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Causes and consequences of declining early departures from foreign assignments

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A survey of directors of human resources and international operations at 74 US companies with substantial foreign activities confirms recent research showing the decline in premature departures from foreign assignments, and attributes it to changes in environmental factors and corporate policies and practices. However, these same factors, policies, and practices may presage new or exacerbated international human resource challenges, such as greater cost and difficulty in developing upwardly mobile managers' knowledge of international operations. Such challenges may require new company practices.

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... However, due to the difference in the general work and living environment between home country and host country, expatriate failure rate in terms of premature return is high (Bashir 2012). In addition, it is common that the expatriates suffer from underperformance during their assignment in another country or district (Insch and Daniels 2002). The problems in expatriate assignment, including expatriates' underperformance and early return, caused significant loss to individuals and organizations (Bolino 2007;Lorange 2003). ...
... In addition, stress results in a wide range of dysfunctional consequences, such as distress symptoms, alcohol abuse, and drug abuse, which can lead to reduced intention to stay in MC (Brown 2008;Koteswari and Bhattacharya 2007). It has also been extensively reported that expatriate employees normally underperform during assignments (e.g., Insch and Daniels 2002), which has been regarded as one of the causes of premature return (e.g., Forster 1997). Hence, based on the extensive literature review, it is reasonable to infer that ExCPs' intention to stay in MC may be affected by various stressors, stress, and their performance. ...
Article
Given the globalization of the construction industry, there are increasing numbers of expatriate construction professionals (ExCPs). The work practices and living environment are different between home and host countries, which often induce stress in ExCPs, cause underperformance, and reduce intention to stay for expatriates. This study aims to investigate the interactions among stressors, stress, performance, and intention to stay for ExCPs through the development of a stressors-stress-performance-outcome model. A questionnaire survey with purposive sampling was conducted. The research results show (1) work-home conflict, organizational centralization, and heavy workload affect ExCPs' overall performance and intention to stay indirectly through the vicious cycle between emotional and physical stress; (2) poor transportation exacerbates ExCPs' physical stress, while language fluency relieves it; (3) physical stress impairs overall performance, further reducing intention to stay; and (4) poor transportation directly reduces ExCPs' intention to stay. Recommendations, including flexible work schedules and stress management programs, are made. The study results enhance the current understanding of the complicated stress and expatriate management for ExCPs in a cross-cultural context.
... Previous research has found that between 16 and 40% of all expatriate managers (mostly American) return prematurely from their overseas assignments due to their poor performance or failure in cross-cultural adjustment (Baker & Ivancevich, 1971; Dunbar & Ehrlich, 1986; Tung, 1981). While there is an increasing acceptance that failure rates might not be as high as originally claimed (Daniels & Insch, 1998; Foster, 1997; Harzing, 1995 Harzing, , 2002 Harzing & Christensen, 2004; Insch & Daniels, 2002) it is still accepted to be an important issue. This is even more so, if the concept of expatriate failure is also to include expatriates who stay on their international assignment but perform below expectations (e.g., Black & Gregersen, 1999; Fukuda & Chu, 1994; Harvey & Wiese, 1998). ...
... As the cost associated with under-performance is likely to be even higher (Harzing & Christensen, 2004), it is crucial to identify the ways to reduce and eliminate such failures. Cross-cultural adjustments of expatriates and their families were found to be the most significant factors in this regard (Black, Mendenhall, & Oddou, 1991; Insch & Daniels, 2002; Shaffer, Harrison, & Gilley, 1999). Academic researchers as well as corporate management of multinational enterprises (MNEs) are searching for ways to address this issue from various perspectives, such as how to facilitate the cross-cultural adjustment. ...
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This paper presents the findings of an empirical study that investigated the relationship between cross-cultural training (CCT) effectiveness, self-efficacy, and adjustment of expatriate managers in Asia. Responses of 169 managers from four different national backgrounds, all currently on overseas assignments in Asia, indicate that the relationship between CCT effectiveness and adjustment is mediated by an increase in self-efficacy. Implications of the findings for professional practice and for future research are discussed.
... The need for mentoring in international assignments Global managers are necessary for organizational success (Gupta and Govindarajan, 2001) and individual career advancement (Insch and Daniels, 2002). However, anticipated career benefits for an international assignment may not materialize. ...
... Long term international assignments may be detrimental to a manager's career because of the time and energy required to readjust to the domestic operations and to re-establish work relationships. If not properly managed by the organization, expatriate assignments may actually demotivate and lower the commitment of the employee, resulting in little return on investment (Insch and Daniels, 2002;Peltonen, 1997). found that 50 percent of repatriates left their employer within two years of repatriation, with much of this turnover due to poor organizational career management practices. ...
