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.1 International Assignments 2.1.1 Definition and Classification of International Assignments International work experience is one of the major requirements for promotion to higher-level managerial positions. International assignments are a powerful mechanism through which managers acquire new business skill sets, international perspectives, and basic cross-cultural assumptions (Furuya et al. 2009). The topic of international assignments (IAs) has an established pedigree in the international management literature and has in particular dominated the research agenda of international human resource management (IHRM) for over three decades (Collings et al. 2007; Stahl and Bjorkman 2006). It has been argued that entrepreneurs have recognised the importance of physically relocating managers to foreign locations where business operations are based since approximately 1900 B.C. (Collings et al. 2007). Owners of international organisations realised the benefits of utilising people known to them and socialised into the organisation in minimising the agency problems associated with managing spatially diverse organisations from an early stage. This is because these individuals had built a level of trust with their superiors and thus were considered to be more likely to act in the best interests of the organisation, relative to local managers from the host country who were largely an unknown quantity. Thus, international assignments were used as a means of addressing agency issues as a result of the separation of ownership and management and their amplification through distance. The most widely recognized and long-standing typology of international assignments is that of Edstrom and Galbraith (1977). Edstrom and Galbraith (1977) proposed a distinctive three-fold subdivision of international assignments based on assignment purposes: fill positions, develop organization, and develop managers. Springer Science+Business Media Singapore 2016 Y. Li, Expatriate Manager's Adaption and Knowledge Acquisition, DOI 10.1007/978-981-10-0053-9_2 7 Firstly, fill positions refers to when suitably qualified host country nationals were not available. Secondly, as a means of organisational development, aim at increasing knowledge transfer within the MNC and modifying and sustaining organizational structure and decision processes. Thirdly, as a means of management development, aim at developing the competence of the individual manager. Although it is important to note that assignments generally have more than one rationale (Sparrow et al. 2004), Edstrom and Galbraith's (1977) typology provides a useful point of departure for the consideration of why MNCs use international assignments and expatriates. Hocking et al. (2004) argue that Edstrom and Galbraith (1977)' classification of international assignments lack a strong conceptual framework to explain the underlying strategic significance of the categories and their relationships. They reclassify the principal strategic purpose of international assignments and present the underlying relationships. According to Hocking et al. (2004, 2007), international assignments' principal purposes comprise three categories: business applications, organization applications, and expatriate learning. In particular, expatriate learning refers to either business- or organization-related knowledge acquisition by the expatriate, which equivalent to the two knowledge application categories: business applications and organization applications. Alongside the conventional international assignment (usually more than one year and involving the relocation of the expatriate), there is the emergence of a portfolio of alternatives to the traditional international assignment, referred to as a non-standard international assignment including: short-term assignments (SIAs); commuter assignments; international business travel; and virtual assignments (Brookfield Global Relocation Trends 2005; Collings et al. 2007). Research suggests there is little evidence of a significant decline in the use of long-term (traditional) international assignments but does identify the growing use of alternative forms of international assignments (Collings et al. 2007). A recent survey by Brookfield Global Relocation Trends (2005) reported that 62 % of respondents suggested that their organizations were seeking alternatives to long-term assignments. This suggests that what is happening is the emergence of a portfolio of international assignments within the MNC (Roberts et al. 1998). The most popular form of non-standard assignments appears to be the short-term international assignment (SIA). Compared to traditional assignments, SIA has three key advantages: flexibility; simplicity; and cost effectiveness. Long-term IAs had uncertain benefits and potential drawbacks. Many expatriates felt that they had to work harder to preserve the home network and their social capital suffered through the traditional IAs. Short-term international assignment seems to be a better choice (Tharenou and Harvey 2008). Managers can be assigned to some challenging tasks in a foreign country. They are not away from the headquarters for a long period of time and can be assigned to several different countries before they are appointed to some important managerial position. Such an approach optimizes the economic efficiency of human resourcesproviding required skills and developing international capabilities simultaneously (Tharenou and Harvey 2008). However, Yamazaki and Kayes (2007) claim that if MNCs expect their expatriates to perform successfully within their assignment periods, they may need to provide the 8 2 Expatriate Adjustment and Expatriate Learning expatriates with at least a three-year tenure. Therefore, this study adopts a pseudo longitudinal research method that examines expatriates with different lengths of assignment tenure to investigate whether short-term international assignments are as effective for expatriate adjustment and learning as traditional long-term international assignments. 2.1.2 Expatriates and International Assignments An expatriate is the person that MNCs assign to an international assignment. Expatriates usually are home country nationals or third country nationals. Edstrom and Galbraith (1977) define expatriates as individuals who, irrespective of their national origin, are transferred outside their native country to another country specifically for employment purposes. Expatriates are usually classified into three broad categories based on their national origin relative to that of the parent company (Shaffer et al. 1999). Parent country nationals (PCNs) are expatriates who are from the home country of the MNC; third country nationals are non-PCN immigrants in the host country (e.g., those transferred between foreign subsidiaries); inpatriates are employees from foreign subsidiaries who are assigned to work in the parent country. There are several reasons why MNCs select various types of expatriates. For example, parent country nationals facilitate communication between corporate and foreign offices, while third country nationals tend to be more sensitive to cultural and political issues. Harzing (2001) identified three specific control roles of expatriates, namely: the bear, the bumble-bee, and the spider. Bears act as a means of replacing the centralisation of decision-making in MNC and provide a direct means of surveillance over subsidiary operations. The title highlights the degree of dominance these assignees have over subsidiary operations. Bumble bees fly 'from plant to plant' and create cross-pollination between the various 'offshoots' (Harzing 2001:369). These expatriates can be used to control subsidiaries through socialisation of host employees and the development of informal communication networks. Finally spiders, as the name suggests control through the weaving of informal communication networks within the MNC. Significantly, Harzing (2001) argues that although expatriates generally appear to perform their role as bears regardless of the situation, the study suggests that their roles as spiders and bumble bees tend to be more contexts specific. Specifically, the bumble bee and spider roles appeared to be more significant in longer established subsidiaries (longer than 50 years) while the bumble bee role appeared to be important in newly established subsidiaries also. Besides, the level of localization of subsidiary operations and further lower levels of international integration (the subsidiary was not greatly reliant on the headquarters for sales and purchases) were positively related to the likelihood of expatriates performing the bumble bee and spider roles. 