This paper examines the challenges multinational companies face in managing expatriate performance across cultural boundaries. Drawing on Adler's stages of corporate internationalization, Perlmutter's ethnocentric-to-global evolution model, and a case study of ASIMCO Technologies in China, the paper argues that expatriate failure stems less from technical deficiencies than from inadequate cross-cultural training, weak organizational support, and poorly designed performance management systems. The paper also highlights Daimler-Benz Aerospace as a model of integrated cross-cultural human resource development. Key factors correlated with expatriate success — including performance appraisal transparency, pre-departure training, family support, and sustained organizational contact — are identified, and recommendations for building more effective international performance management systems are discussed.
The paper exemplifies the use of a single organizational case study (ASIMCO) as an anchoring mechanism. Rather than relying on the case study alone, the author situates it within a broader theoretical context established in the opening sections, then uses the case findings to validate prior research. This technique — theory first, case as evidence, comparative example as solution — gives the argument a clear empirical grounding while maintaining analytical scope.
The paper opens with the business rationale for effective expatriate management, then moves through theoretical frameworks on internationalization and cultural competence. It transitions into the ASIMCO case study as primary evidence of failure, analyzes the nine personal and situational factors studied by Erbacher et al., and closes with positive counterexamples from Daimler-Benz and other corporations before reaching a prescriptive conclusion.
With increasing numbers of American companies going global, it is essential that more emphasis be placed on establishing an effective performance management system designed specifically around the experience of the expatriate within 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 personnel selection and training, and an overall acknowledgement of expatriates' relationships with two different organizational cultures.
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 of expatriates with ASIMCO and other supportive studies discussed below. This research emphasizes that the primary 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 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 since the beginning of globalization persist today. These include ineffective hiring procedures, a dearth of appropriate training, unprepared transfer to foreign assignments, ineffectiveness of expatriates on the ground, and family problems that influence 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 utilized not only for reasons of staffing, control, and representation, but also as a means to develop managers' skills and education and to considerably improve organizational learning and capabilities. Managers in international settings handle highly sophisticated responsibilities, such as leading transnational joint ventures, working with multicultural teams in diverse environments, and balancing the variable responsibilities of global integration and local sensitivity (Mabey, Salaman, & Storey, 1998, p. 194). This multiplicity and complexity of job responsibilities create significant challenges for developing an effective international performance management system.
Evans and Lorange (1989, p. 144) question how a corporation operating in different product markets and socio-cultural environments can 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 multinational companies (MNCs) face, along with workforce cultural diversity.
Adler (1999) explains that companies, as well as their human resource functions, go through four stages of development when beginning to engage with multinational business. The first is domestic, then international, then multinational, and finally global — each with its own unique strategy and orientation. Each stage also places an increased emphasis on the connection of international enterprise to total business activities. These stages can similarly be applied to how organizations 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 may therefore become isolated from the central business, which remains essentially domestic in its perspective. As a result, the amount of interaction and communication between the international and national divisions — in terms of ideas, people, practices, and collaborative learning — is limited. Adler (1991) continues that the multinational corporation attempts to go beyond this international approach by establishing broader multinational business connections. Through its evolution, it increasingly becomes involved with global alliances and, as a result, begins to create common communication and mission, a shared sense of purpose and corporate culture, and management development practices that build connections across corporate resources.
At the same time, culture becomes more important at each of these stages. Perlmutter (1969) adds that the ethnocentric domestic organization evolves into an international enterprise in which cultural sensitivity becomes essential, particularly when managing employees of various backgrounds. Adler's (1991) global organization emphasizes the importance of culture and the recognition that there are many ways to manage and organize. Accordingly, the amount of cultural training increases across these stages. At the global stage, host-country nationals (HCNs) receive extensive training in global strategy, diverse cultural values, and socialization into corporate culture.
Adler (1991) also states that culturally diverse groups can perform either very effectively or very ineffectively. Diversity can be an asset — generating new ideas — or a source of friction and misunderstanding when decisions are being made. For communication to work effectively across cultures, members need to be interculturally competent: they must understand their differences and communicate across them through empathy, negotiation, shared reality, collective participation, open resolution of conflicts, and the ability to leverage cultural differences as a resource. With effective cultural understanding, for instance, an organization can develop a better understanding of customers', employees', and suppliers' preferences, leading to more culturally attuned human resource practices in recruitment, leadership style, communications, training, and appraisal systems.
"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 affected 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 capacity to facilitate successful performance. Expatriate roles depend on social, interpersonal, and cultural skills to a greater degree than purely technical roles.
For managerial performance reviews, some MNCs incorporate achievement of equal opportunity, diversity, and positive action goals. Other issues arise in the appraisal process, including the cultural acceptability of the appraisal itself. The 360-degree feedback model, for example, is not widely 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, whereas employees in Western countries expect management to be risk-takers or to empower employees through the delegation of authority.
Employees in China greatly respect their leaders as authority figures with parental characteristics. They turn to their supervisors for help with personal needs, and white-collar workers frequently request coaching from their manager. Leadership in China must operate strategically at a macro level while simultaneously managing at the micro level. Chinese personnel are most motivated by hands-on leadership and a role model who demonstrates expected behavior. Direct reports typically expect managers to provide detailed directions and explanations rather than broad goals.
These differences between cultures in the United States and China can create significant problems for expatriates who arrive in China without adequate training and cultural understanding. As Erbacher, D'Netto, and Espana (2006) argue, 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, and the research indicates that performance management, training, organizational support, willingness to relocate, and the strength of the relationship between the expatriate and the firm are all significantly associated with expatriate success.
Mabey, C., Salaman, G., & Storey, J. (1998). Human resource management: A strategic introduction. New York: Wiley-Blackwell.
Perlmutter, H. V. (1969). The tortuous evolution of the multinational corporation. Columbia Journal of World Business, 9–18.
Stuttard, J. B. (2000). The new silk road: Secrets of business success in China today. New York: John Wiley & Sons.
Wu, L. (2007, October 23). Talent management insights for China. Retrieved February 3, 2009, from
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