Article
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Purpose – This article aims to examine the process of mentoring and career development within the global arena. Although much has been written on the adjustment of expatriates, relatively little research has examined the exchange of information and knowledge among workers in different countries via the mentoring process. Design/methodology/approach – A model is offered of how an expatriate progresses through learning cycles aided by multiple mentors. Multiple mentoring contributes to the individual's career development and facilitates the development of organizational tacit and embedded knowledge. Findings – Using Hall and Chandler's conceptualization of multiple learning cycles over the life span, it is proposed that the expatriate cycles through a learning cycle over the course of an extended assignment. These learning cycles are shorter than the traditional career stages, often lasting two to four years – similar to the length of an expatriate assignment. It is suggested that the stages of an expatriate assignment – predeparture, on‐site and repatriation – represent a learning cycle. A successful expatriate experience is more likely to occur if multiple mentors in various locations are available – as needed – to offer information and career support to the expatriate. Originality/value – With increasing globalization and rapid technological advances, mentoring relationships that cross national and other types of boundaries have increased, yet theory has not kept pace. A framework is provided for the further examination of expatriate careers and how mentoring can increase career outcomes and knowledge transfer.
... Quoting high expatriate turnover rates has almost been a standard component of introductions to papers on expatriate management. Thanks to several papers discarding this assumption (Forster, 1997;Harzing, 1995;Insch & Daniels, 2002) 'there is growing acceptance that failure rates might never have been as high as originally claimed' (Harzing & Christensen, 2004, p. 616). Interestingly enough, 61% of the companies interviewed as part of the 2014 Cartus global mobility policies and practices survey do not track expatriate turnover at all. ...
... Since engaging expatriates is obviously more expensive than hiring locally available human resources (Daniels & Insch 2002), very compelling reasons are required to justify the practice. It is imperative to ask: why do global businesses hire expatriates? ...
Article
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I aim in this paper to demonstrate the moral problem of expatriate employment in developing countries. To determine how best to construe the moral problem in this context, I first examine four arguments, namely, that in developing countries, expatriate employment is morally wrong because it 1) entrenches the injustice of wage discrimination; 2) produces undesirable outcomes; 3) disregards contextual aspirations and historical memory and 4) is a tool of external domination and control. I analyse these arguments to show that they are insufficient frameworks for understanding the moral impropriety of expatriate employment in developing countries. To this end, I provide an outline of a plausible framework and argue that the moral problem of expatriate employment in this context is unequal or arbitrary distribution of power among employees. The moral wrong in this, I argue, consists in the failure to respect the universal moral equality of people.
... Some studies have estimated that the cost associated with the failure of expatriation would be about one million USD (Insch and Daniels, 2002;Wentland, 2003). Overall, considering the aggregate data about the American situation, Punnett (1997) has calculated that US companies spend a total of up to two billion USD annually to address the failures of their expatriate managers. ...
Article
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Companies’ internationalization appears to be fundamental in the current globalized and competitive environment and seems important not only for organizational success, but also for societal development and sustainability. On one hand, global business increases the demand for managers for international assignment. On the other hand, emergent fears, such as terrorism, seem to be developing around the world, enhancing the risk of expatriates’ potential health problems. The purpose of this paper is to examine the relationships between the emergent concept of fear of expatriation with further workplace fears (economic crisis and dangerous working conditions) and with mental health problems. The study uses a quantitative design. Self-reported data were collected from 265 Italian expatriate workers assigned to both Italian and worldwide projects. Structural equation model analyses showed that fear of expatriation mediates the relationship of mental health with fear of economic crisis and with perceived dangerous working conditions. As expected, in addition to fear, worries of expatriation are also related to further fears. Although, the study is based on self-reports and the cross-sectional study design limits the possibility of making causal inferences, the new constructs introduced add to previous research.
... Finally, it would be worthwhile to find out more about actual expatriate failure rates in HRCs and the reasons behind them. Empirical research on expatriate failure is scarce and the results are controversial (Harzing & Christensen, 2004;Insch & Daniels, 2002). Future research could address this important issue, comparing failure rates in high-risk versus lower-risk host countries. ...
Article
This study analyzes the antecedents of expatriate work attitudes in terrorism-endangered countries. Applying a social exchange perspective, the study empirically analyzes which measures are qualified to achieve and maintain positive work attitudes among expatriates. Hierarchical regression analysis is applied to investigate this relationship, using data from 143 expatriates in high-risk countries. Data show that social support from co-workers as well as from the organization itself is essential. Moreover, the study investigates the expatriate's sensitivity to terrorism as a moderator and finds that companies should incorporate the sensitivity in their considerations for corporate measures.
... The use of expatriate employees by organizations in their foreign subsidiaries represents a substantial investment with costs of expatriate failure reaching exorbitant levels (Baruch, 2004). Specifically, recent estimates suggest that each expatriate failure, a premature departure, can cost an organization in excess of $1 million (Insch and Daniels, 2002; Wentland, 2003). Taken in aggregate, expatriate failure costs US firms approximately $2 billion per year (Punnett, 1997). ...
