Study On Globalization And Expatriates Management Essay

The globalization of the markets creates a situation where organizations rely on having subsidiaries in foreign countries. For various motives they send employees, so-called expatriates, on foreign assignments. While everyone is aware of the diverse difficulties that occur when trying to adapt to the conditions of the host country, the issue of repatriation was not paid attention until very recently, after all the employees return to a familiar environment and acquainted culture, but there can be numerous problems here as well. Today human resource managers begin to understand that the reintegration is part of the expatriate management process and needs further analysis. Seldom enterprises succeed in binding their expatriates, many of them leave the company, influenced by pull and push factors, within the first few month after their come-back (Dowling et al., 2008: 188 à ist GMAC GRS SURVEY 2006?). Not only job-related but also social reasons play a role and the mostly unexpected reverse cultural shock severely affects them (Bittner 2000 s305 -> LITVZ But all these problems are not irresolvable. Therefore this essay deals with the re-entry process of expatriates. At first the problems from the perspective of the individual and the point of view of the Organisation will be identified and analysed, subsequently possible solutions and strategies for improvement are pointed out.

II. Individual´s perspective

The process of successful reintegration already begins in the preparation phase before the dispatch. To begin with Expatriates need to realize that they won´t be coming back to the familiar environment like nothing happened. One of the gravest problems of the return is, that expatriates don´t expect difficulties and therefore have false expectations. Time also passes in the home country and this ensures new relationships with family, friends and the organisation, which the expatriate then will be confronted with at his return. He alienated himself from the working and living conditions (Jumpertz, no date: online). This might hit him completely unprepared, depending on how much he is up to date (Dowling et al., 2008: 193-196 // unvorbereitet auch in Bittner 2000 s305 -> LITVZ

Typically there will be a new negotiated employment contract in place for the foreign assignment, where not only the time abroad, but always also the comeback should be regulated. It must be clear to what extent the foreign assignment contributes to the individual development plan, how and in what position the expatriate will be re-integrated as well as if there will be a job-guarantee at all (QUELLE). While aspects like salary, tax or social insurance can be clarified in advance, there are still many other problems that can´t, e.g. cultural shock or omission of network relationships (Lischke, 2010: online).

As part of the preparation for as well as during the foreign assignment many companies use a mentoring system. Here a contact person in higher position within the enterprise is assigned to the expatriate. Ideally that person is familiar with the host country and knows the expatriate well. Besides accompanying the preparation these are also responsible to regularly update the Expatriate in terms of changes within the firm through regular conversations. Social developments are also communicated in this connection (Dowling et al., 2008: 185). This way the expatriate never loses the reference to the parent company as well as his own culture and he has more realistic expectations for his return. Like this he can prepare better for new situations and he is less likely to experience the re-entry shock.

Spending the holidays in the home country proves to be a good method to stay in contact with family and friends. Thereby occasional visits to former colleagues keep yourself updated with job-related issues and gossip (Parth, 2008). Related thereto the expatriates can now experience directly how the company is developing. Particularly interesting are the changes concerning personal, power politics or business strategy (Dowling et al., 2008: 185).

Just like the foreign assignment period, the repatriation process also proceeds in various stages. For this Hirsch (1992) generated a 3-stage process model to describe the experiences of the returnee. Before coming home anxiety about the future and uncertainty regarding the reintegration bother him. Phase A, the “naïve integration” (up to 6 month after the homecoming), is shaped by the general euphoria to be back home and the Expatriate wants to communicate his experiences (Karbach 2000 p39??). He only integrates himself superficial. In phase B (6-12 month after) he experiences the so-called reverse cultural shock, where the initial joy made room for disillusionment because his obtained knowledge is ignored. He notices job-related and private changes and increasingly encounters unexpected incomprehensible situations. He starts to feel resignation and dissatisfaction. Only after about one year, in the “real integration”-phase he corrects his expectations and tries to adjust as good as possible without giving up his new ideals (Hirsch 1992 <- nicht nochmal zu nennen, falls die Quelle nicht geht -> /// AUCH: Hirsch 1996 LITVZ -> A similar model comes from Fritz (1982) with “anticipation phase”, “accommodation phase” and “adaptation phase” (sonst auch hier:

The repatriation process is influenced by job-related and social factors:

Although the expatriate never entirely disconnects from home, still he gets shocked at the return: His dream of career progress is shattered, his old workplace staffed and the personal network disrupted (Lischke, 2010: online). In reality in the business environment he is usually confronted with two approaches: For one thing he could be expected to immediately perform like before the foreign assignment, regardless of the new situations he has to go through. On the other hand firms are often inadequately prepared for expatriates and don´t know neither how to handle them after their return nor how to use their experiences, if they are interested in them at all (Dowling et al., 2008: 186). A new (suitable) position has to be assigned to them given partly changed general framework. Even the organisation has developed during the time the expatriate spent abroad.

