International experience and international development 1845440730, 9781845440732

Table of contents :
CONTENTS......Page 2
EDITORIAL ADVISORY BOARD......Page 5
Guest editorial......Page 6
Developing global leaders through international assignments......Page 23
The personal characteristics of the successful expatriate......Page 38
Cross-cultural training to facilitate expatriate adjustment: it works!......Page 52
Cross-cultural training and expatriate adjustment in China: Western joint venture managers......Page 69
Facets and dimensions of cross-cultural adaptation: refining the tools......Page 86
Job satisfaction among expatriates, repatriates and domestic employees......Page 111

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ISBN 1-84544-073-0

ISSN 0048-3486

Volume 34 Number 1 2005

Personnel Review International experience and international development Guest Editors: Chris Brewster and Vesa Suutari

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Personnel Review

ISSN 0048-3486 Volume 34 Number 1 2005

International experience and international development Guest Editors Chris Brewster and Vesa Suutari

Access this journal online __________________________

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Editorial advisory board ___________________________

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Guest editorial Global HRM: aspects of a research agenda Chris Brewster and Vesa Suutari __________________________________

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Developing global leaders through international assignments: an identity construction perspective Eeva Kohonen__________________________________________________

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The personal characteristics of the successful expatriate: a critical review of the literature and an empirical investigation Jonna Holopainen and Ingmar Bjo¨rkman ____________________________

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Cross-cultural training to facilitate expatriate adjustment: it works! Marie-France Waxin and Alexandra Panaccio ________________________

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Cross-cultural training and expatriate adjustment in China: Western joint venture managers Jan Selmer_____________________________________________________

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CONTENTS

CONTENTS continued

Facets and dimensions of cross-cultural adaptation: refining the tools Arno Haslberger ________________________________________________

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Job satisfaction among expatriates, repatriates and domestic employees: the perceived impact of international assignments on work-related variables Jaime Bonache__________________________________________________

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HRM practices and MNC knowledge transfer Dana B. Minbaeva ______________________________________________

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About the authors _________________________________ 145 Note from the publisher ____________________________ 147

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EDITORIAL ADVISORY BOARD

Dr Stephen Bach The Management Centre, King’s College, London, UK

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Dr Yehuda Baruch University of East Anglia, Norwich, UK

Professor Filip Lievens Department of Personnel Management, Ghent University, Belgium Dr Hedley Malloch IESEG School of Business and Management, Catholic University of Lille, France

Professor Birgit Benkhoff Lehrstu¨hl fu¨r BWL – Personalwirtschaft, Technische Universita¨t, Dresden, Germany

Professor Mary Mallon Department of Human Resource Management, Massey University, Palmerston North, New Zealand

Professor Shawn Carraher Centre for Emerging Technologies and Entrepreneurial Studies, Cameron University, Lawson, USA

Professor David Megginson Sheffield Business School, Sheffield, UK

Professor Cathy Cassell Sheffield University Management School, Sheffield, UK

Professor Emmanuel Ogbonna Cardiff Business School, University of Wales, Cardiff

Professor Nancy E. Day Henry W. Bloch School of Business and Public Administration, University of Missouri-Kansas City, Kansas City, USA

Professor Stephen Procter University of Newcastle Business School, UK

Professor Greg Bamber Graduate School of Management, Griffith University, Brisbane, Australia

Professor Ken Dovey Rhodes University, East London, South Africa Dr Simon Down University of Wollongong, New South Wales, Australia Professor David Farnham Portsmouth Business School, University of Portsmouth, UK Dr Alan Fish Department of HRM, Charles Sturt University, Australia Dr Stephen Gibb Department of HRM, University of Strathclyde, Glasgow, Scotland Professor Irena Grugulis University of Bradford, UK Professor Jeff Hyman Department of Management, University of Aberdeen Business School, UK Professor Devi Jankowicz Luton Business School, University of Luton, UK Professor Ulf Johanson Ma¨lardalen University and the IPF Institute at Uppsala University

Personnel Review Vol. 34 No. 1, 2005 p. 4 # Emerald Group Publishing Limited 0048-3486

Professor Janice R.W. Joplin University of Texas at El Paso, Texas, USA

Professor Kathy Monks Dublin City University, Dublin, Ireland

Dr Chris Rowley Department of HRM, The Business School, City University, London, UK Professor Margaret Shaffer Hong Kong Baptist University, Hong Kong Professor Ed Snape Hong Kong Polytechnic University, Hong Kong Dr Stephen Swailes The Business School, University of Hull, UK Professor Shaun Tyson Cranfield University School of Management, Cranfield, UK Professor Tony Watson Nottingham Business School, Nottingham Trent University, UK Professor Charlie Weir Robert Gordon University, Aberdeen, Scotland Professor Adrian Wilkinson Loughborough University Business School, UK Professor Les Worrall University of Wolverhampton Business School, UK

Guest editorial

Global HRM

Global HRM: aspects of a research agenda Chris Brewster Henley Management College, Henley-on-Thames, UK

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Vesa Suutari University of Vaasa, Finland Abstract Purpose – This paper introduces this special issue. Design/methodology/approach – The paper examines some of the key themes in global human resource management. Findings – By reviewing, briefly, the existing literature in these areas, the paper outlines a limited but crucial research agenda and sets the papers in this special issue in context. Originality/value – This paper presents some new empirically-based work on human resource development. Keywords Human resource management, Globalization, Careers, Knowledge management, Expatriates Paper type Literature review

Introduction According to Black and Ulrich (1999), the role of the human resources (HR) professional in delivering global strategy is to: . raise, define, and clarify the capabilities required to win globally; and . invest, design, and deliver HR-practices that ensure these capabilities. It is also asserted that, given the critical role of a company’s global talent asset base, the role of HR must become more proactive and strategic – HR must become a fully-integrated global business partner (Brake, 1999). A study among HR managers (Roberts et al., 1998) identified three major challenges concerning global human resource management (HRM): getting the right skills to where they are needed easily, spreading up-to-date knowledge and practices throughout the organisation regardless of where they originate, and identifying and developing talent on a global basis. One special issue of a journal cannot attempt to address all the relevant issues involved here – and even less can an introductory article sensibly attempt to do so. What we have tried instead in this special issue is to bring together some of the latest empirically based research in two of the areas identified by Roberts et al.: developing talent and knowledge transfer, focusing on the experience of expatriation[1]. What we will attempt to cover in this introduction are some of the key areas of global HRM linked to these themes and starting from the international strategic HRM perspective on globalisation. The key question here is the extent to which companies aim to integrate their HRM practices across countries in order to support the global strategies. From this strategic background, we move on to discuss the development of global leaders, global career management, and global knowledge management and

Personnel Review Vol. 34 No. 1, 2005 pp. 5-21 q Emerald Group Publishing Limited 0048-3486 DOI 10.1108/00483480510571851

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transfers as key areas of further research on global HRM. Finally, the articles in this special issue are introduced and connected to this research framework. Strategic global HRM: standardisation versus localisation The key debates in the literature concerning HRM in internationally operating organisations have concerned four issues. First, the strategy-structure – configurations of international organisations have been explored by authors such as Doz and Prahalad (1986), Ghoshal and Nohria (1993), Hedlund (1986), and Perlmutter (1969). In general, these typologies denote a move away from hierarchical structures (Birkinshaw and Morrison, 1995) towards network or heterarchical structures (Hedlund, 1986; Bartlett and Ghoshal, 1989). Second, authors have explored the differences between domestic and international HRM (Adler and Bartholomew, 1992; Dowling, 1988; Morgan, 1986; Sparrow et al., 2004; Sundaram and Black, 1992). These texts generally indicate the greater complexity and strategic importance of the international role. A third stream of research has explored the extent of internal consistency versus local isomorphism. These include the degree to which an affiliate is embedded in the local environment; the strength of the flow of resources such as capital, information and people between the parent and the affiliate; and the characteristics of the parent, such as the culture of the home country (Brewster et al., 2004; Evans et al., 2002; Schuler et al., 1993). Typically, multinational corporations (MNCs) are seen as important disseminators of HRM practices and innovations in work organisations (Walsh, 2001). Interest in a standardisation approach has been increasing recently due to the globalisation of the business. Global integration is becoming a competitive necessity in a number of markets in which decentralised strategies were dominant in the past (Evans et al., 2002). Johansson (2000) states that there are four groups of variables that propel companies towards globalisation: markets, competition, cost and government (e.g. trade policies, technical standards). The literature tends to imply, in its use of terms such as global strategy a focus on similarities, standardisation, homogenisation, concentration, and coordination on a worldwide basis (Brake, 1999; Sparrow et al., 2004; Svensson, 2001). There are strong pressures to adapt global strategies in many fields of industries. The realisation of such strategies in turn typically requires higher levels of global integration of key HRM processes. Empirically, the HRM practices that are found in MNC subsidiaries have been analysed in a number of studies (e.g. Beechler and Yang, 1994; Bjo¨rkman and Ehrnrooth, 1999; Dickmann 2003; Ervasti and Suutari, forthcoming; Ferencikova, 2000; Namazie, 2003; Rosenzweig and Nohria, 1994; Scullion, 1999; Sparrow et al., 2004; Tayeb, 1998; Walsh, 2001). It appears clear that, of all the management domains, HRM is the most sensitive to local context (Rosenzweig and Nohria, 1994). Evans and Doz (1992) and Evans and Genardy (1999) have pointed to the importance of balancing these two perspectives. Thus, many MNCs aim toward higher level of integration of HRM practices, while attempting to gain the benefits of responsiveness to the local culture, legislation and traditions (Sparrow et al., 2004). Black and Ulrich (1999) state that the first critical capability that enables firms to integrate global activities appropriately while also separating and adapting local activities effectively is being able to determine what belongs to the core of the organisation and what does not. Issues that belong to the core of a business generally relate to principles that give the firm its identity and issues, which are important to customers. This core should be integrated

and standardised throughout worldwide operations. According to Evans et al. (2002), global integration does not mean centralisation of all aspects of a company’s operations, but may be limited to a particular product, function, or value chain segment. Finally, a fourth, and for our purposes very relevant, approach to research in this area has examined how MNCs approach the staffing and management of their subsidiaries. Thus, Perlmutter (1969) and Heenan and Perlmutter (1979) developed a typology of organisations based on the dominance of headquarters thinking. These classifications have been criticised (see e.g. Mayrhofer and Brewster, 1996; Myloni, 2002; Rosenzweig and Nohria, 1994; Scholz, 1993), but they have provided valuable indicators for defining the predominant approach to international HRM (IHRM) within an international organisation and have been reflected in other typologies (see e.g. Adler and Ghadar, 1990). There have been attempts to offer integrative frameworks for the study and understanding of strategic IHRM (SIHRM), which include both exogenous and endogenous factors (Schuler et al., 1993). The exogenous factors cover such factors as industry characteristics and technology, the nature of competitors and the extent of change; and country/regional characteristics such as political, economic and socio-cultural conditions and legal requirements. Endogenous factors concern the structure of international operations, the international orientation of the organisation’s headquarters, the competitive strategy being used and the MNC’s experience in managing international operations. Taylor et al. (1996) applied the resource-based theory of the firm to SIHRM and identified three international HRM orientations – the adaptive, exportive and integrative – to corporate, affiliate and employee group level HR issues, functions, policies and practices. These models demonstrate the complexity of HR decisions in the international sphere and the broad scope of its remit. Even these integrative models, however, do not fully answer some of the criticisms that have been levelled against the fields of IHRM and SIHRM. These include the following. In much of this literature the political, social, economic, cultural and institutional contexts are treated as simple contingency factors. Models tend to confuse cross-national with cross-cultural differences, which risks confusing what will remain stable and is hard for firms to influence with what firms might be able to standardise with judicious management. The issue of cultural relativity has tempted researchers to focus on the “hard” or “core” HR functional processes. Researchers invoke idealist HRM systems – such as the view of HRM which emphasises what has become known as high performance work systems (HPWS) as a basis of comparison (see e.g. Pfeffer, 1998; Huselid, 1995). The field tends to ignore the subtle ways in which cultural/ national difference influence the experienced reality of HRM (Earley and Singh, 2000). The wider convergence-divergence debate tends to assume that the HRM system as a whole converges or remains divergent, rather than considering whether some parts of the overall HR system might be converging, in some regions or geographies, while other parts might be diverging. Moreover, even within a single HR function there might be convergence at one level but divergence at another. An HR function operates at multiple levels including philosophy, policy, programme, practice and process (Schuler, 1992). By contrast, an over-emphasis on comparative factors risks freezing the discourse in terms of national differences. Any analysis of IHRM must consider the range of distinctive national and local solutions to HRM issues with which the firm has to deal and the strategic pressures that make and the firm-level processes through which change and development in IHRM practice is delivered.

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Global leader development: competencies and development methods As an outcome of the adaptation of global strategies, the urgent need to develop leaders with global competencies and perspectives has been widely recognised in the literature (Allredge and Nilan, 2000; Bartlett and Ghoshal, 1992; Brake, 1997; Csoka and Hackett, 1998; Conner, 2000; Crotty and Soule, 1997; Gregersen et al., 2000; Neary and O’Grady, 2000; Morrison, 2000; Oddou et al., 2000; Petrick et al., 1999; Rhinesmith, 1996; Roberts et al., 1998; Suutari, 2002). It has been concluded that it is this limitation in HR, not unreliable or inadequate sources of capital, that has become the biggest constraint in most globalisation efforts (Bartlett and Ghoshal, 1992). Many companies have a shortage of competent global managers and it has been argued that in future there will even be intensified competition for competent top management talent in international operations in future (Harvey et al., 1999) as well as in top management positions in global organisations (Brake 1997; Gregersen et al., 1998). Equally, a 1998 conference board study among senior managers and HR executives identified developing leaders as the most important HR goal for global business success (Csoka and Hackett, 1998; Conner, 2000). Although globalisation is not a new phenomenon, global leadership is a nascent field of endeavour and has received much less attention than domestic leadership (Morrison, 2000; Suutari, 2002). In line with this Spreitzer et al. (1997) state that the academic research on the predictors of executive success in a global context is scarce, although we have recently seen a rapid increase of literature on global leaders. Much more work needs to be done on essentially every aspect of global leadership, including substantial research needed to understand the link between global leadership competencies and the process for developing global leaders (Morrison, 2000). No consensus exists about what tools to use in this process (Roberts et al., 1998) or how effective such tools are in practice. The literature on global leadership can be divided into two related tracks: (1) that which aims to develop global leader competency frameworks; and (2) that which aims to identify development methods which could be used in the development of such competencies. Several authors have proposed global competency frameworks (for a review see Suutari 2002). These aims became more common in the middle of the 1990s when authors such as Moran and Riesenberger (1994), Rhinesmith (1996), and Brake (1997) proposed their competency frameworks. At that point there was little empirical research evidence presented to support the frameworks. Later more empirically build frameworks have also been suggested by authors such as Gregersen et al. (1998), Conner (2000) and Mendenhall and Osland (2002). As far as the existing competency frameworks are concerned, detailed integrative analysis would be useful in order to form frameworks that fulfil the necessary criteria (Suutari, 2002). Furthermore, the existing competency frameworks need further empirical validation. The fact that the definitions and perceptions of leadership differ among leaders across countries (see, e.g. Bass, 1990; Suutari, 1996) points to the difficulty of attempting to develop generic, global management competencies (McKenna, 1998). McKenna points out that establishing global leadership behaviours based on just North American perceptions will not work. Thus, more research would be necessary among global leaders representing for example European and Asian countries. Through such studies the understanding of the proportion of

context-specific competencies in contrast to general global competencies could be extended (see Gregersen et al. (2000) and see the new tome by House (2004)). Although the process of developing global leader competencies needs further clarification (Morrison, 2000) and no consensus exists about what tools to use in such a process (Roberts et al., 1998), several development methods are suggested. Typically, these include international assignments, short-term development assignments, international teams, action learning groups/projects/task forces, international training and development programmes, international meetings and forums, and international travel (Suutari, 2002). Still, the research on the developmental aspect is scarce in these areas. One traditional form of management training, applied in global leader development also, is training and development programmes (Brake et al., 1995; Brake, 1997; Dowling et al., 1999; Gregersen et al., 1998). In order to promote integration, cross-cultural interaction and networking, training groups should include participants of different nationalities and teaching staff from different countries (Leblanc, 1994). It has been recommended that, in order to ensure that the training encourages people to rearrange and stretch their minds, training should be combined with action learning components such as a field-based business projects (Gregersen et al., 1998). International assignments are typically seen as an even more efficient method than training programmes because of the reality and the length of the experience (Derr, 1993; Gregersen et al., 1998; Oddou et al., 2000; Pucik, 1992; Seibert et al., 1995). If managers address key strategic business issues abroad, the assignments’ simultaneous intents are to implement global strategy and to provide learning opportunities for developing a sound understanding of worldwide operations and capabilities (Carpenter et al., 2000; Seibert et al., 1995). Research has focused on the ethnocentric transfer of parent country nationals to foreign locations. Other options, such as the transfer of host-country managers to headquarters for training purposes, and the use of third country nationals, have been studied less (e.g. Harvey et al., 1999; Kets de Vries and Mead, 1992; Roberts et al., 1998). The use of shorter-term development assignments has also been suggested (Dowling et al., 1999; Moynihan, 1993; Pucik, 1992; Roberts et al., 1998) but, again, empirical research has been scarce. The use of international teams in global leader development appears in the literature also (e.g. Dowling et al., 1999; Gregersen et al., 1998; Roberts et al., 1998; Seibert et al., 1995). Because of the extent of information and integration needs within global organisations, global teams are making and implementing more and more decisions in companies (Bartlett and Ghoshal, 1992; Bonache and Cervino, 1997; Brake, 1997; Davison, 1994; Maznevski and DiStefano, 2000; Roberts et al., 1998). From the development point of view, managers gain international experience and learn cross-cultural interaction skills while working in global teams. Similarly, the use of other types of formats such action learning groups/projects/task forces (Brake et al., 1995; Gregersen et al., 1998; Lobel, 1990; Neary and O’Grady, 2000; Odenwald, 1993; Seibert et al., 1995) has also been widely recommended. The aim is to form a multi-cultural team which has a specified set of objectives to be completed in a given time frame, which would have an impact on the total business (Tichy et al., 1992). The intent of such projects is to challenge the participants to think beyond their present jobs and to focus on challenges facing their business (Neary and O’Grady, 2000). International meetings and forums can also be used in the development of global competencies (Brake, 1997; Dowling et al., 1999; Roberts et al., 1998). For example, Brake (1997) states that one easy way to facilitate cross-cultural interaction and learning is to

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establish networks through setting up such meetings bringing people together. This may mean global forums on up-to-date subjects where people talk about what they are doing and those who are interested can share their experiences or ask for further information. International travel can also be used for training purposes (Gregersen et al., 1998; Lobel, 1990; Oddou et al., 2000). Foreign travel that puts potential global leaders in the middle of the country environment without too much company guidance and support can be valuable. Two ways to enhance the development potential of international travels are to take detours in the local environment and to dive into the local homes, schools and shops to find out what local life is really like (Gregersen et al., 1998). Before a trip, it should be made clear that the purpose of the trip is for development purposes, not just for task accomplishment (Oddou et al., 2000) and some sort of monitoring or reporting process to formalise the learning may be required. On the whole, the literature on the development of global managers seems to emphasise experimental management development methods in contrast to a didactic approach (see, e.g. Srinivas, 1995). (This may, of course, be a trend in all kinds of executive development.) Experience-based learning focuses on understanding and exploring the natural sources of learning and development that occur on the job. Thus, the use of active assignment management (including project and task force assignments in addition to long-term assignments) is a key element of firms’ executive development strategy (e.g. Crotty and Soule, 1997; Seibert et al., 1995). Experience-based learning is not the same as a “sink-or-swim” training approach. Whether through structured relationships such as sponsors, or periodic visits to the classroom, deliberate mechanism should be provided to support managers’ learning (Seibert et al., 1995). Through such mechanism managers should be helped to articulate lessons learned on the job, share those lessons with other managers, and integrate the lessons into the existing knowledge base of both themselves and the organisation. This would help them to develop the growth of meta-skills, the skills for acquiring new skills. It should be noted, by contrast, that other authors (Mendenhall, 2001) refer to many of the support systems provided for expatriates by MNCs as “buffers” which prevent them from fully experiencing and learning from the situations that they find themselves in. Mendenhall advocates a kind of “tutored sink-or-swim”. From the future research point of view, the process and methods of developing global leader competencies require further attention (Suutari, 2002). The effectiveness of different development practices should still be assessed through controlled, longitudinal studies with a variety of initial skill levels identified and re-evaluated after training and assignments (Lobel, 1990). For example, we should understand what people actually learn during their international work experiences and how we can facilitate this learning (Bonache et al., 2001). The strength and weaknesses of each method should be empirically explored and the results analysed. Global careers The research on international careers has focused on analysing the effect of one separate international assignment on an individual’s career after repatriation to the home country, i.e. international assignment is treated as “once in a life time experience” (Suutari, 2003). Still, even in this limited context it has generally been argued that further research is needed before the connection between international assignments and future career is understood (Fish and Wood, 1997; Stahl et al., 2002; Suutari and

Brewster, 2003; Tung, 1998). Research concerning the careers of global managers, who typically have careers including various international positions and assignments, remains scarce. However, some insights into global careers can be gained through studies of international assignments as a career step. From the career point of view, it has been reported that repatriates often find themselves in a “holding pattern” with no sufficiently challenging job, with unexpectedly low levels of authority and few possibilities of utilising their developed competencies (Gomez-Mejı´a and Balkin, 1987; Gregersen and Black, 1996; Harvey, 1989; Stahl et al., 2002; Stroh et al., 1998; Selmer, 1999). This is in striking contrast to their typically over-optimistic expectations concerning their future career. Thus, the importance of discussing the career impacts of international assignments with the expatriates in good time before the assignment has been stressed. Similarly the repatriation process should be started early enough. From a global career point of view, these findings indicate that in global career management much more emphasis should be given to international career transition. The other key finding in career research is that the existing evidence does not promise an optimistic future career after repatriation (Black et al., 1999; Forster, 1994; Derr and Oddou, 1991; Oddou and Mendenhall, 1991). Questions have been raised as to whether, indeed, an international assignment is an attractive career move (Welch, 2003). There is counter evidence indicates that it can be – although not necessarily in the company that the individual worked for while in the foreign country (Suutari and Brewster, 2003). Perhaps a quarter of US expatriates leave their company within one year after repatriation (Black and Gregersen, 1999; Solomon, 1995), and the figures have risen up to about half of the expatriate population in some companies within three years after repatriation (Black et al., 1999. A good external job market situation among experienced international managers makes such career moves easy for repatriates (Caligiuri and Lazarova, 2001; Suutari and Brewster, 2003). The existing empirical evidence indicates that the majority of expatriates are willing to leave their company for a better job in another firm after repatriation (Stahl et al., 2002) and that a clear majority of repatriates have seriously considered such change after coming back to their home country (Suutari and Brewster, 2003). Thus, much more attention should be given both in research and practice in managing the international career moves and thus developing global career tracks within companies. As argued earlier, far fewer studies have been carried out among managers with more long-term international careers. It has even been claimed that the existence of global managers with frequent international relocations is a myth since the requirements for individuals in such careers are so tough that hardly anyone can fulfil them (Forster, 2000). Forster points out that in his study only 13 per cent of UK expatriates reported that they would definitely accept further international assignments in the future. There is counter-evidence that the willingness to accept new international assignments and thus more global careers may not be so low. For example, it has been reported that 96.5 per cent of Japanese expatriates (The Japan Institute of Labour, 2002) and 91 per cent of Finnish expatriates (Riusala and Suutari, 2000) were ready to consider another international assignment after their repatriation. There is fairly little evidence on the actual push and pull factors concerning such careers but, at least in recent qualitative study (Suutari, 2003) it appeared that the managers’ internal motivation was a key factor. Thus, push factors, such as poor

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career prospects at home country, were not common at all. Such global managers saw the international environment as very challenging but also a very “rich” and enjoyable work environment. All in all, their experiences were very positive and they were highly committed towards global careers. Thus, as with the effect of single assignments on overall careers, the picture was more positive than might have been expected on the basis of the earlier research. Clearly more large-scale research is needed in this area in order better to understand the internal and external career characteristics of people with more permanent global careers. It should also be remembered that there are other kinds of global careers. For example, not every employer is an MNC: there are literally thousands of international organisations such as government, non-governmental aid organisations, charities and inter-governmental bodies where profit is not a factor (Bonache et al., 2001). Organisations such as the United Nations and its agencies and the European Union employ large numbers of expatriates, and many of them with more permanent international careers, but research in this area has been very limited (Brewster and Scullion, 1997). Furthermore, global career research needs to be expanded to other types of international work experiences and their career and developmental connections. As Inkson et al. (1997) state: whereas the research literature on expatriate assignments is large, the research on self-initiated foreign work experiences (SFEs) is almost non-existent. This dearth of data and analysis is important: individuals’ travelling abroad to find their own work is a widespread phenomenon. Suutari and Brewster (2000) reported that one-third of Finnish university level educated people who were working abroad were on so-called SFEs, i.e. they had found the job there on their own. The research among such groups has just started. International knowledge management/transfers The knowledge-based view of the firm focuses on knowledge as the most strategically significant resource of the firm and emphasises the capacity of the firm to integrate knowledge (Conner and Prahalad, 1996; Grant, 1996; Mowery et al., 1996; Spender, 1996). According to Szulanski (1996) the identification and transfer of best practices was one of the most important and widespread practical management issues of the latter half of the 1990s. Particularly for MNCs, cross-unit transfer of business practices (i.e. intrafirm or internal transfer) that reflect their core competencies and superior knowledge is a main determinant of their competitive advantage (Conn and Yip, 1997; Kostova, 1999, Furu, 2000). Scholars have noted that such transfers are hindered less by confidentiality and legal obstacles than external transfers. Nevertheless, there is substantial evidence that these transfers are not always smooth and successful (e.g. Ghoshal and Bartlett, 1988; Kedia and Bhagat, 1988; Zander and Kogut, 1995). This difficulty of transferring knowledge within the organisation has been referred to as internal stickiness (Riusala and Suutari, forthcoming; Szulanski, 1996; Teece, 1977; von Hippel, 1994) and can be caused by various factors. There are at least four sets of factors that are likely to influence the difficulty of internal knowledge transfer and they are linked with the characteristics of the knowledge transferred, the source, the recipient and the context in which the transfer takes place (Szulanski, 1996). Such barriers to the international transfer of knowledge and on the integration of HRM practices across borders clearly require attention in future research.

Gupta and Govindarajan (2000) state that the effectiveness of knowledge flows within MNC is determined by several factors: . the perceived value of the source unit’s knowledge stock; . the willingness of the source to share knowledge; . the existence and richness of transmission channels; . the motivational disposition of the target unit; and . the absorptive capacity of the target unit. These factors clearly indicate that the success on knowledge transfers is closely related on the HRM issues. More research is clearly needed in order to understand better the potential role of HRM practices in facilitating the transfer of knowledge and “best practices” across borders. For example, there is considerable scope for the development of research that is based on the notion of HR, such as expatriates, as a means of international knowledge transfer (Bonache and Brewster, 2001; Downes and Thomas, 2000; Kochan et al., 1992). The role of expatriates appears to be central when decisions are made on what kind of knowledge is transferred to foreign affiliates within MNCs and how it is done (Hetrick, 2002; Riusala and Suutari, forthcoming). The knowledge flows from foreign affiliates to headquarters (see Ferner and Quintanilla, 2001; Ferner and Varul, 2000) through transfers of HR reserve future attention as well. Articles in this special issue The articles in this special issue of Personnel Review are a further contribution to the expanding literature on global HRM – set within the context of strategic HRM and following our generic themes of international development, international careers and knowledge transfer. Kohonen, in “Developing global leaders through international assignments: an identity construction perspective”, suggests a new theoretical perspective to personal development and growth which takes place during international assignments. In her theoretical framework, the author combines literature on global leadership, career transitions and identity construction. From these standpoints, the author opens interesting future research insights that may help us to understand better how individuals develop during their international experiences and how this influences to their future expectations. Holopainen and Bjo¨rkman in “The personal characteristics of the successful expatriate: a critical review of the literature and an empirical investigation”, also, as their title indicates, take a critical approach to previous work in the area of global leadership development. They use both pre-departure psychological assessments and reports of performance in the new country from the expatriate and their boss to develop a more nuanced version of what success means in an expatriate assignment. Waxin and Panaccio in “Cross-cultural training to facilitate expatriate adjustment. It works!”, also add to our knowledge of leadership development, using a sample of more than 50 managers expatriated from each of four countries to India to show the interaction between expatriate adjustment and training. They demonstrate the positive effect of training, especially for those on a first assignment. They also add to our existing understanding by showing that the effects of training vary by country of origin.

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Selmer, in “Cross-cultural training and expatriate adjustment in China: Western joint venture managers”, presents evidence on the effect of cross-cultural training on expatriate adjustment among Western joint venture managers in China. The study presents evidence that the effectiveness of cross-cultural training of business expatriates may be contingent on the specific circumstances of the foreign assignment. Haslberger, in “Facets and dimensions of cross-cultural adaptation – redefining the tools” uses his empirical data to go beyond the received wisdom of the Black and Stephens (1989) three-way split of a one-dimensional adjusted/unadjusted measure into work, communication and general adjustment. His evidence leads him to question that analysis and to develop a more complex measure covering emotional and cognitive adjustment. Bonache, in “Job satisfaction among expatriates, repatriates and national employees: the perceived impact of international assignments on work-related variables” uses data from a Spanish construction company to provide perhaps the first attempt to compare job satisfaction within these three groups. As such, this is a new empirical and theoretical contribution to the growing literature on global careers. Minbaeva, in “HRM practices and MNC knowledge transfer”, examines the effect of HRM practices on knowledge transfer within MNCs. The study provides new evidence on the positive effect of certain HRM practices such as staffing, training, promotion, compensation and appraisal on the degree of knowledge transfer to the subsidiary. It has been our intention as editors to encourage the publication of some new, empirically-based, work on international HR development. We are happy to see here a mix of younger researchers and those who may be more experienced but are obviously still developing new understandings. There remains, as we have indicated, a substantial research agenda to be covered. We are pleased with the contributions made in this special issue and look forward to many more.

Note 1. For details of other research requirements see Brewster and Scullion (1997); Scullion and Brewster (2001); Bonache and Brewster (2001). References Adler, N.J. and Bartholomew, S. (1992), “Managing globally competent people”, Academy of Management Executive, Vol. 6 No. 3, pp. 52-64. Adler, N.J. and Ghadar, F. (1990), “Strategic human resource management: a global perspective”, in Pieper, R. (Ed.), Human Resource Management in International Comparision, de Gruyter, Berlin. Allredge, M.E. and Nilan, K.J. (2000), “3M’s leadership competency model: an internally developed solution”, Human Resource Management, Vol. 39 No. 2 and 3, pp. 133-46. Bartlett, C.A. and Ghoshal, S. (1989), Managing across Borders: The Transnational Solution, Harvard Business School Press, Boston, MA. Bartlett, C.A. and Ghoshal, S. (1992), “What is a global manager?”, Harvard Business Review, September-October, pp. 124-32. Bass, B.M. (1990), Bass & Stogdill’s Handbook of Leadership, The Free Press, New York, NY. Beechler, S. and Yang, J.Z. (1994), “The transfer of Japanese-style management to American subsidiaries: contingencies, constraints, and competencies”, Journal of International Business Studies, Vol. 25 No. 3, pp. 467-92.

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About the Guest Editors Chris Brewster is Professor of International Human Resource Management at Henley Management College in the UK. He studies international and comparative human resource management. Vesa Suutari is Professor of International Management and Head of Department of Management and Organization at the University of Vaasa, Finland. He has specialised in cross-cultural management and international HRM. His current research interests include expatriation, global leadership, global careers, and international knowledge transfers. His research work has been published in various international journals and edited books.

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Developing global leaders through international assignments An identity construction perspective

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Eeva Kohonen Department of Management and Organization, University of Vaasa, Vaasa, Finland Abstract Purpose – International assignments, which are used as an integral part of global management development, are challenging in terms of one’s managerial competencies and self-concept. However, not much is known about how managers develop during international assignments, or about the process of their identity construction. The purpose of this paper is to show the need for studying international assignments from an identity construction perspective and to build up an interdisciplinary framework for this kind of study. Design/methodology/approach – The paper offers a new and an eclectic approach on expatriation by reviewing and combining current literature on expatriation, identity and career. Findings – As a result of the theoretical discussion the paper notes that more empirical research is needed about the consequences of foreign assignments on individual managers’ identity and subjective career and suggests narratives as a promising strategy to capture the fluid process of identity construction during expatriation. Originality/value – The value of the paper for academics is that it opens up new avenues for research on international management development and international assignments in particular. Keywords Careers, Narratives, Leadership, Development, Globalization Paper type Conceptual paper

Personnel Review Vol. 34 No. 1, 2005 pp. 22-36 q Emerald Group Publishing Limited 0048-3486 DOI 10.1108/00483480510571860

Introduction It has been noted that the future success of all multinational companies depends on the availability of globally competent managers (Caligiuri and Di Santo, 2001). The literature review suggests that the need to develop globally competent managers has been widely recognised (Alldredge and Nilan, 2000; Black et al., 1999a; Brake, 1997; Connor, 2000; Evans et al., 2002; Gregersen et al., 1998; Morrison, 2000; Neary and O’Grady, 2000; Oddou et al., 2000; Rhinesmith, 1996; Stanek, 2000; Suutari, 2002, 2003). At the moment, global leadership development is one of the key human resource issues of chief executives in multinational firms (Evans et al., 2002). There are several ways, which can be used for developing global managers. Black et al. (1999a) suggest travel, multicultural teams, formal training and transfers as ways for developing global leaders (see also Gregersen et al., 1998; Morrison et al., 1999; Suutari, 2002). Recently, multinational companies have used increasingly also short-term development assignments (Dowling et al., 1999; Forster, 2000) in the early phase of an employee’s career. However, the most powerful strategy to develop globally competent leaders is expatriation, i.e. cross-border assignments (Black et al., 1999a, b; Brake, 1997; Evans et al., 2002; Gregersen et al., 1998: Morrison et al., 1999). There is a saying that moving is second to death from a stress point of view. For many expatriate managers international assignment is not only a physical adventure, but it also requires the willingness to revise one’s identity (Sanchez et al., 2000; Peltonen 1998). Expatriates and global leaders can be regarded as “boundary-crossing

individuals” who make simultaneously both geographical and organisational moves and inward moves that can be called “reflexive identity construction” or a process of identity development, which unfolds in the interaction between the person and his/her social context (Lindgren and Wa˚hlin, 2001). During assignments managers encounter more discontinuities, critical incidents and occasions for reflection than at home. Thus, expatriation is a process (Evans et al., 2002; Forster, 2000), which represents a special situation for self-examination and self-renewal. International assignment represents also a transition in one’s career. It has been noted that individuals engage in identity construction and self-reflection during phases of societal change (Giddens, 1991) or various turning points in life, e.g. career transition (Glanz et al., 2001; Ibarra, 1999; Lindgren and Wa˚hlin, 2001; Sanchez et al., 2000; Swann, 1987). However, until now, foreign assignments have been studied more from the organisational point of view. There is an extensive literature on the “expatriate cycle” (Osland, 2000; Stahl et al., 2002; Tung, 1998), and on expatriate adjustment in particular (Suutari and Brewster, 2001), but the identity perspective is just emerging. Although an important topic of inquiry, “the sojourner literature seldom describes the subjective nature of the experience, the journey inward” (Osland, 2000, p. 227). We know far too little about how international assignments affect the identity of managers, do they change their identities and if they do, what kind of consequences their new identity has on their managerial competencies or on their future career. Stahl et al. (2002) state that more research is needed in order to gain a better understanding about the nature of the expatriate career and the career implications of expatriate assignments. Also, researchers should use qualitative methodologies (e.g. in-depth interviews and case studies) along with quantitative methods and hypothesis testing to answer these questions. Sparrow (2000, p. 198) calls for “a broader investigation of the nature and value of multicultural experience and identity (. . .), one more in line with post-modern views of chaos, relativity and social constructionism”. Thus, there is a clear need to study international assignments from an identity perspective in order to shed further light on the personal consequences of the career transition. This article aims to: . show the need for studying international assignment from the viewpoint of individual managers’ identity; and . build up an interdisciplinary framework for this kind of study by reviewing and combining current literature on expatriation, career and identity. In the following paragraphs the identity perspective will be introduced in more detail; what we mean by identity, how it evolves and how it can be studied. Next, the connection between career transitions and identity construction is discussed. These theoretical elements are then brought to the international context, i.e. the identity construction perspective is connected with international assignment experience and discussed from a developmental point of view. Finally, future research needs are identified as a conclusion. Understanding identities Definitions of identity Identity as a concept is complex, multi-layered and difficult to define unambiguously (see Sarbin and Scheibe, 1983). It has been suggested that the etymological roots of the

