk Prevention, [online]
Paper no. 01, p01
4. Homayounnejad, Maziar. What factors have contributed to globalisation in recent years?
[online] P02 Available at:
http://www.redbornecommunitycollege.com/_files/Curriculum/5F173131A1478B73B9D918395
207B05C.pdf
5. Chirilă – Donciu, Elena.GLOBALIZATION AND FOREIGN DIRECT INVESTMENTS
[online] P180 Available at:
https://core.ac.uk/download/pdf/27162538.pdf
6. Gurnani, Reshmi M (2015).Globalization and ethical challenges. [Photograph] Vol 5, Number
4, P120. Available at:
https://cberuk.com/cdn/conference_proceedings/2015iciee_india20.pdf
7. Ast, Federico (2017), The Moral Dilemmas of Global Business. [photograph] Available at:
https://www.intechopen.com/books/globalization/the-moral-dilemmas-of-global-business
8. Gurnani, Reshmi M (2015). Globalization and ethical challenges. [online] Vol 5, Number 4,
P121 Available at:
https://cberuk.com/cdn/conference_proceedings/2015iciee_india20.pdf
9. Grundy, Dr. Tony (2014), International management: rising to the challenge. [online]
Availableat:
https://www.accaglobal.com/vn/en/member/discover/cpd-articles/businessmanagement/
international-management.html#:~:text=International%20management%20is %20the
%20management,in%20more%20than%20one%20country.&text=This%20definition
%20stresses%20the%20need,than%20managing%20within%20national%20borders.
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