D-uppsats - s u exemplar.doc · Web view1.2 Background 3. 1.3 Purpose 3. 1.4 Problem Area 3. 1.5 Method 4. 1.6 Limitations 5. 1.7 Disposition 5. 1.8 Keywords 6. 2 RESEARCH METHODOLOGY

1. INTRODUCTION........................................................................................................................ 3

1.2 BACKGROUND.......................................................................................................................... 31.3 PURPOSE.................................................................................................................................. 31.4 PROBLEM AREA........................................................................................................................ 31.5 METHOD.................................................................................................................................. 41.6 LIMITATIONS............................................................................................................................ 51.7 DISPOSITION............................................................................................................................. 51.8 KEYWORDS.............................................................................................................................. 6

2 RESEARCH METHODOLOGY..................................................................................................7

2.1 THE APPLIED APPROACH - AN OVERVIEW.................................................................................72.1.1 Research and Investigation..............................................................................................72.1.2 Research and Knowledge.................................................................................................8

2.2 HERMENEUTICS – THE APPLIED APPROACH...............................................................................92.2.1 The Hermeneutic Spiral..................................................................................................112.2.2 The Actor-Oriented Approach........................................................................................132.2.3 Qualitative and Quantitative Research Methods.............................................................152.2.4 Study Classification........................................................................................................15

2.3 APPLICATION OF THE THEORIES..............................................................................................162.4 THE RESEARCH PROCESS, - A STEP-BY-STEP ANALYSIS............................................................17

3. CULTURE................................................................................................................................. 20

3.1 CULTURE - AN INTRODUCTION................................................................................................203.1.1 National Culture............................................................................................................203.1.2 Corporate Culture..........................................................................................................253.1.3 Culture Shock................................................................................................................. 293.1.4 Stress and Psychosocial Factors Affecting Expatriation.................................................32

4. THEORY.................................................................................................................................... 35

4.1 EXPATRIATION....................................................................................................................... 354.1.1 Cross-Cultural Learning.................................................................................................404.1.2 Cross-Cultural Training.................................................................................................434.1.3 Evaluation Programs......................................................................................................484.1.4 The Trailing Spouse and Family.....................................................................................484.1.5 Expatriation Failure.......................................................................................................49

4.2 REPATRIATION........................................................................................................................ 52

5. EMPIRICAL RESEARCH........................................................................................................ 54

5.1 ELECTROLUX.......................................................................................................................... 545.1.1 Company Background....................................................................................................545.1.2 Expatriation Policy........................................................................................................ 545.1.2.1 The Expatriate Employee and Cultural Training..........................................................555.1.2.2 The Trailing Spouse and the Expatriate Family...........................................................565.1.2.3 Evaluation programs...................................................................................................57

5.2 ABB...................................................................................................................................... 585.2.1 Company Background....................................................................................................585.2.2 Expatriation Policy........................................................................................................ 60

5.2.2.1 The Expatriate Employee and Cultural Training....................................................................605.2.2.2 The Trailing Spouse and the Expatriate Family......................................................................615.2.2.3 Evaluation Programs..............................................................................................................61

5.3 ERICSSON............................................................................................................................... 625.3.1 Company Background....................................................................................................625.3.2 Expatriation Policy........................................................................................................ 62


5.4 THE SWEDISH TRADE COUNCIL...............................................................................................645.4.1 Company Background....................................................................................................645.4.2 STC Operations.............................................................................................................. 64

5.4.3 Turnover, Profit and Financial Position.........................................................................655.4.4 Expatriation Policy........................................................................................................ 66


5.5 AN EMPLOYEE PERSPECTIVE ON EXPATRIATION AND REPATRIATION AT ELECTROLUX.............68

6. ANALYSIS AND COMPARISON.............................................................................................71

6.1 TRAINING PROGRAMS IN THE FOUR COMPANIES- ANALYSIS AND COMPARISON........................716.2 CROSS-CULTURAL TRAINING PROGRAMS -NECESSITY OR CONTEMPORARY TREND...................746.3 CROSS-CULTURAL TRAINING PROGRAMS -A VALUE ADDED APPROACH..................................766.4 EXPATRIATE VS. LOCAL EMPLOYEE – AN ANALYSIS AND COMPARISON...................................796.5 EXPATRIATION FAILURE RATES -AN ANALYSIS AND REVISION.................................................82

7. CONCLUSION AND RECOMMENDATIONS........................................................................84

7.1 EXTERNAL RECRUITING VS. INTERNAL RECRUITING FOR INTERNATIONAL ASSIGNMENTS..........847.2 THE VALUE OF USING EXPATRIATES VS. LOCAL EMPLOYEES..................................................857.3 THE NECESSITY OF CROSS-CULTURAL TRAINING PROGRAMS...................................................857.4 THE VALUE OF CROSS-CULTURAL TRAINING PROGRAMS........................................................867.5 COMMENTS ON IMPROVEMENTS OF EXPATRIATION TRAINING PROGRAMS................................867. 5 COMMENTS ON EXPATRIATION FAILURE.................................................................................87

8. CRITICAL REVIEW.................................................................................................................89

8.1 VALIDITY............................................................................................................................... 898.2 RELIABILITY........................................................................................................................... 898.3 SELF-CRITICISM & REFLECTIONS.............................................................................................90

9. FUTURE RESEARCH AREAS.................................................................................................91

10. REFERENCES......................................................................................................................... 92

11. APPENDIX............................................................................................................................... 94

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1. Introduction

1.2 Background

In a world of increasing globalization, we believe that it is important to be able to understand different cultures to a higher degree than before. This would imply a higher extent of interaction and communication between people with different cultural backgrounds. For companies this could entail both a problem and an opportunity when sending an employee abroad to work in a different environment than the one experienced at home. Multinational companies, and thus also their employees, would have to be flexible in order to perform successfully in this international situation. If the company, through its employees, is flexible and open-minded, difficulties might not arise and the company could even experience benefits. Cultural rigidity, however, could shut doors and impede the company in its operations.

Employee training, as well as for the spouse and accompanying family members, in these issues therefor seems important for the overall success of the company, and should be taken seriously. Professional requirements and skills might not be enough in order to perform well in another cultural business climate. The literature and research today appear to argue that a certain degree of intercultural training and personal flexibility is necessary in order to fulfill the implicit cultural requirements of working abroad. That is what this thesis is about.

1.3 Purpose

The main purpose of this paper consists in determining whether cultural training programs, follow-up and support can add value to the organization. We will examine whether there is a clear benefit for the employer to provide cultural training programs, and for the employee to participate in them. If success or failure of the international assignment lies in other variables, we will seek to define them and state how they affect the outcome of the international assignment and whether they add value to the individual and to the organization as a whole.

1.4 Problem Area

We have already mentioned that with today’s increasing globalization follows the growing importance of cultural diversity awareness and ability to handle situations in an unfamiliar cultural context then the one a person is used to. This holds true both for the personal as well as for the professional situation. The international company is thus faced with the correspondingly important issue of sending the person with the most adequate abilities to handle the challenge of working abroad, in order to increase

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the chances of operating successfully in this type of business situation. The question arises whether a person can be trained to deal with and perform successfully in a culturally challenging environment, or if she needs to have certain qualities from the start. Is it perhaps a mix of the two? Several companies who find themselves in this situation today provide some kind of training programs for their employees before embarking on an international assignment, but the composition of these programs varies in the most different of ways. Other organizations, like the Swedish Trade Council, an organization with the majority of its employees operating on international assignments, do not offer cross-cultural training programs for their future expatriates. What is their rationale? How, if at all, are the trailing family members treated by the expatriating organization, and does the situation change if the spouse also pursues a career?

The problem addressed in this paper is partly how to increase the value of international assignments, whether through e g preparatory training or a more selective screening process of expatriate candidates. We mentioned earlier that the Swedish Trade Council does not provide their employees with such programs, and they are performing well in their field of work. This begs the question whether or not cultural training programs really add value to the organization, or at least if they are worth the effort and resources that go in to them. This is the main problem area, which we will try to examine by analyzing the present situation in the companies mentioned above, comparing them to one another and to the literature on this topic, and finally drawing our conclusions from these findings. Additionally, we will seek to answer the questions put in the previous paragraph and others similar to those in the process.

1.5 Method

This paper is a multiple case study with the aim firstly to analyze the existing preparation programs, support while employee is abroad, repatriation preparations and the follow-up upon terminated international assignment provided by a number of major Swedish companies for their employees in a value added perspective. The companies in question are ABB, Ericsson, the Swedish Trade Council and Electrolux. We will, however, particularly examine the situation in the company Electrolux, a giant in the field of household appliances and electrically powered products. These companies were chosen because they send a substantial number of their employees abroad on various assignments, rendering them suitable as research subjects. As major Swedish multinationals, they fit the profile of companies to which our problem area pertains. Additionally, Electrolux has recently started a new, improved and vigorous in-house training, support and follow-up program for their expatriates, which adds to our interest in that particular organization.

Second, the situation of employee preparation and training in the companies will be compared, to one another as well as to the theories found in the literature regarding this issue. This will be done in order for us to establish whether cultural training programs add value to the organization and to make recommendations to the companies about possible improvements.

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The research methods used will be interviews with the International Assignment Managers at the companies as well as with some repatriated employees.

1.6 Limitations

Culture. This is a vast concept, and to go into detail about all the different aspects of this phenomenon would, in our opinion, not be of interest to the purpose of this paper. However, a summarized definition of culture, which we feel is necessary for the understanding of the purpose of this paper will be presented.

Number of organizations interviewed. We have chosen three major Swedish multinationals and one international trade organization as case study objects. The reasons for the selection were that we wanted to examine these kinds of companies and that they fit the profile of possible candidates. They had all shown interest in collaborating with students before, they were recommended to us by various experts in the field, and in a couple of these organizations we had established company contacts already. We will not conduct a study of all eligible Swedish companies, since this lies beyond the scope of a master’s thesis, nor was it our intentions. We feel that the number of organizations, and these particular organizations, will provide enough information in order for us to draw adequate conclusions concerning the topic of this paper.

Number of interviews conducted. We have conducted interviews with experts in the field, the people responsible for international assignments and cross-cultural training in each organization as well as with employees from the Electrolux Corporation in order to acquire information from different perspectives. However, due to time limitation and availability of interview subjects, only five employees at Electrolux could be interviewed. We realize that a greater number of employee interviews would be preferable, but this had to suffice.

1.7 Disposition

In the second chapter, the Methodology used will be presented. We have chosen the hermeneutic approach, since we wish not only to point out the problems regarding our research area and describe how the organizations handle them, but to reach an understanding of the problems, their cause and how to solve them.

In chapter three, we will present different aspects of Culture in a summarized form, pertinent to the pre-understanding of the theories and to the understanding of the purpose of this thesis.

In chapter four, the Theory chapter, we will present and discuss the theories pertaining to our research area, in order to have a firm theoretical ground to stand on when we analyze the situation in the companies.

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In the Empirical Research chapter we will present findings from previous surveys, research and investigations of how different companies in different countries have dealt with the problem as well as research on employees and expatriation. This is done in order to create a background of where the research stands today and for us to receive updated information about the issue at hand.

In chapter six, the Analysis and Comparison chapter, an analysis of the cultural training situation in the different companies will take place, through applying the theories presented in chapter four and the previous research from chapter five. Our general findings regarding how and if cultural training programs add to the value of the company as well as possible recommendations and amendments to the methods used in the companies will then be treated in the Conclusion, chapter seven.

Our Critical Review, and Future Research Areas that we feel are interesting, will be presented in chapter eight and nine, followed by our List of References and the Appendix.

1.8 Keywords

Corporate Culture -The social norms shared by the people in an organization.Cross-Cultural Learning -Learning about different cultures.Cross-Cultural Training -Training for dealing better with culturally diverse situations.Cultural Differences -Norms and values that vary from one society to another.Dual Career Couples -A married couple where both individuals carry a profession.Expatriate -The employee that goes abroad to work for a limited amount of time.Expatriate Failure (EF) –Not accomplishing the international assignment objectives.Expatriation Failure Rates (EFR) -Rate of expatriate failure in e g an organization.Expatriation -The sending abroad of an employee on an assignment.Home Company -The mother company/company from which the employee originates.Host Company -The affiliate/company abroad to which the employee is sent.Home Country -The country of which the employee is a citizen.Host Country -The country to which the employee moves for the IA.International Assignment (IA) -Work for a limited amount of time abroad.National Culture -The norms shared by the members of a society.Organizational Culture -Corporate culture.Preparatory Program -Training program to prepare the expatriate for the IA.Repatriation -The process of transferring back home again after the IA.Receiving Company -Host company.Sending Company -Home company.

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2 RESEARCH METHODOLOGYIn this chapter we will present and discuss the way to collect information and to conduct a scientific study or research thesis. There will be a discussion on different ways to view the information gathered. We will also present a model to describe the order in which we have conducted our research, and there will be a presentation of which method we have chosen to use for our study.

2.1 The Applied Approach - An Overview

While choosing the adequate methodology for our research, the main consideration was to identify the best possible tool for acquiring the information necessary to conduct an analytical multiple case study.

We have followed the hermeneutic view, mainly using the actor-oriented perspective in our application of qualitative methodology. We have based our analysis mostly on primary data, though secondary data has been used in order to provide the necessary background and context. The primary data has been obtained through interviews made with representatives from Electrolux, Ericsson, ABB and the Swedish Trade Council (STC) in our study, and with other persons with knowledge and information about the area of international assignments and the re- and expatriation problems.

The following sections contain a more detailed discussion of our applied method and the different obstacles that may be encountered in our research. We will also present models to further enhance the understanding of our methodology.

The chapter ends with the structural presentation of the whole research process described as the chain of steps that we have taken while working on this thesis.

2.1.1 Research and Investigation

This thesis is an example of a research paper, which differs from the usual investigation paper. This is due to the theoretical base that we use when gathering the information for our research, which will effect our utilization of our knowledge.

The distinction between research and investigations or inquires is unclear. The authors Patel and Davidson try to do it through comparing the “production of knowledge” with the “utilization of knowledge”1.

The figure illustrates an attempt to make a division between investigations, research and development work from the perspective of production, and utilization of knowledge. Here we can see that the research is more scientific, because of the theoretical base. We believe this to be the main difference between ordinary search

1 Patel, Runa, Bo Davidson. Forskningsmetodikens Grunder 2nd ed. 1994, p. 8-9.

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for knowledge, like an investigation, and the research. Both give the person doing the work a higher degree of learning and understanding, but the research is built upon a more theoretical base, and is therefore inclined to give the researcher a more truthful picture of the subject. With the expression “theoretical base” the authors mean that the work is based on models and theories, and that the research subject is explained on the basis of those theories and models2.

2.1.2 Research and Knowledge Research can be defined in several ways. In everyday language the term has the following definition3:

A research means collection, systematization, analysis and possibly development of knowledge.

Many researchers believe that the last function, development of knowledge, plays a key role. This point of view raises another question, namely: What kind of knowledge is relevant in directing the research towards development of relevant and meaningful knowledge? To start with, it is very important to have sufficient previous knowledge in order to conduct a proper research, at least for the approach that we have chosen, namely the hermeneutic one. Secondly, an exact purpose for the research needs to be defined.

In order to define an exact purpose for a research it is important to consider two main questions:

-0 Who is the receiver?-1 What end is it going to serve?

Taking these factors into consideration, one can distinguish between operative knowledge, repair knowledge, and design knowledge. The first is required for execution of certain actions, the second is required to solve problems or to correct mistakes, and the final is what is required in order to create new systems. In our case the main receivers are both individuals and companies interested in the issues and problems of international assignments. The end that the paper is to serve is that we are trying to find out if expatriation and repatriation programs add value to the companies that are using them. In the light of the above, one may say that our study has been directed towards operative knowledge.

Every scientific research has to be done within the frame of the fixed rules. However, there are different concepts as far as the choice of the research methodology is concerned. The choice is highly dependent on the scientific basis. Before choosing a method for a certain research, several major scientific-theoretical views should be taken into consideration; hermeneutics, positivism, critical theory, postmodernism, feminism, grounded theory et c. These different

2 Patel, Runa, Bo Davidson. Forskningsmetodikens Grunder 2nd ed. 1994, pp. 8-9.3 Lundahl, Ulf, Per Hugo Skärvad. Utredningsmetodik för Samhällsvetare och Ekonomer, 1992, p. 10.

