Words: 4303
Journal of Business Studies Quarterly 2010, Vol. 1, No. 4, pp. 110-118 ISSN 2152-1034 Case Study Rewarding for Success in an International Assignment: the Case of Returning to an Uncertain Future Ileana Alvarado Krystal A. Antoine Gian-Carlo Cinquetti Jorge Fernandez Jabir Najair Giuliana Scagliotti Bahaudin G. Mujtaba Nova Southeastern University Abstract This case discusses how the decisions and communication from Human Resource (HR) management can be detrimental at times when placing expatriates.
It also analyzes some of the problems that a firm can face along with recommended solutions that can prevent a reoccurrence. Recommendations, suggestions, and plans for practical alternatives are provided for human resource professionals and expatriates. The case emphasizes the importance of clear communication between HR management and expatriates working abroad and starting repatriation. Multinational firms can use this case in order to improve their management and business structure. Key words: Communication, Human Resource Management, expatriates, multinational firms.
Andreas Weber’s Reward for Success In this case about Andreas Weber reward for success, the authors looks at the way human resource professionals communicate with expatriates when it comes down to international assignments. Andreas was a typical businessman whose sole purpose was to enter into the workforce and grow in ranking. He entered the leadership program with the understanding that this would be a position where his skills would be put to use. The Chief Executive Officer (CEO) emphasized that international experience is the key to moving upward in this organization. Ileana Alvarado, Krystal A. Antoine, Gian-Carlo Cinquetti, Jorge Fernandez, Jabir Najair, Giuliana Scagliotti and Bahaudin G. Mujtaba The time before Andrea’s arrival, a bigger and better position opened up which allowed him to have more control over the bank. Knowing this would be his assignment, he prepared to head to New York. No arrangements were made for his arrival, and he should have taken the initiative to speak with the head of HR before his departure to the U. S. Another issue that he had was being the victim of miscommunication between HR in Frankfurt and HR in the US.
The original position that was presented to him was not the one he signed up for. Suddenly, he found himself in a foreign country with no other choice but to stick with the position, since his family was coming from overseas. After several months of adjusting, Andreas was finally promoted to a supervisory position and a year later, to a managerial one. A new contract with new terms was presented and signed by Andreas; extending his assignment for another three years. The dilemma that Andreas faced after making this decision was that his family needed to go back to Germany because they were homesick.
The move back would not be an easy one, since the HR department did not have a position for him at his level. After the many years he spent working for the company, in the end he was offered a position that was the same as when he first started. Positive Side of International Human Resources Management (IHRM) The German bank has clearly defined a strategic policy of expansion. Although it is not clear whether this is a written policy or a mandate of the Board of Directors, the CEO spoke out this course of action. It is clear that the bank is facing a growing plan on a global scale.
In this order of ideas, the globalization plan that the top executive level is trying to tackle demands actions in the field of IHRM. It seems that there is an ethnocentric approach to staffing beneath these few actions because key positions in domestic and foreign operations are being filled by parent country nationals (PCN). The use of this approach is appropriate for a business entity that is in its initial stages of globalization, because it reduces the perceived risk and facilitates that the new subsidiaries comply with corporate objectives and policies.
The creation of the so-called “company-wide international leadership development program” is a positive measure because it shows sensitivity towards human resources and their well-being. This program also transitions into new environments without losing productivity and establishes a common working platform. The addition of a “one-week seminar at a leading business school in the United States” is a signal of commitment with modern practices and the standardization of the body of knowledge required by the new generation of executives within the bank.
In general, the German bank took appropriate initial measures to support IHRM, which is facing the global expansion challenge. IHRM Areas to Improve Although there are sparks of good judgment in the company’s field of IHRM, the actions reveal an evident inexperience in the management of this field, with flaws in several areas that ultimately produced the uncomfortable situation suffered by all members of the Weber family. Lack of communication: It is clear that there was lack of communication between HR in Frankfurt and its counterparts in the New York office.
This fact might be extrapolated to other branches and/or subsidiaries. It is recommended to establish communication policies that include levels of responsibility and methods, which depends on the nature of the information that is to be conveyed. 111 ©JBSQ 2010 Journal of Business Studies Quarterly 2010, Vol. 1, No. 4, pp. 110-118 No career development planning. Development is a key point that requires immediate and well-organized methodology.
