Critical Evaluation of Expatriate Failure and Combating Strategies

This report provides a critical evaluation of expatriate failure in developing countries, focusing on the challenges faced by multinational corporations (MNCs). It explores the impact of globalization and the deployment of expatriates, highlighting the high failure rates and the importance of understanding cultural and business environments. The report delves into various factors contributing to expatriate failure, including cultural differences, family stress, and poor candidate selection, particularly in regions like Southeast Asia, Latin America, and Africa. It examines the role of cross-cultural management, Hofstede's five dimensions of culture, and the importance of addressing issues like work-life balance and compensation. The report also emphasizes the need for effective strategies to mitigate these challenges and improve the success of expatriate assignments, offering insights for MNCs to enhance their global business operations.

CRITICAL EVALUATION OF
EXPATRIATE FAILURE IN
DEVELOPING COUNTRIES AND
WAYS OF COMBATING IT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
In the present era, every business organisation requires getting an excellent success in the
global market notably with the rise in Multinational Corporations (MNC) (Ko and Yang, 2011)
due to increased foreign investments (Bersen, 2012; Armstrong and Li, 2017). Globalization has
spearheaded the need to deploy special skilled personnel called expatriates to occupy managerial
posts across national borders with the hope of maximizing knowledge transference (Juhl and
Fuglsig, 2009), strategic insights (Boriçi and Çelepija, 2014).While an organisation expands its
business in the international market, it has to set its business operations according to the
country's culture and business environment (Caganova, Cambal and Weidlichova Luptakova,
2015). In the following report, international business management and issues faced by MNCs
have been critically discussed with key focus on expatriate failure. In addition, various factors
that contribute to expatriate failure in developing countries located in South East Asia, Latin
America and Africa have also been systematically addressed. Nevertheless, proven and resolute
solutions have been engrained to help alleviate the increased high failure rates as suggested by
Lee (2007) which vary between 20% and 50% (Chalre Associates, 2015) while considering the
broader definitions by (Christensen and Hazring, 2004; Juhl and Fuglsig, 2009).
MAIN BODY
As per the view of Caganova, Cambal and Weidlichova Luptakova, (2015) International
business refers to the activity under which company operates its business in the two or more
regions, countries and nations beyond their political boundaries. While any company deals in the
international business then it has to understand its global business environment, issues and factor
that influence business operation at this level. In the international business environment, there
are major six factors which affect the business enterprise and its operation that are political,
social and cultural, economic, technological, environmental and legal component.
As per the view of Cavusgil and Knight, (2015) culture consists of pattern through which
people interact with each other and share their feeling, knowledge and understanding with each
other. As per the view of Caiazza and Audretsch, (2015) Marks and Spencer is one of the most
famous retail outlets in the UK which deals with various products like clothing, food and home
ware etc. It has 82904 employees and also has 959 stores throughout the UK as many
international stores in India, turkey, Russia, Greece, Ireland, France, Poland, Spain, Australia,
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America etc. Cited venture operates its business at global level so as there are various factors
which affects its business activities and functions. With help of globalisation, corporation can
deploy employees on assignments across national borders. This is the best strategy to increase
the performance and productivity of business. In addition to this, profitability and revenue can
also generate with help of globalisation business context. Company can enhance skill, ability,
quality of employees by send them across the national border. Marks and Spencer has
successfully operated its business activities and functions in the various international markets
like India, America, Australia, Germany etc.
As per the view of Cavusgil and Knight, (2015) in the south East Asia, Latin America
and Africa, Marks and Spencer has expatriate failed continents. In these countries, cited venture
have faced various kinds of issue related to business operation, culture, leadership, working
environment etc. In this manner culture is one main issue and factor which affect company's
business operation in the different countries. Due to culture, in the East Asia, America and Africa
Marks and Spencer have failed in performing business operation properly. In these countries,
cited venture employees have not able to perform in an appropriate manner and they have also
not achieved their business target. In the globalisation or international business in the different
countries, employees of Marks and Spencer have faced major issue related to the cross culture.
In the context of organisation, culture is an idea, customs and behaviour of employer and
employees. Company's culture defines that how employees interact with each other, how they
follow the rules and regulation of company, how they perform in order to attain the business
objective. While organisation enters in the international level then cross culture is one of the
major issue which faced by employees and employers. Cross culture refers to the business
environment where a participant enters from the different countries or regions. They bringing
different value, viewpoints and business practices. In order to operate the business and send the
employees in the different countries for expand the business, it is very important for cooperation
to understand the cross cultural management. It is the study of cross culture management which
includes study of influence of societal culture on managers and management practices as well as
the study of the cultural orientation of individual managers and organisation members. As per the
view of Clark and et.al, (2016) Company needed to arise the knowledge and understanding about
the foreign culture among the employees so as they can able to resolve the issue related to cross
culture in the organisation. Marks and Spencer employees have faced the problem related to
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cross culture because cited venture has not effectively maintain and survive its business
operation according to the culture of said countries like South Asia, Latin America and Africa.