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concept identity are inferred from the Latin words “idem” or “id ens” – the former meaning “the same” and the latter highlighting that the core self remains in fact the same over time although one’s identity is under constant change, “a man is the same being as an adult that he was as a child, even though he keeps maturing” (Miller, 1983, p. 320). During history there have been different views about identity: . the enlightenment subject; . the sociological subject; and . the post-modern subject (Hall, 1999, p. 21). During the Enlightenment a person was seen as having a centre, a core identity, which remained stable during the whole life. The post-modern conception of identity expresses just the opposite view; the post-modern subject is a person who does not have a solid, stable or permanent identity. A sociological subject view of identity means that a person’s inner core is not seen as self-supporting, but is shaped in relation to “significant others”, who mediate the values, meanings and symbols of his/her culture. According to the sociological tradition, identities have been seen as constructed and negotiated in social interaction. Cooley’s (1902) description of the “looking-glass self” captures well the importance of social relationships for one’s identity. He claims that it is from the ways in which others treat us, that we get ingredients for our identity development. Social role theory has been particularly influential for the conception of identity, because people are involved in interaction with others through the various roles they have in the community. According to Sarbin and Scheibe (1983, p. 7) “a person’s social identity at any time is a function of his or her validated social positions. These positions are validated through appropriate, proper, and convincing role enactments”. When people interact, they usually attach meanings to the behaviour. Identity refers also to these various meanings attached to a person by self and others. People derive these meanings or self-conceptions from their social roles and group memberships (social identities) and the personal traits they display and others attribute to them (personal identities) (Gecas, 1982, in Ibarra, 1999, p. 766; see also Allen et al., 1983). People make identity claims to others by displaying public images that signal how they want to be viewed by others or how they view themselves. Gradually, they translate observations of their own behaviour and the corresponding reactions of others into self-conceptions (Ibarra, 1999; Swann, 1987). Thus, “On the basis of available clues, individuals infer the role of others and concurrently of themselves” (Sarbin and Scheibe, 1983, p. 8). Furthermore, identity construction is an ongoing process, although those others are not physically present all the time. Weick (1995, pp. 39-40), points out that conduct depends on the conduct of others, whether those others are imagined or physically present. That is exactly what we mean by symbolic interaction. Rejecting the former notion of a stable identity, recently researchers have viewed identity as an ongoing, never-ending process (Allen et al., 1983; Giddens, 1991; Hall, 1992, 1999; Lindgren and Wa˚hlin, 2001). In the post-modern, globalised world, people are searching and continuously working on their identities. In doing so, they are constructing biographies, which tie the different aspects of their fragmented selves into a unified entity (Hall, 1999; see also Giddens, 1991). However, this does not mean an

entire alteration of one’s self-conception (or identity). There is a need of coherence and continuity within individuals, as well. Both stability and change should be included in identity (Corley et al., 2000, p. 108; Ibarra, 1999, p. 783). Having said this, it should be kept in mind that people are constructing and searching for their identities perhaps more in the industrialised, Western countries. Searching for self-identity is a modern project of self, which probably derives from Western individualism (Giddens, 1991; Sparrow, 2000). It is obvious that there are people in other parts of the world who do not have the “luxury” of contemplating who they are or who they would like to be. Socialised into a different kind of culture, their individual identity might be of minor importance for them. Sources of identity The theoretical distinction between personal and social identity reflects the psychological and sociological views of what identity is about. Hogan and Cheek (1983) have clarified the concept of identity suggesting that identity means more than social identity. Both private sources (e.g. personal values) and public sources of identity (social roles) should be seen as important for the construction of one’s identity. The definition of social identity, as a function of one’s social roles (e.g. Sarbin and Scheibe, 1983), has been challenged and criticised by the notion of authenticity (see Hogan and Cheek 1983). If identity is defined by external sources, this means that one surrenders control over one’s life, and is no longer responsible for one’s actions. “People who are self-aware and define their own identities are authentic and autonomous” (Hogan and Cheek, 1983, p. 340). They define their roles for themselves, understanding that the roles they play are alien and external to them, in a deep sense. Thus, for Hogan and Cheek (1983) “social identity and authenticity are opposite notions”. The most mature individuals are able to integrate the competing demands of autonomy and conformity to social standards. Jenkins (1996, pp. 19-20) claims that theoretically identity can be divided into individually unique and socially shared identity. However, these can be viewed as similar, because they are routinely intertwined and “the processes by which they are produced, reproduced and changed are analogous”. Perhaps the most significant difference between them is that individual identity emphasises differences and collective identity similarity. For Jenkins (1996, p. 50) the self is “altogether individual and intrinsically social” by nature. It arises within social interaction, in the internal-external dialectic of social identification. Similarly, Allen et al. (1983, pp. 92-4) note that social identity is practically equivalent to personal identity. One source of identity is nationality. We are inclined to think about a nation state as a political system, although it is also a representational system, which produces meanings. These meanings are connected to traditions, stories that are told, heroes, historical events and memories. There are always some imaginary aspects within identities as well. National identity means emotional attachment to certain places, events, symbols and histories (Hall, 1992, 1999). It is usually placed in the context of a more general social identity. Like other ascribed components of identity (e.g. gender, race, kinship) it is relatively resistant to change (Scheibe, 1983, p. 128). This gives reason to assume that national identity belongs to the very core of the self. The ongoing process of globalisation is thought to affect identity (Giddens, 1991). Arnett (2002) says that, as a consequence of globalisation, many people develop bicultural

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identity, a combination of local and global identity (see also Hall, 1999). He further anticipates that in the future the personal aspects of self are getting even stronger and “Identity becomes based less on prescribed social roles and more on individual choices” (Arnett, 2002, p. 781). The multiple sources of identity are combined around the concept of “embedded identity” (Blustein 1994, pp. 146-7). Blustein suggests this concept to highlight the relational and contextual components of identity. The embedded identity combines individual aspects of identity with our familial and socio-cultural background. Emotional support from family members and significant others and the valued aspects of our culture, become internalised and parts of our identity, our current self. However, identity involves not only our past and present, but also our future. “Possible selves” (Markus and Nurius, 1986) refer to how people think about their potential and about their future. Possible selves function as incentives for future behaviour, and they provide an evaluative context for the current selves. Possible selves represent self-knowledge that is sensitive to changes in the environment, especially to inconsistent feedback about the self. To conclude the theoretical discussion so far, it is assumed here that identity is a multifaceted concept. The sociological view that identity derives from one’s social roles is insufficient. Both self-knowledge and personal values along with social and cultural aspects should be included. It is also assumed here that people do not have a stable identity, but are constantly searching, negotiating and reshaping their identities. However, this does not mean necessarily an entire alteration of identity. Both stability and change should be included in identity, as noted by Corley et al. (2000) and Ibarra (1999). The narrative nature of identity Identity, in order to be put in a narrative form, presumes reflexive awareness. For Giddens (1991, p. 53) self-identity is something that is “reflexively understood by the person in terms of her or his biography”. A person with fairly stable self-identity has a feeling of biographical continuity, which he/she is able to grasp reflexively. He says that an essential feature of a person’s identity is its “capacity to keep a particular narrative going” (Giddens, 1991, p. 54). These narratives are some kind of autobiographies, which are highly contextual and organise human experience into meaningful life episodes (Linde, 1993; Lindgren and Wa˚hlin, 2001). A narrative is a discursive act. If asked, people are normally able to give discursive interpretations and explanations for their behaviour (Giddens, 1991, p. 35). Coherence, rather than factuality, is an important property of the narrative (Mancuso and Sarbin, 1983, p. 250) and serves as an appropriate criterion for judgement. When developing self-stories people attempt to establish coherent connections among life events (Linde, 1993). They try to understand life events as systematically related rather than as “one damned thing after another” (Gergen and Gergen, 1983, p. 255). Discrete events are rendered intelligible by locating them in a sequence. One’s current identity is a sensible and meaningful result of a life story, a sequential account of different events, which indicates some kind of causality. When narrating their life, people usually follow chronological structure and emphasise their intentions, deeds and consequences of their action (Czarniawska-Joerges, 1995, p. 15). This process of organising discrete actions into a meaningful story is called employment (Mancuso and Sarbin, 1983). According to

Mancuso and Sarbin (1983, p. 252) and McIntyre (1985, p. 216) people are inclined to storytelling. They are simultaneously authors of their self-narratives, and the narrative figures and actors of those narratives. Through constructing the autobiographical narrative, a person is fulfilling the coherence principle of the self. In giving oral narratives people make their personal, idiosyncratic experiences socially understandable. Life-stories are tools for self-management in the sense that “the stories told shape the identity of the teller” (Peltonen, 1998, p. 32). Past experiences are interpreted in order to understand and structure the present. While it is claimed that identity has a narrative character and can be studied through narratives (Czarniawska-Joerges, 1994; Gergen and Gergen, 1983; Giddens, 1991; Lindgren and Wa˚hlin, 2001; Murray, 1989), it will be an advisable way of generating qualitative data about identity construction. A special feature of the narrative is that it can be used simultaneously for explanation and interpretation. While the two modes of knowledge sometimes separate, “most of the time they coexist in the same narrative” (Czarniawska-Joerges, 1995, p. 20). This makes narratives particularly promising tools for studying international assignments from an identity construction perspective. Having discussed the theoretical underpinnings of the identity perspective, the next paragraphs concentrate on pointing out the relevance of identity construction perspective in the context of one’s subjective career. Identity construction in the context of one’s career In order to understand better the meaning of international assignment on identity we should approach the question in the context of one’s career. Foreign assignment represents a change or transition in one’s career, which requires coping and adapting. Job changes are perhaps the most frequent and most important transitions that people experience during life. This kind of transition is “a major change in work role requirements or work context” (Nicholson and West, 1989, p. 182), which usually also has psychological consequences. Because work roles can play a vital part in the development of a sense of self or identity (Dalton, 1989, p. 101), any major change in that role demands reshaping of the self-concept. Thus, career and identity are related constructs. Career theory attempts to explain career phenomena (Arthur et al., 1989, p. 9) and identity is an important concept in career theory, because it affects individual career choices and career development. The term “career” derives from the Latin carriaria, meaning a road or carriageway. Thus, it has a connotation of direction and suggests intention and purposive behaviour, with an additional connotation of “getting somewhere” (see Gowler and Legge, 1989, p. 438). A person’s career can be viewed as “the sequence of employment-related positions, roles, activities and experiences encountered by a person” (Arnold, 1997, p. 16) or shortly put “a person’s emerging set of work experiences over time” (Arthur et al., 1989, p. 8; Bailyn, 1989, p. 478). Traditionally, there have been two mainstreams in career theory, which have been identified as subjective (or internal) career and objective (or external) career (Arthur, 1994; Bailyn, 1989; Barley, 1989; Collin, 1998; Collin and Young, 1986; Derr and Laurent, 1989; Savickas, 1994). The subjective career refers to the individual’s own interpretation of his or her career situation, the objective career examines and interprets the same career situation from the institutional or organisational point of

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view (Arthur, 1994). The objective career points to patterns both in the movements of individuals through organisations and in individuals’ work histories, the sequence of related jobs in the organisational ladders. The subjective career is linked to internal matters, such as personal meanings and identity (Collin, 1998, p. 416). The subjective career has some similarities with the concept of “boundaryless career” (Arthur and Rousseau, 1996), which is individually designed, rather than organisationally defined, as a result of individual choices (Arthur et al., 1999). Nowadays, people are increasingly planners, designers and evaluators of their own career. They assess fulfilment and achievement at work by themselves and make occupational moves “in response to a changing, complex and multi-layered self” (Collin, 1998). Because work is a major source of a person’s identity, changing work experiences within flexible, fragmenting organisations mean flexible and fragmenting selves (Collin, 1996). Traditionally, many people have derived their identity from their job or organisation they work for. People, who pursue boundaryless careers, develop their identity more around skills and competencies. Because identity is less based on a certain job or an organisation and people are more ready to make inter-organisational moves, this opens up the boundaries of their identity (Mirvis and Hall, 1994, 372, 375). One’s identity becomes thus a field of active restructuring. In the following paragraphs the theoretical foundations of identity transformation through career transitions are applied to the international context. Because people are susceptible to identity restructuring and changes during career transitions, it is argued here that international assignments are this kind of transitions which offer a favourable situation for expatriates and global managers for sensemaking, to reflect on who they are or who they would like to be, their current and possible selves, and their career. This kind of reflection and subsequent identity transformation may have implications for the direction of their future career. International assignment as a place for identity construction Before applying the identity construction perspective on international assignments, it is necessary to discuss about the role of expatriation from both the company and the individual development point of view. Multinational companies use foreign assignments for strategic reasons: to improve expatriates’ general management skills and intercultural competencies, to coordinate and control their activities, and to transmit and disseminate organisational knowledge, technology and innovation (Black et al., 1999a, b; Brake, 1997; Evans et al., 2002). Within multinational companies international assignments are increasingly viewed as part of career progression (Evans et al., 2002) and international experience is becoming a prerequisite to senior management positions (Forster, 2000; Morrison et al., 1999). It could even be said that expatriate assignments represent “a prototype of an on-the-job learning experience required of all managerial candidates” (Peltonen, 1998, p. 5). This kind of learning/development perspective has been widely stressed in recent literature on global leadership (Black et al., 1999a; Briscoe and Hall, 1999; Caligiuri and Di Santo, 2001; Gregersen et al., 1998; Kamoche, 1997; Morrison et al., 1999; Morrison, 2000; Oddou et al., 2000; Peltonen, 1998; Shim and Paprock, 2002; Stanek, 2000; Suutari, 2002). For companies, the most powerful strategy to develop globally competent leaders is expatriation, i.e. international assignments (Black et al., 1999a, b; Brake, 1997; Evans et al., 2002; Gregersen et al., 1998: Morrison et al., 1999). There is also

research evidence that managers themselves regard international assignments as an excellent situation for learning and professional development (e.g. Stahl et al., 2002; Suutari, 2003). However, a common understanding is missing about the specific dimensions of the required competencies of global leaders (Morrison, 2000) or which ones are the most critical for success. In addition to this, our understanding of how expatriates develop during their international assignments is limited (Bonache et al., 2001) and not much is known about the careers of global leaders (Suutari, 2003). It is suggested in the present paper that identity construction perspective may shed further light on the developmental aspects of international assignments, which have been so actively discussed in global leadership literature as well as expatriation literature. As discussed earlier, foreign assignments represent a change in the career of global leaders, which requires coping and adapting. These kinds of transitions offer also special instances for reshaping one’s identity or self-concept as part of the overall development. Contextual factors are especially important in that they trigger the identity construction process in the first place, when expatriates leave their familiar work place and ongoing social support from peers and friends for a totally new work context and role with new cultural values, norms, routines and social life. Besides cultural novelty, international assignments are especially challenging also in that managers have to balance between the dual forces of global integration and local responsiveness (Adler and Bartholomew, 2001; Evans et al., 2002) and two kinds of allegiances between the host company and the parent company (Black et al., 1999b; Sanchez et al., 2000). The development of such a multicultural identity means a profound personal transformation, which is indeed very challenging (Sanchez et al., 2000). In fact, an expatriate situation can be seen as “a semi-legitimate location to explore one’s identity” (Peltonen, 1998, p. 21). In the literature on global competency development, some discussions can be clearly linked to the identity construction perspective. For example, Rhinesmith (1996) has suggested that global managers need a “global mindset” in order to meet the challenges of globalisation. He explains global mindset as a “way of being” rather than a set of skills and competencies. Although not explicitly said, global mindset can be interpreted to depict some sort of identity change, from local to global identity or a successful combination of those two. Global identity has been referred to also by the concept “cosmopolitanism” (Hannerz, 1996, p. 103), which is first of all an orientation, a willingness to engage with the other. At the same time, it is a matter of competence, which can be seen both as “a state of readiness”, an ability to make one’s way into other culture, and “a built-up skill”, in behaving more or less expertly within a particular system of meaning (or culture). The problem with these frameworks is that they do not tell how one develops such an approach or state of mind nor the prerequisites of such development. Brake (1997) has labelled “transformational self” as a central driving force in his model of “Global Leadership Triad”. Transformational self requires, among other things, detachment from the current situation and current thinking and engagement in personal exploration and reflection. Brake says that successful global managers should be willing to engage in reshaping their identities when necessary. Interaction and mutual, self-related feedback are essential in order to form accurate self-perceptions and to change one’s identity as appropriate (see Briscoe and Hall, 1999). Thus,

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transformational self can be seen as a “substrate” for self-development and new competencies. Weick’s (1995, p. 20) concept of “sensemaking” can be used to illuminate the expatriate learning experience in a foreign culture (Glanz et al., 2001). According to Weick, sensemaking literally means, “making something sensible”. Sensemaking is understood as a process that is (Weick, 1995, p. 17): . grounded in identity construction; . retrospective; . enactive of sensible environment; . social; . ongoing; . focused on and by extracted cues; and . driven by plausibility rather than accuracy. It is assumed here that when confronting surprises and unexplainable events in a new culture, expatriate managers try to make sense of their situation through conscious, rational thinking and this opens up new developments. According to Glanz et al. (2001) sensemaking considers how active individuals “structure the unknown”. That is why it provides a workable framework for expatriate experience. To operationalise the concept they suggest two sensemaking elements: sense of coherence, which integrates individual characteristics and past experience, and socio-cultural brokerage, which integrates the feedback of others and local interpretation schemes. They further note that sensemaking is a useful framework for studying incremental learning, but it also suits situations where all previous learning is overturned in the face of new experience. Instead of the problem-centred approach (culture shock, coping with stress and adaptation) of many previous studies international assignment can also be seen positively, as an incentive to identity construction, self-renewal and learning. Until now there are not many studies of subjective careers of expatriates or the identity changes of managers during assignments. The recent study by Stahl et al. (2002) highlighted the developmental aspects of the expatriates’ subjective careers. Their survey findings revealed that the majority of expatriates view their international assignments as an opportunity for personal and professional development and career advancement, despite their negative expectations of advancement opportunities upon return. This is in line with Peltonen’s findings with a sample of Finnish expatriates. These managers emphasised the transfer as their own decision to broaden their work possibilities and to face new challenges in life (Peltonen, 1998, p. 122). However, these studies do not tell much about the type of development or identity change that takes place during assignments. Besides identity construction, sensemaking can also be used as a framework for understanding expatriate experience from the subjective career perspective. Nicholson and West (1989, p. 181) note that people often think of career as journeys with beginning and ends and purposes, connecting them. According to them, “if work histories are lifetime journeys” (sequences of job experiences), “then careers are the tales that are told about them”. The latter refers to how people make sense of that journey and this sensemaking may have implications for their future career. As Arthur

et al. (1999, p. 47) put it: “Careers are particularly susceptible to retrospective sensemaking because in essence careers (. . .) are narratives”. Because sensemaking (or identity construction) is an internal process, the “quicksilver nature of sensemaking” means that it will be best captured through qualitative methods or a combination of quantitative and qualitative methods (Glanz et al., 2001, p. 113; Glanz, 2003, p. 260). Due to the retrospective nature of the sensemaking process, anticipatory adjustment for foreign assignment may not be possible. “Reflection is required to bestow meaning” (Glanz, 2003, p. 266). This notion has practical implications for future research. First, expatriates and global leaders may not be able to report on their identity transformation when being on assignment. Some distance is required in order to reflect on what has been experienced. That is why retrospective interviewing seems appropriate. Second, if anticipatory adjustment is impossible, it is all the more important to select the most suitable candidates for international assignments. Weick’s concept of sensemaking suggests that, when acting, people do not only react to situations they face but they also create very much their environments, their “external conditions”. Depending on how they define themselves, i.e. depending on their identities, they enact the materials for their own constraints and opportunities (see Glanz et al., 2001; Glanz, 2003). Perhaps it is then appropriate to consider identities of candidates as an important prerequisite for future success in international assignments. Support to this kind of reasoning can be gained from the literature on global leader development. The empirical research findings by Caligiuri and Di Santo (2001) revealed that certain personality characteristics, while desirable for global leadership, cannot be developed through global assignments. “Global leaders are born and then made”, as Black et al. (1999a) have noted. This gives reason to believe that managers with cosmopolitan or multicultural identity may have better prospects for international careers than those with more parochial identity. This is a clear message for scholars and practitioners of international human resource management. Perhaps one needs to learn more about the identity of managers before sending them on international assignments, not only how they construct their identities and develop competencies during assignments. Conclusions and suggestions This paper introduces an identity-construction perspective for studying the individual consequences of foreign assignments. Although having been applied in domestic career transition studies the identity construction perspective has not much been applied in the international context. Thus, there is a clear lack of empirical research, which would help us to understand what kind of identity transformation/learning experience the international assignment is. On the basis of previous discussion, several suggestions for further research can be made. In order to use foreign assignments as a way of developing global leaders, we should perhaps gauge the identity of candidates before sending them abroad understand how managers develop global competencies during international assignments, and what kind of “inward journey” they make. The need to foster globally competent managers is widely recognised in the literature and the most powerful way to do that is through expatriation or cross-border assignments. However, academic studies of international assignments and expatriate careers have been

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conducted primarily from the organisational point of view. Therefore, a research gap exists which would focus more on the subjective side of the international experience and the identity transformation of managers in particular. Subsequent research would also examine how managers who have successive assignments in different locations reconstruct their identities and learn new competencies. Is it possible to develop such a multicultural identity, which is applicable to different cultural contexts? Or, are managers able to build on what has been acquired in the previous placement and transfer that to another context, or do they begin from the zero level every time? This topic relates to the discussion about generalisable and context-specific or idiosyncratic competencies (Black et al., 1999a; Gregersen et al., 1998). More research is needed to provide clarity to the proportion of these two. Another suggestion for further research is to interview repatriates about how enduring such identity changes are. In addition to this, the recent discussion about boundaryless careers shows that people are increasingly designing their careers and making choices of what they feel is meaningful for themselves and their dependants. One research agenda would then be: how does identity change relate to the career expectations of global managers? It is suggested here that the “embedded identity” would provide a relevant framework for identifying high-potential candidates for international assignments, because it is firmly based on past experience (early socialisation, familial relationships, socio-cultural factors). Thus, the embedded identity can be seen to represent the current self. A rigid and ethnocentric identity of candidates may then predict problems and slow learning in a foreign location. On the other hand, the concept of “possible selves” might be particularly interesting for studying international assignments from a developmental point of view, because of its focus on developmental potential, learning and future aspirations. It seems plausible that identity is partly unstable and malleable, although the core self remains intact. This also calls for a different kind of measures, which have not been traditionally used in the field of international management and expatriation. In order to develop current theories, it seems relevant to probe with narratives (or autobiographies) as modes of data generation, instead of standard questions and statistical measures. Because identity construction is a process, it will be best captured through qualitative methodology and interpretive paradigm. Also we need more longitudinal research on this area. In the post-modern, globalised world, many people are constructing their identities and their careers, which are essential parts of themselves. On the basis of their new self-knowledge and identity they then make occupational choices and moves in their careers. What seems to be important is to find a balance between one’s inner world and the necessities of the outer world. Is it so that when you cannot manage the turbulence around you, you are engaged in managing yourself in order to preserve a feeling of coherence and adaptability at the same time? To sum up, this essay aims to open up new avenues for research on international management development and international assignments in particular and to show the relevance and value of interdisciplinary research designs. Although it would be a somewhat uneasy task for a researcher to sit on two or three chairs at the same time, the creative combination of different fields of study may be rejuvenating for theory development. In addition, academic researchers should identify the early signals of

new developments in their field of study and they should be forerunners in these developments. They should be people to whom practitioners can turn to ask for advice in this era of chaos and turbulence. References Adler, N.J. and Bartholomew, S. (2001), “Managing globally competent people”, Academy of Management Executive, Vol. 6 No. 3, pp. 52-65. Alldredge, M.E. and Nilan, K.J. (2000), “3M’s leadership competency model: an internally developed solution”, Human Resource Management, Vol. 39 No. 2 and 3, pp. 133-46. Allen, V.L., Wilder, D.A. and Atkinson, M.L. (1983), “Multiple group membership and social identity”, in Sarbin, T.R. and Scheibe, K.E. (Eds), Studies in Social Identity, Praeger, New York, NY, pp. 92-115. Arnett, J.J. (2002), “The psychology of globalization”, American Psychologist, Vol. 57 No. 10, pp. 774-83. Arnold, J. (1997), Managing Careers into the 21st Century, Paul Chapman Publishing, London. Arthur, M. (1994), “The boundaryless career: a new perspective for organizational inquiry”, Journal of Organizational Behavior, Vol. 15 No. 4, pp. 295-306. Arthur, M.B. and Rousseau, D.M. (1996), The Boundaryless Career, Oxford University Press, New York, NY. Arthur, M., Hall, D. and Lawrence, B. (1989), “Generating new directions in career theory: the case for a transdisciplinary approach”, in Arthur, M.B., Hall, D.T. and Lawrence, B.S. (Eds), Handbook of Career Theory, Cambridge University Press, Cambridge, pp. 7-25. Arthur, M.B., Inkson, K. and Pringle, J.K. (1999), The New Careers. Individual Action and Economic Change, Sage Publications, London. Bailyn, L. (1989), “Understanding individual experience at work: comments on the theory and practice of careers”, in Arthur, M.B., Hall, D.T. and Lawrence, B.S. (Eds), Handbook of Career Theory, Cambridge University Press, Cambridge, pp. 477-89. Barley, S. (1989), “Careers, identities, and institutions: the legacy of the Chicago School of Sociology”, in Arthur, M.B., Hall, D.T. and Lawrence, B.S. (Eds), Handbook of Career Theory, Cambridge University Press, Cambridge, pp. 41-65. Black, J.H., Gregersen, H.B., Mendenhall, M.E. and Stroh, L.K. (1999b), Globalizing People through International Assignments, Addison-Wesley Publishing, Reading, MA. Black, J.S., Morrison, A.J. and Gregersen, H.B. (1999a), Global Explorers. The Next Generation of Leaders, Routledge, London. Blustein, D. (1994), “‘Who am I?’ The question of self and identity in career development”, in Savickas, M.L. and Lent, R.W. (Eds), Convergence in Career Development Theories, CPP Books, Palo Alto, CA, pp. 139-54. Bonache, J., Brewster, C. and Suutari, V. (2001), “Expatriation: a developing research agenda”, Thunderbird International Business Review, Vol. 43 No. 1, pp. 3-20. Brake, T. (1997), The Global Leader. Critical Factors for Creating the World Class Organization, Irwin Professional Publishing, Chicago, IL. Briscoe, J.P. and Hall, D.T. (1999), “Grooming and picking leaders using competency frameworks: do they work? An alternative approach and new guidelines for practice”, Organizational Dynamics, Autumn, pp. 37-52. Caligiuri, P. and Di Santo, V. (2001), “Global competence: what is it, and can it be developed through global assignments?”, Human Resource Planning, Vol. 24 No. 3, pp. 27-35.

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Hannerz, U. (1996), Transnational Connections. Culture, People and Places, Routledge, London. Hogan, R. and Cheek, J. (1983), “Identity, authenticity, and maturity”, in Sarbin, T.R. and Scheibe, K.E. (Eds), Studies in Social Identity, Praeger, New York, NY, pp. 339-57.

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The personal characteristics of the successful expatriate A critical review of the literature and an empirical investigation

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Jonna Holopainen Swedish School of Economics and Business Administration, Helsinki, Finland, and

Ingmar Bjo¨rkman INSEAD, Fontainebleau Cedex, France and Swedish School of Economics and Business Administration, Helsinki, Finland Abstract Purpose – When critically reviewing the empirical research on the relationships between personal characteristics and successful foreign assignments it is revealed that the extant empirical research suffers from several limitations. The aim of this article is to shed additional light into the relationship between expatriate personal characteristics and job performance, circumventing the identified limitations of cross-sectional design, use of self-evaluations and inappropriate measures of success. Design/methodology/approach – The empirical study is based on longitudinal data. Trained psychologists carried out a psychological assessment of the expatriate prior to the assignment. Performance data were provided by both the expatriate and the expatriate’s superior. Findings – The obtained results support the importance of communicational ability for expatriate success, whereas stress tolerance and relational ability were not found to be significantly related to success. Research limitations/implications – The study was conducted in only one multinational company and the country of origin of all studied expatriates was Finland. Another limitation of this study is the relatively limited number of personal characteristics studied and the use of only one superior performance evaluation per expatriate. Practical implications – Based on the results it is recommended that companies systematically assess the personal characteristics of candidates before deciding on an expatriation, especially the communicational ability. Minimising the use of self-evaluations in research is strongly advised. Originality/value – This article contributes to the literature by providing a longitudinal study on the relationship between expatriate personal characteristics and performance. Keywords Expatriates, Personality, Self assessment Paper type Research paper

Introduction With the globalisation of the business world companies increasingly struggle with challenges of coordination, control, and transfer of knowledge across units. As a result the use of expatriates has increased, and successfully managing expatriation has become an important operation in multinational companies. Considering the high costs of expatriates and the many challenges that foreign assignments entail, there is an obvious interest among practitioners and academics in identifying factors associated with expatriate job performance. The lists of factors suggested to lead to successful foreign assignments are abundant and include such as individual, organisational and environmental factors.

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Within this research area, the factors related to the personal characteristics of the expatriate have attracted considerable attention (Church, 1982; Mendenhall and Oddou, 1985; Black, 1990; Arthur and Bennet, 1995; Aycan, 1997; Ward and Weining, 1997; Selmer et al., 2000; Caligiuri, 2000a, b; Selmer, 2001). However, despite the abundant lists of personal characteristics of successful expatriates companies still seem to select their expatriates largely based on technical competence and previous track record (Harris and Brewster, 1999). One reason for using such simplistic selection criteria may be the attempt of the selector to reduce the risk experienced in the process (Miller, 1973), but also shortcomings in the extant body of research may contribute to this pattern. This paper critically reviews previous studies on expatriate success. The definitions of success and methodological approaches are discussed and suggestions for how to improve on empirical research in this area are presented. A special focus is put on analysing research on the relationship between personal characteristics and success of the expatriate. Drawing on previous studies, hypotheses on the relation between personal characteristics and success are formulated and tested in the empirical part of this paper. The results and their implications to research and the business world are discussed. Previous research What constitutes expatriate success? A traditional way to begin an article on expatriate success is by stating the high failure rates of assignments (see, e.g. Mendenhall et al., 1987; Black, 1988; Black et al., 1991; Van Oudenhoven et al., 2001). In these articles the implicit notion is that an assignment has been successful in case the expatriate succeeds in completing the entire assignment. The relevance of this measurement has been questioned as premature re-entry may be caused by other factors such as retirement and the expatriate being offered and accepting a new position (perhaps partly due to outstanding job performance during the assignment!). Furthermore, even a completion of an assignment does not assure effectiveness in how the expatriate has carried out his/her responsibilities (Harzing, 1995). The majority of studies on expatriates examine factors expected to influence their cross-cultural adjustment, i.e. at the extent to which the individual is psychologically comfortable in living outside the home country (Black, 1990). This aspect of success is indeed important, not the least for the expatriate and his/her family. Poor adjustment can also provoke negative feelings with the expatriate towards the sending company and deteriorate organisational commitment and motivation (Gregersen and Black, 1992). All in all poor adjustment has been identified as a cause behind expatriations ending in failures (Tung, 1982) and adjustment has been suggested to impact on both performance and the completion of an assignment (McEvoy and Parker, 1995). The relationship between adjustment and performance is, however, not clear yet. Although evidence exists of a positive relationship between these two, further evidence is needed to conclude the causal direction of this relationship (Kraimer et al., 2001). Is it adjustment that precedes performance or is it the other way around? The main reason for sending people on assignments abroad is the expectation that they will carry out their tasks successfully. Hence, from the company’s perspective it is the actual task performance that is of primary interest. Therefore, as long as the causal

relationship between adjustment and performance is not completely clear it seems extraneous to define success in terms of adjustment. A high level of adjustment is certainly positive for the person him/herself, but if it does not guarantee good performance in the task it can by no means indicate that an assignment would be successful from the company’s point of view. As a consequence, there is a notable need for research in the area of expatriate success with a focus on the task performance of the expatriate. From whom to collect data? A common problem in the reviewed research is the source from which data are collected. The majority of studies investigating the effect of personal characteristics on expatriate success have been conducted with surveys sent to expatriates (e.g. Caligiuri, 2000b; Black, 1990). This incites the problem of common method bias, as the same respondent provides information on both the dependent and the independent variables. If a positive relationship is observed between personal characteristics and performance (and/or adjustment) it may reflect the implicit theory of the respondent rather than any true relationship. Conducting longitudinal research and gathering data on the independent variables before the assignment, or using multiple informants would help researchers overcome this common method bias problem. Some studies have relied on subjective evaluations of the factors that either expatriates themselves or human resources specialists consider as important for successful expatriates (Tung, 1981; Arthur and Bennet, 1995). While such studies increase our understanding of institutionalised beliefs that are likely to influence corporate practice, they do not provide scientific evidence of the true relationship between the expatriate’s personal characteristics and success. But whose view of the role of the expatriate and his/her success in terms of the fulfilment of this role should researchers study? Studies investigating self-reports have consistently shown that self-reports show only low to moderate correlations with reports obtained by superiors or peers (Harris and Schaubroeck, 1988; Farh et al., 1991; Yu and Murphy, 1993). While a number of studies have relied on self-reported measures produced by the expatriate, it appears more relevant to solicit the perceptions of the expatriate’s direct superior. The superior is ultimately responsible for the performance of the unit to which the expatriate belongs and is arguably less likely than the focal employee to provide biased estimates of his/her performance. Although there exist examples of research where performance data have been solicited from the expatriate’s superior (e.g. Caligiuri and Tung, 1999; Caligiuri, 2000a), such studies are in minority. When to collect data? In addition to mostly relying on measures of adjustment, nearly all expatriate studies suffer from utilising a cross-sectional design. Based on both theoretical reasoning and empirical research it has been suggested that personal characteristics affect the adjustment of the individual. In cross-sectional studies it has been implicitly assumed that the characteristics of the expatriate are constant and do not change during the assignment. It is conceivable, however, that the adjustment process may at least to some extent affect some personal characteristic of the expatriate. For instance, events taking place and the degree to which the person adjusts to work, non-work, and, in

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particular, interaction with locals, may influence his/her social orientation or communicational ability. As a consequence, the use of cross-sectional data of personal characteristics and success does not necessary produce results that help predict which expatriate candidates will be successful if sent on an assignment. From the perspective of companies using expatriates this is exactly the information that would be needed. Longitudinal studies would provide more solid evidence of the proposed effect of personal characteristics on adjustment and performance and are thus highly recommended in this field. In summary, previous research on expatriate personal characteristics and success has suffered from several deficiencies. While the extant research has provided a number of interesting findings rigorous empirical work is clearly needed to test the claims and the results obtained so far. The study reported in this paper was designed so as to take steps in this direction. Hypotheses Not only the personal characteristics of the expatriate, but other individual related factors (previous international experience, marital status, gender), organisational factors (role conflict, organisational support, selection and training) and environmental factors (cultural distance) have been suggested as determinants of expatriate success. In this paper we will focus on reviewing previous studies on expatriate personal characteristics and success and include other factors only as control variables. For a more inclusive review of other than personal factors, see Thomas (1998). Personal characteristics of successful expatriates Past research examining the personal factors crucial for expatriates are mostly based on the proposition that the crucial personal factors for expatriates either promote or inhibit the acquisition and utilisation of knowledge about the new environment, the ways host nationals think, the behavioural norms, and the way in which foreigners are expected to behave (Black, 1990). The ability to acquire such knowledge and using it to guide their own behaviour reduces uncertainty and promotes adjustment – which has been assumed to lead to better job performance. Important personal characteristics for expatriates identified in the literature will be discussed more in detail below. Stress tolerance. Taking a foreign assignment substantially affects a person’s social and professional life. These changes involve many stress provoking factors, such as uncertainty and ambiguity (Black, 1988). Moving into a new cultural environment may also produce a feeling of not having control over the situation and as Hofstede (1980) has stated “the forced exposure to alien cultural environment can put people under heavy stress”. A person’s ability to deal with potentially stressful situations has indeed been proposed as an important determinant of adjustment (Mendenhall and Oddou, 1985; Black, 1988) and performance. Therefore, the following hypothesis is forwarded: H1. Stress tolerance will be positively related to expatriate performance.

Relational ability. This refers to the capacity of the expatriate to interact effectively with different groups of people and to establish close relationships with host nationals (Tung, 1981). Establishing relationships with host nationals is beneficial to the adjustment process due to the information exchange included in such relationships. The more the expatriate interacts with host nationals, the more s/he will receive

information about behavioural norms and the rationale for why people behave in a certain way. As a consequence the expatriate will be able to adjust his/her own behaviour to fit these norms. Being able to act in an appropriate way and predict the behaviour of others will reduce uncertainty and increase the feelings of comfort and adjustment (Mendenhall and Oddou, 1985) and is also likely to improve the expatriate’s job performance. Black (1990) presented empirical evidence of a positive relation between relational ability and adjustment. Caligiuri (2000a) found that expatriates scoring high on the Big Five personality construct agreeableness were significantly more likely to report an intention to complete their assignments and their performance was also rated marginally higher by their supervisors (t ¼ 1:61). We therefore hypothesise that: H2. Relational ability will be positively related to expatriate performance.

Communicational ability. In a literature review Mendenhall and Oddou (1985) suggested that it is not the language fluency of the expatriate, but rather the communicational ability that is of specific importance in relation to adjustment. After a basic proficiency in a language has been acquired, it is the willingness or desire of a person to become involved in communications with host nationals that determine the amount of information the individual can receive from the host nationals. The more the expatriate gets involved in communication the better the person can understand the host country culture and nationals. This increased understanding will reduce uncertainty, and increase adjustment and job performance. Empirical evidence of these relationships have been presented by Black (1990), while Caligiuri (2000a) found that the closely related Big Five personality construct extroversion was negatively and significantly related with the expatriate’s desire to terminate their assignment but not significantly related with supervisor-rated performance. Although the empirical findings to date are somewhat mixed we hypothesise as follows: H3. Communicational ability will be positively related to performance

Other factors contributing to success In addition to the above-mentioned personal characteristics also some other factors have been identified to influence the adjustment and performance of an individual. Such factors included previous international experience, cross-cultural training and cultural distance. These factors will be briefly discussed below and included in the empirical study as control variables. Previous international experience. The previous international experience of the expatriate provides the individual with means of predicting what a foreign assignment involves, increases the probability of realistic expectations and thus reduces uncertainty and eases adjustment (Black et al., 1992). Despite the findings in some studies of a positive relationship between previous international experience and adjustment (Black, 1988; Shaffer et al., 1999) research results have not always been consistently supportive (Black and Gregersen, 1991; Selmer 2002). Some research results suggest that previous international experience would have a significant positive effect in the early stages of the adjustment process but that it disappears later during the international assignment (Selmer, 2002; Takeuchi and Yun, 2000).