2.1 International Assignments 9 2.1.3 Cultural Differences Between Nations 2.1.3.1 High-Context Versus Low-Context Cultures Hall (1977) claims a cultural classification of high-context culture and low-context culture based on how, in each individual, identity rests on total communication frameworks. In high-context cultures, surrounding situations, external physical environments, and non-verbal behaviours are all important for its members to determine the meanings of messages conveyed in communication. Covert clues in these contexts make differences to the members and are used to search for a real meaning beyond verbal messages. In a high-context culture, its members tend to be related to each other in relatively long lasting relationships. For their effective communications, high-context culture requires its members to become sensitive to immediate environments through feelings. Yamazaki (2005) contends that the communication patterns in high-context cultures are conceptually associated with the Concrete Experience learning mode. Chinese, French, Japanese, and Arabic countries are classified as high-context cultures (Hall 1977). In a low-context culture, on the other hand, surrounding situations, external physical environments, and non-verbal behaviours are relatively less important in generating and interpreting meanings, whereas explicit verbal messages are crucial in communication (Hall 1977). Most information is conveyed in explicit codes and therefore, explicit communicative styles in logical forms are placed with high importance. In low-context culture, interpersonal relationships last for a relatively shorter period. The communication patterns of low-context cultures focus less on interpersonal relationships while more on rationally detached analyses. Yamazaki (2005) contends that the communicative traits of low-context culture are consonant with the characteristics of the Abstract Conceptualization learning mode and thereby, individuals in low-context culture are likely to learn by logical thinking and analytical cognition. The United States, the United Kingdom, Canada, Australia, Germany, and Switzerland are classified as low-context cultures (Hall 1977). In the present research, the sample of western expatriates constitutes: 35.5 % of the sample comes from the United Kingdom, 29.8 % from the United States, 21.5 % from Canada, 9.1 % from Australia, and 4.1 % from other countries. Basically, western expatriate managers participated in this research are assigned from countries with low-context cultures to a country with high-context culture, China. 2.1.3.2 Collectivism Versus Individualism Cultures Hofstede (1997) proposes five dimensions of cultural differences: individualism versus collectivism, masculinity versus feminity, long-term orientation versus short-term orientation, power distance, and uncertainty avoidance (see Fig. 2.1). This section begins with a discussion of the dimension collectivism versus individualism. 10 2 Expatriate Adjustment and Expatriate Learning Hofstede (1997) defines the collectivism and individualism cultural dimension as 'the degree to which a society reinforces individual or collective achievement and interpersonal relationships'. The fundamental issue addressed by this dimension is the degree of interdependence a society maintains among its members. It has to do with whether people's self-image is defined in terms of 'I' or 'we'. A high score on individualism indicates that individuality and individual rights are paramount within the society. In individualistic cultures, individuals tend to form a large number of looser relationships and they are supposed to look after themselves and their direct family only (Hofstede 2010). On the other hand, a low score on individualism, or a high score on collectivism, indicates that the society has a more collectivist nature with close ties between individuals. In collectivist cultures, the society reinforces extended families and collectives and everyone takes responsibility for fellow members of their group. Markus and Kitayama (1991) examined the culturally different self-construal and proposed two classifications: interdependent-self and independent-self, each of whose attributes differs among cultures. Interdependent-self is represented as the self-construal of people in Asian, African, Latin American, and many southern European cultures, while independent-self is exemplified as the self-construal of those in American culture as well as many western European cultures (Markus and Kitayama 1991). Triandis (1995) and Hofstede (1997) categorized this cultural dimension of interdependent-self versus independent-self as analogous to that of collectivism versus Individualism. Anderson (1988) supports this cultural dimension from a cognitive perspective. He illustrates that Eastern cultures are holistic, relational, and field-dependent, while Western cultures are analytical and field-independent. People with collectivism cultures have the strong sense of belongingness to social contexts and relationships (Hofstede 1997). Markus and Kitayama (1991) claim that individuals with interdependent-self tend to base the relationship with others as a crucial and functional unit of conscious reflection and, they have a strong tendency to seek information about others' perception about self in the relationship. In contrast, independent-self, the American and western European Cultural differences Power distance Uncertainty avoidance Individualism vs. collectivism Masculinity vs. feminity Long-term orientation Fig. 2.1 Hofstede's 5 cultural dimension model 2.1 International Assignments 11 notion of self, is seen as separate from context (Markus and Kitayama 1991). There is a widespread belief that people are inherently detached and distinct in individualistic cultures where the cultural norm is to become independent from others and to express one's uniqueness. Collectivistic cultures, such as the cultures of most Asian countries, emphasize a communication style in which 'most of the information is either in the physical context or internalized in the person' (Hall 1976: 79), whereas individualistic cultures, such as those of the United States, Germany, and the United Kingdom, use a 'low-context' communication style (Hall 1976). Chinese and Japanese are classified with high collectivist culture, while the North American and most western European countries are classified with individualistic cultures (Hofstede 2010). According to the national culture comparisons of Hofstede (2010), China is a highly collectivist culture where people act in the interest of the group and not necessarily of themselves. In-group considerations affect hiring and promotions with closer in-groups (such as family) are getting preferential treatment. Whereas relationships with colleagues are cooperative for in-groups, they are cold or even hostile to out-groups. In China, personal relationships prevail over task and organization (Hofstede 2010). In the present research, western expatriate managers are assigned from countries with individualistic cultures to a country with a high collectivist culture, China. As we can see, the collectivists' cultural characteristics of China may present a major obstacle for western expatriates. The researcher suggests that an awareness of the history, culture, and behaviour of Chinese people would reduce expatriates level of frustration, anxiety, and concern. 