Cited venture required to understand the similarities and differences among the cross culture
communication so as its employees can able to perform in an effective manner.
Hofstede's five dimension of culture
In this manner Hofstede's five dimension of culture can assist to business for understanding
the culture diversity in the South East Asia, Latin America and Africa. In this theory, there are
major five cultural dimensions which assign mathematical scores designating a particular
country's belief about the each dimensions. The first is power distance under which less powerful
members of company distributed power in unequal manner. The power distance index refers
under which less powerful members of firm and institution. As per the view of Clark and et.al,
(2016).In the second dimension people in the society are not easy as they survive from different
perceptions and views. In the third dimension individualism vs collectivism considers on
whether people have a preference for being left alone to look after themselves. This index
explores the degree to which people in a society are integrated into groups. This dimension
defines extent under which individual's value self-determination as opposed to their behaviours
which identified by the collective which will offered by organisation. In the fourth dimension,
masculinity implies a society's preferences for assertiveness, heroism achievements and material
rewards for achieve success. In addition to this femininity represents a preference for modesty,
cooperation, quality of life and caring for the weak. In the long term and short term orientation,
long term orientation describes the inclination of a society toward searching for virtue. In the
short term orientation refer to those societies that are strongly disposed toward establishment of
the absolute truth. This dimension associates the connection of the past with the current and
future actions and challenges. Societies with a high degree in this index view adapt in and
circumstantial, pragmatic problem solving as a necessity.
As per the view of Clark and et.al, (2016) culture it has been analysed that with the help
of this concept of culture, Marks and Spencer can effective gain the success in the different
country and global business environment. As in the global business environment, cross culture is
major issue because there are different people from the different countries. Their skill,
knowledge, language, value, beliefs, customer, living standard etc are also different. Due to this
reason they will unable to collaborate with each other and fail to share their knowledge, skill,
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ability and information related to business In the international business management there are
major roles of the culture because at this level while Marks and Spencer operates its business
then it has to develop policies, practices, strategy and tactics to survive business function and
activities in the international level. For this objective, organisation have to understand and
manage the cross cultural impact on the business. In this manner different people have different
views, opinion, language, ability and skill by which they perform their business activities. In the
different cultural environment in the organisations, it is very difficult for the company to design
the policies and strategy according to new environment. Thus, it is very essential for company to
understand the cross cultural impact and try to overcome this for attain the objective. Cross
cultural management considers on overcoming the cross cultural differences and barriers and
creating cross cultural awareness in order to develop effective communication and cooperation in
the company.
Cultural differences in the Asian businesses
In the Asia, culture is one of the major issue which affect the individual in the country.
In order to survive the business in an effective manner, company have to understand the diversity
in the various country. Company should design such effective working environment where
people can easily share their value, knowledge, information about the business with each other.
In the international business environment, company should develop such policies, practices and
strategy which will suitable for all employees. With help of business environment analysis,
company can understand the various element of the environment like political, social, cultural,
technology, legal etc. With help of business analysis, cited venture can easily cope up in the
Asian environment.
As per view of Clark and et.al, (2016) another major factor due to which expatriate fails
in the general sense and in the developing countries Asia, Africa and Latin America is family
stress. It is another major reason through which Marks and Spencer has failed to operate its
business in three countries. In the international business environment, cited venture have faced
this family issue in large manner because employees have transferred from one country to
another country in order to operate and deal in business. They have to manage their professional
life for survive their career. Family stress can be defined as any stress or that concern one or
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more member of the family. Once employees goes out of the country by leaving their family for
some time then they have to maintain the relationship with them which impacts the emotional
connection between the family members, their mood, well-being etc. Employees have various
kinds of family stress like improper work life balance, financial problem, improper connection
with family etc. Due to this reason, it directly affects the performance of employees as they
cannot concentrate on their work and time accordingly to organisation. This can direct affect the
productivity and profitability of business. Improper work life balance is major portion in the
family stress. They cannot manage their personal and professional life and cannot give proper
time to their family member. By this reason, they get frustrate and their productivity can
automatically decrease.
On the contradicting view Demangeot, Broderick and Craig, (2015) the another major
reason for failure to adjust in the Asia, Africa and Latin America is related to the poor selection
of candidate, poor compensation package, lack of head office support in the new countries. In
order to smooth functioning of business, high skilled employees is very essential because in the
absence of effective personnel no business enterprise can survive its business operation and
activities. If multinational company selects the poor and low skilled employees then it is become
difficult to improve the business performance at global level. Marks and Spencer has selected the
poor working candidate for the international business so that they unable to cope up with these
mentioned countries. On the other hand Ehrlich, Shoham and Asseraf, (2016) stated that poor
selection of candidate made the improper and ineffective process of business in the multinational
company. That is why they have not attained their target in the multinational organisation.