Another aspect is the adjustment to the new workplace. Here the following three factors play an important role: Relationship to the organisation, new position as well as the use of the newly gained knowledge. The expatriate aligns his individual career expectations to the signals sent by the companies. Commonly these communicate directly or indirectly that a foreign assignment is incredibly worthwhile for their career and that they can expect a promotion after coming home. This way especially young employees are being convinced to face up to this challenge. However if they then don´t obtain a promotion or other financial advantages, disillusionment arises quickly and they start wondering whether all the private sacrifices were worth it, “just” for broadening their horizons (Schuster 1995 p26 à oder halt hier: Even worse: A study has shown that managers, who don´t go abroad, normally move up the career ladder two years faster (Mai, 2009: online). In 45% of the cases the returnee lands up on the same level like before the assignment or the job has nothing to do with their newly acquired skills (Behrens, 2001). This then feels like a demotion because most of the time the expatriates had a higher position with more responsibilities and autonomy in the host country. Over there they took decisions by themselves and now, in the highly organized parent company, they have less degrees of freedom (Seelmann-Holzmann, 2010: online). Also many privileges, like additional fees to pay for the rent, cease now. They lose their special status. If the new skills, in addition to this, are not acknowledged as being useful to the organisation but instead rather ignored or rejected, e.g. with a statement like “here in our country it doesn’t work like this”, then the degree of frustration increases. In many cases the only way out is to leave the company. For potential future staff these signals mean, that obviously the foreign assignment doesn´t come up to its expectations (Dowling et al., 2008: 193-196).

Depending on how much the other surroundings influenced the behavior of the repatriate, they will get into trouble, if they try to apply the foreign management style, e.g. the way of exercising authority, in the home country. Their performance and behavior will never be entirely unaffected by the foreign assignment. Due to the experience of living and working in another country, the repatriate developed as a person and gained more “self-confidence”, competence, “flexibility” and “tolerance”. The problem now is to arrange this “new self” with his “habitus” and “cultural capital” with the job-related and private expectations of his environment (Farrell, no date: online and Dowling et al., 2008: 195). Concerning this I can give an interesting example from my family: The uncle of my father experienced something similar after his first foreign assignment in Nigeria more than 40 years ago. Accompanied by his wife and a little child he relocated and could live there in luxurious. To achieve something in this country, he needed a lot of assertiveness. When the project was finished after four years, he returned to Germany. He had huge difficulties re-adjusting to the German norms. Something that bothered nobody in Nigeria, e. g. weapons, were now prohibited again. There you could solve many problems with money, but not in Germany. In addition his behaviour after coming home showed that he still thought that everybody in Germany would have to follow his orders. Consequently the organisation fired him. Because of his aggressions friends and family distanced themselves from him resulting in a divorce. Thereupon he decided to exclusively work abroad and spent many years working all around the world. Only in mature age he changed, when his desire for security in family and circle of friends was rising.

A former colleague of my father felt the effects and the importance of the correct management of such an assignment. He moved to Denmark together with his family having the promise of a promotion afterwards. But when there was no replacement ready after the 2 years he was put off for another 2 years. His wife however returned to Germany, because their child was required to attend school. By the time he finally returned, others were recommended for his promised position, being abroad he was simply invisible and hence not considered. Due to the dissatisfaction he became an alcoholic. Hereby he also lost his family, friends and ultimately his life in an accident.

