The Role of Family in International Assignments

IBUS 618

Chris Chee

Diego Hernandez

Ken Lee

Eugenia Paw

Bilinc Yurtseven

Presentation Outline

o Introduction: Diego Hernandez

o Cultural Differences: Chris Chee

o Problems : Bilinc Yurtseven

o Recommendations: Eugenia Paw

o IHRM Policies: Ken Lee

o Oracle & Conclusion : Chris Chee

Expatriate Failure

• Returning Home before the period of assignment is completed

• Underperforming on assignment as a result of difficulties in adapting to their new lives

The Role of Family in International Assignments

Expatriation Process:

“Today’s workers are less willing to sacrifice their own and their family’s lifestyle without a clear understanding of the benefits to them.” (Leong, K. 2003)

Repatriation Process:

The longer the person is away from the home country, the more likely there will be readjustment problems upon return.

Factors Moderating Performance

• Inability to Adjust to Foreign culture

• Length of Assignment

• Willingness to move

• Work-Related Factors

Personal Experience

Going Abroad to Ecuador:

• Willingness to Move: Spouse Career, Children’s Education

• Length of Assignment: Affected by unhappy spouse

• Inability to Adjust: Frustration which led to failure

Costs of Failure

Direct:• Airfares • Relocation Expenses• Salaries• Trainings

Indirect:• Loss of market share• Difficulties with Host government officials• Brand image

Repatriation

• Staff Availability

• Return On Investment: “US Multinationals spend around 1 million dollars on each expatriate”

• Knowledge of Transfer

Country Profile

USA•Japan•United Kingdom

USA• Punctuality is important

• Low context culture

• Individualistic

• Relationship Build up - Task orientation

• Explicit Communication Style & Time Orientation

• Persuasion - Instrumental orientation

• Long work days, little vacation time

• Disagreements are common and acceptable

Japan

• High context culture

• Gesture-free body language

• Personal interrelation is a traditional feature of Japanese society

• Importance of saving face

• Punctuality is essential

• Long negotiations process

• Long periods of silence during negotiation process

• Women’s roles: managing household and care of children

• Long-term relationships are positively encouraged

United Kingdom

• Low context society

• Polite and courteous

• Formal and detached when faced with difficult situations

• Punctuality is important

• Decision-making is often a slow and systematic process due to rules

• Teamwork is important with strong sense of individuality

Expatriate Failure Survey

A survey for United States MNCs revealed that European and Japanese multinational corporations (MNCs), identified significant expatriate failure in U.S. companies for four reasons:

•The spouse's inability to adjust to a different physical or cultural environment•Spouses Social Life•Children’s education•The employee's inability to adjust.(The employee's personal or emotional immaturity)

•Other family problems

Important issues to cover when screening the family are

• * Level of marital stability

• * Responsibilities for aging parents

• * Chemical dependencies on the part of anyone in the household

• * Existence of learning disabilities in a child

• * Behavioral problems in teenagers

• * Emotional stability of family members

• * Strength of family ties to the community or to other family members not going overseas

• * Strength of children's attachment to extracurricular activities

• * Family cohesiveness

• (Avoid expatriate culture shock HR Magazine,  July, 1993  by Marvina Shilling)

The role of the spouse…(Case of Japan)

• A study of Japanese expatriates found that family related problems were the most important issues in expatriate failure

( Fukuda & Chu 1994)

o Adjusting to foreign cultureo Concerns about their mate’s performance at worko Children’s educationo Stage of the family life-cycleo Government restrictions on their employmento Financial Concerns ( Dual Career Couples)

Children & Education

• Japanese executives indicate that children’s education

is the main problem

• Spouses and children had to return to Japan

• 64.7% American, 56.3% British expatriates in Japan, send their children to International schools.

• Small number send their children to Japanese schools. ( 12.5% UK, 2.9% USA)

Satisfaction With Life Abroad

• American and British expatriates and their families were asked 8 items related to satisfaction with life in Japan.

