Determinants of the Adjustment of Expatriate Managers to Foreign Countries : An Empirical Study
Lee, Hung-Wen
A proposed model of expatriate adjustment to international assignments was developed. Results from a study of 53 Taiwanese banking expatriates in the United States support the model. The results highlight the important role of job satisfaction in expatriate adjustment. They extend previous findings by demonstrating that expatriates who are satisfied with their job in the host country are likely to adjust more effectively cross-culturally, that job satisfaction is a strong predictor of cross-cultural adjustment. They also point to the important role of organization socialization. This study found that organizational socialization in the host country was also an important predictor of cross-cultural adjustment. The results showed that adjustment was enhanced with greater job satisfaction and better socialization in the host country on the part of expatriate managers.
Introduction
Business has become increasingly international. One of the greatest challenges is how to manage human resources on a global scale. To be successfully implemented, global business strategic requires global human resource systems and globally competent people. The human resource personnel need to understand the multi faceted nature of their employees’ identities and maximize the potential of each employee. Hence, an understanding of the identities and traditions of these persons becomes an imperative especially in the era of knowledge economy.
Enterprises can pursue business opportunities abroad in the current era of rapid globalization. Many multinational corporations (MNCs) constantly expand their businesses beyond their own national boundaries and plan increasing globalization. Expatriation represents the most expensive staffing strategy for the multinational corporation, but it remains a viable method for increasing the corporation’s understanding of international operations. While organizations may perceive expatriation as an attractive method for accumulating foreign markets, they face the challenges of selection and management of the most appropriate individuals. Thus factors contributing to the successful expatriation experience are significant to MNCs.
Statement of the Problem
At the beginning of the twenty-first century, corporations and other organizations increasingly are turning to globalization as a strategy for strengthening their market shares and profits. Success in this effort requires an adequate number of expatriate employees who can implement the organization’s strategies in a particular host country.
As more corporations expand internationally, demand for competent expatriate employees continues to increase (Gregersen, Black, & Morrison, 1998).The international movement of human resources has generated the development of research that targets the adjustment of expatriates in foreign cultures. However, previous research has been developed, but information on Taiwanese who are preparing for oversea assignments was rare and needed.
Purpose of the Study
The purpose of this research focused on examining the relationship between independent variables (job satisfaction, family support, learning orientation, organizational socialization, and cross-cultural training) and the dependent variable (cross-cultural adjustment) in a proposed model of cross-cultural adjustment. This study was unique because it dealt specifically with Taiwanese expatriates.
Research Questions
The purpose of this study was to examine the relationship between particular independent variables and the dependent variable. Specifically, the research questions was included: Does the proposed model well predict the cross-cultural adjustment of Taiwanese expatriates?
Definitions
Multinational Corporation (MNC)
According to Root (1994), an MNC is a parent company that engages in foreign production through its affiliates located in several countries, exercises direct control over the policies of its affiliates, and implements business strategies in production, marketing, finance and staffing that transcend national boundaries.
Globalization
A relatively new phenomenon that emerged in the last part of the 20th century, globalization has caused and was caused by a converging of economic and social forces, of interests, commitments, values, challenges and opportunities (Marquardt & Berger, 2003). Globalization may be a positive force for greater cross-cultural understanding via more cross cultural exposure and closer cross-border ties (Tomlinson, 1999).
Expatriate
An expatriate is an employee who is sent by a multinational parent company on a work assignment to a foreign nation (Aycan & Kanungo, 1997). However, due to cultural differences and barriers, it may be even more difficult for expatriates to rely on current organizational members and native citizens in making sense of their new environment.
Cross-Cultural Adjustment
Cross-cultural adjustment is generally defined as the process of adaptation to living and working in a foreign culture. It is the perceived degree of psychological comfort and familiarity a person has with the new host culture (Black, 1988; Black, Mendenhall, & Oddou, 1991).
Job Satisfaction
May be defined as the positive emotional state resulting from the overall evaluation of one’s job (Shaffer & Harrison, 1998).