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methodologies present a plan of how to structure and conduct the research. We will now present the methodology that we have chosen for this thesis.

2.2 Hermeneutics – the Applied Approach

In our study we have used the hermeneutic methodology, but before we present this, and how this is used we would like to present the method often referred to as the opposite to hermeneutics, namely positivism.

Positivism is a method that is based upon the fact that theories must be able to be proven in verifiable observations. The method is often used in the natural sciences such as physics, and includes some sort of statistical base for proving the findings of the research4. We do not consider it to be of any advantage to us to use the positivistic approach, mainly because we are concerned with “soft” issues, such as cultural awareness, that can not easily be measured and sometimes can not be verified. The interviews that we are concerned with are mainly about subjective experiences, and these can not easily be proven right or false.

From the two main theories, hermeneutics and positivism, we have chosen the hermeneutic approach. These are the two, to our knowledge, most used and widely spread theories. They are also the two that we as scientists and researchers are most accustomed to. That fact saves time for us in our research process, as we search and gather material.

Hermeneutics, as mentioned earlier, is sometimes called the opposite to positivism and could be translated to “the understanding of interpretation”. It is nowadays a scientific approach where the researcher studies, interprets and tries to understand the underlying principles for the human existence5.

Hermeneutics was in the beginning a way to interpret the writing of the bible. This technique was later used on non-religious text. In the 19th century there was a movement to make it the general methodology for the science of man. Later on in the 20th century the technique developed into a methodology sometimes claimed to be able to interpret human actions and existential claims just as one could interpret other oral or written material concerning more worldly subjects6.

Hermeneutics’ basic foundations are7:-2 Research on human and social relations can result in knowledge that is limited as

far as time and place are concerned.-3 There is a clear distinction between physical and social phenomena; to understand

social phenomena requires a comprehensive interpretation of meaning and content of certain phenomenon.

-4 The main objective of research is to interpret and understand.

4 Patel, Runa, Bo Davidson. Forskningsmetodikens Grunder 2nd ed. 1994, pp. 23.5 Patel, Runa, Bo Davidson. Forskningsmetodikens Grunder 2nd ed. 1994, p. 25.6 Ibid.7 Arbnor, Ingeman, Björn Bjerke. Företagsekonomisk Metodlära, 1994, pp. 62.

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-5 Separate phenomena can be understood only by putting them into the right context; the achievement of real understanding is influenced by the assessment that the individual has, performing the research, as well as his applied perspective.

Nowadays hermeneutics is used in many different scientific disciplines such as the human- the cultural- and the social sciences. In these different disciplines the hermeneutic approach has been interpreted and altered to suit each and every one of the specifics for the disciplines. The basic foundations of hermeneutics have inspired many scientists, but they often do not use any specific method or theory in their applied research8.

One could claim that a main prerequisite of hermeneutics is to have a pre-understanding of the research situation in question. To proceed in his investigation, the scientist can then use any methodology of his own choice. But, when it comes to the subject of understanding, one is always scrutinized by others regarding the objectivity of the method, and in our opinion sometimes rightfully so. It is hard to interpret someone else without being affected by one’s own prejudices.

The hermeneutic scientist approaches a subject matter with his own pre-understanding of reality. This should be used as an asset and not as an obstacle. The goal is to understand the whole, and one should not be too concerned with the differences of the parts, but search for similarities that combine and give a clearer understanding. The scientist should also be focused on relations between the different parts that could lead to a whole. Usually the scientist alters between the subject (the interviewer) and object (the interviewee) approach in a way to reach a higher understanding. Again, the pre-understanding to this matter should be used as a tool in this journey to a higher understanding9.

We believe that as a person you always have something that we can call ordinary pre-understanding or opinion about what the world is and how it functions. This is not what we shall consider pre-understanding in this context, but instead concentrate on the fact that we as researchers should read up on earlier studies and other materials, before making the interviews. In order to make as much use as possible of the interviewee’s knowledge and expertise, and through that make it obtainable for us to reach the purpose of the thesis.

There is a model that further explains the hermeneutic approach when observing, gathering and interpreting information, which is called the hermeneutic spiral.

2.2.1 The Hermeneutic Spiral

Interpreters of the model often refer to the interpretation as a journey that includes several steps before one could claim understanding10. There is no specific end or starting point for this journey of interpretation. The parts, the whole, subject, object

8 Patel, Runa, Bo Davidson. Forskningsmetodikens Grunder 2nd ed. 1994, p. 25.9 Patel, Runa, Bo Davidson. Forskningsmetodikens Grunder 2nd ed. 1994, pp. 26-27.10 Patel, Runa, Bo Davidson. Forskningsmetodikens Grunder 2nd ed. 1994, p. 27.

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and the researcher’s pre-understanding are all parts of a “whole” that lives and develops. This development is very often referred to as the hermeneutic spiral11.

Figure 2 Process of Interpretation.

The model consists of two main axes, one diachronous (temporal) and one synchronous. The research object is placed in the center of the field in which the axes intersect (origo). The research object, i. e, the object that for the moment stands in focus, is what the researchers seek to interpret and understand. Research objects could be texts of varying length as well as events, situations, or the thinking or mentality of people. Consequently, the contents along the two axes vary in both quantity and quality. How much of the contemporary and historical context the axes will encompass depends wholly on the purpose of interpretation. The form of the figure is quite arbitrary. Above all, its illustration is much too short and much too simple for an obvious reason: the figure must be readable. In reality, the circle constitutes a spiral tacking from the whole to individual parts and back again, with circles of varying amplitudes. Starting from the research objects, the hermeneutics circle of the figure passes the situational contexts and goes on to the future of the research object. On its way towards its point of departure (the research object), it also passes contemporary circumstances, the future and past of the object, and before ending it rests temporarily in the situational context12.

In the text above it is explained that the figure/model is often used on historical text documents, but it could also be used on people or even situations. The model is general and depicts a way to structure the process of understanding. We believe the relationship between a historical and future time-span is crucial in many contexts. We can discuss if the reason for expatriate’s problems in the future is often based on the historical context of the person. We need to understand the underlying reasons in order to interpret and give further recommendations. We also often start out in a micro perspective, to understand the “smaller” world or in other words the unique problems for the individual, makes it possible for us to make statements about the macro level, the “larger” world.

Researchers often move back and forth in these different contexts, to further obtain information or input and then move further. A researcher must in our opinion, always question the so called perceived reality and force himself to go back and obtain new and maybe different information in order to be able to go forward. Eventually, we had to stop this process in order to present an understandable painting of the world that we have researched. This does not mean that the reality stops there or that this thesis presents a complete understanding of the ex- and repatriation problems and value issues.

11 Ödman, Per-Johan, Interpreting the Past, Qualitative Studies in Education, 1992, in Vetenskapsteori för Ekonomer 1998, p. 172.12 Ödman, Per-Johan, Interpreting the Past, Qualitative Studies in Education, 1992, in Vetenskapsteori för Ekonomer 1998, p. 171.

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The hermeneutic spiral, is built upon a conceptual triad13:1. Interpreting intentions, i. e the focus. (Literal meaning)2. Clarify the meaning of the research object in relation to its situational context, i. e

clarify the sentence/text as a whole.3. Reconstruct the meaning of the object as a part of its existential world.

This triad illustrates the basic notion that the researcher goes from the part to the whole, understanding the part to then assemble them to an understandable whole. We can, and often must, as researchers, go back and forth in this process. After we have interpreted the parts and were able to depict a whole, we would have to start over again in order to achieve a higher understanding. This metaphorical journey does not come to a complete stop; it is on the contrary an ongoing process. Learning and interpretation is never a static situation but instead a lifelong experience.

To sum up, we would claim that the character of our assignment, the problem area, and the purpose of our thesis made us inclined to choose the hermeneutic perspective. We have conducted the research in two dimensions; first we tried to understand the subjective reality of the studied actors and secondly we tried to use this subjective logic as a base for deeper analysis. For this, we used an approach called the actor-oriented approach, which we will present in the following section.

2.2.2 The Actor-Oriented Approach

According to the authors Ingeman Arbnor and Björn Bjerke we can in the field of business administration identify three different methods14:

1. The analytical-oriented approach2. The systematic-oriented approach3. The actor-oriented approach

The analytical-oriented approach is based upon philosophy and is characterized by the notion that the sum of the parts is the whole, and that these parts should not be based on subjective experiences. In fact, they should instead be verifiable and based on hypotheses.

The systematic-oriented approach is based on the notion that whole is not the sum of the parts, but instead differs from the parts and could give synergy effects. Here one starts with the focus on the whole and then understands/describes the parts or individuals by the structural social rules that forms them (system).

The actor-oriented approach however, is not concerned with the issue of explaining, but rather focuses on understanding social realities. The knowledge that the researcher obtains when using this approach is based on individual’s reality, but an “objective” reality can be constructed on the foundation on a series of individuals.

13 Ödman, Per-Johan, Interpreting the Past, Qualitative Studies in Education, 1992, in Vetenskapsteori för Ekonomer 1998, p. 172.14 Arbnor, Ingeman, Björn Bjerke. Företagsekonomisk Metodlära, 1994, pp 65.

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We will here explain, in short, the reasons for using the actor-oriented approach when looking upon our problem area. It helps us in the distinction between the subjective experience, on the one side, and the “objective” reality on the other side. We need, in order to explain people’s experiences, to interview individuals that have a perception of their unique situation. From this we have to build a conceptualized world. As this model illustrates15:

Figure 3 The Actor-Oriented Conceptualized Reality

The main focus for this approach is that we as researchers engage ourselves close to the actor in the organization, company or some other group that we are looking into. Through interviews try to understand the actors subjective reality, and from a population of these interviewed actors we can draw conclusions about the experienced objective reality. The model also identifies that all individuals (actors) are being affected by the so-called social reality as well. This could be further explained as the society where these actors exist, such as an organization or a small community.

To further explain how we collected the information in our thesis, we will now explain and compare the qualitative and quantitative research methods. These methods are concentrated on how to measure the information that we are to interpret.

2.2.3 Qualitative and Quantitative Research Methods

The qualitative and quantitative research methods are different in many ways.16 The differences can be described briefly as follows. The qualitative method aims to collect, analyze and interpret data that can not necessarily be quantified or expressed in a figure or in numerical form. Such a method is often applied in studies made in the form of case studies or surveys. Quantitative studies, on the other hand, are such in which the collected material is expressed in a numerical form and is analyzed in a quantitative way. Bigger surveys, experiments and statistic time serial analysis have often a more quantitative character.

Using the qualitative method, one aim to understand the problem, which makes this way of analysis focused on the process as such. The quantitative approach aims to explain the problem, which makes the method focused on the result. Often, as in our case, when researchers are involved and concerned with so called soft issues, that are not easy to measure in ordinary numerical numbers, like knowledge capital, human resources issues et c, the qualitative method is used.

Since this thesis is based on interviews in the form of discussions and since the research subjects are examined through case studies, this thesis is characterized by a qualitative method. We are focused upon issues that concern culture and culture

15 Arbnor, Ingeman, Björn Bjerke. Företagsekonomisk Metodlära, 1994, p. 200.16 Lekvall Per, Claes Wahlbin. Information för Marknadsföringsbeslut, 1993, p. 41.

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diversity, human resource management, personnel and other soft issues. We believe that these things are hard to measure, and we are also more interested of subjectively experienced matters that are not suitable for a quantitative thesis.

In the next section we will discuss different classifications of a thesis. This section is important for the readers of this paper to understand the approach that we have chosen to use.

2.2.4 Study Classification

According to Patel and Davidson, there are mainly three ways of classifying a study; as explorative, descriptive or as one of verifying hypotheses.17

The main criterion of an explorative study is to learn as much as possible about relatively new or unknown problem areas. The explorative study seeks to clarify and simplify the interaction between various factors. This is usually done in order to see if a cause-and-effect relationship is present or not.

The descriptive study aims at searching for data concerning well-specified problem areas and issues. This type of study is often called “mapping”. The main purpose while conducting the descriptive study is to describe, as the name implies, and to depict the particular issue without explaining the causes.

Within problem areas where the amount of knowledge has become more extensive and different theories have been developed, the study would become one of verifying hypotheses. Hypotheses verifying studies require that there exist a sufficient amount of accumulated knowledge concerning that area. The necessary amount of knowledge should be enough for the researcher to be able to derive assumptions from the reality, built upon accurate theories. Such assumptions are called hypotheses. The hypothesis’ validity can then be tested using statistical instruments.

Our research paper has some characteristics of a descriptive study, since we describe, analyze and compare the present expatriation and repatriation situation in the case study companies. We would also like to claim that some elements in this research paper have explorative characteristics. We build this upon the fact that each expatriation/repatriation program in some sense is quite unique and therefore creates questions and issues that, to our knowledge, have not been addressed before. In addition, it is our intention to try to measure the value of these programs, and if possible present a general model on how to illustrate that.

When we address the issue of classification of the study, it is our purpose to illustrate the complexity of our problem area and purpose. In an early stage in our research process we experienced an overwhelming amount of information regarding culture and also what an expatriate should be concerned with before departure. We found, however, less information regarding the issue of evaluating these programs. Apart from describing, analyzing and comparing certain aspects, we also had to look for and

17 Patel, Runa, Bo Davidson. Forskningsmetodikens Grunder, 1994, p. 11.

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find new aspects of the issue of this thesis. Therefore, our study is both explorative and descriptive.

2.3 Application of the Theories

We will use the actor-oriented approach in collecting primary data through in-depth interviews with representatives of each company as well as other well-informed persons. We believe that the actor-oriented approach is more suitable because of the subjectivity of the problems. Many diversities and cooperation problems exists in personalities and pre-obtained cultural traits, each experienced problem is therefore unique for each person. That is why it is important to try to understand and depict the interviewee’s experiences, in order to be able to address the expatriation and repatriation programs. We believe that there can not be any one clear picture or truth about these matters, which is why we have chosen the actor-oriented approach.

Secondary data will be used when presenting backgrounds of markets and companies. Thus a certain degree of analytical orientation will be implemented.

The aspects that we expect to face are not easily accountable or measurable, they consist more of subjective experiences and cultural diversities. These matters are not suitable for a quantitative study, which as mentioned above, aims for numbers and statistical relations.

We will also use an inductive method in our approach, due to the lack of prior knowledge and studies, and due to the complexity of the research problems. An inductive approach differs from the deductive in that it is based on assumptions about the reality from observations, rather then theoretically proven truths as in deductive reasoning. Issues concerning culture and cultural diversity are not often easily theorized into clear understandable attributes, since many situations are unique. This is why we have chosen to use an inductive method for our collection and analysis of the material.

2.4 The Research Process, - a step-by-step analysis

According to Lindgren the research process can be divided into several steps, which the researcher follows when he has set out to gain information and knowledge concerning a specific problem area18. The literature mentions eight different phases, that follow a chronological order. These phases are general and not specific for any methodological approach or theory.

In this study, it was our intent to closely follow the scientific approach discussed above. Not as a specific method, but rather a way to structure the work process. We will now present our approach in a figure that will illustrate the process that we have followed.

18 Lindgren, Christer, Metodkompendium. 1994, p. 16.

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The model referred to as “The Research Process” illustrates the main steps that we have taken from the first idea to the presentation of our thesis. We have divided these steps into four sections in order to show the process better, each with an own color code;

White: This is the initial phases where we discussed, planned and organized our work. We also tried to define the problem area, in order to structure our research. After these steps we performed a preliminary literature check, to verify that it was possible to write the thesis that we were aiming for.

Turquoise: The second phase where we collected data for our thesis. The data consisted of both primary data required through interviews, and secondary data required through literature.

Blue: The third section where we performed the analysis and synthesis, compiling the information and turning it into a product of our own. Here we did our interpretation of the material, and criticized our own conclusions.

Navy-blue: This is the final section, the presentation of our masters’ thesis.

This model differs substantially from the hermeneutic spiral, which is more concerned with the process to interpret and eventually understanding. That is the model we shall follow regarding the understanding and interpretation of our material and interviews. The research process model is more of a planned work schedule, how to structure ourselves in our work. We believe it is of importance to be structured when working with the amount of material that a master thesis requires. This is why we present how we structured our work with this thesis.

