Briefly describe the three general types of goals used as the basis for performance criteria?

Briefly describe the three general types of goals used as the basis for performance criteria?

Your response should be at least 200 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.

 

Dowling, Peter, Marion Festing, and Allen D. Engle. International Human Resource Management. 6th ed., Pg. 151-153, 163-164. Andover: Cengage Learning, 2013.

CHAPTER 6 INTERNATONAL PERFORMANCE MANAGEMENT

151

 

INTRODUCTION

 

The complexities of managing performance i n a M N E ‘ s various globally distributed facilities have received a great deal of professional and academic attention in the last decade. As pre-sented in Chapters 2 and 3, diversity in cultures, production and operations, geographical dis-persal and varieties of modes of operations all combine to make performance measurement and the creation of performance management processes that are simultaneously locally relevant and globally comparable a major challenge for H R M practitioners . ‘ M o n i t o r i n g performance and ensuring conformity to agreed-upon standards are significant elements i n the managerial control system of a multinational f i r m ; and yet, as Cascio has stated, ‘the terrain of global per-formance management systems is largely uncharted’.^

 

In this chapter, we differentiate between ‘performance management’ and ‘performance appraisal’. Performance management is a process that enables the M N E to evaluate and con – tinuously improve individual, subsidiary unit and corporate performance, against clearly defined, pre-set goals and targets. Figure 6.1 illustrates the major issues, actors and decision processes related to performance management i n the international context. This model w i l l allow us to investigate the complex interaction between local and global contexts for perform – ance and the tasks of the actors, performance criteria, purposes for, and timing of perform – ance management as these elements relate to individual and f i r m outcomes. I t provides a convenient starting point for our exploration of the l i n k between the M N E ‘ s internationaliza-tion strategies, its goals for individual units in terms of contribution to global profitabiUty and the performance management of individual employees, whether P C N , T C N or H C N . The aspects of these relationships are critical as an individual’s performance is appraised (or eval-uated) according to expectations of appropriate outcomes and behavior that contribute to organizational goal attainment.

 

 

 

 

 

FIGURE 6.1 Perspectives, issues, actions and consequences in MNE performance management

 

Individual outcomes

 

Global corporate

Remote

•

Training

 

strategies, roles,

 

•

Career implications

 

 

appraisal

 

 

 

processes and

 

 

 

 

 

sources/input

•

Financial

 

practices

 

 

 

 

 

 

 

consequences

 

 

 

Critical issues

 

 

 

 

 

 

 

 

 

Criteria

 

 

 

 

• Implicit/explicit

 

 

Pattern

Performance

• Person vs,

Additional

 

 

management

activities vs.

 

 

of priorities.

 

 

subsequent

 

 

processes for

outcomes

 

 

global or local

 

 

assessment

 

 

individual

Purposes

 

 

emphasis

 

 

purposes

 

 

employee

• Developmental

 

 

 

 

 

 

 

 

 

• Pay

 

 

 

 

Tasks/roles

 

 

 

 

Timing

Organizational

 

 

 

 

 

 

Local strategies.

Local appraisal

 

outcomes

 

roles, processes

 

«Control

 

 

sources/inputs

 

 

and practices

 

‘

Reputation

 

 

 

 

 

 

 

> Legal compliance

 

Source: Adapted from A. Engle and P. Dowling, ‘State of Origin: Research in Global Performance Management: Progress or a Lost Horizon?’, Conference Proceeding of ttie Vlllth World Congress of the International Federation of Scholarly

 

Associations of Management, Berlin, September, 2006.

152 CHAPTER 6 INTERNATIONAL PERFORKMNCE MANAGEMENT

 

MULTINATIONAL PERFORMANCE MANAGEMEN

 

W h i le a given firm’s general strategic position may vary^ (depending o n , for instance, its size, industry and geographic dispersal), a multinational makes strategic choices based on economic and political imperatives. W i t h i n this context, as indicated i n Figure 6 . 1 , the M N E has specific expectations for each of its foreign subsidiaries, cooperative ventures and other forms of opera-t i o n modes, in terms of market performance and contribution to total profits and competitive-ness. W h e n evaluating subsidiary performance against these expectations, however, it is important to recognize various constraints that may affect goal attainment. These include the f o l l o w i n g five constraints outhned below.

