The Concept of Multinational Managers - Essay Example

? Managing Culture: The Importance of Training Programmes for Expatriates Analysis Paper Introduction Several organisations have developed different programmes to educate and enhance employee performance in diverse work environments. Nevertheless, even in instances where the organisations have developed initiatives to cultivate cultural awareness, productive application of employees and diversity management, it is often discerned that essential information remains absent among personnel concerning the precise description of diversity; alongside fundamental differences of particular cultural and ethnic groups and most vital for management executives, a paradigm and context for identifying the function of individual self-identity in human development, behaviour, and apparently in the workplace. This article will discuss diversity management from the point of view of a wide-ranging definitional perspective, professional training and acquisition of information. Contemporary studies of multinational managers specify the foremost reasons for failure to operate competitively in a foreign nation which include the manager’s “inability to adapt rapidly to a different culture; personality or emotional characteristics and inability to cope with the complexity of work responsibilities posed by the overseas assignment” (Katz and Seifer 1996, para 4). Managerial shortcomings happen not merely in the classic multi-year expatriate missions but also in short-term, more focused tasks that are oftentimes vital to the prospect of the company’s success in overseas markets. Significant inefficiency is more likely to occur if managers without adequate understanding and appreciation of the host country’s culture are sent on foreign assignment. For instance, the acquisition of Firestone tire by Japan’s Bridgestone necessitates new managers to be assigned in to complete the purchase because of the bad-tempered management approach of the former chairman of Firestone, John Nevin. Japanese, whose behaviour is much more restrained, were not used to the persuasive and hard lined American management technique (Ricks 1993). Firms have the leeway to choose whether to delegate managers from headquarters to overseas assignments, hire foreign nationals, or look for developing country’s nationals to fill the needs in the firm’s international operations. Apart from the nationality of the manager selected for the task at hand, selection, training and socialization aspects continue to be a crucial part of increasing managerial achievements (Dowling, Schuler & Welch 1994). It is a common agreement among multi-national firms that there is no alternative for on-the-job expatriate training in the premature stages of executive growth. For instance, Colgate-Palmolive, whose foreign sales correspond to two-thirds of the company’s annual sales of $6 billion, recognizes international managers as those who have attained considerable first-hand experiences in various environments (Lublin 1992). Therefore, a multi-national firm’s success profoundly depends on the capability and competence of expatriate managers. Hence, there is an urgent and significant need for a solid and useful training ground for the expatriates. Nevertheless, MNCs initially consult theories regarding expatriate training in order to come up with a viable activity-based management plan that would produce efficient, spirited and open-minded expatriate managers. Hofstede’s and Trompenaar’s Theory of Diversity Management Geertz Hofstede, equipped with a vast record of cultural information, examined the outcomes and discovered evident trends of difference and similarity among the feedback alongside the five cultural dimensions (Lucas 2006). His study was conducted with IBM employees only, which enabled him to ascribe the trends of national differences in culture, mainly eradicating the diversity issues in organisational culture. The five dimensions are: (1) power distance; (2) individualism; (3) masculinity; (4) uncertainty/avoidance index; and (5) long term orientation. Power/distance stands for the level of inequality that is present- and is recognised—among individuals with and without authority (Lucas 2006). According to the model of Hofstede, in a high power/distance country, such as Malaysia, employees would perhaps send reports just to senior management and have private discussions where just a chosen few, influential elites were present. Individualism (IDV) embodies the strength of the bonds individuals have to others. The analysis of Hofstede indicates that in low IDV countries, such as Guatemala and Panama, a marketing scheme that stressed gains to the society or that linked to a popular political campaign would probably be interpreted and well-accepted (Fardon 1995). Masculinity implies how much a community commits itself to it, and beliefs, conventional female and male roles. According to the analysis of Hofstede if a company was to open a branch in a highly masculine society, it may have greater success if it hired male employees (Alon 2003). Uncertainty/avoidance index (UAI) implies the anxiety level members of society experience when in unknown or unsure circumstances. The cultural dimensions of Hofstede mean that when deliberating a project with individuals in high UAI countries, they should consider the different alternatives and afterward provide a number of options, but have quite exhaustive information available on their