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3. CultureIn this chapter we will present some authors’ definition of, and relevant aspects regarding national culture, corporate culture and culture shock. Last, there will be a presentation of a recent doctoral thesis on stress among expatriates due to cultural differences. The authors feel that this presentation is important in order to acquire an adequate understanding of the concept of culture, and the impact of cultural differences on individuals. This will then serve as a pre-understanding for the sections on expatriation and repatriation in the theory chapter.

3.1 Culture - An Introduction

In order to understand the topic of this paper better, the authors feel that some kind of definition of culture is in order. As we have already mentioned in the introductory chapter, the full definition of culture will not be discussed. It is our belief that there is a vast number of potential philosophical explanations to clarify what culture is, as well as standpoints for doing so. Therefore we feel it necessary to cut short the number of these definitions, and to concentrate on those relevant for the purpose and problem of this thesis. In the following sections we will give some authors’ opinions of how culture could be explained and defined.

3.1.1 National Culture

When talking about culture, it is important to correctly define the phenomenon in order to be apply it accordingly to the topic at hand. We feel that it is necessary, for our topic, to divide the concept of culture into the dimensions of national and corporate culture. This section will deal with national culture and the following with corporate culture.

Albaum et al. define national culture this way19:

”For anthropologists, culture has long stood for the way of life of a people, for the sum of their learned behavior patterns, attitudes, and material things. [...] In a real sense, culture is man-made. It is learned and, as such, is communicated from one generation to another. Culture is shared by the members of a society and the behavioral traits of which it is comprised of are manifested in a society’s institutions and artifacts. [...] To understand a culture one must understand its origins, history, structure and functioning [...]”.

Since this thesis deals with culture in a business context, we would also like to present the same authors’ view on national culture in business20:

19 Albaum, Gerald et al, International Marketing and Export Management, 2nd ed, 1994, pp. 53.20Ibid.

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”Culture provides norms for behavior of buyers, consumers, and sellers, and these norms control behavior in ways that are not always well understood”.

Culture is thus something that we all are familiar with, but at the same time might have difficulties with to understand: per definition should there not be any problems in relating to our own, but when it comes to that of others, the situation is radically different. In a concluding comment on this issue, Albaum et al. point out these difficulties21:

”Culture is a pervasive environmental variable affecting all international and export marketing activity. Of concern to the manager are the influences of the religious, family, educational, and social systems of a society. Often these are manifested in the values, attitudes and motivations of people and can affect business customs such as personal manners, colors, advertising, ”gift” giving and receiving, pride and status, and other aspects. All too often, in domestic transactions we have a tendency to take culture for granted and not explicitly incorporate its effects into our decisions. When dealing with the foreign markets, even those whose cultural distance from ours is not great, this should not be done”.

Albaum et al. thus argue that (national) culture, in a way, is omni-present and that it, in this capacity, affects every action that we take. Given that it constantly surrounds us, the authors’ point that one should be careful when dealing with a different culture than one‘s own is relevant: if culture is taken for granted, difficulties might arise.

Torbiörn defines the phenomenon of national culture in a similar way, but goes into more depth22. He argues that a society can be defined as a social system with a certain set of norms, encompassing a geographical region. These norms can be explicit or implicit, but have in common the fact that they set out guidelines for the appropriate or inappropriate behavior in various situations for the members of this society. Norms are not just formal rules and regulations, but also informal. Common problems and goals, tradition and history contribute through informal norms to the uniformity of attitudes and behavior in many situations for the individual members of the society.

Torbiörn calls the formal and informal norms that apply to more or less everyone in a society national norms23. These norms affect the society as a whole, i e, on a national level. There are however different levels of a society where norms apply, not just on the national level. Torbiörn mentions group norms and individual norms24. These norms have the same kind of impact on the individual but differ in the number of people that each norm applies to. To explain this further, Torbiörn presents this schematic model25.

21 Albaum, Gerald et al, International Marketing and Export Management, 2nd ed, 1994, pp. 58.22 Torbiörn, Ingemar, Att leva utomlands, 1976, pp. 15-24.23 Torbiörn, Ingemar, Att leva utomlands, 1976, p. 15.24 Torbiörn, Ingemar, Att leva utomlands, 1976, p. 16.25 Torbiörn, Ingemar, Att leva utomlands, 1976, p. 18.

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Figure 5 The Various Levels of Culture in Different Nations

The aggregated norms on all the different levels of a society make up the national culture of that particular society26. The national culture in turn creates the national identity among a society’s members27. The different norms on the various levels then have to be taken into consideration when meeting another culture with different norms on the same, respective level. Otherwise, obstacles and difficulties can occur in the form of culture shock, misunderstanding and misinterpretation et c28.

Torbiörn is thus agreeing with Albaum et al. regarding the nature of culture as being constantly present in our lives. The distinction that Torbiörn makes, however, is that the concept of national culture can be divided into various levels in a society. This renders the image of what culture actually is somewhat clearer and perhaps more distinct, but the similarities between the authors’ opinions of how to define culture are nonetheless apparent.

Hofstede employs an even more complex way of describing and defining culture29. In his research, conducted in the 1970’s, he examined the situation among IBM’s employees in 65 countries all over the world, and found that the different national cultures could be divided into certain variables. These variables, or dimensions, thus helped categorizing the national culture of the countries represented through the individuals belonging to those cultures. According to Hofstede, the national culture is the collective programming of the mind, acquired by the individuals growing up in a certain country 30. Although described using other words than the previous authors, the similarity in the meaning of the concept national culture is striking: It all comes down to collective norms, behaviors and attitudes, inherent in the mind of a group of people belonging to the same society.Let us now proceed to take look at the earlier mentioned dimensions that, according to Hofstede, make up the national culture. These dimensions are31:

· Femininity/Masculinity. A society can either be predominantly feminine or masculine. The gender terminology refers to the values, feminine or masculine, deemed important in a society. Feminine values are ”soft values”, and a feminine society that the men and women are supposed to be modest, caring and interested in a high quality of life. In a feminine society there is a crossover of the social gender roles, whereas in a masculine society, the gender roles are clearly separated. In a masculine society, the men are fostered to be self-assertive, tough and directed towards material success. The women however, to be modest, caring and directed towards a high quality of life. Sweden, for instance, is viewed as a feminine society.

26 Torbiörn, Ingemar, Att leva utomlands, 1976, p. 18.27 Ibid.28 Torbiörn, Ingemar, Att leva utomlands, 1976, p. 158.29 Hofstede, Geert, Culture’s Consequences, 1984.30 Hofstede, Geert, Organisationer och Kulturer -Om Interkulturell Förståelse, 1991, p. 326.31 Hofstede, Geert, Organisationer och Kulturer -Om Interkulturell Förståelse, 1991, pp. 323-326.

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· Individualism/Collectivism. In an individualist society, the ties between the individuals are loose. The individual’s main concern is that of himself and of his family. In a collectivist society, the individuals are highly integrated into groups that all through the life times of these individuals protect them in exchange for non-questioning loyalty. Sweden is viewed as an individualist society.

· Power Distance. This dimension deals with the degree to which the members of a society expect that there be an uneven distribution of power. (From low to high). Sweden is viewed as a society of low power distance.

· Uncertainty Avoidance. This pertains to the degree to which the members of a

society feel threatened by uncertain or insecure situations. A sign of high uncertainty avoidance is that the individuals need rules, regulations and norms to be written. Verbal guarantees in, e g contracts, are not alone satisfactory. Sweden is viewed as low on uncertainty avoidance.

With these dimensions as tools for describing the national culture of a society, countries can be compared to one another and classified in models and diagrams. That, and the fact that Hofstede’s work was one of the first studies in this area, made for the impact that this way of defining, analyzing and categorizing national cultures has had on the scientific community. However, when examining the definitions to each dimension and the classification that Hofstede makes of a specific country, it could be argued if he is always right in placing the countries where he does. Can an entire nation be classified in these dimensions, solely based on the data provided by a fragment of its population? Are the norms of a society static, or do they, and thus also the national culture, change over time? If so, could it be that the classification of some countries has changed since the 1970’s? In any case, Hofstede’s classification should probably be seen as an aid, and not as an absolute truth, when discussing national cultures in different countries.

Aside from his well-known classification of national culture among countries, Hofstede presents another, perhaps lesser-known, classification of the norms, or manifestations, constituting the culture of a society. This is taking the definition of culture one step further than the previous authors have, and can be illustrated in this ”onion diagram”32.

Figure 6 “Onion Diagram” of the Cultural Components

The reason why this diagram is called an ”onion diagram”, is because the manifestations of culture are illustrated as the different layers of an onion: the closer to the center you get, the deeper are the manifestations of culture. ”Symbols” are thus the most shallow manifestations of culture, while ”values” are the strongest or deepest. We will now describe the components of this diagram33.

32 Hofstede, Geert, Organisationer och Kulturer -Om Interkulturell Förståelse, 1991, pp. 16-17.33 Hofstede, Geert, Organisationer och Kulturer -Om Interkulturell Förståelse, 1991. pp. 16-18.

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· Symbols are words, gestures, images or objects with a specific importance to, and which is only recognized by, those sharing the particular culture. Examples of symbols are the words in a language, way of dressing, hairstyles, flags and status symbols. New symbols develop easily and old ones disappear; symbols from one cultural group are constantly copied by others. That is why ”symbols” is placed farthest from the center in the diagram.

· Heroes are persons, alive or dead, real or fictitious, who have character traits which are highly appraised in a culture, and therefor serve as models for the social behavior. Even imaginary- or comic book characters, such as Batman or Snoopy may serve as cultural heroes. In this age of television, external factors such as looks have become more important in the choice of heroes. To a lot of young girls, fashion models are the heroes or role models in many cultures.

· Rituals are collective activities. Technically they are obsolete in order to achieve desired goals and outcomes, but within a culture they are deemed necessary socially: they are performed for the sake of their own. Different ways of greeting and showing respect to others, as well as social and religious ceremonies are examples of rituals.

· Practices. Symbols, heroes and rituals are all gathered under the term practices. As such they are visible; their cultural significance however, is not. It is present only in the ways that its practitioners interpret these practices.

· Values constitute the core of the ”onion”. These are broad tendencies to prefer certain states, traits and various other factors to others. Values are feelings directed towards something; they have a negative and a positive side:

good vs. badugly vs. prettyunnatural vs. naturalirrational vs. rational et c.

Values are among the first things that a child learns -not consciously but subconsciously. Development psychologists state that most ten year olds already have acquired a basic system of values, which, in time grows harder to alter. Since the values enter our lives at such an early stage, they remain with us on a subconscious level. This is why they can not be discussed or easily detected by outsiders. Only by the way people act can they be understood.

We have now taken a look at how some authors, experts in this field, have defined national culture. We have also mentioned some of the applications of these definitions and we have tried to further clarify them in models. The conclusion of this section is that national culture is a set of norms, beliefs, attitudes, behavioral patterns et c, that is shared by a group of people in one society and that are different from those of another. The different models and applications are merely another way of further clarifying how national culture works and what it ”looks like”, and should be viewed as a way for the reader to acquire a deeper and individual knowledge of his own regarding this issue. It is clear that there is a striking similarity in the ways in which different authors, of whom those presented

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in this thesis are but a few, in different contexts describe the concept of (national) culture. This leads us to believe that the theories mentioned above probably hold true and that they should constitute the theoretical base for the following sections.

3.1.2 Corporate Culture

We have earlier mentioned that culture can be defined as a set of norms, derived from certain common values and attitudes, pertaining to individuals, groups of individuals and entire nations. In the previous section we analyzed mainly what national culture is in order to understand the fact that different nations function differently due to differences in norms, and that an understanding of these cultural differences is necessary in order to avoid obstacles such as e g culture shock. (See 3.1.3 Culture Shock).

Now we will leave the national level of thinking, and discuss the ”lower levels” of culture, the group- and individual levels. (See Torbiörn’s model p. 23). It is possible, however unlikely, that an expatriate does not come in much contact with culture differences at the national level, but contact with these lower levels through the form of corporate culture is unavoidable.

Torbiörn defines corporate culture as the actions and norms that a certain company applies in situations where it through its members, mainly its employees, acts as a group34. The norms that the company follows in these situations are either national- or group norms. If the norms are set on a national level, all companies in a similar situation have to act in a similar way due to national principles such as laws, tradition and mentality et c. If the norms are group norms however, a company can choose its way of acting with only its own objectives in mind. The actions in a certain situation will then vary between companies in a country.

When a company goes international, it might be faced with other national- and group norms, or with the fact that such norms that were national norms in the home country now are group norms, or vice versa, which leads to at least a partial change in the company’s behavior. The adaptation of a company’s behavior to a new environment is often explained in the terms ethnocentric-, culture bound- and universal enterprising35.

· Ethnocentric enterprising is when a company tries to act as much as possible in the same way abroad as in the home country. The reason for this ethnocentric standpoint could be that the company’s own norms are considered superior, and therefor are sought to be implemented in every context. Another reason, however, is poor knowledge of the new, different situation abroad, and the incapability of realizing that there could be alternatives to the own set of norms, i e a lack of cultural training.

34 Torbiörn, Ingemar, Att Leva Utomlands, 1976, p. 41. 35 Torbiörn, Ingemar, Att Leva Utomlands, 1976, pp. 42-49.

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· Culture bound enterprising is when all companies, regardless of national origins, have to act in the same way in a certain country due to that country’s national culture, i e institutional conditions, laws, traditions and mentality et c. Where the national culture, or -norms, differ between countries, the enterprising must also differ. On the other hand, where the national culture is the same between countries, the enterprising will take place in a uniform way.

· In the case of universal enterprising, group norms and not national norms apply in the country, thus making the company free to act in the way that the group norms dictate. Differences in national cultures then are of no consequence to an international company: it can act in the same way or differently in such countries, as the company self pleases. Under another condition is the enterprising universal as well, namely when the national norms are the same in all countries where the company operates, making it needless for the company to change its way of acting unless the organization wants to.

Corporate culture, according to Torbiörn’s definition, thus consists of norms that apply on a lower level than the national, namely on the group level, with the group being the company. The principle is the same though: the actor, individual or company, might be faced with a different set of cultural norms and must decide whether to adapt to the norms or disregard them and enforce its own norms on the new environment, with the potential clashes between cultures that both options might entail. We believe this to be a fairly ”practical” and ”hands-on” approach to describing corporate culture and its implications for the company. A more psychological approach in this matter is found with Hofstede, which we will examine next.

Hofstede describes corporate culture in other dimensions36. His definition of corporate culture are the common way (or ways) of thinking, feeling and behavioral patterns that the organizational members have learned. He goes on to add that corporate culture is a soft, holistic concept, but with presumed hard consequences. This is clear in the following quote 37:

”[Corporate culture is] the psychological assets of the company, which can be used for predicting what will happen to the financial assets of the company during five years”.

Hofstede emphasizes the fact that there are important differences between the concepts of national- and corporate culture38. He argues that organizational cultures are phenomena in themselves and that they, in many aspects, are different from national cultures. An organization is a social system itself. It is different from a country’s social system in the aspect that the organization’s members usually decide whether to be a part of it or not, and in that they are only part of the system for as long as they themselves want to.

36 Hofstede, Geert, Organisationer och Kulturer -Om Interkulturell Förståelse, 1991, p. 2837 Ibid38 Ibid.

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To further explain and clarify the differences between national- and corporate (organizational) culture, we can take a look at Hofstede’s ”onion diagram” once again39.

Figure 7 “Onion Diagram” of the Cultural Components

This diagram was used in the previous section to explain national culture. (See page 25). It can also be used for explaining organizational culture, but with the difference that the components of the diagram differ in meaning in the two types of cultures40.

In the corporate culture diagram, the manifestations gathered under ”practices” may be very similar to one another in a company comprised of employees of many nationalities. People may dress in the same way, buy the same products and use the same words (symbols), watch the same TV-shows and movies (heroes), and practice the same sports and leisure activities (rituals). However, the values of each individual is, as we saw in the previous section, something that we carry with us from when we are very young and can not be changed just by switching workplace. Hofstede argues that when people in general talk about the convergence of cultures in the world, they only see to the outer manifestations of culture, which Hofstede calls practices. The use of similar practices among employees of various cultural backgrounds are not enough, however, to draw the conclusion that the underlying values of people from different cultures are the same.