 

 

 

Whole versus part

 

First, it is important to appreciate that by its very nature, the M N E is a single entity that faces a global environment, which means that it simultaneously confronts differing national environ – ments. Integration and control imperatives often place the multinational in the position where it decides that the good of the whole (i.e., the entire A4NE) is more important than one subsid-iary’s short-term profitability . A n example is provided . by Pucik,”* where a multinational estab-lishes an operation in a particular market where its m a i n global competitor has a dominant position . The main objective of entering the market may be to challenge the competitor’s cash f l o w w i t h aggressive pricing poHcies. Pucik explains that:

 

 

The balance sheet of this particular subsidiary might be continually in the red, but this strategy, by tying up the competitor’s resources, may allow substantially higher returns in another market The difficulties in quantifying such a global strategy in terms of the usual return-on-investment objectives are obvious.

 

 

Another situation is where the M N E establishes a joint venture in a particular market i n order to have a presence there, even though i t has l o w expectations in the short term, and may provide a relatively l o w level of resources to the venture. Therefore, the consequences of such global decisions for subsidiary management must be taken into consideration when considering the issue of performance appraisal of the senior managers of this joint venture.

 

 

 

Non-comparable data

 

A second key constraint it that frequendy the data obtained f r o m subsidiaries may be neither easily interpretable nor reliable. The f o l l o w i n g examples illustrate this point:^

 

Sales in Brazil may be skyrocketing, but there are reports that the Brazilian government may impose tough new exchange controls within a year, thus making it difficult for the multinational to repatriate profits. Does this mean that the MNE is performing effectively? Is the subsidiary performing effec-tively? Are the senior managers of the subsidiary performing effectively?

 

Sales in Peru may be booming, but headquarters management was unaware that under Peruvian accounting rules, sales on consignment are counted as firm sales. How should the headquarters accounting system handle these sales relative to sales from other subsidiaries, which do not consider sales on consignment as firm sales?

 

As Garland et al.^ explain, physical measures of performance may be easier to interpret than in the above examples, but difficulties may still arise. For instance, notions of w h a t constitutes adequate quality control checks can vary widely f r o m one country to another, import tariffs can distort pricing schedules, or a dock strike in one country can unexpectedly delay supply of

 

 

 

necessai may req tors can plicates

 

Volatil

 

A third : and t u r l goals be inflexibl the new events ir in Eastei rency b) Respirat Gulf W ; account! and aus’ A r a b Sp

 

Each tination; long-ten agers pe tic and i a volatili ning ass;

 

 

Separ

 

A fourth time and activities frequenc the cost systems ‘face-to-l commun may be problem: agers sp« agers i n perform; specific f

 

T h e g time, disi the com) competir the poter the M N : and purp

 

CHAPTER 6 INTERNATIONAL PERFORfvtANCE MAlNAGEMENT

 

necessary components to a manufacturing plant i n another coimtry . Further, local labor laws may require close to f u l l employment at plants that are producing at below capacity. These fac-tors can make an objecdve appraisal of subsidiary performance problematic, w h i c h in t u r n com – plicates the task of appraising the performance o f individual subsidiary managers.

 

 

Volatility in the global business environment

 

A third factor that can impact on the performance of a subsidiary is the occurrence of volatility and turbulence i n the global business environment. This volatility may require that long – term goals be flexible in order to respond to potential market contingencies. According to Pucik,” an inflexible approach may mean that subsidiaries could be pursuing strategies that no longer f i t the new environment. Consider, for example, the impact o n international business of major events in the past three decades or so, such as: the collapse of communist rule in the late 1980s in Eastern Europe and the former Soviet U n i o n ; the adoption of the Euro (€) as the single cur-rency by most of the European U n i o n countries; Chinese market reforms; the Severe Acute Respiratory Syndrome (SARS) and bird flu epidemics; the spread of internadonal terrorism; the Gulf Wars; rising oil prices; high-profile corporate collapses; the adoption of international accounting standards (IAS); the Indian Ocean tsunami disaster in 2004, government cutbacks and austerity measures associated w i t h the global financial crisis that began in 2008 and the A r a b Spring pohtical disturbances j n 2 0 1 1 .

