Reducing Expatriate Failure Rates in Multinational Companies

The assignment highlights the issue of expatriate failure rates in multinational companies, which can be attributed to various factors such as cultural differences, power distance, and lack of motivation. It emphasizes the need for IHRM practices to fill the gap between local members and expatriates, thereby facilitating effective business operations in international markets.

Role of power distance in expatriate failure

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
CONCLUSION ..............................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
Expatriates are the employees who have been sent to the different unit of the company
reside in some other countries for a particular assignment or a project ad for a some specific
period of a time. As the globalization and internationalization of the business is increasing the
number of expatriates is also increasing at a rapid speed, because companies are now very much
interested in international market. This assignment focus upon the, impacts of expatriates upon
the organizations and the impact of IHRM practices in reducing the rate of expatriates.
MAIN BODY
Multi National Companies operates in a diverse environment of cultural and economical
factors. Among all the factors, cultural factors plays a most significant role in effecting the
functions of the multinational business. There are many Multi National Companies, who have
seen the failure because of the difficulty in managing the outcomes of the external factors of the
culture. In business, culture is combination of the mind, which allows the people to distinguish
one group of individual with the another group. In the current growing market the most stressful
issue for the multinational company is operating business successfully overseas, it is important
for the human resource to have ability to manage such situations occurring in the enterprise. On
the other hand power distance is defined as extent to which less powerful people of the
organization develop the feeling that power is distributed unequally within the organization.
They seek it as a unequal distribution of the power and authority. Generally expatriates of the
multinational company develop such feelings within them.
Managing expatriate is sometimes difficult for the Human Resource Team, as they are
the one who is sent to another unit of the same company located somewhere outside their native
country (Chudnovskaya, 2016).
One of the most common and highly expensive problem which has been faced by the
multinational companies in conducting their business overseas is the high rate of failure in
expatriates. Due to the internationalization of the business the number of the expatriates has been
increased tremendously, so it become essential for the human resource department to bring
efficiency in their working. The failure of the expatriates is the situation that occurs when, the
expatriates face some cultural issues in the country they has been sent, such situations leads to
the failure. In every country their have been different IHRM practices that are used to reduce the

rate of failure of expatriates within the company. As per the context of the Multi National
Companies, the failure in the rate of expatriates, effects the productivity of the company as there
are large number of individual who are sent to other units of company in some different
countries to contributes in the efficiency and productivity of the company (Engle, 2015). As
because of the poor performance as cultural variations approximately 30% of expatriates leave or
end their assignments and return back to their country. And thus it effects the working of an
Multi National Company. The contemporary International Human Resource Management, take
various measure to reduce the rate of failure of expatriates, some of these measure are: Reducing Cultural Differences Overcoming the problem of Language barriers Developing Effective Communication of the local staff with the expatriates Handling Mismanagement
 Others factors that are related to the host country
Multi National Companies operates in a diverse environment of cultural and economical
factors. As according to some study based on the international operations of the organizations,it
has been seen that cultural sensitivity is the most common measure of the expatriates, as per the
study, 70% of respondents (418 executives from 77 countries) believed on the fact that recruiting
managers for over seas is much more difficult than hiring them for their native country. The
other specifications are : working out of the country experiences(%38) skills of foreign language
(%30), effective network abilities (%26). As the globalization is increasing it is becoming very
crucial for the organizations to bring internationalization into their business functions
(Furusawa,2016).
In the situation of the today's world, the competition in the business is increasing day be
day, as the number of expatriates, are increasing in the foreign market the failure rate of the
expatriates are also been increasing at a rapid pace. Multinational companies deals in a variety of
market which are dominant by the economical and cultural forces of the environment.
As per the view of Wang (2017) among all the factors cultural forces are the most
dominant one, because of the failure in Human Resource practices and the working of the
multinational companies. If key human resource practices are effective enough to ensure the
global competitors, then HR management can play an effective role in developing effective
management of the employees who are sent from another countries. According to the view of