The corporate culture thus plays an important role for the way a company and its expatriates should act abroad on an international scene. It also seems important to be prepared to meet and interact with different cultures as well as for a different cultural situation before embarking on an international venture, or failing to perform successfully threatens. We will now take a look at what unsatisfactory preparations and difficulties to adapt to the new culture can lead to.

39 Hofstede, Geert, Organisationer och Kulturer -Om Interkulturell Förståelse, 1991, p.17.40 Hofstede, Geert, Organisationer och Kulturer -Om Interkulturell Förståelse, 1991, pp. 225-228.

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3.1.3 Culture Shock

If the expatriate is inadequately trained for working in a culturally diverse environment, various kinds of difficulties will occur. These difficulties are often summarized under the term culture shock. We will now take a look at how some authors, more specifically, describe this phenomenon.

Lane and DiStefano define culture shock as41:

”[...] disorientation when entering another culture. This phenomenon is rooted in our psychological processes. The normal assumptions that the manager uses in his or her home culture to interpret perceptions and to communicate intentions no longer work. When this happens, whether in normal attempts to socialize or in a business context, confusion and frustration result. Frustration occurs because the manager is used to being competent in such situations, and now, the manager finds that he or she is unable to operate effectively. [...] the disorientation stemming from the inability to interpret surroundings and to behave competently can lead to anxiety, frustration, and sometimes, to more severe depression. Most experts agree that some form of culture shock is unavoidable, even by experienced internationalists. People who repeatedly move to new cultures likely dampen the emotional swings they experience and probably shorten the period of adjustment, but they don’t escape it entirely”.

It is here noteworthy that the authors are of the opinion that one can not entirely escape the effects of culture shock: one can only dampen them. About the symptoms of culture shock, Lane and DiStefano add42:

”During a person’s adaptation to a new environment, frequently observed symptoms are similar to most defensive reactions. People reject their new environment and the people who live there, often with angry or negative evaluations of ”strangeness”. Other culture shock symptoms include fatigue, tension, anxiety, excessive concern about hygiene, hostility, an obsession about being cheated, withdrawal into work, family or the expatriate community, or, in extreme cases, excessive use of drugs and alcohol”.

The symptoms of culture shock thus range from barely detectable to grave illnesses in a person. It is clear that one should strive for reducing even the mildest form of culture shock in order to minimize negative impact on performance as well as on the physical and mental state of the expatriate.

Similar, although somewhat shorter, definitions of culture shock, are found in Czinkota et al.43 and in Ström et al.44. All of these authors also mention the various

41 Lane, Henry, Joseph J DiStefano, International Management Behavior, 2nd ed. 1992, p. 47.42 Lane, Henry, Joseph J DiStefano. International Management Behavior, 2nd ed. 1992, pp. 47-48.43 Czinkota, Michael, et al. International Business, 4th ed. 1996, p. 693.44 Ström, Björn, et al. Utlandstjänst, 1995, p. 106.

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stages of adapting to a new culture, of which the culture shock stage is one. Lane and DiStefano argue45:

”The pattern usually experienced by people who move into a new culture comes in three phases: first, the elation of anticipating a new environment and the early period of moving into it; second, the distress of dealing with one’s own ineffectiveness and, as the novelty erodes and reality sets in, the realization that one has to function in a strange situation; and, third, the adjustment and effective coping with the new environment. The critical aspect of these phases is that during the first and second periods, performance is usually below one’s normal level. The period of adjustment to normal or above-average performance takes from three to nine months, depending on previous experience, the degree of cultural difference being experienced, and the individual personality. It should be noted that culture shock is not a shock experienced as, for example, a result of conditions of poverty. Culture shock is more a behavioral pattern associated with a loss of control and a loss of sense of mastery in a situation”.

Three different stages are thus to be found in the adaptation of an expatriate to unfamiliar cultural surroundings according to Lane and DiStefano. Czinkota et al. put it somewhat differently. Instead of three, there are four stages to their cycle of adaptation, the length of each being highly individual46:

· Initial Euphoria: Enjoying the novelty, largely from the perspective of a spectator.· Irritation and Hostility: Experiencing cultural differences, such as the concepts of

time, through increased participation. · Adjustment: Adapting to the situation, which in some cases leads to biculturalism

and even accusations from corporate headquarters of ”going native”.· Reentry: Returning home to face a possibly changed home environment.

Czinkota et al. also present a model of this cycle and its stages to illustrate how these stages span over time47:

Figure 8 Culture Shock Cycle for an Overseas Assignment

Ström et al. also present a corresponding model based on Torbiörn’s U-curve theory of well-being48. This theory states that there is a U-shaped correlation between the well being of a person and the amount of time he lives abroad.

Figure 9 Well Being Diagram

45 Lane, Henry, Joseph J DiStefano. International Management Behavior, 2nd ed. 1992, p. 47.46 Czinkota, Michael, et al., International Business, 4th ed. 1996, p. 694.47 Czinkota, Michael, et al., International Business, 4th ed. 1996, p. 694.48 Torbiörn, Ingemar, Att Leva Utomlands, 1976, p. 155.

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Ström et al. elaborate this model into visualizing the concept of cultural collision49:

Figure 10 Cultural Collision Diagram

The U-curve in the first model corresponds to the first half of the curve in Czinkota’s model, and is actually the same, only less elaborated than the one found in Czinkota’s book. The second, however, demands further explanation. This model tries to visualize the concept of culture collision, which we have mentioned earlier. According to Ström et al. 50, culture collision is when, after experiencing initial difficulties and perhaps even culture shock, the person starts to successfully adjust to the new norms. Learning how to function and how things are done according to the new way of acting makes the person feel more like a native of the host country. At the same time, the home country norms and the home country itself start to feel more distant to the expatriate. If the stay abroad is for a long enough period of time, a feeling of not belonging to either culture will occur. (At the intersection of the two graphs). This is what could be called culture collision.

What is interesting in comparing these groups of authors’ opinions of the cycle of adaptation is that Czinkota et al. address the cultural disorientation of reentry, or repatriation, in this expatriation cycle. We will address this particular situation later in this chapter. Apart from this distinction, however, there are small variations in these descriptions, and only more or less elaborated variations of the definition of culture shock. Hofstede’s definition of culture shock does not differ much from the ones above, but he does mention that culture shock can be accompanied by symptoms of physical illness51. This is what we will take a look at in the following section.

3.1.4 Stress and Psychosocial Factors Affecting Expatriation

In the previous section we mentioned the various reactions a person might display when faced with the challenge of functioning in a different culture, with a different set of norms, beliefs and attitudes. We discussed the concepts of culture shock and culture collision as collective names for these occurrences. We mentioned Torbiörn’s theory of the U-shaped well-being curve: that there is a U-shaped correlation between the well being of a person in this situation and time. Decreased well being in the early stages of culture shock is in turn correlated to increased stress at the same point of time. With this as a starting point, we will now show what some of the latest research has discovered in the area of stress among expatriates and how it influences their situation abroad.

Ingrid Anderzén is a research associate and doctoral student at Karolinska Institutet in Stockholm. During the last five years she has conducted a research

49 Ström, Björn, et al. Utlandstjänst, 1995, pp. 106-107.50 Ström, Björn, et al. Utlandstjänst, 1995, p. 107.51 Hofstede, Geert, Organisationer och Kulturer -Om Interkulturell Förståelse, 1991, p. 325.

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study among 60 first-time expatriate families from major international Swedish companies and organizations such as Ericsson, ABB, The Swedish Trade Council and the Swedish State Department. The employee expatriates were all in middle-manager positions and were researched before, during and after the international assignment. At these points in time, a reference group, which remained in Sweden, was used as comparison. In December the study was presented as a doctoral thesis at Karolinska Institutet. The findings of this five-year research study are interesting, and will here be presented in an abbreviated form52.

The general conclusion that Anderzén has found in her study is that there is a substantial increase in stress with both the expatriate and all trailing family members in an expatriation situation. Although this finding is not revolutionary, the conclusion that the highest levels of stress were found in the research subjects a year after repatriation might come as a surprise. This will be treated further in section 3.3 Repatriation.

Another finding of this study was that it did not appear to matter in which country the expatriates spent their international assignment53. There seems thus not to be any special regions with particularly different and hard cultures to handle, but that each and every country’s culture, different from one’s owns, manifests itself in more or less the same degree of increased stress levels.

The author emphasizes the need for adequate preparations before going abroad, and provides a checklist of advice for this purpose, both for the persons leaving the home country as well as for the sending organization. These pieces of advice will be further discussed in section 3.2.3 Cultural Training. We will, however, bring attention to a couple of interesting points from the results of Anderzén’s study.

A pre-visit to the city where the family is going to spend their next year or more, is sometimes organized by the company. Someone from the receiving organization will then take care of the family and show them the workplace, the schools, prospective future residential areas and houses et c. This pre-visit, according to Anderzén, has shown to be far more important and essential to a fast acclimatization of the expatriates than the cultural training, which, in some form, more often than the pre-visit, is provided by the companies in the home country.

Another factor that showed crucial to the adaptation to the new country was language knowledge: Those who had had language training could function well in their new surroundings already after six months, while those who had not received any language training experienced a slump during the first year. Not until after two years would the two groups be more equal in their reported experiences.

If there were no or inadequate preparations, signs of stress would appear among the expatriates. Symptoms like headaches, difficulties to concentrate, sleeping problems and insomnia, worrying and anxiety were most frequent. Worrying and anxiety were even shown to increase with the amount of time abroad. Again, these symptoms were, surprisingly enough, most frequently found and showed the

52 Anderzén Ingrid, The Internationalization of Work, 1998. 53 Ibid.

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highest levels among the repatriates, not the expatriates. In general, the expatriates coped with stress fairly well, although increased levels were found.

In conclusion, culture shock and having to face cultural differences affect the expatriate to a certain degree. The impact of this cultural diversity on the expatriate can be strenuous and even harmful, which seems to be yet another argument for the implementation of cross-cultural training programs prior to departure and during the stay abroad. What is interesting, however, is that the most recent research by Anderzén showed that the greatest amount of stress is found with the employees after repatriation.

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4. TheoryIn this chapter we will present theories relevant to the aspects of expatriation and repatriation. Recent and earlier research as well as survey findings will also be presented and discussed in order to clarify the current standings regarding the topic and give the necessary theoretical background for the analysis and conclusion of our study.

4.1 Expatriation

This far we have discussed different concepts of culture, since culture plays a major role in the expatriate’s new environment. We have then mentioned terms like expatriate, expatriation, expatriation failure, trailing spouse and family etc. It is now time however, that we take a closer look at these concepts, and especially that of expatriation.

What is understood by the term and phenomenon expatriation in this context is an employee going abroad for an extended period of time to perform an assignment54. The time-span of this assignment is too long for the employee to commute between the host- and home country, why the expatriate needs to move. In general when addressing the issue of expatriation, this time-span is one year and beyond. This is oftentimes regulated in the various expatriation policies in the Group, home country, company or sending organization. An expatriate does not, by any definition, need to bring the family members to the new country. Since this often appears to be the case, however, (if the expatriate has a family), and since this issue is so important, we wish to address the concept of expatriation by also taking the family factor into consideration. There will be a separate section treating the family factor later in this paper. (See 3.2.4 The Trailing Spouse and Family).

How does one define an expatriate then? Ström et al. make these distinctions between different personal categories when it comes to expatriates55:

· Expatriate is the term used for a person who works outside his own home country, usually on a time-limited assignment: an employee sent out from the mother company to work abroad in an affiliate for a couple of years.

· Third Country National, TCN, applies to a person of one national origin, working in another country for a company of yet another cultural origin, e g, an Englishman working for a Swedish company in Turkey. For an increasingly internationalized company or organization, it is important to have people from different countries in more qualified positions as well. Often the TCN is an internationally highly mobile and qualified employee who works for a few years in one country and thereafter moves to the next.

54 Personnel Directors, International Assignment Managers, Electrolux, ABB, Ericsson and the STC, Interviews, 1998. 55 Ström, Björn, et al. Utlandstjänst, 1995, pp. 181-183.

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· Contract Employee means that the person on assignment has a special contract for the time abroad. Both the expatriate and the TCN are contract employees. The reason for the use of this term is to make a distinction between the local- and the foreign employees, since contract employees usually have other terms than the nationals regarding travel fares home, schooling costs, insurance, et c. To render clear from which country the contract employee originates, the terminology used is e g Swedish-, English- or Japanese contract employees.

· Foreign Service Employee (FSE), is a term used by some companies instead of expatriates, TCN or contract employee for all employees working outside their own home country.

· Local Employee is actually a person working in his or her home country, but is also used for an expatriate who has worked abroad in the same country for so long that he or she is employed through a local- and not a foreign service contract. The reason for why contract employees are treated differently [in their contracts -authors’ remark], is mainly due to the fact that the contract employee is supposed to be in the host country only for a limited amount of time. The majority of expatriates keeps the house or apartment in the home country and is often subject to the insurance system of the home country. A contract employee has usually certain extra-costs compared to a local employee. If the international assignment proves to exceed the initially planned duration of time, a conversion of the foreign service contract to local employment should be considered.

The duration of the international assignment thus seems to be of importance to a certain extent in this matter. Ström et al. mention this aspect, arguing that three types of international assignments can be distinguished, depending on the variation in time; the business trip, the short-time assignment and the long-term assignment56:

· The Business Trip can last from a day to a year. There is no natural limit to how long a business trip can be. The majority of companies seem to set the limit at around 1-2 months. What is determinant of whether an assignment is supposed to be viewed as a business trip or a short-term assignment is the nature of the task to be accomplished and the employment conditions. On a business trip abroad, the home country employment terms regarding overtime, travel expenditures, cost compensations et c, are still in effect.

· The Short-Term Assignment is somewhat different though. Generally it is something between a business trip and a long-time assignment. There is no specific time limit here either, but usually a stationary assignment, lasting more than 1-2 months, thus not meeting the criteria for a long-time assignment, is considered as short-time. In this situation, the employee is in general still subject to the tax laws of the home country, but a certain addition to the salary is often paid to the expatriate.

56 Ström, Björn, et al. Utlandstjänst, 1995, pp. 183-185.

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· The Long-Term Assignment is defined as an international assignment with the duration of more than sex months or a year. Usually, the time limit has shown to be from one up to 3-5 years. The upper limit is set by the companies, who in general do not want the employee to stay abroad for a longer period of time. On a long-term assignment, there are special fringe benefits packages, different for each company, and tax regulations change. Normally, the expatriate will be subject to taxation in the host country.

After having looked at the different time-spans of international assignments, we can now conclude that although an employee working abroad in any of the cases above can be called an expatriate, it is the third and final example that pertains to, and is relevant for, the expatriation situation for this paper.

Why is then an employee from the home organization sent abroad to work in a situation where all kinds of difficulties can arise? Why not hire a national to do the job, which could save the company time and money? From the interviews with the different companies in our study as well as experts in this field, the cost per person (expatriate) of sending him abroad, lies around MSEK 157. Adding the various compensation packages, fringe benefits and salaries, the cost is doubled. Then there are the trailing family members to consider: spouse pensions and insurance, schooling for children et c, that make the expatriation process very costly for the company.

Ström et al. give these reasons for why expatriates are used instead of local employees58:

· Someone who knows the mother company well is needed in the country of operations.

· It is easier to communicate with someone from the same culture, misunderstandings are fewer that way.

· The person who is to perform the assignment must know and be well acquainted with the cultural spirit and -environment of the company.

· The mother company wants to acquire an overview and control of operations.

· Well-trained personnel are lacking in the country in question.

· The international assignment is part of the employees’ development within the organization (career planning). The company aims to create an international way of thinking.

· One ”knows” the expatriate, which reduces the risk of potential failures.

From the points above, one can conclude that the reason for why an expatriate is selected instead of an local employee, is ”know-how”. Not ”know-how” in the

57 Personnel Directors, International Assignment Managers, Electrolux, ABB, Ericsson, The STC, Björn Ström, Interviews, 1998.58 Ström et al. Utlandstjänst, 1995, pp. 42-43.