 

 

Each of these events has had p r o f o u n d implications for the global and local strategies of m u l – tinationals. Because subsidiaries operate under such volatility and fluctuation, they must tailor long – term goals to the specific situation in a given market. Problems arise when subsidiary m a n – agers perceive that goals and deadlines set by a distant headquarters strategy team are unrealis-tic and inflexible, due to a failure to take into account local conditions that change as a result of a volatile environment. Obviously, involving regional and subsidiary managers in strategic plan – ning assists i n managing this perception.

 

 

 

Separation by time and distance

 

A f o u r t h factor that can impact on the performance of a subsidiary is the effect of separation by time and distance. Judgments concerning the congruence between the M N E and local subsidiary activities are further complicated by the physical distances involved, time-zone differences, the frequency of contact between the corporate head-office staff and subsidiary management and the cost of the reporting system.^ Developments in sophisticated w o r l d w i d e communications systems such as increasingly advanced video-conference facilities do not fully substitute for ‘face-to-face’ contacts between subsidiary managers and corporate staff. In some areas, the tele-communications system may be underdeveloped or impacted by an unreliable power grid and it may be necessary to meet personally w i t h a manager and their team to fully understand the problems that these local managers must deal w i t h . For tliis reason, many M N E corporate man – agers spend a considerable amount of time traveling i n order to meet expatriate and local man – agers in foreign locations. It is then possible for H R corporate staff, when designing performance management systems, to more accurately account for the influence of country – specific factors.

 

 

The g r o w i n g use of web-based HRIS platforms are i n part a response to the separations of time, distance and culture experienced by multinational firms . These strategies may be driven by the complexity and inherent uncertainty of global performance and a sense that successfully competing i n the global marketplace w i l l require increased efficiency of operations. However, the potential of these technical systems to control and coordinate activities and processes w i t h i n the M N E may be limited by unspoken or ill-articulated roles, processes, practices, criteria and purposes.’

 

 

CHAPTERS INTERNATIONAL PERFORMANCE MANAGEMEINTT

163

 

 

 

As shown i n Figure 6 . 1, individual performance management

involves a set of decisions on the

 

 

ctively

 

dimensions and level of performance criteria, task and role definitions, and the tim ing of the for –

 

 

rategy

 

mal and informal aspects of the appraisal. Traditionally, it comprises

a f o r m a l process of goal

 

 

 

jL

setting, performance appraisal and feedback. Data f r o m this process is often used to determine

 

 

 

S

pay and p r o m o t i o n , and training and development requirements. M N E goals influence the i n d i –

 

 

vork

 

vidual’s saUcnt task set, against w h i c h job goals and standards are established and measured.

 

 

 

4

There are differences i n the way this process is handled w i t h i n

M N E s . For example, in Germany

 

 

ss

 

 

 

 

 

 

 

and Sweden it is c o m m o n for employees to have input into

job

goal

setting, whereas in other

 

 

 

 

 

 

 

 

 

 

 

 

countries such as the USA, job goals tend to be assigned.’*” In addition, the type and length of

 

 

 

 

assignment appears to influence h o w performance management

is

handled . For example, a

 

 

 

 

study of Finnish firms revealed that those on short – term assignments

were treated the same as

 

 

 

 

any other employee in the company, and there was more flexibility in the timing of the perfor-

 

 

 

 

mance review for those assigned to projects.”^

 

 

 

 

 

 

 

 

lose

 

s in sals, mbers

 

ve

 

 

 

 

 

 

s, the

 

:iali2ed

 

:sfor le way

 

 

 

e rs

 

 

 

 

 

 

 

 

luding which levant rature ussion levant tween

 

 

Performance criteria

 