2.1.3.3 Power Distance Hofstede (1997) defines power distance as 'the degree of equality, or inequality, between people in the country's society'. Power distance refers to 'the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally' (Hofstede 1997). High scores on a Power distance index indicate that inequalities of power and wealth have been allowed to grow within the society. These societies are more likely to follow a caste system that does not allow significant upward mobility of its citizens. Low scores on a Power distance index, on the other hand, indicate that the society deemphasizes the differences between citizen's power and wealth. In these societies, equality and opportunity for everyone is stressed. According to the national culture comparisons in Hofstede centre (Hofstede 2010), China sits in the higher rankings of his Power Distance Index, i.e. a society that believes that inequalities amongst people are acceptable. The subordinate-superior relationship tends to be polarized and there is no defense against power abuse by superiors. Individuals are influenced by formal authority and sanctions and are in general optimistic about people's capacity for leadership and initiative. People should not have aspirations beyond their rank. On the other hand, the United State, the United Kingdom, and most western European countries 12 2 Expatriate Adjustment and Expatriate Learning are classified with low power distance cultures (Hofstede 2010). Within organizations in low power distance societies, hierarchy is established for convenience, superiors are always accessible and managers rely on individual employees and teams for their expertise. Both managers and employees expect to be consulted and information is shared frequently. At the same time, the communication is informal, direct, and participative. In the present research, western expatriate managers are assigned from countries with lower power distance cultures to a country with a high power distance culture, China. 2.1.3.4 Strong Uncertainty Avoidance Versus Weak Uncertainty Avoidance Cultures Hofstede (1997) defines uncertainty avoidance as 'the extent to which the members of a culture feel threatened by uncertain or unknown situations'. Furthermore, uncertainty avoidance index refers to the level of tolerance for uncertainty and ambiguity. High scores on uncertainty avoidance index indicates that the country has a low tolerance for uncertainty and ambiguity and is a rule-oriented society that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty. On the other hand, a low score on the uncertainty avoidance index indicates that the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions. A society with weak uncertainty avoidance culture is less rule-oriented and more readily accepts change. The characteristics of strong uncertainty avoidance are reflected in Chinese culture (Hoppe 1990). The main concern of the society is to control everything in order to eliminate or avoid the unexpected. As a result, the society does not readily accept change and is risk adverse. Organizational members in strong uncertainty avoidance countries have a feeling of anxiety or fear when encountering unfamiliar risks, deviant ideas, or conflicts in their work place. Those members need to take time for action until they acquire enough knowledge and information to reduce or resolve unclear and unstructured situations. In contrast, organizational members in weak uncertainty avoidance countries tend to feel less uncomfortable in unclear and unstructured circumstances and are more likely to take risks in unfamiliar situations when encountering deviant or innovative ideas and behaviours (Hofstede 1997). Self-actualization in a weak uncertainty-avoidance work place functions as a great motivational factor, while no failure is the main concern in a strong uncertainty-avoidance work place. Hoppe (1990) tested the relationship between the strong/weak uncertainty avoidance cultural dimension and Kolb's (1986) learning styles. He examined a sample of 1544 adults from 19 countries: 17 European countries (Great Britain, Germany, France, Italy, and so on), the US, and Turkey. His results showed that people from strong uncertainty avoidance cultures tend to learn through the reflective observation learning mode, while those from weak uncertainty-avoidance cultures tend to learn through the active experimentation learning mode. 2.1 International Assignments 13 Japanese, South Korea, and Germany are classified with strong uncertainty avoidance cultures; Chinese is classified with medium to strong uncertainty avoidance culture; the United State, the United Kingdom, Australia, and Denmark are classified with weak uncertainty avoidance cultures (Hofstede 2010). In the present research, western expatriate managers are assigned from countries with weak uncertainty avoidance cultures to a country with a medium to strong uncertainty avoidance culture, China. 2.1.3.5 Long-Term Orientation Hofstede (1997) defines Long-term orientation as 'the degree to which a society embraces, or does not embrace, long-term devotion to traditional, forward thinking values'. High scores on a Long-term orientation index indicate that the country prescribes to the values of long-term commitments and respect for tradition. This is thought to support a strong work ethic where long-term rewards are expected as a result of today's hard work. In a society with a long-term orientation, businesses may take longer to develop, particularly for an 'outsider'. Low scores on a Long-term orientation index, on the other hand, indicate that the country does not reinforce the concept of long-term, traditional orientation. In a society with this culture, change can occur more rapidly as long-term traditions and commitments do not become impediments to change. According to the national culture comparisons in Hofstede centre (Hofstede 2010), China is a highly long-term oriented society in which persistence and perseverance are normal. Resources and investment tend to be in long-term projects, such as real estate. The United States, on the other hand, is classified as a short-term culture. American businesses tend to measure their performance on a short-term basis, with profit and loss statements being issued on a quarterly basis. This also drives its people to strive for quick results within the work place. In the present research, western expatriate managers are assigned from countries with relatively short-term orientation cultures to a country with a highly long-term oriented culture, China. 2.1.3.6 Masculinity Versus Feminity Hofstede (1997) defines the Masculinity/Feminity cultural dimension as 'the degree to which a society reinforces, or does not reinforce, the traditional masculine work role model of male achievement, control, and power'. High scores on the Masculinity index indicate that the country experiences a high degree of gender differentiation. Males dominate a significant portion of the society and power structure, with females being controlled by male domination. On the other hand, low scores on the Masculinity index indicate that the country has a low level of differentiation and discrimination between genders. Females are treated equally to males in all aspects of the society. In the present research, western expatriate 14 2 Expatriate Adjustment and Expatriate Learning managers are assigned to a country with a slight Masculinity oriented culture, China. In summary, Chinese culture is highly contrasted with western (American and Western Europe) cultures. China is distinct different from most other countries. From a western perspective, China 'is seen as the most foreign of all foreign places. Its culture, institutions, and people appear completely bafflinga matter of absolute difference' (Chen 2001: 17). Also, companies in different cultures have different ways of conducting business. There is a wealth of evidence that cultural differences can act as important barriers for business expatriates. According to Torbiorn (1988), the more dissimilar, foreign, or strange a situation appears, the more negative the expatriates' attitudes towards those situations. Psychological cultural barriers are typically associated with negative reactions towards another culture, norms of the other culture appear as less familiar, less normal, less good, and so forth than those to which the individual is acculturated (Selmer 2004). A psychological cultural barrier is said to be more obvious when two cultures are different in terms of language and other cultural norms (Selmer 2004). 