Zhang (2017) the role of human resource is very crucial in managing and reducing the rate of
expatriates, the problems employees suffer in the organization which IHRM Needs to
concentrate is: lack of motivation, work pressure and entirely different life style, developing
negative approach towards the organization, lack of effective communication with local staff of
the organization, cultural differences and language barrier. It is the duty of Human Resource
department to lay stress on the orientation and development of the individual who are sent from
some other countries.
The effective or key measure which can be taken by HR managers to manage such
situations are: providing cash incentives to the individual in order to convince them to go
abroad, easy transition to the expatriates, encourage expatriates to be open minded, make them
more practical regarding their jobs, positivism in the attitude and behaviors.
As per the view of Kossek (2017 )Human Resource Managers should apply the four level
training to the expatriates: the level one of the training should be focus upon the impacts of the
cultural differences and the measure to overcome the same; level two of the training should be
focus upon the, understanding of the both types of the attitude either its negative or positive;
level three of the training should be focus upon, information regarding the facts and figures of
the culture of the country; level four of the training should be focus upon, building skills in the
ares where language and other skills are important.
In international market of the business, conducting proper research is very important for
applying the concepts of the Human Resource Management, the main area over which the study
is implemented is, cultural, economical and legal differences between the tow countries.
Hiring right person for conducting the overseas assignment comes under the strategy of
staffing internationally. Selection process of hiring candidates for the international projects
based upon the competence of the managers, training and ability of the individual to acquire the
new circumstances of the market. Hiring right person includes analyzing his overall
circumstances on the basis on their families issues, their state of motivation, other related job
factors, are the key aspects that are used by the organization to hire the appropriate person for
the international projects.
As per the view of Poonpol(2018) approximately 80 % of HR managers now a days use
social media to find the best suitable candidate to send for overseas assignment. Contemporary
human resource management, has been changed from its traditional point of views till now a

days. As it is well known fact that human resource is the key to success of the organization. The
contemporary practices of the human resource, for reducing the expatriates is much more
influential and provides a modernize way to deal in the international organizations. As the
modernization and digitization in emerging the industries, it is becoming very crucial for the
organizations to enhance their overall working structures as per the requirements of the internal
business market. These modern approaches like selecting employees through social media and
by various other means of the internet in increasing at a rapid pace. But on the other as per the
view of Wang (2017) traditional practices of Human Resource is much more authenticated than
the contemporary practices. As it methods are used for very long period by various managers so
the approaches followed by traditional method of HR is well evaluated and examined.
Power distance is the process of distributing, the power in which the one who is less
power develop the feeling of inequality, power distance give rise to cultural differences and
create the sense of inequality among the persons who has been sent to some countries for some
specific period of time or for some particular project, power distance relationship give rise to
cultural differences, as the expatriates are the one who have been sent to some other countries
for a particular period of time, so basically they are demotivates and dissatisfied as they have
been sent out of their native countries for some particular period of time they generally develop
the feeling of inequality, such feelings are example of power distance, whenever companies
wants to expand their business functions they decide to enter in the international markets,
convincing employees to attend the assignments overseas is the matter of huge of concern for
organizations, power distance is the distribution of the power among different people as the one
with who encompass less power develop the feeling of dissatisfaction, demonstration and
inequality. The culture of each and every society is different from one another, power distance is
measure on which less powerful members of the organization develop the feeling that power is
distributed unequally among the organization.
Basically IHRM is nothing but practicing the human resource practices at the
international level in order to bring the internationalization to the company. It helps in
developing human resources practices at cross culture level. As the practices of contemporary
IHRM is not able to maintain the sustainability in the reduction rate of the expatriates, it is very
essential for the organizations to bring modifications and enhancements in its working
(International Human Resource Management, 2018).

CONCLUSION
From the above assignment it can be concluded that, as the internationalization of the
business is increasing the expansion of the organization s into the global market is also
increasing at a rapid pace, thus sending candidates overseas for the international assignments has
become a problem of concern for the organization as no individual is motivated to leave their
native country, thus due to such lack of interest and motivation failure of expatriates is
increasing tin multinational companies. For reducing the reduction rate in the failure of the
expatriates, International Human Resource Management should take various measure to fill the
gap between the local members of the organizations and the expatriates. Thus this will help the
organizations to operate their business functions effectively in international market.
REFERENCES
Books and Journals

Chudnovskaya, E. V., 2016. Experiences of Danish Business Expatriates in Russia: Power
Distance in Organizational Communication. Journal of Intercultural Communication
Research. 45(4). pp.261-281.
Engle, R. L., 2015. Does it matter if researchers use individual dimension constructs or only
aggregated constructs of cultural distance and cultural intelligence?. Journal of
International Business Research. 14(2). p.47.
Furusawa, M., 2016. IHRM and expatriation in Japanese MNCs: HRM practices and their
impact on adjustment and job performance. Asia Pacific Journal of Human Resources.
54(4). pp.396-420.
Kossek, E. E., 2017. Rating expatriate leader effectiveness in multisource feedback systems:
Cultural distance and hierarchical effects. Human Resource Management. 56(1). pp.151-
172.
Poonpol, P., 2018. Determinants of expatriate cross-cultural adjustment and its effect on
performance. AU Journal of Management. 8(2). pp.52-64.
Wang, C. H., 2017. Cultural distance and expatriate failure rates: the moderating role of
expatriate management practices. The International Journal of Human Resource
Management. pp.1-20.
Zhang, Y.,2017. An asymmetric cross-cultural perspective on the mediating role of conflict
management styles in expatriation. International Journal of Conflict Management. 28(5).
pp.592-616.
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