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technical, professional sense however, but in the cultural. An expatriate is selected because of his knowledge of the mother company, its corporate culture and the national culture of the country in which the mother company operates. The cultural ”know-how” can be traced in the majority of the aforementioned reasons, making it apparently the most important ingredient in a person that one wishes to send abroad.

How is then an expatriate selected, once the reasons are established for why a local should not be employed instead? Ström et al. emphasizes the importance of an early, adequate and carefully planned recruitment procedure59. Torbiörn mentions that in the case of recruiting for an expatriate position, qualities beyond the actual vocational skills and the candidates themselves need to be reviewed60. Instead the ability, both of the employee and of trailing family members, to adapt to a strange cultural surrounding is emphasized. The screening of the trailing family members is viewed as crucial by Lane and DiStefano as well61, who present a list of criteria for expatriate selection62:

· Technical competence.

· The selection process should focus on the measurement and evaluation of the candidate’s current levels of expertise in technical skills as well as in international acculturation, productivity and inter personal skills. This can be done through psychological tests, stress tests and evaluations by the candidate’s superiors, subordinates, peers and acquaintances.

· The candidate’s trailing family members should undergo modified versions of criteria one and two. Important factors that that need to be covered in ”family adaptability screening” are: level of marital stability, responsibilities for aged parents, chemical dependencies on the part of anyone in the household, existence of learning disabilities in a child, behavioral problems in teenagers, emotional stability of family members, family cohesiveness et c.

· International manpower planning should occur in concert with strategic planning. Often, expatriates are selected in a ”knee-jerk” fashion to quickly staff an unanticipated vacancy in an overseas subsidiary. Global success in planning requires the accurate forecasting of human resource needs worldwide and the maintenance of a pre-selected pool of candidates to draw from so as to negate the lengthy screening process each time a vacancy arises.

Czinkota et al. also mentions a set of criteria to be looked at when selecting and recruiting an expatriate. These are somewhat differently stated than the ones above, but nevertheless point in the same direction. The authors mention three different kinds of factors that are essential to review in order to select the person best suited for the international assignment63:

59 Ström et al. Utlandstjänst, 1995, p. 44.60 Torbiörn, Ingemar, Att Leva Utomlands, 1976, pp. 89-94.61 Lane, Henry W, Joseph J DiStefano. International Management Behavior, 2nd ed. 1992, p. 247.62 Lane, Henry W, Joseph J DiStefano. International Management Behavior, 2nd ed. 1992, p. 251.63 Czinkota et al. International Business, 4th ed. 1996, pp. 689-691.

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· Competence Factors such as technical knowledge, leadership ability, experience, past performance, area expertise and language skills in the candidate need to be evaluated.

· Adaptability Factors. These include interest in overseas work, relational abilities, cultural empathy, appreciation of new management styles and appreciation of environmental constraints and adaptability of the family. In order to conclude whether the expatriate and the family will be able to adapt successfully to the new environment, these areas need to be screened.

· Personal Characteristics are age, education, sex, health status, marital relations and social acceptability.

The authors do not rank these areas of factors in any way: they are all important for the overall success of the international venture, and are what the screening process should concentrate on.

Lane and DiStefano show a similar division into three dimensions in a list of their own64. The three factors in their list display many of the same characteristics as the one in Czinkota et al, but with a somewhat different terminology. Apart from this, the factors should be viewed to have the same implications as the ones in the previous listing:

· Self-orientation: stress-reduction, reinforcement substitution, physical mobility, technical competence, dealing with alienation, dealing with isolation, realistic expectations prior to departure.

· Others-orientation: relationship skills, willingness to communicate, non-verbal communication, respect for others, empathy for others.

· Perceptual-orientation: flexible attributions, broad category width, high tolerance for ambiguity, being non-judgmental, being open-minded, and field-independence.

It is important to note that the order of the components in each of the factors is random, and that the importance attributed to them lies in the hands of the organization, due to the character of the assignment, company policy et c.

In this section we have given some authors’ definitions of the various components of the concept of expatriation. We have examined what expatriation is, why a company chooses an expatriate instead of a local employee, although there are high costs involved, and what the screening process for recruiting an expatriate should be concerned with. The authors seem to be of the same opinion regarding which criteria to look for in a future expatriate. The screening process is a complex matter and could take time, but when this is done, it is time for the organization to decide how to prepare the expatriate for the international assignment. This is an even more complex matter, and in the following two sections we will examine this issue in more detail.

64 Lane, Henry W, Joseph J DiStefano, International Management Behavior, 2nd ed, p. 245.

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4.1.1 Cross-Cultural Learning

We have given some form of definition to the term and phenomenon ”culture”. We will now try to give some authors’ views on how to deal with cultural differences in order to turn them into advantages or at least how to prevent them from turning into obstacles. In this and the following sections, we have divided this issue into two categories, ”cross-cultural learning” and ”cross-cultural training”. We are not trying to split hairs by doing so, but rather to use this differentiation in order to separate the general adaptation, (cross-cultural learning), to another culture, (albeit in a business context), from the general implementation, (cross-cultural training), of the insights acquired from this general adaptation. The authors feel that there is a slight but relevant difference to these definitions, and hope that any confusion that might follow this division of terms will vanish in the following sections.

In her book, Hoecklin argues that cultural differences can be advantageous if handled properly, as well as the source of considerable difficulties and obstacles in an organization’s operations if handled poorly. The people at the top of the organization must recognize both the potential benefits and the problems that culture can create, and see to it that the cross-cultural learning process is implemented from top to bottom in the organization. The following are examples of how organizations like Siemens, ABB, Honeywell and others are dealing with cultural difficulties by becoming more representative of the markets in which they operate65:

· Making boards of directors more international.· Holding international meetings where people share information, (that is, technical,

functional, projects).· Forming multicultural teams or task forces.· Increasing the number of foreigners in headquarters.· Rotating staff across cultures.· Attempting to ”share best practice”.

Hoecklin goes on to argue, however, that although these steps are important, they often remain at the level of coexistence: two cultures meeting and working together with one another does not in itself entail an adding of value to the entire organization. There are some typical obstacles that still can get in the way66:

· I am my national culture. In an intercultural encounter, people tend to define their personal identity by referring to their national identity. They seek the fundamental values and norms that define their society to decide how they should behave in dealing with people from different cultures. They then overvalue their own culture and adopt an ethnocentric attitude.

65 Hoecklin, Lisa, Managing Cultural Differences -Strategies for Competitive Advantage, 1995, pp. 50-90.66 Ibid.

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· People from a different culture are my enemies. In dealing with people from other cultures, people tend to assume that the others will try to impose their values. They may become transformed into a warrior, a defender of their national honor, with the attitude ” I will not let them get away with it!” This is usually the result of feeling threatened and insecure in the interaction with another culture.

· The illusion that ”I am helping them develop”. Those who consider their own ways to be better or more sophisticated than those of another culture can focus on the view ” I will teach them my ways so that they can become more advanced”. They take on the role of ”conqueror, expert, missionary or educator”.

· The illusion that ”I have the answer ”. Since people adopt the role of the ”expert” or ”teacher”, they tend to transfer the techniques that have worked so well ”back home”. They usually assume that they know what is best for the other culture in the long run. This is usually done without realizing that pushing for a solution that works well in one culture can often have negative consequences elsewhere.

· The delusion of being able to understand another culture just by living there. Often people believe that, just because they have learned to live or work successfully in another culture, they understand it completely. But often a great deal more time is spent criticizing the other culture than is taken to understand why people from another culture do what they do.

· The myth of the expert. There is often the belief that, if only the visitor has enough technical expertise, cultural expertise is not necessary. A supplementary assumption can prevail with some technical experts that they can easily become a cultural expert since, after all, ”the soft stuff is easier to understand than the hard stuff”.

Hoecklin believes that the initiative for cultural learning must come from the top management as a strategic requirement at the operational level67. They must realize the potential benefits as well as the potential problems that culture can create, and take steps to ensure that the best outcome possible in the particular situation is reached. She has identified certain steps that companies successfully have used to achieve ”cultural synergy”, as she puts it. That is, steps for improving the cultural learning process in specific cultural encounters and turning the cultural differences at hand into benefits68:

· A very considered process of making implicit knowledge explicit. · Agreeing on the specific outcomes that are desired from the action.· Understanding why each culture does things the way it does and agreeing which

approach or combination of approaches will lead to achieving the desired outcomes.

67 Hoecklin, Lisa, Managing Cultural Differences -Strategies for Competitive Advantage, 1995, pp.50-90.68Ibid.

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FK, 01/03/-1,

t they do

· Reviewing the outcomes and modifying the approach to fit both cultures and the desired outcomes better.

The author also suggests that these steps can be put into a model of cultural learning, much resembling a decision tree 69:

Figure 11 A Model of Cultural Learning

Cross-cultural learning is here argued to be essential for successful cross-cultural encounters, and in the end, the fulfillment of the international assignment. We shall now take a look at how a person can acquire cross-cultural knowledge and thus improve the cross-cultural learning.

4.1.2 Cross-Cultural Training

We have earlier mentioned that we would like to make a distinction between cross-cultural learning and -training. The cross-cultural learning being the adaptation to a different culture and the training the implementation of the insights required from that adaptation. We will now try to define what could be considered as cross-cultural training and give some examples of what this training could represent in a company.

When two cultures meet, there is a clash of different national norms and cultures on the various levels in the societies involved70. Examples of this can be negotiations between countries in the UN, between companies from different countries and international migration and tourism, at the national-, group- and individual level, respectively, as this model from Torbiörn shows71.

Figure 12 International Contact

Without proper training, the cultural clashes might be too great to master and the individual becomes subject to culture shock, as discussed in section 3.1.3 72.

Cross-cultural training programs are in some way designed to prepare a person, or personnel in this case, for encounters with one or more cultures, different from the one of the person himself. The American author Tung mentions the five main categories of such programs, which can be implemented all together or each one

69 Hoecklin, Lisa, Managing Cultural Differences -Strategies for Competitive Advantage, 1995, pp. 50-90.70 Torbiörn, Ingemar, Att leva utomlands, 1976, p. 21.71 Ibid.72 Torbiörn, Ingemar, Att leva utomlands, 1976, p. 158

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separately. The programs are listed in ascending order of rigor, i e, in the ascending order of complexity, time consumption and width73.

· Area studies programs include environmental briefing and cultural orientation programs that provide the trainee with factual information about a particular country’s sociopolitical history, stage of economic development, geography, climate, housing, schools, cultural institutions, and value systems.

· Culture assimilator programs consist of a series of seventy-five to one hundred episodes briefly describing an intercultural encounter. The culture assimilator is based on the critical-incidents method, that is, presenting incidents determined (by a panel of experts, including returned expatriates) to be critical to the situation between members of two different cultures. Studies of the validity and effectiveness of this training method have shown that in general ”these programs provide an apparently effective method for assisting members of one culture to interact and adjust successfully with members of another culture” (Fiedler and Mitchell 1971:95)74. The technique, however, was designed for people who were assigned for overseas on short notice. Consequently, when time is not a major factor, and when assignments will require extensive contact with members of the local community, more rigorous training programs should supplement this technique.

· Language training programs teach the candidate the language of the country to which he is assigned. It often takes months, sometimes years, for a candidate to master a foreign language.

· Sensitivity training programs focus on learning at the effective level and are designed to develop the individual’s attitudinal flexibility to make him aware, and eventually accept, that unfamiliar modes of behavior and value systems can be valid in their own cultures. Although the effectiveness of sensitivity sessions has been questioned, there is some indication that they may ”well be a powerful technique in the reduction of ethnic prejudice, particularly among those who are low in psychological anomie”. (Rubin 1967:30)75. The Peace Corps is by far the most ardent advocate of this method of training. To increase the effectiveness of sensitivity training, the Peace Corps supplements these sessions with field experience.

· Field experience programs send candidates to the country of assignment or to micro-cultures nearby (such as Indian reservations or urban black ghettos) where the trainees may experience some of the emotional stress of living and working with people from a different subculture. Research indicates that although differences in cultural content exist between these micro-cultures and the country to which the trainee is assigned, trainees seem to benefit from their encounters with people whose way of life is different from their own, since ”the process problems that grow out of confrontation are similar” (Harris and Harris 1972:9)76.

73 Tung, Rosalie, The New Expatriates, 1988, pp. 12-13.74 Fiedler and Mitchell, 1971:95, in Tung, Rosalie, The New Expatriates, 1988, pp. 12-13.75 Rubin, 1967:30, in Tung, Rosalie, The New Expatriates, 1988, pp. 12-13.76 Harris and Harris, 1972:9, in Tung, Rosalie, The New Expatriates, 1988, pp. 12-13.

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The exact same cross-cultural training methods are mentioned by Czinkota et al77. but they are accompanied by a diagram to further clarify the extent of each program78.

Figure 13 Cross-Cultural Training Methods

These training programs are mentioned yet again in Lane and DiStefano, who put them into an even more rigorous model79. What distinguishes this model from the previous one is the correlation of the duration of the training program, and the training approach, to the length of stay abroad:

Length of Training

Cross-Cultural Training Approach

1-2Months +

1-4 Weeks

High

LEVEL OF RIGOR

Immersion approachAssessment centerField experienceSimulationsSensitivity trainingExtensive Language Training

77 Czinkota et al. International Business, 4th ed. 1996, pp. 317-318.78 Czinkota et al. International Business, 4th ed. 1996, p. 318.79 Lane, Henry W, Joseph J DiStefano, International Management Behavior, 2nd ed. 1992, p. 253.

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Less than a weekLow

Affective ApproachCulture Assimilator TrainingLanguage TrainingRole-playingCritical IncidentsCasesStress Reduction CentersModerate Language Training

Information-giving ApproachArea briefingsCultural briefingsFilms/BooksUse of Interpreters“Survival-level” Language Training

Low Moderate HighLength of

Stay1 month or less

2-12 months

1-3years

Degree of Integration

Figure 14 The Relationship Between Cross-Cultural Training Approach, Length of Stay, Length of Training and Degree of Integration

This model states that the longer the stay abroad, the higher the degree of integration with the host country culture will be necessary and perhaps also unavoidable. In turn, the longer the length of stay, the longer the training should be, in order to achieve a successful integration.

These authors thus share the same opinion regarding what cross-cultural training programs should consist of and how these should be implemented. This is not surprising, since the structure of these programs probably has been developed from experience in the business community. We shall now take a look at Anderzén’s opinion of cultural preparations before an assignment abroad.

Anderzén takes another approach to cross-cultural training80. She provides the employee with a checklist of advice before going abroad, as well as one for the company sending the expatriate away. These pieces of advice are less academic and have the character of a practical aid for the employee and the responsible person in the organization in order to avoid difficulties later on. The list of advice to the expatriate is as follows:

· Regard the time abroad as an adventure -but an adventure that needs careful planning. Plan for the return home as well.

· Make a list of positive and negative expectations. Plan for the whole family, and let the children be a part too.

80 Anderzén, Ingrid, The Internationalization of Work, 1998.

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· The expatriate employee should find out exactly what the assignment consists in and what is expected from him. A mentor, either abroad or at home, is useful.

· The trailing spouse should be well prepared too. Once abroad it might be too late to organize things the way one wants to.

· The expatriate should be aware that there are everyday routines even abroad.· Keep in touch with relatives and friends at home, via the Internet, telephone,

letters or tapes.· Try to take a break, go home to see family and friends if you feel low when

abroad.· Help the kids adapt, meet friends and receive a social network. · Do not give up too soon, even if things do not work out right away.· Let the company know what you have learned and what you have forgotten before

returning home. Prepare socially for the repatriation.

To the sending organization, Anderzén gives this list of advice:

· Make sure that both the expatriate and the trailing family members are well prepared for the stay abroad as well as for the repatriation procedure.

· Emphasize language training, since it is one of the most important factors for a positive adaptation.

· Let the employee and trailing family members participate in a pre-visit in the future host country under the supervision of a guide. This will pay off in the end.

· Keep in touch with the employee regularly and acknowledge his/her experience.· Follow up on the expatriate’s adaptation. Make sure that the employee has

someone to talk to. · Appoint a mentor with relevant expertise and experience, at home or abroad.· Prepare the organization as well as the expatriate in time for the repatriation

process.· Try to utilize the new knowledge and experience that the employee has to offer.

