International assignments are an integral part of the current state of the world due to globalization. Businesses and companies seek to expand their territory across boundaries and thereby target a larger market share.
The development of technology has actually made the whole process easy as it is very easy to communicate with subsidiary managers as well as move from one country to the other. International assignments are however not assigned to any employee but are mainly given to managers and executives who demonstrate a high level of competency with regard to the assignment and working in a multi-cultural context.
This is a very interesting topic as it gives insight into the process of expatriation, it advantages as well as the challenges faced when one goes on an international assignment. This paper will focus on discussing precisely these issues so as to gain a better understanding about international assignments.
The process of international assignment takes place in three distinct stages as indicated in the figure below (Bonache, Brewster, & Suutari, 2001):
The first stage is the pre-assignment stage and involves selection and preparation. This phase entails the use of four types of variables that are paramount in contributing towards the success/failure of an assignment. They are technical competence on the assignment since the expatriate will be very far away from the mother company thus cannot readily consult peers and superiors.
This way, the individual should demonstrate a very high degree of technical competence in relation to the task at hand. The other selection variable is personal traits with a focus on the individual’s ability to effectively relate with his/her peers, superiors, business associates, subordinates and clients. This is a very significant variable with regard to working in a multi-cultural context.
During the selection process, the expatriates should show their ability to amicable handle environmental variables. The expatriate is required to show a high level of competency in coping with governments, customers, unions and competitors. Despite the fact that the environmental systems in a foreign country may be different from that of the expatriate’s home country, understanding the systems first is very necessary so that the expatriate can operate in accordance with these systems.
In case the expatriate is required to move with his/her family, during the selection process, it will be very necessary to ensure that the expatriate’s family is willing and ready to adjust to the living conditions in the host country. This is especially very complicated when one of the spouses is forced to give up their career so as to accompany their partners in the foreign country (Reiche & Harzing, 2009).
After thoroughly and carefully selecting the expatriates, they are prepared by engaging them in diverse cross-cultural training programs so that they can gain insight on their own cultural backgrounds, the specific cultural features of the host country, the degree of contact required with the host country, duration of assignment, family situation and communication skills with a special focus on language.
This kind of preparation is essential because it enables the expatriates to know what is expected of them hence develop the necessary strategies required to attain effectiveness while in the foreign country (Black, Mendenhall, & Oddou, 1991).
Culture shock is inevitable with regard to exposure to a foreign country as is the case during international assignments. However, it gives rise to uncertainty and stress which can be dealt with if the expatriate’s anticipatory adjustment is positive based on cross-cultural training and prior international experience. The expatriate is required to make adjustments based on work, local nationals and living conditions.
The spouse is part of the adjustment process and there is need that he/she is equally prepared before arrival in the foreign country. Finally, once the assignment is over and he international assignee is required to go back home, it is important that he/she is prepared for the journey back home. This is attributed to the fact that the assignee may encounter another culture shock that he/she may not be able to cope with hence resulting into negative effects such as job resignation and loss of valuable employees.
Effective management of human talent is a very important factor for competitive differentiation in determining the success of organizations. This is because, the human ability is known to invent and develop products and services that are later sold to the public.
The workplace, for many decades, has been composed of people and as companies and organizations extend beyond the boundaries, international assignments have become commonplace. Globalization has been at the forefront in promoting the growth of business across cities, states, regions and countries (Stroh, et al., 2009).
International assignments entail the deployment of nationals from a given country to a different country, where they live and work for a given period of time depending on the assignment. They take place in three forms: ethnocentric, polycentric and geocentric. The ethnocentric form entails the appointment of parent country nationals to executive posts at the subsidiary companies.
Polycentric kind of orientation is where host country nationals are appointed while the geocentric form entails the appointment of the most suitable individual irrespective of their nationality thus accommodates third country nationals (nationals from other countries other than the MNC’s or the subsidiary’s countries).
Heenan and Perlmutter (1979) identified a fourth kind of approach, the regiocentric orientation where managers are given transfers to different regions. The mode of appointment is chosen depending on the MNC’s preference and decision.