Part of the social factors is that family and friends provide a range of opportunities for employees to offset their daily work routine. They can have a positive influence on the acculturation. The long absence and the changes in personality have possibly distanced the expatriate from them. On the basis of his status he perhaps only associated with the elite abroad and now feels socially demoted. He first has to re-establish his social networks. Thanks to the technological developments, staying in contact with home is easier today. It can be quite a shock, if suddenly “the phone does not ring” anymore, because everyone is “busy with their own lives” and the expatriate seems no longer to be part of a large community (Dowling et al., 2008: 196-197). At home he is threatened to be swallowed up by the daily routine. Abroad he could experience new and interesting trips every weekend, now he appears to be caught up at home. It is a narrow line and dilemma, where the right balance of support has to be found, so that the expatriate feels comfortable in the foreign country, but at the same time not impeding the homecoming if they occupy themselves more with the comforts abroad (“host focus”) instead of the developments in the mother country (“home focus”) (Dowling et al., 2008: 186).

Every member of the family who travelled with experiences his own adaption difficulties. They need to get used to the new reality and the loss of certain privileges like a housekeeper, chauffeur or special extra salaries. These losses in standards of living cause discontentment (Scholz 2000 s666?? LITVZ -> Quite in line with the motto “A prince abroad, a poor devil at home” (free translation of a German saying in Nuri, 2008: online). The spouse needs a new job and the children need to find new friends, change schools again and are not up-to-date regarding new trends (Dowling et al., 2008: 197-198). Rarely the suitability of the family members for a foreign assignment is taken into account when selecting an eligible candidate (Steidl, 2003).

III. Viewpoint of the multinational enterprises

Expatriates play a key role for a steadily growing, globally-operating company. These use foreign assignments to achieve certain business objectives like e.g. serving new markets, global corporate culture, personnel development, filling personnel gaps, coordination and control function as well as transferring know-how (Hölper, 2001 à Verweis auf Pawlik, Horsch, Hein ?!?!). The knowledge transfer is necessary because foreign branches are commonly used to produce more cheaply, but to offer the products to the domestic market at the same quality afterwards. Hence the Organisation is considerably more flexible. Conversely they can apply the knowledge, skills, networks, experiences and problem-solving strategies to other concerns of the parent company or foreign subsidiary. Therefore expatriates can be an important source for innovation and creativity which then creates significant competitive advantages over its competitors (Dowling et al., 2008: 203-205).

At the same time the foreign assignment is a costly and risky undertaking. The expatriates represent a major investment for companies to achieve their goals abroad. Multinational enterprises spend between 150,000 and 250,000 €uro per expatriate each foreign assignment (ICUnet.AG, 2010), about four to five times the costs for the same person and position at home (Minssen and Schmidt, 2008). As a result companies should endeavour to maximise the benefits of the assignments. The aim is to find the right compromise through a cost-benefit analysis, but this can be complicated because some aspects, like the degree of knowledge transfer or network establishment are hard to be observed or quantified (Dowling et al., 2008: 202). It is certain, that, if 60% of expatriates exit their firms within the first two years after their foreign assignment, their specialized skills, knowledge and experiences leave as well. This implies a severe loss of human capital and not least money. In the worst case they then start working for the competitor and use their qualities there (ICUnet.AG, 2010). The way how the repatriation process passes should be of particular interest to companies because like that they can increase the profit rate of their investment (the foreign assignment) and develop a large internal labour market for projects in the future. As some studies show, organisations still don´t prepare and escort the repatriation process with the same vigor as they did with the foreign assignment itself. Only 40% of the companies perform a cost-benefit analysis and just 27% carry out a repatriation program where they simply discuss issues such as career goals, performance and future workplace. The developments in recent years point to a change here: Already in 2004 there was a repatriation program of different quality in 86% of the organisations, but only 44% held conversations before the return of the expatriate (Dowling et al., 2008: 199, 202-203).

If the reintegration fails it will have far-reaching consequences for the returnee´s motivation and performance. This way organisations indirectly accept that knowledge, experience and competences can easily move away (Dowling et al., 2008: 203-205 irgendwo). In general this can then be way more expensive than an extensive reintegration program (Hülswitt 2002 s15 -> LITVZ Companies that actively support the reintegration process will be rewarded with loyal employees, which increases its human capital stock. Crucial employees can only be maintained through the activities of IHRM, e.g. using their newly acquired knowledge and assigning a satisfying position that meets the repatriate´s expectations (Dowling et al., 2008: 203-205 irgendwo à Fußnoten Absatz zusammenfassen).