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Cross-cultural training. This provides the expatriate with information on the host country and helps the expatriate to form realistic expectations. This increased knowledge on the host country reduces uncertainty and facilitates adjustment (Caligiuri et al., 2001). The results concerning the effects of cross-cultural training are not entirely consistent. Cross-cultural training has been found to be positively related to measures of expatriate success (Black and Mendenhall, 1990; Caligiuri, 2000b) but has also been found to be negatively related to adjustment (see, e.g. Black and Gregersen, 1991). The existence of a negative relationship has been explained as an outcome of expatriates believing – after a short, relatively superficial pre-departure training session – that they already know the host environment. The chock when realising that they do not may produce adjustment problems that are greater than those of expatriates who received no pre-departure training whatsoever. Cultural distance. This indicates the extent to which the expatriate’s home country differs culturally from the country of assignment. In cases where this cultural distance is large the expatriate is likely to have a harder time to adjust, as s/he has to learn a bigger set of new behaviour. Cultural distance has been found to be negatively related both to adjustment and intent to stay on the assignment (Black and Stephens, 1989). The study Sample and data The study was conducted in one Finland-based multinational company. The studied company was chosen due to the frequent use of foreign assignments and its highly systemised expatriate management and support practices. Prior to assignments future expatriates go through psychological assessments with trained psychologists. They also have assignment discussions with personnel from the international transfers department. All expatriates are (at least in principle) offered cross-cultural training, but in reality less than half of them attend any formal training programme. Although the company makes few formalised efforts at using assignments abroad for development purposes, international transfers are viewed as natural and important parts of the career path of high performing, ambitious employees. The company posts all positions on its intranet, and uses internal recruitment to an important extent also across borders. The sampling frame for this study was set to include all expatriates that had been on their assignment for a minimum of the last 12 months and have been assessed by company representatives prior to the assignment. The minimum stay of 12 months is considered relevant as the cultural shock should smooth out after the first half year (Torbio¨rn, 1982) and thereby all expatriates included should have passed the initial problems of adjustment and performance. In the total data collection a total of 171 expatriates fulfilling these requirements were identified. A survey-instrument to be used to obtain information on the dependent variables was designed and pilot tested on ten former expatriates. The focal company’s corporate International Transfers Department subsequently sent an e-mail to the 171 expatriates fulfilling the requirements of this study. Attached to the e-mail were the two questionnaires: one for the expatriate and one for his/her superior. The expatriate was asked to fill one of the questionnaires and send it back to one of the authors. The expatriate was also asked to forward the message to his/her superior who then was to fill the questionnaire and send it directly to the first author.

On the last return date a notification was sent to all expatriates that had not yet answered. One week later a reminder was sent to all that had not answered. Finally two weeks after the initial return date the first author contacted the expatriates who had not answered by phone to check whether they had received the questionnaire and whether they intended to answer. A total of 117 expatriates (68 per cent response rate) and 82 superiors responded. Even if in one case only the superior filled in the sent questionnaire, it can be assumed that the superior got the questionnaire only in case the expatriate participated. The study sample of superiors was thus limited to the total number of expatriates who answered and the response rate for superiors was approximately 70 per cent. All supervisors resided in the same country as the studied expatriate. Information about the origin of the supervisor was requested but many respondents did not provide this information and it was therefore impossible to control for superior nationality in the regression analyses (see Caligiuri and Day, 2000). The respondents were situated in 22 different countries whereof 51 were in Europe, 38 in Asia, 24 in the USA, two in Australia and one in the Middle East. Information about the country of assignment was missing in two of the observed cases. A total of 104 (88 per cent) of the respondents were male, 90 respondents were joined by their families on the foreign assignment, and 55 of these had children. Measures Dependent variables – performance. Performance was measured on a four-item scale partly adapted from Black and Porter (1991). Both superiors and expatriates were asked to rate, on a five-point scale, their evaluation of how well the expatriate overall had succeeded in his/her task, how well the expatriate had performed, met the pre-expectations of performance and met the business goals that were set. This measure had Cronbach alpha reliability scores of 0.92 (superior sample) and 0.80 (expatriate sample). As the dependent variables suffered from skewed distributions, they had to be transformed. In line with the suggestions presented in Hair et al. (1998), we did the transformation of the dependent variables by grouping the responses into three different categories. The new groupings allowed us to carry out regression analyses as the responses now were approximately normally distributed. Independent variables. Information on the personal characteristics was obtained through assessment reports. Trained psychologists had carried out psychological assessments of all expatriates prior to their assignments, and as a result qualitative statements on the expatriates’ personal characteristics regarding the assignments were available. As quantitative data were needed for the purpose of this study the statements were rated. This was done independently by two raters; one of the psychologists that had been involved in the initial assessments and the first author (the psychologist did not have any information on adjustment or performance of the expatriates, and therefore there were no problems of common method error). As the psychologist had not been involved in some of the assessments, and thus had no additional information that would have been of use, the mean of the two raters’ scores were used in the subsequent study. The high correlations of the two raters’ evaluations presented in Table I provides support for the reliability of the codings: . Stress tolerance. This was adapted from Stening and Hammer (1992) and was evaluated on the following dimensions: ability to deal effectively with

Characteristics of the successful expatriate 43

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44 .

frustration, ability to deal effectively with stress, flexibility/adaptability to new changing conditions and ability to operate efficiently in new challenging situations. Relational ability. In rating relational ability the following factors, previously used by Stening and Hammer (1992), were looked at: ability to establish satisfying interpersonal relationships, ability to accurately understand the feelings of others, ability to empathise with another person and ability to co-operate efficiently. Communicational ability. This was evaluated on different dimensions using the intercultural communication scale, previously used by Stening and Hammer (1992). The score was composed of such items as the expatriate’s ability to initiate interaction with a stranger, ability to enter into a meaningful dialogue with other people and his/her ability to deal effectively with communication misunderstandings between him/her-self and others.

Control variables. These were: . Previous international experience. The assessment statement included information on this variable. The expatriate was seen to have previous international experience if s/he had spent a minimum of six months abroad for reasons of work or study. . Cross-cultural training. The expatriate was asked to indicate whether s/he had taken part in cross-cultural training either prior to the assignment or during the assignment. . Cultural distance. This was measured using a cultural distance index, which was calculated for each country, by a method presented by Kogut and Singh (1988) and based on the cultural values obtained by Hofstede (1980). The distance index is derived with the following formula: CDjk þ ln

.

X


ð Dij 2 DikÞ2=V i

=4;

where: CDjk ¼ the cultural distance between countries j and k; Dij ¼ the score for parent country j on cultural dimension i; Dik ¼ the score for subsidiary country k on cultural dimension i; and V i ¼ the variance of the index for cultural dimension i. The formula corrects for the variance of each cultural dimension and averages across the four dimensions. Gender. Although there is no empirical research to suggest that males or females would exhibit superior performance during assignments abroad (Caligiuri and Tung, 1999), the gender of the expatriate will be included as a control variable.

Variable

Table I. Inter-rater correlations of personality ratings



Stress tolerance Relational ability Communicational ability Note: * Correlation is significant at the 0.01 level (two-tailed)

Correlation 0.562* 0.710* 0.646*

Information about the gender of the respondent was available in the assessment report. The means and standard deviations of the independent and dependent variables are presented in Table II. Results First, a correlation matrix for all the variables in the study was calculated. These correlations are presented in Table II. The only personal characteristic significantly related to superior rated performance was stress tolerance. This characteristic was however not significantly related to the expatriate-rated performance. The expatriate evaluated performance was significantly correlated with the expatriates’ communicational ability whereas there was no significant correlation between communicational ability and the superior rated success measure. Thus, H1 and H3 were all partly supported whereas H2 was not supported. Of the control variables previous international experience and cross-cultural training correlated significantly with expatriate-rated performance, whereas cultural distance and gender were not significantly related to either superior or expatriate performance. To test the hypotheses further two regression analyses were carried out. The predictor variables were the same in all of the analyses, whereas the predicted variables changed. The two predicted variables were superior rated performance and expatriate rated performance. Table III presents the results of the regression analyses. The results of the regression analyses offer full or partial support for some of the hypothesised relationships whereas some of the results did not show any significant relationships. No statistically significant relationship was found between stress tolerance and relational ability and either superior or expatriate rated performance. In fact, relational ability was negatively related to expatriate rated performance (b ¼ 20:24, t ¼ 22; 08, p , 0:01). Consequently, H1 and H2 had both to be rejected. Communicational ability was significant both to superior and expatriate rated performance (b ¼ 0:24, t ¼ 1:80, p , 0:05) (b ¼ 0:36, t ¼ 2:89, p , 0:01). Therefore H3 was offered full support by the analysis. Of the control variables, previous international experience was significantly related with superior rated performance (b ¼ 0:32, t ¼ 1:87, p , 0:05). Neither gender, the provision of cross-cultural training to the expatriate, nor cultural distance between the expatriate’s home and host country were significantly related with performance. Summary and discussion In this paper we have presented a critical review of previous studies of expatriate personal characteristics and their influence on the success of assignments. We have also reported the results of our research aiming at shedding additional light on the relationship between expatriate personal characteristics and job performance. The empirical part of this article contributes to the literature by providing what seems to be one of the very few attempts at conducting a longitudinal analysis of the relationship between expatriate personal characteristics and performance. Additionally, the findings are based on data submitted by both expatriate and superior respondents. We hypothesised that the personal characteristics of the expatriate would have an effect on the outcomes performance during the assignment. The results offered partial support for the hypothesised influence of personal characteristics. While the study did

Characteristics of the successful expatriate 45

114 118 118 118 118 118 110 83 117

1. 2. 3. 4. 5. 6. 7. 8. 9.

0.72 0.82 0.80 0.32 0.49 0.98 0.94 0.73 0.55

Std deviation 0.387** 0.473** 0.081 0.058 0.036 0.000 0.236* 0.039

1

0.609** 0.145 0.133 20.043 0.089 0.123 20.002

2

0.124 0.097 20.103 0.110 0.171 0.214*

3

20.018 20.048 0.086 0.013 20.062

4

0.014 0.103 0.169 0.183*

5

Notes: * Correlation is significant at the 0.05 level (two-tailed); **; Correlation is significant at the 0.01 level (two-tailed)

3.23 3.28 3.15 0.12 0.38 0.27 1.83 4.27 4.11

Mean

0.148 0.067 20.213*

6

46

Stress tolerance Relational ability Communicational ability Gender (female) Previous international experience Cross-cultural training Cultural distance Superior: performance Expatriate: performance

n

Table II. Means, standard deviations and correlation matrix of the dependent and independent variables

Variable

20.053 20.040

7

0.320**

8

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Independent variables Stress tolerance Relational ability Communicational ability Gender (female) Previous international experience Cross-cultural training Cultural distance n R R2 F

Superior-rated performance Beta t 0.18 20.00 0.24 0.12 0.32 0.00 20.00 76 0.21 0.17 2.10

1.33 20.67 1.80* 0.45 1.82* 1.05 20.63

Expatriate-rated performance Beta t 20.00 20.24 0.36 20.11 0.19 20.12 20.00 106 0.35 0.12 2.01

2 0.35 2 2.08** 2.89** 2 0.46 1.25 2 0.74 2 0.41

Notes: Significance (one-tailed) * p , 0:05; ** p , 0:01

not support the hypothesised importance of stress tolerance and relational abilities for expatriate performance, our findings do indicate that the communicational ability of the expatriate is an important determinant of expatriate performance. This relationship was established both with the expatriate’s self-reported performance estimate and with the performance evaluations provided by the superior. In spite of the methodological strengths of this study – the use of longitudinal data and performance ratings by the expatriate’s superior – also this research suffers from some limitations. The study was conducted in only one multinational company, the sample size was relatively small and the country of origin for all expatriates was Finland. Further, we studied only a relatively limited number of personal characteristics that were measured through assessments made by psychologists. The performance of the expatriate was evaluated by only one person, his/her supervisor. Therefore, the findings reported in this paper must be considered with caution. Scholars may in future studies combine psychologist assessments with the use of questionnaires such as the Multicultural Personality Questionnaire (Van Oudenhoven and van der Zee, 2002) or the Intercultural Development Inventory (Hammer et al., 2003). There is also a need to clarify further the construct validity of the wide range of constructs that have been proposed as being associated with expatriate adjustment and success (see e.g. Caligiuri, 2000a; Van Oudenhoven et al., 2001). The limitations of the current findings aside, the implications of our results for companies using expatriates are quite straightforward. The study provided some evidence for the relevance of assessing the personal characteristics of the candidates before making selection decisions. More specifically, companies that select individuals with good communicational abilities and candidates that already have lived abroad (see also Shaffer et al., 1999) are more likely to have well performing expatriates. Additionally, previous research has strongly indicated that the family situation of the candidate should be included among the factors that are considered when selecting expatriates (e.g. Black and Stephens, 1989). Today, most multinational corporations seem to fail to have in place practices that would help the firms to assess important personal characteristics of expatriate candidates (Harris and Brewster, 1999).

Characteristics of the successful expatriate 47

Table III. Regression analyses predicting expatriate performance

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The results of this study should not, however, incite companies to ignore other functions than selection, such as cross-cultural training, when aiming at improving the performance of their expatriates. In the studied sample the expatriates were free to participate in cross-cultural training, if they so desired. It is conceivable that the lack of a significant positive relationship between cross-cultural training may be due to a self-selection of the people that chose to take part in the training, e.g. because they had been selected for particularly challenging jobs or because they “knew” that they lacked cross-cultural knowledge or skills. In our research, the expatriates evaluated their performance quite differently compared to their superiors, with a correlation coefficient of a relatively modest 0.32. This is a finding well worth noting, as the many previous studies have relied solely on expatriate self-reports. Differences in self-evaluation practices are well known (Harris and Schaubroeck, 1988), but the extent to which expatriate self-evaluations differed from more objective evaluations was somewhat unexpected. One implication of this study is that the reliance on self-evaluations should be minimised in future research on expatriate success. The advantages associated with the use of longitudinal data are also significant. Methodological rigour should indeed be an important consideration for scholars aiming at further augmenting our knowledge of factors that contribute to expatriate success. References Arthur, W. and Bennet, W. (1995), “The international assignee: the relative importance of factors perceived to contribute to success”, Personnel Psychology, Vol. 48 No. 1, pp. 99-114. Aycan, Z. (1997), “Expatriate adjustment as a multifaceted phenomenon: individual and organizational level predictors”, International Journal of Human Resource Management, Vol. 8 No. 4, pp. 434-56. Black, J.S. (1988), “Locus of control, social support, stress, and adjustment in international transfers”, Asia Pacific Journal of Management, Vol. 7 No. 1, pp. 1-29. Black, J.S. (1990), “The relationship of personal characteristics with the adjustment of Japanese expatriate managers”, Management International Review, Vol. 30 No. 2, pp. 119-34. Black, J.S. and Gregersen, H.B. (1991), “The other half of the picture: antecedents of spouse cross-cultural adjustment”, Journal of International Business Studies, Vol. 22 No. 3, pp. 461-78. Black, J.S. and Mendenhall, M. (1990), “Cross-cultural training effectiveness: a review and a theoretical framework for future research”, Academy of Management Review, Vol. 15 No. 1, pp. 113-36. Black, J.S. and Porter, L.W. (1991), “Managerial behavior and job performance: a successful manager in Los Angeles may not be successful in Hong Kong”, Journal of International Business Studies, Vol. 22 No. 1, pp. 99-114. Black, J.S. and Stephens, G.K. (1989), “The influence of the spouse on American expatriate adjustment and intent to stay in Pacific Rim overseas assignments”, Journal of Management, Vol. 15 No. 4, pp. 529-44. Black, J.S., Gregersen, H.B. and Mendenhall, M. (1992), Global Assignments: Successfully Expatriating and Repatriating International Managers, Jossey-Bass, San Francisco, CA. Black, J.S., Mendenhall, M. and Oddou, G. (1991), “Towards a comprehensive model of international adjustment”, Academy of Management Review, Vol. 16 No. 2, pp. 291-317.

Caligiuri, P. (2000a), “The Big Five personality characteristics as predictors of expatriates’ desire to terminate the assignment and supervisor-rated performance”, Personnel Psychology, Vol. 53 No. 1, pp. 67-88. Caligiuri, P. (2000b), “Selecting expatriates for personality characteristics: a moderating effect of personality on the relationship between host national contact and cross-cultural adjustment”, Management International Review, Vol. 40 No. 1, pp. 61-80. Caligiuri, P. and Day, D.V. (2000), “Effects of self-monitoring on technical, contextual, and assignment-specific performance”, Group and Organization Management, Vol. 25 No. 2, pp. 154-74. Caligiuri, P. and Tung, R. (1999), “Comparing the success of male and female expatriates for a US-based multinational corporation”, International Journal of Human Resource Management, Vol. 10 No. 5, pp. 763-82. Caligiuri, P., Phillips, J., Lazarova, M., Tarique, I. and Bu¨rgi, P. (2001), “The theory of met expectations applied to expatriate adjustment: the role of cross-cultural training”, International Journal of Human Resource Management, Vol. 12 No. 3, pp. 357-72. Church, A.T. (1982), “Sojourner adjustment”, Psychological Bulletin, Vol. 91 No. 3, pp. 540-72. Farh, J.-L., Dobbins, G.H. and Cheng, B.-S. (1991), “Cultural relativity in action: a comparison of self-ratings made by Chinese and US workers”, Personnel Psychology, Vol. 44 No. 1, pp. 129-47. Gregersen, H.B. and Black, S.J. (1992), “Antecedents to commitment to a parent company and a foreign operation”, Academy of Management Journal, Vol. 35 No. 6, pp. 65-90. Hair, J.F. Jr, Anderson, R.E., Tatham, R.L. and Black, W.C. (1998), Multivariate Data Analysis, Prentice-Hall, Englewood Cliffs, NJ. Hammer, M.R., Bennett, M.J. and Wiseman, R. (2003), “Measuring intercultural sensitivity: the intercultural development inventory”, International Journal of Intercultural Relations, Vol. 27 No. 4, pp. 421-43. Harris, H. and Brewster, C. (1999), “The coffee-machine system: how international selection really works”, International Journal of Human Resource Management, Vol. 10 No. 3, pp. 488-500. Harris, M. and Schaubroeck, J. (1988), “A meta-analysis of self-supervisor, self-peer, and peer-supervisor ratings”, Personnel Psychology, Vol. 41 No. 1, pp. 43-62. Harzing, A.-W. (1995), “The persistent myth of high expatriate failure rates”, International Journal of Human Resource Management, Vol. 6 No. 2, pp. 457-74. Hofstede, G. (1980), Culture’s Consequences – International Differences in Work-related Values, Sage Publications, Beverly Hills, CA. Kogut, B. and Singh, H. (1988), “The effect of national culture on the choice of entry mode”, Journal of International Business Studies, Vol. 19 No. 3, pp. 17-31. Kraimer, M., Wayne, S.J. and Jaworski, R.A. (2001), “Sources of support and expatriate performance: the mediating role of expatriate adjustment”, Personnel Psychology, Vol. 54 No. 1, pp. 71-99. McEvoy, G. and Parker, B. (1995), “Expatriate adjustment: causes and consequences”, in Selmer, J. (Ed.), Expatriate Management, Quorum Books, Westport, CT. Mendenhall, M. and Oddou, G. (1985), “The dimensions of expatriate acculturation: a review”, Academy of Management Review, Vol. 10 No. 1, pp. 39-47. Mendenhall, M., Dunbar, E. and Oddou, G. (1987), “Expatriate selection, training and career-pathing: a review and critique”, Human Resource Management, Vol. 26 No. 3, pp. 331-45.

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Miller, E. (1973), “The international selection decision: a study of some dimensions of managerial behavior in the selection decision process”, Academy of Management Journal, Vol. 16 No. 2, pp. 239-52. Selmer, J. (2001), “Expatriate selection: back to basics?”, The International Journal of Human Resource Management, Vol. 12 No. 8, pp. 1219-33. Selmer, J. (2002), “Practice makes perfect? International experience and expatriate adjustment”, Management International Review, Vol. 42 No. 1, pp. 71-87. Selmer, J., Ebrahimi, B.P. and Li, M. (2000), “Personal characteristics and adjustment of Chinese mainland business expatriates in Hong Kong”, International Journal of Human Resource Management, Vol. 11 No. 2, pp. 237-50. Shaffer, M.A., Harrison, D.A. and Gilley, K.M. (1999), “Dimensions, determinants, and differences in the expatriate adjustment process”, Journal of International Business Studies, Vol. 30 No. 3, pp. 557-81. Stening, B.W. and Hammer, M.R. (1992), “Cultural baggage and the adaptation of expatriate American and Japanese managers”, Management International Review, Vol. 32 No. 1, pp. 77-90. Takeuchi, R. and Yun, S. (2000), “Does previous international experience matter for expatriate adjustment? The moderating effects of current work experiences”, paper presented at the National Meeting of the Academy of International Business, Phoenix, AZ. Thomas, D.C. (1998), “The expatriate experience: a critical review and synthesis”, in Cheng, J.L. and Peterson, R.B. (Eds), Advances in International Comparative Management, Vol. 12, JAI Press, Greenwich, CT, pp. 237-73. Torbio¨rn, I. (1982), Living abroad: Personal Adjustment and Personnel Policy in the Overseas Setting, Wiley, New York, NY. Tung, R.L. (1981), “Selection and training of personnel for overseas assignments”, Columbia Journal of World Business, Vol. 16 No. 1, pp. 68-78. Tung, R.L. (1982), “Selection and training procedures of US, European and Japanese multinationals”, California Management Review, Vol. 25 No. 1, pp. 57-71. Van Oudenhoven, J.P. and Van der Zee, K.I. (2002), “Predicting multicultural effectiveness of international students: the Multicultural Personality Questionnaire”, International Journal of Intercultural Relations, Vol. 26 No. 6, pp. 679-94. Van Oudenhoven, J.P., Van der Zee, K.I. and Van Kooten, M. (2001), “Successful adaptation strategies according to expatriates”, International Journal of Intercultural Relations, Vol. 25 No. 5, pp. 467-82. Ward, C. and Weining, C.C. (1997), “‘Cultural fit’: a new perspective on personality and sojourner adjustment”, International Journal of Intercultural Relations, Vol. 21 No. 4, pp. 525-33. Yu, J. and Murphy, K.R. (1993), “Modesty bias in self-rating of performance: a test of the cultural relativity hypothesis”, Personnel Psychology, Vol. 46 No. 2, pp. 357-63.

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The current issue and full text archive of this journal is available at www.emeraldinsight.com/0048-3486.htm

Cross-cultural training to facilitate expatriate adjustment: it works! Marie-France Waxin and Alexandra Panaccio

Cross-cultural training

51

HEC Montre´al, Montre´al, Canada Abstract Purpose – The paper examines what are the effects of the different types of cross-cultural training (CCT) on expatriates’ adjustment and whether prior international experience (IE) and cultural distance (CD) have a moderator effect on the effectiveness of CCT. Design/methodology/approach – In a quantitative approach the paper examines the effect of four different types of CCT on the three facets of expatriates’ adjustment, on a sample consisting of 54 French, 53 German, 60 Korean and 57 Scandinavian managers expatriated to India. The paper then examines the moderator effect of IE and of CD on CCT’s effectiveness. Findings – CCT accelerates expatriates’ adjustment. The type of CCT received matters. IE and CD have a moderator effect. Practical implications – Implications for practice are identified. Originality/value – The paper demonstrated the effectiveness of different kinds of CCT and the moderator effects of IE and CD. Keywords Expatriates, Cross-cultural management, Training, Country of origin Paper type Research paper

Introduction Corporations have a hard time recruiting candidates who are qualified for expatriation. The training they provide to employees and their families thus becomes crucially important. It is now widely accepted, by both academic researchers and human resources (HR) practitioners, that pre-move training and cross-cultural briefings can help expatriate staff adapt to living and working in new environments (Forster, 2000). However, the cross-cultural training provided by most multinationals is insufficient, incomplete or simply non-existent (Brewster, 1995; Waxin et al., 1997, Selmer, 2000). Because the objectives of such training are qualitative by nature, evaluating its effectiveness is difficult. Few authors have studied the effects of the different types of cross-cultural training on the different facets of expatriate adjustment, on a sample sufficiently large and while monitoring the cultural distance between the host county and the expatriates’ country of origin, which is nevertheless one of the main variables of cross-cultural training models. Moreover, few authors have studied the optimal conditions of effectiveness of cross-cultural training. Waxin (2000, 2004) has shown that the country of origin had a moderator effect on adjustment and its antecedents. One could think that cultural distance also has a moderator effect on the effectiveness of cross-cultural training. Many researchers have shown that international experience facilitates cross-cultural adjustment. One could thus expect that expatriates with many years of international experience would be less dependent on cross-cultural training in order to adjust, and that cross-cultural training would be more effective for those with little or no prior international experience.

Personnel Review Vol. 34 No. 1, 2005 pp. 51-67 q Emerald Group Publishing Limited 0048-3486 DOI 10.1108/00483480510571879

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The objective of this research is to answer the following questions: “What are the effects of the different types of cross-cultural training on work adjustment, interaction adjustment and general adjustment of expatriates?”; and “Do prior international experience and cultural distance have a moderator effect on the effectiveness of cross-cultural training?”. In order to achieve this, we study the effect of four types of cross cultural training (conventional/experimental and general/specific to the host country) on the three facets of adjustment on a sample consisting of 54 French managers, 53 German managers, 60 Korean managers and 57 Scandinavian managers expatriated in India. We examine the moderator effect of prior international experience and of cultural distance on the effect of cross-cultural training on adjustment. 1. Literature review 1.1 Cross-cultural adjustment Literature on cross-cultural adjustment (Black, 1990; Parker and McEvoy, 1993; Caligiuri, 2000) defines it as “the degree of psychological comfort of an individual with several aspects of a new environment”. Black (1988) put forward three facets of adjustment: work adjustment, which encompasses supervision, responsibilities and performances; relational adjustment, which encompasses interaction with members of the host community; and general adjustment, which encompasses life conditions in the foreign country. Many authors have confirmed this typology (Waxin, 2000; Black and Stephens, 1989; Black and Gregersen, 1991; Parker and McEvoy, 1993; Cerdin, 1999). Black et al. (1991) identify three categories of explicative variables for expatriates’ cross-cultural adjustment: individual, organizational, and contextual. Individual antecedents include the individual’s adjustability and prior international experience. Contextual antecedents consist of the length of time spent in the host country, partner’s social support and organization’s logistic support. Organizational antecedents include job-related variables (such as role clarity and role discretion), variables related to the organizational social support (such as supervisory, coworkers, and home-country organization support), organizational culture dissimilarity between the home-country organization and the host-country organization, and finally, cross-cultural preparation. Waxin (2000, 2004) has shown that the expatriates’ country of origin has a direct effect on the three facets of adjustment as well as a moderator effect on their antecedents. In this research, we study the effect of different types of cross-cultural training on the three facets of adjustment. 1.2 Cross-cultural training and its effectiveness in terms of cross-cultural adjustment The objective of cross-cultural training is to teach members of one culture to interact effectively with members of another culture, and to predispose them to a rapid adjustment to their new positions (Brislin and Petersen, 1986; Mendenhall and Oddou, 1991). Brislin (1979), a cross-cultural psychologist, identifies three methods of cross-cultural training: cognitive, affective and behavioral. The cognitive method corresponds to a diffusion of information, using conferences or non-participative sessions, on a foreign cultural environment. The affective method aims at provoking individual reactions so the subject can learn to deal with critical cultural incidents. The behavioral method aims at improving participants’ capacity to adapt their communication style, and to establish positive relationships with members of another culture. Management science researchers have used Brislin’s model and have added situational variables (hardness of the culture and hardness of the communication (Tung, 1987); function and role of the manager (Black et al., 1992);

planned duration of expatriation (Mendenhall and Oddou, 1986)) and individual variables (personal learning objectives (Ronen, 1989); degree of active participation (Black et al., 1992)). Tung (1981) identifies five different training programs, which she places on a continuum: (1) didactic training: (2) culture assimilator; (3) language training; (4) sensitivity training; and (5) field experience.

Cross-cultural training

53

She suggests that the training method should be chosen according to the type of assignment and should be contingent to two determinant factors: the degree of similarity between the culture of origin and the host culture (which is a synonym of cultural distance) and the degree of interpersonal interaction between the manager and host country’s inhabitants, which would be linked, according to Black et al. (1992) to the role and function of the manager. In conclusion, the different models of cross-cultural training and their content are built around three fundamental variables: the cultural distance between the country of origin and the host country, the manager’s level of integration with his/her environment and the duration of the expatriation. Gertsen (1990) proposes a typology of training methods encompassing four categories. First, she identifies two kinds of training: conventional training, where the information is transmitted through a unidirectional communication, as is the case in schools and universities, and experimental training, where the trainer gets the trainees to participate by simulating real life situations. Then, she identifies two possible orientations: either the training focuses on the notion of culture in general and aims at sensitizing participants to the notion of culture, or it focuses on one specific culture and aims at making participants more competent in that particular culture. According to Gertsen (1990), the combination of these two dimensions reveals four types of training, as represented in Figure 1. In our research, we use those four types of training.

Figure 1. Gertsen’s typology of cross-cultural training methods (1990)

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Black and Mendenhall (1990), followed by Black et al. (1991), conducted a review of empirical studies on the relationship between cross-cultural training and cross-cultural efficiency. Their findings can be summarized in three conclusions – cross-cultural training is associated with: feelings of well-being and self-confidence; development of appropriate behaviors in the context of the foreign culture; and improvement of the relationships with host country’s inhabitants. However, the authors noted several methodological problems. First, only 48 percent of the studies included control groups, and only 24 percent included control groups and longitudinal studies. Moreover, 85 percent of those researches had been conducted on populations of students or American Peace Corps rather than managers. Finally, in 75 percent of the cases, the samples comprised less that 100 individuals. Deshpande and Viswesvaran (1992) conducted a meta-analysis from existing researches, published, including the ones referred to by Black and Mendenhall (1990), and non-published researches, such as academic thesis. They reached the same conclusion. Earley (1987) conducted longitudinal studies in order to test the extremes of Tung’s (1981) continuum, i.e. conventional training and field experiences. His sample consisted of 80 American managers on a three-month assignment in Korea. Earley (1987) found that both types of cross-cultural training had a positive effect on adjustment to the host country’s culture and on managerial performance. Those results must however be put into perspective because these managers were expatriated for a period of only three months. Nevertheless, Hammer and Martin (1992) came to similar conclusions after studying American managers expatriated in Japan, confirming the effectiveness of the two opposite training methods. On the other hand, Pruegger and Rogers (1994) found, through a qualitative study, that interpersonal methods were more effective than didactic programs in generating a change of attitudes towards a foreign culture. Their quantitative study could not demonstrate the effectiveness of either method of training. However, the authors insisted on the temporary aspect of their findings because of the small size of the sample and because of the respondents’ characteristics (who were psychology students). However, Cerdin (1996) found, with a sample consisting of 293 French managers expatriated in 44 different countries, that cross-cultural training had no significant influence on the three facets of adjustment. It must be noted that the average work adjustment was significantly lower among managers who had not received cross-cultural training, but this relationship ceased to be significant when the cultural newness of the host county was taken into consideration. In conclusion, researches in the fields of cross-cultural psychology and management sciences have shown the positive effect of cross-cultural training on expatriates’ cross-cultural adjustment. However, too few authors have studied the influence of the different methods of cross-cultural training on the different facets of expatriate adjustment, on sufficiently large samples and while monitoring the cultural distance between expatriates’ country of origin and the host county, which is known to be one of the main variables of cross-cultural training models. In our research, we state the following hypotheses: H1. Expatriates who received cross-cultural training will show a higher level of

adjustment than those who have not. H2. Experimental forms of cross-cultural training have the most beneficial effect on the three facets of expatriates’ adjustment.

1.3 Prior international experience In his review of empirical literature, Church (1982) shows the importance of a first cultural experience or prior exposition for the adjustment of individuals who sojourn in a foreign country. Black (1988) shows that the experience of a prior expatriation lowers the difficulties related to work adjustment, but not those related to general adjustment. On the contrary, Parker and McEvoy (1993) find that prior international experience is significantly correlated only with general adjustment. One could expect that managers who have little or no prior international experience to would need more cross-cultural training in order to adjust than those who have already lived and worked in a foreign country. We thus state the hypothesis that prior international experience has a moderator effect on the effectiveness of cross-cultural training and on expatriates’ adjustment: H3. The effectiveness of cross-cultural training will be more marked for managers

with little of no prior international experience. 1.4 Cultural distance Many authors suggest that the more different the expatriate’s country of origin and the host country are, the more difficult the adjustment will be. Church (1982) refers to this phenomenon in terms of “cultural distance” and Tung (1987) in terms of “hardness of culture”. Mendenhall and Oddou (1985) also identify a “cultural dimension”. Waxin (2000), Parker and McEvoy (1993) and Gregersen and Stroh (1997) show that the cultural distance is negatively linked to cross-cultural adjustment. One could expect that, as the cultural distance increases, cross-cultural training becomes more important in terms of adjustment. For example, a Korean manager expatriated in India could need more cross-cultural training than a French one, because the cultural distance between Korea and India is larger than the one between France and India, according to Hofstede’s (1991) findings. This would explain why researchers who studied the effectiveness of cross-cultural training obtained such different results. Indeed, studies conducted so far neglected to take into account the cultural specificities of the host culture and the cultural distance between expatriates and their host country, while this factor could play a moderating role on the effectiveness of cross-cultural training. We thus state the following hypothesis: H4. The effectiveness of cross-cultural training will be more marked for managers

whose country of origin presents a large cultural distance with India.