According to the view of Demangeot, Broderick and Craig, (2015) poor compensation package
and lack of head support is another major reason that contribute to expatriate failure. In the
Marks and Spencer organisation in these countries such as Latin America, Africa, Asia. As per
the view of Gonzalez-Padron, Hult and Ferrell, (2016) sometime organisation does not focus on
the developing effective strategy and policy for employees’ motivation. In this manner, salary
package is one of the way to motive and retain employees within company for long time.
Improper salary package can demotivate personnel at workplace through which they cannot
encourage for higher performance and productivity. In addition, this ineffective support from the
higher authority is also reasoned to contributing the failure in these mentioned country.
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In order to improve the proper selection of candidate in the company, firm should
improve its employees’ salary package and motivation tool. This will assist in improving
business performance at in these mentioned countries. Furthermore, company should make an
effective recruitment and selection process so as right candidate can select for the company.
As per the view of Ehrlich, Shoham and Asseraf, (2016) Following are some strategy by
which Marks and Spencer can overcome the differences of cross culture in the different countries
and maintain stability and progress in the business environment are Good knowledge of foreign
culture as This is the best strategy to overcome the negative impact of cross culture in the
business at global level. In the international level there are various cultural people involved as
they have different language, background, beliefs, value, thoughts, living standards etc. This
strategy admitting the existence of difference culture. While people have good knowledge and
understanding about the foreign culture then they will able to frequent cope up with changes. By
proper recognition of culture of the other people in different country is the best strategy to
develop mutual understanding and effective coordination at workplace. Marks and Spencer
employees can easily generate the great value about business while they familiar with other
culture. One another strategy is related to the Respect of a foreign culture as this is another major
strategy for survive in the cross cultural environment at workplace. Marks and Spencer's
employees can easily carry out their functions and activities while they respect to foreign culture
in countries like East Asia, America and Africa. With assistance of this strategy, employees from
the other countries can understand the culture of foreign and respect to other member at
workplace.
As per the view of Demangeot Broderick and Craig, (2015) this strategy assists in
improving the relationship with other people in an organisation. One another strategy is related
to the Ignore the cultural differences. It is another best strategy to cope up with cross culture in
the different countries like East Asia, America and Africa. In this strategy, Marks and Spencer's
employees can understand the other's belief, value, custom etc. In this strategy employees can
develop mutual understanding and effective coordination. With assistance of these criteria,
personnel’s can design excellent team working in cooperation so as they can able to attain the
business objective. This is one another strategy which is related to Use effective use of ICT. This
is another strategy to overcome the negative impact of cross culture in the business environment.
In these criteria, company should adopt an excellent communication technology by which
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it can able to improve its business communication between nations (Mor, Kaur and Khaiwal,
2016). With assistance of this strategy, employees of different culture and countries can easily
communicate with each other and maintain effective working at workplace. It assists to resolve
the conflicts and business issue at international level. Personnel can carry out their business
function at collaborate manner with help of ICT in the global level of business. ICT strategy will
aid in overcome the gap between the countries and people can exchange their idea, thoughts,
information relate to the business to other people in different countries. This strategy assist in
overcome the gap between members so as they can collaboratively carry out their business
activities and functions. Another main reason for the expatriate failure is related to the inability
of mangers to adjust to new environment, the manager inability to adapt to the new environment,
other family related issues, the manager's personality or emotional immaturity, the manager
inability to cope with responsibility associated with the overseas work.
By use of high quality information communication technology, company can generate
effective communication among the various functional areas in the business. On the
contradicting view of Grünig and Kühn, (2015) Economy is one another major factor which
create barrier in the international business. Economy refers to the condition of the country under
which include recession, inflation, interest rate, trade cycles, general price level, income and
employment, economic growth and development, money and banking, demand and supply etc.
All business whether it is domestic or international are affected by the dynamic economic
environmental condition prevalent in the market. Marks and Spencer deals in the various
countries like south East Asia, Latin America or Africa etc. In the various countries, there are
different economic systems which cited venture has to understand.
From the above discussion about the factor which affect the international business in the
south east Asia, Latin America or Africa countries, it has been analysed that Marks and Spencer
have faced various issue related to cross culture, family stress, poor selection of candidate, poor
compensation package and lack of office support. The major issue which is faced by cited
venture is diversity and cross culture among the countries. This issue creates major barriers in the
operation of business activities and employees performance in the different countries. Employees
can unable to share their knowledge, skill, information, opinion with related to the business and
also they unable to develop team by this cross culture issue. Thus, with help of various theories
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and model related to cross cultural management, Marks and Spencer can effectively resolve the
issue related cross culture.
CONCLUSION
From this report it has been concluded that Cross culture refers to the business
environment where participants enters from the different countries or regions. . At the
international business environment with different values, viewpoints and business practices,
employees may face the issue related to cultural differences. These things affect employees’
performance as well business functions. It has been also analysed that by use of various strategy's
life effective tools of ICT, respect to foreign culture and having good knowledge about new
business environment, manager can overcome the negative impact of cross culture at global
level. It has also analysed that various theories and model assists in depth knowledge about the
cross cultural management.
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