Anderson (2005) indicates that although some development has been made in selection and training stage, many problems which recognized in the 1980s are still present today. Consequently, these expatriation issues involve inappropriate selection procedures, poor training before departure expatriates, and expatriates’ with their family’s inability of cultural and physical adjustment and derivative other concerns such as expatriate failure (Dowling, Festing & Engle, 2008).
2.2 Expatriate failure
Although MNCs recognize the importance of expatriates as they implement international strategies, today most MNCs are still struggling with a high rate of expatriate failure (Expired Expressions, 2007). In developed countries which expatriates are transferred to, failure rate is between 25 and 40 percent, compared to expatriate failure rate in developing countries is approximately 70 percent (Tran & Wong, 2006). In general, expatriate failure is defined as the “premature return of an expatriate”, which means expatriates return to their home country before the assignment is completed. Lee (2007, p.1) defines a more precisely view of expatriate failure in areas of “not achieving performance objectives, repatriation difficulties and more specifically, undervaluing the skills and knowledge of repatriates, are just as important in defining expatriate success and failure”.
Failure of expatriation not only has a negative influence on expatriate themselves, but also incurs a financial and societal cost for MNCs (Dowling, Festing & Engle, 2008). Tran and Wong (2006) estimate that direct costs of expatriates’ premature return are roughly USD$ 250,000 to USD$1 million. The societal cost could be loss of company reputation and market share, failed negotiations, and difficulties with host-government officials (Dowling, Festing & Engle, 2008).
But, what caused expatriate failure? state common reasons which connect with expatriates’ failure from previous till now; poor culture adjustment (neither expatriates nor their families); length of international assignment; expatriates do not really willing to move; language differences; poor organisational support. Anderson (2005) also claims that spouse and family issue of physical and cultural adjustment still continues impacted on assignment failure for two decades. This circumstance presents that most companies do not have an effective method to cope with this problem.
Furthermore, Enderwick and Hodgson (1993) point out that most expatriate failure are caused by a poor selection process and inappropriate pre-training. When HR managers select expatriates, they usually focus on candidates’ technique ability rather than self-ability of environment adjustment or just simply fill an urgent vacancy requirement overseas. From above reasons, there is an error in early three stages of selection, pre-training and “arrival and support” needs to be concerned. These errors results expatriate failure and have a bad impact on stage of repatriation (Gao & Lange, 2005).
2.3 Review of expatriation issues in Saab Training System (STS) and the Swedish Red Cross
From Anderson (2005) point of view, the problems such as expatriate failure which indentified in the 1980s are still present today. Almost all expatriates get pre-departure training before transferring. So, why the problems still happen during the expatriation period? In Tran and Wong’s (2006) research, an investigation has been made of both from an expatriates’ perspective of pre-departure and from a company’s perspective of selection and pre-departure process in the case of STS and the Swedish Red Cross.
- From STS expatriates point of view, they argue that there were not any particular program to improve their work skills or any training to assist them better adjust living and working in a foreign environment. Furthermore, in the Swedish Red Cross, expatriates argued that even though organizations provide training before departure, the training emphasis on work-related issues rather than cultural awareness in training process.
- From organizations’ perspective, STS tends to select candidates with higher work-related skills such as previous experiences in the same field; language and leadership skills because the ability of adjust in different cultures is not easy to measure like technical skills. In Red Cross, the organization generally faces emergency situations; there will be no time for training. So, Red Cross prefers to choose experienced expatriates assigned to the assignment and provides support with the practical details but disregards the cultural training. Also, the HR managers from STS argue that the lacks of resources such as budgets and do not have suitable people to handle the training are the reasons why the organization cannot offer a program to meet expatriates’ needs (Tran & Wong, 2006).
3.0 Repatriation
Repatriation is the final process of expatriation and this activity involves the move of the expatriates back to the parent country or company from a foreign country when they complete their international assignments (Dowling, Festing & Engle, 2008). According to Shen and Edwards (2005), the process of repatriation can be broken down to four steps; preparation, physical relocation, transition and readjustment. More importantly, expatriates have to face cultural and work adjustment again, rebuild their social and professional network and re-connect their new career division in organization after they return to their home country. The role of repatriates is as vital as expatriates for the organization. Bark and Bergman (2008) state that repatriates are valued human capital for MNCs because they bring knowledge and experiences back that can benefit and have positive impact of the organization. Therefore, how organizations maximize and capture these valued human capitals will be a key factor for organization’s success.