There are various reasons as to why a company may want to send an employee to its subsidiary company in a foreign country. The Edstrom and Galbraith (1977) typology is used to explain the reason why managers are sent on international assignment based on three motives.
To start with, there is the need to fill up positions and this entails the transfer of technical and managerial knowledge. This is very much applicable in developing countries where the qualifications of the desired person are not available. This cannot be ruled out in developed countries as well since specific knowledge transfer may be required.
This is attributed to the fact that the expatriates are considered to be the key bearers of tacit knowledge. Secondly, the assignment is vital for management development since it enables the manager to gain international experience, which may be required for future use. International assignments based on management development do not take into consideration the availability of qualified host-country nationals.
Lastly, international assignments are carried out for the purpose of organization development. This is necessary so as to establish socialization between the expatriates and local managers, as well as develop verbal information network to link the subsidiary companies and the headquarters.
International assignments serve the purpose of coordination and control with regard to three main elements. Expatriates provide personal/cultural control by replacing or complementing headquarters centralization of decision-making as well as directly surveying the subsidiary companies. Expatriates also exercise control through socialization and creation of informal communication networks. This they do by moving from one subsidiary company to another establishing a certain kind of informal communication network.
This they do by assuming the roles of a bumble-bee fly and spiders. This helps the subsidiary companies to function independently by facilitating informal control. On the other hand, there are subsidiaries which are highly dependent on the headquarter company and in such a case the expatriate tends to facilitate direct expatriate control (Reiche & Harzing, 2009).
Coordination and control of MNCs has been greatly enabled by advances in transportation and communication technology. It is because of this technology that companies have been able to expand into other countries and are globalizing at very great rates. However, there arises some misunderstanding with regard to cultural diversity because different people from different cultures, countries and regions perceive things differently.
In the way, management styles are different and therefore, a manager may face a great challenge trying to adjust and fit into the culture of the host/foreign country. Failure to act in accordance with the culture in the foreign country may jeopardize achievement of the formulated and set objectives.
It is because of the great challenges involved with international assignments that have led to the development of alternative forms of expatriation. To start with, there are inpatriate assignments where managers of subsidiary companies are transferred to the headquarters for a given period of time so that the manager gets to know and understand the operations of the parent company thereby, establish informal communication networks (Harvey, Novicevic & Speier, 2000).
This also enables the subsidiary managers to have a direct link with the corporate culture and plays a key role in exposing parent company managers to the international perception.
Short-term assignments are another alternative used to counteract the challenges associated with expatriation. Short-term assignments usually last for a period between 1-12 months and the expatriate in this case does not have to go with his/her family hence avoiding the challenges and disruptions associated with relocating an entire family (Collings, Scullion, & Morley, 2007). Short-term assignments are rather ad hoc and tend to be less formal thus are not too involving.
They are cost-effective and require less bureaucratic efforts in addition to the fact they can be promptly and flexibly carried out. However, short-term assignments do not allow the expatriates to establish local networks with the local colleagues and customers. In addition, their marriages are at risk since their roles in their marriages if left pending (Tahvanainen, Worm, & Welch, 2005).
There are various uncertainties that are associated with international assignments. Expatriates are usually concerned about the status of their compensation and benefits. There are concerns about compensation and benefits retention during stay of the expatriates in the foreign country. In addition, the expatriates are worried that they would not be compensated for the additional expenses they incur and especially in foreign countries where the cost of living is higher.
Tax is a very sensitive issue as it forms the largest part of the costs linked to subsidiaries. An international assignment is a very expensive venture for both the organization and the expatriate. While the organization is required to pay tax liabilities on benefits associated with the assignment such as accommodation under tax equalization, an expatriate on the other hand incurs additional expense when having to relocate with the family.
Most companies and individuals continuously believe that international assignments are imperative with regard to escalating the managers’ global competence (Gregersen, Morrison & Black, 1998). Since international assignments entail working in a cross-cultural context, it enables managers and selected international assignees to comprehend how to efficiently and effectively function within such a multinational and multicultural business environment.