The global firm’s ability to measure an employee’s individual contribution to performance and to assess the aggregate contribution of human capital to strategic progress is a complex and timely topic in organizational studies.”’^ Goals tend to be translated into performance appraisal criteria so specificity and measurability issues are important aspects, and we need to recognize that hard, soft and contextual goatsare often used as the basis for performance criteria. Hard goals are objective, quantifiable and can be directly measured – such as return-on-investment (ROI), market share, etc. Soft goals tend to be relationship or trait-based, such as leadership style or interpersonal skills. Contextual goals attempt to take into consideration factors that result f r o m the situation in which performance occurs. For example, M N E s commonly use arbi – trary transfer pricing and other financial tools for transactions between subsidiaries to minimize foreign-exchange risk exposure and tax expenditures. Another consideration is that all financial figures are generally subject to the problem of currency conversion, including sales and cash positions. Further complications could arise because some host governments (usually emerging economies) may decide to place restrictions on repatriation of profits and currency conversion. The nature of the international monetary system and local accounting differences may also pre-clude an acctu-ate measurement of results. The dilemma this poses is that the use of transfer pric-ing and other financial tools is necessary because of the complexity of the international environment. Multinationals cannot allow subsidiaries to become autonomous in financial management terms, and place controls on subsidiary managers. Thus, the financial results recorded for any particular subsidiary do not always accurately reflect its contribution to the achievements of the M N E as a whole . Therefore, such results should not be used as a primary input in performance appraisal.’*^ For this reason, a performance management approach is n o w advocated, rather than traditional performance appraisal, as it allows clarification of goals and expectations of performance against those goals.

 

 

 

 

 

Janssens’*” suggests that performance appraisal of subsidiary managers against hard criteria is often supplemented by frequent visits by headquarters staff and meetings w i t h senior manag-ers f r o m the parent company . Soft criteria can be used to complement hard goals, and take into account areas that are difficult to quantify such as leadership skills, but their appraisal is some-w h a t subjective and, in the context of both expatriate and non-expatriate assignments, more complicated due to cultural exchanges and clashes. However, relying on hard criteria such as f i – nancial data to evaluate h o w well a manager operates a foreign subsidiary does not consider the way results are obtained and the behaviors used to obtain these r e s u l t s . C o n c e r n w i t h ques-tionable ethical practices led to the enactment of the US Foreign C o r r u p t Practices Act (FCPA), w h i c h may p r o m p t an increased use of behavioral as well as results data to appraise the per-formance of managers in foreign subsidiaries.’**’ H owever, an appraisal system that uses h a r d , soft and contextual criteria builds upon the strengths of each while minimizing their

164 CHAPTER 6 INTERNATIONAL PERFORMANCE MANAGEMENT

 

disadvantages.’* Using multiple criteria wherever possible is therefore recommended in the rele-vant literature. I n addition, job analysis must, as Harvey”* suggests, generate criteria that adequately capture the nature of international w o r k as opposed to the domestic context, i n order to provide valid appraisal i n f o r m a t i o n .

 

 

Who conducts the performance appraisal?

 

Another issue is w h o conducts the performance appraisal. Typically, employees are appraised by their immediate superiors, and this can pose problems for subsidiary chief executive officers (or senior managers). They w o r k in countries geographically distant, yet are evaluated by supe-riors back at headquarters w h o are not in a position to see on a day-to-day basis h o w the expa-triate performs in the particular situation. Consequently, subsidiary managers tend to be assessed according t o suWiAiary performance, wit\ a reV\ance on h a r d criteria similar to that apphed to heads of domestic units or divisions. O f course, there is a danger that a subsidiary manager w i l l take decisions and implement local strategies that favor short-term performance to the detriment of longer-terjn organizationa) goals.