3.1 Issue associated with repatriation
As mentioned before, from HRM perspective, the expatriation process includes selection, pre-training, arrival and support and repatriation (Tran & Wong, 2006). If there any error incurs in the early three stages, not only caused expatriate failure but also result an ineffective repatriation such as re-entry shock and repatriate turnover (Gao & Lange, 2005). The initial expatriates selection of expatriation and pre-training processes may be responsible on this re-adjusting difficulty of repatriation due to lack of selection criteria on candidates’ interpersonal adjust ability and inappropriate pre-training in the organisation (Mesmer-Magnus & Viswesvaran, 2008).
Furthermore, repatriation may be a harder process for international assignees than expatriation because repatriates need to experience cultural or work adjustment twice, culture shock out and culture back (Dowling, Festing & Engle, 2008). So, the poor re-entry adjustment of ineffective repatriation will cause repatriate intend to leave the organisations (Bark & Bergman, 2008). Tran and Wong (2006) also argue that lack of career development is the other issue of repatriate turnover. Because a majority of repatriates often have their own career plan for future and organisations usually ignore or do not provide other better opportunities for them.
According to Dowling, Festing and Engle (2008), MNCs paid less attention on repatriation process and there were just a few literatures regarding this area in the past. Due to increasing globalization, more and more expatriates are sent into overseas to assign international assignments, MNCs and academics start recognizing the importance of repatriation. Even though some MNCs start being aware of the importance of expatriation, Bark and Bergman (2008) argued that most organizations still view the problems of repatriation are minimal and often neglect their repatriates along with previous literatures from Jassawalla et al. in 2004; Black et al. in 1992 and Tung in 1988. That is the reason why most repatriates still has troubled with re-entry converse adjustment and resulted high repatriate turnover of the organizations for over two decades.
3.2. Re-entry adjustment and repatriate turnover
Bark and Bergman (2008) point out that both the difficulties of re-entry adjustment after expatriates return and the displeased repatriation process are the major issues of repatriation and might cause repatriate turnover. Dowling et al., (2008) indicate the common factors which impact on repatriates’ adjustment:
- Career anxiety which means repatriates loss of visibility on their career and feel isolation. Also, there is not any post-assignment guarantee of employment by MNCs and a fear of home workforce changes cause career anxiety.
- Work adjustment
- Dealing with new position demand
- Less pay and status
- Family adjustment
- Social associations
- Dual career couples
The reason why repatriates and their families are trouble with re-adjusting home culture and work force is because their thinking and acting might be changed by their overseas experience and the initial work force environment may be differ as well. Besides, as expatriates have gained valued knowledge during international assignment, this will lead to high expectations upon return to home country. If the organizations fail to gather these expectations, the repatriates might seek other employment (Tran & Wong, 2006). Moreover, the turnover rate of repatriates shows that the difficulty of oft-cited adjustment when expatriates back (Mesmer-Magnus & Viswesvaran, 2008). According to Mesmer-Magnus and Viswesvaran (2008), there are about fifth of returning expatriates plan to leave their company as they return. In Chen and Tye (2005) research about one third to one half of expatriates quit the job within two years of their return. It is not only a loss of knowledge transferring; it is also a loss of a great human capital who has obtained a merit in his/her international assignment period (Tran & Wong, 2006).
3.3 Review of repatriation issues in Saab Training System (STS) and the Swedish Red Cross
Although the importance of expatriation has been recognizing by some MNCs after 1970s and some literatures provide suggestions on how to manage a successful repatriation process, why the issues of repatriate turnover still exist at present (Bark & Bergman, 2008). Tran and Wong (2006) state that the possible reason of this circumstance might be the HR department and the expatriate have different perceptions of this repatriation process. Therefore, Tran and Wong’s (2006) investigate from both repatriates and company views of repatriation process in the case of STS and the Swedish Red Cross to find out the causes of repatriates to leave the organizations.
- From STS repatriates’ point of view, the company provided unsatisfactory support when they return to home country. Repatriates argued that STS should improve the orientation programs about what kinds of changes in STS during the period they left and should regard highly the know-how of expatriates gained from international assignment. Repatriates from STS also felt less motivation on their job and loose the technical challenge and got less pay than before. These circumstances also happened in the Swedish Red Cross, repatriates felt less motivation because the organization did not take into consideration of their overseas experiences. And, the Swedish Red Cross did not provide sufficient support in the re-adjusting process.