Every employee should have an individual career development plan based on strengths, weaknesses, threats, and opportunities that will be defined and reviewed, at least once a year, to match corporate and personal goals. Furthermore, this plan should include training activities and courses that allow the prospect to have a balanced development. Improvisation in making an easy transition to the new environment and culture. Andreas and his family lived the worst experience an expatriate can live, in terms of transition.
Accepting an expatriate position requires compensating every member of the family. The success of the assignment is a direct function of the level of well-being for family members. Moreover, the corporation has to compensate from different standpoints, which include professional growth of the spouse, purchasing parity power, quality of education, and housing. This plan did not incorporate spouses to an active life, nor regular home leave absences planned to keep in contact with parent country. Lack of evaluation drills to measure the work and implement corrective actions.
After several years, no measures were taken to fix the errors made in this international assignment. As it is in character in all managed projects, vital activities are the measuring and evaluation of key parameters to understand the effectiveness of the plan. Failure in retaining personnel. This is a weak point perhaps due to the lack of human resources planning. A thorough analysis of the reasons of employees holding positions in New York might indicate a deficiency in the motivational messages from the corporation.
Andreas had an explosive growth, from credit analyst to managing director, in five years. In standard conditions, this growth would have taken ten to twenty years to guarantee that the employee is developed at the level of duties required by the positions. There is no respect for the employee in terms of consideration as a human being. Apparent Challenges and Problems This firm has a titanic amount of changes to make in creating a true human resources department.
Even though the bank has experience in managing domestic human resources issues in Germany, it is completely naive in the international arena. Under the current scheme, there is no professional growth despite the implementation of foreign assignments and some courses. As it was expressed previously, there are at least five different noticeable aspects to consider and integrate in a coherent and functional international human resources department that allow the bank to be competitive in its expansion into the global market.
Problem Andreas bank had a problem with their employees entering the international development program. Even though it was properly structured, it was not as effective for some expatriates. Andreas bank was unable to foresee the possible problems with the transfer to New York since, their first priority was to fill in the position as opposed to train the expatriate properly from the beginning. The expatriate then felt that the unexpected transfer led to many challenges.
Although he attempted to work with the issues he was given, he believed HR did not prepare him for repatriation or the return to headquarters. Andreas bank did not have a proper strategy in place for internationalization and repatriation. 112 © Ileana Alvarado, Krystal A. Antoine, Gian-Carlo Cinquetti, Jorge Fernandez, Jabir Najair, Giuliana Scagliotti and Bahaudin G. Mujtaba By not having efficient HR management in both countries and no proper pre-departure and expatriate training, during, and after the international assignment, the process proved ineffective for Andreas.
The main problem is that his bank needs to have pre-departure and return preparation thoroughly explained and presented to expatriates. Andreas’ bank has done some of these procedures incorrectly, such as the lack of early identification of candidates who are qualified for expatriate assignments which tends to limit the time available for their preparation and training, resulting in lower performance and productivity overseas.
Rushed, lastminute recruiting of employees can cause excessive administrative costs (extra travel, expediter services, phone, telefax, express delivery, staff overtime, higher airfares, etc. ) (Wederspahn, 1992). If they would have taken more time, they probably would have placed a better suited expatriate for the international assignment. Recommended Solution The program should have included a more thorough process when it comes to the return of the expatriate.
This way, expatriates can feel more secure about the international assignment because they know what the future is and have more faith in the company. A program that specifically handles the return of expatriates to certain headquarter positions would be a fundamental part of the program. The bank could also have a program in regards to promotions that can keep expatriates with the mindset of having job security. The program would detail and prepare expatriates on how to deal with their return, plus possible future promotions.
Expatriates need to be treated individually because companies that have relied on expatriate policies in the past are finding that a ‘one-size fits all’ approach is no longer realistic in today’s global and diverse workplace (Sharma, 2001). A promotion could even be established as a ladder that gives a general time frame on when they would move up to their executive levels upon returning from international assignments. HR would have to keep expatriates informed about any potential promotions or changes being made to their position.