2. Methodology 2.1 Sample and data collection Our sample consisted of 224 managers, of which 54 were French, 53 German, 60 Korean and 57 Scandinavian (Swedish, Danish and Norwegian). The respondents were expatriated in the area of New Delhi, in India, where they had been working for at least eight months. Respondents held general management positions or were high-level executives in the foreign subsidiaries of multinationals from their home country, in several different fields of activity. The mean age of the 33 women and 191 men who participated in the study was 38 years old. Respondents reported on average 2.16 years

Cross-cultural training

55

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of prior international experience. They had been working in India for an average of 20.49 months at the time the data were collected, while the average duration of their contract was 3.11 years. The first author collected the data in 1999, in New Delhi, in the context of her thesis, using self-administered questionnaires written in English. Embassies of France, Korea, Denmark and Sweden provided lists of their national companies based in New Delhi. The director of human resources of each subsidy was contacted and asked to participate in the study and to provide the names of their expatriate employees. Those employees subsequently received the questionnaire with a letter explaining the objectives of the research and guaranteeing the anonymity of their responses. Respondents could return the questionnaires directly to the first author. The answer rate was 76 percent. 2.2 Measurement Adjustment. We use the scale developed by Black and Stephens (1989), which uses 14 statements to measure the managers’ self-estimated level of adjustment. For each statement, the expatriates rate their level of adjustment on a seven-point ordinal scale using antinomic adjectives (1 ¼ not adjusted at all, 7 ¼ completed adjusted). A factorial analysis of main components on the 14 statements confirms the existence of the three distinct facets of adjustment. Our results show a strong internal consistency for each facet, on the global sample as well as on the national samples: Cronback’s alphas range from 0.89 to 0.94. Cross-cultural training. One question allows us to determine whether the expatriate has received some kind of cross-cultural training. If the answer is positive, four additional questions based on the work of Gertsen (1990) allow us to determine which type of training was received. Answers are then coded in the following manner: no training (0), general conventional training (1), specific conventional training (2), general experimental training (3), specific experimental training (4). Prior international experience. This was measured by adding the number of months that the expatriate declared having spent abroad, whether in the context of an expatriation, articling, studies or in the accompaniment of family. Cultural distance. To study the impact of cultural distance on the effectiveness of the different types of cross-cultural training, we needed to choose respondents whose countries of origin presented various cultural distances with India. The first author had the opportunity to collect data in New Delhi, India. She consequently chose four countries that were not only very different one from the other, but that were also increasingly distant from India: France, Germany, Korea and Denmark. Since the number of Danish expatriates in New Delhi was insufficient to constitute a valid sample, the author decided to form a Scandinavian sample. In order to calculate the objective cultural distance between countries, we proceed as did Caligiuri (2000) and Parker and McEvoy (1993), that is to calculate the sum of the absolute differences between the scores found by Hofstede (1980 1993) on the four dimensions of the studied countries, using the information given by the respondents (see Table I). 2.3 Statistical analysis For each facet of adjustment, we proceed in the following manner. First, we test the effect of cross-cultural training in general: we conduct analyses of variance to compare the level of adjustment of expatriates who received some kind of cross-cultural training

Country France Germany Korea Norway Sweden Denmark Scandinavia India

Power distance

Control of uncertainty

Individualism

Masculinity

Distance with India

68 35 60 31 31 18 27 77

86 65 85 50 29 23 34 40

71 67 18 69 71 74 71 48

43 66 39 8 5 16 10 56

91 96 109 125 131 142 133 –

Source: Hofstede (1991)

and to that of the expatriates who have not. Then, we test the effect of the different types of cross-cultural training through additional analyses of variance, using the five levels of cross-cultural training[1]. In order to show the significant contrasts between the average levels of adjustment reported by expatriates who received the different types of training, we use a Bonferroni test with a significance level of 5 percent. To test the influence of prior international experience on the effectiveness of cross-cultural training, we conduct additional analyses of variance, this time using only respondents with less than two years of prior international experience. We then compare the results with those of the analyses conducted on the whole sample. Finally, to study the impact of the cultural distance, we compare the relative importance of the effects of cross-cultural training on adjustment for the different national samples. 3. Results We shall analyze, in turn, the effect of cross-cultural training on the three facets of adjustment (see Table II). 3.1 Work adjustment The effect of the presence of cross-cultural training and of the type of cross-cultural training. On the global sample, the analysis of variance shows that expatriates who received some kind of cross-cultural training report an average work adjustment that is significantly higher than those who have not (F test ¼ 6:93 p , 0:01). The only significant contrast revealed by the Bonferroni test at a 5 percent risk level appears between respondents who have not received any kind of training and respondents who have received a specific experimental training. The effect of prior international experience. On the global sample of respondents having less than two years of international experience, the effect of cross-cultural training is reinforced (F ¼ 9:85, p , 0:01 vs F ¼ 6:93, p , 0:01). Similarly, the effect of the five different types of cross-cultural training is stronger than on the complete sample (F ¼ 3:51, p , 0:01 vs F ¼ 2:89, p , 0:05). The positive effects of cross-cultural training are thus even stronger on the work adjustment of expatriates who have less that two years prior international experience. The effect of cultural distance. On the national samples, the analyses of variance show that only Korean expatriates who received some kind of cross-cultural training report an average work adjustment that is significantly higher than those

Cross-cultural training

57 Table I. Hofstede’s cultural variability factors and cultural distance

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Table II. The effect of cross-cultural training (CCT) on work adjustment

Sample/cross-cultural training Presence of CCT, all resp. No training Training (any form) F test Presence of CCT, int. exp. , 2 yrs No training Training (any form) F test Type of CCT, all resp. No training Conventional, general Conventional, host country Experimental, general Experimental, host country F test Bonferroni Type of CCT, int. exp. , 2 yrs No training Conventional, general Conventional, host country Experimental, general Experimental, host country F test Bonferroni

Global

France

Germany

Korea

Scandinavia

n ¼ 224 4.90 (103) 5.37 (121) 6.93**

n ¼ 54 5.50 (28) 5.88 (26) ns

n ¼ 53 4.98 (27) 5.30 (26) ns

n ¼ 60 4.23 (19) 5.11 (41) 5.46*

n ¼ 57 4.71 (29) 5.37 (28) ns

n ¼ 138 4.63 (62) 5.35 (76) 9.85*** n ¼ 224 4.90 (103) 5.35 (31)

n ¼ 36 5.39 (18) 5.98 (18) ns n ¼ 54 5.50 (28) 6.10 (7)

n ¼ 38 4.74 (19) 5.44 (19) 4.42** n ¼ 53 4.98 (27) 5.41 (9)

n ¼ 39 4.13 (13) 5.09 (26) 3.99* n ¼ 60 4.23 (19) 4.67 (10)

n ¼ 25 3.86 (12) 4.87 (13) ns n ¼ 57 4.71 (29) 5.60 (5)

5.05

(39)

6.17

(6)

5.20

(5)

4.76

(8)

4.83

(10)

5.55

(25)

5.62

(7)

5.33

(6)

6.06

(6)

5.17

(6)

5.73 2.89** 0 , 4

(26)

5.67 ns ns

(6)

5.17 ns ns

(6)

5.86 3.43** 0 , 3

(7)

6.14 ns ns

(7)

n ¼ 138 4.63 (62) 5.13 (20)

n ¼ 36 5.39 (18) 6.08 (4)

n ¼ 38 4.74 (19) 5.25 (8)

n ¼ 39 4.13 (13) 4.22 (6)

n ¼ 25 3.86 (12) 5.50 (2)

5.09

(26)

6.16

(6)

5.11

(3)

4.94

(12)

4.13

(5)

5.61

(17)

6.08

(4)

5.60

(5)

6.00

(4)

4.75

(4)

5.87 3.51*** 0 , 4

(13)

5.50 ns ns

(4)

6.00 ns ns

(3)

5.92 2.52* ns

(4)

6.33 ns ns

(2)

Notes: * ¼ p , 0:07, ** ¼ p , 0:05, *** ¼ p , 0:01 and **** ¼ p , 0:001, ns ¼ non-significant

who have not (5.11 vs 4.23, F test ¼ 5:46, p , 0:05). If we use only respondents who have less than two years of international experience, results are even more significant for the Korean (F test ¼ 3:99, p , 0:07) and German managers (F test ¼ 4:42, p , 0:05). Combined effects. On the national samples, the analyses of variance on the five types of cross-cultural training are significant only for the Korean managers (F test ¼ 3:40, p , 0:01). The only significant contrast, with the Bonferroni test at a 5 percent level, appears between Korean managers who have not received any training and those who received a general experimental training. Results are the same when we only include respondents who have less than two years of international experience. We conclude that cross-cultural training has a positive effect on work adjustment. That effect is even stronger for managers who have little or no prior international

experience, especially for the Koreans and the Germans. Among the different types of training, experimental forms of training are the most effective. H1 and H2 are thus validated for work adjustment, and H3 is verified on the global sample. 3.2 Interaction adjustment The effect of the presence of cross-cultural training and of the type of cross-cultural training. On the global sample, the analysis of variance shows that expatriates who received some kind of cross-cultural training report a higher average interaction adjustment than those who have not (4.05 vs 4,74, F test ¼ 15:68; p , 0:000). Expatriates who received general conventional, specific conventional, general experimental and specific experimental training report increasing averages of interaction adjustment (4.36, 4.47, 4.96 and 5.38, respectively). The Bonferroni test shows the specific experimental trainings to be the most effective ones (see Table III). Sample/cross-cultural training

Global

Presence of CCT, all resp. n ¼ 224 No training 4.05 (103) Training (any form) 4.74 (121) F test 15.68**** Presence of CCT, int. exp. , 2 yrs n ¼ 138 No training 3.72 (62) Training (any form) 4.60 (76) F test 16.51**** Type of CCT, all resp. n ¼ 224 No training 4.05 (103) Conventional, general 4.36 (31) Conventional, host country 4.47 (39) Experimental, general 4.96 (25) Experimental, host country 5.38 (26) F test 7.08**** Bonferroni 0, 1, 2 , 4; 0 , 3 Type of CCT, int. exp. , 2 yrs n ¼ 138 No training 3.72 (62) Conventional, general 4.14 (20) Conventional, host country 4.38 (26) Experimental, general 4.59 (17) Experimental, host country 5.75 (13) F test 8.36**** 0, 1, 2 , 4; Bonferroni 0 , 3

France

Germany

Korea

Cross-cultural training

59

Scandinavia

n ¼ 54 n ¼ 53 n ¼ 60 n ¼ 57 4.37 (28) 4.19 (27) 3.29 (19) 4.12 (29) 5.45 (26) 5.15 (26) 3.84 (41) 5.01 (28) 9.27*** 9.40*** 3.04* 8.47*** n ¼ 36 4.08 (18) 5.24 (18) 7.13** n ¼ 54 4.37 (28) 5.21 (7)

n ¼ 38 3.95 (19) 5.05 (19) 8.84*** n ¼ 53 4.19 (27) 4.69 (9)

n ¼ 39 2.98 (13) 3.70 (26) 4.20** n ¼ 60 3.29 (19) 3.38 (10)

n ¼ 25 3.60 (12) 4.85 (12) 7.20** n ¼ 57 4.12 (29) 4.55 (5)

5.25 5.46

(6) 5.55 (7) 4.83

(5) 3.63 (6) 4.38

(18) 4.98 (6) 5.08

5.92 2.50*

(6) 5.83 3.65**

(6) 4.61 2.64**

(7) 5.32 2.38*

ns

0 , 4

0 , 4

ns

(10) (6) (7)

n ¼ 36 n ¼ 38 n ¼ 39 n ¼ 25 4.08 (18) 3.95 (19) 2.98 (13) 3.60 (12) 4.69 (4) 4.53 (8) 3.04 (6) 4.75 (2) 5.25 4.94

(6) 5.42 (4) 4.85

(3) 3.52 (5) 3.88

(12) 4.80 (4) 4.63

6.06 ns

(4) 6.42 4.23***

(3) 5.06 4.39***

(4) 5.50 ns

ns

0 , 4

0.1 , 4

ns

Notes: * ¼ p , 0:07, ** ¼ p , 0:05, *** ¼ p , 0:01 and **** ¼ p , 0:001, ns ¼ non significant

(5) (4) (2)

Table III. The effect of cross-cultural training on interaction adjustment

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The effect of cultural distance. In the four national samples, expatriates who received some kind of cross-cultural training report a significantly higher average of interaction adjustment than those who have not. Similarly, in the four national samples, the analyses of variance on the four types of cross-cultural training show that interaction adjustment averages vary significantly according to the type of training received. However, we notice that French, Korean and Scandinavian managers who received general conventional, specific conventional, general experimental and specific experimental trainings report increasing averages of interaction adjustment. According to the Bonferroni test, specific experimental training is the most effective on the German and Korean samples. The effect of prior international experience. On the global sample, the effect of cross-cultural training in general is much stronger for expatriates who have less than two years of international experience (F ¼ 16:51, p , 0:000), and the effect of the different types of training is also more significant than on the complete sample (F ¼ 8:36, p , 0:000). On the national samples, cross-cultural training still has a positive effect on interaction adjustment of respondents who have less than two years of international experience, although results are slightly less significant than results for the complete national samples, except for Korean managers, for whom the effect is stronger. Combined effects. Concerning the combined effects of the different types of cross-cultural training, of the expatriates’ country of origin and of the expatriates’ prior international experience, the results show a significant difference in averages only for the German and Korean samples, while such a difference was visible for all respondents, in the complete sample. The explanation for this is probably the small size of the French and Scandinavian samples. However, for the German and Korean samples, results show a stronger F test and are more significant than when analyses are carried out on all respondents. In conclusion, cross-cultural training greatly facilitates interaction adjustment on the global sample as well as on the national samples. The specific experimental type of cross-cultural training is the most effective one. H1 and H2 are thus validated for interaction adjustment and H3 is validated on the global sample. The effect of cultural distance has not been clearly assessed.

3.3 General adjustment The effect of the presence of cross-cultural training and of the type of cross-cultural training. On the global sample, the analysis of variance shows that expatriates who received some kind of cross-cultural training report a higher average of general adjustment than those who have not (4.97 vs 4.54, F test ¼ 8:57, p , 0:01). The analysis of variance on the five types of cross-cultural training show that the averages of general adjustment vary significantly according to the type of training received (F ¼ 5:76, p , 0:000). The Bonferroni test shows that general and specific experimental forms of training are the most effective in terms of general adjustment. The effect of prior international experience. On the global sample, when we retain only respondents who have less that two years of international experience, analyses show that the effect of cross-cultural training in general (F ¼ 10:13, p ¼ 0:002) and of the different types of cross-cultural training (F ¼ 5:79, p , 0:000) are stronger than for

the complete sample. Therefore, cross-cultural training is more effective in facilitating general adjustment for those who have little of no international experience. The effect of expatriates’ country of origin. On the national samples, having received some kind of cross-cultural training has a positive and significant effect on general adjustment on all national samples, except for the French one. Similarly, the five types of cross-cultural training have a significant effect on the German, Scandinavian and Korean samples, but not on the French one. Combined effects. Concerning the combined effects of the different types of cross-cultural training and of the expatriates’ country of origin, the Bonferroni test reveals that, for Korean managers, experimental forms of training (general and specific) are the most effective, and that for the Germans, specific experimental training yields the best results. If we consider only expatriates who have less than two years of international experience, the results are the same as for the national samples, but the F tests are stronger and the differences are more significant for the Korean and Scandinavian samples. Similarly, the analysis shows that the effects of the different types of cross-cultural training are the same as for the complete sample, although results for the Scandinavian sample show a stronger F test and are more significant (see Table IV). In conclusion, cross-cultural training significantly facilitates general adjustment. Experimental forms of training have the strongest positive effects on general adjustment. The effects of cross-cultural training are even stronger for respondents who have less than two years of international experience, especially for the Korean and Scandinavian samples. H1, H2 and H3 are thus validated. The effect of cultural distance is partially verified. 4. Discussion 4.1 Discussion of the results The purpose of this article was to analyze the effect of the different types of cross-cultural training on the three facets of adjustment and to examine the moderator effects of the culture of origin and of the prior international experience on this relationship. Our results confirmed the tridimensionality of adjustment. Indeed, our factorial analysis of main components clearly reveals the existence of the three facets: work adjustment, interaction adjustment and general adjustment. Because our results simply confirm those obtained by many authors before us, we will not dwell on this point. We also wish to point out the fact that 54 percent of our respondents had received some kind of cross-cultural training, a relatively high percentage compared that of other researches. According to Waxin et al. (1997), less than 5 percent of French expatriates in Norway had received some kind of cross-cultural training, and according to Cerdin (1996), only 20 percent of French expatriates in 44 different countries had received such training. The high rate of training in our sample is probably due to the fact that India is considered to be quite culturally distant from France, Germany, Korea and Scandinavia. In the following paragraphs, we discuss the effects of the presence of cross-cultural training, of the different types of cross-cultural training, of prior international experience and of the expatriates’ culture of origin on the relationship between cross-cultural training and adjustment. The effect of cross-cultural training. Our results clearly show that cross-cultural training, in all its forms, facilitates all three facets of expatriates’ adjustment. Our first hypothesis is thus clearly verified. However, we notice that work adjustment is the one facet on which cross-cultural training has the least influence. This could probably be explained by the fact that work-related matters remain relatively constant whether the manager works in his country of origin of in another country, while interactions and

Cross-cultural training

61

Table IV. The effect of cross-cultural training (CCT) on general adjustment n ¼ 36 5.13 4.89 5.64 5.57 5.50 ns ns

Notes: * ¼ p , 0:05, ** ¼ p , 0:01 and *** ¼ p , 0:001, ns ¼ non-significant

(62) (20) (26) (17) (13)

(103) (31) (39) (25) (26)

(62) (76)

n ¼ 54 5,30 5.56 ns n ¼ 36 5.13 5.43 ns n ¼ 54 5.30 5.27 5.64 5.78 5. 57 ns

n ¼ 224 4.54 4.97 8.57** n ¼ 138 4.28 4.86 10.13** n ¼ 224 4.54 5.59 4.72 5.40 5.37 5.76*** 0 , 3, 4; 1 , 3 n ¼ 138 4.28 4.35 4.69 5.32 5.40 5.79*** 0 , 3, 4; (103) (21)

France

Global

(18) (4) (6) (4) (4)

(28) (7) (6) (7) (6)

(18) (18)

(28) (26)

n ¼ 53 4, 76 5.22 6.11* n ¼ 38 4.58 5.04 4.28* n ¼ 53 4.76 4.68 5.52 5.28 5.72 4.63** 0, 1 , 4 n ¼ 38 4.58 4.54 5.52 5.16 5.68 3.95** ns

Germany

(19) (8) (3) (5) (3)

(27) (9) (5) (6) (6)

(19) (19)

(27) (26)

n ¼ 60 3.23 4.18 12.31** n ¼ 39 2.95 2.14 13.07*** n ¼ 60 3.23 3.90 3.87 5.07 4.61 5.94*** 0 , 3, 4 n ¼ 39 2.95 3.62 3.88 5.11 4.57 5.97*** 0 , 3, 4

Korea

(13) (6) (12) (4) (4)

(19) (10) (18) (6) (7)

(13) (26)

(19) (41)

62

Presence of CCT, all resp. No training Training (any form) F test Presence of CCT, int. exp. , 2 yrs No training Training (any form) F test Type of CCT, all resp. No training Conventional, general Conventional, host country Experimental, general Experimental, host country F test Bonferroni Type of CCT, int. exp. , 2 yrs No training Conventional, general Conventional, host country Experimental, general Experimental, host country F test Bonferroni

Sample/cross-cultural training

n ¼ 57 4.47 5.30 9.85** n ¼ 25 3.98 5.32 13.48*** n ¼ 57 4.47 4.66 5.29 5.43 5.67 3.27* ns n ¼ 25 3.98 4.71 5.00 5.46 6.43 4.88** 0, 4

(12) (2) (5) (4) (2)

(29) (5) (10) (6) (7)

(12) (13)

(29) (28)

Scandinavia

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other aspects of life in general vary a great deal. Our results confirm those of Black and Mendenhall (1990), Black et al. (1991) and Deshpande and Viswesvaran (1992), who found that cross-cultural training was linked to an improvement of the relationships between expatriates and members of a foreign culture. Our results, however, infirm those of Cerdin (1996) who found that cross-cultural training had no significant influence on any of the three facets of adjustment of French expatriates. The effect of the type of cross-cultural training. Our results on the global sample (224 respondents) also show that the averages of the three facets of adjustment vary significantly according to the type of cross-cultural training received. This effect varies according to the expatriates’ country of origin, but globally, the most effective types of training are the experimental ones, especially experimental trainings focused on the host-country’s culture (specific experimental). Our second hypothesis is thus verified. Our results are consistent with those of Pruegger and Rogers (1994), who show that interpersonal types of cross-cultural training are more effective that conventional didactic programs when it comes to changing one’s attitude towards a foreign culture. The effect of prior international experience. It is worth noting that French, German, Korean and Scandinavian expatriates report an average prior international experience of 1.9, 1.7, 1.7 and 3.4 years, respectively. Of the Koreans, 30 percent had no prior international experience, while French, German and Scandinavians in that situation represented only 26, 19 and 5 percent of their national sample, respectively. Our results show that the positive effects of the presence of cross-cultural training and of the different types of cross-cultural training on the three facets of adjustment are even stronger for managers who have little or no prior international experience. It would have been interesting to measure the effect of the different types of cross-cultural training for expatriates who had absolutely no prior international experience, but the small size of our sample did not permit such analyses. The size of our sample led us to determine that, for the purpose of this research, “little international experience” would refer to two years or less. We consider that our fourth hypothesis is verified at the level of the global samples, although the small size of our samples prevented us from verifying its validity at the level of each national sample. Selmer’s (2001) recent research suggests that the type of prior international experience could matter more than the magnitude of such experience. Further research should take this into consideration. The effect of cultural distance. The effect of cultural distance on the effectiveness of cross-cultural training on adjustment is difficult to assess in our samples. We notice that the effect of cross-cultural training differs according to the expatriates’ culture of origin. For instance, cross-cultural training appears to be more effective for the Korean and German managers. However, the small size of our samples prevents us from drawing general conclusions. The analyses conducted on the complete national samples reveal that the Koreans are the only ones for whom cross-cultural training has a positive effect on all three facets of adjustment. Results for the German and Scandinavian samples are significant for interaction and general adjustment, and results for the French sample are only significant for interaction adjustment. Therefore, the French are the ones for whom cross-cultural training has the least effect on adjustment. According to Hofstede’s measure of cultural distance, France presents the shortest cultural distance with India, followed by Germany, Korea and Scandinavia. Except for Scandinavia[2], our results seem to support our fourth hypothesis: the larger the cultural distance between the country of origin and the host country, the more pronounced are the effects of cross-cultural training. However, when we compare the effectiveness of cross-cultural

Cross-cultural training

63

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training using F tests, those results are not always validated. Surely, larger samples would allow for a detailed analysis of the effects of cultural distance. This might be explained by the fact that cultural characteristics other than those taken into consideration in the measure of Hofstede’s cultural distance could come into play. Scandinavia, although culturally distant from India, has been open to the world for many years. For decades, Scandinavian corporations have been sending managers abroad, which, incidentally, is reflected in the average international experience of our Scandinavian respondents. By contrast, Korea has only opened itself to the world recently, and its contacts with other countries are still limited. The average international experience of our Korean respondents reflects that state of fact. Taking that factor into consideration, one could think that Korean managers presented, de facto, the largest cultural distance with India, which would explain why cross-cultural training benefited them the most. Other factors, such as time apprehension, could also have intervened in the cultural effects on the effectiveness of cross-cultural training on adjustment. The measure of Hofstede’s cultural distance does not take into account the subjective cultural distance, which an expatriate might feel towards the host country. Indeed, an individual who has been in touch, one way of another, with a foreign culture, will feel less distant from that particular culture, no matter which country he is from. Finally, from an other “cultural” point of view, Vance and Paik (2002) call for a significant change in research and practice to incorporate the voice of the host country workforce to develop more valid and effective pre-departure training for expatriate managers to enhance their performance in the host country to which they are assigned. To be effective, a cross-cultural training should be consistent with the cultural characteristics of the host country. 4.2 Practical implications Cross-cultural training appears to be an important factor of adjustment, especially when it comes to interaction and general adjustment. Nevertheless, corporations often neglect to provide any kind of cross-cultural training to their international managers. This could be explained in part by the fact that those who make decisions on such matters often do not have any international experience themselves (Shumsky, 1992). They perceive cross-cultural training as a useless expense rather than as the necessity that it is. In order to compensate the insufficiency of the training provided by corporations, some expatriates choose to take matters into their own hands. However, only a minority of managers does so. Indeed, only 1.7 percent of French expatriates surveyed by Cerdin (1996) had attempted to train themselves independently from their corporation. The mere existence of some kind of cross-cultural training is not sufficient. The training must be in accordance with the hardness of the culture of the host country. The more different that culture is from that of the country of origin, the more important and necessary is the use of cross-cultural training programs. Waxin (2000) showed that cultural distance is negatively related to adjustment, and cross-cultural training is an effective way to reduce that distance. While linguistic training is necessary, it is clearly insufficient. Our research focused on the different types of training without considering the linguistic aspect. Our results show that experimental methods of training that focus on the host country are the most effective. Those rigorous programs, experimental and interpersonal, must be the responsibility of the corporation rather than that of the individual. Furthermore, the method of training should be tailored to the cultural distance between the expatriate’s country of origin and the host country, but also to the nature of his assignment, to his position and to the duration of his contract. For instance,

if the position is mainly technical, the levels of interaction and general adjustment will have less impact on the success of the expatriation. The training could therefore be less elaborate. On the other hand, a position in marketing, for instance, necessarily demands that the expatriate have more contacts with the host country’s inhabitants. The expatriate’s level of interaction adjustment will be determinant on the success of the assignment. The cross-cultural training should therefore be more thorough. As an alternative to pre-departure training, cross-cultural training in the host country could also be envisaged. Briody and Chrisman (1991) and Selmer (2001) report that some expatriates and their families would have preferred to receive the training in the host country. “Cross-cultural training should be timed with motivation to learn which may make postarrival training a more effective alternative to more traditional, predeparture training” (Selmer, 2001). Mendenhall and Stahl (2000) mention in country real-time training as one of the three new tendencies that are emerging for HR managers who work in the international HR area, alongside with global mindset training, and CD-ROM/internet-based training. However, since culture shock manifests itself in the first few months of expatriation, pre-departure training seems indispensable. Black et al. (1992) believe that pre-departure training would be more effective if it were continued in the host country, considered as the ideal place for learning a new culture. Further, corporations should provide cross-cultural training to expatriates’ spouses, since a lack of adjustment on their part could have negative repercussions on the adjustment of the expatriate himself (Cerdin, 1996). Barham and Devine (1991) mention that cross-cultural training of the accompanying family is an often-neglected aspect of the cross-cultural preparation of international managers. Finally, Harris (1989) notes that corporations would benefit from using their former expatriates as trainers for the new expatriates. Indeed, usage of the newly acquired competencies of expatriates is often neglected, and cross-cultural training constitutes an area where those competencies could easily be put to contribution.

Conclusion In summary, the findings of this research confirm the view expressed by researchers over the last 20 years, that pre-move cultural training has a positive effect on adaptation to international assignments. However, this study shows that experimental types of training are the most effective ones. Furthermore, the efficacy of interculural training is clearly influenced by the magnitude of expatriate’s prior international experience. Finally, our research seams to show that the larger the cultural distance between the country of origin and the host country, the more pronounced are the effects of cross-cultural training. Further research is needed for detailed analysis of the effects of cultural distance and cultural characteristics on the efficacy of intercultural training.

Notes 1. 0 ¼ no training, 1 ¼ general conventional training, 2 ¼ specific conventional training, 3 ¼ general experimental training, 4 ¼ specific experimental training. 2. Indeed, the effects of cross-cultural training on adjustment of Scandinavian managers are comparable with the effects it has on the adjustment of German managers, while according to Hofstede Scandinavia is more distant culturally from India than is Germany.

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References Barham, K. and Devine, M. (1991), The Quest for International Manager: A Survey of Global Human Resource Strategies, Special Report No. 2098, Ashridge Management Research Group, The Economist Intelligence Unit, London. Black, J.S. (1988), “Work-role transition: a study of American expatriate managers in Japan”, Journal of International Business Studies, Vol. 19 No. 2, pp. 274-91. Black, J.S. (1990), “The relationship of personal characteristics with the adjustment of Japanese expatriate managers”, Management International Review, Vol. 30 No. 2, pp. 119-34. Black, J.S. and Gregersen, H.B. (1991), “Antecedents to cross-cultural adjustment for expatriates in Pacific Rim assignments”, Human Relations, Vol. 44 No. 5, pp. 497-515. Black, J.S. and Mendenhall, M. (1990), “Cross-cultural effectiveness: a review and a theoretical framework for future research”, Academy of Management Review, Vol. 15 No. 1, pp. 113-36. Black, J.S. and Stephens, G.K. (1989), “Expatriate adjustment and intent to stay in Pacific Rim overseas assignments”, Journal of Management, Vol. 15 No. 2, pp. 529-44. Black, J.S., Gregersen, H.B. and Mendenhall, M. (1992), Global Assignments: Successfully Expatriating and Repatriating International Managers, Jossey-Bass, San Francisco, CA. Black, J.S., Mendenhall, M. and Oddou, G. (1991), “Toward a comprehensive model of international adjustment: an integration of multiple theoretical perspectives”, Academy of Management Review, Vol. 16 No. 2, pp. 291-317. Brewster, C. (1995), “Effective expatriate training”, in Selmer, J. (Ed.), Expatriate Management: New Ideas for International Business, Quorum Books, Westport, CT. Briody, E.K. and Chrisman, J.B. (1991), “Cultural adaptation on overseas assignments”, Human Organization, Vol. 50 No. 3, pp. 264-82. Brislin, R.W. (1979), “Orientation programs for cross-cultural preparation”, in Marsella, A.J., Tharp, G. and Ciborowski, T.J. (Eds), Perspectives on Cross-cultural Psychology, Academic Press, Orlando, FL, pp. 87-304. Brislin, R.W. and Petersen, P. (1986), Cross-Cultural Orientation Programs, The Gartner Press, New York, NY. Caligiuri, P. (2000), “Selecting expatriates for personality characteristics: a moderating effect of personality on the relationship between host national contact and cross-cultural adjustment”, Management International Review, Vol. 40 No. 1, pp. 61-80. Cerdin, J.L. (1996), “Mobilite´ internationale des cadres: adaptation et de´cision d’expatriation”, The`se de Doctorat, Universite´ des Sciences Sociales, Toulouse. Cerdin, J.L. (1999), La Mobilite´ Internationale: Re´ussir l’Expatriation, Editions d’Organisation, Paris. Church, A. (1982), “Sojourner adjustment”, Psychological Bulletin, Vol. 91 No. 1, pp. 540-72. Deshpande, S.P. and Viswesvaran, C. (1992), “Is cross-cultural training of expatriate managers effective? A meta analysis”, International Journal of Intercultural Relations, Vol. 16 No. 3, pp. 295-310. Earley, P.C. (1987), “Intercultural training for managers: a comparison of documentary and interpersonal methods”, Academy of Management Journal, Vol. 30 No. 4, pp. 685-98. Forster, N. (2000), “Expatriates and the impact of cross-cultural training”, Human Resource Management Journal, Vol. 10 No. 3, pp. 63-78. Gertsen, M. (1990), Intercultural Competence and Expatriates, Oslo Business School, Oslo. Gregersen, H.B. and Stroh, L.K. (1997), “Coming home to the Arctic cold: antecedents to Finnish expatriates and spouse repatriation”, Personnel Psychology, Vol. 50 No. 3, pp. 635-54.

Hammer, M.R. and Martin, J.N. (1992), “The effects of cross-cultural training on American managers in a Japanese-American joint venture”, Journal of Applied Communication Research, Vol. 20 No. 2, pp. 161-82. Harris, J.E. (1989), “Moving managers internationally: the care and feeding of expatriates”, Human Resources Planning, Vol. 12 No. 1, pp. 49-53. Hofstede, G. (1980), “Motivation, leadership and organization: do American theories apply?”, Organizational Dynamics, Vol. 9 No. 1, pp. 42-63. Hofstede, G. (1991), Cultures and Organisations, McGraw-Hill, New York, NY. Hofstede, G. (1993), “The cultural relativity of organizational practices and theories”, Journal of International Business Studies, Vol. 14 No. 2, pp. 75-89. Mendenhall, M. and Oddou, G. (1985), “The dimensions of expatriate acculturation”, Academy of Management Review, Vol. 10 No. 1, pp. 39-47. Mendenhall, M. and Oddou, G. (1986), “Acculturation profiles of expatriate managers: implications for cross-cultural training programs”, Columbia Journal of World Business, Vol. 21 No. 4, pp. 73-9. Mendenhall, M. and Oddou, G. (1991), “Toward a comprehensive model of international adjustment: an integration of multiple theoretical perspectives”, Academy of Management Review, Vol. 16 No. 2, pp. 291-317. Mendenhall, M.E. and Stahl, G. (2000), “Expatriate training and development: where do we go from here?”, Human Resource Management, Vol. 39 No. 2/3, pp. 251-65. Parker, B. and McEvoy, G.M. (1993), “Initial examination of a model of intercultural adjustment”, International Journal of Intercultural Relations, Vol. 17 No. 3, pp. 355-79. Pruegger, V.J. and Rogers, T.B. (1994), “Cross-cultural sensitivity training: methods and assessment”, International Journal of Intercultural Relations, Vol. 18 No. 3, pp. 369-87. Ronen, S. (1989), “Training the international assignee”, in Goldstein, I.L. (Ed.), Training and Development in Organisations, Jossey-Bass, San Francisco, CA, pp. 417-53. Selmer, J. (2000), “A quantitative needs assessment technique for cross-cultural work adjustment training”, Human Resource Development Quarterly, Vol. 11 No. 3, pp. 269-81. Selmer, J. (2001), “The preference for pre-departure or post-arrival cross-cultural training – an exploratory approach”, Journal of Managerial Psychology, Vol. 16 No. 1, pp. 50-8. Shumsky, N.J. (1992), “Justifying the intercultural training investment”, The Journal of European Business, Vol. 4 No. 1, pp. 38-43. Tung, R.L. (1981), “Selection and training of personnel for overseas assignments”, Columbia Journal of World Business, Vol. 16 No. 1, pp. 68-78. Tung, R.L. (1987), “Expatriates’ assignments: enhancing success, minimizing failures”, Academy of Management Executive, Vol. 1 No. 2, pp. 117-26. Vance, C.M. and Paik, Y. (2002), “One size fits all in expatriate pre-departure training? Comparing the host country voices of Mexican, Indonesian and US workers”, The Journal of Management Development, Vol. 21 No. 7/8, pp. 557-71. Waxin, M.F. (2000), “L’adaptation des cadres expatries en Inde: ses de´terminants et l’effet de la culture d’origine”, The`se de Doctorat, IAE Aix-en-Provence, Aix-en-Provence. Waxin, M.F. (2004), “The impact of country of origin on expatriates’ interaction adjustment”, International Journal of Intercultural Relations (forthcoming). Waxin, M.F., Roger, A. and Chandon, J.L. (1997), “L’inte´gration des expatrie´s dans leur nouveau poste: une analyse contingente et quantitative: le cas des expatrie´s franc¸ais en Norve`ge”, in Tremblay, M. and Sire, B. (Eds), GRH Face a` la Crise: GRH en Crise?, Presse HEC, Montre´al.

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Jan Selmer Department of Management, School of Business, Hong Kong Baptist University, Kowloon, Hong Kong Abstract Purpose – Joint ventures remain the largest group of foreign-invested enterprises in China. Given the high level of potential conflict, this paper examines whether Western expatriates in joint ventures benefit from cross-cultural training. Design/methodology/approach – A mail questionnaire targeted business expatriates assigned by Western firms to joint ventures and other types of organisations in China. Findings – Results show that training had a weak positive association with work adjustment for expatriates in joint ventures, but no relationship with work adjustment for Western managers in other types of operations. Research limitations/implications – Data were collected through a self-report questionnaire and a cross-sectional approach was applied. However, the scale measuring sociocultural adjustment may have some potential problems. Practical implications – This paper emphasises the work context in China when training expatriate candidates. Alternatively, individuals should be selected with recent positive experiences of the host country and work task at hand. Such experience could be regarded as a perfect substitute for cross-cultural training Originality/value – The distinction between different organisational contexts in assessing the effect of cross-cultural training constitutes a novel approach. The study contributes to the literature on the effectiveness of cross-cultural training of business expatriates in general and the impact of their organisational setting in particular. It is important to notice that the improved adjustment covers the very reason for the foreign assignment, the work duties of the expatriate manager. Keywords China, Joint ventures, Managers, Cross-cultural management, Training, Expatriates Paper type Research paper

Personnel Review Vol. 34 No. 1, 2005 pp. 68-84 q Emerald Group Publishing Limited 0048-3486 DOI 10.1108/00483480510571888

China is an important current and potential market for Western and other international business firms. Foreign capital has poured into China on a large scale over the last two decades and the Chinese market has retained a considerable attraction for international business. Initially, the Joint Venture law from 1979 only allowed foreign companies to invest in joint ventures (JVs), but from 1987 onwards they could also form wholly foreign-owned enterprises. Although the number of wholly foreign-owned enterprises is increasing at a faster rate, international JVs (IJVs) still constitute the largest group (Bjo¨rkman and Lu, 2001; Braun and Warner, 2002). In 1997 and 1998 alone, agreements for more than 21,000 IJVs were signed with a total contract value exceeding US$61.5 billion (Zhang and Rajagopalan, 2002). However, China is distinctly different from most other countries and would be a challenging destination for Western business expatriates. Their need for effective cross-cultural skills appears to be substantial, as they have to adjust to a fundamentally different cultural and social context than their own. Although

adjustment may be facilitated by means of cross-cultural training, there is inconclusive evidence of its effectiveness (Kealy and Protheroe, 1996). Although seldom studied, the impact of such training may be contingent on circumstances at the host location, as for example, the organisational context of the foreign assignment. As elsewhere, IJVs in China are usually managed jointly by the local and foreign parent companies, both seeking “due representation” in the top management group (Bjo¨rkman and Lu, 2001; Hambrick et al., 2001). Besides involving the usual problems of partners having their own expectations, objectives and strategies, top executives usually differ widely in national origins, cultural values and social norms (Li et al., 2002). Hence, the challenges facing Western expatriate managers in Sino-foreign JVs could be extraordinary. This could make an expatriate assignment to an IJV in China a very frustrating experience. Presumably, cross-cultural training may be particularly helpful for the adjustment of Westerners encountering the frustrating work environment in a Sino-foreign JV. In comparison, the adjustment of Western expatriate executives in other types of organisations may not be facilitated as much by cross-cultural training. In organisational settings totally dominated by the foreign parent, Western expatriates may encounter a less frustrating internal work environment. Therefore, the purpose of this study is to examine the differential effects of cross-cultural training on the adjustment of Western expatriate managers in Sino-foreign JVs and other business organisations in China. This is an important and relevant task due to the high level of conflict in IJVs in China. It is not surprising that so many IJVs fail in China, but rather how any can succeed at all (Li et al., 1999). If cross-cultural training has potential in facilitating the adjustment of Western executives in Sino-foreign JVs, it should be offered more frequently and perhaps even targeted at and designed for the relevant group of business expatriates. Besides, the literature on how the effectiveness of cross-cultural training may be influenced by various circumstances at the location of the foreign assignment is very scant. The distinction between different organisational contexts in assessing the effect of cross-cultural training is a novel approach. Hence, the present pioneering study may contribute to the literature by incorporating the impact of organisational abode on the effectiveness of cross-cultural training of business expatriates. Against the backdrop of a discussion of challenges of IJVs in general, and the problems with Sino-foreign JVs in particular, this paper introduces the captioned topics of cross-cultural training and expatriate adjustment. Hypotheses are developed and the methodology of the study is highlighted. The results section is followed by a thorough discussion of the findings and the main conclusions of the paper. Managing JVs in China Challenges of IJVs Owing to its multi-parent origins, the JV relationship is complicated. As parent firms’ interests seldom fully overlap and typically are in conflict, JV managers may encounter problems. Conflict, confrontations and crises seem unavoidable in JVs, leading to poor performance, threatening failure, and even dissolution (Peng and Shenkar, 2002). The problems of JVs are accentuated in the international arena. Managers of IJVs face a host of additional challenges due to the international context. Such executives usually differ widely in national origins, cultural values and social norms, as well as in their demographic background, international experience and experiences with the parent