- From organizations’ perspective, STS and Red Cross do not have broad repatriation programs to entertain the expatriates upon return or take a consideration of what repatriates have learned during international assignments. The reasons to why both organizations do not provide a sufficient repatriation program is because the organizations believe that the knowledge of repatriates only matter a small number of people. Furthermore, Tran and Wong (2006) find that STS and Red Cross objective are only to coach and assist the local subsidiaries to manner their work but do not likely to learn or take up the culture or knowledge from local subsidiaries. This may be the reasons to why organizations are not interested on transferring repatriates’ overseas experiences from their local subsidiaries.
4.0 Expatriation and repatriation of IHRM in future
Thus, based on above Tran and Wong’s (2006) empirical research, the expatriation and repatriation will still remain as critical issues of IHRM in the future. A success of expatriation process starts from the step of selection and follows by pre-training and arrival and support to the end of repatriation (Dowling, Festing & Engle, 2008). From expatriation perspective, several thoughts could be made:
- In selection process of expatriation, both organizations do not concern the candidate’s interpersonal ability such as culture-adjustment due to the difficulty in measurement of this criterion (Lee, 2007). Also, expatriates are often selected in an immediate response to fulfill an urgent or unexpected situation on foreign country without well-informed selection (Shilling, 1993).
- STS do not has any particular program to assist expatriates before departure, this circumstance against Dowling and Welch’s (2004) claim that cultural and work-related training should be given to expatriates. Furthermore, the organizations which offer pre-training do not really pay attention on expatriates’ cultural awareness in overseas and they focus more on work-related skills (Lee, 2007). This position also violates Dowling and Welch (2004) approach on which indicates that a sufficient pre-training process is necessary for expatriate’s success in foreign countries.
- From past to present, the cost, time and people issues are still major problems of most MNCs’ on their pre-training process. It also matches the approach, which Medich made in 1995 most organizations do not have a sound pre-training program because of the time involved, cost issues and the lack of recognition of the needs for training programs (Tran & Wong, 2006). The situation still does not change over decade. So, these thought might be the reasons why most MNCs are suffering with a higher rate of expatriate failure and expatriates under-performance today. These circumstances also match Anderson (2005) claim about the issue of expatriate failure still occurs today from 1980s. As a result, this issue of expatriation will be still ongoing.
Also, from repatriation perspective, several thoughts could be made as following:
- As expatriates return to home country, both STS and the Swedish Red Cross do not take into account of regarding what repatriates have gained during their international assignments. This results repatriates became less motivated on their employment and do not feel that originations value them as an important role of the company and more likely to leave the organizations after return. This circumstance conflict with what Bruning and McCaughey (2005) argue that originations should value what repatriates have learnt aboard otherwise the organization will loss these great valued human capitals and benefit other company (Tran & Wong, 2006).
- And, the Swedish Red Cross did not provide a sufficient support in the re-adjusting process such as the program about what organization has changed during their period of international assignment. The repatriates of Red Cross felt so embarrassing on this situation because they felt isolated after they left home organization and did not have enough information to know what organization has changed. However, Bruning and McCaughey (2005) suggest that further orientation programs about what changes have been made in the organization and provide adjustment work force programs should be provided to expatriates (Tran & Wong, 2006). These organizations just practice on their ways and do not follow the literatures’ recommendation.
Hence, all of these circumstances just match what Medich (1995) and Dowling, Festing and Engle (2008) state that the factors in terms of expatriates have higher expectations after return, re-adjustment of work force and lack of career development which makes repatriates intend to leave the organization.
5.0 Conclusion
To sum up, will expatriation and repatriation still be the issues of IHRM in future? The answer is “Yes”. What organizations do practice of expatriation and repatriation in real business is mostly conflict the theoretical suggestions on development process. Obviously, there is a gap between thoracal research and reality practices. In organisations’ perspective, although they are recognizing the importance of expatriation and repatriation, a various factors still need to take a concern such as cost and time issues. Also, the HR department and expatriates have different perceptions of expatriation and repatriation process. Those circumstances are the reasons why in expatriation and repatriation process, most organisations are still suffering from a high rate of expatriate failure, sufficient repatriation process which caused repatriate turnover today. So, there is still room for developing a sound and sufficient expatriation and repatriation process for organisations in future.
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