Challenges in the Leadership and Management Development Program - Research Proposal Example

Challenges in the Leadership and Management Development Program Introduction These days, many medium sized companies have a practice of sending their employees abroad for training in the subsidiaries. Such training is considered beneficial in order to help the employees serve in senior positions when they get back. One such company that does this is the medium-sized British MNC. However, the new local director has noticed certain problems with the expatriates that have been sent on this programme before. This paper analyzes the possible causes of those problems with the expatriates. Possible reasons of dissatisfaction of the expatriates at the international subsidiaries Underestimation of the international subsidiaries Assuming the expatriates have been sent to the international subsidiaries located in such developing countries as China and India, one reason for the dissatisfaction of the expatriates with the international subsidiaries and their earlier than supposed return to the UK might be their underestimation of the international subsidiaries. Many people are very cautious about working at well-reputed organizations throughout their career. They tend to think that the quality of organization that they are employed in depicts the reliability and quality of the experience gained. The dissatisfied expatriates might not be optimistic about spending two valuable years of their career serving in an organization that does not have much recognition in the market. Another cause of underestimation of the international subsidiaries might be their poor organizational structure and faulty work setup. Considering the fact that the expatriates belong to a medium-sized British MNC and have worked there for a while and have proved their skills and competences there to the point that they have been considered as the high flyers by the local directors, the expatriates are used to working in an organization with a proper system and a healthy organizational structure and culture. The dissatisfied expatriates might have found out the international subsidiaries contrary to their expectations and thus decided to get back to the UK before the completion of the two years period. Family problems One reason of the dissatisfaction and earlier than supposed return of the expatriates might be their familial problems rather than them having any problem with the international subsidiaries. When the expatriates are located abroad, they have to take decisions about their families as well. They have to decide whether they can afford to take their families along with them or they have to leave their families behind in the UK for two years. If it is assumed that the expatriates were allowed to take their families with them to the host countries, they might not be satisfied with the accommodation, medical and recreation facilities, or educational opportunities for their children in the host countries. On the other hand, if it is assumed that the expatriates were not allowed to take their families along with them to the host countries, they might have felt home-sickness because of which they opted to return to the UK before the completion of the two years period. Hence, the cause of dissatisfaction of the expatriates may or may not be related to the international subsidiaries that they worked in. Maslow’s hierarchy of needs theory is a very important theory of humanistic psychology. Maslow identified certain needs of human beings common to all and arranged them in a hierarchical order so that they formed a pyramid. The five needs identified by Maslow included the physiological needs, safety needs, love and belongingness needs, self-esteem needs, and the need to self-actualize (Cherry, 2013). Maslow proposed that an individual cannot work towards fulfilling a hire level need unless all of the lower level needs have been satisfied. This means that according to Maslow, physiological needs’ fulfillment is the most important for an individual, followed by the safety needs, then the love and belongingness needs, then the self-esteem needs, and lastly the need to self-actualize. If an individual’s love and belongingness needs are not satisfied, he/she would continue to try to fulfill that need and cannot think about self-esteem or self-actualization unless the love and belongingness needs have been met. The dissatisfied expatriates living away from their families might have found their love and belongingness needs unmet because of which they chose to go back to the UK where they can work while living with their families. Culture shock Culture shock is one of the most commonly encountered problems by the people whenever they have to move abroad for any kind of purpose. The existing literature suggests that the main reason of poor adjustment of the expatriates in the international subsidiaries is difficulties experienced in the intercultural adjustment rather than expatriates’ technical competence (Stening and Hammer, 1992; Bird and Mukuda, 1989). The expatriates might be very dissatisfied because they could not adjust in the culture of the host countries. Culture shock is commonly experienced by the foreigners and it often take few years for the foreigners to overcome the effects of the culture shock and completely assimilate in the culture of the host country. From the information provided in the case study, it can be inferred that the expatriates who returned to the UK before the completion of two years stayed in the international subsidiaries probably for a year or even less than that. That is very short period for an individual to come out of culture shock. The expatriates might have felt that they cannot adjust in the culture of the host country and thus decided to go back to the UK. Possible reasons of under-performance of the returning managers Flaws in the organizational culture of the international subsidiaries Apparently, the medium-sized British MNC is not sending its managers to some very successful companies in the other countries according to the High Flyers Programme. All it is doing is sending the managers to a different company in a different environment performing different functions. While making managers work in international subsidiaries is a