2.2 Expatriate Adjustment International assignments involve significant changes in the job the individual performs and the corporate culture in which responsibilities are executed. It also involves dealing with unfamiliar norms related to the general culture, living conditions, weather, food, health care, daily customs, and political systems. It is estimated that 20-40 % of all expatriates sent on foreign assignments return home prematurely. McGinley (2008) suggests that expatriate failure rates vary from country to country. National Foreign Trade Council (2006) demonstrates that the rate of early return from expatriate assignment was approximately 21 %. However, failure rates are said to increase further when repatriation failure (expatriates who return from overseas assignments but then leave their firms within one year) rates are considered (McGinley 2008). Expatriate failure is a significant issue for MNCs due to the high costs of expatriate failure which are both direct (e.g. salary, training costs, travel and relocation expenses) and indirect (damaged relations with host country organizations and loss of market share). Research suggests that the latter should be considered as the most significant costs by MNCs, as damage to reputation in key strategic foreign markets could be highly detrimental to the prospects of successfully developing international business in particular regions. Expatriate failure also bears considerable costs for managers themselves, including loss of self-esteem, self-confidence, and reputation. In summary, the literature indicates that the failure rate of expatriates has been reported to range from 10 to 80 %, costing MNCs from $40,000 to $1million for each failed assignment. The inability of expatriates to successfully adjust to foreign environments has been cited as one of the most frequent reasons for unsuccessful international assignments (Black et al. 1991; Shaffer et al. 1999; Takeuchi et al. 2005; Okpara and Kabongo 2010). 2.1 International Assignments 15 Liu and Lee (2008) contend that management researchers have largely failed to study systematically the psychological, social and behavioural concerns of managing overseas operations. In order to advance the research on expatriate failure and increase our understanding on expatriate adjustment, additional research is needed, particularly from a non-western context like China, because the majority of the researches conducted on these issues have been done in the west (Black et al. 1991; Grainger and Nankervis 2001; Selmer 2004). Expatriate adjustment is generally described as a process where a manager leaves a familiar cultural environment and enters an unfamiliar one. It is the perceived degree of psychological comfort and familiarity an expatriate has working with the new culture (Black et al. 1991). Scholars have only focused their research efforts on the problem of expatriate adjustment and effectiveness since the late 1970s (Black et al. 1991). Previous to that time, some research had been conducted on Peace Corps volunteers and foreign exchange students, but little work was done on expatriate managers (Church 1982, cited in Black et al. 1991). Selmer (2004) contends that psychological adjustment is a main component of expatriate adjustment. Psychological adjustment connotes subjective well-being or mood states (e.g. depression, anxiety, tension, and fatigue), emphasizing attitudinal factors of the process of adjustment. The theoretical concept of subjective well-being is associated with the psychological aspects of international adjustment (Selmer 2004). The concept of socio-cultural adjustment has been proposed and defined in the literature on international adjustment (Searle and Ward 1990; Ward and Searle 1991). Research on international assignments highlights psychological or socio-cultural adjustment as the vital construct underlying the rewards and costs of expatriate experiences to individuals, their families, and their firms (Bhaskar-Shrinivas et al. 2005). Socio-cultural adjustment relates to the ability to 'fit in' or effectively interact with members of the host culture (Ward and Kennedy 1992). Socio-cultural adjustment has been associated with variables that promote and facilitate culture learning and acquisition of social skills in the host culture (Selmer 2006). The socio-cultural notion of adjustment is based on cultural learning theory and highlights social behaviours and practical social skills underlying attitudinal factors (Black and Mendenhall 1991). Selmer (2006) claims that Black et al.'s (1991) theoretical framework of international adjustment covers socio-cultural aspects of international adjustment. A significant amount of existent empirical research supports a positive correlation between expatriates' international adjustment and their work performance (Caligiuri 1997; Selmer 2006). 2.2.1 Expatriate Adjustment Dimensions and Process Black (1988) contends that expatriate adjustment to the cross-cultural environment can be viewed as having three primary dimensions: degree, mode, and facet. Degree of adjustment can be viewed as both a subjective and objective concept. Subjectively, it is the degree of comfort the expatriate feels in the new role and the 16 2 Expatriate Adjustment and Expatriate Learning degree to which he/she feels adjusted to the role requirements. Objectively, on the other hand, it is the degree to which the expatriate has mastered the role requirements and is able to demonstrate that adjustment via his/her performance (Black 1988). Mode of adjustment refers to the manner in which the expatriate adjust to the new role, i.e. expatriates can adjust by altering the new role to match better themselves or by altering their own attitudes and behaviours to match better the role expectations or altering both to compromise. Black (1988) proposes that there are at least two facets of expatriate adjustment: work adjustment and general adjustment. Black and Stephens (1989) further extended this framework and suggest that there are three specific facets of expatriate adjustment: adjustment to work, which encompasses supervision, responsibilities, and performances; adjustment to interacting with host nationals; adjustment to the general environment, which encompasses life conditions in the foreign country. Several researchers have confirmed this typology (Black and Gregersen 1991; Shaffer et al. 1999; Okpara and Kabongo 2010). Expatriate adjustment is the process of adaptation to living and working in a foreign culture. Torbion (1988) proposed that cross-cultural adjustment occurred in four phases which is often referred to the U-curve. It depicts a progression of adjustment through four sequential stages: honeymoon, culture shock, adjustment, and mastery. The trajectory of adjustment over time resembles a U-curve: initially rising during the honeymoon, falling when culture shock occurs, recovering as adjustment take place, and stabilizing during mastery. Black and Mendenhall (1991) explained the U-curve in terms of social learning theory. The first phase occurs during the first few weeks after arrival. At this time, the new arrival is fascinated with the new and different aspects of the foreign culture and country (Torbion 1988). During the initial stage, the person has not had sufficient time and experience in the new country to discover that many of his/her past habits and behaviours are inappropriate in the new culture. This lack of negative feedback and the newness of the foreign culture combine to produce the 'honeymoon' effect. Once the newcomer begins to cope seriously with the real conditions of everyday life, the second phase of cross-cultural adjustment begins. This stage is characterized by frustrations and hostility toward the host