 

Appraisal of other employees is likely to be conducted by the subsidiary’s C E O , or the imme – diate hoSt-COUntty supecvisor, depending u p o n the nature and level of the position concerned.'”‘^ W i t h regard to expatriate performance appraisal, host-country managers may have a dearer picture of expatriate performance and can take into consideration conrextual criteria. Ho wever, they may have culturally bound biases (e.g. about role behavior) and lack an appreciation ot the impact of the expatriate’s performance in the broader organizational context. As the I H R M i n A c t i o n Case 6.1 illustrates, some expatriates may prefer to have parent-company evaluators g i v e n that, their f u t u r e career progression m a y depend on h o w the appraisal data is utilized back at headquarters. This may be especially so in cases where foreign operations are relatively less important than, say, domestic US operations.”” Others may prefer a host-country appraisal if they perceive it as a more accurate reflection of their performance.

 

M u l t i p l e raters are sometimes used in the domestic context – e.g. the 360-degree feedback process. It has been argued that, given the cross-cultural complexity of the foreign assignment, a team of evaluators should be used for performance appraisal. For example, Gregersen et al.^^ found that most firms (81 per cent) in their survey of H R directors in 58 US multinationals used more than one rater when assessing expatriate performance. The immediate superior (in either the home or host country), the expatriate as self-rater, and the H R manager (either home or host-country based) were conimonly used as multiple evaluators of US expatriate performance. The 2010 Brookfield Global Relocation Trends Survey Report found that 35 per cent of respondents reported using performance reviews in the host country, 27 per cent used reviews in both host and home countries and 10 per cent used performance reviews in the home country.^^ For the virtual assignment situation, the use of multiple appraisers w o u l d most likely be the most accurate way to determine performance. However, the availability of knowledgeable, trained raters may constrain the approach taken in the international context.

 

 

 

 

Standardized or customized performance appraisal forms

 

Domestic firms commonly design performance appraisal forms for each job category, particu – larly those using a traditional performance appraisal approach rather than performance man – agement. Such standardization assists in the collection of accurate performance data on w h i c h H R decisions can be made, and allows for cross-employee comparisons. The question often posed is should these standardized forms be adapted when used for appraising international managers? As Gregersen etal.^^ argue:

 

CHAPTER 7 INTERNATIONAL TRAINING, DEVELOPMENT AND CAREERS

175

 

 

Reflecting the general literature on this topic, the focus of the chapter is on the traditional, expatriate

 

assignment. However, where possible we will draw out training and development aspects relating to \

 

short-term assignments, non-standard assignments and international business travelers. ;

 

The chapter concludes with what could be called the post-assignment stage and its wider impact on { \

 

the careers of employees who have been on an international assignment. Re-entry raises issues for both ;

 

the expatriate and the MNE, some of which may be connected to events that occurred during the

 

international assignment. We examine:

 

• The process of re-entry or repatriation.

 

• • Job-related issues.

 

•

Social factors, including family factors that affect re-entry and work adjustment.

j

•

MNE responses to repatriate concerns.

,

 

• • • Staff availability and career issues,

 

• • • Return on investment (ROI) and knowledge transfer.

 

• • • Designing a repatriation program.

 

• Broader international career issues. ^

 

 

 

 

 

INTRODUCTION

 

I n order to compete successfully in a global market, more firms are focusing on the role of h u m a n resources as a critical part of their core competence and source of competitive advant-age. As Kamoche’ comments: ‘the human resource refers to the accumulated stock of k n o w l – edge, skills, and abilities that the individuals possess, w h i c h the f i r m has built up over time into an identifiable expertise’. Training and development activides are part of the w a y in which the M N E builds its stock of human resources – its human capital. A n indication of the importance of this is the increasing nimiber of M N E s that have established their o w n ‘universities’ or ‘schools’. M o t o r o l a , M cDonal d’s, Oracle, and Disney universities are good examples of these in-house training centers. Several European, Japanese and Korean firms have similar arrange-ments (e.g. the Lufthansa School of Business).”

 

 

The international assignment in itself is an important training and development tool:

 

• • • • Expatriates are trainers, as part of the transfer of knowledge and competence between the various units – a major rationale for the use of international assignments. Whether implicitly or explicitly stated, they are expected to assist the MNE train and develop HCNs – that is, train their replacements.

 

• • • • Expatriates are also expected to ensure that systems and processes are adopted, and inevitably they will be engaged in showing how these systems and processes work, as well as monitoring the effective performance of HCNs.