good idea considering the fact that their knowledge would be expanded as they encounter different kinds of challenges and problems, it cannot be said with utmost confidence that exposure to those challenges would actually make the managers learn how to deal with them. In certain companies, the organizational culture is so complex and full of flaws that the employees’ ability to grow professionally and develop their skills and competence is extremely limited. The rules that prevail in the organization depict the extent to which the employees would be able to optimize on their potential to deal with the challenges successfully. The reason why a considerable percentage i.e. 35 per cent of the expatriates were considered to be under-performing by the local directors as compared to what had been initially expected of them could be that the expatriates were employed in the organizations that were not fit for them. There could be different reasons for this mismatch including the failure of organizational culture and wrong style of leadership prevailing in that organization. “Expatriates, highly committed to headquarters’ way of doing things, inculcate the host county operation with the required organizational values and practices, resulting in potential cultural conflicts with host country nationals that may undermine effective control” (Paik and Sohn, 2004, p. 63). Apparently, the medium-sized MNC did not check the performance of the international subsidiaries that it was sending its managers to or the performance of the international subsidiaries was not included in the criteria of eligibility of the international subsidiaries to be chosen for the training of the expatriates. Lack of responsibilities on the expatriates in the international subsidiaries Although the medium-sized British MNC had assigned individual expatriates to the international subsidiaries, yet there is no indication that the expatriates were given the due roles and responsibilities as managers in the assigned firms. Although it is expected of the expatriates to control the overseas subsidiaries successfully, yet many expatriates have been found to experience serious problems in the international subsidiaries (Banai, 1992; Tung, 1998). The managers at the international subsidiaries might have chosen not to assign the expatriates resources and/or responsibilities adequately thinking that they are only trainees who have been sent by the medium-sized British MNC for two years and would leave after this period is over. Managers have a tendency to only trust those employees for difficult jobs and responsibilities who are long-staying as well as reliable. These expatriates might have been spared all such responsibilities because of this perception that they are there for a limited period. Since the expatriates were not assigned the due resources and/or responsibilities in the international subsidiaries, they never gained enough experience to display good performance when they returned to the UK or France. Underestimation of the skills of the expatriates While the medium-sized British MNC has sent the expatriates to the international subsidiaries for training and experience of managerial jobs, the international subsidiaries have their own systems and organizational structures. The concerned authorities at the international subsidiaries might have underestimated the expatriates for the complex jobs. Obviously no firm wants to risk its future by laying responsibilities in the hands of employees that are deemed unskilled and incompetent. Particularly when the concerned authorities know that the expatriates are there for schooling and experience, they might never be able to trust them enough to assign them the roles that the medium-sized British MNC had intended for them. Accordingly, since the expatriates never got an opportunity to be assigned the required roles, they never became competent enough to display good performance back in the UK or France. Culture shock An individual does not only experience culture shock when he moves from his/her homeland to a foreign country with a different culture, but the culture shock is also experienced when the individual moves back from the foreign culture to the culture of the homeland. The same might have happened with the expatriates of the medium-sized British MNC. In the information revealed in the case study, it is not mentioned how long it took the local managers back at the medium-sized British MNC to find that the expatriates who had returned from the international subsidiaries were underperforming. Probably most of the expatriates were deemed poor in performance within a very short span of time after their return. Differences of social norms and behavioral patterns that accompany the cultural distance between the international subsidiaries and the medium-sized British MNC might have complicated the relationships between the local directors at the British MNC and the expatriates and impeded the decision making processes established in the British MNC (Adler, 1986; McEvoy and Parker, 1995). Had they been allowed more time, they might have displayed better performance and been able to impress the managers back home. It is understandable because the local directors back at the medium-sized British MNC would have high expectations from the expatriates because according to them, the expatriates have been receiving adequate training and experience at the international subsidiaries for two years, whereas in reality, it might not have happened. To make it worse, the local directors have this impression that the expatriates returning from the international subsidiaries are the high-flyers which was the prime reason they had been sent abroad for training and experience. Many expatriates might have just been recovering from the culture shock while their performance was being judged by their seniors in the UK or France. Possible reasons of resignation of the returning managers Growth opportunities in the international subsidiaries The reason 30 per cent of the middle and senior managers that left within a year of returning to the UK or France after completing their postings might have found better opportunities for themselves as they worked as expatriate managers in the international subsidiaries. It so happens that managers, while