Family Support
The extent to which family members are concerned and committed to the family and the degree to which family members are helpful and supportive of each other (Moos, Insel, & Humphrey, 1974).
Learning Orientation
Learning orientation is an individual’s motivation, desire, or readiness to learn (Porter &Tansky, 1999).
Organizational Socialization
The process whereby an individual develops an understanding of the value, expected behaviors, and social knowledge that are essential for assuming an organizational role and for participating as an organizational member (Chatman, 1991).
Review of Literature
Expatriation
Expatriates
For many organizations, sending expatriates abroad to develop global competencies is consistent with their overall strategic human resource plan. In general, expatriates find the position to offer developmental experiences and report having gained tangible skills that are value-added for their organizations. Oddou and Mendenhall (1991) surveyed expatriates and found that 90 percent report an increase in their global perspectives, 80 percent report being able to communicate more effectively with people from culturally diverse backgrounds, and 80 percent are better able to comprehend business trends. These results indicate a tremendous developmental benefit from foreign assignments.
Louis (1980), studying work transitions, discussed the changes, contrasts, and surprises within the organization which newcomers to organizations experience and attempt to understand. Expatriates will need to make sense of not only the new organizational facility, but also the foreign country. The foreign country may entail different political, economic, and monetary systems, a different language, and different norms and standards of behavior compared to the expatriate’s home country, which results in the expatriate having to overcome culture shock (Oberg, 1960).
Advantages of Expatriation
Expatriate assignments may facilitate intersubsidiary communication and coordination (Boyacigiller, 1991; Rosenzweig, 1994) by transferring overall corporate philosophies and the company vision along with the expatriate. Having worked for the company in its home location, it is likely that the expatriate has “bought into” the corporate culture through assimilation and socialization, and would therefore communicate goals and objectives in the manner in which they were intended.
The use of expatriates in overseas subsidiaries may also aid in forming linkages with other nations (Boyacigiller, 1991 ). Ongoing relationships with host-country governments, Λ domestic businesses, and other interest groups can enhance the competitiveness of firms operating abroad. As their firms compete for access and for market share in the . international arena, the “first-mover advantages” associated with government ‘ concessions and establishing efficient channels for distribution may by critical to long- ·· term success.
The practice of employing expatriates may be a strategic move on the part of an MNC ‘,j to increase the international experience and knowledge base of present and future managers (Boyacigiller, 1991 ). A significant advantage of expatriation is the organization that is facilitated by the expatriate’s experiences overseas. This expatriation is a tool by which organizations can gather and maintain a resident base of knowledge, which in , turn helps with the complexities of international management. This knowledge in turn provides for competitive advantage by creating a cadre of cosmopolitan executives sensitive to international opportunities.
Expatriates’ Success
Multinational corporations, wanting consistency in culture across their subsidiaries, might try to export the parent company’s culture by staffing expatriates in key positions of its foreign subsidiaries. MNCs using this tactic believe that expatriates can significantly ‘ impact the subsidiaries’ cultures (Kobrin, 1988). Selecting expatriates for foreign assignments would be quite simple for MNCs if success in domestic assignments were ‘ predictive of success in foreign assignments.
The expatriates in a given subsidiary, however, are generally working in environments comprised of many more host nationals than compatriot expatriates. This results in an organizational culture more similar to the host country than that of the more familiar parent country (Louis, 1980). Expatriates will adapt their behaviors, norms, and values to fit in and ultimately succeed in the cross-cultural environment. “,’
MNCs can maximize the likelihood of expatriate’s success through appropriate selection !’ programs. Since the dimensions comprising the performance construct for expatriate positions differ from performance in domestic positions, expatriate employees in a foreign environment need a somewhat different set of skills and abilities to accomplish the same job they performed successfully in a domestic environment (Tung, 1981).
Theory
An Integration of Multiple Theoretical Perspectives
Although international adjustment has received increased scholarly attention, the majority of the writing has been anecdotal in nature, and few scholars have rigorously investigated the phenomenon, empirically or theoretically (Adler, 1983a; Black & Mendenhall, 1990; Ky i, 1988; Schollhammer, 1975). Five dimensions emerged as components of the crosscultural adjustment process: (a) predeparture training, (b) previous overseas experience, (c) organizational selection mechanisms, (d) individual skills, and (e) nonwork factors.