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firms and the IJVs (Li et al., 2002). Furthermore, each group of employees in the IJV has its own characteristics, originating with its nationality, employment history, position in the management hierarchy of the IJV, legal rights and promotion aspirations (Shenkar and Zeira, 1992). In this complex system of the IJV resides the leadership team responsible for daily operations and the venture’s long-term success. Not surprisingly, given their differing background and orientation, these executives are not always operating as a “team”, better deserving the denomination of the top management group (Hambrick, 1994; Li et al., 1999). Since these managers are assigned by the two parent companies, they often have a strong allegiance to their respective parents. They face the simultaneous demands of policy makers in each parent company as well as the stakeholder groups within the IJV. Their task is to translate the different, often ambiguous and conflicting, expectations of these various groups into workable strategies for the IJV. The level of stress for top managers in IJVs is likely to be high as they typically experience considerable role conflict and divided loyalty (Li et al., 1999). Sino-foreign JVs In China, IJVs face many additional problems. As the old Chinese saying goes: sharing the “same bed” and having “different dreams” is not the only issue at stake here (Walsh et al., 1999). Most key venture managers operate in unfamiliar surroundings, as expatriates usually do not understand the language and the culture. Chinese IJV managers are usually older than their expatriate counterparts. Since elders are respected in traditional Chinese culture, the older Chinese executives expect younger members of the leadership group to respect and defer to them. This is such a subtle expectation that most Westerners probably do not even perceive it. They might not even consider the age of the people with whom they work. There could be considerable friction and strain as a result if the Western executives are behaving without such consideration. Also, foreign and Chinese managers often differ a great deal in terms of education. Typically, senior managers in China have good technical training, but it is not common for Chinese managers in IJVs to have formal management training. Besides, they may have little international experience or understanding of a free-market economy (Li et al., 1999). Such differences may create substantial problems for expatriate IJV managers in China. Disparity in education and background may result in lower affinity on an interpersonal level. Differences in age and experience may lead to further complications. While Chinese managers expect age and general life experience to be given some priority in discussions and decisions, Westerners usually value expertise and experience specific to the business task at hand. Due to their representative functions, managerial factions based on the parental subgroups often exist within the IJV leadership group. Avoiding dealing with each other and compartmentalising their tasks, executives in different parental subgroups may try to minimise interaction (Li et al., 1999). In China, this distinction between in-group and out-group could be further accentuated because of the language and cultural barriers. Besides, this distinction is crucial in Chinese culture. Kinship or other particularistic ties exist between members of the in-group. Such ties, and the special relationship developing with these ties, are called guanxi, often considered as facilitating business success in China (see Tsui and Farh, 1997; Xin and Pearce, 1996). Since the expatriate IJV managers are not family members or share other common experiences with their Chinese counterparts, they

may not have any meaningful guanxi with them. This could further obstruct the development of a harmonious and supportive relationship between the Western and Chinese IJV executives (Li et al., 1999). A negative circle can easily take hold, creating a considerable amount of stress. Unaware of the finer nuances of the local cultural and social context, Western expatriates may quickly attribute their inevitable business difficulties to the ineptness of their Chinese JV partners. This attribution could be reinforced when they are reminded that they have been invited to China to improve on the business deficiencies of their Chinese counterparts (Walsh et al., 1999). Is it possible that cross-cultural training of Western business expatriates sent to China in some way can ease such problems? In the following section basic modes and possible effects of such training are discussed. Cross-cultural training Content and duration of cross-cultural training may vary widely. Cultural familiarisation training could range from brief introductions less than one day to intensive orientations for several days or a week (see Caligiuri et al., 2001; Gudykunst et al., 1996). Language training may vary from brief survival language instruction to extensive, immersion training, aiming for complete spoken and written fluency. Host language ability may serve several purposes. Besides facilitating communication with locals, it may also demonstrate an attitude of attempting to learn about the host culture, enabling one to be polite, and permitting cultural understanding not otherwise possible (Eschback et al., 2001). Environmental briefings typically include information essential for practical arrangements, such as, information about geography, climate, housing, schools, etc. Executive courses may include anything from industry or market related information to essential business details of the firm’s operations in the host country. Many studies advocate the use of cross-cultural training (see Berry et al., 1993; Black and Mendenhall, 1990; Deshpande and Viswesvaran, 1992; Gregersen and Black, 1992; Hammer and Martin, 1990; Naumann, 1993; Oddou, 1992). However, evidence of its effectiveness remains inconclusive. After a thorough examination, Kealy and Protheroe (1996) claimed that most of the studies that support the effectiveness of training applied flawed methodologies or were based on anecdotal or limited information restricting their generalisability. Also, most investigations study other sojourners than business expatriates making the findings doubtful in a corporate context (Caligiuri et al., 2001). Even studies examining training effects on business expatriates typically fail to examine the impact of the specific circumstances of the foreign location. For example, it is not unlikely that cross-cultural training may especially benefit expatriate managers assigned to tough jobs. Cross-cultural training of business expatriates in adverse organisational contexts may facilitate their adjustment. However, expatriate adjustment is usually regarded as a multi-faceted theoretical construct of some complexity, which deserves a separate discussion. Expatriate adjustment A distinction has been proposed between sociocultural and psychological adjustment in the literature on cross-cultural adjustment (see Searle and Ward, 1990; Ward and Kennedy, 1992, 1993; Ward and Searle, 1991). Although conceptually interrelated, sociocultural adjustment relates to the ability to “fit in” or effectively interact with

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members of the host culture (Ward and Kennedy, 1996). Sociocultural adjustment has been associated with variables that promote and facilitate culture learning and acquisition of social skills in the host culture (Cross, 1995; Searle and Ward, 1990). The sociocultural notion of adjustment is based on cultural learning theory and highlights social behaviour and practical social skills underlying attitudinal factors (see Black and Mendenhall, 1991; Furnham, 1993; Klineberg, 1982). Psychological adjustment refers to an individual’s subjective well-being or satisfaction in their new cultural environments. It has been associated with individuals’ emotional states, cognitive perceptions, and personal trait variables (Ward and Kennedy, 1996). The concept of psychological adjustment encompasses a problem-oriented view, focusing on attitudinal factors of the adjustment process (see Grove and Torbio¨rn, 1985; Juffer, 1986; Oberg, 1960). This distinction between sociocultural and psychological adjustment is consistent with the separation of behavioral from attitudinal acculturation as discussed by Jun et al. (1997). The theoretical framework of Black et al. (1991) includes sociocultural aspects of expatriate adjustment. They argued that the degree of cross-cultural adjustment should be treated as a multidimensional concept, rather than a unitary phenomenon as was the previous dominating view (see Gullahorn and Gullahorn, 1962; Oberg, 1960). In their proposed model for expatriate adjustment, Black et al. (1991) made a distinction between three dimensions of in-country adjustment: (1) adjustment to work; (2) adjustment to interacting with host nationals; and (3) adjustment to the general non-work environment. The three dimensions of expatriate adjustment have found support in several empirical studies of US expatriates and their spouses (Black and Gregersen, 1990, 1991a, b; Black and Stephens, 1989; McEvoy and Parker, 1995). The theoretical concept of subjective well-being, corresponding to the psychological aspects of expatriate adjustment, has been well developed, especially in relation to work and work environment characteristics (see Caplan et al., 1975; Karasek, 1979; Kornhauser, 1965). In connection with the adjustment of expatriate business managers, the concept of subjective well-being has been applied in several instances (see Anderzen and Arnetz, 1997, 1999; Arnetz and Anderzen, 1992; Aryee and Stone, 1996; Nicholson and Imaizumi, 1993). Having discussed the main themes of the study, it is appropriate to develop a set of hypotheses in order to examine empirically the differential effects of cross-cultural training on the adjustment of Western expatriate managers in Sino-foreign JVs and other business organisations in China. Hypotheses At work, Western top IJV executives are likely to encounter their Chinese JV counterparts in stressful situations on a daily basis. Sharing authority prevents full control and may result in frustrating experiences on the part of the Westerners. Coming to understand basic tenets of Chinese values, norms, and behaviours through cross-cultural training may facilitate the daily work routines of the Western expatriates increasing their work adjustment. Therefore, it is likely that cross-cultural training will be beneficial to the work adjustment of Western managers in Sino-foreign

JVs. Westerners in other types of organisations, totally dominated by the foreign parent, are presumably encountering a less frustrating internal work environment. Although they may also encounter problems in their daily work, they at least have the sole authority to do something about it. Hence, cross-cultural training may be less effective in facilitating work adjustment in such relatively less frustrating surroundings. This presumption is examined in H1: H2. Cross-cultural training will have a stronger positive association with work

adjustment of expatriates in Sino-foreign JVs than work adjustment of expatriates in other organisational entities. Cross-cultural training may be particularly effective for Western expatriate IJV managers even outside their work context. Spillover theory suggests that work and non-work experiences will be positively correlated (see Bhagat, 1983; Kohn and Slomoczynski, 1990; Staines, 1980). Unintentionally, the frustrated Western executives in Sino-foreign JVs may bring their negative emotions to sociocultural, non-work settings as well. Cross-cultural training may therefore also facilitate their general and interaction adjustment more than for expatriates in non-IJV organisations. This issue is explored in H2 and H3: H2. Cross-cultural training will have a stronger positive association with general

adjustment for expatriates in Sino-foreign JVs than in other organisational entities. H3. Cross-cultural training will have a stronger positive association with interaction adjustment for expatriates in Sino-foreign JVs in other organisational entities. Psychological adjustment, concerning deep-seated mental predispositions, may not occur easily (Jun et al., 1997). Besides, most of an individual’s core values are well-established by the end of adolescence at one’s late teens (Thompson and Thompson, 1990). It is not likely that a relatively short cross-cultural training programme in any way will change a person’s basic value system. This proposition is explored in H4: H4. Cross-cultural training will have no association with the psychological adjustment

of expatriate managers regardless of their organisational abode. Method Sample Data for this study were extracted from a mail questionnaire targeted at business expatriates assigned by Western firms to China. Eventually, 165 usable of 1,929 mailed questionnaires were returned. Subtracting respondents no longer in China, respondents who were not business expatriates, etc., a net, targeted sample of 651 respondents emerged indicating a response rate of 25.4 per cent. This is not high, but it is equivalent or higher than other mail surveys involving business expatriates (see Harzing, 1997; Naumann, 1993). The two subgroups were extracted in the following way. Respondents reporting that they worked as managers in IJVs (n ¼ 67) were grouped together. Expatriates managers working in wholly owned subsidiaries (n ¼ 47), representative offices (n ¼ 39), and branches (n ¼ 6) were grouped together in the non-IJV category (n ¼ 92).

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The average age of the IJV managers was 45.10 years (SD ¼ 8:29) and they had spent an average of 4.92 years in China (SD ¼ 3:35) and had worked abroad for an average of 9.55 years (SD ¼ 6:21), including China. The non-IJV managers had a similar mean age (44.39 years; SD ¼ 8:74) and had also spent a similar average time in China (6.85 years; SD ¼ 9:51) and had, on the average, worked abroad for a similar time as the IJV managers (10.11 years; SD ¼ 10:25). The most common nationalities among the IJV managers were US (28 per cent), British (12 per cent), German (12 per cent), and French (10 per cent). The rest of the IJV managers were mostly from a European country. The group of non-IJV managers was dominated by respondents from the USA (22 per cent), Germany (14 per cent), Australia (11 per cent), Britain (8 per cent) and Denmark (8 per cent). Again, the remaining expatriates in this group were mostly European. As displayed in Table I, both sub-samples had a similar gender distribution and marriage frequency. Consistent with other recent studies of business expatriates (see Caligiuri, 2000; Selmer, 2001; Shaffer et al., 1999), most of the respondents were male and married. Also the distributions of organisational positions and educational level were similar between the two groups. Most of the respondents were chief executive officers (CEOs) and the overwhelming majority had a postgraduate or bachelor degree. Analyses of variance (ANOVAs) confirmed that there were no significant inter-group differences on any of the background variables age, educational level, gender, marriage frequency, organisational position, time abroad, and time in China. Instrument To measure the independent variables, two separate scales for sociocultural and psychological adjustment were applied. Expatriates completed Black and Stephens’ (1989) 14-item scale to assess sociocultural adjustment. This scale is designed to measure three dimensions: work adjustment (sample item: “Supervisory responsibilities”); general adjustment (sample item: “Food”); and interaction adjustment (sample item: “Speaking with host nationals”). The respondents indicated how well adjusted they were to China on a scale ranging from 1 ¼ very unadjusted to 7 ¼ completely adjusted. Principal component factor analysis

Background variables

Table I. Background of the subsamples (n ¼ 159)

Gender Male Female Married Position CEO Manager Education Postgraduate Bachelor Professional Other

Expatriate IJV managers (n ¼ 67) Frequency Percent

Expatriate non-IJV managers (n ¼ 92) Frequency Percent

65 2 53

97 3 79

88 4 68

96 4 74

57 10

84 15

67 25

73 27

27 30 8 2

40 45 12 3

32 36 20 4

35 39 22 4

with varimax rotation produced the three previously identified dimensions of expatriate adjustment. There were seven items on general adjustment (alpha ¼ 0:81), and four items on interaction adjustment (alpha ¼ 0:80). One of the three items making up the work adjustment factor was deleted to improve the reliability resulting in a coefficent alpha ¼ 0:70. Expatriate psychological adjustment was measured using the General Health Questionnaire (GHQ-12) developed by Goldberg (1972). This scale is commonly applied to assess minor psychiatric symptoms, but it has also been extensively used to monitor levels of well-being in community and organisational samples (Forster, 2000), as well as to measure expatriates’ subjective well-being (see Anderzen and Arnetz, 1997, 1999; Arnetz and Anderzen, 1992). Containing a number of questions concerning how people have been feeling recently, it includes sleeping difficulties, feelings of unhappiness, and respondents’ ability to enjoy everyday experiences. Respondents were asked to think about how they have been feeling over the past few weeks (sample item: “Have you recently felt that you are playing a useful part in things?”). Responses ranged from (1) “not at all” to (4) “much more than usual”. The reliability of this scale was acceptable (alpha ¼ 0:85). The dependent variable was measured by two direct questions to the respondents. One was asking whether they had undergone any cross-cultural training/preparation before they departed for their assignment in China. The other asked if they had undergone such training after they had arrived in China. For the purpose of this investigation, the answers to these two questions were combined. Finally, time in China is a relevant control variable since expatriate adjustment is a process over time (see Black and Mendenhall, 1991; Church, 1982; Furnham and Bochner, 1986). This variable was measured by directly asking the respondents how long they had been assigned to China.

Expatriate adjustment in China 75

Results The overall sample means, standard deviations and zero-order correlations are provided in Table II. A review of that table reveals that the mean scores for the three adjustment variables are all above the mid-level point depicted as “somewhat adjusted”, indicating a certain degree of comfortableness with the Chinese context after having spent an average of three to four years there. Also the mean score of the subjective well-being variable is above the mid-level point. All adjustment variables are significantly inter-correlated. It is worth noting that interaction adjustment has a Variables 1. 2. 3. 4. 5. 6.

General adjustment Interaction adjustment Work adjustment Psychological adjustment Cross-cultural trainingb Time in China (control)

Meana

SD

1

2

3

4

5

6

5.51 5.38 5.99 2.96 1.24 6.00

0.86 1.00 0.71 0.42 0.43 7.53

1.00 0.44** 0.44** 0.08 0.04 0.11

1.00 0.58** 0.09 0.05 0.21*

1.00 0.15 0.07 0.07

1.00 0.04 0.02

1.00 20.01

1.00

Notes: a The higher score, the higher degree of adjustment; Cross-cultural training ¼ 2; * p , 0:01; ** p , 0:001

b

No cross-cultural training ¼ 1;

Table II. Means, standard deviations, and correlations among the variables (n ¼ 159)

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lower mean score than the two other sociocultural variables, which may indicate some communication difficulties, possibly induced by language problems. The mean score of psychological adjustment, as measured by subjective well-being, was also above the mid-level point of its scale. Only 24 per cent of all the expatriate managers, 15 (22 per cent) in IJVs and 23 (25 per cent) in non-IJVs, had received any cross-cultural training. A t-test confirmed that there was no significant difference between the two groups of managers in that respect. Furthermore, there was no significant correlation between cross-cultural training and any of the adjustment variables, tentatively indicating that such training had little overall effect on expatriates’ adjustment. On the other hand, the control variable, time in China, was significantly and positively correlated with interaction adjustment. It is easy to understand that problems of communication with host nationals may be reduced over time. The hypotheses were formally tested by means of hierarchical regression analysis. Initially, expatriate IJV managers were tested. The control variable, time in China, was entered first. As displayed in Table III, the control variable was only significant for one of the adjustment variables, explaining 12 percent of interaction adjustment (beta ¼ 0:33; p , 0:01). The predictor variable, cross-cultural training was entered in Step 2. That produced a significant positive effect on one of the sociocultural adjustment variables, explaining 5 percent of work adjustment (beta ¼ 0:23; p , 0:10). Subsequently, hierarchical regression analysis was applied on the expatriate non-IJV managers. Similarly, entering the control variable, time in China, only produced a significant effect on one variable, explaining 4 percent of interaction adjustment (beta ¼ 0:21; p , 0:10). On entering the predictor variable, cross-cultural training in Step 2, no significant effect was detected on any of the adjustment variables. Although the significant findings concerning the hypotheses are only on the level of p , 0:10, applying such an unconventional significance level may be justified in a pioneering exploratory approach such as this study. Hence, these findings reveal some support, although weak, for H1. H4 was also supported. However, H2 and H3 were not supported. Discussion As expected, the results suggest that cross-cultural training may facilitate work adjustment for expatriate IJV managers, but not for expatriate managers in other organisations. This must be regarded as a tentative finding since the positive association is relatively weak in statistical terms. However, the sample of expatriate IJV managers (n ¼ 67) is much smaller than the sample of expatriate non-IJV managers (n ¼ 92). Small samples are less effective in detecting genuine significant relationships (Hair et al., 1995). Despite the smaller sample of expatriate IJV managers, the effect of cross-cultural training is revealed here anyway, although by the unconventional statistical significance level of p , 0:10. Hence, it is possible that this indicates a genuine significant relationship and that a larger sample size of expatriate IJV managers would have attained a higher level of statistical significance. On the other hand, in the larger sample of expatriate non-IJV managers, all effects of cross-cultural training are very far from being significant, making it unlikely that an even larger sample would have indicated any genuine significant relationship. Accordingly, the tentative finding that cross-cultural training may facilitate work adjustment for expatriate managers in IJV, but not for expatriates in other

0.33** 0.12 8.77** 0.14 0.02 1.45 0.21* 0.04 3.92* 2 0.01 0.00 0.01

0.16 0.03 1.73 0.00 0.00 0.00 0.10 0.01 0.80 0.05 0.00 0.22

Interaction adjustment b

2 0.03 0.00 0.06

0.10 0.01 0.91

0.23* 0.05 3.18*

0.01 0.00 0.11

Work adjustment b

Notes: All standardised regression coefficients are from the final step in the analyses; * p , 0:10; ** p , 0:01

Expatriate IJV managers (n ¼ 67 ) Step 1 Time in China (control) R2 F Step 2 Cross-cultural training DR 2 DF Expatriate non-IJV managers (n ¼ 92) Step 1 Time in China (control) R2 F Step 2 Cross-cultural training DR 2 DF

General adjustment b

2 0.07 0.01 0.46

0.03 0.00 0.09

0.17 0.03 1.82

0.04 0.00 0.28

Psychological adjustment b

Expatriate adjustment in China 77

Table III. Results of hierarchical regression for effects of cross-cultural training on adjustment of expatriate IJV managers and non-IJV managers

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organisational settings may still be regarded as a potentially crucial result. Expatriate managers are sent on foreign assignments, first and foremost, to perform a work task, so adjusting to the foreign work context may be fundamental. Anecdotal evidence has suggested a positive relationship between expatriate adjustment and work performance (see Aycan and Kanungo, 1997; Ones and Viswesvaran, 1997; Tung, 1981). Emerging rigorous empirical research supports a positive association between the two concepts (see Caligiuri, 1997; Kraimer et al., 2001; Parker and McEvoy, 1993). Therefore, if it should be the case that cross-cultural training especially facilitates IJV expatriates’ adjustment at work, their performance may also improve. On the other hand, unexpectedly, cross-cultural training was not more beneficial for the expatriate IJV managers than for the other foreign executives’ adjusting socioculturally outside work. In this case, a similar argument as advocated above cannot be offered, since the numerical results are less equivocal. Neither general adjustment, nor interaction adjustment was especially facilitated by training for the foreign executives in IJVs, perhaps indicating that spillover theory is less applicable in this case. As presumed, there was no especially beneficial effect of cross-cultural training on the psychological adjustment among the foreign IJV managers as compared to other executives, supporting the view that relatively short training sessions may not make much of a an impact on participants’ deep-seated basic values. It is worth noting that these findings are supportive of the expressed doubts of the effects of cross-cultural training as discussed above (Kealy and Protheroe, 1996). From a Western perspective, China is frequently regarded as the most foreign of all foreign places. Chinese culture, institutions, and people may appear completely baffling (Chen, 2001). If there is only marginal evidence that cross-cultural training is effective across this substantial cultural divide, what does that indicate about it elsewhere? Limitations Like most studies, this investigation has some potential shortcomings to be considered in evaluating its findings. First, the data were collected through a self-report questionnaire, which may constitute a limitation. However, Crampton and Wagner (1994) found the general condemnation of self-report methods to be overstated. Nevertheless, to lessen any potential problem of method bias, all items within the two categories of variables; sociocultural and psychological adjustment; were assigned to the instrument in random order. Furthermore, half of the items measuring subjective well-being had reverse-polarity, as in the original scale, to make it less easy for the respondents to give uniform answers. These precautions may generate more reliable responses as it avoids the problem of respondents depending on a cognitive set of rules in evaluating items intended to measure constructs that are supposed to be conceptually different (Lord and Maher, 1991). Second, another limitation emanates from the cross-sectional approach applied here. Expatriate adjustment is considered to be a process over time (see Black and Mendenhall, 1991; Janssens, 1995; Ward et al., 1998). Yet, only measures of the average level of adjustment for the investigated groups of business expatriates at a certain point in time were used. A longitudinal approach may have produced a more rich data source where adjustment patterns over time could have been identified and compared. However, longitudinal studies involve other serious methodological challenges (see Menard, 1991).

Third, the scale used to measure sociocultural adjustment may have some potential problems. Although the Black and Stephens (1989) scale has been found to be structurally equivalent with a good fit in culturally dissimilar samples providing evidence if its construct validity (Robie and Ryan, 1996) it may appear to have some conceptually weaknesses. The distinction between the three dimensions of sociocultural adjustment: general adjustment, interaction adjustment, and work adjustment, may be less than obvious. For example, interactions with host nationals may take place both at work and outside work, potentially influencing the outcome of the two other modes of sociocultural adjustment. Although identified as separate dimensions by the exploratory factor analysis, the relatively high inter-correlations in Table II between the three dimensions of sociocultural adjustment may indicate some common grounds between these concepts. Implications Many business firms do not provide systematic training programmes for expatriate managers (see Dunbar and Katcher, 1990; Mendenhall et al., 1987; Tung, 1988). Companies seem to be ambivalent on the usefulness of training, apparently assuming that “good persons always manage”, preferring a learning-by-doing approach (Black and Mendenhall, 1990; Brewster, 1995; Ku¨hlmann, 2001). This may not be good enough. Our tentative findings seem to imply that the potential beneficial effects of cross-cultural training on IJV managers’ work adjustment may be enhanced through re-targeting and re-focusing such training. A good idea could be to emphasise the work context in China when training expatriate candidates destined for JV operations there. That could be worthwhile also because cross-cultural training aimed at facilitating work adjustment is not very commonly provided to business expatriates (see Brewster and Pickard, 1994; Early, 1987; Tung, 1982). This is unfortunate since efficient job interaction skills are essential for maintaining and developing the competitive strength of international firms in general (see Bartlett and Goshal, 1989; de Cieri and Dowling, 1995), and JVs in particular. Of course, an alternative to target expatriate IJV managers in China for specific training could be to amend the selection strategy. Since much of the negative impact on expatriates in IJVs is presumably induced by the cross-cultural aspects of the China assignment, individuals better suited to deal with such issues could be selected. Unfortunately, cross-cultural skills are traditionally not highly valued when selecting expatriates (see Franke and Nicholson, 2002). Especially candidates with expatriate experience from China may have acquired such skills which could facilitate their adjustment, even if their past assignment was not at an IJV (Selmer, 2002). In fact, a previous recent assignment to the same host location can be seen as the ideal expatriate training experience, especially if the assignment was relatively successful. Selecting such candidates, with recent positive experiences of the host country and work task at hand, could be regarded as a perfect substitute for cross-cultural training. Another worthwhile endeavour might be to match the characteristics of expatriate candidates with the cultural profile of the host country (Nicholson et al., 1990). Conclusion The distinction between different organisational contexts in assessing the effect of cross-cultural training as applied in this investigation constitutes a novel approach. This pioneering exploratory study presented some preliminary evidence that the

Expatriate adjustment in China 79

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effectiveness of cross-cultural training of business expatriates may be contingent on the specific circumstances of the foreign assignment. As such, it may contribute to the literature on the effectiveness of cross-cultural training of business expatriates in general and the impact of their organisational setting in particular. The tentative finding that business expatriates experiencing a stressful organisational environment may benefit more from cross-cultural training than foreign executives in less challenging organisational contexts makes perfect sense. Furthermore, it is important to notice that the potentially improved adjustment covers the very reason for the foreign assignment, the work duties of the expatriate manager. References Anderzen, I. and Arnetz, B.B. (1997), “Psychophysiological reactions during the first year of foreign assignment: results from a controlled longitudinal study”, Work & Stress, Vol. 11 No. 4, pp. 304-18. Anderzen, I. and Arnetz, B.B. (1999), “Psychophysiological reactions to international adjustment: results from a controlled, longitudinal study”, Psychotherapy and Psychosomatics, Vol. 68, pp. 67-75. Arnetz, B.B. and Anderzen, I. (1992), “The internationalization of work. Optimizing adaptation of employees to a global economy. A multidisciplinary study of the expatriation and repatriation process”, in Selmer, J. (Ed.), Proceedings of the 1st International Conference on Expatriate Management, Hong Kong Baptist College, Kowloon. Aryee, S. and Stone, R.J. (1996), “Work experiences, work adjustment and psychological well-being of expatriate employees in Hong Kong”, International Journal of Human Resource Management, Vol. 7 No. 1, pp. 150-64. Aycan, Z. and Kanungo, R.N. (1997), “Current issues and future challenges in expatriate management”, in Sunders, D.M. and Aycan, Z. (Eds), New Approaches to Employee Management, JAI Press, Greenwich, CT. Bartlett, C. and Goshal, S. (1989), Managing across National Borders: The Transnational Solution, Harvard University Press, Boston, MA. Berry, J., Poortinga, Y., Segall, M. and Dasen, P. (1993), Cross-cultural Psychology, Research and Applications, Cambridge University Press, Cambridge. Bhagat, R.S. (1983), “Effects of stressful life events on individual performance effectiveness and work adjustment processes within organizational settings: a research model”, Academy of Management Review, Vol. 8 No. 4, pp. 660-71. Bjo¨rkman, I. and Lu, Y. (2001), “Institutionalization and bargaining power explanations of HRM practices in international joint ventures – the case of Chinese-Western joint ventures”, Organization Studies, Vol. 22 No. 3, pp. 491-512. Black, J.S. and Gregersen, H.B. (1990), “Expectations, satisfaction and intentions to leave of American managers in Japan”, International Journal of Intercultural Relations, Vol. 14 No. 4, pp. 485-506. Black, J.S. and Gregersen, H.B. (1991a), “Antecedents to cross-cultural adjustment for expatriates in Pacific Rim assignments”, Human Relations, Vol. 44 No. 5, pp. 497-515. Black, J.S. and Gregersen, H.B. (1991b), “The other half of the picture: antecedents of spouse cultural adjustment”, Journal of International Business Studies, Vol. 22 No. 3, pp. 461-77. Black, J.S. and Mendenhall, M. (1990), “Cross-cultural training effectiveness: a review and theoretical framework for future research”, Academy of Management Review, Vol. 15 No. 1, pp. 113-36.

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Facets and dimensions of cross-cultural adaptation: refining the tools Arno Haslberger

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PEF Private University for Management, Vienna, Austria Abstract Purpose – The management literature on cross-cultural adaptation has used a conceptualisation and measurement approach developed by Black and Stephens. Their work has led to significant development in the field. Now it is time to move beyond and use a more refined tool. This paper proposes such a tool and compares its characteristics with those of the older instrument. Design/methodology/approach – The paper is based on a sample of 204 expatriates, who were surveyed using the older and the proposed instrument. It uses confirmatory factor analysis to compare the two instruments. Independent variables include cultural difference and language skills. Findings – This study demonstrates that a more refined measurement of adaptation outcomes, which distinguishes cognitive and affective factors and four non-work facets, is superior to measurement based on the older instrument. The new scale also provides a case for the improvement of cross-cultural adaptation theory. Research limitations/implications – The paper is based on a cross-sectional sample and sample size is relatively small for confirmatory factor analysis. Additional research is necessary to corroborate the evidence presented here about the superiority of the proposed measure. The paper provides researchers with a new tool for use in cross-cultural adaptation studies. Originality/value – The paper describes a new, empirically developed measurement tool for cross-cultural adaptation. Keywords Expatriates, Cross-cultural management, Management effectiveness, Measurement Paper type Research paper

For over a decade, many cross-cultural adaptation studies (e.g. Black, 1990a, b, Black and Gregersen, 1991a, Black, 1994, Taylor and Napier, 1996a, Robie and Ryan, 1996, Aycan, 1997, Kraimer et al., 2001, Selmer, 2001, 2002, Takeuchi et al., 2002) in the management literature have looked at a three-fold split initially proposed by Black (1988): general adjustment, interaction adjustment, and work adjustment. A subsequent measure developed by Black and Stephens (1989) has fairly consistently reproduced these three facets in these studies. The literature in the wake of the Black and Stephens questionnaire has contributed greatly to our understanding of cross-cultural adaptation of expatriates. Yet, there are a few problems associated with the measure: it was not developed in a systematic, theory-driven way; it measures adaptation one-dimensionally on an adjusted- unadjusted range; the three facets of adjustment may be an artefact of the unsystematically chosen items going into the original measure. This paper makes reference to some data analyses without including detailed statistics. Please contact the author, if you are interested in the details.

Personnel Review Vol. 34 No. 1, 2005 pp. 85-109 q Emerald Group Publishing Limited 0048-3486 DOI 10.1108/00483480510571897

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The purpose of this article is to deal with the second shortcoming. First, it will reiterate the principle that cross-cultural adaptation is a multi-dimensional phenomenon. Second, it will suggest a way to measure at least two separate dimensions of adaptation. Third, it will demonstrate that there are significant differences in the association of independent variables with two different dimensions of cross-cultural adaptation on a sample of 204 expatriates, thus showing the superiority of multi-dimensional over one-dimensional measurement of adaptation outcomes. The article will close with a discussion of the practical relevance of these results for the management of expatriate assignments. Multiple dimensions of cross-cultural adaptation Cross-cultural adaptation is a complex process in which a person becomes capable of functioning effectively in a culture other than the one he or she was originally socialised in. As people become immersed in foreign cultures their whole being gets affected. One way to analyse this is to look at the whole person only, and this is what management researchers in the wake of the Black and Stephens (1989) instrument have done. Another way is to disaggregate the holistic view into its constituent parts to gain a better understanding. This has a long-standing tradition going back to Plato (1989, p. 436a) who asked whether we “learn with one part of ourselves, feel anger with another, and with yet a third desire the pleasures of nutrition and generation and their kind, or whether it is with the entire soul that we function in each case when we once begin” and decided in favour of the former. Modern neuroscience also distinguishes a “tripartite amalgam that includes cognition, emotion, and motivation” (LeDoux, 2002, p. 174). In the cross-cultural adaptation literature several authors have used differentiated models. Grove and Torbio¨rn (1985) developed a model that integrates behaviour and cognition. Gudykunst and Hammer (1988) focus on anxiety, an emotion, and uncertainty, an element of cognition. They theorised that different variables impact on uncertainty and anxiety, and that some are associated with both. Kim (1988) has for years stressed the need to integrate behaviour, cognition and emotion. Roth’s (1997) neuroscience model of consciousness supports the split into behaviour, cognition and emotion. Cross-cultural adaptation is measurable from an external point of view by behavioural observation either by members of the local culture or by researchers. This type of measurement is resource intensive. Alternatively, there is the “internal” measurement of the person’s cognitive and affective states. The concept of uncertainty avoidance (Berger and Calabrese, 1975; Berger, 1979, 1987) lends itself to studying the cognitive side of adaptation. Gudykunst and Hammer (1988) and others (Grove and Torbio¨rn, 1985; Gudykunst and Nishida, 1986; Gudykunst, 1988; Berger and Gudykunst, 1991; Black and Gregersen, 1991b; Black et al., 1992a) regard uncertainty about predictions of others’ behaviours and the driving forces behind those behaviours as well as about the likely outcomes of one’s own behaviours as central to adaptation. Low uncertainty or, alternatively, high confidence is an indicator for a state of high adaptation. Emotions are difficult to measure. LeDoux (2002) emphasises that direct measurement of emotions in humans encounters ethical and practical barriers. Rather than feelings researchers measure behaviour or verbal reports of emotions. Cross-cultural adaptation studies have to rely on summary reports of emotions[1].

Gudykunst and Hammer (1988) have combined uncertainty reduction with an affective dimension. They focus on the negative emotion of anxiety. Other research into the emotional aspects cross-cultural moves regards satisfaction, a positive emotion, in different areas of life as part of adaptation (Naumann, 1993a, b; Bhuian and Islam 1996). Rarely do adaptation studies include the whole range of positive and negative emotions[2]. The literature mentions four basic emotions rooted in human biology: anxiety, satisfaction, anger, and depression (Kemper, 1987; Mattenklott, 1996), i.e. one positive and three negative. Roth (1997, p. 209) states that the limbic system, which plays a major role in the experience of emotions, evaluates based on the basic criteria of “pleasure”, meaning a range from positive to negative. This study has used the distinction between cognitions and emotions to explore adaptation outcomes in a cross-sectional sample of expatriates. In this it goes beyond research done with the Black and Stephens (1989) scale, which combines cognitions and emotions into an adjusted-unadjusted range. In order to establish the usefulness of a separate measurement of cognitions and emotions, the following independent constructs will be used: novelty, discretion, self-efficacy, and social networks. The choice of independent constructs is guided by prior research. Various operationalisations, particularly of novelty, have been researched extensively in the past. Therefore, they are useful for the demonstration of the advantages of multi-dimensional measurement of adaptation outcomes. Novelty Cultural distance and previous expatriate experience are two aspects of the construct of novelty that will be discussed here. Cultural distance In the cross-cultural adaptation literature cultural novelty has played an important role for a long time (e.g. Simmel, 1987; Schuetz, 1944; Nash, 1967; David, 1972; Taft, 1977; Triandis, 1980; Church, 1982; Grove and Torbio¨rn, 1985; Earley, 1987; Kim and Gudykunst, 1988; Kim, 1988; Gregersen and Black, 1990; Black et al., 1991; Taylor and Napier, 1996a; Aryee et al., 1996). Hofstede’s research on differences in values has influenced the field for a quarter of a century (Hofstede, 1980, 1984, 1992; Hofstede and Bond, 1984, 1988). In its wake other researchers have contributed their own versions of cultural difference measures (Trompenaars, 1993; Javidan and House, 2001). Research has indicated a negative influence of cultural novelty on adaptation outcomes (Black and Stephens, 1989; Black and Gregersen, 1991c). However this relationship is not always consistent. In a repatriation study, Black and Gregersen (1991a, p. 689) found no association between the novelty of the culture in the foreign location and any of three facets of adaptation for expatriate employees or their spouses: This may suggest that “net culture novelty” or the difference between the absolute novelty of one culture relative to another and a given individual’s familiarity with the target culture should be included as a variable in future expatriation and repatriation adjustment studies.

These differing results for expatriates and repatriates are interesting. Yet, the measurement of cultural novelty in these studies is problem-laden. For example, in the revised version of an existing instrument, respondents “were asked to indicate on [a] 5-point Likert scale how similar or different the following were compared to America

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. . . 1. Everyday customs that must be followed. 2. General living conditions. 3. Using health care facilities. 4. Transportation systems used in the country. 5. General living costs. 6. Available quality and types of food. 7. Climate. 8. General housing conditions” (Black and Stephens, 1989, p. 542). A comparison with Black and Stephens’ (1989) adaptation scale, which is described below, shows that the cultural novelty measure and the adjustment measure match closely. Under such circumstances, culture novelty is bound to correlate significantly with adaptation outcomes. Black and Stephens’ (1989) results, although in line with theory, have to be read with caution. The most important and most obvious aspect of novelty in cross-cultural adaptation is the distance between home and host cultures. It is the essence of content novelty. Over the years, a number of conceptualisations of culture and cultural distance have been introduced. A widely used conceptualisation of cultural distance stems from Dutch researcher Geert Hofstede, who studied IBM employees in over 50 different countries in the 1970s and 1980s (Hofstede, 1980, 1984, 1992; Hofstede and Bond, 1984, 1988). Hofstede distinguished originally four dimensions of national culture: power distance, individualism, masculinity, and uncertainty avoidance. In co-operation with researchers from the People’s Republic of China, he and a colleague found a fifth dimension: long-term orientation (The Chinese Culture Connection, 1987). Hofstede published scores on each of the first four dimensions for most of the countries covered in this study. Previous expatriate experience Besides cultural distance, previous expatriate experience relates to the novelty experienced by expatriates. A first time expatriate is uninformed about his or her reactions to and ability to live in another country. Depending on the length of stay, the expatriate will or will not be able to reach a relatively stable state in the foreign location. After a few months most people will have learned enough about their own reactions to cross-cultural moves to make a subsequent move significantly less novel as they can anticipate their reactions and feelings. For previous experience to become an adaptation facilitating force, although, it must have been a positive one. Theoretical discussions have, for a long time, included previous expatriate experience as relevant for the adaptation process (Nash, 1967; Church, 1982; Black and Stephens, 1989; Black and Gregersen, 1991c; Nicholson and Imaizumi, 1993; Brewster and Pickard, 1994; Taylor and Napier, 1996a; Aycan, 1997). Yet empirical evidence, particularly when focused on the length of exposure, has been weak. Church (1982, p. 549) suggested that: “the nature and quality – for example, the depth, intimacy . . . , and similarity . . . – of the previous cultural experience or host culture exposure may be more important”. The line of research focusing on the distinction of work, general, and interaction adjustment supports the relevance of previous expatriation experience on adaptation outcomes only in some instances (Black, 1988). Most of the time, it does not. Black and Stephens (1989) as well as Black and Gregersen (1991c) found no significant relationship between spouse’s general and interaction adaptation and previous experience. Black and Gregersen (1991b) found no significant relationship for either of the three facets of adaptation. Taylor and Napier (1996a, p. 68) reported that “previous experience abroad did not strongly affect work adjustment of the foreign women professionals”. Nicholson and Imaizumi (1993) even found an inverse relationship between previous overseas

experience and the adaptation of Japanese expatriates in Britain. They suggest that “lack of experience may actually be beneficial, presumably because it is more likely to convey to the assignment the benefits of being a completely new and exciting experience” (Nicholson and Imaizumi, 1993, p. 128). Theoretically and intuitively, it makes sense to include previous overseas experience in cross-cultural adaptation models. As Church (1982) pointed out, with Black and Stephens (1989) and Black and Gregersen (1991b, c) concurring, the problem may lie in the simple quantitative measurement of the variable rather than its lack of relevance. Cultural novelty influences both cognitive uncertainty and emotional well-being of expatriates. Prior experience is a moderating factor that helps people cope better with the emotional strain of cross-cultural adaptation. This leads to the following hypotheses: H1a. Cultural distance is negatively related to both cognitive and emotional

adaptation. H1b. Positive prior expatriate experience is positively related to emotional adaptation and unrelated to cognitive adaptation.