they are in their homeland know very little about the world and the opportunities they have waiting for them in the world abroad. Once they are exposed to the international environment, they get to realize that there was a lot that they had been missing in their original company. The same might have happened with at least some of the managers that left the company within a year of returning from the international subsidiaries. Managers leaving because of this reason may not be dissatisfied with medium-sized British Multi-national Company (MNC). It is just that they found better opportunities of work abroad. These better opportunities may include but are not limited to better salaries, more benefits, or better opportunities of business and investment than they can find in the UK or France. Particularly, the managers who had been located in such developing countries as China and India might be very optimistic about getting back to them after coming to the UK or France because the opportunities of growth particularly establishing personal businesses in these countries is very easy and profitable because of the favorable laws and very little constraints. If the matter is investigated, most of these managers are expected to have returned to the international subsidiaries after terminating their services in the medium-sized British MNC. Conclusion Concluding, the main factors that caused problem in the L & MD programme of the medium-sized British MNC can be categorized into three main categories. The first category is of dissatisfaction of the expatriates at the international subsidiaries, the second category is of under-performance of the returning managers whereas the third category is of resignation of the returning managers. In light of the points discussed in this paper, the causes of problems were underestimation of the international subsidiaries, family problems, culture shock, flaws in the organizational culture of the international subsidiaries, lack of responsibilities on the expatriates in the international subsidiaries, underestimation of the skills of the expatriates, culture shock upon return to the home countries, and growth opportunities in the international subsidiaries. References: Adler, N 1986, International dimensions of organizational behavior, Boston: Kent. Banai, M 1992, The ethnocentric staffing policy in multinational corporations: A self-fulfilling prophecy, International Journal of Human Resource Management, Vol. 3, No. 3, pp. 451–472. Bird, A, and Mukuda, M 1989, Expatriates in their own home: A new twist in the human resource management strategies of Japanese MNCs, Human Resource Management, Vol. 28, No. 4, pp. 437–453. Cherry, K 2013, Hierarchy of Needs, [Online] Available at http://psychology.about.com/od/theoriesofpersonality/a/hierarchyneeds.htm [accessed: 27 February 2013]. McEvoy, G, and Parker, P 1995, Expatriate adjustment: Causes and consequences, In J. Selmer (Ed.), Expatriate management: New ideas for international business, Westport, CT: Quorum Books. Paik, Y, and Sohn, JD 2004, Expatriate managers and MNC’s ability to control international subsidiaries: the case of Japanese MNCs, Journal of World Business, Vol. 39, pp. 61–71. Stening, BW, and Hammer, MR 1992, Cultural baggage and the adaptation of expatriate American and Japanese managers, Management International Review, Vol. 32, pp. 77–89. Tung, R 1998, American expatriates abroad: From neophytes to cosmopolitans, Journal of World Business, Vol. 33, No. 2, pp. 125–144. Part II Recommendations The medium-sized British MNC can take the following measures to improve the High-Flyers Programme of leadership and management development: Checking the performance of the international subsidiaries beforehand From the information provided in the case study, it is not apparent that the medium-sized British MNC checks the performance of the international subsidiaries before sending its expatriates to them. This might be a major reason of the underperformance of the returning managers. To ensure that the expatriates get the right skills developed, it is imperative that they are provided schooling in the right and competent organizations. To achieve this, the medium-sized British MNC should check the performance of the international subsidiaries before sending its expatriates to them for practical training. The existing literature proposes that the level of international experience of an MNC has a huge impact on the international activities it gets involved in (Fagre and Wells, 1982; Erramilli, 1991) e.g. sending the expatriates to the international subsidiaries in this case. The international experience of an MNC is measured by the number of years for which it has operated in the host country. The medium-sized British MNC should send its expatriates only to those international subsidiaries in which countries it has also worked before. Performance of the international subsidiaries can be checked by conducting surveys in which the level of satisfaction of the employees in general and the managers in particular of the international subsidiaries are assessed, by getting the required data from the international subsidiaries to observe their level of profitability, and conducting surveys to check the reputation of the international subsidiaries among the stakeholders including the consumers. Addressing familial needs of the expatriates The medium-sized British MNC should ideally arrange the settlement of the instant family of the expatriates in the host countries. If this is not possible, the expatriates should be given additional leaves or off-days so that they can meet their families frequently. Preparing the expatriates for culture shock mentally and strategically Literature presents abundant evidence that expatriates frequently experience difficulties in interacting with the workforce of the host country, thus discontinuing their services in the international subsidiaries and returning to their homelands earlier than supposed (Black & Gregersen, 1998; Bartlett and Yoshihara, 1988). Local directors at the medium-sized British MNC need to inculcate the knowledge of the culture of the host countries in the expatriates before they are sent there. These days, use of such Internet sources of information as Kwintessential (n.d.) and