Harris, Brewster & Sparrow (2003) have stated that unfortunately, these competencies do not benefit an individual directly since the skills are directed towards enhancing the performance of an organization or company. It is true that international assignments play a key role in enhancing the knowing how of assignees but these skills and knowledge cannot be transferred to their home context.
Managers and executives are required, and should possess the abilities to place emphasis and understand the peculiar needs of local foreign customers, labor pools, government policies, suppliers, and technology to effectively and efficiently formulate and implement strategic plans. In addition, there is need to focus on the general global market trends.
Great environment scanning abilities are necessary for the manager to help them pick up the relevant and necessary information. Extensive knowledge and processing ability is necessary if data is to be categorized and interpreted effectively. To second an earlier mentioned statement, international assignments require the international assignees to possess great interpersonal skills that are necessary while integrating and working with the people in the foreign country.
International assignees are usually managers, highly recognized executives within an organization or some other highly selected individuals with proficient skills in handling the assignment at hand. It is very important that managers develop the required skills in as far as international assignments are concerned because, the world in the 21st century where globalization is inevitable and therefore, managers and individuals who can work with people from different cultures, religions and ethnicities are a necessity (Stroh et al., 2009).
International assignments are now considered part of the pedigree required while trying to look for talented individuals within an organization. International assignments are considered important in developing global leaders in the present global society. If growth and prosperity is to be achieved within an organization, then it becomes very difficult to do away with international assignments since business growth entails growing beyond the local boundaries.
The Philip Morris Companies for example owes its growth due to its ability to identify and know its global ‘bench-strength’ alongside appreciating its people as strategic weapons. As a manager or leader in a company, one is required to be very adept in handling different kinds of people because having a global business means managing teams made up of people across different cultures.
The Philip Morris Companies Inc. spends a great deal of time on international assignments as a typical leadership technique. The Generic Electric (GE) is another company that appreciates international assignments as a means of gaining knowledge and experience that is very vital in the 21st century.
This is because the company needs to know how it should compete and satisfy the global-base market hence the manger at GE are required to comprehend the global markets, competitors, consumers and suppliers (Stroh et al., 2009).
International assignments are not a means of progressing in relation to one’s career; rather it is a chance for assessing one’s ability in handling challenges as well as extending business. They are a central component of the global management approach of a majority of organizations.
The reason for this is that once an international assignee has returned home from the international assignment, they are not promoted and face a difficult time trying to adjust with their former state. The main importance of these assignments is to ensure the smooth running of subsidiary business in compliance with the headquarter objectives.
International assignments are associated with various benefits like development of global leadership skills. On the other hand, there are some problems revolving around these assignments like heavy costs incurred by an organization, the organizations risks losing valuable employees and there is lack of certainty with regard to career progression and development once the assignment is over (Lazarova & Caligiuri, 2004).
The international assignee selected for the assignment is faced with great challenges including resistance to set a posting date because of “family constraints, issues of personal investment into cultural and work adaptation, reverse culture shock and applicability of the capabilities gained during and after an IA” (Suutari & Brewster, 2004).
Management of the global leadership gap is the main focus with regard to international businesses. However, the lack of high quality talent is a huge impediment to successful execution of international assignments.
Therefore, there is a great need for an organization to carry out a thorough careful selection process so as to identify the individuals who are most preferred for the assignment. Poor selection is very costly to organizations as it leads to losses (direct and indirect costs). The selection process entails a central focus on prediction of job context rather than job context.
Only individuals who have demonstrated a great deal of competency with reference to the assignment at hand are considered for the job. Qualified individuals showing the capability of being able to effectively handle challenges that are prevalent while working with individuals, organizations and groups that have different perceptions and approaches in carrying out duties are selected for expatriation (Caligiuri, Tarique & Jacobs, 2009).