The first three dimensions describe issues that exist before expatriates leave their home countries, and the remaining two deal with issues that become relevant after the expatriates arrive at their foreign assignments.
However, scholars in the area of international human resource management have not utilized the domestic adjustment literature in order to formulate theories or models that would assist them in understanding the international adjustment process (Black et al., 1991). Domestic adjustment involves the basic process of adjusting to a new setting. The literature provides important insights for constructing a theoretical framework for international adjustment. Consequently, four areas of research are related to individual adjustment (Ashford & Taylor, 1990): (a) organizational socialization, (b) career transitions and sense making, (c) work role transition, and (d) relocation/domestic transfer.
In both, domestic adjustment and international adjustment literatures, an individual leaves a familiar setting and enters an unfamiliar one. Because the new setting is unfamiliar, it upsets old routines and creates psychological uncertainty. Scholars from both literatures either argue or imply that individuals generally have a desire to reduce the uncertainty inherent in the new setting, especially concerning new behaviors that might be required or expected and old behaviors that would be considered unacceptable or inappropriate.
In general, the domestic adjustment literature has focused on pre- and post-entry adjustment variables, especially those related to the job and the organization, and the mode and degree of adjustment, whereas the international adjustment literature has focused on individual and non-job variables and on degree of adjustment. A more comprehensive understanding of international adjustment can be gained by integrating both literatures rather than simply extrapolating from the domestic adjustment or from only relying on the extant cross-cultural adjustment literature (Black et al., 1991).
Methodology
Research Population
The population of this study was Taiwanese financial institution expatriates in the United States. To select the sample for this study, the membership directory published by the Banking expatriates Association of the Republic of China was used. A random selection method was use to obtain the possible sample. The final sample comprised 53 managers from the Expatriate Association who completed the specially-derived questionnaire.
Research Design
Empirical studies tried to determine if certain factors were related to international adjustment. In the past, scholars in the international adjustment area have relied primarily on international adjustment literature, neglecting domestic adjustment literature. Black, Mendenhall, & Oddou (1991) believed that comparison of domestic and international adjustment has contributed to a more comprehensive theoretical framework of international adjustment, but future comparison and integration are needed to further refine and make more comprehensive theories. Based on Black et al.’s comments and this researcher’s opinion, there is enough support showing the influence of the variables to construct the model.
The quantitative research method was used in this study. The purpose of this research focused on examining the relationship between independent variables (job satisfaction, family support, learning orientation, organizational socialization, and cross-cultural training) and the dependent variable (cross-cultural adjustment) in the proposed model. These provided possible explanations about relationships between the given set of variables and the cross-cultural adjustment of Taiwanese expatriates participating in the study. The research design provided a basis for answering the research questions.
Instrumentation
Cross-Cultural Adjustment
Black’s (1988) cross-cultural adjustment questionnaire was used in this study. The questionnaire consisted of 14 questions. Of the fourteen items, seven items measure general adjustment, four items measure interaction adjustment, and three items measure work adjustment.
Job Satisfaction
Hackman and Oldman’s (1975) questionnaire of general job satisfaction was used as job satisfaction questionnaire in this study. This questionnaire indicated whether the expatriates felt satisfied in their jobs.
Family Support
King, Mattimore, and Adams’s ( 1995) questionnaire of family support inventory was partially adopted as the family support questionnaire in this study. 10 questions with higher reliability were chosen.
Learning Orientation
Porter and Tansky’s ( 1999) questionnaire of learning orientation was used in this study. The questionnaire consisted of 8 questions. This measure required participants to indicate on a 5-point Likert scale the extent to which they agreed or disagreed with statement. Organization Socialization
Jones’ (1986) and Chao, O’Leary-Kelly, Wolf, Klein, and Gardner’s (1994) questionnaires of socialization were used. Jones’s items focused primarily on the measurement of socialization tactics employed.