geert-hofstede.com (2013) enable the local directors to inculcate this knowledge in the expatriates almost free of cost. For example, if the local director is sending an expatriate to an international subsidiary based in China, it is imperative that the ethics and strategies of doing business in China are taught to the expatriate. Kwintessential (n.d.) provides information about a number of cultural facts whose knowledge helps integration of the expatriates into the Chinese subsidiaries. The cultural facts discussed include Confucianism, face, meeting and greeting, building relationships, gift giving, and organizing and conducting meetings and negotiations. Ensuring the assignment of responsibilities to the expatriates in the international subsidiaries If training the expatriates in the local subsidiaries is inevitable or not possible because of any reason, it is important for the medium-sized British MNC to check the organizational culture of the international subsidiaries it is sending the expatriates to and ensure that the culture is healthy. If the MNC overlooks such particular factors of the international subsidiaries as their regulations and culture, the organization’s overall performance might deteriorate (Ghoshal and Nohria, 1989). The managers should have a means and framework to ensure that when the expatriates are sent to the international subsidiaries, they not only have a prior understanding of the organizational culture, organization’s roles and functions, aims and objectives, and its reputation, but are also assigned the roles and responsibilities that the medium-sized British MNC expects. One way to achieve this is to establish with the international subsidiaries beforehand what positions would the expatriates serve in, what are the roles and responsibilities of those positions, and what level of decision-making authority would be assigned to the expatriates. Settling these things with the international subsidiaries beforehand would not only enable the medium-sized British MNC to make informed decision about choosing the right international subsidiaries for the expatriates, but would also make both the international subsidiaries and the expatriates aware of what changes in the nature and scope of the responsibilities of the expatriates are supposed to happen when they arrive. Impressing upon the international subsidiaries that the expatriates are skilled and competent In order to encourage the concerned authorities at the international subsidiaries to make genuine effort in employing the expatriates and consider them loyal workers and part of the workforce that can be trusted for responsibility, being skilled and competent, it is imperative that the local directors at the medium-sized British MNC take measures to impress this upon the concerned authorities at the international subsidiaries that the expatriates are skilled and competent to take on the challenges. In spite of the fact that most MNCs send the expatriates to the international subsidiaries for reasons beyond the foreign operations’ exclusive control, effective control still remains a main reason for the use of the expatriate managers specifically when the overseas subsidiaries are in their initial stages of establishment (Edstrom and Galbraith, 1977; Tung, 1993). One way to achieve this is by not telling the international subsidiaries this that the expatriates are being sent according to the High Flyers Programme for a period of two years to get the necessary training and experience in management. Since the international subsidiaries are under the control of the medium-sized British MNC, the British company can exercise its right to deploy any worker or manager anywhere. If this is possible, it would be the best way to avoid the underestimation of the expatriates by the international subsidiaries. However, if this is not possible to achieve, the local directors at the medium-sized British MNC should establish with the concerned authorities at the international subsidiaries what roles and responsibilities would be assumed by the expatriates in the position that they are given when they arrive. Establishment of these things would keep the international subsidiaries from deviating from their commitment and the expatriates would be granted fair chance and opportunities to learn the required skills and competences that are expected of them. Allowing the expatriates time to settle in the UK or France after completion of programme In the literature of social psychology, self-efficacy is commonly recognized as a critical factor in the successful achievement of such changes in behavior as acculturation or adaptation (Bandura, 1977; Bandura, 1986). Self-efficacy is an individual’s belief in his/her ability to mobilize the cognitive resources, motivation, and ways (Bandura and Wood, 1989). Expatriates that have a great deal of information about the culture of the host country are confident about their self-efficacy and are better able to control the local personnel’s behaviors to ensure that desired outcomes are achieved. A very important advantage that may be realized by the expatriates as a result of this is their increased competence of conducting effective communication with the local personnel. Comprehensive knowledge about the culture of the host country enables the expatriates to process the non-verbal signals correctly and thus avoid the interpersonal dysfunctional conflicts. “Meaningful and appropriate social rewards (such as titles or commendations) may also be offered, with which desirable behaviors could be stimulated. This would further enhance the expatriates’ control” (Paik and Sohn, 2004, p. 64). Considering training managers in the local subsidiaries When the managers are required to get back and serve in the company based in the UK or France, it is advisable for the company to send the managers to another company for training that operates in the same cultural and business environment as that prevails in the company. Managers should not be sent to the international subsidiaries located in the developing countries with a lot of opportunities unless the managers are required to work permanently in those subsidiaries. Therefore, the first thing that the HR Director should do is to consider changing the location of the managers from the international subsidiaries to other companies based in the UK or France. This would improve the programme in many ways. Firstly, the managers would gain an opportunity to polish their managerial and leadership skills in the same environment as the one that exists for the medium-sized British MNC. This would develop their skills in the right way because they would learn to deal with the very challenges that leaders and managers encounter in the environment of the medium-sized British MNC. They would gain exposure to the same stakeholders that they would have to deal with when they return to the medium-sized British MNC. In addition to that, they would not have a motivation to leave the company one year after returning to it because they would not be exposed to the myriad of business and growth opportunities that managers get in the international subsidiaries during the two years of their training period. The role of different people in the successful implementation of the new Leadership and Management Development (L & MD) programme Successful implementation of the new L & MD programme requires commitment and dedication of the local director at the medium-sized British MNC. Some of the recommendations made above necessitate changes in the organizational policies while others can be achieved with better supervision and monitoring of the processes and units involved in the system. To successfully implement the new L & MD programme, the local director needs to be very selective about the selection of the international subsidiaries he/she has chosen for the expatriates. The best way to send the right expatriate to the right subsidiary is by providing the expatriates with a list of options of countries and asking them to arrange the countries in order of their preference for them. When more than one expatriate opts for the same country, the local director should grant the wish in accordance with the expatriates’ duration of service at the medium-size British MNC so that the seniors are given advantage. Whether it is economically feasible to send the expatriates’ families with them to the host countries or to lend them few extra off-days needs changes in policy and the decision making authority, the CEO of the medium-sized British MNC needs to check this. The CEO may involve senior management as well as the first line managers in this decision making. Ideally, a survey should be conducted in which the preferences and perspectives of the expatriates regarding their familial needs are identified. The local director assumes the responsibility to check the organizational culture of the selected international subsidiaries and settle all matters related to job position, job description, responsibilities, and benefits with the concerned people in the international subsidiaries beforehand. Evaluation of the effectiveness of the programme The effectiveness of the new L & MD programme would be evaluated with respect to the very factors that were identified by Brigitte Lagarde during her initial investigation of the problems. The three factors that she had identified included; number of expatriates returning to the UK before the completion of two years duration of service in the international subsidiaries because of dissatisfaction, number of expatriates who were thought to be under-performing as compared to the management’s expectations of them upon their return from the international subsidiaries, and the number of expatriates that left the company within a year of their return from the international subsidiaries. A decline in the percentage from 25 per cent, 35 per cent, and 30 per cent in the above factors respectively after the implementation of the new L & MD programme would provide the proof of the effectiveness of the programme. Although the process is lengthy, since the local director needs to wait for at least three years including the first two years of expatriates’ training in the international subsidiaries and the third year in which their performance after return is judged, yet the strategy would hopefully yield positive results with minimal needs of modification. Conclusion The medium-sized British MNC can benefit a lot from the recommendations made in this paper. The recommendations have been made to target the problems identified by the new local director at the medium-sized British MNC. If these recommendations are implemented in the company, the L & MD programme would be improved because there would be lesser number of dissatisfied expatriates returning to the UK from the international subsidiaries before the completion of two years of training abroad, there would be lesser number of expatriates found under-performing by the local directors at the medium-sized British MNC, and also there would be lesser number of expatriates that would be leaving the company within one year of their return from the international subsidiaries. The recommendations made in this paper emphasize upon carefully studying the organizational culture of the international subsidiaries and be very selective in choosing them for the expatriates. The recommendations also emphasize upon a need for the local director to settle everything with the concerned authorities at the international subsidiaries before the expatriates are sent there. The main role to be played in the new L & MD programme is by the local director. However, senior management particularly the CEO of the medium-sized British MNC also needs to make some changes in the policies to make them more favorable for the expatriates to ensure that their needs are addressed and they are best able to gain the training in the international subsidiaries. References: Bandura, A 1977, Self-efficacy: Toward a unifying theory of behavioral change, Psychological Review, Vol. 84, No. 2, pp. 191–215. Bandura, A 1986, Social foundation of thought and action: A social-cognitive view, Inglewood Cliffs: Prentice-Hall. Bandura, A, and Wood, RE, 1989, Effect of perceived controllability and performance standards on self-regulation of complex decision-making, Journal of Personality and Social Psychology, Vol. 56, No. 5, pp. 805–814. Bartlett, C, and Yoshihara, H 1988, New challenges for Japanese multinationals: Is organization adaptation their Achilles heel? 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