 

• • • • • One of the reasons tor international assignments is management development. A move into another area internationally – job rotation – is a useful way for employees to gain a broader perspective. It assists in developing capable people who form the required pool of global operators, as discussed in eariier chapters.

176 CHAPTER 7 IMTERNATONAL TRAINING. DEVELOPMENT AND CAREERS

 

Therefore, the way i n which an M N E anticipates and provides suitable training for international assignments is an important first step. This is reflected i n the g r o w t h of interest i n , and provision of, pre-departure training to prepare expatriates and accompanying family members for their international assignment.

 

Figure 7.1 is a schematic representation of the international training and development proc-ess. It shows the hnk between international recruitment and selection, and training and develop-ment activities. M o s t expatriates are internal hires, selected f r o m w i t h i n the M N E ‘ s existing operations. However, as indicated by the dotted arrow in Figm-e 7 . 1, some expatriates may be hired externally for an international assignment. W e w i l l n o w consider the various elements related to expatriate training and development in the context of managing and supporting inter-national assignments.

 

 

FIGURE 7,1 International training and development

 

Recruitment

Training

5

Development

1

International

 

and selection

 

 

 

 

team

 

 

 

 

 

 

 

 

J

 

 

 

 

 

 

 

Pre-departure

 

International

 

 

 

 

training

 

assignments

 

 

 

 

 

 

 

The roie of expatriate training

 

Given that the primary selection criterion for most MNF^s is technical ability of existing employ-ees,^ it is not surprising to find that most of the literature on expatriate training is devoted to ex-patriate pre-departure training activities that are mainly concerned w i t h developing cultural awareness. Therefore, once an employee has been selected for an expatriate position, pre-depar-ture training is considered to be the next critical step in attempting to ensure the expatriate’s effectiveness and success abroad, particularly where the destination country is considered cultur – ally tough . In Figure 7.1 pre-departure training is indicated as a subset of general training . Effec-tive cultural training, it is advocated, assists individuals to adjust more rapidly to the new culture. As Farley” points out, a major objective of intercultural training is to help people cope w i t h unexpected events in a new culture.

 

 

The limited, predominately US-based, research into this area reveals that a large number of US multinationals have been reluctant to provide even a basic level of pre-departure training, though this is n o w changing. Particular interest in the area began w i t h Tung’s^’ study on expatri – ation practices, including the use of pre-departure training programs. Her results showed that US multinationals tended to use training programs for expatriates less frequently than European and Japanese firms (32 per cent compared w i t h 69 per cent and 57 per cent, respectively). The US attitude to the provision of pre-departure training appeared to persist through the 1980s. For example, a 1984 study of one thousand US multinationals found that only 25 per cent offered extensive pre-departure training programs;^ while a 1989 study of US firms found that only 13 per cent of respondents indicated that they w o u l d offer expatriates a pre-departure p r o – gram . ” A m o n g the various reasons cited by firms in these studies was that top management d i d not beUeve pre-departure training was necessary or effective.^ So, while the potential benefits of cultural awareness training are widely acknowledged, such training was downgraded or not offered by a large number of US multinationals . ‘ A 1997 survey of European firms (including subsidiaries of non-European multinationals) f o u n d that only 13 per cent of responding firms always provided expatriates w i t h access to cultural awareness courses, though a further 47 per cent provided briefings for culturally ‘challenging’ postings (compared w i t h 21 per cent in a 1995 survey).^”

 

 

M N E s a sibjy in par tionals can reports fror w i t h 43 per (see source; assignments of assignme intended loc

 

TABLE 7.1

 

 

: CCT availe

 

[ CCTatten

 

i • Employe

 

• • • • • • •Employe

 

• • • • • • • Whole fa

 

Source: Brookl

 

All Rights Rese

 

Previousl the spouse between exj their pre-df reflected in tional Assi^ accompanyi language t r reports simi hers, 19 per ever, as Tab per cent in review of C has made it research-bas

 

It is also i industries: ^ overall the n ous. For exa vide languag

 

 

 

COMPC TRAININ

 

