Expatriation and Culture Shock in China - Essay Example

?#606079 Expatriation and Culture Shock in China Introduction Globalisation, driven by the rapid growth of information and communication technology, has naturally resulted in the expansion of business as a consequence of the opening of national markets to international access. Part of this internationalization expansion of business is the natural activity of overseas posting, or what is known as expatriation, or the assignment of a national to a position in a subsidiary that is located in another country. Such overseas assignments, according to Cardozo (2007), are generally seen as very attractive and desirable career moves since they would carry a juicy compensation package. Cardozo (2007) believes that these opportunities are being sought and preferred because of the excitement of foreign travel and the challenges presented by the new posts. It would appear, however, based on studies and recent developments on expatriation, that the figure is not altogether rosy for the expatriates. One of the undesirable effects of expatriation is culture shock, a condition defined as “coming to understand and adapt to differences in culture” by Kwintessential Ltd., a company engaged in cross cultural services. It is the objective of this paper to take an in-depth look at expatriation and culture shock in China, how expatriation leads to culture shock and how this condition is experienced by the expatriates. The choice of China is made for the simple reason that China is an interesting case for cultural study especially in its present role as the bearer of a new economic order, and for many expatriate managers, is a stimulating environment in which to live and work (Kaye and Taylor, 1997). The paper further aims to examine the causes of this undesirable state using research data gathered from secondary sources. It is hoped that the examination will add more insights into this problem and possibly contribute to a deeper understanding and resolution of the same. Extent of Failure of Expatriation According to Harzing (1995), almost every publication on the topic of expatriation defines and evaluates expatriate failure as the “percentage of expatriates returning home before their assignment contract expires.” Harzing (1995) cites Buckley and Brooke who claimed that expatriate failure would be in the range of 70 per cent for developing countries and 25-40% in developing countries. Rosalie Tung in Shilling (1993) puts a second to this claim by citing survey results among US, European and Japanese multinational corporations indicating a high percentage of failures in overseas assignments. In another report by Sharon Lobel, failed assignments were reported to have occurred in as often as 70% of the time in many developed countries (Shilling, 1993). Addler and Ghadar in Harzing (1995) attribute a range of 25-40% for failed American expatriates while Tung’s estimate of the failure rate among expatriates in Europe is 10%. It is easy to see from these percentages that the returning expatriates, known as repatriates, represent a substantial sum of money lost on their failure to adapt to the country of assignment. If the losses are substantial from the returning assignees, what is more disturbing is the finding in recent studies that showed the decreasing number of candidates now refusing foreign assignments (Rao, 2010) Other studies have shown, according to Kaye and Taylor (1997), that 16-40% of expatriates terminate their foreign assignments early because of their poor performance on the job or their inability to adjust to their new environment. Not only that, the same studies show that as many as 50% of those who stay would be functioning at low levels of effectiveness (Kaye and Taylor, 1997). It is estimated that the average cost to the parent company of a failed assignment would be in the range of $65,000 to $300,000 per failure (Mendenhall and Oddou in Kaye and Taylor, 1997). Culture Shock: A Major Cause of Failure The Oxford Dictionary of Sociology refers to culture shock as “an experience of sudden immersion in a culture very different from one’s own.” The term is said to be generally implying a negative or adverse reaction to moving within societies; those who become immersed may suffer return culture shock when entering back into their own society. Andersen and Taylor (2011) refer to it as a feeling of disorientation when one encounters a new or rapidly changed cultural situation. They said that the culture shock is greater when the differences in cultures are deeper (Andersen and Taylor, 2011). A View of Culture Perhaps a better understanding of the term could be achieved if we recognize what culture is. Deresky (2000) describes culture as the “shared values, understandings, assumptions and goals that are passed down through generations.” Hofstede (1984) calls it the collective programming of the human mind that creates the distinction between the members of one group against the members of another group. A more down to earth description is provided by Bodley (1994): it is what people think, what they do, what they produce, their mental processes, knowledge, beliefs and values that are part of those elements. In other words, culture is a set of values, beliefs and concepts that are commonly shared by a group of people to enable them to make sense of their existence. Cultures, as seen by Kluckhohn and Strodtbeck in Adler and Gundersen (2008), vary according to the perception dimensions of individual, world, human relations, activity, time and space. Culture then is what makes nations different from each other, and when people of different cultures meet in an organization, there is created a condition called diversity which is a natural breeder of conflict (Harvard Business Press, 2008; Deresky, 2000). This is what expatriates go through when they take on their foreign assignments. The exposure could lead to what is known as culture shock. Stages of Culture Shock Experts have identified culture shock as occurring in various stages. Kwintessential (nd) describes these stages as stimulation, culture shock, adjustment and enthusiasm. At the first stage, the shock is not yet felt as the expat is still filled with positive outlook and excitement for the new job. In the second stage, the expat begins to actively interact with the host culture through the daily interactions