country and its people (Torbion 1988). This is because the person discovers that his/her past behaviours are inappropriate in the new culture but as yet has not learned what to substitute. Torbion (1988) argues that culture shock generally occurs at the transition between phase two and phase three when the person has received the maximum amount of negative feedback but as yet has very little idea about what the appropriate behaviours are. The third stage begins as the person acquires some language skills and adaptive ability to move around on his/her own. In the third phase, the person begins to learn not only how to get around but also some new appropriate behaviours. By the third phase, the person also has developed some proficiency in performing the new set of behaviours (Black 1988). In the fourth phase, the person's adjustment is generally complete and the incremental degree of adjustment is minimal. In this stage, the person now knows and can properly perform the necessary behaviours to function effectively and without anxiety to cultural differences 2.2 Expatriate Adjustment 17 (Black 1988). Bhaskar-Shrinivas et al.'s (2005) Meta-analyses, using data from 8474 expatriates in 66 studies, provided support for the U-curve, or sideways S-shape, to expatriate adjustment's trajectory. Integrating the international and domestic adjustment literatures, Black et al. (1991) propose two major components (including seven dimensions) of the expatriate adjustment process. Figure 2.2 presents Black et al.'s (1991) International adjustment model. The first component, anticipatory adjustment, describes issues that exist before expatriates leave their home countries; the second component, in-country adjustment, deals with issues that become relevant after the expatriates arrive at their foreign assignments. Anticipatory adjustment includes three dimensions: pre-departure training, previous overseas experience, and organizational selection mechanisms. In-country adjustment, on the other hand, includes four dimensions: individual skills, job-related factors, organizational factors, and non-work factors. Shaffer and Harrison (2001) propose that an expatriate's language skills should also be considered in anticipatory adjustment. Black (1988) explains that in both domestic and international adjustment literatures, an individual leaves a familiar setting and enters an unfamiliar one. However, because international adjustment usually entails greater disruptions of old routines than domestic adjustment, the magnitude of uncertainty is usually higher in international versus domestic adjustment. In general, the domestic adjustment literature has focused on pre- and post-entry adjustment variables, especially those related to the job and the organization, whereas the international adjustment literature has focused on individual and Anticipatory adjustment Previous international experience Cross-cultural training Selection mechanism and criteria In-country adjustment Individual Self-efficacy Relation skills Perception skills Job Role clarity Role discretion Role novelty Role conflict Organization Organization culture novelty Social support Logistic support Non-work Family adjustment Culture novelty Expatriate adjustment Work adjustment Interaction adjustment General adjustment Fig. 2.2 Black et al.'s (1991) International adjustment model 18 2 Expatriate Adjustment and Expatriate Learning non-job variables and on degree of adjustment (Black et al. 1991). Black et al. (1991) further suggest that general adjustment and interaction adjustment may be much stronger predictors of organizational commitment, intent to leave, or turnover in the case of international adjustment versus domestic adjustment. Hechanova et al. (2003) argue that the adjustment model proposed by Black et al.'s (1991) has instigated and galvanized a large body of evidence. While Tan et al. (2005) argue that Black et al.'s (1991) cross-cultural adjustment model is mainly descriptive and needs to be more prescriptive, Bhaskar-Shrinivas et al. (2005) produced evidence that strongly supported the model, through meta-analyses using data from 8474 expatriates in 66 studies. They contend that Black et al.'s (1991) model is the most influential and often-cited theoretical treatment of expatriate experiences. 2.2.2 Factors Influencing Expatriate Adjustment The present research will discuss the factors that influence expatriate adjustment from four aspects: individual factors, job-related factors, organizational factors, and non-work factors based on Black et al.'s (1991) International adjustment model (see Fig. 2.2). It should also be noted that different adjustment influencing factors may have different impacts on each facet of expatriate adjustment (general adjustment, work adjustment, and interaction adjustment). 2.2.2.1 Individual Factors The present research will discuss the individual factors that influence expatriate adjustment from two aspects: individual characteristics (including self-efficacy and interpersonal skills) and previous international experience. 1. Individual characteristics Black (1988) reviewed the individual factors that were hypothesized to facilitate expatriate adjustment and reported a summary of these which includes: (1) the individual's desire to adjust; (2) technical or managerial competence (Hays 1971, cited in Black 1988); (3) a person's social relation skills orientation (Ratiu 1983); (4) an individual's tolerance for ambiguity or open mindedness (Ratiu 1983); (5) an individual's self-confidence. Mendenhall and Oddou (1985) reviewed the individual skills necessary for a manager to be effective in a cross-cultural setting. They categorized all these skills into three dimensions: the self-dimension, which encompasses skills that enable the expatriate to maintain mental health, psychological well-being, self-efficacy, and effective stress management; the relationship dimension, which constitutes the array of skills necessary for the fostering of relationships with host nationals; and the perception dimension, which entails the cognitive abilities that allow the expatriate to correctly perceive and evaluate the host environment and its actors (Mendenhall and Oddou 1985). Ones and 2.2 Expatriate Adjustment 19 Viswesvaran (1997) confirmed the appropriateness of using individual traits and temperaments for understanding differences in how managers respond to expatriate and repatriate experiences. More recently, Mol et al. (2005) conducted a quantitative review of the Big Five personality factors and found that they were as predictive of expatriate performance. However, Tan et al. (2005) contend that expatriates' emotions should also be considered as an important individual factor in the international adjustment model. They claim that expatriates' emotions play a major role in cross-cultural success, especially for individualists working in collectivistic culture for long periods of time. They further suggest that emotional demands caused by cultural differences in expatriate encounters impact negatively on their experience. Klein and Lee (2006) found that certain personality traits, such as openness, increased expatriate adjustment and their learning. Despite criticisms such as these, Okpara and Kabongo (2010) contend that Black et al.'s (1991) international adjustment model is a well-established theoretical model and allows for further inclusion of related factors on each level. 