Hall, Zhu & Yan (2001) are of the opinion that international assignments are very crucial in terms of development of leadership skills as they expose managers to surprises hence triggering reflection and exploration, which are very important elements in learning. It is evident as earlier seen through examples that multinational organizations recognize the necessity of international assignments in fostering leadership development.
Despite the argument that international assignments do not promise career growth/progression, one cannot assume the fact that expatriates gain a lot of experience and skills since they are able to have a global perspective of the organization’s business and thereby work well with people from various cultural backgrounds (Dickmann & Harris, 2005).
It is worth noting that not all international assignments offer valuable developmental experiences to leaders/mangers. This is attributed to the fact that the assignments could be short-term and efficient use of time and resources is called for. As a result, there is dilution of development experiences for the manager. In addition, the learning ability and personality traits of the leaders could also be an impediment to gaining developmental experiences (Dalton & Ernst, 2004).
International assignments involve more than just one department. If a marketing division of a company intends to venture in an international assignment, then there is need to involve other departments for the expatriate assignment to be successful. When an expatriate is selected, the human resource manager consents the selected person and subsequently holds consultations with other executives to deliberate on the suitability of the selected candidate as the ideal expatriate.
The global mobility coordinator (GMC) is then consulted with regard to international relocations and it is the global mobility coordinator that defines and structures the assignment in the most attractive offer. The GMC seeks answers to the following (Halverson, 2004):
The necessity of the relocation and if it can be executed by a different person in the host country
Whether the assignment is temporary or permanent
The business objectives of the assignment and where they are SMART
Why the selected candidate is the best person to be sent on the expatriate assignment
If the company is ready to shoulder the costs that come with an international transfer
A relocation company is consulted to give the estimated costs for the relocation. The home and host country need to arrive at a consensus with regard to the assignment. The host country human resource manager should be actively involved in the assignment so that he/she is able to explicitly explain it to the rest of the executive and management team of the company in the host country. The home and host countries should reach a consensus on (Halverson, 2004):
The start and end date of the assignment
The corporate entity that will be responsible for the relocation costs
The process through which charge-backs are handled
When all the above have been met, there are other factors that need to be addressed (Halverson, 2004):
Immigration process with a focus on attainment of work permits and visas
Where the expatriate’s payroll will be processed
Whether promotion is guaranteed
Benefits that will accompany the relocation
Payment of taxes
The assignment should be in accordance with both the home and host country laws
The assignment should be easily tracked in the general ledger
Enough money should be allocated for this assignment
Changes related to the international assignment should be continuously updated
A senior engineer from a certain European electronics company was given an international assignment based in Saudi Arabia for a period of four years. The entire assignment cost approximately $ 4million.
The senior engineer was able to learn and speak fluent Arabic; he gained new technical skills and expanded his network of friends. However, after the man went back home, he was in constant arguments with his colleagues, superiors and subordinates because he had become so much adjusted to the Arabic’s way of doing things that he had practically forgotten how things ran in the headquarters.
To add on to his misery, he waited for close to nine months before he could get a permanent assignment, which granted him lesser authority and power than he had had while in Saudi Arabia. As is the usual trend in most cases upon repatriation, the man resigned from his job and joined a direct competitor, where he ended up maximizing on the knowledge and skills gained from Saudi Arabia to compete against his former employer (Black & Gregersen, 1999).
This case study clearly shows how international assignments bring about huge set-backs upon the company and repatriate. Therefore, it is important that repatriates receive the same kind of preparation they received during transfer to a foreign country. This is because, they have gotten used to the systems and culture in the foreign country that overlap their initially held perceptions and cultural traits.
International assignments are necessary in today’s current world but, the style in which they are designed and implement is paramount. This is important so that the assignment is successful and when the expatriate eventually returns to his/her home country, he/she will continue living and working just as before.
However, in most cases as seen from the case study above, repatriates do not get any preparation upon returning home and as a result are not able to cope with their former situation. International assignments help in managing businesses overseas but in doing so, organizations and companies should factor in all the anticipated challenges and help the international assignees cope with them in the most amicable way possible.
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