Essay on "What Are the Key Aspects of Effective Performance Management of Expatriates Using Examples?"

Essay 9 pages (2709 words) Sources: 7 Style: Harvard

[EXCERPT] . . . .

Expatriates

With increasing numbers of American companies going global, it is essential that more emphasis be placed on establishing an effective performance management system that is designed specifically based on the experience of the expatriate in his or her international corporate culture. Growing initiatives in global internationalism will necessitate finding creative ways for international staffing, such as better understanding of the position of the international management team, new strategies for their personnel selection and training, and an overall acknowledgement of their relationships with the two different companies.

Daimler-Benz Aerospace, for example, incorporates a number of different cultural aspects into its overall management performance structure. Such an individualized human resources approach is needed, as demonstrated by the case study explained below of expatriates with ASIMCO and other supportive studies. This case study and research emphasize that the issue of concern with expatriates is not their management skill level or business capabilities, rather it is their inability to perform to their highest potential because of their feelings of isolation from the parent organization.

While some progress has been made in selecting and training expatriates, many of the problems that have been present from the beginning of globalization are still here today. These include: ineffective hiring procedures, dearth of appropriate training, unprepared transfer to foreign assignments, ineffectiveness of expatriates, and family problems and influences on job performance. A truly effective international performance management system must be updated to handle the major changes in international human resource strategies. The "increasingly global nature of business activities has placed new demands on organizational and managerial performance and has called for new responses" (Mabey, Salaman, & Storey, 1998, p. 194). For example, today's international assignments are being utilized not only for reasons of staffing, control and representation, but also as a means to develop the managers' skills and education and to considerably improve organizational learning and capabilities. Managers in other national settings handle highly sophisticated responsibilities, such as leading transnational joint ventures, working with multicultural teams in a diverse environment, balancing the variable responsibilities of global integration and centralization and local sensitivity (Mabey, Salaman, & Storey, 1998, p. 194). This multiplicity and complexity of job responsibilities create challenges for developing an effective international performance management system. Evans and Lorange (1989, p. 144) question how a corporation that operates in different product markets and social-cultural environments is able to effectively determine human resource policies. In response, these authors suggest a socio-cultural logic relative to the diverse cultural, political, social and legal situations that multi-national companies (MNCs) face along with workforce cultural diversity.

Adler (1999) explains that companies, as well as human resources, go through four stages of development when beginning to deal with multinational business. The first is domestic, then international, multinational and finally global, each with its own unique strategy and orientation. Each also places an increased emphasis on the connection of international enterprise to the total business activities. These stages can also be equated as to how to manage people in an international setting. The domestic enterprise has a centralized structure and a focus on functional divisions; the international company has a more decentralized structure and places its emphasis on its international division. International activities, therefore, may become isolated from the central business, which is still "domestic" in its perspective. Thus, the amount of interaction and communication between the international and the national is lacking in terms of ideas, people or practices and collaborative learning. Adler (1991) continues that the multinational corporation tries to go beyond this international approach by establishing multinational business connections. Through its evolution, it increasingly becomes involved with global alliances and, as a result, begins to create a common communication and mission, shared sense of purpose and corporate culture, and the establishment of management development practices that build a connection of corporate resources. At the same time, culture becomes more important at each of these stages. Perlmutter (1969) adds that the ethno-centric domestic organization evolves into an international enterprise where cultural sensitivity becomes essential, particularly when managing employees of various backgrounds. Adler's (1991) global organization emphasizes the importance of culture and recognizing that there are many ways to manage and organize. Likewise, the amount of cultural training increases over these stages. At the global stage, the HCNs receive extensive training in global strategy, diverse cultural values and socialization into the corporate culture.

Adler (1991) states that culturally diverse groups can perform very effectively or very ineffectively, and diversity can be an asset with new ideas emerging or a source of friction and misunderstanding when decisions are being made. In order for this communication to work, the members need to be inter-culturally competent. That is, they must understand their differences and communicate across them through empathy, negotiation and shared reality through collective participation, the open resolution of conflicts and the ability to leverage the differences in culture as a resource. For instance, with effective cultural understanding, the organization can develop a better understanding of the customers, employees, and suppliers' preferences. It can lead to more culturally associated human resource practices in recruitment, leadership style, communications, training, and appraisal systems.

Thus, "successful performance in international assignments requires not only technical competence, but also cross-cultural skills, interpersonal skills, empathy, sensitivity, and adaptability" (Mabey, 1998, p. 218). These individual factors can become an integral part of a performance evaluation system. However, global appraisals are impacted by several factors, such as isolation in time and distance, varying market maturity, difficulties in collecting comparable data, environmental unpredictability, and the desired mix between global and unit performance (Dowling et al., 1994). In addition, expatriate performance is influenced by the national environment and its varying ability to facilitate successful performance. These expatriate jobs are dependent on social, interpersonal and cultural skills more than technical jobs.

For managerial performance reviews, some MNCs incorporate achievement of equal opportunity, diversity and positive action goals. Other issues arise in the appraisal, such as the cultural acceptability of appraisal itself. The 360 degree feedback performance is not acceptable in many Asian countries. According to an article on the China Success Story website, "Employees in China and the West have different perspectives on what makes a good leader" (Wu, 2007). Chinese employees expect their management to be modest and humble, but people in the Western countries expect the management team to be risk-takers or to empower employees through delegation of authority. Employees in China greatly respect their leaders as authority figures with parental characteristics. The employees turn to their supervisors for help with personal needs, and white-collar workers request coaching help from their manager. The leadership in China must be strategic operators at a macro level, but at the same time be able to manage at the micro level. Chinese personnel are most motivated by hands-on leadership and a role model who shows them what is expected and what behavior to copy. Normally, direct reports expect managers to give them detailed directions and explanations, rather than broad goals.

These differences between cultures in the United States and China can create a problem for expatriates who go to China without receiving the training and understanding of the culture. Erbacher, D'Netto, & Espana (2006) the success of international ventures depends crucially on the performance of key expatriate personnel These expatriates must often operate in a foreign country with little guidance from their corporate office the results indicate that performance management, training, organizational support, willingness to relocate and strength of the relationship between the expatriate and the firm were significantly associated with expatriate success

In their case study, "Expatriate Success in China: Impact of Personal and Situational Factors, Erbacher, D'Netto, & Espana (2006) explain that in these times of growing competition, a number of companies are expanding into foreign markets. Theories of competitive advantage emphasize the necessity for companies to transfer skills and develop managerial staff. Expatriates are an important human resource option that allows for this skill transfer. However, the number of expatriates that fail in their positions in several different ways has historically been quite high. It may take expatriates awhile to adjust. They may exhibit poor behaviors, be withdrawn, go home early, or "brown out," completing their assignment in a low state of effectiveness (Forster, 1997). Those expatriates who have not been able to adjust may disrupt the company, have a conflict between personal and organizational goals, reject local culture and resist localization efforts (Hailey, 1996). The result of this poor expatriate performance is low productivity in this international operation, enhanced problems with client relations and operational inefficiency.

The Chinese economy continues to grow rapidly, and most global companies have wanted to weave China into their international strategy. Yet the success rate of expatriates sent to China has not been adequately researched. According to Stuttard (2000), the number of expatriate failures in China could be two times that of other countries. To determine what is causing this high failure rate and its relationship to management performance Erbacher, D'Netto, & Espana (2006) conducted a study of the company ASIMCO, which sends expatriates to China.

ASIMCO Technologies was… READ MORE

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