Recommendations

• Select the right person

• Offer Pre-departure training programs

• Provide Support services

• Short-term assignments

Select the Right Person…

• Assess skills, competencies, and international experience

• Assess individual and his/her family’s ability to adapt

Pre-departure Training Programs…

• Cultural awareness programs– Level of interaction (High or Low)– Degree of similarity (High or Low)– Training methods

• Preliminary visits– Provide a preview– Introduction to the business

Pre-departure Training Programs Cont.

• Language training– Key to adjustment– Gain access to social support

structures– Important in terms of task performance and cultural adjustment

Support Services

• Spousal career assistance– Job search assistance– Inter-company networking– Career counseling and support

• Finding suitable schools• Additional orientation programs

– Language training

Short-term assignments

• Extended business trips– Range from several months to one

year• Commuter expatriate assignments

– Commute from home country on a regular basis

• Virtual expatriate assignments– Manages from home-base

U.S. Multinational Corporation

Staffing Policies

• Used parent-country nationals (PCNs) for some control functions– Finance; Accounting

• Used local or third country nationals (TCNs) served for market-sensitive functions– Marketing; Advertising

• Used host-country nationals (HCNs) for greater extent of all levels of management– Management Level

British Multinational Corporation Cont.

Expatriate Policies• Selection

– Informal Interview * – Formal Interview

– Psychometric Testing • Training

– Informal Briefing– Language Training

– Cultural Orientation • Repatriation

– Sink or Swim Attitude

* Informal interview is more reliable because it can avoid potential

candidates intentionally concealing family concerns and issues

British Multinational Corporation

• Staffing Policies

• Use of parent-country nationals expatriates to run foreign subsidiaries– Management Development– Objective of control of local operations

• Intention to employ more third-country nationals (TCNs)

• Ex. Imperial Chemical Industries Ltd. (ICI), Britain’s largest industrial is one of the surveyed companies, and it employed 250 TCNs out of 550 expatriates.

U.S. Multinational Corporation Cont.

Expatriate Policies• Selection

– Performance Record– Psychological Tests – Interviews with both candidate and spouse

• Interviewing both candidate and spouse benefits both the company and the candidate’s family

• Training2/3 of the respondents didn’t have pre-departure training programs

• Trend of employing local nationals • Short-term nature of such assignments • Doubt over the effectiveness of such training program and lack

of time • Fear that employees may leave the company

• Repatriation Lack of clear repatriation policies and comprehensive planning

Japanese Multinational Corporation

Staffing Policies

• Used PCNs more extensively in their top and middle management positions in their oversea operations

• North American operations were relatively more important to Japanese MNCs

• Japanese MNCs prefer to send older and more experienced managers for international assignments

Japanese Multinational Corporation Cont.

Expatriate Policies• Selection

– Managerial talent was the most important criteria for selecting candidates of CEO

– Gender of candidate was being considered in the selection

– Usually women would not be assigned as expatriates • Training

– Provide more rigorous training programs– Stress the importance of language training

• Repatriation – Closer communication with headquarters and

exchange of information – Japanese expatriates have certain planned career

paths at headquarters • Well planned repatriation policies and benefits can reduce family

problems, especially spouse’s dissatisfaction for international assignments.

Work Family Relationships Oracle

Company Profile– Based in Redwood City– Founded in 1977– 40,000+ employees in 1977– Enterprise software giant provides a

range of tools for managing business data, supporting business operations, and facilitating collaboration and application development.

Oracle Expatriate Work/Family Relationships• Expatriate benefits

– Work Relocation reimbursement of up to $20,000

– All phone calls to parent country are reimbursed

– Club memberships

– 4 trips back to parent country per year

– Schools are paid for

– Flexible work schedule, 3 months at host country, 3 months at home country

– Employee Assistance Program (EAP)

– LifeWorks Family Resource and Referral Program