at and off work. Due to the differences in behavior and the stress from the daily routine, a feeling of dislike for the host culture starts to develop. These shock symptoms appear as homesickness, boredom, irritability and hostility. In the third stage, after the initial settling-in period, when an understanding of the host culture begins to develop, the expat starts to feel comfortable with his routine and his surroundings. By this time, a working knowledge of the language is acquired and used actively. At the fourth stage, the expat now feels at home in the host country and the culture shock transforms into a genuine liking and enjoyment for the place and its people. Instead of being critical, the expatriate exhibits a certain preference for the native culture and in fact adopts some local behaviors and attitudes (Kwintessential, n.d.). Culture Shock in China No one can miss China today. China looms as the world’s leading superpower in the next few decades. China is one country very rich in culture, and organisations intending to expand to China need to understand China and how the Chinese do business if they want to address the problems posed by cultural diversity. The challenges facing Western expatriates going into a Sino-foreign location would be extraordinary and, as already experienced, very frustrating. This is because of the distinction of China’s culture from most other countries (Selmer, 2005). Zhang (2008) cites some examples of culture shock in China. One does not traditionally say “thank you” to a family member; to do so would actually create a distance between the family members. Chinese nationals would normally pay in cash than with credit cards. It is not unusual for man to hold hands with another man, or for a woman to hold hands with another woman while they are walking in the streets; there is no malice in the gesture in China. The National Centre for Language Learning (NCLT, 2008) cites a Chinese business principle called “Li” which means proper conduct that expatriates should take into account as they take on their assignments. Li controls all aspects of business meetings including introductions, seating and decorum (NCLT, 2008). It is tradition at a business meeting for one person to speak for the whole group. Li considers the Western tradition of young executives speaking out as disrespectful. In decision making, whereas a Western executive can make a decision on the spot, in the Chinese culture, executives take time to think through the various options. Chinese tradition values business relationships as a relationship that extends to their company and their families. Chinese nationals put a very high premium on trust in relationships. (NCLT, 2008) The Chinese extremely value their honor. Loss of face is a stigma they have a difficult time from which to recover. Addressing a Chinese national with respect equates to according them a high social standing. Being late is considered an insult to the other person. It is also considered impolite to do eye contact; they prefer to look at the lips instead of the eyes. (NCLT, 2008) Causes of Culture Shock The Tung study (Shilling, 1993) identified the four main causes of expatriates’ problems as the spouses’ inability to adjust, the expatriates’ inability to adjust, the expatriates’ emotional immaturity and other family problems. Shilling (1993) believes that the selection of the right candidates for expatriation has a lot to do in avoiding the serious consequences of culture shock and consequently in ensuring greater success for the international endeavour. Selecting the right candidate would also mean a tremendous value to the expatriate and his family. It was observed that very often, foreign assignments are made reactively, as in knee-jerk fashion, just to fill in a new vacancy, resulting in the assignee’s failure to adapt to the new environment (Shilling, 1993). This observation is confirmed by Kaye and Taylor (1997) who laments the practice of putting up expatriates based solely on the technical aspects of the work and less on the aspect of cultural adaptability. Shilling (1993) cites the tremendous cost consequences of such failures in assignments in terms of overseas compensation, allowances and repatriation expenses, given the priority and importance the assignment is accorded. One can only imagine how staggering the total costs would be after inputting the greater loss in the damaged relationship with the host country, the loss in the company’s market share and standing, and the damage to the expatriate’s future and that of his family. Apple Gidley, writing for Lifestyle, deplored the misery suffered by returning foreigners to their homeland in terms of the change in lifestyle brought about by unsettled children, jobless spouses and immensely increased expenses. This is not to mention the social exclusion exhibited by the people back home as a reaction to their suddenly unfamiliar culture (Gidley, 2010). Dealing with Culture Shock Global organizations no longer disregard the value of expatriation as a corporate strategy. Global business is the way to go in the 21st century and this means that the demand for more managers with sufficient global preparation will continue to push organizations into making more foreign assignments (Adler and Gundersen, 2008). This also means there will be continuing need for a deeper understanding of cultures in order to come up with better mechanisms for dealing with culture shock. It is important to understand the value of readiness and preparation before finally going into an expatriation decision. Bucknall (2002) suggests that the key is not to write off expatriation as an organizational strategy but to avoid or lessen the impact of a sudden exposure to a new environment. This approach recognizes that an overseas posting of somebody qualified is a necessary and desirable option in the overall strategy of the business. Since it is a matter of culture that touches into the depth of the expat’s and his family’s psychology, the preparation must begin with the proper selection of the right person (Bucknall, 2002). Identifying the qualifications and attributes necessary for a successful adjustment to the assignment is the critical step towards such posting. Qualifications include professional and technical ability to perform the job and the ability to solve problems and make decisions. For the necessary