Cross-Cultural Training
Ku’s (1993) questionnaire was used as the cross-cultural training questionnaire in this study. The questionnaire consisted of 5 questions. This measure required participants to indicate on a 5-point Likert scale the extent to which they agreed or disagreed.
Reliability
The reliability of a measure refers to its consistency. Internal consistency reliability is determined by checking the components of a questionnaire against each other. Internal consistency reliability in the form of Cronbach alpha is the type reported in this research. Internal consistency reliability estimates were produced for the dependent variable scale and five independent variable scales. This was done to verify the accuracy of the measurement process. In this study reliability estimates ranged from .6724 to .9375 for the pilot data. These all fall in between the range of “minimally acceptable” and the range of “very good” according to the guidelines provided by DeVellis (1991).
Statistics Analysis
All statistical data analyses were performed on a PC computer using SPSS (Statistical Package for the Social Science) for Windows, Version 10. The statistical method applied to this study was regression. A multiple regression analysis and correlation coefficient were conducted to see how well the proposed model predicted the overall cross-cultural adjustment from job satisfaction, family support, learning orientation, organization socialization, and cross-culture training. With multiple regression analysis, each individual or case has scores on multiple independent variables and on a dependent variable. A predicted dependent variable is formed that is a linear combination of the multiple independent variables.
Results
A multiple regression analysis was conducted to see how well the proposed model predicted overall cross-cultural adjustment from job satisfaction, family support, learning orientation, organization socialization, and cross-culture training. The linear combination of the proposed model was significantly related to cross-cultural adjustment, F (5,47) = 3.62, p = .007
Based on the magnitude of the correlation coefficient, the researcher concluded that the overall proposed model was significantly related to cross-cultural adjustment in this sample. Twenty-seven point eight percent of the variance of the proposed model was associated with overall cross-cultural adjustment. There was a statistically significant linear relationship between independent variables (job satisfaction, family support, learning orientation, organization socialization, and cross-cultural training) and the dependent variable (cross-cultural adjustment). Thus the proposed model was statistically significant to cross-cultural adjustment.
One of the findings of this research was the evidence of the important role of job satisfaction. The results of this research replicated previous findings by demonstrating that expatriates who were satisfied with their job in the host country were likely to adjust more effectively cross-culturally. The other finding of this research was to support the important role of organization socialization. The results (r = .35, p
Conclusion
The goals for a successful cross-cultural assignment are to choose the best person for the situation, optimize their effectiveness, and maximize the performance of the entire organization. Successful cross-cultural assignments strengthen the communication channels, providing a first hand source of information on the economic and political circumstances. Consequently, in addition to accomplishing the immediate concrete objectives, successful cross-cultural assignments can increase the corporation’s international reputation and profits.
The results provided practical implications for managing expatriates. In testing the relationship among the variables in the proposed model of cross-cultural adjustment, this study provided a comprehensive framework that can be used to guide the design and development of international human resource interventions that promote the crosscultural adjustment of expatriates.
In terms of selection of expatriates, this study reveals that job satisfaction was important for the adjustment of expatriates. The results showed that expatriate adjustment was enhanced by greater satisfaction in the host country. Given the associations between job satisfaction and cross-cultural adjustment, multinationals needed to ensure that they have human resource polices and practices to support job satisfaction of their expatriates while abroad. Maximizing job satisfaction would likely have expatriates who were more cooperative and willing to help the corporations be successful.
Furthermore, expatriates should be encouraged to strengthen work-related relationships and networks. Expatriate job-relevant information could be developed to support the establishment of expatriate networks. In addition to formal socialization mechanisms, expatriates should also be encouraged to become involved in informal social activities. Multinational corporations need to recognize that modifying the socialization policies and practices can have a positive influence on their expatriates’ adjustment.
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Lee, Hung-Wen
National Chia-Yi University, Taiwan
Liu, Ching-Hsiang
National Formosa University, Taiwan
Copyright International Journal of Management Jun 2006
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