Discretion Novelty makes adaptation harder. Discretion granted to the individual by the host environment, allows him or her to influence surroundings and to offload some of the burden of adaptation[3]. Discretion comes from two sources: the first is the level of tolerance within the host society (Berry et al., 1988), and the second is the socio-economic status the stranger enjoys in the new location. The level of tolerance within society refers to two facets (Kim, 1988): one is the pressure to conform, in Kim’s (1988, p. 66) words: “the extent to which the environment challenges strangers to adopt the normative patterns of the host culture and its communication system” or “the degree to which the environment overtly or covertly expects or demands that strangers follow its normative cultural and communication patterns” (Kim, 1988, p. 128). In other words, conformity pressure is the deviation allowed from the average culture such as values, norms, behaviours, etc. It may also be expressed as the homogeneity or heterogeneity of lifestyles in a particular social environment. Major cities are more complex and, therefore, possess more diversity and show a greater number and more heterogeneous life styles than rural areas. The other facet is the host society’s receptivity for strangers. Kim (1988, p. 66) defines it as “the opportunities offered to strangers to participate in on-going social activities” or “the degree to which a given host environment shows openness and acceptance toward strangers” (Kim, 1988, p. 128). This study included the first facet of tolerance only. The host society’s receptivity for strangers and the respondents’ socio-economic status were not observed. Since discretion lowers the impact of novelty by allowing strangers to only loosely adhere to local norms, the following hypotheses are advanced: H2a. Freedom to adhere or not adhere to local rules is positively related to cognitive

and emotional adaptation. H2b. The size of the city of residence is positively related to cognitive and emotional adaptation.

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Self-efficacy A person moving internationally arrives in the new location with a set of beliefs and attitudes that will determine his or her resistance to the temptation to give up and withdraw that develops when problems arise. The conviction of the person that he or she can overcome the obstacles encountered is his or her self-efficacy. Black and Mendenhall’s (1991) conceptualisation of the cross-cultural adaptation process based on social learning theory describes self-efficacy as an important variable influencing the person’s motivation to retain and to reproduce a learned behaviour (also Black et al., 1992b): Theoretically, one of the most powerful individual variables that determines persistence in effort is the individual’s belief in control or self-efficacy (Black et al., 1992a, p. 749).

A person with high self-efficacy will be less likely to give up when he or she encounters adaptation problems. Therefore, withdrawal will become less likely and positive adaptation outcomes will become more likely. This study included one aspect related to self-efficacy that is particularly relevant but often neglected in cross-cultural adaptation studies: language skills. In a rare study including language variables on work adaptation of expatriate women in Japan, Taylor and Napier (1996b, p. 78, emphasis added): “found language skills and age to be the most important personal attributes for successful adjustment”. Language skills will determine the person’s ability to interact with host nationals and learn from interactions, refining his or her cognitive maps and behaviours. The accurate assessment of skill levels requires the use of standardised tests such as the Test of English as a Foreign Language (TOEFL). Alternatively, self-ratings will provide some indication of language ability. For the measurement of self-efficacy the perceived sufficiency of language skills independent of their absolute level is also important. Language skills are key for an adapted life, which leads to the following hypotheses: H3a. Language skills are positively related to cognitive and emotional adaptation.

H3b. The perception of possessing sufficient language skills is positively related to cognitive and emotional adaptation.

Social networks An expatriate does not exist in a social vacuum. Many expatriates move with their spouses and children. They establish contacts with neighbours, eventually developing a social network of acquaintances and friends. In the case of expatriate employees, there is the company support system or lack thereof. Taken together, these form the social networks that influence adaptation outcomes directly as well as withdrawal tendencies. Like many of the other variables discussed here social support or social networks have long featured in cross-cultural research (Nash, 1967; David, 1972; Berry et al., 1988; Black and Gregersen, 1991c; Aycan, 1997). As Church’s (1982) review article points out, results sometimes differ according to how networks or support are measured. Oberg’s (1960) conceptualisation of culture shock included the sense of losing one’s friends back home. The replacement of social networks is important in cross-cultural

adaptation. Expatriates who are able to develop friendly relationships with local nationals will be more adapted than those who do not: H4a. The friendly character of contacts with the local population is positively related to

Dimensions of cross-cultural adaptation

cognitive and emotional adaptation Measurement of variables Dependent variables Refined outcome measure. Adaptation outcomes relate to behaviour, cognition and emotion. In addition, they fall into two broad spheres: societal processes, which include day-to-day interactions and the establishment and maintenance of relationships; and societal structures, comprised of general conditions, institutions, values and norms. The self-report questionnaire, therefore, included 12 items related to processes and structures which were measured with questions regarding cognition and emotion[4,5]. Behaviours were not included because self-reports on behaviours are notoriously inaccurate: (1) Interactions (A): . Reprimanding a local person of lower status than you – telling off someone for something that they have done wrong (based on Furnham and Bochner, 1982). . Dealing with a local person who is upset/cross and aggressive/abusive (based on Furnham and Bochner, 1982). (2) Relationships (R): . Establishing friendships with local people. . Getting to know your local neighbours. . Finding social contact with locals (based on: Spradley and Phillips, 1972; Earley, 1987). . Maintaining interpersonal relationships with local persons (based on Hammer et al., 1978). . Approaching others (locals) – making the first move in starting up a friendship (based on Furnham and Bochner, 1982). (3) Conditions (C): . Living conditions in general. . Dealing with the housing conditions, for instance reliability of electricity or telephones, or amount of available space. . Dealing with the environment, for instance noise levels, pollution, litter (based on De Leon and McPartlin, 1995). (4) Values (V): . Prevailing political values of local nationals. . Religious values of local nationals. The response scales for each of the items are as shown below. Respondents were asked to answer the following three questions for each of the items above:

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(1) Cognition (C). People who live in a foreign country sometimes are uncertain about various aspects of life in the foreign culture. How confident are you about your knowledge regarding the following: 7 ¼ completely confident; 1 ¼ not confident; N/A (move to next item)? (2) Emotion (E): . Which one of the following four groups of emotions most closely resembles what you generally feel? Satisfaction/happiness; anxiety/fear; impatience/ anger; sadness/depression. . How strong is this emotion (are these emotions) generally: 7 ¼ extremely strong; 1 ¼ barely noticeable? Emotions were coded along a positive-negative range (þ 7 to 2 7) with anxiety, anger and depression forming the negative branch. Black and Stephens (1989) scale. The nine interaction and general adaptation items from Black and Stephens’ (1989) scale formed part of the questionnaire. Their scale also includes items related to work adaptation which were omitted here. This approach is the same as Robie and Ryan’s (1996) who also excluded work-related items from their structural equivalence study of the Black and Stephens scale. The Black and Stephens scale looks at adaptation one-dimensionally along an adjusted-unadjusted range. By not separating cognitions and emotions, their scale measures either both concurrently or one of the two. It is impossible to tell which it is and measurement may differ from one respondent to the next. The following questions were included: How unadjusted or adjusted are you regarding the following: 1 ¼ unadjusted 7 ¼ adjusted? 1. Socialising with host nationals 2. Interacting with host nationals on a day-to-day basis 3. Living conditions in general 4. Housing conditions 5. Food 6. Shopping 7. Cost of living 8. Entertainment/recreation facilities and opportunities 9. Health care facilities.

Exploratory factor analysis of the Black and Stephens (1989) items showed poor results for the entertainment/recreation and the health care facilities items. They were excluded from further analysis. Socialising and interacting items formed a communication adjustment factor. The other items make up an adjustment to general conditions factor. Independent variables Novelty ( H1 and H2)[6]. Two indicators served to determine cultural novelty. By asking open-ended questions about the country of citizenship and the country the respondent currently lives in an approximate assessment of cultural distance was made. Hofstede’s (1980 1984 1992) four original dimensions of power distance, masculinity/femininity, individualism/collectivism, and uncertainty avoidance provided the first indicator. His fifth dimension of long-term orientation is unavailable for most countries covered in this study. Most of the data refer to home and host countries of Western heritage, while

long-term orientation is particularly important when looking at Asian cultures. Therefore, long-term orientation was excluded. Based on Hofstede’s scores for each country on the four dimensions, the absolute difference for each was entered for every respondent. In the model below, the simple sum of absolute differences was used[7]. Besides cultural distance the second indicator of novelty used in this study is quality of the respondent’s previous expatriate experience. As discussed earlier, length of prior experience has shown very little relation to adaptation outcomes. The following question was used: How satisfied were you in your previous overseas stays (if you had differing experiences in different stays, please answer for the one that most influences your attitude towards overseas stays)? 1 ¼ very satisfied, 7 ¼ very dissatisfied.

The question was coded in reverse for data processing. Discretion ( H3a and H3b). Two questions gauged the discretion expatriates felt in the foreign environment. One was a more objective, the other a purely subjective measure tapping into respondents’ perceptions. The more objective measure makes a distinction between simple and complex or diverse environments in terms of size and population density. The following question assessed the size of the environment: In what type of area do you live? 1 ¼ rural, 2 ¼ small town, 3 ¼ medium-size town, 4 ¼ major metropolitan area (including suburbs), 5 ¼ major city.

A weakness of the question is that it can provide relative information within one country but is not necessarily accurate across countries. It is likely that a small town in a pluralistic society allows more freedom than a major city in a repressive country. Since most respondents lived in pluralistic countries, the consequences of the question’s weakness should not be too severe. The other measure of discretion was purely subjective: How much freedom do local people give you to adhere or not adhere to local norms and values? 1 ¼ total freedom; 7 ¼ no freedom at all.

This question refers to what Kim (1988) calls the pressure to conform. As a subjective measure included in the same questionnaire with adaptation outcome scales it may suffer from common method variance. The question was coded in reverse for data processing. Self-efficacy ( H4a and H4b). The literature contains well-established self-efficacy scales for general self-efficacy, social self-efficacy (Woodruff and Cashman, 1993; Harrison et al., 1996), and job self-efficacy (Jones, 1986). In addition, plenty of research exists on measurement and effects of self-efficacy in various settings (e.g. Lust et al., 1993; Mitchell et al., 1994; Mone, 1994; Parker, 1994; Saks, 1995). Space restrictions in the questionnaire – general and social self-efficacy scales taken together contain 23 items – led to the exclusion of the scales. Rather, attention was focused on one aspect of self-efficacy that is only relevant in cross-cultural contact and not included in established scales: language skills. The following questions were used: How well do you speak/understand/read/write the language? 1 ¼ not at all; 7 ¼ like a native speaker

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– Speak – Understand – Write – Read Is your level of knowledge of the local language: 1 ¼ much more than sufficient; 7 ¼ completely insufficient?

The second question was coded in reverse for data analysis. Social networks ( H5). As with self-efficacy, extensive literature exists on the influence of the social environment on adaptation, coping and satisfaction in various contexts, including expatriation (Tardy, 1985; Maynard, 1986; Black, 1990a, b; Taal et al., 1993; van der Poel, 1993). Tardy (1985) comprehensively covers all facets of social support in a discussion of its measurement. The measures used in empirical research are diverse and sometimes lengthy, including as many as 41 separate items (Maynard, 1986). They deal with aspects as varied as emotional support, instrumental support (Taal et al., 1993; van der Poel, 1993), social companionship (van der Poel, 1993), and network support satisfaction regarding family, friendship, social and community, profession, and work (Maynard, 1986). Again, space restrictions in the questionnaire prevented the inclusion of these established scales and required focusing on issues unique to expatriate adaptation. Only one simple question was used to look at the effects of networks: How would you characterise your contacts with local nationals? 1 ¼ very friendly, 7 ¼ very unfriendly.

The question was coded in reverse for data analysis. Analysis method This study used the Amos structural equation modelling package of SPSS. It was used for confirmatory factor analysis, an advanced statistical technique that combines factor with regression analysis. Groups of dependent and independent variables are factor analysed. In Figure 1, the independent variables of speak, understand, write and read load on a common factor language skills. Similarly, the dependent variables on the right load on the factors of cognition-related relationship formation (RC) and emotion-related relationship formation (RE). There are several other observed (all rectangular boxes represent observed variables) independent variables such as “satprev” (satisfaction with previous experience abroad). The arrows in the middle show the hypothesised relationships between independent variables/language factor and dependent factors of adaptation. Regression weights were calculated for these arrows. Curved arrows represent covariances among independent variables. Confirmatory factor analysis produces model fit statistics, which indicate how well the proposed theoretical model fits the data analysed. For better comparison, fit statistics for the perfectly-fitting saturated model and the terribly-fitting independence model are also calculated. Statistics are in the Appendix. Figure 1 only exemplifies the underlying model. The left side shows all independent variables. On the right side is a sample of the dependent variables: relationship factor for cognitions and for emotions. The complete model includes the same arrows for the dependent factors of day-to-day interactions, conditions, and values. For the Black and

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Figure 1. Model used in analysis

Stephens (1989) scale the independent variables represented in Figure 1 correlate with interaction and general conditions factors. Error variables were omitted in the drawing, but not in the analysis. Results Sample demographics This study used a convenience sample (n ¼ 204). It consists mainly of members of American and British women’s clubs in Madrid, Spain and the Frankfurt metropolitan area in Germany and their spouses (61.9 per cent of sample population). In addition, expatriate employees of a multinational corporation residing in and outside of Europe participated in the study. Finally, a small number of expatriate faculty members at an American university and members of the expatriate community in Madrid responded as well. Two-thirds of the respondents were female. Their age ranged from 20 to 73 with a mean of 40 years and a median of 38. Almost all respondents (97.5 per cent of responses; two missing answers) were under 60 years of age. Roughly three-quarters were married, about 15 per cent were single, and 5 per cent were cohabitating. Respondents were highly educated. A total of 80 per cent had

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obtained at least a Bachelor’s degree, with a further 15 per cent having completed some course work towards a college degree. Half of the respondents had children residing with them. Exactly half of the respondents stated that they were the expatriate, that is the person initiating the overseas stay; 42 per cent were the accompanying spouse, and 8 per cent declined to answer the question. Almost two-thirds of respondents were currently employed (64 per cent). Their jobs fell into three main categories: general business such as information technology, finance, sales and marketing (58 per cent); journalism (33 per cent); and public sector such as positions in embassies and teaching (9 per cent). Most of those employed indicated the level of their employment. Almost half (46 per cent) worked in non-supervisory professional or technical positions. A further 27 per cent worked in mid- and upper-level management positions. A total of 10 per cent were in executive positions and 6 per cent reported to be self-employed. The remaining 11 per cent worked in administrative and lower management positions. The length of the current stay ranged from a minimum of three months to a maximum of 42 years. The median length of stay was just under 2.5 years, the mean was 5.5 years. Table I summarises length of stay. Of the respondents, 51 per cent reported that the current was not their first overseas stay. Of those on multiple assignments, 39 per cent were on their second assignment, 23 per cent on their third, and a further 16 per cent on their fourth. The remainder had had up to a maximum of 11 overseas stays. For multiple expatriates the total length of overseas experience ranged from 16 months to 44 years. Respondents resided in 22 different countries. Almost half of them (48 per cent) lived in Germany, 28 per cent were in Spain, and 6.5 per cent in the USA. About three-quarters of respondents were citizens of either the USA (39 per cent) or the UK (35 per cent). Only three respondents reported a dual citizenship, all of them American and Spanish. A plurality lived in a major city (37 per cent), followed by a major metropolitan area (26 per cent). A total of 12 per cent lived in a medium-size town, 21 per cent in a small town and only 5 per cent lived in a rural area. Value label Up to 3 months 4 to 6 months 7 to 9 months 10 to 12 months 1 to 1.5 years (13-18 months) 1.5 to 2 years (19-24) 2 to 2.5 years (25-30) 2.5 to 3 years (31-36) 3 to 4 years (37-48) 4 to 5 years (49-60) 5 to 10 years (61-120) Over 10 years (121 þ )

Table I. Length of stay

Total

Value

Frequency

Per cent

Valid per cent

Cum per cent

1 2 3 4 5 6 7 8 9 10 11 12

2 27 16 11 17 23 12 16 9 5 31 33 2 204

1.0 13.2 7.8 5.4 8.3 11.3 5.9 7.8 4.4 2.5 15.2 16.2 1.0 100.0

1.0 13.4 7.9 5.4 8.4 11.4 5.9 7.9 4.5 2.5 15.3 16.3 Missing 100.0

1.0 14.4 22.3 27.7 36.1 47.5 53.5 61.4 65.8 68.3 83.7 100.0

Tables AI-AVI in the Appendix provide the parameter estimates for evaluation of the hypotheses based on the new outcome measure described above and the Black and Stephens (1989) scale. Model fit Both models, the one for the refined outcome measure and the one for the Black and Stephens (1989) scale, show a borderline fit. Arbuckle and Wothke (1999) cite a rule of thumb for CMIN/DF based on the literature that calls for a value of , 2 to , 5 as reasonable. This study is mostly concerned with demonstrating that the separate measurement of cognitive and emotional adaptation outcomes is superior to a one-dimensional measurement. It does not attempt to provide a complete model of adaptation. Therefore, the model fit indicated seems sufficient. Of course, better fitting models would be preferable to more firmly establish the superiority of the proposed measure. More research is required to provide further evidence. Explained variance The refined outcome measure model shows an explained variance range of 0.152 to 0.704, better than the Black and Stephens (1989) model except for two instances. The Black and Stephens (1989) model has an explained variance of 0.314 for communication and only 0.099 for general adjustment. Results related to proposed hypotheses H1a. Cultural distance is negatively related to both cognitive and emotional adaptation.

H2b. Positive prior expatriate experience is positively related to emotional adaptation and unrelated to cognitive adaptation. When tested with the Black and Stephens (1989) scale both H1a and H1b have to be rejected[8]. The refined outcome measure shows significant negative relationships of cultural distance with three of the four emotion factors, but none with the cognitive factors, lending partial support to H1a (see Tables II and III). This indicates that a large cultural distance may be an issue for expatriate well-being, but not for their confidence in knowing how to behave. As this is a cross-sectional study with a median length of stay of just under 2.5 years, this is understandable. The “average” person in the sample has had enough time to learn the rules, but perhaps not enough to feel entirely comfortable with them. Positive prior expatriate experience has highly significant correlations with two cognition and three emotion factors, lending partial support to H1b. The significant relationships with cognition factors are surprising. Both factors relate to interactions with people, either on a day-to-day basis or regarding the formation of relationships. Previous expatriate experience helps people become more confident in how to conduct interactions with the local population perhaps because they have developed their own way of interacting with people from cultures foreign to them. One seasoned expatriate mentioned to the author that she had developed, over the course of several moves, a portable expatriate lifestyle that requires only relatively little adaptation. This may

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Estimate of standardised regression weights H1a H1b

98 H2a

H2b H3a

Table II. Refined outcome measure (significant relationships)

H3b H4

RE AE CE RC AC RE AE CE VC CC AE VE CC AE CE RC AC VC RE AE AE RC VC RE

ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ

hof_sum hof_sum hof_sum satprev satprev satprev satprev satprev freedom freedom freedom freedom area area area SKILL SKILL SKILL SKILL SKILL sufficnt charlocc charlock charlocc

20.185 20.277 20.271 0.297 0.252 0.399 0.414 0.258 0.173 0.195 0.192 0.243 20.199 20.195 20.416 0.463 0.782 0.552 0.510 0.878 20.458 0.221 0.140 0.189

Estimate of standardised regression weights Table III. Black and Stephens (1989) measure (significant relationships)

H2a H3a H4

GEN ˆ freedom COMM ˆ freedom COMM ˆ SKILL COMM ˆ charlocc

0.233 0.191 0.416 0.156

affect the confidence with which expatriates approach interactions with representatives of the host culture. The different results for the refined and the Black and Stephens (1989) measure provide evidence that the one-dimensional measurement may lose important information about the association of cultural distance and prior expatriate experience and adaptation outcomes. Perhaps the critical comments of some scholars about the measurement of cultural distance and prior expatriate experience should be re-evaluated in light of this study and at least part of the criticism directed to the way the dependent variables were measured. H2a.

Freedom to adhere or not adhere to local rules is positively related to cognitive and emotional adaptation.

H2b. The size of the city of residence is positively related to cognitive and emotional adaptation.

H2a is confirmed by the Black and Stephens (1989) scale, while H2b is not confirmed. The refined outcome measure shows two significant relationships each of freedom to adhere to local rules with cognition and emotion factors, lending partial support to H2a. The freedom expatriates experience is associated with the confidence they have in relation to values and general living conditions. The respondents’ confidence regarding values can be understood as stemming from a reduced pressure to know exactly the local value system. The relationship with living conditions is more difficult to explain without further information. Perhaps expatriates who are confident had good support from their employer in dealing with conditions. But this is pure speculation that has to be tested in future studies. Freedom also relates to more positive feelings regarding values and day-to-day interactions. They probably feel better because they do not have to adhere to values and to daily interaction practices they do not share or support. One cognition and two emotion factors are significantly, but negatively, related to the size of the area of residence. H2b is rejected. Expatriates who live in smaller communities are more confident and feel better, particularly when it comes to living conditions. It is harder to get orientated in a big city and understand all the specifics of living conditions, and conditions may be experienced as worse by big city dwellers, making them feel worse. In the same vein, life in big cities may be more stressful thus causing more tension in day-to-day interactions resulting in worse feelings. H3a. Language skills are positively related to cognitive and emotional adaptation.

H3b. The perception of possessing sufficient language skills is positively related to cognitive and emotional adaptation. The Black and Stephens (1989) scale supports H3a in relation to communication, but not to general adjustment. This makes perfect sense, since language skills are important in interaction, but hardly in adjustment to general conditions. H3ba was not confirmed. The refined outcome measure shows similar results to the one-dimensional one. Relationship and day-to-day interaction factors for both, cognitions and emotions, are highly correlated with language skills. The cognitive side of the values factor is also strongly associated with language skills, while the emotional side is not. Language skills may help to learn about local values, but not to make them more comfortable. Thus, the refined measure partially confirms H3a and shows its potential to add more depth to the understanding of adaptation. It does so by distinguishing additional factors of adaptation and by separating cognitive and emotional dimension. H3b is rejected in its entirety. It shows only one significant relationship, which is quite strong but opposite to expectations. The more sufficient people feel their language skills are, the worse they feel in day-to-day interactions. It is difficult to explain this. This relationship needs to be tested again in future studies. H4. The friendly character of contacts with the local population is positively related to cognitive and emotional adaptation

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The friendly character of contacts with locals is significantly related with Black and Stephens’ (1989) communication factor, lending support to H4. As with H3a, it is understandable that the association is with communication and not with general conditions. The refined measure shows significant relationships with two cognition factors and one emotion factor. This partially confirms H4. The distinction between relationship and day-to-day interaction factors as opposed to Black and Stephens’ (1989) communication factor shows that relationships are particularly associated with friendly contacts. Expatriates experience greater ease in the formation of relationships with representatives of the local culture, if contacts are friendly. Yet, friendly contacts seem unrelated to day-to-day interactions. In addition, the understanding of local values, but not the attitude towards them, is related to local contacts. Friendly contacts may enable expatriates to learn about local values. How they feel about those values is unrelated to the character of contacts. Discussion The results of this study demonstrate that a more refined measurement of adaptation outcomes, which distinguishes cognition and emotion factors, is superior to a one-dimensional measurement. The association of cultural distance with adaptation outcomes is a case in point. Theoretically and for every expatriate it is clear that a larger cultural difference is related to a more difficult adaptation process. Yet, the Black and Stephens (1989) measure, which does not distinguish between cognitive and affective outcomes, was unable to establish any significant relationships. The study also demonstrates that the distinction of general and communication adjustment (besides work adjustment, which was excluded here) in the one-dimensional measure may be to simplistic. Several results showed that there is a benefit to distinguishing at least the formation of relationships and day-to-day interactions. The separate value-related factor also produced some unique and interesting results. The discussion of the results in relation to the hypotheses shows also that theory could be enhanced significantly. The current theory of expatriation does not distinguish between the relationships of independent variables with cognitive and with affective outcomes. Based on the current state of theory it is sometimes difficult to explain the presented results. As always, some of the less explicable results can, and in some cases should, be attributed to shortcomings of sample selection, data collection, and data quality. But the point is, the state of theory based on one-dimensional measures does not allow us to do more than speculate on whether a result is surprising because the underlying data are poor or because we simply do not sufficiently understand the dynamics of cross-cultural adaptation. Research based on refined outcome measures will provide a challenge to theorists to come up with better, more detailed models. Practical relevance It is nice if a new tool leads to improved theory and an advancement of the discipline. But what is the ultimate benefit to expatriates and practitioners? The most immediate benefit may follow from an application of the instrument to regularly monitor adaptation levels of expatriates. Depending on whether cognitive

or affective adaptation is lacking, support measures can be tailored. If cognitive certainty is less than expected, additional cognitive input such as training, books, etc. may be provided. If expatriates do not feel overly good, psychological support may be the answer. The better the diagnosis, the better the resulting intervention will be. Once a sufficient number of studies has led to a further refinement of our understanding of the adaptation process, preparatory as well as follow-up training and support abroad may be designed to provide the most pertinent services as a preventative measure to the most common adaptation problems. Expatriate management has made great strides over the last two decades, but it is still far from perfect. To cite just one small example from this study: basic language skills training is a common feature in expatriate preparation. However, once abroad, most expatriates drop classes under the pressures of work and companies happily oblige to save money. Trailing family members often receive less training to begin with. The strong relationship of language skills with cognitive and affective adaptation warrants heightened attention to continued language training once abroad. Limitations and outlook This study, like many before, suffers from a number of shortcomings: . It is based on a cross-sectional convenience sample[9]. . The sample size of just over 200, while about average for expatriate studies, is small for confirmatory factor analysis. . The independent variables do not represent a systematic selection from a comprehensive theoretical model. They were included because prior research has dealt with them, allowing the development of grounded hypotheses. On the positive side, the study has demonstrated that a two-dimensional measurement of adaptation outcomes is more sensitive and thus superior to the one-dimensional measurement still prevalent in expatriate studies. Future research has to show whether these results can be reproduced to confirm the view about the superiority of the proposed two-dimensional measure. Ideally, these studies would be based on a longitudinal sample and a fully-elaborated theory of cross-cultural adaptation. Notes 1. This adds an interesting twist to adaptation research since people tend to remember selectively what emotions they felt during the course of an interaction (see LeDoux, 2002, p. 202, for an example). This supports Roth’s (1997) contention that emotions are concentrated experiences, and is particularly the case when people try to remember them. Therefore, reports on emotions are cognitively filtered to fit with a person’s construct of reality. 2. An exception is Wong-Rieger (1984) who included nine emotions to measure responses to adaptation problem scenarios. 3. Nicholson (1984) has analysed the role of novelty and discretion in work role transitions. With appropriate alterations his analysis can be usefully applied to cross-cultural adaptation.

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4. A different part of the study included 67 items, most used in prior research and supplemented by additional items related to relationships, day-to-day interactions, general conditions, institutions, values and norms. Factor analysis resulted in the selection of the 12 items used here. Day-to-day interactions and values dimensions include only two items each. Exploratory factor analysis showed them as one dimension with four items. But confirmatory factor analysis indicators improved when a model with the two separate dimensions was used. Items related to institutions and to norms did not form significant factors. 5. Dependent variable names are combinations such as “RC” or “RE”, the first indicating the cognitive relationship factor and the second indicating the emotion-based relationship factor. For the Black and Stephens (1989) scale “GEN” denotes general adjustment and “COMM” denotes communication adjustment. Items in the refined outcome measure taken from or inspired by Black and Stephens (1989) are not separately identified. 6. Independent variable names in the statistics: cultural difference is called “hof_sum” in the statistics. Satisfaction with previous experience is called “satprev.” The type of area is called “area” and the freedom from local norms and values is called “freedom.” The four variables “speak,” “understand,” “write,” and “read” were combined into a language skills factor for data analysis called “SKILL.” Perceived knowledge of the local language is called “sufficnt.” The characterisation of contacts is called “charlocc.” 7. No corrections such as those suggested by Kogut and Singh (1988) were made. 8. For the evaluation of H1a-H4 with the Black and Stephens (1989) scale any hypothesised relationship, for cognitions or emotions together or separately, is treated as one-dimensional. 9. The discussion of results sometimes uses a language of causality. The reader should be aware that this cross-sectional research has only established associations between variables. A more elaborate research design involving longitudinal data is required to show causal relationships.

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RC AC VC CC RE AE VE CE RC AC VC CC RE AE VE CE RC AC VC CC RE AE VE CE RC AC VC

ˆ hof_sum ˆ hof_sum ˆ hof_sum ˆ hof_sum ˆ hof_sum ˆ hof_sum ˆ hof_sum ˆ hof_sum ˆ satprev ˆ satprev ˆ satprev ˆ satprev ˆ satprev ˆ satprev ˆ satprev ˆ satprev ˆ freedom ˆ freedom ˆ freedom ˆ freedom ˆ freedom ˆ freedom ˆ freedom ˆ freedom ˆ area ˆ area ˆ area 20.003 20.001 0.004 20.002 2 0.017 20.021 20.011 2 0.025 0.277 0.242 0.115 0.075 10.048 0.874 0.145 0.678 0.099 0.118 0.217 0.121 0.043 0.401 0.427 0.177 20.018 20.042 0.078

Estimate of regression weights 0.002 0.002 0.003 0.002 0.006 0.007 0.006 0.008 0.065 0.076 0.088 0.055 0.208 0.236 0.183 0.257 0.055 0.064 0.075 0.048 0.172 0.195 0.185 0.217 0.060 0.069 0.082

S.E. 21.513 20.495 1.493 21.339 2 2.784 2 2.951 21.811 2 3.215 4.261 3.183 1.307 1.363 5.041 3.700 0.790 2.633 1.789 1.831 2.872 2.528 0.252 2.057 2.303 0.816 20.296 20.600 0.959

C.R. 0.130 0.620 0.136 0.180 0.005 0.003 0.070 0.001 *** 0.001 0.191 0.173 *** *** 0.429 0.008 0.074 0.067 0.004 0.011 0.801 0.040 0.021 0.415 0.767 0.548 0.337

P

20.089 20.033 0.089 20.100 2 0.185 2 0.277 20.174 2 0.271 0.297 0.252 0.091 0.120 0.399 0.414 0.082 0.258 0.107 0.124 0.173 0.195 0.017 0.192 0.243 0.068 20.018 20.041 0.059 (continued)

Estimate of standardised regression weights

Dimensions of cross-cultural adaptation 107

Table AI. Regression weights

Table AI.

area area area area area SKILL SKILL SKILL SKILL SKILL SKILL SKILL SKILL sufficnt sufficnt sufficnt sufficnt sufficnt sufficnt sufficnt sufficnt charlocc charlocc charlocc charlocc charlocc charlocc charlocc charlocc

2 0.131 20.101 2 0.432 20.351 2 10.147 0.356 0.616 0.574 0.097 10.102 10.526 0.381 0.259 0.069 20.107 0.015 0.055 20.187 2 0.677 20.220 20.204 0.220 0.037 0.189 0.099 0.528 20.406 0.191 20.090

Note: Significant relationships in italics

ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ ˆ 0.052 0.186 0.211 0.186 0.247 0.078 0.099 0.105 0.064 0.249 0.302 0.229 0.298 0.064 0.074 0.087 0.054 0.199 0.230 0.185 0.251 0.062 0.072 0.084 0.053 0.195 0.217 0.177 0.243

S.E. 2 2.525 20.543 2 2.044 21.880 2 4.644 4.546 6.248 5.445 1.507 4.427 5.060 1.662 0.868 1.084 21.442 0.175 1.015 20.939 2 2.948 21.191 20.813 3.528 0.520 2.239 1.880 2.707 21.868 1.078 2.370

C.R. 0.012 0.587 0.041 0.060 *** *** *** *** 0.132 *** *** 0.097 0.386 0.278 0.149 0.861 0.310 0.348 0.003 0.233 0.416 *** 0.603 0.025 0.060 0.007 0.062 0.281 0.712

P

2 0.199 20.037 2 0.195 20.188 2 0.416 0.463 0.782 0.552 0.188 0.510 0.878 0.261 0.120 0.106 20.160 0.017 0.125 20.102 2 0.458 20.177 20.111 0.221 0.037 0.140 0.149 0.189 20.180 0.101 20.032

Estimate of standardised regression weights

108

CC RE AE VE CE RC AC VC CC RE AE VE CE RC AC VC CC RE AE VE CE RC AC VC CC RE AE VE CE

Estimate of regression weights

PR 34,1

RC AC VC CC RE AE VE CE

Model Default model Saturated model Independence model

GEN ˆ hof_sum COMM ˆ hof_sum GEN ˆ satprev COMM ˆ satprev GEN ˆ freedom COMM ˆ freedom GEN ˆ area COMM ˆ area GEN ˆ SKILL COMM ˆ SKILL GEN ˆ sufficnt COMM ˆ sufficnt GEN ˆ charlocc COMM ˆ charlocc

0.470 0.523 0.408 0.198 0.417 0.704 0.152 0.321

NPAR

CMIN

DF

P

CMIN/DF

158 629 34

1,353.819 0.000 4,569.601

471 0 595

0.000

2.874

0.0000

7.680

Estimate of regression weights

S.E.

C.R.

P

Estimate of standardised regression weights

0.001 20.002 0.084 20.100 0.222 0.183 0.010 20.032 0.131 0.330 0.027 0.054 20.043 0.161

0.003 0.002 0.110 0.100 0.071 0.065 0.077 0.070 0.097 0.091 0.082 0.074 0.079 0.073

0.472 2 0.780 0.767 2 0.999 30.107 2.801 0.126 2 0.453 1.351 3.608 0.328 0.731 2 0.546 2.214

0.637 0.435 0.443 0.318 0.002 0.005 0.900 0.651 0.177 *** 0.743 0.465 0.585 0.027

0.035 20.052 0.076 20.090 0.233 0.191 0.010 20.031 0.167 0.416 0.040 0.080 20.042 0.156

Model Default model Saturated model Independence model

109 Table AII. Explained variance

Table AIII. Model fit summary – CMIN

Table AIV. Regression weights

Note: Significant relationships in italics

GEN COMM

Dimensions of cross-cultural adaptation

0.099 0.314

NPAR

CMIN

DF

P

CMIN/DF

65 170 17

318.604 0.000 2168.520

105 0 153

0.000

3.034

0.000

14.173

Table AV. Explained variance

Table AVI. Model fit summary – CMIN

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Job satisfaction among expatriates, repatriates and domestic employees

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The perceived impact of international assignments on work-related variables Jaime Bonache Universidad Carlos III de Madrid, Madrid, Spain Abstract Purpose – The present study aims to provide an empirical evaluation of job satisfaction among expatriates, repatriates, and domestic employees with no international experience. Design/methodology/approach – The study was conducted on a large sample of employees from a Spanish multinational construction company. One-way analysis of variance (ANOVA) and the Scheffe test were employed to analyse the data. Findings – After controlling for hierarchical status, the results indicated that, among these three groups of employees, there are some significant differences in the satisfaction ratings on job characteristics, career prospects, and internal communication. The authors did not, however, find differences in the mean satisfaction rating on general job satisfaction. Findings are discussed, as are limitations and suggestions for future research. Originality/value – The study contributes to the literature on job satisfaction. Keywords Expatriates, Employees, Job satisfaction, International business Paper type Research paper

Personnel Review Vol. 34 No. 1, 2005 pp. 110-124 q Emerald Group Publishing Limited 0048-3486 DOI 10.1108/00483480510571905

Introduction With the increasing globalisation of business and economic activities, international job mobility is becoming a more common experience for a growing number of employees. An international assignment is no longer confined to a core cadre of global managers who move among the different units and then up into the central corporate hierarchy, but a real possibility for a much larger group of employees such as business establishers, customer project employees, research and development (R&D) project personnel; etc. (Tahvanainen, 2000). From the individuals’ point of view, an international business experience may have a number of positive outcomes, including skill acquisition, personal development, and long-term career advancement (Black et al., 1992). However, such an experience is not without difficulties. On the contrary, many expatriation problems have been reported. In addition to the often-cited family and social tensions associated with expatriate assignments (Black et al., 1992; Shaffer et al., 1999), it is well documented that the career implications of international assignments are often frustrating. A lack of respect for acquired skills, loss of status, and reverse culture shock on return are recurring problems in many companies (Daily et al., 2000; Caligiuri and Lazarova, 2001; Stahl et al., 2002). In the light of these positive and negative aspects associated with international relocations, individuals must confront a high degree of uncertainty when

they are offered a foreign assignment. They may ask themselves a number of questions, including: . How satisfying will the experience be? . How will I feel upon return? . Will I be more or less satisfied than my colleagues who stayed home? . Is it worth accepting the offer? This study provides some empirical evidence to help in answering these questions. Focusing on purely work-related aspects, the study first offers a series of hypotheses on job satisfaction among three groups of employees: expatriates, repatriates and nationals with no international experience. We then test these hypotheses on a sample of employees from a Spanish multinational construction Company (Dragados y Construcciones, S.A.). This empirical analysis consists of asking the same job-related questions both to expatriates, repatriates and domestic employees, and then to compare the extent to which their satisfaction levels differ. To the knowledge of the author, this procedure has not yet been applied by the literature on expatriation. In this sense, the paper casts some additional light on an increasingly relevant type of experience for a growing number of employees. Theoretical framework and hypotheses In a review on recent developments in international management in the 20 top management journals from 1996 to 2000, Werner (2002) has shown that literature on expatriation has focused on a wide number of issues, including: assignment acceptance (Aryee et al., 1996); concerns and expectations of dual career expatriates (Harvey, 1997); adjustment (Caligiuri et al., 1998; Shaffer et al., 1999); psychological withdrawal (Shaffer and Harrison, 1998); pre-departure thoughts (Garonzik et al., 2000); and commitment (Gregersen and Black, 1996). Job satisfaction – the main object of this paper – is a significant construct for all of these issues. However, studies focusing on expatriates’ satisfaction as such remains a relative rarity (see Guzzo et al. (1993) for an exception). Job satisfaction is usually defined as an affective or emotional response toward one’s job (Kreitner and Kinicki, 1992). From an economic perspective, job satisfaction is a unitary concept that tends to be explained in purely monetary terms (Lazear, 2000). It is assumed that individuals like rewards but dislike effort. As a result, a better salary, for an identical level of effort, will determine the decision to quit and a higher level of satisfaction. From the lens provided by psychology and sociology, however, the employment relationship is about much more than the exchange of labour services for a pay-cheque. It is an economic relation in part, but it is a potent social and psychological one as well (Baron and Kreps, 1999). Thus, a person can be relatively satisfied with the absolute monetary rewards he or she receives and dissatisfied with how they fare relative to others (Festinger, 1954; Adams, 1965), or with other aspects of his or her job, either because they do not allow to fulfil his or her needs (Salansik and Pfeffer, 1977) and values (Locke, 1976) or because they do not met his or her expectations. This psycho-sociological perspective will be the one adopted here. This means job satisfaction will not be understood as a unitary concept, but as an affective or emotional response toward various facets of one’s job, and in which processes of social comparison take place. The facets or aspects we will consider will be the job characteristics, career prospects, salary, coworkers, and internal communication.