'Self-efficacy' was initially conceptualized as a belief in a person's ability to succeed in the enactment of a specific task (Bandura 1977). Sherer et al. (1982, cited in Shaffer et al. 1999) explored the concept of general 'self-efficacy' and defined it as 'an individual's past experiences with success and failure in a variety of situations which should result in a general set of expectations that the individual carries into new situations'. In case of expatriate adjustment, 'self-efficacy' refers to the ability to believe in one self and one's ability to deal effectively with the foreign surroundings, even in the face of great uncertainty (Mendenhall and Oddou 1985). Bandura (1977) first explored the impact of the concept 'self-efficacy' in social learning. Bandura (1977) suggests that individuals with higher levels of self-efficacy tend to persist in exhibiting new behaviours that are being learned longer than do individuals with less self-efficacy. Based on this, Black et al. (1991) propose that high level of self-efficacy would drive the expatriate to persist in exhibiting new behaviours which, in turn, would facilitate his/her degree of adjustment. They contend that expatriates with high overall self-efficacy persist in exhibiting newly learned behaviours despite negative feedback; they use the resulting learning to improve their adjustment. Relational skills, or interpersonal skills, refer to a repertoire of tools and techniques that facilitate the formation of one's interpersonal ties. Through those ties, expatriates obtain necessary information and behaviour-relevant feedback in host cultures (Black et al. 1991). Interaction with host nationals is another important adjustment facilitating factor. Because interaction with host nationals can provide cues concerning appropriate behaviour in the new culture, greater interaction with host nationals would reduce novelty and positively affect adjustment. Black et al. (1991) propose that the accuracy of the expectations held by expatriates is a key to effective international adjustment. The more accurate expectations expatriates can form, the more uncertainty they will reduce and the better their adaptation will be. Relational skills, or interpersonal skills, provide an important means of increasing the cues expatriates receive about what is expected and how they are doing regarding the expectations. In summary, interpersonal skills 20 2 Expatriate Adjustment and Expatriate Learning have two main beneficial impacts on expatriate adjustment. First, the greater expatriates' interpersonal skills, the easier it is for them to interact with host nationals (Mendenhall and Oddou 1985). Second, the more expatriates interact with host nationals, the more information they can receive about what is and what isn't appropriate in the host culture and how they are doing. Black (1988) found a significant positive relationship between percentage of time spent with host nationals and general international adjustment. Bhaskar-Shrinivas et al. (2005) claim that relational skills allow the expatriates to gain familiarity with what is acceptable and/or unacceptable in the host cultures. 2. Prior international experience Prior international experience refers to individuals' prior experience in living and/or working abroad. Prior international (working and/or non-work) experience that expatriates possess is likely to influence their adjustment to a host country (Okpara and Kabongo 2010). Previous international non-work experiences, such as travelling and studying, are likely to be associated with the extent to which expatriates adjust to foreign cultures (Okpara and Kabongo 2010). When people travel to foreign countries, they learn the behaviors, customs, and norms of those cultures through direct experience or through observation of the host nationals' behaviours (Bandura 1977). Past international experience provides expatriates with direct opportunities to learn a variety of skills. Intercultural communication, relocation, and adaptive skills will be gained, all of which should have a positive influence on the expatriates' cross-cultural adjustment (Black et al. 1991; Selmer 2002, 2004; Shaffer et al. 1999). Black (1988) suggests that the experience of a prior expatriation lowers the difficulties related to work adjustment. Black et al. (1991) suggest that previous international experience is an important source of information from which accurate expectations can be formed and the accuracy of the expectations held by expatriates is a key to effective international adjustment. Yamazaki (2005) argue that previous experience may change how expatriates adjust by allowing them to ignore what had not worked for them in the past and to concentrate on what did work. Research examining the extent of prior international working experience (Black 1988; Okpara and Kabongo 2010) has generally indicated a slightly positive association with adjustment, especially with work adjustment. However, Torbiorn (1988) found that specific length of previous overseas experience was not related to higher levels of adjustment. Therefore, quantity of prior international experience does not seem to necessarily relate to current international adjustment. These inconsistent findings indicate that exactly how previous international experience influences expatriate adjustment and what factors inhibit or magnify the impact of previous experience needs to be comprehensively investigated. Selmer (2002) explored the possibility that prior international experience moderated the relationship between current assignment tenure and adjustment, studying western expatriates in Hong Kong. His results showed that the impact of prior Asian experience on the novice group (less than one year on an international assignment) was significant, but prior international experience outside Asia was not significant for either group. In the light of Selmer's (2002) research results, 2.2 Expatriate Adjustment 21 Takeuchi et al. (2005) organized previous international experience along two dimensions (domain (work/non-work) and cultural specificity) and examined the effects of expatriates' current past international experience on their cross-cultural adjustment. They targeted 243 Japanese expatriates working in the United States and their results indicate that past international experience moderates the relationship between current assignment tenure and both general and work adjustment. Takeuchi et al. (2005) made explanations to previous inconsistent research findings regarding the impact of prior international experience: the interaction effects of previous international experience differed depending on the measurement mode being used. The interaction figures for the length-based measures of prior international experience illustrated both direct and indirect effects, while the number-based measure of prior international experience only exhibited the mediating effects. Takeuchi et al. (2005) further conclude that previous international experience acts as a moderator rather than as an antecedent to expatriates' cross-cultural adjustment. Bhaskar-Shrinivas et al. (2005) also examined the mediating influences of prior overseas assignments. They suggest that time spent on current assignment may enhance the effect of previous international experience on work adjustment and expatriates may leverage past experiences better as they stay on assignments longer. As their assignments progress, expatriates may be better able to pick out the experiences that best enable them to adjust to their work surroundings. 2.2.2.2 Job-Related Factors Black (1988) reviewed the job-related factors that were hypothesized to influence (facilitate or inhibit) expatriate adjustment based on both international adjustment and domestic adjustment literature and proposes four job-related factors that can increase the uncertainty, uncontrollability, unfamiliarity, or unpredictability of the new work role and consequently inhibit the adjustment. These four adjustment inhibiting job-related factors are: role novelty (role novelty involves the difference between the past role and the new role), role ambiguity, role conflict, and role overload. Moreover, he proposed three job-related factors that have the potential for reducing the uncertainty and facilitating expatriate adjustment: role discretion, previous transfer or previous overseas work experience, and pre-departure knowledge. International assignments are often associated with policy and procedural conflicts with parent companies (Gregersen and Black 1992). Bhaskar-Shrinivas et al. (2005) further explain that role clarity refers to exact understanding of position requirements; role discretion refers to decision-making autonomy; role novelty refers to differences between host and native country work