International Career ManagementCase: Catskill Roads

Prof. Ruth V. Aguilera

College of Business & ILIRUniversity of Illinois at Champaign-Urbana

November 1st, 2006

Definitions of International Assignments

Expatriates - Managers from headquarters sent abroad

Inpatriates - Host country managers sent to headquarters

Transpatriates - Managers from different countries sent to any other country

International assignments do not come cheap: on average, expatriates cost a company two or three times what they would cost in equivalent positions back home.

Business Strategy & Nature of Global Assignments Domestic Multidomestic Multinational Global

Global Assignment

None Expatriates Expatriates &

Inpatriates

E, I, & T

Who sent No One Average performers

Good performers

High potential managers & top executives

Purpose --- To get a job done abroad

Project & career dv’t

Project, career, organizational development

Career Impact --- Negative for domestic career

Good for global career

Essential for executive suite

Professional Reentry

--- Extremely difficult

Somewhat difficult

Easy

Global Organizational Learning

None None Limited Extensive

Adler (2002), p. 260

Cross-Cultural EntryCulture Shock - the frustration and confusion that results from being bombarded by too many new and uninterpretable cues, p. 263.

Moo

d

Time in new culture

Stress - caused by change and manifested by

– psychological responses such as anxiety and impatience

– physiological responses such as headaches

Managing stress through– stability zones

– stress management mechanisms

Cross-Cultural Entry (cont.)

Adjustment - after 3 to 6 months in new culture

– problem solving

– decisions made under uncertainty

– tendency to blame others

– finding reliable information

– role of the spouse … SEE VIDEO!

Patience and creativity remain essential.Effective global managers “know that they don’t know.”

Cross-Cultural Entry (cont.)

Home Country Reentry and Professional Reentry

• Many firms often underestimate this stage and do not have explicit repatriation mechanisms.

• “Returnees come back neither to the world they left nor to the world they are anticipating” (p. 272).

• Problems:– organizational cultural shock

– effectiveness

– xenophobic response

– use of learned skills

Reentry Transition StrategiesOriented toward home

country

Oriented toward foreign country

Re-socialized Returnees

Proactive Returnees

Alienated Returnees

Adler (2002), p. 280

Transition Strategies

• Managing reentry through:– Communication: keep in touch with home

office.– Extent of validation: recognizing and valuing

global experiences.

• Underutilized Global Managers– Anemic returns on their expat investments.

Coaching Women for Global Managerial Success

In 2000, 13% of expats are women (10% married). In 2005, 21 % women expats. (WSJ 2001).

Myths:1. Global experience is not that important.2. Given my family commitments, I cannot take a global

assignment.3. For global managers, being a woman is a disadvantage.4. Certain cultures make it impossible for woman

executives to succeed.5. Public is public, and private is private: To be taken

seriously, a woman executive must hide her role as a wife and mother/grandmother

How to measure expat failure?

• Return home early

• Finish assignment but don’t perform as well as expected

• (many) leave their companies within a year of repatriation

Most common reason for failure:– Partner dissatisfaction

Reasons for Expatriate Failureby Tung, California Management Review

US Multinationals1. Inability of spouse to adjust

2. Manager’s inability to adjust

3. Other family problems

4. Manager’s personal or emotional maturity

5. Inability to cope with larger overseas responsibilities

Japanese Firms1. Inability to cope with larger

overseas responsibilities2. Difficulties with the new

environment3. Personal or emotional

problems4. Lack of technical competence5. Inability of spouse to adjust

European Firms – Only one consistent reason: Inability of manager’s spouse to adapt to new environment

Reasons Young Managers Would Accept International AssignmentsPercent of MBAs citing reason (N 1129):

52 Cross-cultural experience and personal growth

53 Job54 Money55 Career Advancement56 Good Location57 Satisfying Life58 Spouse and Family59 Short Term; Other

Reasons Young Managers Would Reject International Assignments

Percent of MBAs citing reason (N 1129):59 Location60 Job and Career61 Spouse and Family62 Money63 Unpleasant Life Abroad64 Disruption of Home Country Life6 Contract Too Long; Other

The Right Way to Manage ExpatsBlack & Gregersen (1999) Harvard Business Review

Three General Practices from successful companies:

1. When they send people abroad, the goal is not just to put out fires. Once expats have doused the flames, they are expected to generate new knowledge for the organization or to acquire skills that will help them become leaders.

The Right Way to Manage Expats

2. They assign overseas posts to people whose technical skills are matched or exceeded by their cross-cultural skills.

3. They recognize that repatriation is a time of upheaval for most expats, and they use a variety of programs to help their people readjust.

Hofstede’s Model• Differences across countries in work-related

values. • Sampled over 100,000 IBM employees across 40

countries.• Four dimensions:

POWER DISTANCE INDIVIDUALISM VERSUS COLLECTIVISM UNCERTAINTY AVOIDANCE MASCULINITY VERSUS FEMININITY

Power distance:

• Focuses on how a society deals with the fact that people are unequal in physical and intellectual capabilities.

• High power distance cultures are countries that let inequalities grow over time into inequalities of power and wealth (e.g. China). Low power distance cultures are societies that tried to play down such inequalities as much as possible (e.g. Denmark).