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Job characteristics Probably the most important element of an individual’s satisfaction with his/her job is related to the characteristics of the position he/she occupies. Almost everyone agrees with the notion that an interesting and rewarding job will greatly contribute to increasing satisfaction within a given work environment. Researchers have repeatedly shown that these job/task characteristics strongly influence worker’s attitudes, including satisfaction and commitment (Miller and Monge, 1986; Cotton and Tuttle, 1986). Considering the importance of job characteristics in determining workers’ satisfaction, it is surprising that the literature on expatriate assignments has paid so little attention to them, focusing instead on those aspects of international positions that are unique to expatriates’ experiences (usually non-work variables). Some authors, however, have dealt with this issue and found results consistent with domestic research, in the sense that sets of variables considered to be antecedents of job satisfaction in domestic situations seem to be also strongly related to satisfaction in overseas assignments (Shaffer and Harrison, 1998). Given that our objective is to assess the differences in satisfaction among expatriates, repatriates and domestic employees, we will focus on those aspects of expatriates’ jobs that might be generating differential levels of satisfaction. In general, employees on international assignments will be subject to a higher level of stress than that of domestic employees. They usually need to travel frequently and sometimes their work overload is considerably high (Black, 1988). Along these same lines, it has been found that expatriates, as compared with domestic employees, experienced greater job overload, greater external pressure, and greater pressure from the visibility of their jobs. Moreover, their functions are not always completely specified; so, they may experience a higher degree of uncertainty and role ambiguity. All these circumstances have been proved to affect satisfaction negatively (Naumann, 1992; Bedeian and Armenakis, 1981; Lyons, 1971). On the other hand, a series of exploratory studies have shown that usually expatriates’ jobs have a greater task variety (Czinkota et al., 1989; Edstrom and Galbraith, 1977) and provide a more challenging position. Along these lines, Guzzo et al. (1993) used a sample of 148 expatriate managers to whom they asked questions about their job experience. Their findings showed that the majority of things expatriates indicated were the best part of their assignment were related to their work. For example, they generally reported greater autonomy, variety and responsibility. In the light of the overall positive characteristics of expatriation jobs, it is reasonable to expect expatriates to be in general more satisfied with their positions than domestic employees and reentry positions to be perceived as less challenging and satisfying (Caligiuri and Lazarova, 2001; Hammer et al., 1998; Stahl et al., 2002). From these considerations, we propose the following hypothesis: H1. Compared to both repatriates and domestic employees, expatriates will report a

significant higher level of satisfaction with their jobs. Career prospects The career can be defined as the sequence of work-related experiences and attitudes that the individual has over the span of his or her work life. The international management literature has often discussed the implications of international positions on employees’

careers (Scullion, 1992; Feldman and Thomas, 1992; Daily et al., 2000; Yan et al., 2002). The basic problem faced by expatriates in this area is commonly summarised in the cliche´ “out-of-sight, out-of mind”. When someone has to leave his/her country and begin to work in a new environment, many of the professional contacts that he/she had at home disappear. This may harm their career prospects. As the sociological literature has profusely shown (Burt, 1992; Podolny and Baron, 1997), social networks have positive effects on career outcomes and, specifically, on upward mobility. If this is so, one could think that expatriates will feel more pessimistic with their career prospects as they perceive that the distance from headquarters puts them at an informational and networking disadvantage (Daily et al., 2000). Yet, a recent survey of a large population of German expatriates (Stahl et al., 2002), showed that the majority of expatriates view their international assignment as an opportunity for personal and professional development and career advancement, despite perceived deficits in corporate career management systems and a widespread scepticism that the assignment will help advance within their companies. These findings support the emerging notion of “boundaryless careers” (Arthur and Rousseau, 1996), which are managed more by the person than by the organisation and is characterised by more inter-organisational mobility than the traditional career (Yan et al., 2002). Compared to purely national assignments, international relocations may have more positive effects on boundaryless careers, as they allow for the acquisition of international experience, an asset increasingly valued within corporate environments. In fact, recent empirical research has shown that, in the external selection of chief executive officers (CEOs), organisations increasingly consider international experience of fundamental importance (Daily et al., 2000). In addition, research has also shown that, for repatriates who stay in the same organisation, international assignments do not always have a positive impact, as many repatriation problems often arise (Black et al., 1992; Black and Gregersen, 1999). Lack of respect for acquired skills, loss of status, and reverse culture shock are reported to be recurring problems on repatriation. The gap between an expatriate’s expectation and reality on return may negatively affect his or her level of satisfaction (Guzzo et al., 1993). On the basis of this discussion, we propose the following hypothesis: H2. Compared to both repatriates and domestic employees, expatriates will report a

significant higher level of satisfaction with their career prospects. Salary Research on expatriates’ attitudes has uncovered low levels of salary satisfaction among these workers. For example, Black et al. (1992) assert that 77 per cent of expatriate employees are highly unsatisfied with their compensation systems. Similarly, Hamill (1989) suggests that these low levels of pay satisfaction might explain the high rates of expatriate failure that have been widely documented by the international management literature. These low levels of salary satisfaction among expatriates can be explained in terms of the social comparison theory (Festinger, 1954; Adams, 1965). In this model, satisfaction is a function of how “fairly” an individual is treated at work. Satisfaction results from one’s perception that work outcomes, relative to inputs, compares favourably with a significant other’s outcomes/inputs. Dissimilar ratios lead to

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perceptions of inequity. This proposition implies that the same organisational circumstance may be perceived as fair or unfair depending on with which individual or group of individuals the worker chooses to compare him/herself. Accordingly, a main concern when analysing people’s satisfaction with their salary is identifying the referent used in the individual’s comparisons (Chen et al., 2002). In a workplace context, an employee will compare him/herself to other employees within the same organisation (assessment of internal equity), to people occupying similar jobs in other companies (assessment of external equity), and to employees performing similar jobs within the same company (assessment of relative equity). The problem faced by expatriate workers is that there are multiple referents available to them when working abroad (Bonache et al., 2001). Not only can they compare themselves to other expatriates within the same company and host country, but also with expatriates within the same company and other host countries, expatriates from other companies within their host country, local employees, etc. This fact has led some authors to assert that, for a majority of these workers, lack of equity with respect to other expatriates is a very significant issue (Harvey, 1993). Yet, a low level of salary satisfaction is a very common problem among all types of employees (Gomez Mejia et al., 1995). This means that, even though expatriates might not feel satisfied with their pay, they might be relatively more satisfied than other groups of employees. In fact, researchers have found that that satisfaction tends to be greater among individuals with higher socioeconomic status and income (Shaffer, 1987). In this respect, it is well known that employees on international assignments are particularly costly for most organisations. According to a report elaborated in 1996 by the Management Europe Center, the cost of an expatriate is about three times that of a domestic employee. Most multinational companies (MNCs) use the so-called balance-sheet approach in order to determine how much an expatriate should be paid (Organization Resources Counselors, 1998; Schell and Solomon, 1997). The objective of this approach is to maintain the employee’s purchasing power in different locations, as well as making international assignments appealing. To this end, the firm calculates how various categories of expenditures are affected by an overseas assignment, and provides differentials when needed. Moreover, some incentives or allowances – bonuses, currency insurance, etc. – are offered in order to encourage acceptance of an overseas assignment. Most companies also provide benefits such as domestic staff, childcare, health insurance, etc., which are not normally available for domestic employees (Guzzo et al., 1993; Chen et al., 2002). These incentives and allowances fail to be provided when the expatriate return home, leading to a substantial loss of income. In fact, such a loss of income is mentioned as one of the difficulties on return (Harvey, 1989). In sum, we could expect that, in principle, expatriates will be more satisfied with their salaries than both repatriates and domestic employees, as a result of their higher salaries and benefits. Thus, the following hypothesis results: H3. Compared to both repatriates and domestic employees, expatriates will report a

significant higher level of satisfaction with their salaries. Co-workers Social support can be defined in terms of the sources and quality of helping relationships. The literature on expatriation has often argued that the spouse and the family are the

most important sources of social support for expatriates. However, given that this study focuses on work-related variables, we choose to analyse another source of social support: an individual’s co-workers. Research on social networks has shown that social support from co-worker networks serve as a resource that affects job satisfaction (Hulbert, 1991; Hodson, 1997; Ducharme and Martin, 2000). Yet, it has also shown that social ties are less likely to develop between people who do not shared a common background. Thus, there is evidence that interactions with local peers are so scarce that expatriates miss an opportunity to learn about the host country culture (Adler, 1997). Maney and Stevenson (2001) explain these scarce interactions on the basis of their status differences. Three factors make that the status distinction between expatriates and local peers become a barrier for close ties among them. First, local employees see the culture of the home country as less accessible and may rarely initiate contact with expatriates. Second, in order to exploit their relative national advantages, MNCs frequently conduct activities in less-developed countries (Dunning, 1988). The cultures of countries of less national wealth are often characterised by higher power distance, which discourages local staff in those countries from interacting with expatriates. Third, communication is affected by the language abilities of both expatriates and local staff. For all these reasons, we can expect that expatriates will be less satisfied with co-workers than their national counterparts. As for repatriates, they usually experience difficulties in the process of adjusting to working with colleagues from their own culture (Hammer et al., 1998). Gomez Mejia et al. (1995) illustrate such difficulties with the example of an American expatriate who had worked in Spain, and who noted that: I began to take for granted the intense camaraderie at work and after hours among male friends. Upon returning to the US, I realised for the first time in my life how American males are expected to maintain a high psychological distance from each other, and their extremely competitive nature in a work environment. My friendly overtures were often misconceived as underhanded maneuvers for personal gain.

The conflict between the repatriate and his/her national counterparts is not only due to the psychological changes he/she has undergone living and working in another culture, but also to different host/home perceptions: host nationals understand that expatriates may not behave the way native members of the culture do, while members for the repatriate home culture do not expect the expatriate to act differently (Hammer et al., 1998). In light of the above considerations, we propose the following hypothesis: H5. Compared to both expatriates and repatriates, domestic employees will report a

significant higher level of satisfaction with coworkers.

Internal communication Being distant from headquarters for extended periods involves a risk and may lead to a feeling of isolation. As Daily et al. (2000, p. 520) puts it: “one could imagine a series of executive-level changes in personnel, practices, and responsibility about which the expatriate may not be well informed, due simply to the distance from headquarters”. Feelings of isolation lead to high perceptions of stress when the worker finds him/herself in a relatively new and unknown business environment, experiences

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difficulties of cross-cultural adjustment and does not get enough information from corporate headquarters. Under such conditions, the perceived stress will probably be higher than that of both repatriates and domestic employees. Given that lack of support and perceived stress lead to job-related strains such as dissatisfaction and turnover (Katz and Kahn, 1978), we propose the following hypothesis: H6. Compared to expatriates, both domestic employees and repatriates will report a

significant higher level of satisfaction with the company’s internal communication. Data, methodology and results The data for this study were taken from an organisational climate survey in Dragados y Construcciones, S.A., a leading Spanish construction company. The company’s international activities are located mostly in Latin America and, to a lesser extent, in Europe. At the time of the study, it employed 3,450 workers in Spain and had 138 Spanish expatriates working abroad. The company regularly collects the opinion of these employees on different aspects of the company’s management practices and policies. Local employees hired by overseas branches are not included in these surveys. Therefore, the population of the study are the company’s Spanish employees, either working in Spain or abroad. Data on employees’ attitudes were gathered through a self-administered questionnaire, which was distributed on November 2001. Respondents were ensured that individual responses were anonymous. A pre-test was run on one of the small units in the company (22 employees). This initiative allowed us to improve some of the questions and arrive at the final version of the questionnaire. The company coordinated the distribution and collection of the surveys with their internal mail services and forwarded them to the researchers from Universidad Carlos III of Madrid, who designed the questionnaire and conducted the statistical analyses of results. Employees were asked to provide demographic information as part of the self-report questionnaire. Information regarding age (in 15-year increments), hierarchical level (upper level managers, middle level managers, lower level managers, clerical staff, and blue-collar workers), functional position (line or staff), and international experience in the last two years (yes or no) was required from all employees. Gender was not requested to assure confidentiality, as there were only a few women at line positions. Those respondents with international experience were further required to indicate whether or not were they currently working abroad (yes ¼ expatriates; no ¼ repatriates). If they were expatriates, they were further required to provide information on previous international experience, length of time abroad, and area of assignment. If they were repatriates, they had to indicate the number of previous assignments, and the number of years abroad. The global response rate was 64.78 per cent. In the case of domestic employees, 1,616 valid questionnaires were received. In the case of expatriates, our sample was of 101 individuals. For repatriates, 117 valid questionnaires were received from employees who have been back in Spain during the last two years. Characteristics of the sample are presented in Table I. In addition to the demographic data, the questionnaire included 41 questions. They were classified into several sections which were concerned with different aspects of the company (the job, communication, career prospects, salaries, safe conditions, quality management initiatives, etc . . .). In this paper, we will only refer to those questions relevant for our research. Hence, we have considered the following variables:

Demographic variables Age 35 or less than 35 years old 36 through 50 years old 51 or more years old Hierarchical level Upper level managers Middle level managers Lower level managers Clerical staff Blue-collar workers Functional position Line Staff Information specific for employees with international experience Variables for expatriates Previous international experience Yes No Length of time abroad (years) Less than 1 More than 1 Area of assignment Asia Africa Europe Latin America North America Variables for repatriates Number of previous assignments 1 assignment More than 1 assignment Number of years abroad Less than 3 More than 3

Domestic (n ¼ 1; 616) Number %

Expatriates (n ¼ 101) Number %

Repatriates (n ¼ 117) Number %

365 601 617

23.1 38.0 39.0

23 37 41

22.8 36.6 49.6

30 39

25.6 33.3 41.0

329 379 381 296 231

20.4 23.5 23.6 18.3 14.3

46 19 13 7 16

45.5 18.8 12.9 6.9 15.8

55 21 10 10 21

47.0 17.9 8.5 8.5 17.9

1,136 468

70.8 29.2

79 22

78.2 21.8

91 26

77.8 22.2

43 57

43 57

34 67

33.7 66.3

1 35 29 34 2

1 34.7 28.7 33.7 2.0 54 62

46.6 53.4

79 38

67.5 32.5

Note: The sum of certain cells differs due to the fact that some employees failed to provide specific demographic data

.

Job characteristics. Job characteristics satisfaction was measured on a five-point Likert-type scale (alpha ¼ 0:76) that asked employees to indicate their level of agreement or disagreement with six statements about satisfaction with task clarity (t-clarity), task variety (t-variety), role discretion (autonomy), opportunities for learning (O-learning), possibility to apply one’s own knowledge (K-Applicability), and responsibility. For example, the statement for role clarity is: “I know exactly what is expected of me in my job”. This statement was taken from Shaffer et al. (1999).

Job satisfaction

117

Table I. Numbers and percentage of usable responses from domestics, expatriates, and repatriates for the demographic variables

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.

.

118 .

.

.

Pay satisfaction. A three-item scale (alpha ¼ 0:68) was used to measure salary satisfaction. Each item referred to one of the three main components of an employee’s compensation (base pay, variable pay, and benefits). Responses were made on a five-point scale (1 ¼ highly dissatisfied to 5 ¼ highly satisfied). Career prospects. Using a five-point Likert scale, we asked respondents a single statement regarding the extent to which there were good promotion opportunities (promotion) within the company. The statement was taken from Truss et al. (1997). Coworkers. Using a five-point scale, the respondents indicated the extent to which they agreed or disagreed with one statement regarding the level of support from co-workers (Co-workers). The statement was: “How much have you been able to rely on your co-workers when things get tough”. This statement was taken from Shaffer et al. (1999). Internal communication. Using a five-point Likert scale, we asked respondents a single statement regarding the extent to which there were satisfied with the quality of information they received from the company regarding the firm’s policies, practices and strategies. The statement was taken from Truss et al. (1997). General job satisfaction. Respondents were asked to indicate their level of agreement or disagreement with four items. These four items were: “I am satisfied with my job”, “I would take the same job again”, “I would recommend this job to a friend”, and “This job measures up to my expectations”. Responses were made on a five-point scale (1 ¼ strongly disagree to 5 ¼ strongly agree). The reliability of the scale proved acceptable (alpha ¼ 0:85).

Method and results The data were analysed in two phases. In Phase 1, since the three groups had a different profile in terms of hierarchical status (see Table I), we selected three homogeneous samples with respect to this demographic variable. Thus, for each group, we had 45 per cent upper level managers, 18 per cent middle level managers, 12 per cent lower level managers, 7 per cent clerical staff, and 16 per cent blue-collar workers. The selected sample is presented in Table II. Phase 2 of our empirical study consisted of determining whether differences existed between the mean responses of each sample group on each the work dimensions analysed. To this end, one-way analysis of variance (ANOVA) was used. Where differences did exist, Scheffe post-hoc tests were used to determine statistically

Hierarchical level

Table II. Selected sample

Upper level managers Middle level managers Lower level managers Clerical staff Blue-collar workers Total

Domestic ðn ¼ 723Þ Number % 329 136 93 50 115 723

45.5 18.8 12.9 6.9 15.9 100

Expatriates ðn ¼ 101Þ Number % 46 19 13 7 16 101

45.5 18.8 12.9 6.9 15.9 100

Repatriates ðn ¼ 81Þ Number % 37 15 10 6 13 81

45.7 18.5 12.4 7.4 16.0 100

significant differences between individual pairs or clusters of groups. Tables III and IV show the results of these analyses. H1 of this study states that: .

job satisfaction differences would exist between expatriates and the other two group of employees; and

.

expatriates would report a significant higher level of satisfaction with their overall job characteristics.

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119

The results of the one-way ANOVA test indicate that all means, with the exception of task clarity, were statistically different from each other. Scheffe test results also generally support H1. Although some groups were misclassified in some of the job characteristics Expatriates (n ¼ 101) M SD

Job characteristics Task clarity Task variety Autonomy O-learning K-applicability Responsibility Pay satisfaction Promotion Coworkers I-communication General J-satisfaction

3.88 3.89 3.69 3.44 3.66 3.77 1.79 2.84 2.86 1.67 3.58

1 0.93 1.09 1.16 1.03 0.97 0.78 1.03 1 0.9 0.98

Domestic (n ¼ 723) M SD 3.68 3.56 3.43 3.07 3.32 3.49 1.67 2.42 2.80 2 3.44

0.96 0.92 1 1.13 1.11 1 0.89 1.09 0.92 1.06 1

Repatriates (n ¼ 81) M SD 3.64 3.61 3.27 3.22 3.21 3.33 1.63 2.27 2.9 1.8 3.32

1.03 0.97 1.15 1.12 1.14 1.05 0.92 1.09 0.95 1.09 1.04

F

P

2.06 5.51 4.14 4.81 6.17 4.58 1.16 17.81 0.57 5.01 1.48

0.1276 0.0042** 0.0162* 0.0084** 0.0023** 0.0105* 0.3147 0.0004** 0.5654 0.0069** 0.2273

Notes: Means are responses to the five-point Likert scale survey; * p , 0:01; ** p , 0:001

Cluster 1

Overall mean

Task variety Autonomy

Expatriates Expatriates

3.89 3.69

O-learning K-applicability

Expatriates Expatriates

3.44 3.66

Responsibility

Expatriates

3.77

Promotion

Expatriates

2.84

Internal communication

Expatriates

1.67

a

Cluster group Overall Cluster 2 mean Domestic Domestic Repatriates Domestic Domestic Repatriates Domestic Repatriates Domestic Repatriates Domestic

Cluster 3

Table III. Satisfaction means, standard deviations, and ANOVA results for the three groups

Overall mean

3.56 3.41

Repatriatesa

3.61

3.07 3.24

Repatriatesa

3.22

Repatriatesa

1.8

3.48 2.41 2

Notes: Hypothesised that this group would be in the same cluster as domestic employees; Critical F-value = 2,42; rejection level ¼ 0:1; Groups within each cluster do not differ in their satisfaction levels; significant satisfaction levels exist between clusters

Table IV. Scheffe results for the significant differences

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(task variety and opportunities for learning), expatriates form a group whose job satisfaction mean is different from and higher than that of the other two groups. ANOVA results indicate that statistically significant differences exist among the groups in the mean satisfaction ratings on career prospects. Scheffe test results fully support H2 of this study. Essentially, this hypothesis states that: . differences exist between expatriates and the other two groups on career prospects; and . expatriates tend to be more satisfied with their career prospects. The results of the one-way ANOVA test for an overall difference between expatriates, repatriates and domestic employees on the mean ratings of salary satisfaction was not significant. Therefore, H3 was not supported. Also in contrast to H4, the results of analysis indicate that the three groups did not differ in the mean satisfaction rating on co-workers. H5 received partial support. The results of the ANOVA test indicate that, indeed, statistically significant differences exist among the three groups on the mean satisfaction ratings of internal communication. However, the three groups were misclassified in the Scheffe test results. Contrary to expectations, the group of repatriates did not form a cluster with that of domestic employees. It is worth noting that the low means in the satisfaction ratings of internal communication on each of the three groups are consistent with the results obtained by Truss et al. (1997), from which the statement of satisfaction with internal communication was taken. Although no formal hypothesis was developed, we exploratory investigated whether there were significant differences in general job satisfaction among the three groups. The result of the one-way ANOVA test for employee type on general job satisfaction mean was not significant. Although expatriates tend to be more satisfied with a number of the work-aspects analysed (i.e. the job, promotion), their level of general job satisfaction is not significantly different from that of the other two groups. Conclusion and discussion The present study aimed to provide an empirical evaluation of job satisfaction among expatriates, repatriates, and domestic employees. The empirical analysis consisted of asking the same job-related questions to these three groups, and after controlling for hierarchical status, comparing the extent to which their satisfaction levels differ. Some interesting results have been found. First, compared to both domestic employees and repatriates, expatriates are in general more satisfied with a number of job characteristics. Specifically, they value more positively the extent to which their jobs have task variety and autonomy, provide opportunities for learning, allow them to apply their knowledge and give them enough responsibility. These findings lend support to authors such as Guzzo et al. (1993) and Suutari (2003) who claim that the best part of international assignments is related to the new work experiences and learning they offer. Second, the expatriates’ satisfaction with career prospects is different from and higher than that of the other two groups. Consistent with other studies (Stahl et al., 2002), this finding suggests that the gap between high expectations and reality on return negatively affect the level of satisfaction. Finally, we have found that expatriates tend to be less satisfied with the company’s internal communication, a finding fully consistent with the extant literature on the feelings of isolation experienced by expatriates while working abroad.

On the other hand, the study failed to find differences among the three groups in other work-related variables. Thus, contrary to expectations, we did not find significant differences with respect to pay satisfaction. We expected that the high salaries and benefits enjoyed by expatriates would positively affect their satisfaction and put them in a more positive cluster with respect to both repatriates and domestic employees. To account for this result, we could draw on social comparison theory (Festinger, 1954; Adams, 1965) and argue that: . People care not so much about their absolute pay but they do care about being treated fairly. . The problem faced by expatriates in this area is that they usually compare themselves to multiple referent groups when assessing the fairness of their salaries (i.e. expatriates within the same company and host country; expatriates within the same company and other host countries; expatriates from other companies within their host country; local employees). In such a case, it might well be that high absolute pay levels are not very satisfying when perceived equity is low. Unfortunately, the lacking of questions regarding equity in salary levels among employees prevent us from supporting or rejecting this argument. Future research should explore this issue. Also contrary to our expectations (H4), we did not find significant differences among expatriates, repatriates and domestic employees in the mean satisfaction rating on co-workers. The way that satisfaction with co-workers was measured might explain these results. The respondents had to indicate the extent to which they had been able to rely on co-workers when things got tough. H4 assumed that: . co-workers will be employees from the same culture; and . the status distinction between employees from a different culture becomes a barrier for social ties. However, in answering the questionnaire, expatriates, for example, might well have assumed other expatriates to be their co-workers. This is a relevant element, because it is well documented that sharing a status group (expatriate vs local) provides common experience and points of view and therefore result in stronger social ties (Maney and Stevenson, 2001). To test the hypothesis fully, respondents should have been asked to indicate the national origin of co-workers. Clearly more research is needed on this issue. While the results of this study provide insight into the perceived impact of international assignments on some highly relevant work-related elements, they do not allow accurate conclusions to be drawn regarding the extent to which expatriates are more or less satisfied when compared to their national counterparts (repatriates and domestic employees). We investigated whether there were significant differences in general job satisfaction among the three groups, but we failed to find such differences. Although expatriates tend to be more satisfied with a number of the work-aspects analysed, their level of general job satisfaction was not significantly different from that of the other two groups. This result might be explained by the lack of inclusion of non-work variables in the study. In fact, in the case of expatriates, non-work factors seem to provide a key role in explaining their satisfaction with international assignments. For example, in another study, family situation was rated by expatriates as the most important contributor to expatriates’ satisfaction with international assignments. These non-work

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factors, such as spouse adaptation, integration within the local community, and logistics support, are complex issues and might have deteriorated the overall job satisfaction of expatriates from this sample. Future research on this topic should attempt to get more fine-grained data on non-work variables in these three groups and integrate them in the variables we have considered in this study. Our study is, then, a first step in this direction.

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HRM practices and MNC knowledge transfer

MNC knowledge transfer

Dana B. Minbaeva Department of International Economics and Management, Copenhagen Business School, Copenhagen, Denmark

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Abstract Purpose – The purpose of the paper is to determine and empirically examine the effect of human resource management (HRM) practices on knowledge transfer within multinational corporations. Design/methodology/approach – It is suggested that the employment of human resource practices, which affect absorptive capacity of knowledge receivers and support organizational learning environment, is positively related to the degree of knowledge transfer to the subsidiary. Moreover, the higher degree of knowledge transfer is expected when HRM practices are applied as an integrated system of interdependent practices. Hypotheses derived from these arguments are tested on the data from 92 subsidiaries of Danish multinational corporations (MNCs) located in 11 countries. Findings – Results of the analysis indicated the existence of two groups of HRM practices conducive to knowledge transfer. The simultaneous effect of the first group of HRM practices consisting of “staffing”, “training”, “promotion”, “compensation” and “appraisal” on the degree of knowledge transfer was found to be positive and substantial. The hypothesis regarding the effect of corporate socialization mechanisms and flexible working practices (the second group of HRM practices) was not supported by the data. The analysis also indicated that some HRM practices have a complementary effect on the degree of knowledge transfer when they are applied as a system. Research limitations/implications – While this study makes a contribution to our understanding of the relationship between HRM practices and knowledge transfer in the MNC, clearly, additional research is needed to develop this link further, which until now has been largely black-boxed. Originality/value – Makes a contribution to our understanding of the relationship of HRM practices and knowledge transfer in MNCs. Keywords Knowledge management, Multinational companies, Human resource management Paper type Research paper

Introduction Empirical studies on internal knowledge transfer in multinational corporations (MNCs) have been focusing on how knowledge transfer within MNCs depends on the characteristics of that knowledge (Zander and Kogut, 1995; Szulanski, 1996; Simonin, 1999), knowledge sources (Foss and Pedersen, 2002), knowledge senders (Lyles and Salk, 1996; Szulanski, 1996; Lane and Lubatkin, 1998; Gupta and Govindarajan, 2000; Lane et al., 2001), knowledge receivers (Szulanski, 1996; Gupta and Govindarajan, 2000), their relationships (Szulanski, 1996; Simonin, 1999; Bresman et al., 1999; Gupta and Govindarajan, 2000), etc. However, the referred literature has often paid very little attention to the idea that MNCs can institute various organizational policies and practices to facilitate knowledge transfer within MNCs. In the conclusions of those few The author gratefully acknowledges the support of the MANDI project (Managing the Dynamic Interfaces between Knowledge and Culture) undertaken at the Copenhagen Business School. The author also would like to thank Professor Nicolai Juul Foss (Copenhagen Business School) for his helpful comments on the paper.

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studies that included organizational practices (see for example, Lane and Lubatkin, 1998; Gupta and Govindarajan, 2000), we often find calls for further research on “the learning capacities of organizational units”, “more explicit description of the motivation and cooperative choices of the organizational individuals”, “organizational mechanisms to facilitate knowledge acquisition”, etc. Clearly, as a somewhat crude generalization, transfer of knowledge has been seldom consistently taken to be endogenous to organizational processes and arrangements (Foss and Pedersen, 2002). On the other hand, researchers working in the field of human resource management (HRM) more than a decade ago called for the transformation of the HRM system and identified the support to the process of organizational learning as the key strategic task facing the HRM function in many MNCs today (Pucik, 1988). Lado and Wilson (1994, p. 699) suggest that HRM practices “can contribute to sustained competitive advantage through facilitating the development of competencies that are firm specific, produce complex social relationships, . . . and generate organizational knowledge”. Clearly, HRM practices and knowledge-related outcomes are associated, but their link still misses some important aspects of the interpretation and empirical support. The paper aims to explore why this association exists and how various HRM practices influence knowledge-related outcomes. In particular, it is proposed that more extensive employment of HRM practices (those affecting knowledge receivers’ ability and motivation, and supporting organizational learning environment) enhance knowledge transfer within MNCs. Furthermore, from the previous studies we have learned that HRM practices applied as a coherent system have greater effect on organizational outcomes than the sum of the individual effects from each practice alone (Ichniowski et al., 1997). Therefore, it is also suggested that the impact of HRM practices on the degree of knowledge transfer is stronger when HRM practices are applied as a system of mutually reinforcing practices. The novelty of the study is in bringing together two fields, which have not met very often: knowledge transfer and HRM. It is among the first attempts to examine empirically the role of HRM practices in the process of knowledge transfer within MNCs. The study differs from the existing limited work on HRM and knowledge transfer by introducing the wider range of HRM practices and looking at their system effect. The knowledge-driven HRM practices Theoretical papers and numerous case studies have illustrated that knowledge management and HRM are linked. Developing the link further is a matter of penetrating the issues of what HRM practices and in which combinations do they matter for MNC knowledge transfer process. What HRM practices? Managing human resources to achieve better knowledge-related outcomes means “retaining personnel, building their expertise into the organizational routines through learning processes, and establishing mechanisms for the distribution of benefits arising from the utilization of this expertise” (Kamoche and Mueller, 1998, p. 1036). To identify which HRM practices could be employed to help organizations to achieve knowledge-related outcomes, a brief review of representative case-based and existing empirical studies undertaken by scholars from different research fields (international HRM, innovation, strategy, international business, etc.) on the link between HRM practices and various knowledge-related outcomes is necessary. The purpose is to determine what

HRM practices organizations could employ to enhance knowledge-related outcomes, otherwise known as knowledge-driven HRM practices. Using an illustrative case study, Gupta and Singhal (1993) investigate how companies manage human resources to foster innovation and creativity. They conceptualize HRM practices along four dimensions (Gupta and Singhal, 1993, pp. 41-2): (1) Human resource planning, which includes creating venture teams with a balanced skill-mix, recruiting the right people, and voluntary team assignment. This strategy analyzes and determines personnel needs in order to create effective innovation teams. (2) Performance appraisal, which includes encouraging risk taking, demanding innovation, generating or adopting new tasks, peer evaluation, frequent evaluations, and auditing innovation processes. This strategy appraises individual and team performance so that there is a link between individual innovativeness and company profitability. Which tasks should be appraised and who should assess employees’ performance are also taken into account. (3) Reward systems, which includes freedom to do research, freedom to fail, freedom to form teams, freedom to run businesses, balancing pay and pride, noticeable pay raises, dual career tracks, promoting from within, recognition rewards, and balancing team and individual rewards. This strategy uses rewards to motivate personnel to achieve an organization’s goals of productivity, innovation and profitability. (4) Career management, which includes empowering people, leading by example, and continued education. This strategy matches employees’ long-term career goals with organizational goals through continuing education and training. Recently, international business researchers have identified the role of HRM practices in the organizational learning as one subject of inquiry. For instance, Lane and Lubatkin (1998) look at the similarities and differences between the student and teacher firms in their study on relative absorptive capacity and interorganizational learning. Among other factors, the researchers consider compensation practices and find that a firm’s ability to learn from another firm depends on the relative similarities of compensation policies in the student and teacher firms. Lyles and Salk (1996), and Lane et al. (2001) find training programs to be an important knowledge acquisition mechanism. They claim that, when properly organized, training programs are also important vehicles for establishing contacts between local and parent companies’ employees, and thus promote collaboration and knowledge exchange. In Minbaeva et al. (2003) an effort is made to diverge from previous work on knowledge transfer within MNCs by integrating this stream more closely with the HRM-performance literature. The results of the study indicate that investments in the development of absorptive capacity of knowledge receivers through the extensive use of training, performance appraisal, performance-based compensation and internal communication contribute to MNCs knowledge transfer. Similar discussions have been undertaken in innovation literature. Laursen and Foss (2003, p. 249) investigate the link between new HRM practices and innovation performance, arguing that HRM practices are “most conducive to innovation performance when adopted, not in isolation, but as a system of mutually reinforcing practices”. Applying principal component analysis, they identify two HRM systems that influence innovation performance. The first consists of HRM practices, which

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affect employees’ ability to innovate. They are interdisciplinary workgroups, quality circles, systems for the collection of employee proposals, planned job rotation, delegation of responsibility, integration of functions, and performance-related pay. The second system is dominated by internal and external training. The overall conclusion is that “while the adoption of individual HRM practices may be expected to influence innovation performance positively, the adoption of a package of complementary HRM practices could be expected to affect innovation performance much more strongly” (Laursen and Foss, 2003, p. 257). From the reviewed articles we learned that there are certain knowledge-driven HRM practices, the extensive use of which enhances knowledge-related outcomes. We also learned that the existing empirical work on the relations between HRM practices and knowledge-related outcomes has exclusively focused on the individual HRM practices and their isolated effect. That could become a serious limitation since HRM is defined as “a set of distinct but interrelated activities, functions, and processes that are directed at attracting, developing and maintaining (or disposing of) a firm’s human resources” (Lado and Wilson, 1994, p. 701, emphasis added). Which combinations of HRM practices? Once the question what HRM practices is addressed, the next step is to determine in which combination HRM practices matter to knowledge transfer. The literature offers several choices. According to Wright and Boswell (2002) there are three alternatives to classify practices available to the researchers: conceptual (used for example Gardner et al., 2000); factor analytic (used for example Huselid, 1995); and cluster analysis (used for example Becker and Huselid, 1998). Conceptually it is be possible to identify HRM practices, which application enhances mediating variables (as it was recommended by Guest, 1997). Alternatively, the groups of HRM practices may be identified through some form of factor or principal component analysis. Generally speaking, factor analytic solution is useful when researchers wish to uncover the latent structure (dimensions) of a set of variables. In studies on HRM practices factor analysis has been used mainly for the following purposes: . to reduce a large number of independent variables; . to select a subset of independent variables from a larger set, based on which original variables have the highest correlations with the principal component factors; . to create a set of factors to be treated as uncorrelated variables as one approach to handling multicollinearity in such procedures as multiple regression; and . to validate a scale or index by demonstrating that its constituent items load on the same factor, and to drop proposed scale items which cross-load on more than one factor. The final alternative is to use a cluster analysis. The cluster solution is possible when there is “a single most effective HRM system and a large group of firms have adopted it” (Delery, 1998, p. 301). The technique has been applied in several studies (see for example Arthur, 1992). Its proponents believe that when compared to factor analysis the cluster analysis does not assume linear relationships between practices, which may be crucial in some cases (Becker and Gerhart, 1996). However, the cluster technique was found to be less useful for testing theoretical frameworks (Delery, 1998).