The returnee could e g write a report about experiences, contacts made et c.

In the literature today, most authors seem to argue that there are only benefits to come out of cross-cultural training programs. The implementation of such programs should therefor be of great importance for the success of international assignments. The aspect of the cost of these programs is not addressed by the authors however, which is of great importance for the purpose of this thesis. Does the cost of cross-cultural training programs match the value of a successful international assignment? We will take a closer look at the cost in section 4.1.5 Expatriation Failure. There also seems to be a great consent to what these programs should contain and how they ought to be implemented among the authors. Anderzén mentioned follow up as being important in her checklist. We will now address this issue in somewhat more detail in the following section.

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4.1.3 Evaluation Programs81

In order to keep track of the employee, help him with his situation, and get general as well as specific feedback, both pertaining to the preparations having been made before the international assignment as well as to the actual experience of the employee abroad, some kind of evaluation programs are necessary. They also serve as support for the employee and as a sign that he is not forgotten when away from the company.

In the course of writing this paper, we have found that the methods of going about collecting this feedback are as varying as the different training programs discussed earlier. Surveys can be sent out from the mother company, interviews can be made by the local company et c. Some organizations leave the responsibility entirely to the part of the corporation where the expatriate is currently staying, be it to an affiliate in the host country, or to the mother company at home upon return. In some cases, the evaluation is left to the marketing department, and in others to the human resources division. There is no uniformity among different companies in this matter, and it seems that the degree and method of performing evaluation programs are dependent on the size of the organization, the strategic goals, the financial aspects and the degree of internationalization, i e, the number of actual and future expatriates, of the company.

The aspect of how an organization goes about collecting feedback for themselves and offering support to their expatriates is an interesting matter, and will be discussed in more detail for each of the companies of our study in the analysis chapter.

4.1.4 The Trailing Spouse and Family

In the last few years, the dilemma of how to deal with the trailing family members has become more important and pressing for sending organizations82. It used to be that the expatriate employee was a male manager and the spouse a woman homemaker. In a more traditional sense, the wife simply followed her husband when he was on an international assignment. Nowadays, however, managers are getting younger, women expatriates increase in number and so called dual career couples, where both individuals pursue a career, are becoming more frequent. In light of this, organizations are realizing that the trailing spouse needs to be treated differently than before.

All the company representatives and the experts in the field that we have talked to83, as well as the literature, state that an important factor for the success of the expatriate in the assignment abroad, is the well-being of the spouse and children. If the family relations are poor, the expatriate will not perform at his best. Torbiörn

81 Personnel Directors, International Assignment Managers, Electrolux, ABB, Ericsson, The STC, Interviews, 1998.82 Ibid.83 Personnel Directors, Intenational Assigment Managers, Electrolux, ABB, Ericsson, The STC, Björn Ström, Interviews, 1998.

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also mentions the importance for the spouses of being able to rely on each other when culture shock sets in84. For this, a good family relationship is essential. Therefor, necessary preparations must be made even for the trailing family members of the expatriate before going abroad. Anderzén pointed out earlier, in section 3.1.4 Psychosocial Factors Affecting Expatration, two of the most important preparatory measures: the pre-visit, allowing the spouse and family to visit prospective residential areas and look at housing possibilities, going school-hunting et c, and language training. Having made this pre-visit, the family is already mentally in their new environment, making the actual transfer much easier. Language training is also crucial, in order to go shopping, being able to explain what needs to be done when faced with e g medical-, housing- and transportation problems.

If the spouse has to give up a position to follow the expatriate abroad, which is occurring to a greater degree than before, which we mentioned earlier, adequate compensation needs to be provided. Pension- and insurance plans as well as maternity leave arrangements, school fees et c, need to be looked at and provided for by the company. Otherwise, there could be the risk that the expatriate might resign from the IA.

Regarding the children, Torbiörn argues that the most problematic factor is changing school environments and losing friends, which occurs when leaving home and going abroad85. He goes on to argue that although children seem to be more flexible than the parents, they still need support and a healthy family relationship to feel safe in their new surroundings. Anderzén mentions in an earlier study than the one previously quoted, that stress in children can increase the sensitization to diseases and allergies86. To avoid such negative long-term consequences, a healthy relationship to the parents, and between the spouses, is essential.

To summarize, we have argued, supported by the literature and by the persons interviewed, that not only the expatriate, but also the trailing family members need to be given adequate preparations before going abroad, and that this training is crucial for the overall success of the international assignment. Sometimes, success is not achieved, and a failure to perform in the assignment is the result. It is now time that we take a look at the concept of expatriation failure.

4.1.5 Expatriation Failure

Sometimes, the international assignment does not work out the way it should, due to various reasons, and an evaluation of what went wrong needs to take place. Two important questions need to be answered regarding this issue, namely, in what way did the international assignment fail, and what were the reasons for it? The first question could perhaps be answered by looking at the pre-departure outlines for

84 Torbiörn, Ingemar, Att leva Utomlands, 1976, pp. 363-364.85 Torbiörn, Att Leva Utomlands, 1976, p. 401.86 Anderzén, Ingrid, Stress and Sensitization in Children: A Controlled Longitudinal Study of Children Exposed to International Relocation, 1997, pp. 259-269.

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the assignment in various factors such as the expected length and revenue of the project abroad et c, while the second question might be harder to answer. The underlying reasons for the failure of the assignment can be several and hard to pinpoint. In this section we will take a closer look at what constitutes failure and the reasons for why this occurs.

What constitutes an expatriation failure? The first thing that comes to mind is of course a premature return of the employee, due to difficulties fulfilling the work assignment requirements abroad and/or coping, in some aspect, with the different cultural situation. However, a premature return does not necessarily mean a failure. The expatriate might have, for instance, fulfilled his work assignment successfully, ahead of time, and sees no point in staying any longer. Forster comments on the dilemma of defining expatriate failure solely in terms of premature return as follows87:

”[...] we too began to question this rather narrow definition of EFRs. [Expatriation Failure Rates -authors’ remark] In the first instance, failure is defined exclusively from the standpoint of the company. For example, should this definition include every premature return - even if it is beyond the control of the employee (for example, a company pulling out of a foreign operation)? Should it include those who return early because the assignment is successfully completed ahead of schedule? Should it include the failure of companies to ensure equality of opportunity on IAs [International Assignments -authors’ remark] for women employees (in terms of the range of countries and positions they are selected for)? Does it include those who return home early to a post at home or those who are poached by another company while on an IA? Does it include those who perform poorly abroad without the knowledge of the home company (of which there is clear evidence in this research)? Does failure include those who experience problems after repatriation in terms of downward mobility or redundancy? Does this include those partners who have had to interrupt (or give up) their careers to accompany an employee on an IA? What about families who have experienced stresses and strains while abroad and are unenthusiastic about IAs in the future? Finally, should ”failure” include those companies who are coping with the development of international managers in an essentially ad hoc, reactive and short-term fashion?It can be argued that a more sophisticated definition of ”failure” should include most if not all of the possibilities presented above”.

Taking these new definitions of failure into consideration, Forster argues that the results of a large number of previous surveys and research could be misleading88. He also comes to the conclusion that there is no clear evidence that the supposed failure rates among expatriates are as high as the general opinion seems to think. This fact is evident in the very title of his article: ”The persistent myth of high expatriate failure rates”: a reappraisal89.

Lane and DiStefano mention that the percentage of prematurely aborted international assignments range between 20 to 50 percent, at an average cost per

87 Forster, Nick, ”The persistent myth of high expatriate failure rates”: a reappraisal, 1997 pp. 414-433.88 Forster, Nick, ”The persistent myth of high expatriate failure rates”: a reappraisal, 1997, p. 416.89 Forster, Nick, ”The persistent myth of high expatriate failure rates”: a reappraisal, 1997, pp. 415.

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failure to the parent company of between $ 55,000 and $ 150,00090. When unrealized business is added, losses could total close to a quarter of a million dollars per expatriate failure.

The broadest definition of expatriate failure, seems to be either the failure of completing the designated work assignment while abroad, or the failure of adapting successfully to the new cultural environments, leading to an incapability to perform successfully or, perhaps, incapability of performing at all. Naturally, both of these circumstances could coincide.

Albaum et al.91 and Czinkota et al.92 both mention a phenomenon called the Self-Reference Criterion, the unconscious reference to one’s own cultural values, to be the root of most international business problems and hence expatriation failure. The following analytical approach is recommended to reduce the influence of one’s own cultural values:

”James Lee coined the term ””Self-Reference Criterion””, as a useful concept to avoid cultural bias. He suggested that problems should be defined first in terms of the cultural traits, habits or norms of the home society. Then they should be redefined without value judgments, in terms of the foreign culture traits, habits and norms. He indicated that the difference between these two specifications is an indication of the likely cultural bias, or SRC effect, which can then be isolated and carefully examined to see how it influences the concept or the problem. Following this examination, the problem is redefined with the bias removed. The value of this approach lies in forcing the manager posing the problem to make specific his or hers assumptions about the cultural elements affecting the problem and to question whether or not they hold for another culture”.

Albaum takes the discussion one step further when stating that avoiding cultural bias is not enough93. One also has to have cultural empathy, i e:

”[...] the ability to not only recognize cultural differences, but also to be able to understand them in a manner that permits effective communication and effective direction of human efforts to implement marketing decisions”.

To summarize, the definition of expatriate failure seems to be about to change somewhat from what it has traditionally been. An observation on our part is that this might be due to the fact that the issue of expatriation with all of its implications is being more discussed today, as it grows in practice and in importance. A natural step in the process of redefining expatriation failure might be that the EFR in organizations is lower than traditionally expected. However, it is probably closer to the truth to argue that people and organizations today are becoming more internationalized and that employees are receiving more cross-cultural training, which brings down the expatriation failure rates.

90 Lane, Henry W, Joseph J Distefano. International Management Behavior, 2nd ed. 1992, p. 245.91 Albaum, Gerald, et al. International Marketing and Export Management, 2nd ed. 1994, pp. 57-58.92 Czinkota, Michael R et al. International Business, 4th ed. p. 316.93 Albaum, Gerald, et al. International Marketing and Export Management, 2nd ed. 1994, p. 9.

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4.2 Repatriation

By now, we have mentioned the concept of repatriation a number of times, and we believe that a fairly clear picture of what this concept can entail has been conveyed over the previous pages. However, some interesting variables regarding repatriation need yet to be presented, as well as the clarifying of others already mentioned. This will take place in this section, as well as a short definition of the concept.

The repatriation situation could be considered as not being that different from expatriation: in a way, it is merely reversed. However, the fact that the most severe problems in the entire expatriation process, (in which repatriation is included), seem to occur during, or in connection to, the repatriation stage.

In her most recent study on stress in expatriates, Anderzén found that the highest levels of stress were found among returning expatriates, or repatriates, a year after coming home94. She attributes this to insufficient preparations before leaving the host country, both from the expatriate and the company. Inadequate housing- and school hunting, insufficient career-pathing and planning for the employee upon return from the company, less prestigious or challenging work assignments than the ones experienced abroad, can be some of the things that the employee faces at home, leading to the results of Anderzén’s study.

Lane and DiStefano cite a study from 1973, which brings up the career problems of 81 repatriated US managers95. Although old, the results of that study are much in concurrence with those of Anderzén:

· No job existed for the manager upon return.· There was a loss of authority and professional freedom in decision making.· There was a loss of career and promotional opportunities.· There was resentment from colleagues upon return.· Uncertainty had existed about the length of the overseas stay.

Regarding the repatriated family, divorces were more common in the group of returning repatriates than in the reference group, which had remained in Sweden during the same time, in Anderzén’s study96. The author suggests that the reason for this might not lie only in the repatriation phase, but also in the time abroad. A family might have been struggling for a long time to keep the marriage, rocked by increased stress, together, only to have to let go upon arrival home when the highest level of stress appears.

We have seen that repatriation causes greater problems than one might expect. Moving back home should not entail problems for the expatriate: after all, he is returning to a well-known cultural situation and to familiar surroundings. This attitude, however, might be the main cause of the problems of repatriation, since

94 Anderzén, Ingrid, The Internationalization of Work, 1998.95 Lane, Henry W, Joseph J DiStefano. International Manegement Behavior, 2nd ed. 1992, p. 250.96 Anderzén, Ingrid, The Internationalization of Work, 1998.

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no preparations then appear to be necessary. Preparations both of the employee and family, as well as of the company, are important for a smooth repatriation process. (For preparation examples, see 3.2.2 Cross-Cultural Training)

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5. Empirical ResearchIn this chapter we will present the findings of our research. First we give the introduction and background to the companies in our study, then we examine the aspects pertaining to our research area in each company. Furthermore, we will include information relevant to the problem area that we have encountered when interviewing repatriated staff at Electrolux.

5.1 Electrolux

5.1.1 Company Background97

Electrolux is one of the world’s leading producers of household appliances for indoor and outdoor use, and of corresponding products for professional users. In the European market the company is a leader in white goods, and the third largest in the US. Electrolux had a total net sales of MSEK113,000 and 105,950 employees in 1997. At the present time the organization has 220 expatriates of which 110 are Swedish employees. Electrolux has divided the world markets into five different regions: EU and the rest of Europe, North America, Latin America, Asia, Oceania and Africa.

The Electrolux Group is the world’s largest producer of floor-care products, absorption refrigerators for caravans and hotel rooms, and compressors for refrigerators and freezers. Electrolux is among the largest companies in the world in food-service equipment, professional laundry equipment, and in forestry and garden equipment.

5.1.2 Expatriation Policy98

Electrolux wishes to remain one of the leaders in its area, therefor the company has to strengthen international mobilization among its employees. The specialized division regarding this issue is called Group Staff Human Resources & Organization. Its mission is to develop and deploy strategies, policies and processes in an innovative way so as to enhance the individual, team and organizational performance. As a multicultural organization, Electrolux needs team members with broad international experience, employees who are willing to take on responsibilities abroad, in sometimes difficult circumstances.

Prior to 1996, the expatriates were employed under conditions regulated by the Foreign Service Policy (FSP 89) and the Expatriate Benefit Package (Expac90). Electrolux realized however, that there was a need for a more extensive policy.

97 Annual Report, Electrolux, 1997.98Global Expatriate Policy, GEP 96, Electrolux.

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The company considers those that undertake international assignments, and their families, as an important Group resource and a considerable investment. Therefore, since 1996, international assignments are regulated by a more extensive policy than FSP 89 or Expac 90, namely the Uniform Global Expatriate Policy, GEP 96. The legal relationship between Electrolux and the expatriate is set forth in a service contract. Electrolux expatriation policy forms the basis for the service contract and applies to all expatriates. The responsibility and procedures for managing international assignments are set out in a document called Group Policies & Procedures for international assignments. The Global Expatriate Policy (GEP 96) is applicable to service contracts issued by Group Staff Human Resources & Organization (C-AU). It is based on the corporate visions and values of the Electrolux group, and should be seen as guiding rules and aid in explaining the Group’s view on international assignments.

The Service Contract period is normally three years with en option to prolong the service period by one year at a time. For service in “difficult or risky countries” i e countries of high violence and crime rates, unstable political situations, where there is a risk of war or coup d’etats, the contract period may be shorter. However, the minimum period is one year and the maximum service period should not exceed five years for any one assignment. This maximum period will include working on the same assignment under previous expatriate policies.

5.1.2.1 The Expatriate Employee and Cultural Training99

Moving abroad often involves major changes in regards to both work and private life. To facilitate the relocation and make it easier to settle in the new country, Group Management has decided that a global relocation program needs to be implemented. Electrolux has chosen to use external consultants in order to prepare the employees for the new environment before going abroad. The reason why the company uses external consultants is because there are no experts available in the field of cross-cultural training within the company. The objective of the program is for the employee to become efficient in his/her new job as quickly as possible after the move, and for the accompanying family to adapt more easily to life in the new country.