Studies indie ute to a snioi

 

 

CHAPTER 7 INTERNATIONAL TRAINING, DEVELOPMENT AND CAREERS •

177

M N E s appear to be more positive about the provision of training over the last few years, pos-

 

sibly in part due to the g r o w t h

in numbers of providers of pre-departure training that multina –

 

tionals can access. Today wc see different patterns emerging. For example, in 2011 Brookfield

 

reports f r o m a sample of 118 M N E s that 74 per cent provided cross-cultural training (CCT),

 

w i t h 43 per cent offering preparation on some assignments and 31 per cent on ail assignments

 

(see source at Table 7.1). Furthermore, where cross-cultural preparation is offered only on some

 

assignments, 46 per cent make

it available based on host location, 29 per cent based on the type

 

of assignment and 25 per cent

based on other criteria. Here we see that type of assignment and

 

 

‘jk.

intended location have considerable influence on when cross-cultural training is offered.

 

TABLE 7,1 Availability of cross-cultural training in MNEs

 

 

 

 

Brookfield 2009

Brookfield 2011

 

CCT available:

81 percent

74 per cent

 

CCT attendance options^ Provided to:

78

 

 

• Employee only

7 per cent

4 per cent

 

• BiTftoyee aid spouse

 

 

 

• Whole family

56

49

 

Source: Brookfield Global Relocation Services. Global relocation trends survey reports, 2011 and 2009. Woodridge, IL. All Rights Reserved.

 

Previously, mukina tional firms placed less priori ty on p r o v i d i n g pre-departure training for the spouse and family.^^ However, perhaps due to increasing recognidon of the interaction between expatriate performance and family adjustment, more multinadonals are n o w extending their pre-departure training programs to include the spouse/partner and children . This is reflected in the Brookfield data above, and in another survey – the Mercer MR 2010 Interna- tional Assignments Survey. The latter reports that provision of pre-departure training for accompanying spouses and partners continues to increase, w i t h two – thirds of M N E s providin g language training to the spouse and 55 per cent providing cross-cultural training . O R C ^ ” reports similar findings, w i t h 38 per cent pr o v i ding cross-cultural training to all family mem – bers, 19 per cent to the expatriate and spouse only and 11 per cent to the expatriate only . H o w – ever, as Table 7.1 shows, the percentage of firms that make C C T optional remains very high (74 per cent i n 2011) so it is possible that many expatriates still receive very little training . In a review of C C T , Littrell and Salas suggest that a lack of synthesis in the area of C C T research has made it difficult for managers to implement C C T . Their review provides a number of research-based guidelines as to h o w M N E s can enhance the success of their C C T prograras.^^

 

 

It is also important to note that the provision of pre-departure training appears to vary across industries: Mercer^”* reports that chemical, pharmaceutical, healthcare and consumer firms are overall the most generous in terms of pre-assignment support, while I T firms are the least gener-ous. For example, 56 per cent of chemical, pharmaceutical, healthcare and consumer firms pro – vide language training to assignees’ children but only 14 per cent of I T companies do .

 

 

 

COMPONENTS OF EFFECTIVE PRE-DEPARTURE

 

TRAINING PROGRAMS

 

Studies indicate that the essential components of pre-departure training programs that contrib – ute to a smooth transition to a foreign location include: cultural awareness training, preliminary

186

CHAPTER 7 IhJTERNATIONAL TRAINING, DE\/ELOPMENT AND CAREERS

 

 

TABLE 7.2 Perceived value of cross-cultural preparation of expatriates

 

 

 

Value rating

Brookfield 2011

Brookfield 2009

 

 

Of great value

25%

19%

 

 

Of high value

64%

60%

 

;

Of neutral value

1 1 %

19%

 

r

Ofpoor\^tlue

0%

2%

 

Source: Brookfield Global Relocation Trends, 2009 and 2011. LLC. All rights resen/ed.