The HR department could offer the proper training for the expatriate by including a strategy that offers proactive actions. Proactive actions are ones that will assist the expatriates with career planning sessions and agreements to clarify assignments available upon return, financial and tax advice, reorientation programs to provide the expatriate with a briefing on changes in strategy, policies and organization. It is vital that international human resource management professionals recognize what the value of international experience is to both the company and the expatriate.
Expatriates are almost always key employees of today’s organizations, and proper repatriation at end of their assignments is a crucial part of employee mobility management (Cohen, 2010). Survey results have revealed that repatriation terms are usually included in the international assignment policy for 60% of companies, with about one-third requiring that employees take home leave and visit the home office before they finish their assignment, and slightly more than one-quarter regularly update employees on home country developments (Cohen, 2010).
The bank should also discuss with Andreas what can be done for this not to happen again and what the motives of him taking the assignment were to begin with. HR can also go into detail with matters regarding the expatriate after the international assignment has been completed. Although many companies are shifting to a more liberal approach regarding their organization’s structure, it is recommended that headquarters in Frankfurt maintain a solid foundation that supports individual and company growth through established corridors.
Although the bank is considered a global company, it appears that if they have an “Act Local 113 ©JBSQ 2010 Journal of Business Studies Quarterly 2010, Vol. 1, No. 4, pp. 110-118 Think Local” approach as opposed to an “Act Local Think Global” company structure. This is apparent by the lack of preparation for their expatriates who invest a considerable portion of their individual and families’ lives into the company.
At the end of the process, they find out that their experience did not provide them with any type of progression within the company for the reason that the completion of the program has not been fully developed, therefore providing a link between the commencement and conclusion of the company’s international leadership program. The establishment of the company-wide international leadership development program is important for the international growth through global leaders, but the program lacks the bridges that link the various phases of the program together.
The firm should establish an “Expatriate Management Program” within their HR division to manage the expatriate’s progress of each stage in the process. The responsibility of the expatriate management division would be to monitor every aspect of the expatriate training before embarking on the assignment until the completion, individual task achievements within the assignment, and the preparation of the expatriate return to headquarters, which includes placement into their new position.
It would enhance the expatriate experience by allowing them to concentrate on the assignments awarded and maximize the benefits by creating smooth transitions between phases to avoid any disturbance in the harmony of their professional or personal lives. The process can only be achieved through a good system of communication with the Expatriate Management Program Personnel, the expatriate, and the branch locations within the host country. The expatriate management program should have an established protocol that does not allow an expatriate to advance to the next step without the completion of the prior step.
This advancement is not only dependant on the expatriate’s performance, but that of HR’s expatriate management as well. Each expatriate should have the proper cross cultural training for their performance at work, as well as cross cultural training for his or her family to assist them in managing the challenges that they encounter through culture shock. HR should also require that the host country conducts training for their local employees to help them understand the reason for the expatriate, the cultural challenges that they may face, and how to work together with the expatriate on a professional and social level.
Training of both the expatriate and the local employees is imperative to lower the invisible wall that normally is built in assignments dealing with cultures that are very different, which can lead to the expatriate feeling like an outsider as opposed to belonging to the team and the locals not relating to the expatriate or the outsider in their work environment. Secondly, the living arrangements and the availability of the position must be arranged between HR and the host country for a smooth transition of the expatriate.
It is recommended that the expatriate’s family is constantly evaluated throughout the assignment to ensure that the pressure of the family dealing with their new environment does not affect the performance of the expatriate at work. In addition, the performance of the expatriate should be constantly monitored to guarantee that they are receiving experience needed from the various sectors of their assignment, ensure that they are not spending too much time on an individual sector and that the proceeding sector is available for their arrival.
Considering that the preparation must be made in the host country, it is very important that HR has excellent communication with the host country, as the expatriate is the responsibility of the HR. Although the host country should have the expatriate’s best interest in mind, they may still view the expatriate as the responsibility of the parent country. Expatriate management is a two-part process which includes the tracking and preparation of the next step in the assignment in the host country, as well as the preparation of the entry of the expatriate back into the parent company.
It is very important that the these two parts are 114 © Ileana Alvarado, Krystal A. Antoine, Gian-Carlo Cinquetti, Jorge Fernandez, Jabir Najair, Giuliana Scagliotti and Bahaudin G. Mujtaba worked on simultaneously, as the arrangement for expatriate return could take months, if not years, which is where the most critical of all the challenges that Andrea experienced took place.
Although he was able to overcome the challenges that came along with the undeveloped program, he soon found out that he may have endured them pointlessly, as the company was not prepared for his return and placed him in a position equal to the one he had prior to leaving, with a lower salary than what he got accustom to making. To link these two parts together upon the completion of the program in the host country and the re-entry into the home country, the expatriates and their family should receive similar counseling as they did prior to leaving, in an effort to prepare them for the living expectations within the parent country.
This would include the living arrangements, education for the children, readjusting to the culture, and the details including the demands of the expatriate’s new position. Table 1 – Goal #1 (Dowling, Festing, & Engle, 2009) Goal #1: Development of international human resource management as critical part of their competitive advantage in order to transfer accumulated knowledge, skills and abilities that the bank needs to build up over time into an specialized expertise. Action Leadership development Preliminary visits Activities to Support Actions Increase and motivate employee’s capabilities in decision making and managing skills.
The candidate and spouse travel to the host country to assess their suitability for an interest in the assignment. Introduce the candidate to the business context in the host location. One-week seminar at the leading business school in the host country. Continuous orientation and support in housing, education, health coverage, dual career orientation, and international taxation. Permanent communication on changes in strategy, policies and organization of the bank. Provide evaluation frameworks as part of their individual orientation program in order to monitor the effectiveness of the orientation programs.
Practical assistance The current system of promotion within the firm is similar to what Hewlett-Packard employees referred to as a ‘career maze. ‘ Here, promotions are commonly based on performance and potential that can easily lead to cross-functional and cross-divisional promotions, many times placing an employee in sectors that they have no experience in. The firm’s system is similar, except for the fact that employees who leave on an international assignment can easily be excluded from such promotions simply because they are not within the presence of the corporate office.
This can be very discouraging to an expatriate, especially considering the numerous professional and individual challenges that they and their family may have faced. This common cycle can easily be grounds for employee dissatisfaction due to the instability of the company’s attempt to establish and manage a career path for employees to follow. The career maze may be acceptable in an industry that may be a little more liberal in its ways of promoting within the company, but is not so in an industry such as banking. It is 115 ©JBSQ 2010 Journal of Business Studies Quarterly 2010, Vol. , No. 4, pp. 110-118 recommended to keep clear and defined career paths and alternatives that are readily accessible to employees. If employees are dedicated but believe that there is not an established structure to the advancement within the company and that their dedication my lead to certain dead ends then, the company will experience an unmotivated staff and eventually the loss of their best employees. HR would help to promote good morale within the company that is conducive to a healthy work environment and employee satisfaction.
Implementation Plan The Strategic Plan for Human Resource Management establishes components of predeparture training programs, career development, and repatriation programs that are fully integrated with the bank’s goals, and that contain flexibility to be updated on an annual basis. Regional and sector activities in the area of Human Resource Management flow from the strategic plan, including cultural awareness training, preliminary visits, language instruction, and assistance with practical day-to-day matters that facilitate the transition to a foreign location and the success of the international assignment.
Table 2– Goal #2 (Dowling, Festing, & Engle, 2009) Goal #2: Career development in order to enhance an effective representative workforce, learning, training and development to meet future business needs. Action Activities to Support Actions Management Expand efforts to attract candidates for international assignments. development Expose employees to a range of jobs, tasks and challenges within the bank and its international affiliates to increase management development potential. Encourage career advancement.
Continuous individual succession planning including transfer opportunities, cross-training and specific trainings Enhance The human resource management will undertake a review of training professional professional development opportunities in order to identify gaps in development interpersonal communications, managerial skills and recruitment practices. initiative Design and development of the Mentorship web-base training program to assist expatriates during their assignments. The department should continuously review the training programs in order to improve them in the annual basis.
Performance Implement a comprehensive performance appraisal process and guidelines to appraisals recognize the success of the assignments abroad. Update and monitor the appraisal program on an annual basis. Employee Recognize expatriates effectively and immediately. recognition The employee recognition program should reinforce and reward the achieved outcomes for the business. Career development programs minimize career anxiety upon return by ensuring a robust and effective organization that is able to transfer market specific knowledge, inter-cultural knowledge, and management skills in a cost-effective manner.
As Tables 1, 2, and 3 illustrate, the results emanating from the Strategic Plan for Human Resource Management will contribute to the achievement of effective human resource 116 © Ileana Alvarado, Krystal A. Antoine, Gian-Carlo Cinquetti, Jorge Fernandez, Jabir Najair, Giuliana Scagliotti and Bahaudin G. Mujtaba management practices and will be assessed against the performance measures set out for the bank’s human capital and goals. Table 3– Goal #3 (Dowling, Festing, & Engle, 2009) Goal #3: Repatriation program to success in the integration of home and host experiences and minimize staff turnover.
Action Activities to Support Actions Practical Minimize reverse cultural shock. assistance Reduce career anxiety and employment conditions. Social adjustments and social network. Dual career assistance and job-search services. Continuous orientation and support in housing, education, health coverage, dual career orientation, and international taxation. Provide evaluation frameworks as part of their individual orientation program in order to monitor the effectiveness of the orientation programs. Relocation Managing expectations upon return.
Multiple career planning sessions to emphasize career objectives and performance indicators. Communication of different assignments available upon return. Mentoring programs after post-assignment career. Permanent communication on changes in strategy, policies and organization of the bank. Establish net working opportunities Training programs to cross ideas among expatriates and achieve competitive advantage. Dual-way transfer knowledge activities to increase the bank’s return on investment and the employee’s performance.
Reduce reluctance to knowledge transfer inherent in the motivation and capabilities of the repatriate and the receiving unit at home. Generate available positions related to international assignments in order to retain key staff for building upon their international experience. Summary The issue that started the entire problem began with HR in Frankfurt upon offering the position. Communication efforts between HRM in Frankfurt, Germany and the U. S. came up short. In addition, no communication was given to Andreas.
The case study shows that IHRM practices flawed in many instances, but the one way to maintain effectiveness throughout the firm is to communicate and have well drawn out plans for expatriates. From this case alone, other international firms can learn the following in order to keep the faith from their expatriates, and have clear communication. All communication should be documented to include what position an expatriate is being sent for, the accurate length of time including stipulations, and any other information that will assist in a smooth transition.
For the company as a whole, once expatriates move up in ranking, they should be able to maintain the position within their home country. Other policies should be clad and airtight so that a 117 ©JBSQ 2010 Journal of Business Studies Quarterly 2010, Vol. 1, No. 4, pp. 110-118 misunderstanding or miscommunication does not occur. If a company wants to secure their employees and maintain the relationship they have with them, accurate information along with research goes a long way. References Caliguiri, P. M, & Lazarova, M. (2009). Designing a repatriation program. In P. J.
Dowling, M. Festing, & A. D. Engle, International Human Resource Management (p. 207). Mason: South-Western Cengage Learning. Cohen, E. (2010). 44% Have No Short Term Policy. Retrieved May 1, 2010 from http://www. globalhrnews. com Dowling, P. J. , Festing, M. , & Engle, A. D. (2009). Internationa Training and Development. In P. J. Dowling, M. Festing, & A. D. Engle, International Human Resource Management (pp. 137-154). Mason: South-Western Cengage Learning. Dowling, P. J. , Festing, M. , & Engle, A. D. (2009). Re-entry and career issues. In P. J. Dowling, M. Festing, & A. D.
Engle, International Human Resource Management (pp. 183-209). Mason: South-Western Cengage Learning. Sharma, S. (2001). Handling “expatriates”… Issues and Challenges… Are We Ready? Retrieved May 1, 2010 from http://www. bpoindia. org/research/handling-expatriates-issues-andchallenges. shtml Wederspahn, G. M. (1992). Costing failures in expatriate human resources management. Human Resource Planning, 15. Retrieved May 1, 2010 from http://www. questia. com/googleScholar. qst;jsessionid=L3np2ydSlZM2LxcxJzk1CgR8Q x9xXP1hhF9LHw6my8zhhhy1LCGS! -2078906399! -294124474? docId=5000165631 118