roles; and role conflict refers to incompatible cues regarding job expectations. These four job-related factors are likely to influence expatriates' ability to adjust to the new environment. For example, role clarity may reduce the ambiguity associated with foreign work surroundings, whereas role discretion may enable expatriates to use previously 22 2 Expatriate Adjustment and Expatriate Learning employed behavioural mechanisms to minimize that ambiguity. Bhaskar-Shrinivas et al.'s (2005) meta-analyses using data from 8474 expatriates in 66 studies provided support for a significant correlation between job role clarity and work adjustment. Obviously, the uncertainty regarding objectives and role requirements are the strongest stressors in expatriates' overseas work environments. (a) Current assignment tenure Black (1988) also found a significantly positive relationship between the length of current assignment tenure and work adjustment. It is reasonable to argue for a positive relationship between the length of time in a current work assignment (current international assignment tenure) and expatriate adjustment. When expatriates initially arrive in the host country, they face considerable uncertainty about many different aspects of both life and work. However, over time, they are likely to acquire information that enables them to function more effectively in the new environment. With prolonged exposure to the differences of the host culture, expatriates are likely to become more familiar with the general surroundings and find more suitable standards and become better adjusted (Takeuchi et al. 2005). Takeuchi et al. (2005) examined the effects of current assignment tenure on expatriate adjustment, studying 243 Japanese expatriates working in the United States. Their results showed that current assignment tenure had significant relationships with expatriates' general and work adjustment. Takeuchi et al. (2005) propose that the time spent in an international assignment is very important for expatriates' work adjustment and suggest researchers adopt a time perspective for understanding expatriate adjustment. Longer tenure increases opportunities for expatriates to learn appropriate work behaviours through direct as well as vicarious modelling (Bandura 1977). In addition, an extended period of time is also required before expatriates are fully accepted by their peers and develop work relationship with their peers. Accordingly, the length of current assignment tenure is related to an enhanced understanding of the culture of a host country and an increased ability to adapt to the host country (Takeuchi et al. 2005). Black and Mendenhall (1991) define 'time to proficiency' as the period it takes an employee in a new job to reach an acceptable performance level. The time expatriates take to become proficient after transfers may have several important implications both for themselves and their organizations. Typically, the total costs for an organization of an international assignment will exceed the total contribution an expatriate makes for some time during a post-entry period of settling-in. Hence, the longer the time to proficiency, the greater the balance of costs will be to the organization. It would be in the interest of both the expatriate and the assigning organization to keep the time to proficiency as short as possible. 2.2.2.3 Organizational Factors Organizations' selection criteria and mechanisms are also important expatriate adjustment influencing factors. Black et al. (1991) claim that the closer the selected 2.2 Expatriate Adjustment 23 expatriate matches the needs of the organization, the easier the expatriate's adjustment after entering the international assignment. Also, the greater the difference between the organizational culture of the subsidiary organization in the foreign country compared to the organization in the home country (i.e. high organizational culture novelty) the more difficult the expatriate adjustment would be (Black et al. 1991). Moreover, logistical support from the organization, parent firm assistance with day-to-day living, such as help with housing, schools, grocery stores, and so on, could potentially reduce uncertainty associated with international assignments and therefore facilitate expatriate adjustment (Black et al. 1991). Social support from co-workers and logistical support from the parent company can play important roles in easing adjustment. By providing expatriates with information about culturally suitable norms and behaviours in their work context, social support from co-workers reduces uncertainty emanating from an expatriate's new circumstances. Logistical support, on the other hand, could assist adjustment by making critical resources available to the expatriate at times of necessity and thus, meeting the demands of the new environment. In a study by Guzzo et al. (1994), expatriates' judgments of sufficiency of employer benefits and their perceptions of support were significant predictors of organizational commitment and intention to leave. Organization's social support, defined in terms of the sources and quality of helping relationships, acts as a stress buffer and has an indirect effect on strains such as job dissatisfaction. 2.2.2.4 Non-work Factors The present research will also discuss the non-work factors that influence expatriate adjustment from two aspects: expatriate's family's adjustment and host culture novelty. (a) Expatriate's family's adjustment Poor cross-cultural adjustment of a spouse is likely to inhibit an expatriate's adjustment. In Tung's (1982) survey of American MNC executives, she found that these executives believed that a spouse's inability to adjust to the foreign host culture was the number one reason for expatriate failures. Tung (1982) further claims that an expatriate's family's inability to adjust is the biggest reason for the expatriate's inability to make the transition. Black (1988) contends that the expatriate's family's ability to adjust to the new culture/country has a significant impact on the expatriate's transition at work and adjustment. Black and Stephens (1989) investigated a large sample of American expatriates on assignment in several different countries and their spouses. They found positive and significant relationships between expatriates and spouse cross-cultural adjustment. In a recent study by Black and Stephens (1989), family situation was rated by expatriates as the most important contributor to successful international assignments. Bhaskar-Shrinivas 24 2 Expatriate Adjustment and Expatriate Learning et al.'s (2005) meta-analyses using data from 8474 expatriates in 66 studies provided support for the idea that there is a strong correlation between spouse and expatriate adjustment. (b) Culture novelty There is a wealth of evidence that cultural differences can act as important barriers for business expatriates. As we discussed in Sect. 2.1.3 ('cultural differences between nations'), Chinese culture is highly contrasted with western (American and Western Europe) cultures. Western expatriate managers experience high culture novelty when they work in China. Mendenhall and Oddou (1985) refer to culture novelty as culture toughness and suggest that some countries, like China, seem to be more difficult to adapt to than others. They claim that the greater the difference between the cultures of the host country compared to the home country, i.e. high culture novelty, the more difficult would be the expatriate adjustment. Torbiorn (1988) noted that culture novelty has its largest impact on expatriates during the first two years of their assignments. After that, the impact of culture novelty diminishes somewhat. Some authors such as Pires and Stanton (2005) question the efficacy of culture immersion strategies. They contend that cultural values and norms in the individual typically are not changed by simply living in, or learning the language of another culture. According to Selmer's (2002) study of 36 UK-based companies, he found that respondents from similar cultures (e.g., USA) were as likely to report adjustment