 

 

repatriates. They measured cognitive, affective and experiential cross-cultural training and language training, provided by the company or self-initiated. The amount and type of training, based on the models of T u n g and Black et al. described earlier in this chapter, was included. Expatriates w i t h integrated cross-cultural training exhibited cultural p r o f i – ciency earlier, and appeared to have greater job satisfaction, than those w i t h lesser train – ing . Repatriates commented that there was a need for accurate, up-to-date cultural and language training for expatriates and spouses and many considered that preliminary visits should be used.

 

 

The second study was a meta-analysis of the cross-cultural training literature.”^ The conclu-sion reached was that the effectiveness of cross-cultural training was somewhat weaker than expected due to:

 

 

• • • • • • • Limited data as few organizations systematically evaluate or validate the effectiveness of their training programs or make them available to the public.

 

• • • • • • • The use of a mixture of different training methods, making evaluation of which method is most effective difficult to isolate.

 

• • • • • • • The large diversity in cultures that expatriates face.

 

• • • • • • • The interaction between individual differences between expatriates and the work environment they face. What works for one person may not work for another. Thus, the effects of cross-cultural training can be as diverse as the countries to which expatriates are assigned.

 

The authors add that traditional training methods may underestimate the complexity of interna-tional business life, where expatriate managers are required to perform complex jobs across multiple cultural contexts, sometimes on the same day or even w i t h i n the hour . Training pro – grams that capture this reality are difficult to f i n d and many existmg cross-cultural training p r o – grams have yet to prove their u t i l i t y . * *

 

 

 

 

DEVELOPING STAFF THROUGH INTERNATIONAL

 

ASSIGNMENTS

 

International assignments have long been recognized as an important mechanism for developing international expertise (see Chapter 5). The expected outcomes arc:

 

• Management development. Individuals gain international experience, which assists in career

 

progression, while the multinational gains through having a pool of experienced international

 

operators on which to draw for future international assignments.

 

 

• Org acc giot disc tran

 

 

We shall r f r o m the n

 

Individu

 

A n interna that seeks i them to a assumptioj potential, j motive for advanced { land) wher tional acti’ employees stand that ment. A re Zealanders company-a

 

Overall, assignment paths as a < for this lacl

 

MNE orga activ peric

 

• Sun/ acce as a expe assic thee not r expa interr conti expa

 

Develop

 

Expatriates as we have the interna

 

CHAPTER 7 IKTTERNATIONAL TRAINING, DEVELOPMENT A^.]D CAREERS

187

 

Organizational development. International assignments also provide a MNE with a way of accumulating a stock of knowledge, skills and abilities upon which it can base its future growth. A global mindset is an important side benefit, as key personnel take a broader view. Further, as discussed previously, expatriates are agents of direct control and socialization and assist in the transfer of knowledge and competence.

 

• • We shall n o w consider these outcomes, first from the perspective of the i n d i v i d u a l , and then f r o m the multinauonal’s viewpoint .

 

 

Individual development

 

A n international assignment can be compared to job rotation , a management development t o o l that seeks to provide certain employees w i t h opportunities to enhance their abilities by exposing them to a range of jobs, tasks and challenges. It is therefore not surprising to find an implicit assumption that an international assignment almost always has management development potential . A l o n g w i t h expected financial gain, perceived career advancement is often a primary motive for accepting international assignments. This is particularly the case in small population advanced economies (e.g. Austria, The Netherlands, AustraUa, Finland, Sweden and N e w Zea-land) where the relatively small local economy is not big enough to generate g r o w t h and interna-tional activities provide the opportunity for ongoing revenue growth . ‘*^ In such a situation, employees (particularly younger eihployees w h o are motivated to build their careers) under-stand that international experience is often an essential requirement for further career advance-ment. A recent review by Kerr, M c N u l t j ‘ and Thorn^° o u d i n i n g h o w Australians and N e w Zealanders pursue global careers reports that expatriates f r o m these countries not only pursue company-assigned opportunities, but increasingly pursue self-initiated opportunities as well .

 

 

Overall, there is a paucity of research that demonstrates a l i n k between an international assignment and career advancement. There remains a need for research that establishes career paths as a direct consequence of international assignments. There are t w o possible explanations for this lack of interest in the career outcomes of international assignments: