Multinational corporations (MNCs) seem to be paying little
attention to international training and management development for new
expatriate assignments. Effective training of expatriate employees is
needed for the success of any MNC. The literature review provides the
view that more sensitivity needs to be paid to the intense training
needs for the benefit of MNCs, expatriates, and family members. It also
provide a better understanding to the merits of the unique experiences
of expatriate managers in international assignments adjusting to the
cross-cultural conditions on global tours and confronting the challenges
affecting their career goals. In order to succeed in a globally
competitive environment, MNCs need to effectively train expatriates in
international capabilities, including fluency in foreign languages and
in the ability to adapt to different cultures. Those international
assignments can lower the probability of expatriate failure through
training programs. This paper has been developed from the same tradition
that the expatriate assignment is often poorly performed in
international business operation as a result of deficiencies in training
and learning. It focuses on ways to improve and foster knowledge
acquisition for expatriates in MNCs' training and learning
In an increasingly changing business world, MNCs establish
foreign-owned subsidiaries and enter into joint ventures and strategic
alliances to create a presence in international competition and to take
advantageous production resources. Many opportunities and challenges of
the globalizations processed are creating the need for expatriates to
locate managers and skilled workers in international locations. However,
the task of expatriate employment is complicated by profound differences
between countries in labor markets, culture, legal and economic systems
(Hill, 2007). In this international environment, the quality of
expatriate employees and management seems to be even more critical than
in domestic operations. MNCs of all sizes (small, medium, or large) that
have subsidiaries in foreign counties are facing the problem of
training, selecting, compensating as well as the reintegrating
expatriate managers. Despite the problem, these expatriate managers are
contributing significantly to the achievement of the MNC's goals
and as a result, their importance should not be overlooked (Treven,
2003). Expatriates are citizens of one country who are working and have
subsidiaries in foreign countries. Inpatriates are also used to identify
a subset of expatriates who are citizens of a foreign country working in
the home country of their MNC employer (Hill, 2007; Harvey & Fung,
2000). These expatriates are sent to a foreign country by MNCs with the
intent to control their operations and to provide technical and
administrative services (Jun, et al., 2001).
A common feature of the literature is to focus on managerial
employees, reflecting the assumption that MNC training and development
efforts have tended to be focused on a small cadre of international
managers. These cadres are mainly drawn from the home country. However,
there are some suggestions in the literature of widening international
training and development cadres among MNCs in their global operations
(McPherson & Roche, 1997). An increasing number of MNCs are
acknowledging the importance of providing training for all categories of
expatriate employees. In order to have access to qualified staff at the
time and place required, more MNCs are becoming aware of a need to
develop international experience across a wider range of employees, from
host locations as well as from the home country (McPherson & Roche,
1997). Expatriate employees need to be selected not on technical
expertise alone, but also on cross-cultural fluency in order to maximize
the expatriate's effectiveness and efficiency working in a
different culture (Hill, 2007; Scholes, 2003). Therefore, it becomes
necessary to train the new expatriates to perform the goals and
objectives set by the MNCs. The purpose of this paper is to illustrate
the importance of training and learning in order to reduce the direct
and indirect costs of expatriate failure rates by improving selection
DIRECT AND INDIRECT COSTS OF EXPATRIATE FAILURE
Global business frequently requires the expatiation and
repatriation of managers and skilled workers. Employee satisfaction with
expatriation and repatriation is critical to the success of MNCs because
these employees often play a pivotal role in managing and coordinating
the operations of the extended enterprise (Morgan, et al., 2004). The
decision of MNCs to participate in international competition raises a
host of human resource issues. One must consider whether a particular
location provides an environment where human resources can be
successfully acquired and managed. One important issue that has been
recognized over and over the past few years is the set of problems
inherent in selecting, training, compensating, and reintegrating
expatriate managers. The importance to an MNC's profitability is
making the right expatriate assignments. A prominent issue in the
international staffing literature is expatriate failure--the premature
return of an expatriate manager to his or her home country (Hill, 2007).
Expatriate and their families suffer high rates of poor performance and
failure, each loss or failure can be extremely expensive in direct and
indirect costs. The total financial costs associated with expatiation as
well as premature repatriation stints are estimated to be between $2 and
$2.5 billion (cited in Jun, et al., 2001).
The expatriate failure rate is an important indicator for measuring
the effectiveness of expatriation management. Results showed that the
costs of expatriate failure are high and involve both direct and
indirect elements. In the case of expatriate recalls, the direct costs
include salary, training costs, and travel and relocation expenses
(Shen, 2005). In addition to finances, the early returns can be also
costly for MNCs with respect to good will and reputation (Dowling &
Schuler, 1990). In many cases, this high failure rate of expatriate
managers is becoming a persistent and recurring problem in the MNCs.
One of the difficulties encountered by expatriates has been blamed
on inadequate training programs before departure to the host country. On
the other hand, the indirect costs may be considerable and unqualified.
Indirect costs may include damaging relation with the host country
government and other local organizations and customers. Also, indirect
costs include loss of market share, damage to corporate reputation and
lost business opportunities (Shen, 2005).
The use of more effective training programs is to improve the
expatriate's performance in an overseas environment, thus
minimizing the incidence of failure (Shen, 2005). Because of the
increasing pace of global challenges in the workplace environment,
employees may have to attend training and development programs offered
by their employers on a regular basis (Rowold, 2007). For example,
Honeywell surveyed 347 managers who lived abroad or traveled regularly
and found that increased training was critical for executives and
employees for international assignments. It is also noted that cross
cultural training has been found to reduce the severity of culture shock
and reduced the time necessary or expatriate managers to adjust to the
culture, reach a level of cultural proficiency, and become effective and
productive in their international assignments (Ronen, 1989).
THE NEED FOR EXPATRIATE TRAINING AND PREPARATION
An analysis for the needs of expatriate training analysis has
attracted considerable attention in the international literature of
expatriate failure. Expatriate failure is always regarded as a result of
lack of adequate training for expatriates and their spouses (Shen,
2005). Reviewing of the literature led the authors of this article to
propose that training methods and MNC's support "both have an
impact on the process of training and learning acquisition (Rowold,
2007). Training aims to improve current work skills and behavior,
whereas development aims to increase abilities in relation to some
future position or job, usually a managerial one (Shen, 2005). Training
can involve the changing of skills, knowledge, attitudes, or behavior.
Also, training may mean changing what employees know, how they work,
their attitudes toward work, or their interaction with their co-workers
or supervisor (Treven, 2003). An emphasize is put on the importance of
training and educating for expatriate managers in preparation for MNCs
to minimize culture shock and maximize the manager's effectiveness
and efficiency while working in a different culture (Scholes, 2003). In
her area of concentration, Scholes also provided a brief overview of the
current practices of MNCs based in South Korean culture and suggested
for further improvement in cross culture training and education for MNCs
to become effective and productive in the global market. In fact,
training characteristics (methods) and MNCs characteristics (management
support) impact on the process of training and learning acquisition
Training should be considered as a life-long endeavor to learn
about other cultures due to the increasing use of expatriate assignments
by MNCs. A successful expatriate manager must be sensitive to the host
country's cultural norms. Also, this expatriate must be flexible
enough to adapt to those cultural norms, and strong enough to make it
through the inevitable culture shock. In addition, the expatriate
manager's family must be familiarly capable of adapting to the new
culture. To adapt to this new culture, MNCs will have to invest more
heavily in international training programs (Aycn, 1997; Tung, 1998;
Boles, 1997). The key to successfully competing in the globalization
business may be staffing by key expatriate positions that has
accomplished leadership (Harvey, 1996). These expatriate managers must
have technical competence in the area of operation; otherwise, they will
be unable to earn the respect to subordinates.
Technical competence has been almost the sole variable used in
deciding whom to send on overseas assignments, despite the fact that
multiple skills are necessary for successful performance in
international assignments (Mendanhall, et al., 1987). In fact,
expatriate failure is seldom a result of a lack of technical skills
(Shen, 2005). Greater technical sophistication of the MNC allows for
less reliance on language and culturally based norms that make
international assignments difficult and confusing (Morgan, et al.,
2004). In fact, the expatriate's material life dissatisfaction is
strongly associated with turnover tendencies (Jun, et a., 2001). With an
appreciation of the role of culture in organizations comes a better
understanding of management and organizational behavior around the world
(Treven, 2003). Thus, U.S. firms have begun to realize that to be
successful in overseas operations, they need to prepare their expatriate
employees to work in international assignments. MNCs that are serious
about succeeding in international business are providing intensive
training to achieve the desired level of performance. Companies such as
AMP, Texas Instruments, Procter & Gamble, Bechtel, and others with
large international staffs prepare employees for international
assignments. The biggest mistake expatriate managers can make is to
assume that people are the same globally. An MNC that makes a concerted
effort to train its employees to understand and respect cultural
differences will realize the impact of its effort on its sales, costs,
and productivity (Kemper, 1998; Kaeter, 1995).
THE IMPORTANCE OF TRAINING FOR INTERNATIONAL ASSIGNMENT
Training and orientation for international assignments are more
common today. It is estimated that 50 percent of companies who sent
employees overseas were conducting pre-training and orientation
(Training, 1997). Other countries, such as Japan, are more committed to
the importance of training for international assignments. This may
explain the low (less than 10 percent) failure rate cited for most of
Japan's MNCs. In Japanese firms, international training is
typically conducted over a one-year period where expatriate employees
are taught about the culture, customs, and business techniques of the
host country (Hogan & Goodson, 1990).
A growing number of MNCs have also shown a strong commitment to
international training and orientation (Lubin, 1992). More increasingly
companies are also outscoring expatriate training (Allerton, 1997).
Federal Express sends future expatriates and their families on
"familiarization" trips, which also serve as "realistic
job previews." Over 70 percent of companies now pay for similar
trips. Gillette is a leader on familiarization trips for international
assignments as a part of its junior trainee program. This program is
aimed at building careers with a global perspective and experience
(Lubin, 1996). American Express provides U.S. business school
students' summer jobs in a host country. Also, Colgate-Palmolive
trains recent graduates for multiple international assignments. A topic
for discussion in recent training programs has been safety of personnel
issues due to increased violence experienced by businesspeople working
in foreign countries (Bensimon, 1998).
If businesses are to be managed effectively in an international
setting, managers need to be educated and trained in international
management skills (Quality, 1998; Rothwell, 1993). It is important to
understand the kinds of skills expatriate managers and employees will
need for international assignments. In addition to good technical
skills, expatriate employees who will be working overseas need to be
adaptable and have skills in languages and an understanding of social
customs, cultural values, codes of conduct, and motivation and reward
systems in the host country (Kemper, 1998). For Middle Eastern
assignments for example, Bechtel places great emphasis on the importance
of religion in the culture. Expatriates also need assistance in the
practical aspects of international assignments (e.g., housing, schools,
currency, and health issues). Visits to the host country can aid in
reassuring expatriate employees and their families about their home,
hospitals, dentists, and schools. These training programs are important
for expatriates and their families, particularly in cultures where women
are excluded culturally from doing a variety of things during the day.
For instance, in Saudi Arabia women have many restrictions about dress
and proper behaviors. Therefore, successful cultural adaptation can be
conceptualized as an individual's general satisfaction with
one's personal situation in the host country (Jun, et al., 2001).
There are several examples of cross-cultural training programs used
by MNCs. Cross-cultural training prepares expatriate managers to live
and work in a different culture. For the expatriate, coping with a new
environment is a much greater issue than dealing with a new job (Treven,
2005). It is important to remember that when the expatriate employees
arrive, they are foreigners in the host country. Therefore, it is
important to provide much cultural and practical background before the
employee and family are relocated for international assignment. In
recognition of expatriate family issues, some MNCs have also begun to
prepare and assist their families. Assistance may take the form of
training in the culture and language of the host country. An example for
this case is ARAMCO, a Saudi Arabian corporation, who uses an extensive
orientation program for expatriate employees and their families. The
program includes practical housekeeping information such as local
transportation, shopping, day-to-day finances, and comparisons of the
beliefs and customs of the Saudi and American people. The research on
cross-cultural training showed that expatriates perform better and are
more satisfied with their assignments after intense training (Black
& Mendenhall, 1990). Also, research evidence shows that an MNC that
provides training for expatriates believe that it improved their
employees' effectiveness and enabled them to relate more easily to
a foreign culture, which fosters a better image of the firm in the host
country (Hill, 2007).
Acquiring the skills necessary to be successful in an international
assignment can be accomplished through the use of a variety of training
techniques. Procter & Gamble use several methods to training and
learning language skills and to improve intercultural awareness among
international assignees (Copeland, 1987). The "P&G
College" for new and mid-level expatriate managers recommends that
the expatriate employee and his or her family should be actively
involved in the training to ease the transition and build a supportive
environment. It is further suggested that the training for expatriates
should be led by people who have served in the specific country and that
the training should begin a year before the new expatriate
employee's move to the host country's environment (McCrea,
Field experiences are recommended to provide a more in-depth view
of the host country's customs, values, and behaviors. The value of
such experiences is to provide a realistic preview of what is to be
expected in the international assignment (Tung, 1998). Finally, language
skill classes and cassettes are recommended for use in developing skills
in interpersonal communication and the day-to-day dealings that the
family will encounter in the host country. In a 12-country study of
3,000 executives, respondents from many countries viewed foreign
language skills as critical to a firm's competitive advantage
(Tung, 1998). This should include not only verbal communication skills,
but also nonverbal messages and meanings.
In addition to providing training for expatriates, U.S. firms are
increasingly providing training for inpatriates (foreign national who
are coming to the United States to work). For example, SC Johnson Wax
has been bringing employees into the United States for the past 10
years. Eli Lilly and Company brings in about 20 people a year, typically
in the fields of science, finances, and marketing. Their training needs
are very similar to those of expatriates. If they succeed in adjusting
and contributing to the MNC as planned, the organization will benefit.
If they continually struggle or fail, the employee, family and MNC
suffer (Boles, 1997).
It is argued that a prominent issue in the international staffing
literature is expatriate failure--the premature return of an expatriate
manager to his or her home country (Hill, 2007). This argument is based
on the notion that MNC provide insufficient expatriate training and
therefore, expatriates and their families suffer high rates of poor
performance and failure. This paper has examined the training and
learning of culture since it is essential for expatriate managers and
employees to succeed in today's global business competitive
environment. The role of MNCs is to select expatriate managers that
require careful evaluation of the personal characteristics of the
candidate and his or her spouse. Once an individual is selected, an
intensive training and learning program is essential to qualify that
person for an international assignment. It is during the face-to-face
interviews that the diversity and significance of learning and training
practices become clear for international assignment. Development should
also extend beyond information and orientation training to include
sensitivity training and field experiences that will enable the
expatriate manager to understand cultural differences better. Those in
charge of the MNCs' international training and learning program
should provide training needed to protect expatriate managers and
employees from career development risks, reentry problems, and culture
shock. It is the role of the MNC to understand in terms of encouraging
expatriate employees to learn knowledge, skills and attitudes congruent
with its objectives in global business operations, which are important
to job and business performance.
Successful training and learning depends upon a systematic approach
involving a careful needs assessment, relevant program design and
complete evaluation of results. MNC's have greater influence over
the content and process of expatriate training and learning programs
designed to meet its particular needs as well as the expatriate
employees. MNC have greater power to design training programs and
structure for expatriate managers to stay current and anticipate future
needs to view training as a continuous learning endeavor. Expatriate
employees who receive training not only will be more valuable to their
MNCs, but also will earn 30 percent more than those who don't
receive such training (Galagan & Wulf, 1996).
Allerton, H. (1997). Survey says. Training & Development,
Aycan, Z. (1997). New approaches to employee management, vol. 4:
Expatriate management: Theory and research, Greenwich, CT: JAI Press.
Bensimon, H. (1998). Is it safe to work abroad? Training &
Development, 52(8), 20-24.
Black, J.S., & Mendenhall, M. (1990). Cross-cultural training
effectiveness: a review and theoretical framework for future research.
Academy of Management review, 1591), 113-136.
Black, J.S., & Gregersen, H. (1999, March-April). The right way
to manage expatriates. Harvard Business Review, 52-63.
Black, J.S., Mendenhall, M., & Oddou, G. (1991). Towards a
comprehensive model of international adjustment. Academy of Management
Review, 16, 291-317.
Boles, M. (1997). How organized is your expatriate program?
Workforce, 7698), 21.
Caudron, C. (1991, December). Training ensures overseas success.
Personnel Journal, 27.
Copeland, M. J. (1987). International training. In R.L. Craig
(Eds.), Training and development handbook (pp. 717-725). New York:
Dowling, P.J. & Schuler, R.S. (1990). International dimensions
of human resource management. Boston, MA: PWS-Kent.
Fiedler, F. E., Mitchell, T., and Triandis, H.C. (1971). The
culture assimilator: An approach to cross-cultural training. Journal of
Applied Psychology, 55, 95-102.
Galagan, P. & Wulf, K. (1996). Signs of the times. Training
& Development, 50 (2), 32-36.
Gudykunst, W.B., & hammer, M.R. (1983). Basic training and
design: An approach to intercultural training. In D. Landis and R. W.
Brislin (Eds.), Handbook of intercultural training (Vol. 1, pp. 118154.
Elmsford, NY: Pergamon.
Harrison, J. K. (1992). Individual and combined effects of behavior
modeling and the cultural assimilator in cross-cultural management
training. Journal of Applied Psychology, 77, 952-962.
Harvey, H.G. (1983). The multinational corporation's
expatriate problem: An application of Murphy's Law. Business
Horizons, 26, 71-78.
Harvey, H.G. (1996). Developing leaders rather than managers for
the global marketplace. Human Resource Management Review, 6, 279-288.
Harvey, M. & Fung, H. (2000). Inpatriate managers: The need for
realistic relocation reviews. International Journal of Management, 17,
Hill, Charles W. (2007). International business, 6th ed. New York:
Hogan, G. W., & Goodson, J.R. (1990). The key to expatriate
success. Training & Development, 44 (1), 50, 52.
Jun, Sunkyu, Gentry, James W. & Hyun, Yong J. (Second Quarter
2001). Cultural adaptation of business expatriates in the host
marketplace. Journal of International Business Studies, 32 (2), 369-377.
Kaeter, Margaret. (1995, May). International development. Training,
32 (5), S23-S29.
Kemper, C.L. (1998, February). Global training's critical
success factors. Training & Development, 52 (2), 35-37.
Kemper, C.L. (1998). Global training's critical success
factors. Training & Development, 52(1), 35.
Lubin, J.S. (1992, March 31). Younger managers learn global skills.
The Wall Street Journal, p. B1.
Lubin, J.S. (1996), January 29). An overseas stint can be a ticket
to the top. The Wall Street Journal, pp. B1, B5.
McCrea, J. (1997, July). Rx for expatriates. World Traveler, pp.
18-20, 22, 25-27.
Mendenhall, M., Dunbar, E. & Oddou, G.R. (1987). Expatriate
selection, training, and career patching: a review and critique. Human
Resource Management, 26, 331-345.
McPherson, Alastair H. & Roche, William K. (1997). Peripheral
location equals localized labor? Multinationals and the
internationalization of training and development in Ireland. The
International Journal of Human Resource Management, 8 (4), 369-384.
Morgan, Leslie O., Jie, Winter & Young, Scott T. (2004).
Operational factors as determinants of expatriate and repatriate
success. International Journal of Operation & Production, 24: Iss.
Ronen, S. (1989). Training the international assignee. In I.L.
Goldstein and Associates (Eds.), Training and development in
organizations (pp. 417-453). San Francisco: Jossey-Bass.
Rowold, Jens. (March 2007). Individual influences on knowledge
acquisition in a call center training context in Germany. International
Journal of Training and Development, 11 (1), 21-36.
Rothwell, S. (1993, Summer). Leadership development and
international HRM. Manager Update, 4 (4), 20-32.
Scholes, Sonya. (2003). The expatriate manager in South Korea:
Cross cultural communication. www.international_business_careers.com.
Shay, J., & Bruce, T. J. (1997, February). Expatriate managers.
Cornell Hotel & Restaurant Administration Quarterly, 34-40.
Shen, Jie. (2005). International training and management
development: Theory and reality. The Journal of Management Development,
24: Iss.7/8, 656-666.
Solomon, C. M. (1995a). HR' helping hand pulls global
inpatriates on board. Personnel journal, 74(11), 40-49.
Training (1997). 1997 Industry Report, 34 (10), 33-72.
Treven, Sonja. (2003). International training: The training of
managers for assignment abroad. Education + Training, 45 (8/9), 550-557.
Tung, R.L. (1998). A contingency framework of selection and
training of expatriates revisited. Human Resource Management Review,
Tung, R.L. (1982). Selection and training procedures of U.S.,
European, and Japanese Multinationals. California Management Review, 25,
What does it take to be a global manager? (1998, March). Quality,
37 (3), 34.
Semere Haile, Grambling State University, Grambling, Louisiana, USA
Marcus D. Jones, Northwestern State University, Natchitoches,
Tsegai Emmanuel, Grambling State University, Grambling, Louisiana,