The parties responsible for the execution of the relocation program are the sending company, the receiving company and C-AU. The detailed planning of the activities is to be worked out jointly by the employee and the parties responsible. The employee is required to fill out a profile and send it to C-AU for coordination with the sending and receiving companies. In this phase it is C-AU’s responsibility to assist the employee in coordinating the relevant relocation activities with the parties responsible. C-AU is expected to act as a speaking partner and to coordinate problem solving in contractual matters, as well as in matters of a personal nature that cannot be handled locally.

99 Electrolux Relocation Programme, 1998.

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Before transfer abroad, the sending company is responsible for providing the employee with relevant language training, for arranging a meeting with a reference family or -person, for providing host country orientation and cultural awareness training as well as for special leadership training in work related cultural differences.

The expatriate is entitled to language training, before the assignment and/or in the host country according to the employee’s preference and availability or suitable training possibilities. The length of training is to be determined by the host company, and the employee should by intensive training obtain satisfactory work related language skills.

Before or after the transfer, special leadership training will be provided if the employee has a supervisory managerial position. The objective is to bring understanding to the employee in terms of good and efficient leadership of local nationals, intercultural communication, the understanding of the local mentality as well as how to deal with local labor code and unions.

At the receiving company, a relocation coordinator is appointed in order to inform the host company of the arrival of the new expatriate, his/her job position and mission, as well as to inform the employee and introduce him to the work site.

After the completed contract period the repatriates are entitled to continued Group employment. If the employee expresses the wish to remain in the home company and qualifies for that, it is his/her responsibility to contact the superior manager so as to initiate a search for a new job. The home company should make known to its divisions that the employee and family are returning from abroad, and should inform the prospective division of the position that the employee will assume in the home country. It is however the employee’s responsibility to pro-actively participate in the search of a new job.

5.1.2.2 The Trailing Spouse and the Expatriate Family100

All relocating family members (excluding minor children) shall have the possibility to learn a language relevant for life in the host country. The educational level and amount of training shall be based on individual needs.

A repatriate employee and/or a reference person living, or that has been living abroad in the host country, will share their experiences during an informal meeting with the future expatriate and the accompanying family. The meeting can be held either in the home country or in the host country during the so called pre-visit.

A session called “Host country orientation and cultural awareness training” is to be held in the home country before the transfer, for easy comparison of host country culture to home country culture. For practical reasons, however, there is an

100 Global Expatriate Policy, GEP 96, Electrolux.

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opportunity to have the session after the transfer instead of before. The session is recommended to be held by a professional consultant. The consultant’s task is to inform about the host country, to make the expatriate and family aware of cultural differences between the home and host countries, to inform about habits and practices in the host country, to explain the phenomenon of cultural shock as well as how to prevent and/or deal with it. This orientation should be followed up after the transfer with a session on intercultural communication in which the consultant will give information about how one should interact with others.

To inform and prepare the expatriate and the family for the assignment, the host company will welcome them on a pre-visit. The host company should appoint a local mentor called Relocation Coordinator (from within or outside the company), who will be responsible for planning the pre-visit and, upon arrival, introducing the family to the new location. The Relocation Coordinator will also be responsible for initiating the processing of necessary visas and permits for entering, working and living in the host country. This person is also responsible for making arrangements so that the employee and his family can complete unfinished training. During the pre-visit, the family should be informed about housing and schooling, personal safety and security, local health care provisions, available spouse activities, as well as about general living and working conditions.

C-AU will also meet the accompanying spouse and inform about issues and corporate undertakings that concern the family, i e. the role of C-AU and the role of the accompanying spouse, insurance, medical arrangements, moving of the household, spouse funding et c.

Along with the employee, the company’s responsibility is to take care of the trailing members. Free rental housing can be provided by the host company as part of the total compensation package. For each year of service, the expatriate and the accompanying family are entitled to one company-expensed return trip by air to their home country.

As a compensation to the spouse and in order to attract and retain people on international assignments, the host company will provide expatriate spouse funding on the conditions that the service contract period must be two years or more and that the expatriate’s spouse must have had a pensionable employment more than three consecutive years immediately prior to the assignment.

5.1.2.3 Evaluation programs101

Electrolux has realized the importance of evaluating the preparation programs in order to avoid possible mistakes and to improve themselves. According to Electrolux the purpose of the evaluation is:

“[…] to enable C-AU to assess the effectiveness of the Relocation Programme, and to assess how the employee and the accompanying family members perceived

101 Electrolux Relocation Programme, 1998.

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the process of relocation. Furthermore, it will serve as a basis for periodic reviews of the content of the program.”

The company uses a questionnaire in order to find out how the employees view the help that was given to them and in which way they think the preparation program could be better. The questionnaire is divided into the parts Relocation Programme Profile Follow-up and Questions about Relocation Procedures.

Relocation Programme Profile Follow-up concerns every part of the preparation program. In this section, questions concerning before and after transfer procedures are asked. It also contains issues treated during the pre-visit. The topics treated are: language training, meeting with reference family, host country orientation and cultural awareness training, inter-cultural communication training, special leadership training in cultural differences at work, house and school, introduction to the living environment, information about personal safety & security and local health-care provisions. Questions about available spouse activities are also considered in this section.

In the last section, questions valuable for the C-AU unit about the relocation procedure are presented. The purpose of this part is for the employee to evaluate the work of the unit, as well as to state opinions and general comments on issues like language and life in the new country. For the C-AU unit it is also important to find out to which degree the family was involved in taking the decision of moving abroad.

5.2 ABB


ABB is a global (B$) 35 engineering Group serving customers in electric power generation, transmission and distribution, industrial and building systems and rail transportation. Of the Group’s total sales, 55 percent are in Europe, 20 percent in the Americas and 25 percent in Asia, the Middle East and Africa. The number of employees in the consolidated Group was in 1997 more than 213,000. The owner-structure of the Group is described in this model:

102 Annual Report, ABB Group and Parent Companies. 1997.

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ABB AB Shareholders ABB AG Shareholders

ABB ABStockholm

Sweden50 %

ABB AGBaden

Switzerland50%

ABB Asea Brown Boveri LtdZurich

Switzerland

ABB Asea Brown Boveri Group1,000 Companies

37 Business areas organized into 4 Business Segments

Figure 15 The ABB Owner Structure

ABB AB (Sweden) and ABB AG (Switzerland) are the two sole owners in equal parts of ABB Asea Brown Boveri Ltd, Zurich (Switzerland), which is the holding company of the ABB Group with approximately 1,000 companies around the world. The two parent companies each provides a transparent vehicle for investing in ABB as virtually all of their income and stockholders’ equity comes from their respective 50 percent shares of the ABB Group income and equity.

ABB companies throughout the world report their income and financial positions in local currencies, which are then translated to U.S dollars ($) to establish the ABB Group’s consolidated accounts. In order to compute the income of the two parent companies, their 50 percent shares of the ABB Group income are translated from U.S dollars to Swedish Kronor and Swiss Francs respectively.

The Group has divided the business activities into several business segments as well as three different business regions, Asia, the Middle East and Africa. The business areas are; Power Generation, Power Transmission and Distribution, Industrial and Building Systems and Financial Services. Each one is operating worldwide, under the umbrella of the three business regions. The ABB Group also has a 50 percent owner share in the joint venture ABB Daimler-Benz Transportation (ADTranz).

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The program follows a policy that is confidential, and can therefore not be presented in this thesis. Instead can we present the information presented to us during our interview with a company representative, Mrs. Majdalani.

The Group has a company called ABB Support AB that is focused upon supporting the rest of the companies with different in-house solutions, all from secretarial services to cultural awareness training for expatriates. There is a specific department focused on the expatriates and their unique problems, consisting of five people situated in Västerås, Sweden. They handle all expatriates who leave Sweden for an international assignment. The expatriates become employed by another ABB company, for example in Managua, that needs some unique skills for a project or similar, over a limited amount of time.

Five individuals at ABB support have divided the world between them in order to provide best possible service, based on the different experiences they have. All of the personnel that today works at the department have some kind of international experience, preferably that themselves have taken part in this kind of program. The program at ABB today is not mandatory, but based on voluntary participation. In general the program is based upon discussion with the expatriate and the family regarding different problem areas that could appear. The expatriate has a person that they easily can contact later on, because it is ABB personnel that are involved in the preparation. This is important, that a person not closely involved with the expatriates career at the local company can be contacted in need. Each participant of the program is also encouraged to ask around for a contact person at the local department in Sweden, so that their interest can be protected as well as a source for information.

The preparation program takes place in Västerås at the head-office for ABB Sweden. It is also here that the corporate presentations are situated. This is a series of different presentations that can give the family of the expatriate a clearer understanding about ABB and the company history.

The ABB Group operates in such fields where the future demand for engineers and other experts most often can be estimated. This gives the company and the expatriates an advantage in the planning and preparation process, time is often a scarce resource when dealing with these issues.

5.2.2.1 The Expatriate Employee and Cultural Training

The expatriate as well as the family is encouraged to read material about the country that they are traveling to. If they can not find such material at ordinary libraries, the international assignment apartment at ABB Support can provide the family with the relevant material, both general and country specific. In such kind of literature the culture in the country is often discussed, for example, manners and social structures.

103Majdalani, Margareta, Interview, ABB Support 98-11-16.

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The company representatives usually have experience from earlier encounters with the host country culture, both their own as well as from other expatriates. This is an advantage that the ABB support can present because of the division of the globe into specific geographical areas.

The expatriates also receive material on how to explain Swedish cultures and traditions in English. This is an easy way to ensure that the employees do not experience “speechlessness”104 when asked about their own country, since explaining the domestic culture in a foreign language can sometimes be a challenge.


The expatriate as well as the family is looked upon by ABB as ambassadors of the Swedish company. Therefore, the family is given a presentation and historical background of the company. According to ABB it is important that the spouse feel for and have an understanding about what the partner is involved in, especially because of the spouse’s sacrifices. They do not often work in the country to which the family moves, and sometimes abandon a career at home. It is therefore important to discuss what each of the two expects of the assignment. Maybe, the spouse looks upon the assignment as a promotion, and expatriate does not. This could end up in a conflict between different interests, and even divorce.

Among other things the family is advised to list pros and cons, about the future transfer, for each of the family individual, so that the expectations for each person are presented. Then the differences that occur can be discussed with experienced personnel in the field of expatriation.

The family is encouraged to activate itself, even to plan in advance. It is important, especially for the spouse, that something is planned when arriving in a new country. Through this the family can counteract isolation and dependency on the working spouse.

The expatriate and the whole family, but the spouse in particular is encouraged to take language lessons. The reason for this is to be able move around more in the local surroundings. Contrary to the spouse can the expatriate many times get by with English, the official Group language for the ABB Group.

5.2.2.3 Evaluation Programs

ABB Support does not today use any evaluation program of the preparation program. They have, however, a questionnaire given to the families after the two days in order to measure the satisfaction of the participants (see appendix XXX).

104Majdalani Margareta, Interview, ABB Support, 98-11-16.105

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5.3 Ericsson


Ericsson is a world-leading supplier in telecommunications, producing advanced systems and products for wired and mobile telecom systems in private and public networks. The company has developed the world’s largest customer base in telecommunications, with customers on all continents. Ericsson has more than 100,000 employees in over 130 countries worldwide. The company’s largest markets are; The United States, China, The United Kingdom, Italy, Brazil and Sweden, in that order.

The business area that generates the highest net sales is mobile systems, followed by infocom systems, mobile phones, terminals and other operations. The company’s net sales in 1997 were MSEK 167,740, a 30% increase from the year before. Earnings before tax for the same year were MSEK 17,218 (10,152).

The company has a progressive approach regarding the development of their biggest asset, their employees, or as Lars Ramqvist (CEO) declares in the annual report:

“Since telecommunications is developing continuously, we also have to develop our most important asset – the expertise and experience of our employees. That is why we are investing very substantial resources in competence development among our own personnel”

Of the total number employed, over 69,300 – including over 45,400 in Sweden – work in units within the European Union.


Ericsson is one Swedish company that has been using themselves of expatriation training programs since the 1950:s. Today the company has over 3,300 contracts, of which 1,700 are Swedish citizens, on a worldwide basis. The company has since 1991 concentrated the handling of expatriates up to a Group level. The Group department responsible for the expatriates today consists of 24 employees, of which 14 are directly handling the expatriates.

The minimum stay abroad, in order the expatriate to be let to participate in the program is 12 months. There are around 25 courses per year and each prepares approximately 10 families every time. Around some 300 employees go trough such program a year. The Group department presents the expatriate with a two-day course that covers many different issues concerning the international assignment. Many times the local companies at the receiving end continue this preparation. In the United

106 Annual Report, Ericsson, 1997.107 Göthlinder, Karin, International Assignment Manager, Ericsson, Interview 98-12-09.

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States, for example, the local company continue the preparation with a three day cross-cultural training course. All local companies have introduction days to welcome their expatriates.

The two preparation days are divided into one soft day and one hard day, i. e, one day concerned with issues of culture and international behavior and so forth, and another concerned with issues like pensions, insurance and job security. These days should preferably take place within in a month from departure, but that is a question of timing and availability of the expatriate and the families.

The overall policy is put into a folder that is given to each family. This can serve as a source for different kinds of information. We had the opportunity to view at such a folder, put could not examine it closer, and therefore can our presentation of it be rather limited.

5.3.2.1 The Expatriate Employee and Cultural Training108

Every expatriate and spouse is given lectures concerned with the issues of culture, what it means and how their assignment can change their reality. The families also have an opportunity to meet a former expatriate to discuss practical problems and overall preparation. This former expatriate would preferably be from the same country as the one that the family is going to. That is not always the case however, mainly because that can not be done sometimes, since countries may not have that many expatriates each year. But, according to Ericsson, this issue is of no great importance.

There are no pre-visits in this program, but most of the time have at least the expatriate been in the country for business reasons.


The children and spouse of an expatriate family are presented with the opportunity to study a language course that spans over 20 hours. Ericsson can provide a service that is called Ericsson Language Service, if the language is uncommon. The spouse is also given a presentation of the company, at the preparation training as a folder, in order to be able to present and identify with the company.

5.3.2.3 Evaluation Programs110

There are always evaluations done every six months at Ericsson. There are actually two evaluations done, first one after the training occasion and secondly in the form of a questionnaire at a later stage.

108 Göthlinder, Karin, International Assignment Manager, Ericsson, Interview 98-12-09.109 Ibid.110 Göthlinder, Karin, International Assignment Manager, Ericsson, Interview 98-12-09.

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5.4 The Swedish Trade Council


The Swedish Trade Council, (STC), is an organization with a total staff of 382,225 of which are stationed in 35 different countries. The main objective of the organization is to facilitate the establishment of Swedish companies abroad, in taking place among the world elite of export promoting organizations and in ranking as a top quality consulting business. The STC has 33 offices of their own and, via separate agreements with six chambers of commerce, two Swedish embassy offices, five representatives of consulting firms, and four BSO (Business Support Office) offices, they have a total of 50 office facilities abroad. Furthermore, the STC collaborates with Swedish embassies, consulates and chambers of commerce in a further approximately 100 countries.

Over the past year, the STC focused the client work on small and medium-sized businesses, which today account for 20 percent of Swedish exports. Two thirds of STC clients have fewer than 100 employees and a turnover of less than MSEK 150. With a view to delivering a better service to these small businesses, The STC is developing the services offered by the offices abroad to assure a consistent level of quality. To further raise the standard of service that the STC offers, the organization is also investing in IT development. This involves new databases, international communications and upgrading not only the IT structure but also the IT proficiency of the personnel.

5.4.2 STC Operations112

The Export Service is part of the Swedish Trade Council’s Government Assignment. It requires the STC, free of charge, to provide information and advice about markets abroad, to supply answers to business inquiries from important importers abroad, and to distribute information about potential areas of sale for Swedish products and possibilities for joint ventures with companies abroad. The unit also deals with inquiries on legal matters and trade rules and regulations. These activities are supplemented by visiting work for information gathering, as well as evaluation and analysis of areas of market potential for Swedish exports. The STC fields around 200,000 inquiries per year. Of these, 80 percent are made by small businesses, both in Sweden and abroad.

Consulting comprises practically all services in export marketing that are designed to establish a company and its products. The services offered by the STC consist of analyses of market conditions, market planning, export strategies, market selection, market surveys, competition analysis, product modification, visit programs, seminars and specific business establishment services of various kinds.