IV. Conclusion and recommendations

Since the return rarely matches the repatriate´s preconceptions, there are to be the mentioned problems in job, social environment and shock experiences. Therefore it is no wonder that hardly any employees want to go and work abroad (7% Pricewaterhouse-Coopers 2009). Solely expatriates in large corporations receive good support, small and medium-sized companies often lack the required resources for that (Lischke, 2010: online). To minimize the problems in future, the following items should be an important component in designing a reintegration program: To begin with firms should outline in what way they are planning to support the expatriate in the repatriation process. Afterwards both the organisation and the expatriate shall do a reality check to prevent false expectations before the return and to work on possible problem areas (Dowling et al., 2008: 205-206). The support for the expatriate may not end with the termination of his project abroad, it must continue so long as he is fully re-integrated, carries out his tasks and feels satisfaction at his workplace (Weber+Festing 1998,s194/ The organisation should clearly communicate the individual career planning, the position after returning and assist at possible workplace changes. Reintegration seminars or trainings can sensitize the employee to the reverse cultural shock. Also not only the repatriate, but also the other members of the family shall receive help in establishing new social contacts and a strong network of relationships, thus he will feel happier and more satisfied (Dowling et al., 2008: 190-192 irgendwo). They all need assistance with social reintegration, flat-hunting and school search, lifestyle changes and additional family problems (Dowling et al., 2008: 207-208). Job application trainings for the partner and extra tuition for the children can certainly help along. Thus the family is under enormous pressure that needs to be encountered with strong cohesion activities. In the case that one family member suffers from the re-entry shock, the organisation should provide experts, who can try to solve the problems (Dowling et al., 2008: 205-206 table 8-2?? à à Quellen Absatz zusammenfassen???). On this occasion it would be good to have contacts to other repatriates to exchange information (Kühlmann/Stahl 1995 s195ff ?? -> LITVZ

Like already mentioned, many companies successfully use a mentor system. Besides the regular transmission of information, these also ensure that the feeling of “out of sight, out of mind” is being alleviated and that the expatriate is not being overlooked in terms of important in-house management decisions (Lischke, 2010: online). The mentors should then also inform the firm about the forthcoming return and co-design the new workplace as well as the adjustment to it. For the success of the re-entry process the “timely and comprehensive planning of the reintegration” plays a major role. This would also reduce the labour turnover rate within the first two years after returning home. Repatriates themselves can then take over the function of a mentor for other employees going abroad (Hölper, 2003). The whole mentor program has to be managed, so that there won´t be any breaks, if e.g. the mentor or other superiors departure from the company (Dowling et al., 2008: 207). Caliguiri and Lazarova (2001?? P389???) investigated strategies that increase the chances for professional, financial and emotional issues, which bother the expatriate and his family, to be discussed and dealt with, so that he returns with complete and well-balanced experiences the company can use afterwards. In addition to the already mentioned aspects they also conclude that the individual career planning and goals as well as performance indicators should be talked about before going abroad. Also the expatriate himself must take action by actively seeking information, steadily calling attention in the parent company and suggesting himself through self-marketing and claims (Seelmann-Holzmann, 2010: online). Besides mentor programs periodical holidays at home and the utilisation of modern methods of communication can be recommended because like this the expatriate is always up-to-date regarding social, familiar and in-house changes and he never loses contact to his home country and culture entirely. Regular invitations to give presentations in the parent company and the intranet to share experiences and information with other expatriates counteract the loss of reality of the home country (Lischke, 2010: online).

The organisation will be rewarded for its efforts in these fields with a highly motivated and content employee who sticks with the company for a longer period and in consequence also introduces his newly acquired, unique experiences and capabilities. That way the firm in total is better placed on a global scale and more competitive as well as, through improved reputation, more attractive for other highly qualified workers (Dowling et al., 2008: 207-208).

In mutual interest the expatriate and the organisation should assemble after the return and perform a reciprocal success control with regard to the agreed objectives (Hölper, 2001). At the same time this also prevents the possible feeling that the repatriate understands himself as an underestimated resource. If companies have realised the importance of the re-entry process, such as the Robert Bosch GmbH, a successful knowledge transfer takes place. This also determines the influence of the special capabilities on corporate success (Dowling et al., 2008: 199-201 wo da? and 208; Robert Bosch GmbH, no date: online). In this way the loop closes as other potential candidates recognize that a foreign assignment can be worthwhile and start applying. Then the company can in turn select the best among them using also the know-how of the repatriate (Hölper, 2003).

Companies and Expatriates need to understand themselves as a unity and support each other, so that a win-win situation emerges for both sides (Dowling et al., 2008: 203-205).

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