Individualism vs. Collectivism: • Focuses on the relationship btw the

individual and his or her fellows. • In individualistic societies, the ties btw

individuals were loose and individual achievement and freedom were highly valued (e.g. U.S. & Australia). In collectivist societies, the ties btw individuals were tight and the collective interests is above the individual interest (e.g. China, Japan, Turkey, Indonesia)

Uncertainty Avoidance: • Measures the extent to which different cultures

accept ambiguous situations and tolerate uncertainty.• High uncertainty avoidance cultures place a premium

on job security, internal career patterns, retirement benefits, and so on. They also have a strong need for rules and regulations; managers are expected to issue clear instructions, and subordinate initiatives are tightly controlled (e.g. Japan, France, Spain). Lower uncertainty avoidance cultures are characterized by greater readiness to take risks and less emotional resistance to change (Sweden).

Masculinity vs. Femininity:

• Looked at the relationship between gender and work roles.

• In masculine cultures, sex roles are sharply differentiated and traditional “masculine values,” such as achievement and the effective exercise of power (e.g. Hungary, Iraq, Venezuela). In feminine cultures, sex roles are less sharply distinguished, and little differentiation is made btw men and women in the same job (e.g. Finland, Netherlands).

Country Hofstede CodePower DistanceIndividualism Masculinity Uncertainty AvoidanceArab_World(ARA) 80 38 52 68Argentina (ARG) 49 46 56 86Australia (AUL) 36 90 61 51Austria (AUT) 11 55 79 70Belgium (BEL) 65 75 54 94Brazil (BRA) 69 38 49 76Canada (CAN) 39 80 52 48Chile (CHL) 63 23 28 86Colombia (COL) 67 13 64 80Costa_Rica(COS) 35 15 21 86Denmark (DEN) 18 74 16 23East_Africa(EAF) 64 27 41 52Ecuador (ECA) 78 8 63 67El_Salvador(SAL) 66 19 40 94Finland (FIN) 33 63 26 59France (FRA) 68 71 43 86Germany (GER) 35 97 66 65Great_Britain(GBR) 35 89 66 35Greece (GRE) 60 35 57 112

Hofstede, Culture’s Consequences

Country Power DistanceIndividualism Masculinity Uncertainty AvoidanceGuatemala 95 6 37 101Hong_Kong 68 25 57 29India 77 48 56 40Indonesia 78 14 46 48Iran 58 41 43 59Ireland 28 70 68 35Japan 54 46 95 92South_Korea 60 18 39 85Malaysia 104 26 50 36Mexico 81 30 69 82Netherlands 38 80 14 53New_Zealand 22 79 58 49Norway 31 69 8 50Pakistan 55 14 50 70Panama 95 11 44 86Peru 64 16 42 87Philippines 94 32 64 44Portugal 63 27 31 104Singapore 74 20 48 8South_Africa 49 65 63 49Spain 57 51 42 86Sweden 31 71 5 29Switzerland 34 68 70 58Taiwan 58 17 45 69Thailand 64 20 34 64Turkey 66 37 45 85United_States 40 91 62 46Uruguay 61 36 38 100

Hofstede, Culture’s Consequences

Country Power DistanceIndividualismMasculinityUncertainty AvoidanceUruguay 61 36 38 100Venezuela 81 12 73 76West_Africa 77 20 46 54Albania 90 20 80 70Baltic_Republics40 60 30 50Bulgaria 70 50 50 80Bhutan 94 52 32 28Burkina_Faso 70 15 50 55Caucasus 70 20 50 60China 80 15 55 40Croatia 72 33 40 80Czech_Republic35 60 45 60Dominican_Rep65 30 65 45Egypt 70 25 45 80Ethiopia 70 20 65 55

Hofstede, Culture’s Consequences

Country Power DistanceIndividualismMasculinityUncertainty AvoidanceFiji 78 14 46 48Ghana 80 15 40 65Hungary 19 55 79 83Iraq 95 30 70 85Jordan 70 30 45 65Kenya 70 25 60 50Lebanon 75 40 65 55Luxemburg 55 70 60 70Malawi 70 30 40 50Namibia 65 30 40 45Nepal 65 30 40 40Nigeria 80 30 60 55Poland 50 60 70 55Romania 90 20 40 95Russia 95 47 40 75Saudi_Arabia 95 25 60 80Serbia 86 25 43 92Sierra_Leone 70 20 40 50Slovenia 71 27 19 88Sri_Lanka 80 35 10 45Surinam 80 48 35 80Syria 80 35 52 60Tanzania 70 25 40 50Zambia 60 35 40 50Isreal 13 54 47 81Italy 50 76 70 75Jamaica 45 39 68 13

Hofstede, Culture’s Consequences

Power Distance

Individualism/Collectivism

Individual

Collective

Small Large

ISR

USAAUL

GBR

CANNZLITA

SPA

FRA

BEL

TAI

PAK

INDJAPARG

TUR

BRA

CHI

FIN

DEN

Catskills Roads

• Issues:

- Argentina,

- Mexico,

- New Jersey

- Job changes