risk and contingency plans (Alon 2003). Long term orientation (LTO) embodies how much a community gives importance to long-term—in opposition to short-range—values and practices. As stated by the analysis of Hofstede, individuals in the UK have low grades in LTO (Lucas 2006). This implies that an individual can quite anticipate anything in this culture with regard to new thoughts and ingenious expression. The model means the individuals in the UK do not give importance to customs as much as several others, and are hence likely to be eager to assist in implementing the most novel schemes as long as they are completely involved. Apparently, societies are different hence there will be departures from the standards Hofstede enumerated. Similarly, Trompenaars collected information over a decade using a process that depended on providing respondents problems or contradicting inclinations (Alon 2003). And like Hofstede, Trompenaars developed seven cultural dimensions of diversity management (ibid, p. 82): (1) universalism versus pluralism; (2) individualism versus communitarianism; (3) specific versus diffuse; (4) affectivity versus neutrality; (5) inner directed versus outer directed; (6) achieved status versus ascribed status; and (7) sequential time versus synchronic time. Hofstede and Trompenaar’s cultural dimensions help managers understand more the ‘other side’, such as when attempting to make multinational projects successful. Better knowledge reduces the likelihood of cultural conflicts and misinterpretations thereby cutting down the costs of coordination (Lucas 2006). The models of Hofstede and Trompenaars help marketers gain knowledge of how the public in various societies behave in different ways towards the same product. Hofstede’s and Trompenaar’s perceptions of training programs are personal and accountable to modification with time; specifically, awareness embraced by participants immediately after the course might be altered by their actual expatriate experience and might be adjusted again by their arrival from the assignment. Moreover, there is substantial consensus in the literature to the outcome that an expatriate assignment commonly goes by through a celebratory stage during which the expatriate examines but fails to come to terms with the new setting, followed by a learning phase at some point in which the adjustment occurs (Black and Gregersen 1991). The duration of the assignment might also be a reason. The literature holds an array of educated guess for the duration of a standard expatriate assignment; “Tung (1987) quotes two to three years for U.S. MNCs and five or more years for European MNCs; Black (1989) estimates three to five years; Brewster (1991) found that the average varied with the nationality of the MNC; it is questionable that those assigned for longer periods would have a greater desire or requirement to adjust to the foreign assignment, and this would affect their perceptions of the training course” (Brewster & Pickard 1991, para 18). Therefore, regarding perceptions of training programs, expatriate reactions to the importance of training will differ with the point at which they were approached for their perceptions, either prior to, during, or after the assignment; and with the foreseen length of the overseas task. Hofstede underlines the existence of expatriate communities in a host country as contributing largely to the mutual support mechanism that individual expatriates need so as to complete the duration of the overseas assignment. Moreover, she emphasized that the span of history of overseas operations by European MNCs whose alien contributories are frequently well-founded created a relatively big expatriate community in which fresh arrivals are reasonably take care of. Likewise, Black (1990) furthered the argument that expatriate community is an effective support mechanism because it can facilitate information and counsel to guide cross-cultural adjustment. Thus, it can be assumed that the presence or absence of an important expatriate community might transform the adjustment practices of expatriates and hence change their outlook of the training program. Expatriate communities can be categorized as “large enough to influence the type and availability of, for example, foods and shopping facilities, medical facilities, schools and recreation opportunities; visible, but not large enough to modify the local environment significantly; and insignificant or nonexistent” (Brewster & Pickard 1991, para 18). Accordingly, it could be assessed that those belonging in larger communities are in less need of training. The ultimate question in the business world remains unanswered. Why do some firms compete productively in the global marketplace and others go down or fail to achieve an international advantage? Some analysts will argue that strategy is the solution. The frontrunners are the ones with the accurate game plans. Some argue that the path to success is to build up the appropriate corporate configuration. Whereas, others allege that confronting the challenges of global industry involves technological modernism. Similar to Hofstede and Trompennar, the knowledge available on strategic human resource management (SHRM) has been preoccupied with the importance to organizations of finding a match between their enterprise and human resources (HR) strategy. The principle is to attempt to support the formal structure and the HR systems so as to compel the strategic intention of the