Despite the variety of the statistical tools to classify the HRM practices, the literature recommends grouping of the practices to be derived from the theoretical rationales (MacDuffie, 1995; Youndt et al., 1996). It is not, however, often pursued and repeatedly “statistical sophistication appears to have been emphasized at the expense of theoretical rigor” (Guest, 1997, p. 263). In this paper, the following steps are taken to address this weakness. In the following section, first the mediating variables, which determine the relationships between HRM practices and knowledge transfer, are introduced. Then, the groups of HRM practices that produce those mediating variables are theoretically identified. In the analysis part of the paper, the grouping of HRM practices is justified through the factor analysis. Based on the grouping, two hypotheses on how HRM practices could influence knowledge transfer are derived. Finally, the issue of complementarity, within each of the identified groups of HRM practices and between them, is addressed. What is inside the “black box”? There are at least two mediating variables that should have been considered when arguing for a link between HRM practices and knowledge transfer. They are knowledge receivers’ ability and willingness to absorb knowledge, and the environment in which knowledge is determined, shared, interpret and used collectively. The inability of knowledge receivers to recognize the value of new information, assimilate it, and apply it to commercial ends (low absorptive capacity) is one of the most often referred impediments to knowledge transfer (Cohen and Levinthal, 1990). It has been proposed in the knowledge transfer literature that absorptive capacity of the receiving unit is the most significant determinant of internal knowledge transfer in MNCs (Gupta and Govindarajan, 2000). Subsidiaries differ in their absorptive capacity, and this affects the level of internal knowledge transfer (Lyles and Salk, 1996; Szulanski, 1996, Mowery et al., 1996; Lane and Lubatkin, 1998; Gupta and Govindarajan, 2000; Lane et al., 2001). Absorptive capacity has been conceptualized as comprising both employees’ ability and motivation. Both aspects of absorptive capacity (ability and motivation) need to be present in order optimally to facilitate the absorption of knowledge from other parts of the MNC (Minbaeva et al., 2003). Even subsidiaries with highly-skilled and motivated employees will not be effective in knowledge transfer if subsidiaries are unsuccessful in building the infrastructure of learning and supporting learning environment. Knowledge transfer will be higher within certain organizational contexts where communication bridges between people and possibilities for dialogue across organizational hierarchy exist, where continuous learning opportunities are offered to employees, where systems to capture and share learning within the organization are established, etc. (Leavitt and March, 1988; Senge, 1990; Argyris and Schon, 1996). The purpose of the following is to determine HRM practices, which enhance knowledge transfer by developing absorptive capacity of knowledge receivers and supporting organizational learning environment. Developing absorptive capacity of knowledge receivers Absorptive capacity has two elements: prior knowledge and intensity of effort (Cohen and Levinthal, 1990; Kim, 1998). “Prior knowledge base refers to existing individual units of knowledge available within the organization” (Kim, 1998, p. 271). Thus, employees’

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ability, their educational background and acquired job-related skills represent the “prior related knowledge” which the organization needs to assimilate and use (Cohen and Levinthal, 1990). However, in order to perform effectively individuals should have both ability and willingness to absorb transferred knowledge. Indeed, few would question that “if individuals possess the prerequisite ability to learn . . . performance will likely be poor if motivation is low or absent” (Baldwin et al., 1991, p. 52). What HRM practices could enhance ability and motivation of knowledge receivers? As outlined by Huselid (1995), organizations, interested in achieving better individual ability, should employ those HRM practices that aim at acquiring, developing and retaining human capital. For example, an analysis of the competencies needed for different positions – together with an analysis of the firm’s current pool of employee competencies – helps the organization specify the desired skills and knowledge. Staffing procedures aim to bring into vacant positions people with the identified skills and knowledge. There is extensive evidence that investment in employees’ training enhances the human capital of the organization, which later results in a positive relationship between employee training and organizational performance (Delaney and Huselid, 1996; Koch and McGrath, 1996). In addition, performance appraisal (or performance management) systems provide employees with feedbacks on their performance and competencies, and give directions for enhancing their competencies to meet the needs of the organization. “The effectiveness of even highly skilled employees will be limited if they are not motivated to perform” (Huselid, 1995, p. 637). HRM practices may influence individual performance by providing incentives that elicit appropriate behaviors. Such incentive systems may include performance-based compensation and the use of internal promotion systems that focus on employee merit and help employees to overcome invisible barriers to their career growth (Huselid, 1995). Indeed, while from an expectancy theory point of view it is the existence of a clear linkage between individual effort and reward that matters, from an equity theory (and organizational justice) perspective the main question is whether employees perceive that they receive the rewards that they are entitled to based on their contribution to the organization. Both perspectives would lead us to expect a positive relationship between performance-based compensation systems and employee effort. Promoting employees from within the firm is likely to provide a strong motivation for employees to work harder in order to be promoted (Pfeffer, 1994; Lepak and Snell, 1999). In addition, a philosophy of internal promotion indicates that a firm has decided to invest in its employees and is thus committed to them. In sum, staffing, training, promotion, compensation and appraisal are expected to enhance knowledge transfer to the subsidiary through their affect on ability and motivation of knowledge receivers. H1. The more the subsidiary adopts HRM practices, which affect absorptive capacity

of knowledge receivers, the higher degree of knowledge transfer to the subsidiary is expected. Supporting learning environment Knowledge transfer is possible only when the close relationships between senders and receivers are established (Ghoshal and Bartlett, 1988; Gupta and Govindarajan, 2000). Rigid organizational boundaries impose high barriers, which impede knowledge flows

at all levels of the MNC. By employing organizational practices that remove traditional boundaries, melt the bureaucratic structures and support learning, organizations may establish the environment that promotes knowledge transfer. MNCs are multi-level entities, in which knowledge transfer takes place within at least two contexts – inter-organizational (between the focal subsidiary and the sister subsidiaries, the focal subsidiary and the headquarters) and intra-organizational (within the focal subsidiary, between its sub-units). Empirical researchers named frequency of communication in inter-organizational context as an important determinant of knowledge transfer process (Szulanski, 1996; Birkinshaw et al., 1998; Bresman et al., 1999; Gupta and Govindarajan, 2000). Szulanski (1996, p. 32) argues that “a transfer of knowledge, especially when the knowledge transferred has a tacit components, may require numerous individual exchanges”. Gupta and Govindarajan (2000) consider not only the existence of communication channels, but also the richness of communication, captured as informality, openness, and density of communication. In particular, they find that corporate socialization mechanisms linking a focal subsidiary to the rest of MNC are positively associated with the knowledge transfer into that subsidiary. There is also an increasing need for unobstructed knowledge transfer in intra-organizational context. The appearance of new forms of working practices such as flexible working practices reflects that need. Indeed, Hansen (1999) concludes that the lack of direct relations between people from different departments within the organization inhibits knowledge transfer. Crossing traditional organizational boundaries is important for effective use of obtained knowledge through common projects, decentralized and autonomous groups, flexible working arrangement, etc. In the empirical studies, flexibility was found to be associated with learning opportunities, organizational climate for innovation and development, higher capacities to absorb knowledge, etc. Lyles and Salk (1996, pp. 881-2) postulate that flexibility promotes knowledge transfer process: “by encouraging greater receptivity of organizational members to new stimuli from the outside, by promoting collaboration and exchanges of information within the organization and by granting members greater latitude in altering activity patterns and ways of doing things to adopt to perceived changing needs an conditions”. Overall, it is expected that corporate socialization mechanisms employed across MNCs units and flexible working practices employed within the subsidiary support learning environment and thereby increase knowledge transfer to the subsidiary: H2. The more the subsidiary adopts HRM practices, which support learning

environment, the higher degree of knowledge transfer to the subsidiary is expected. Evidence of complementarity? As mentioned, HRM practices are expected to have a stronger effect on the degree of knowledge transfer when they are applied as a system of mutually reinforcing practices. As defined in Milgrom and Roberts (1990, 1995, p. 181), a system effect/complementarity occurs when “doing more of one thing increases the returns of doing more of the others”. Milgrom and Roberts (1990, 1995) do not assume an effect on performance from a simple pairwise relationship between two practices. Instead, they argue for multiple, complex interactions among several practices, reinforcing the effect of other practices in either a positive or negative direction. Overall, we should expect

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the full system effect of complementary practices to be larger than the sum of the marginal effects from adopting each practice individually (Ichniowski et al., 1997). In the HRM literature, the methods for testing complementarity vary substantially. However, a closer look indicates two simple alternatives – an additive approach vs a multiplicative approach. Researchers who argue for the additive approach believe that its “desirable property” is that “the sum of normally distributed variable scores is still normally distributed, which is not try for the multiplicative product” (MacDuffie, 1995, p. 204). Others believe that “the hypothesis of synergies implies that we should test for interactive effects, as the synergy argument is that the effects of subsets of work practices are greater when they are implemented jointly” (Capelli and Neumark, 2001, p. 758). Capelli and Neumark agree with MacDuffie’s counter argument that a multiplicative approach implies that if one work practice is not present the others have no effect. However, “as long as the main effects are entered along with the interactive effect, this criticism does not apply” (Capelli and Neumark, 2001, p. 758). In their argumentation Capelli and Neumark rely to large extent on findings of Ichniowski et al. (1997, p. 296), who suggested: “to examine the importance of sets of highly correlated and presumably complementary HRM practices, one must examine the effects of interactions among the practices”. However, researchers face a problem if they decide to test complementarity using the interaction terms. With a few HRM practices, there are often an insufficient number of degrees of freedom to test a full set of interaction terms among all HRM practices. For instance, in the data set of this paper I test the impact of seven potentially complementary HRM practices on the degree of knowledge transfer. Adding two-way interactions (21 two-way interactions) while controlling for a main effect (seven individual practices) would result in 28 independent variables. Such analysis would require a larger sample and sufficient number of degrees of freedom (at least 140 observations). Some authors introduce higher-order interactions (see for example, MacDuffie, 1995). However, this solution is often criticized since the information provided by these effects is difficult to interpret. A solution is to use a smaller set of interaction terms. The critiques warn that there may be “lack of theoretical motivation for the selection of combinations . . . lack of clarity as to why certain combinations are selected over others . . . (and the fact that) the authors consider only complementarities between several single practices” (Horgan, 2003, p. 124). But the critique is incongruous when combinations of HRM practices are defined conceptually (theoretically defined, reliability analysis) and/or empirically (factor analysis, cluster analysis). If grouping of HRM practices is done theoretically, the next step is to transform the individual variables into aggregate variables and then “explore complementarities between them by comparing the performance relationships of these singly and in various “system” combinations” (Whittington et al., 1999). Complementarities may also be explored within the groups of HRM practices (Delaney and Huselid, 1996). Taking into consideration the above arguments the following approach for testing complementarity is chosen. In the previous section two groups of HRM practices were identified theoretically. The first group contains the practices influencing absorptive capacity of knowledge receivers. They are selection, promotion, training, compensation and appraisal. The second group consists of two practices supporting learning environment. They are corporate socialization mechanisms and flexible working

practices. First, the grouping is to be verified through reliability test and factor analysis. Second, I introduce two-way interactions between individual HRM practices within each group and then check for complementarity between two groups of HRM practices. Theoretical expectations regarding complementarity are that the system effect of HRM practices on the dependent variable should be stronger than of the single practice. More detailed discussion on the expectations is found in the next section in which three hypotheses on complementarity are developed. It is expected that staffing, promotion, training, compensation and appraisal, when applied as a system of mutually reinforcing practices, help MNCs to achieve higher outcomes, in terms of the degree of knowledge transfer to the subsidiary. Staffing (job analysis, recruitment and selection procedures) serves as the backbone for nearly all HRM activities of the organization. In the high performing organizations, staffing and promotion practices are closely connected since the organizations extensively use internal recruitment for all positions, including managerial, and prefer promotion from within to recruitment from outside. Placement decisions involving internal transfers, promotions, and demotions are also informed by the various selection approaches and by performance appraisals. Performance management is a process of identifying how closely the actual behavior matches the expectations derived from the previous job analysis. If the behavior of an individual departs significantly from the expectations (both positively and negatively), further actions should be taken to improve the actual behavior (training and transfer) and motivate for even better performance (compensation and benefits). The high performing organizations utilize the performance appraisal results to customize compensation programs for “must-keep” employees. Thus: H3a. The higher degree of knowledge transfer is expected when HRM practices, which

affect absorptive capacity of knowledge receivers, are applied as a system of mutually reinforcing practices. The higher degree of knowledge transfer is expected when closer relationships between knowledge senders and receivers are established within both inter- and intra-organizational context. Ghoshal and Bartlett (1988) find that normative integration and communication within both inter- and intra-organizational contexts appeared to be positive to creation, adoption and diffusion of knowledge by MNCs’ subsidiaries. The findings are supported by Gupta and Govindarajan (2000), who advocate a multi-level perspective in analyzing knowledge transfer. Overall, it is expected that complementarity among HRM practices, which support learning environment at inter- and intra-organizational levels, is to be positive: H3b. The higher degree of knowledge transfer is expected when HRM practices, which

support learning environment, are applied as a system of mutually reinforcing practices. Previous research has shown that absorptive capacity will be higher when extensive intra-organizational communication is in place (Minbaeva et al., 2003). Knowledge transfer is expected to be higher within a certain organizational context due to promoting collaboration and social exchanges. Conceptually, this argument is in line with research on the social character of learning. According to the latter, it is important to focus on “the structure of communication between the external environment and the organization, as well as among the subunits of the organization, and also on the

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character and distribution of expertise within the organization” (Cohen and Levinthal, 1990, pp. 131-2). Hence, it may be useful to consider the system effect between two groups of HRM practices influencing two determinants of knowledge transfer, i.e. affecting absorptive capacity and supporting a learning environment. Dealing with only one determinant is not likely to enhance knowledge transfer unless the other determinant is considered as well. Thus: H3c. The higher degree of knowledge transfer is expected when HRM practices, which

affect absorptive capacity of knowledge receivers and support learning environment, are applied as a system of mutually reinforcing practices.

Data and method The hypotheses are tested on a data set of the subsidiaries of Danish MNCs (headquartered in Denmark). For the construction of the data set the Hermes CD Direct from Kobmandstandes Oplysnings Bureau (KOB) was used. The database query was initiated by selecting the firms with headquarters in Denmark, and then limited to the ones, which had two or more subsidiaries abroad. This limitation was introduced as a result of the chosen operationalization of the degree of knowledge transfer. As will be discussed later this study has adopted the measure of knowledge transfer as a composite index of various types of knowledge transferred to the focal subsidiary from the headquarters and the sister subsidiaries. The procedure resulted in a list that was crosschecked with the Borsen 500 in order to ensure that the population was as complete and relevant as possible. Then, the number of the MNCs included in the sample was further limited to subsidiaries, which employ more than 30 employees. This limitation was necessary since small-scale companies in general and small subsidiaries in particular do not employ a big range of formal HRM practices (Miner and Crane, 1995). Some of the Danish headquarters provided names and contacts at their subsidiaries; for other subsidiaries contacts were obtained from the foreign commercial sections of the Danish embassies in the respective countries. The final data set consisted of 305 Danish subsidiaries located in Europe, Asia, and North America. To test the hypotheses empirically, a questionnaire survey methodology was chosen. The new questionnaire was developed using a combination of prior related surveys (Gupta and Govindarajan, 2000; Szulanski, 1996; Simonin, 1999; Zander, 1991; Brewster et al., 2001) and findings from the pilot case studies (more on measures in the next section). The variables were captured through perceptual, self-report measures. To deal with the reliability of the perceptual measures, the inter-rate reliability test recommended by Gupta and Govindarajan (2000) was conducted prior to the analysis. The language of the questionnaire was English. Explanations of such terms as knowledge, knowledge transfer, and the degree of knowledge transfer were provided at the start of the questionnaire. The questionnaire was pre-tested. The purpose of the piloting stage was to try out the preliminary version on a small sample of potential respondents, people knowledgeable about the subject and people ignorant of the subject. Managers interviewed in the pilot study were asked to complete the questionnaire and provide written feedback. The feedback from researchers and colleagues proved to be useful since they were very knowledgeable about the subject. Feedback from unknowledgeable pilot testers was also beneficial to estimate where the

wording and sentences were too heavy for comprehension, where the language was incorrect, where the answering process was considered boring. Selecting appropriate knowledgeable key informants was critical since the reliability of information about activities related to a subsidiary depended on whether the selected persons had the required knowledge. Since the survey had a lot of questions on HRM practices and employees’ behavior, it was decided to address the questionnaire to a HRM manager/general manager of the focal subsidiary. If the approached manager was unable to complete the survey, it was up to the individual to forward the questionnaire to another senior/middle level manager with sufficient knowledge regarding the themes of the study. Owing to the time and cost considerations, it was decided to use a web-based survey. The respondents were approached by the cover letter sent via email. The emails were as personalized as possible since personalization was reported to be “an important element in increasing the response rate“ (Schaefer and Dillman, 1998, p. 380). Each e-mail was addressed to one individual, had a name of that individual at the top and a name of the person through whom the contact was obtained (if applicable). In earlier studies it was found out that unsolicited questionnaires sent via e-mail are unacceptable (Schaefer and Dillman, 1998). Instead, the cover letter/e-mail explained the purpose of the survey, informed about the research process and analysis procedures, offered follow up reports and related working papers, and provided with straightforward directions about how to complete the questionnaire. The cover letter also contained a link to the questionnaire. The survey was put on the web page that could only be accessed through that link. This restricted unwanted answers and decreased the risk of potential error. An additional web page was established to back up the survey. The respondents were invited to visit the web page and read more about the survey subjects and the related themes. The resulting data set consisted of 92 subsidiaries (response rate of 30 percent). The subsidiaries were located in the USA, China, Germany, Sweden, the UK, Russia, Poland, France, Sri Lanka, India, and Portugal. Descriptive data (mean values, standard deviation, minimum and maximum values) on all variables are provided in Table I.

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Measures Dependent variables The measure for the dependent variable was adopted from Gupta and Govindarajan (2000). Degree of knowledge transfer (DoKT). The degree of knowledge transfer was defined at the beginning of the questionnaire as the extent to which the subsidiary’s employees Variable

Label

Degree of knowledge transfer Staffing Training Promotion Compensation Performance appraisal Corporate socialization mechanisms Flexible working practices

DoKT Staffing Training Promotion Compensation Appraisal Inter Intra

Minimum Maximum 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

4.36 5.00 5.00 5.00 5.00 5.00 5.00 5.00

Mean

Std. deviation

2.4922 3.2815 3.1259 3.4398 3.4944 3.0274 2.3483 2.6579

0.83605 0.87039 0.90474 0.98587 0.98156 1.14228 0.91826 1.22804

Table I. Descriptive statistics for all variables

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received knowledge, transferred to the subsidiary from the rest of MNC (headquarters and sister subsidiaries). Following Gupta and Govindarajan (2000) the data were collected on the following items: marketing know-how, distribution know-how, packaging design/technology, product designs, process designs, purchasing know-how and management systems and practices. Based on these, the respondents were asked to evaluate separately the degree of knowledge transfer from the sister subsidiaries and from the headquarters using a five-point Likert-type scale, where 1 indicates very low use of knowledge and 5 indicates substantial use of knowledge. Responses were averaged to yield a composite index reflecting the degree of knowledge transfer to the focal subsidiary from the rest of the MNC. Cronbach alpha is 0.84. Independent variables In the literature the traditional measures for HRM practices do not correspond to the theoretical assumptions behind the knowledge-driven HRM practices (Keegan and Turner, 2001). Thus, some of the existing measures for high performance HRM practices were adopted from the previous studies and some of them were modified. The measures developed and described in Huselid (1995), Huselid et al. (1997) and Delaney and Huselid (1996) were used as main sources of inspiration. Additionally, scales were adopted from the Cranet survey on international human resource management (for 1991, 1995, 1999). The measures were cross checked with the conclusions of theoretical papers, findings from the case studies and limited empirical work on the link between HRM and knowledge-related outcomes. The respondents were asked to mark the number that best indicates the degree to which each statement describes HRM practices employed within their subsidiary. Respondents indicated this on a five-point Likert-type scales ranging from 1 ¼ never to 5 ¼ always. Staffing (Staffing). Staffing procedures aim to bring into vacant positions people with the previously identified skills and knowledge. The extent to which subsidiaries apply staffing procedures is measured through three items capturing the extent of competence-based job analysis, recruitment procedures, and variety of selection procedures used. Cronbach alpha is 0.65. Training (Training). The extent of regular organized training was measured using an index comprised of three items: job-related skills training, regularity of training, and extent of degree-earnings programs supported by the organization. Cronbach alpha is 0.71. Promotion (Promotion). The importance of merit-based promotion and internal transfer schemes is measured by an index comprised of two items. The first item measures whether promotion decisions are made of the basis of employees’ previous performance and achievements. The second measures the extent of internal transfer taken place to allocate and retain talented people. Cronbach alpha is 0.67. Compensation (Compensation). The degree of use of incentive compensation systems was measured using two items: performance-based compensation and extra recognition for superior performance. Cronbach alpha is 0.79. Performance appraisal (Appraisal). One item is used to measure the extent to which the results of performance appraisal are used for developmental purposes. Corporate socialization mechanisms (Inter). One item measures the existence of corporate socialization mechanisms across MNC, which enhance inter-personal familiarity, personal affinity among employees from different subsidiaries.

Flexible working practices (Intra). One item measures the use of flexible working practices – such as flexitime, job sharing, part-time work – to accommodate best the individual working arrangements preferences. Results The correlation coefficients were shown in Table II. There were high associations among HRM practices: 15 correlations out of a possible 21. Almost all HRM practices (except “inter” and “intra”) were pairwise correlated. Some of the correlation coefficients indicated the possibility of multicolinearity (i.e. r . 0:5). Thus, the previous choice of a factor analytic solution proved to be useful: it is a way to create a set of factors to be treated as uncorrelated variables as one approach to handling multicollinearity in regression. Following Huselid (1995), the independent variables were factor-analyzed using the principal component analysis. Factor loadings for each factor, eigenvalues and percentage of variance explained by each factor were reported in Table III. The analysis had a confirmatory rather than exploratory nature. As expected, two factors with eigenvalues . 1 emerged from the analysis. Factor 1 included a range of HRM practices employed to improve ability and motivation of knowledge receivers. Among them were “staffing”, “training”, “promotion”, “compensation” and “appraisal” (Cronbach alpha 0.80). Factor 2 included corporate socialization mechanisms and flexible working practices employed to support a learning environment. Cronbach alpha was much lower than for the first factor (0.30).

1. 2. 3. 4. 5. 6. 7. 8.

DoKT Staffing Training Promotion Compensation Appraisal Inter Intra

1

2

3

4

5

6

7

8

1.00 0.137 0.127 0.231** 0.169 0.301*** 0.194* 0.063

1.00 0.528**** 0.467**** 0.514**** 0.541**** 0.304*** 0.059

1.00 0.496**** 0.555**** 0.314*** 0.274*** 0.094

1.00 0.406**** 0.377*** 0.134 0.016

1.00 0.426**** 0.249** 0.011

1.00 0.157 20.013

1.00 0.187

1.00

Notes: * p , 0:1; ** p , 0:05; *** p , 0:01; **** p , 0:001

Variables Staffing Training Promotion Compensation Appraisal Inter Intra Initial eigenvalues Percentage of variance

Factor 1

Factor 2

0.816 0.796 0.765 0.762 0.662 0.357 0.100 3.039 43.415

20.127 0.095 20.048 20.144 20.192 0.613 0.822 1.137 16.237

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Table II. Correlation matrix

Table III. Factor loadings for independent variables – extraction method: principal component analysis

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To test H1 and H2, regression analysis on the degree of knowledge transfer was carried out. Model 1 in Table IV presented the results of the regression analysis when two factors (Factors 1 and 2) were entered simultaneously (as recommended by Huselid, 1995). The overall model was statistically significant (p , 0:001) with R-square 0.187 (adjusted R-square 0.163). The simultaneous effect of “staffing”, “training”, “compensation”, “promotion” and “appraisal” (Factor 1) on the degree of knowledge transfer was positive and highly significant (p , 0:001). H1 is supported. The effect of Factor 2 (“inter” and “intra”) on the dependent variable was in the expected direction but insignificant. It was anticipated since Cronbach alpha of 0.30 for Factor 2 was too low to use the factor as a coherent construct. Models 2, 3, 4, 5 and 6 reported the results of the regression analyses carried out to test H3a, H3b and H3c. At a first glance, the presence of complementarities was indicated by the presence of pairwise correlations among HRM practices. As expected, the correlations were generally positive and substantial (Table II). However, it is not enough. The logic of complementarity implies that “full system effects outweigh individual component effects” (Whittington et al., 1999, p. 585). Thus, to test for complementarity effect of HRM practices affecting absorptive capacity (H3a) first “staffing”, “training”, “compensation”, “promotion” and “appraisal” were entered simultaneously (Model 2). Then, the impact of interactions between individual practices on knowledge transfer was tested while controlling for their main effect (Model 3). Both models were significant with p , 0:05 and R-square 0.183 (adjusted R-square 0.123) for Model 2 and R-square 0.340 (adjusted R-square 0.166) for Model 3. Among HRM practices affecting absorptive capacity, only training and compensation, and promotion and appraisal were mutually reinforcing. Indeed, the individual effects of compensation, promotion and appraisal were insignificant and the effect of training was only slightly significant (p , 0:10). Only when applied together did these practices provide a significant influence on the degree of knowledge transfer. The interaction effects of “training £ compensation” and “promotion £ appraisal” were positive and significant at p , 0:05 and p , 0:10 accordingly. The same tests were carried out for H3b (Models 4 and 5) and H3c (Models 1 and 6). Neither of the hypotheses were confirmed. The individual effect of “inter” remained positive and significant even when the interaction “inter £ intra” was entered. H3b did not find any support. The interaction effect of Factor 1 and Factor 2 was insignificant. The positive and significant effect of Factor 1 remained at level p , 0:001. All tested models were significant. The highest explanatory power of 34 percent was achieved in Model 3. However, the highest adjusted R-square (0.176) was reported in Model 6, which tested the complementarity effect of HRM practices both affecting absorptive capacity and supporting a learning environment. The adjusted R-square has the advantage over the normal R-square since it will not always increase when we add variables, but only increases if variables add significantly to the model. Concluding remarks This paper aimed to determine and examine empirically HRM practices, the employment of which may help MNCs to overcome knowledge transfer barriers. From the previous research on MNC knowledge transfer it was concluded that among other things MNCs should develop employees’ ability and motivation to absorb knowledge,

7.917**** 0.187 0.163

0.272**** 0.70 0.061 0.70

2.576**** 0.70

Model 1 b S.E.

3.011** 0.183 0.123

1.437**** 0.041 0.199* 20.003 0.032 0.095

1.957** 0.340 0.166

20.116 20.038 20.257 20.093 20.126 0.329** 0.177 20.044 0.199* 20.064

0.174 0.155 0.173 0.136 0.130 0.161 0.113 0.149 0.114 0.134

1.258 0.743 0.660 0.597 0.438 0.512

Model 3 b S.E.

0.332 0.670 0.121 1.836** 0.111 20.681 0.092 0.147 0.095 0.131 0.076 20.728

Model 2 b S.E.

Notes: * p , 0:1; ** p , 0:05; *** p , 0:01; **** p , 0:001

Constant Staffing Training Promotion Compensation Appraisal Inter Intra Factor 1 Factor 2 Staffing £ training Staffing £ promotion Staffing £ compensation Staffing £ appraisal Training £ promotion Training £ compensation Training £ appraisal Promotion £ compensation Promotion £ appraisal Compensation £ appraisal Inter £ intra Factor1 £ Factor2 F value R-square Adjusted R-square

Variables

3.662** 0.094 0.068

0.228*** 20.003

0.086 0.060

2.066**** 0.243

Model 4 b S.E.

2.587* 0.100 0.061

2 0.051

0.373* 0.108

0.073

0.223 0.169

1.763**** 0.497

Model 5 b S.E.

20.110 0.076 6.062**** 0.211 0.176

0.287**** 0.070 0.060 0.070

2.576**** 0.069

Model 6 b S.E.

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Table IV. Regression analysis

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and establish conditions for frequent communication and knowledge exchange among individuals. It was argued that MNCs can institute various HRM practices to overcome transfer barriers associated with the identified determinants and hence facilitate the degree of knowledge transfer. Two hypotheses were advanced based on the arguments that the employment of HRM practices, which affect knowledge receivers’ ability and motivation, and support, positively related to the degree of knowledge transfer within MNCs. Note, the hypotheses were developed in a way that they assumed the simultaneous effect of HRM practices on the dependent variable and not the effect of individual practices. Such an assumption was recommended in the literature since it was found that HRM practices applied in combination have greater effect on organizational outcomes than the sum of the individual effects from each practice alone (Ichniowski et al., 1997; Wright and Boswell, 2002). Factor analysis was used as a method of verifying the classification initially suggested by non-statistical arguments or evidence. Results of the factor analysis indicated the existence of two groups of HRM practices hypothesized as being conducive to knowledge transfer – the first factor was marked by higher loadings on the HRM practices affecting ability and motivation of knowledge receivers (Factor 1). It contained staffing, training, compensation, promotion and appraisal. The second was marked by high loadings on the HRM practices supporting learning environment (Factor 2) and included corporate socialization mechanisms and flexible working practices. To verify the classification further the reliability analysis was conducted. Cronbach Alpha for Factor 1 was high and satisfactory (0.80), while for Factor 2 it was very low and did not justify the use of Factor 2 as a coherent constrict. The latter may be explained by the fact that not enough items were used to capture the HRM practices. To test H1 and H2, the defined factors were entered as independent variables into the regression. The simultaneous effect of “staffing”, “training”, “promotion”, “compensation” and “appraisal” (Factor 1) on the degree of knowledge transfer was positive and substantial. H1 was supported. Those organizations, which engage in the extensive staffing procedures (including examination of the competencies, extensive recruitment and selection procedures) are able to generate a pool of skilled external candidates, with a desired level of knowledge and skills, who in the future show the higher ability to absorb knowledge. Performance appraisal provides employees with feedback on their performance and competencies and offers direction for enhancing their competencies to meet the changing needs of the firm. An integrated part of most performance appraisal systems is also the establishment of objectives and targets for the self-development and training of employees. Training when organized as a systematic process helps to eliminate the skills deficiencies identified through performance appraisal. Promoting employees from within the firm is likely to provide a strong motivation for employees. Internal transfers as a variation of promotion activities aim at better allocating individual needs for growth and development. In addition to a learning experience, employees achieve higher commitment and involvement. Formation of performance-based compensation system that reward employees for the value of their job and their personal contribution to organizational performance is a strong incentive. Contrary to expectations, the effect of corporate socialization mechanisms and flexible working practices was insignificant. H2 was not supported by the data.

The fact that HRM practices correlate with each other and end up in the same factor does not mean that they as a system contribute more to knowledge transfer than some of them individually. To test for complementarity it was recommended in the literature to use a multiplicative approach and test a full set of interactions while controlling for the main effect of individual practices. Owing to the insufficient number of the degrees of freedom the testing was done separately for HRM practices affecting absorptive capacity of employees (H3a), for HRM practices supporting learning environment (H3b) and for the whole set of HRM practices grouped into two factors (H3c). The analysis indicated that complementarity exists for some of HRM practices affecting absorptive capacity. In particular, the interaction effects between “compensation” and “training”, and “promotion” and “appraisal” were positive and significant. In each pair of the complementary practices one of the practices is related to improving the employees’ knowledge-related ability either through pointing at the deficiencies in performance and directing attention to the causes of deficiencies (appraisal) or providing employees with specific skills of helping them correct deficiencies in their performance (training). The other practice, in the identified pairs of complementary practices aimed to recognize and reinforce the employees’ behavior, either by providing monetary (compensation) or non-monetary (promotion) incentives that elicit the appropriate behavior. These findings are in line with the previous findings of Minbaeva et al. (2003): managers can improve the absorptive capacity of their employees by applying specific HRM practices oriented towards employees’ ability and employees’ motivation. Moreover, to achieve better results those practices should be applied as a system. The study has several limitations. First of all, the characteristics of knowledge receivers and learning environment are only two mediating variables to be considered when analyzing the link between HRM practices and knowledge transfer. Examining other black-boxed mediating variables, such as for example the senders’ characteristics and the characteristics of the knowledge transferred, can extend the present model. Second, one of the challenges as pointed out by Huselid (1995) was the methodological problem confronting the survey-based research in general: survey response bias. The study of this type requires as broad sample as possible. Future research should also try to collect data from multiple respondents to minimize the risk of common method bias. The validity of the current data was limited due to the use of only one respondent per subsidiary, a weakness in most international research. However, it proved to be useful to test knowledge transfer measures for inter-rater reliability (recommended by Gupta and Govindarajan, 2000). Finally, one limitation of the statistical analysis is the use of control variables. Generally speaking, the proposed framework may benefit from including such control variables as size, industry, mode of entry, ownership, subsidiary age and previous experience (Birkinshaw et al., 1998; Bresman et al., 1999; Simonin, 1999; Gupta and Govindarajan, 2000). Degrees of freedom were not available to include all control variables at earlier stages of statistical analysis. Results of post-hoc analysis indicated no significant changes in either direction of the relationships or the regression coefficients after control variables were introduced. While this study makes a contribution to our understanding of the relationship between HRM practices and knowledge transfer in the MNC, clearly, additional research is needed to develop this link further, which until now has been largely black-boxed.

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About the authors Ingmar Bjo¨rkman Ingmar Bjo¨rkman is a Professor of Management and Organization at the Swedish School of Economics and Business Administration in Helsinki, Finland. His current research interests focus on international human resource management. He is also involved in research on knowledge management in multinational corporations and the integration of international mergers and acquisitions. E-mail: ingmag.bjorkman@ INSEAD.edu

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Jaime Bonache Jaime Bonache is Professor of Human Resource Management at the University Carlos III of Madrid in Spain. He received his PhD and MBA degrees in Management from the Universidad Autonoma of Madrid, and his MA from Carleton University of Ottawa in Canada. His research interests are in the areas of international management development, expatriate management and cross-cultural management. He has participated in a number of European and Spanish research projects in the area of international human resource management. E-mail: [email protected] Arno Haslberger Arno Haslberger is a Member of Faculty and Intake Director 1-year MBA, PEF Private University for Management, Vienna, Austria. His research interests are: human resource management, cross-cultural adaptation and expatriate management. E-mail: [email protected] Jonna Holopainen Jonna Holopainen is a Doctoral Student at the Swedish School of Economics and Business Administration in Helsinki, Finland. Her research interests are related to international human resource management and diversity in organizations. E-mail: [email protected] Eeva Kohonen Eeva Kohonen is based in the Department of Management and Organization at the University of Vaasa, Finland. E-mail: [email protected] Dana B. Minbaeva Dana Minbaeva is a Research Assistant at the Department of International Economics and Management, Copenhagen Business School, Denmark. She is completing her doctoral dissertation on the role of HRM practices in the process of knowledge transfer in multinational corporations. E-mail: [email protected] Alexandra Panaccio Alexandra Panaccio is a Doctoral Student at HEC Montre´al. Her research interests include international HRM, congruence between individual and organisational values. E-mail: [email protected]

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Jan Selmer Jan Selmer is a Professor of Management at Hong Kong Baptist University. Having lived and worked in Asia for the last 15 years, his research interest lies in cross-cultural management. He has published extensively, especially on expatriate management. E-mail: [email protected]

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Marie-France Waxin Marie-France Waxin is Professeur Adjoint based at HEC Montre´al. Her research interests include international HRM, congruence between individual and organisational values. E-mail: [email protected]

Note from the publisher Emerald structured abstracts have arrived! Well, it’s finally happened and all the first issues of the 2005 volume of Emerald journals will contain structured abstracts. Have a look at an article title page in this issue. That’s how they will look from now on. The look will be slightly different in the electronic version on the web site but this is only a cosmetic variation and takes account of the different media and the way people use the information. The idea took hold at the beginning of 2004 and a small team worked on the design and introduction of structured abstracts throughout the year. Thanks to all the hard work of authors, editors, editorial and production staff at Emerald we can now showcase them for the first time. We believe they provide real benefits to our readers and researchers and that they answer some of the key questions people have about a paper without having to scan or read the entire paper: . “What research has been conducted on this topic?” . “How was the research approached – what methods were used?” . “What were the main findings?” . “Are there any literature reviews on this topic and are they selective or inclusive?” . “So what? They have shown this but what does this mean in my work/organization?” . “I want to conduct research in this area but what questions still need answering?” . “Has this work got any relevance and value for me?” . “What did the writer set out to show?”

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Structured abstracts supply the answers to these types of questions without the researcher having to go any further. Authors can be more confident that their paper will be noticed and read by others with a real interest in the topic or research. As far as possible, all our past authors and editorial team members (editorial advisory boards, etc.) have been alerted to this change. Authors who have been asked to rewrite their abstracts in the new format have readily obliged. The response from all parties has been most gratifying: Structured abstracts are increasing in popularity among the social and behavioral sciences. There’s overwhelming evidence that readers (and indexers) glean more from structured abstracts (Jonathan Eldredge, MLS, PhD, AHIP, Associate Professor, School of Medicine, Academic & Clinical Services Coordinator and Author, Health Sciences Library and Informatics Center, Health Sciences Center, The University of New Mexico, USA).

To read more on structured abstracts and their value for researchers and writers, read this short paper by Liz Bayley and Jonathan Eldredge outlining their benefits at: http:// research.mlanet.org/structured_abstract.html

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Everyone has problems in the digital environment when weighing up the value of any piece of information – information overload is discussed endlessly in the media. Structured abstracts go some way towards a remedy. Emerald is the very first publisher in the management field to introduce structured abstracts. We know this means change for the author and researcher but the fact that other journals don’t do it shouldn’t stop us from making the advancement. It’s wonderful to be first in the field with a good idea! We have only two regrets! We didn’t think of it before and we are unable to go back through more than 40,000 papers already in the database and change the abstracts into structured ones. Having said that, nearly 5,000 new papers will be deposited in our database this coming year and all will be accompanied by a structured abstract. Let us know what you think. E-mail Sue de Verteuil, Head, Editorial Developments, with your views at: [email protected]