problems as expatriates assigned to more dissimilar cultures like China. He concluded that the degree of cultural novelty of the country does not seem to have any correlation with the outcome of the international assignment. Based on in-depth interviews of ethnic Hong Kong Chinese business managers assigned to China, Selmer and Shiu (1999) found that the perceived cultural closeness seemed to build up expectations of easy and quick adjustment, which could, if it was not accomplished, result in frustration and withdrawal. Furthermore, comparing the adjustment of western and overseas Chinese business expatriates in China, Selmer (2002) found that although the westerners perceived a higher degree of culture novelty than the overseas Chinese, they were better adjusted in work environment. More recently, Selmer (2006) examined 165 western business expatriates assigned by western firms to China to find out whether the culture novelty is a relevant factor in assessing the adjustment of business expatriates. Their results showed that there was no significant relationship between culture novelty and expatriate adjustment. A possible explanation for this is that an expatriate from a very different culture, may be tolerated and given the benefit of the doubt going through the process of trying to adjust to a new culture. An expatriate from a similar or presumed identical culture, on the other hand, could be treated with less patience and given less latitude for culturally deviant behaviours (Selmer 2006). Expatriates, overlooking any possible cultural differences that may exist in foreign locations with a similar culture, exhibiting even minor inappropriate behaviours, will most probably be unfavourably assessed. Hung (1994) argues that in China, Hong Kong Chinese may 2.2 Expatriate Adjustment 25 be judged by different standards and more harshly than a westerner for any mistake made because he/she is presumably knowledgeable about Chinese etiquette and manners and would be expected to fully understand the appropriate social protocol and behave accordingly. 2.2.3 Adjustment of Expatriates in China Since the introduction of the 'Open Door' policy in the late 1970s, China has undergone enormous social and economic transformations. In 1979, when China opened up for foreign investment, foreign businesses started to move into claim a share of the country's vast markets. China continues to attract more foreign direct investment than any other developing country. However, many parts of the Chinese mainland still have the character of a developing country. China has enjoyed an average annual growth rate of 9 per cent since 1980, partly because of a huge inflow of foreign direct investment (FDI). The country's entry into the World Trade Organization has accentuated its importance as a current and potential market for Western and other international business firms. China has emerged as the world's most desirable market (Selmer 2006). Selmer (2006) indicate that wholly owned subsidiaries in mainland China perform better if the companies have subsidiaries elsewhere in Greater China. The area 'Greater China' encompasses mainland China, Hong Kong, Singapore, and Taiwan (Selmer 2006). In doing so, business firms may accumulate substantial benefits in terms of enhanced experience of their expatriate staff that may facilitate their eventual entry into mainland China. Selmer (2006) examined the comparative adjustment of expatriates in Greater China and their empirical findings suggest that adjustment of business expatriates is better elsewhere in Greater China than in mainland China. He further proposed an expansion strategy for the internationalization of an organization that using other Greater China locations, like Singapore or Hong Kong, as a stepping-stone and source of experience in the ultimate quest to enter mainland China. Obviously, interpersonal interactions are relatively difficult in China in the absence of a common language. The official language of China is Mandarin, but, beside that, local dialects are spoken in different regions. Business expatriates in China tend to see language differences as a fundamental obstacle to interaction adjustment. The language barrier is substantial, despite the fact that the level of English proficiency is generally rising in China. Accordingly, there is reason to believe that western expatriate managers in China have a lower degree of interaction adjustment than their general adjustment. Many western business expatriates found their assignment in China frustrating (Selmer 2006). General adjustment for western expatriates in Beijing and Shanghai, China should be relatively easy. Both Beijing and Shanghai are highly dynamic cities with a good provision of modern conveniences. Living conditions in general are good, with ample supply of Western and Asian food, excellent shopping, good housing conditions, good health care 26 2 Expatriate Adjustment and Expatriate Learning facilities as well as modern entertainment facilities and opportunities. With regard to anticipatory adjustment, it has been argued that previous international experience may be an important source from which accurate expectations can be formed (Church 1982) and that 'several previous international adjustment experiences would provide more information from which uncertainties could be reduced and accurate expectation formed' (Black et al. 1991, p. 306). Empirical evidence has also shown that prior international experience facilitates an individual's ability to function and work effectively (Takeuchi et al. 2005; Selmer 2002) and the more contact assignees have had with the host culture, the greater their cross-cultural adjustment. This leads to the present research's first hypothesis: Hypothesis 1 Duration of managers' international experiences in the host culture will positively influence their adjustment to the current international assignment. 2.3 Experiential Learning Theory Experiential learning theory (ELT) is a learning theory that is characterized by six basic propositions (Kolb 1984). 1. Learning is best conceived as a process, not in terms of outcomes (p. 26). 2. Learning is a continuous process grounded in experience (p. 27). 3. The process of learning requires the resolution of conflicts between dialectically opposed modes of adaptation to the world (p. 29). 4. Learning is a holistic process of adaptation to the world (p. 31). 5. Learning involves transactions between the person and the environment (p. 34). 6. Learning is the process of creating knowledge (p. 36). Despite the wide acceptance of Kolb's experiential learning theory, there are salient issues concerning the structure and validity of its use. Kolb's theory has been criticized for logical inconsistencies in theory construction and for the psychometric properties of the learning style inventory. In the 1970s, critical analysis began to emerge regarding the theoretical limitations of Kolb's theory. Critics mainly questioned the psychometric properties of its measure. In response to these criticisms, Kolb redesigned the inventory in 1986 (Mainemelis et al. 2002). Research results indicated that the updated versions largely addressed earlier concerns related to measurement validity (Mainemelis et al. 2002). However, researchers still pointed out several issues concerning data validity and ipsative measurement of the revised model of the learning style inventory. Reynolds (1997) claim that Kolb's experiential learning theory is in decontextualizing learning the concept of style which may provide a discriminatory basis for dealing with difference in gender or race. DeCiantis and Kirton (1996) argue that Kolb's theory conflated three unrelated elements (cognitive style, cognitive level and cognitive process) and attempted to measure all three using a single instrument.

1. MNCs need to provide a three-year tenure (assignment) before an employee fully produces on the expectations.

So, what factors of expatriate adjustment/acclimation would you focus on if the assignment was for 18 months? Would an 18-month to 2-year assignment be worth it to an organization?

2. You jus