organization (Fombrun et al 1984, 37). Such a contingency framework to human resource management (HRM) can be additionally clarifies as follows, “Different HRM practices serve to elicit and reinforce the appropriate behaviors in the organization. These ‘role’ behaviors cut across the specific skills, knowledge and abilities that are required to perform particular tasks. They are considered as instrumental in the implementation of the competitive strategies; HRM strategies are all about making business strategies work” (Sparrow & Hilltrop 1994, 83). Four HRM practices that Fombrun et al (1984) classified are “selection, performance appraisal, rewards and development” (Selmer 1998, 152) which are the foremost aspects in achieving the balance. Certainly, the strategic mission of HRM is to allocate and distribute aptitude and competencies within the companies, which then increasingly demands employees to traverse national borders and become expatriates (Bartlett & Goshal 1989). The population of expatriate managers in China and in other countries is substantial and increasing, seemingly following the growth of foreign direct investment (FDI) as the prior arrangement of parent firm expatriates to most important positions in their organizations is pervasive (Bjorkman & Schaap 1994). There are profound discrepancies between Western and Chinese SHRM; also, although most overwhelming in the several joint business enterprises, overseas business operations in China characteristically come across an array of obstacles managing local human resources. Expatriation and the Chinese Context The statistics of expatriate managers in China is significant, most probably following the development of FDI. Even though, several Western multinationals depend on their PCN expatriates to embody them, at least in prime positions, the use of overseas, Western educated, cultural Chinese expatriates is becoming more well-liked in the perception that the shared cultural legacy with the hosts will do good to the latter group of expatriates. However, this is not essentially in reality, as subjective evidence demonstrates (Bjorkman & Schaap 1994). Currently, such documentations have been substantiated by empirical research findings. Some researchers, who based their analysis on on-site and in-depth interviews, have illustrated that ethnic Chinese expatriate managers from Hong Kong sent to Beijing and Shanghai endured harsh difficulties, equivalent to the most terrible torments ever accounted in the literature on expatriate management (Stening & Hammer 1992). The primary conclusion from this research study was that life and labour in China seem to be poles apart in countless ways from that in Hong Kong. Strangely enough, the average Chinese cultural heritage appears to exacerbate the adjustment dilemmas of the Hong Kong managers in China instead of smoothing the progress of acclimatization. At the workplace, they commonly abstain from becoming accustomed to the managerial style of local expectations. Alternatively, they persevere, oftentimes in vain, that the subsidiary take on parent country work standards and behaviours, leading to disappointment and in feelings of lack of involvement on the part of the expatriate manager. Since they regularly leave their families in Hong Kong, they can obtain modest or even no support from them. Outside the workplace, they shy away from socializing with host nationals, instead residing in the neighbourhood of and looking for companionship and social interaction with other parent country nationals. Moreover, their free time is largely squandered in the isolation of their homes (Selmer 1998). Cross cultural training and groundwork for expatriate assignments are activities recognized in the literature both as being indispensable for successful adjustment as well as being negatively disregarded. An extremely evident proposition for international business companies is that cultural training and preparation could be valuable not merely when delegating expatriate managers to especially different cultures, but also for missions to identical cultures. Nevertheless, it is highly probable that the training must be different for expatriates appointed to similar as against to remote cultures. While the latter form of preparation frequently includes considerable elements of cognitive training, emphasizing factual information about the host country (Gudykunst, Guzley and Hammer 1996), the former would more likely center on the small number of significant cultural differences that subsist in the moderately alike host culture. Analysis and Conclusion The expansion of international business at a period when most global organizations are experiencing expenditure stresses has resulted in the examination of policies of multinational organizations for expatriates. There are some research studies that were conducted which show that multinational enterprises in the United Kingdom (MNEs) have responded to this challenge through attempting to curtail the number of expatriates that they hire. Although, there are instances which demonstrate exceptional trends such as for European MNEs, which makes it highly probable that the overall population of expatriates from these organization will persist to grow. Confronting this new challenge in international business enterprise, multinational organizations endeavoured in finding alternatives to expatriation, such as depending more heavily on locally recruited personnel, interim transfers, more