attributes, Bucknall (2002) cites the need for demonstrated maturity, flexibility, and physical and psychological fitness. Systems Approach; Hofstede’s Dimensions Harris and Moran in Deresky (2000) propose a system approach to understanding culture variables and their impact on work behavior. They have identified eight subsystems of cultural variables. These are kinship, education, economy, politics, religion, associations, wealth and recreation (Deresky, 2000). Hofstede on the other hand proposes four underlying dimensions that identify and describe the cultural profile of a country: power distance, uncertainty avoidance, individualism and masculinity (Deresky, 2000). Kaye and Taylor (1997) are affirmed in their observation that Hofstede’s four dimensions provide a productive characterization of Chinese culture, that of a tight social framework that seeks to strengthen the harmony within groups. An understanding of the cultural dimensions of a country can guide an expatriate in his interactions with people in that country. China, for example, has a power index of 80 versus the world average of 56.5 (Crown Relocations, 2011), which means that the Chinese value protocol immensely. Crown Relocations, a global company engaged in global intercultural training, provides some tips for using China’s power distance dimension in interpersonal relations: Always greet the eldest member of a group first. Do not call people by their first names but by their professional addresses, as Dr. or Professor. The Chinese reply of “We will see” or “We’ll think about it,” is a non-confrontational method of saying No. On the dimension of individualism, China ranks lower than any other Asian country which the site attributes to the local Confucian principles of respect for age, loyalty, and harmony. The website suggests being polite, not losing one’s temper, not being confrontational, avoiding putting someone on the spot, avoiding asking pointed questions, looking at meetings as simply avenues for information exchange and not for decision-making and always aiming to build lasting relationships (Crown Relocations, 2011). More ideas that could provide clues as to how the Chinese interact with others may be learned through diligent research. Trompenaars’ Four Diversity Cultures Fons Trompenaars, a Dutch culturalist, offers another insight into international culture (Changing Minds, 2011). Trompenaars introduces four diversity cultures that look into dimensions involving person versus task and centralized versus decentralized. The factors studied pertain to relationships between employees, attitude to authority, ways of thinking and learning, attitudes to people and managing change. Cultural Sensitivity It is becoming evident that one clear way to dealing with culture shock is for prospective foreign assignees to have a cultural sensitivity to accommodate behavioral differences in different societies (Deresky, 2000). These differences are reflected in the attitudes, expectations and behavior of individuals and groups where the expatriate would be posted. Deresky (2000) suggests that expatriates must avoid what he calls parochialism, an assumption that one’s own skills and techniques are the best and superior in any situation or location. Expats must make way for an understanding of how the locals might respond or react to such a posture and adjust their behavior or actions accordingly. Role of Communication On the job conflicts in international organizations, according to Deresky (2000), arise out of conflicting or opposing values and orientation about certain aspects of life and work such as time, change, material factors and individualism. Much of these conflicts are not addressed because of ineffectiveness of communication skills. Deresky (2000) sees communication as taking up majority of a manager’s time at work, and since communication is the pipeline of culture, the success of his interactions, transactions and interrelations would be determined by the effectiveness of his communication skills. Effective communication requires the development of cultural sensitivity, careful encoding, selective transmission and careful decoding (Deresky, 2000). Cross-Cultural Training Selmer (2005) suggests cross-cultural training as a possible solution to lessening the shock. The training program could include cultural familiarization, language training, environmental briefing and executive briefing. Many studies advocate cross-cultural training although its effectiveness has not been conclusively proven. Another method being suggested is sociocultural and psychological adjustment training, a program that incorporates social skills in the host culture with culture learning and its association with an individual’s emotional state (Selmer, 2005). Again, the effectiveness of this method has yet to be substantially validated. Conclusion As competition moves to the wider global plain due to the expanded marketplace, the demand for qualified managers and executives who are skilled in international management and working in diverse cultures has equally intensified. Yet, simultaneous with the speed at which foreign postings are made, an alarming percentage of these expatriates would turn back home and terminate their assignments without finishing their contracts (Shilling, 1993). The culprit has been identified as culture shock and has sent everybody looking for an antidote. Two major causes of early repatriation have been known: technical incompetence and failure to adjust to the host culture (Kaye and Taylor, 1997). But it is the inability to adjust that has caused the shock that would immediately send the poor expat scampering back home. It is truly a great waste of valuable resources to send one’s high-value executive to a foreign assignment just to be turned back without recovery of losses. The approaches that seem to be emerging with potential positive effects have to do with the preparations prior to posting, from selection to cultural orientation of both candidate and spouse to language acquisition and personal acculturation via a visit to the intended place of assignment prior to actual transfer. Culture learning and adaptation skills could be very useful. Exploring all possible preparations, including sociocultural and psychological adjustment, should be considered prior to the assignment. 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