Article
Purpose This study aims to examine important situational factors impacting expatriate compensation and common practices utilized in compensating expatriates. Design/methodology/approach A synthesis of literature was reviewed, leading to the identification of numerous situational or contextual factors impacting expatriate compensation. A review of extant literature also identified several customary approaches to expatriate compensation. Findings A variety of factors can directly affect expatriate compensation, with three primary approaches an organization should consider. These factors include host‐country cost of living, housing, dependent education, tax implications and health care – factors most often incorporated as a component of one of the primary approaches to compensation discussions: destination‐based approach, the balance‐sheet approach, and the international headquarters approach. Practical implications This article was intended to enhance understanding of expatriate compensation by collectively examining not only the “how” (primary approaches) but also the “why” (salient contextual or situation factors) firms should consider when determining how to assemble an appropriate package. Originality/value Presenting the factors and practices together makes an important contribution to the literature on expatriate compensation by addressing not only the “how” (customary approaches) of expatriate compensation, but also the “why” (salient contextual factors).
... Even articles dealing with other areas of expatriate management often routinely refer to (high levels of) expatriate failure to frame their arguments. More recently, several articles have attempted to discard the " myth of high expatriate failure rates " (Daniels & Insch, 1998; Forster, 1997; Harzing, 1995 Harzing, /2002 Insch & Daniels, 2002). Even though some contemporary authors still continue to support this myth (see e.g. ...
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This article reviews the established understanding of the concept of expatriate failure, discusses its associated problems and presents a more sophisticated and comprehensive understanding of the concept. The article argues that it might well be time to abandon the concept of expatriate failure altogether and instead draw on the general human resource literature to analyse problems related to turnover and performance management in an expatriate context..
... Previous research has found that between 16% and 40% of all expatriate managers (mostly American) return prematurely from their overseas assignments because of their poor performance or failure in cross-cultural adjustment (Baker & Ivancevich, 1971;Dunbar & Ehrlich, 1986;Tung, 1981). Although there is an increasing acceptance that failure rates might not be as high as originally claimed (Daniels & Insch, 1998;Foster, 1997;Harzing, 1995Harzing, , 2002Harzing & Christensen, 2004;Insch & Daniels, 2002), it is still considered an important issue. This is even more so, if the concept of expatriate failure includes expatriates who stay on their international assignment but perform below expectations (Black & Gregersen, 1999;Fukuda & Chu, 1994;Harvey & Wiese, 1998). ...
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In this conceptual article, the literature on expatriate social network and its relationships to adjustment and performance in overseas assignments have been reviewed exhaustively. By identifying some gaps and inconsistencies found in the literature, a typology of research on expatriate network explanations has been proposed based on whether the aim is to explain performance variation or adaptation to local practices and norms, and also whether their explanatory mechanism is based on the structure or resources of the network. Specific propositions for each of the four resulting approaches have been developed. It has also been recommended that future researchers should study antecedents of social network structure because of their relevance to HRD interventions. The implications for HRD research and practice have been discussed at the end.
... Seventy-five percent of them complained about the ''out of sight, out of mind'' syndrome (Hauser, 1999;Suutari & Brewster, 2003), as well as other negative outcomes such as reverse culture shock, lack of expected promotions and rewards, and less satisfying and challenging positions upon repatriation (Adler, 1981(Adler, , 1991Fink et al., 2005;Sanchez, 2000). Although individuals have been encouraged to gain international experience in order to rise to top management positions (Insch & Daniels, 2002;Lorange, 2003), the expected benefits of expatriate assignments are often not realized (e.g., Cafaro, 2001). Over 50% of the 900 expatriates studied by Egan, Bendick, and Miller (2002) reported that their international assignment had no impact on their careers, while 9.3% reported a negative impact and only 34.8% reported a positive impact. ...
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There has long been an interest in the effects of mentors on protégé career outcomes, and with scholars now beginning to examine mentoring across national boundaries. Using survey information as well as company records for 299 expatriates (163 men, 136 women) in 10 countries, we examined the impact of home- and host-country mentors upon expatriate effectiveness. We found that having a host-country mentor had a significant positive effect on the expatriate's organizational knowledge, organizational knowledge-sharing, job performance, promotability, and perceptions of teamwork. Having a home-country mentor had a significant positive effect only on organizational knowledge, job performance, and promotability. Surprisingly, our results revealed that having a home-country mentor had a significant but negative effect on the expatriate's organization identification and job satisfaction. Contrary to the literature, neither type of mentoring had a significant effect on job tension. Implications for practice as well as future research are detailed. Journal of International Business Studies (2008) 39, 1310–1326. doi:10.1057/palgrave.jibs.8400407
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