regular international travel, international commuting or even teleconferencing (Lucas 2006). However, generally, international organizations have tried to boost the cost-effectiveness of their expatriates. A primary ingredient in this has been an increased in attention to proper preparation and training for foreign assignments. Growing interests to preparation is associated to research into cross-cultural adjustment which implies that it incorporates at least three elements, which are, adjustment to the foreign workplace, adjustment to interacting and communicating with host nationals and adjustment to the overall overseas culture and environment. Different scholars from available literature identify an array of individual level skills which have to be enhanced in order to muddle through with international assignments; these skills include self-assurance, relational and perceptual expertise. A fourth element, emotional adjustment has also been proposed. “An internationally-assigned manager has to adjust and respond to these different sources of change. Newly assigned managers must find ways to adjust to the new cultural environment and this process may alter their values and beliefs” (Bird and Dunbar 1991, 6). Countless of the work on expatriate training is established on the significance of this ability to understand, appreciate, tolerate and adjust. However, it has also been emphasized that this is not a trouble free process. The expatriate has to simultaneously adjust to the environment and preserve the distinctive characteristics that they are projected to carry in to the host country. Thus, training and preparation itself become a complicated process. Multinational companies embarking on training and development programs for expatriates confront significant dilemmas. “However imperfect training may be as a substitute for actual foreign living experience, it is valuable if it can reduce the often painful and agonizing experience of transferring into another culture and avoid the great damage that culture shock and cultural misunderstanding can do to a firm’s operating relationship” (Robock & Simmonds 1983, 562). Two difficulties make training and development for foreign assignment more complicated than for local tasks. Primarily, the expatriate not simply has to adapt to a new task and a new function, but also to a new culture. Second, because the pressure associated with an overseas assignment affects all family members, the concern with regard to training programs for the partners/spouse and family have to be attended to. UK MNEs have the proclivity to capitalize on pre-departure training programs less recurrently than European and Japanese companies. Also, there is substantial evidence pointing to the reality that expatriates are extremely optimistic about the importance of training programs. Other alternative forms of preparation such as briefings, surveillance, visitations, are more normal than prescribed training courses and perhaps be more cost-effective. Cross-cultural training has long been established as a way of guiding effective cross-cultural management, however, in actuality most companies choose not to use cross-cultural training. The primary reason seems to be that the senior management simply doubts that training is essential or effective. Paradigms of training and development for expatriate managers, increased over the last decade, pay attention to the assignments, the individual and the setting prior to resolving the breadth of training necessary. Tung’s (1981) design for choosing cross-cultural training techniques recognized two foremost dimensions that must be used, which are, the extent of interaction requisite in the host culture and the continuity between the expatriate’s own culture and the host culture. Mendenhall and Oddou (1985) enhanced this framework to incorporate the level of assimilation and level of thoroughness required and interpreted this into the mandatory length of time for each form of training program. The connection between preparation, adjustment and performance is vital but unsubstantiated, partially due to obstacles in resolving the criteria by which to evaluate expatriate competency. Apparently, the three most important variables influencing effectiveness are the personality characteristics of the individual, the setting or milieu, which include culture, and the job demands. The first concern can be determined through staffing and selection and the other two via training and preparation. Expatriates are among the most costly individuals that any organization employs and are commonly in critical positions. It appears that, there is an urgent need for further and better training programs and preparation courses in order to guarantee that they are capable to be as competent as possible, as immediately as possible. Within the general paradigm of the overall expenditures of an overseas assignment the costs of such preparation is insignificant. Cost-effective management of expatriates would entail generating this valuable investment. References Alon, I., 2003. Chinese Culture, Organisational Behaviour and International Business Management. Westport, CT: Praeger. Bartlett, C. and Goshal, S., (1989). Managing Across National Borders: The Transnational Solution. Boston, MA: Harvard Business School Press. Bjorkman, I. and A. Schaaps, (1994). "Outsiders in the Middle Kingdom", European Management Journal, 12(2): 147-153. 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