111 Review of Operations, Organizational Annual Statement, The Swedish Trade Council, 1997, pp. 1-5112 Review of Operations, Organizational Annual Statement, The Swedish Trade Council, 1997, p. 5.

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Business Support Offices, (BSOs), are an important part of the consulting activities. The BSO scheme allows companies to rent a part of the STC office and the services of one of the organizations’ consultants in the prospective market. BSOs are mainly designed to suit medium-sized businesses. The Tokyo office, for instance, handles around 20 BSO assignments on an ongoing basis.

Projects and Procurement is a unit of the STC created to make it easier for Swedish companies to participate in major international projects. The unit works on the monitoring of, and the procurement in international projects, and has the task of coordinating Swedish involvement in this type of activity.

Joint Promotion Groups, comprising a total of 220 member companies in various areas of technology, are another part of the STC’s business. In 1997, for instance, Swecare held a Swedish Health Care Symposium in Indonesia and the Swedish Pulp and Paper Technology Group arranged technology seminars in India, to mention a few. The STC also operates secretariats on behalf of approximately ten market-based Chambers of commerce to develop certain national markets, including Russia, Bulgaria, Hungary and China.

Other Activities include the Swedish county-based training programs entitled ”Young Export Sales Personnel”. To date, 20 projects have been completed, including 11 in 1997. A total of 254 export sales personnel have been awarded diplomas, and an additional 60 are currently receiving training.

5.4.3 Turnover, Profit and Financial Position113

Turnover for the STC in 1997 totaled MSEK 434 (417), including turnover of MSEK 34 (36), by the Exportrådet Språktjänst AB subsidiary. Over the past five-year period, turnover has held at around MSEK 400, despite a halving of the Government Assignment. The reduction in government support, mainly to export services, has been offset through a sharp rise in assignments from business customers.

The profits for 1997, MSEK 1.7 (MSEK 3.2), reflect a non-recurring cost of MSEK 11.5 in connection with severance arrangements.

Investments were concentrated in the area of Information Technology, where MSEK 15 were invested in equipment and, above all, the development of home pages, various databases and applications.

For 1999, the aim of the STC is continued growth through strengthened representation abroad, namely in Central and Eastern Europe, Latin America and Southeast Asia, as well as continued IT development.

113 Review of Operations, Organizational Annual Statement, The Swedish Trade Council, 1997, p. 4.

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The Swedish Trade Council operates in a different way than the other companies in our study regarding expatriate policy and expatriate recruitment. Therefor, we find it interesting to compare it with the others. The STC does not provide cultural training programs for the employees in the sense that we describe and that is relevant for this paper. The only training provided is a two week course for STC trainees, the details of which we will not get into, since, after having analyzed this program, we have realized that it is not pertaining to this paper. In the following sections we will analyze the STC’s policy regarding this matter and give the reasons why they enforce this particular policy.

5.4.4.1 The Expatriate Employee and Cultural Training

The Swedish Trade Council employs 382, of which 225 work abroad. This means that around 60 percent of the staff are located in a foreign country. It is thus crucial to the organization that the personnel abroad can cope with different cultural settings without experiencing the difficulties that can sometimes be involved in these cases, as we have mentioned earlier. Yet the STC does not provide any cultural training programs for the employees before sending them abroad.

The reason for this according to Lars Ilar, Personnel Director of the Swedish Trade Council, is to be found in the recruitment procedures, the organizational structure as well as in the experience and practice of the company115.

· The recruitment for the international assignments does not necessarily take place internally, i e, when there is a position to be filled, the STC fills it with an employee already working for the organization and who is available when possible, but might just as well turn to candidates outside of the organization. The main consideration is that the position is filled with the most competent person available. The possibility of recruiting externally is something that the other companies in our study do not have. If, for instance, ABB needs an engineer to build a power plant in a jungle somewhere, the position will be filled from within the ranks, regardless of the cultural training background of the, otherwise, most suitable engineer. At ABB, a cultural training program would have to precede the assignment. At the STC however, the person with the highest qualities for the job, professional and cultural, will be hired to do the job, be it from within or externally. Locally, people who are employed all have a connection to Sweden or the Swedish culture such as Swedish nationals living in the country, perhaps married to a national, or nationals with a background of studying or working on Sweden.

· At the STC offices around the world, the majority of the employees are Swedish and/or have strong connections to the Swedish culture. At the Chicago STC office for instance, there are ten persons, of whom eight are Swedish nationals. This makes for a significantly less arduous situation regarding cultural

114 Ilar, Lars, Telephone Interview, Personnel Director, The Swedish Trade Council, 98-11-12.115 Ibid.

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difficulties at the workplace for the employees at the STC when compared to the other companies in our study. Again, with the example of the engineer at ABB sent to a jungle to build a power plant, perhaps after having worked in Sweden all his life, it is not hard to realize the differences in stress levels, due to e g cultural differences, of the employees in the two scenarios. The situation is doubtless less straining for the person on the STC assignment

· The majority of the Swedish Trade Council’s offices are located in countries with a western culture, namely in Europe and North America, where the cultural differences are kept to minimum. ABB, for instance, might face greater cultural variations being a global company supplying business solutions around the world, which makes it harder to adjust.

5.4.4.2 The Trailing Spouse and the Expatriate Family

We have already mentioned that no preparatory programs for the STC expatriates are provided by the organization before going abroad. There are thus no training available for the trailing family members either. The extent of the STC’s family policy is a monetary contribution for spouse and child support while abroad. The extent of the STC’s family policy is a monetary contribution for spouse and child support while abroad, along with the necessary visa processing and house hunting, done at the host country affiliate. Schooling and other aspects are handled by the expatriates themselves. A mentor at each affiliate is appointed, but with the primary task to assist the expatriate in his work, not to help the trailing family members.

5.4.4.3 Evaluation Programs

Since there are no cultural training programs, (in the sense that is relevant for the purpose of this paper at the Swedish Trade Council), there are no evaluation programs either. No statistics are available to judge the efficiency of the organizations’ members regarding international assignments. According to Lars Ilar, however, there have been no reported expatriate failures in the time that he has been in charge of personnel policy, which has been for 10 years. Since the operations of the organization have worked well in the past, there has been no need to change the procedures. By tradition and experience, the STC’s mode of operations regarding this issue have remained as they are today; hiring, internally or externally, the most suitable person, professionally and culturally, for the assignment116.

5.5 An Employee Perspective on Expatriation and Repatriation at Electrolux117

So far in our study, we have accounted for information acquired through talking to people in charge of sending and receiving expatriates in each organization. We felt, however, that it was necessary to meet with employees who had been abroad at one of these organizations in order to gain information from their perspective. The results

116 Ilar, Lars, Telephone Interview, Personnel Director, The Swedish Trade Council, 98-11-12.117 Repatriated Employees at Electrolux, Interview, 98-12-18.

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and findings of five one-hour meetings with repatriated Electrolux staff, in the form of a discussion, is presented in this section. (We realize that only five interviews offer a scarce material for proper statistical analysis, but due to time shortage, we could not extend the number of interviews. We believe, however, that the information gathered still is relevant from the point of view that we wanted to examine the individual experience). This discussion revolved around the preparation of each employee before going abroad, the support given by the organization while abroad, preparations made before returning home, and the current post-repatriation situation of the employee.

It should be noted that, at the time of the interviews, all five employees had been in Sweden for less than a year after having returned from abroad, why we considered them still to have up-to-date information and impressions of their expatriation experience. The group was made up of one female and four male employees, one of the male expatriates having brought a trailing family, consisting of a wife and two children, on the IA. The employees interviewed had been in a variety of different countries; Latvia, Vietnam, Singapore, Thailand, Italy, Germany, Hungary, India, the USA and Denmark. The shortest consecutive time-period away among the employees was one year, and the longest time-period was nine years.

Another important fact is that all of these interviewees had been sent on their respective foreign assignment before January 1, 1998, when the new relocation program at Electrolux, which is examined in this thesis, was implemented. They were therefore not offered the same amount of preparations and training by the company as the expatriates on location starting from the year 1998 and forward.

The first observation that we made was that the recruitment of all the interviewees had been made in a very ad hoc and haphazard way. Even if there would have been an elaborate program of cross-cultural training at the time, there would not have been time to enforce it before the expatriates’ departure. In our research process, we have found this situation to be common in all the companies of our study: realizing the need for a person to be on location to work on a project or similar, without having enough time for proper preparations before departure. Unfortunately, there is little one can do to prevent this less than ideal situation from occurring: one can only hope that the experience of the person chosen to go abroad is enough to make him cope with the situation at hand. This fact could, however, account for the negative image of the company’s handling of these particular expatriation situations that we received from the majority of the repatriated employees that we interviewed.

Another source of disappointment was the support provided by Electrolux while the employees were abroad. A general consent of a lack of interest in the expatriate’s work situation and overall return preparations by the organization, was to be found in all the interviewed employees. This failure to provide the necessary support and follow-up by Electrolux has already been pointed out in a previous thesis written at Stockholm University118. We can only hope that Electrolux embraced this critique and that of its employees in order to avoid further disappointment in the current expatriates. We believe, however, that the chances of the expatriates currently abroad to be more positive towards Electrolux’s relocation policies is greater, since the

118Andersson, Maria, Petra Johansson. Förberedelse av personal inför utlandstjänstgöring –en casestudie av Electrolux, 1996.

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organization’s relocation program is more elaborate at the present than at the time for the IAs of the employees that we have interviewed.

Unfortunately, only one of the interviewed employees had a family at the time of the IA, which gave us little feedback on this important issue of how trailing family members perceive the expatriation situation. Our findings, however, supported what the literature examined earlier in this thesis argues, namely that the situation for the trailing family members is harder than for the employee himself. For the children, the new environment, with language- and cultural difficulties, as well as losing old friends was the hardest part. Our interviewee said, however, that after six months, this no longer was a problem: the children spoke better English than the parents and had gotten new friends without much difficulty. Regarding the spouse, who had held a career in Sweden before departing, the main problem was the allocation of the family income. In Sweden, both spouses had had access to a joint household account, but had each also been able to put aside a certain amount of money of their own. On the IA, there was only one source of income which they both had to share, which apparently took some time getting used to for both the expatriate and the spouse. The expatriate also realized, and sympathized with, the dilemma of the spouse to be dependent on the expatriate for money in their particular situation.

The greatest dissimilarities among the interviewed employees were to be found in the satisfaction with the current work situation at Electrolux, which pertains to the repatriation process. Our impression is that three out of the five employees were satisfied or very satisfied with their current position and work assignment at Electrolux. One of the respondents was fairly satisfied and one was very unsatisfied regarding this matter. The reason for these differences in opinion lies, according to us, in two factors: the way of preparing for the repatriation by the company and the degree of pro-active arrangements for the repatriation on the part of the employees.

These two factors are to a high extent interconnected: the degree of active search for post-expatriation assignments within the company depends on the individual opinion of the degree to which the company is viewed as responsible for, capable of and interested in providing the expatriate with a future work assignment in the organization. As mentioned earlier, the expatriates interviewed were all negative to the way that support, follow-up and return preparations had been handled by Electrolux. The expatriate who displayed the greatest amount of satisfaction with the current work situation had actively, and a year before the termination of the international assignment, begun hunting for a new job in the organization. Our impression is that the person least satisfied had merely returned after the IA waiting to receive a position corresponding to his experience from abroad with the organization. A job, below his abilities, had been created for him upon arrival, which was the root of his discontent.

An observation on our part is therefor that it appeared as if the degree of success of the entire expatriation process lies to a high extent, at least in the Electrolux organization previously to 1998, in the personal characteristics of the person himself. The most positive before, during and after experience, was found in self confident and self relying persons who actively took steps to promote themselves and to improve their own situation. They did not wait for the company to take care of them, but took the initiative themselves. A conclusion to be drawn from this finding, is

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therefor that certain characteristics in a person, such as those mentioned above, are important for the general outcome of the international assignment. It could be argued however, that the sending organization should take better care of their employees abroad, and when it comes to the situation of the expatriation policies and procedures of Electrolux before 1998, we agree. It should also be noted that, in the end, it is up to the individual to make the most of the situation, be it at home or abroad, and that not only Electrolux, but the other organizations in our study as well, emphasize the need for the individual expatriate to pro-actively seek solutions to improve his situation. The organization should provide the necessary means and prerequisites as well as act as an aid in the expatriate’s efforts in this process. This issue is important since a former expatriate who is unsatisfied with the repatriation situation could threaten to leave the organization, and thereby cost the company the loss of important transfer knowledge, achieved from the international assignment.

As a final comment, we can conclude that there has been an unsatisfactory handling of foreign personnel at Electrolux prior to 1998 according to the employees. Examples of this are the discontent of the expatriates regarding the preparations prior to departure, support and follow-up by the company while abroad, return preparations and in some cases even the handling of the current post-expatriation work situation in the organization. The company itself is partly to blame, since the company has failed to provide the means for a successful expatriation process in the aspects mentioned above. After having interviewed these persons we believe, however, that part of the blame also is to be found in some of the employees in that they did not take it upon themselves to ensure that their situation was the best possible. The persons with a ”go-getter” personality were the ones with the most positive description of their experience, which leads us to believe that certain characteristics make for a better adjustment to an unfamiliar situation.

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6. Analysis and ComparisonIn this chapter we will analyze the findings from our empirical research and compare them to the theories and previous research studies, in order to reach results of our own regarding procedures and value of the concepts of cross-cultural training programs, expatriation and repatriation.

6.1 Training Programs in the Four Companies- Analysis and Comparison

We will now structure our gathered company specific information in a table in order to compare the organized policies and procedures. This is done in order to simplify the following discussion regarding the similarities and differences between Electrolux, Ericsson, ABB and the STC. As we discussed before, the STC does not have a preparation program similar to the others, but rather employs and recruits persons with local culture experience or knowledge that are unlikely to experience cultural difficulties in the country in question. We have presented the STC as a reference organization to the others in this thesis and their international assignment policy as an example of an alternative approach to those of the other companies. Due to their differing approach, the STC will not be accounted for in this table of comparison in the way that the other companies are.

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Electrolux ABB Ericsson STC

Pre-departure

· Cross-cultural training program Yes

Yes Yes No

· Length of pre-departure training*

2 Days 1 Day 2 Days -

· Form of pre-departure training

Individual Individual Seminar -

· Content of expatriation program

Þ Language training

Þ Area studies program

Þ Pre-visit




Þ Culture assim.


-

· Post expatriation career planning

No No No -

· Evaluation program Yes Yes Yes -

While abroad

· Mentor* No No No No

· Spouse Funding Yes Yes Yes Yes

· Continued cultural training program

Yes No Yes No

· Continued language training

Yes Yes Yes Yes

· Evaluation program Yes No Yes No

· Content of repatriation Information None Information None

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preparation folder folderComing Home

· Evaluation program Yes No No No

· Debriefing Yes No No1 No

· Re-employment guarantee

Yes Yes Yes Yes

· Knowledge transfer** Debriefing Shared experiences

with IA staff

Meeting with future expatriates

None

Figure 16 Comparison of the Four Companies

* The word mentor is here used in a specific sense, meaning an individual that is assigned to an expatriate in order to assist help with general problems, be a role model for the expatriate and someone to talk to et c. However, the companies all have research coordinators that handles some of these issues, but mostly in the initial stage.** With the word knowledge transfer we mean the transfer of cultural knowledge, as well as that of experiences concerning international assignments.

1 Ericsson does in a sense use debriefing, by letting the former expatriate meet with new assignees as a reference person.

Our gathered experience regarding expatriation training is that the importance of these programs are growing, or in other words, the companies are more willing to put in more effort in preparing their expatriates. The company with the most experience is Ericsson, which not only has the largest number of expatriates but also has implemented cross-cultural training programs for the longest time. In fact, we would argue that Ericsson is a benchmark for other companies interested in expatriation preparation. However, as far as we can tell, the new Electrolux relocation program is an even more extensive and ambitious policy than that of Ericsson. This was one of the reasons for which we became interested in Electrolux to begin with. But, the policy is not yet meeting all of its objectives, mainly because of the time-consuming procedure to implement it, as well as the lack of time on the part of the expatriate for participating. So, we would claim that the best policy and practice in use today would be that of Ericsson.

Especially ABB’s and Electrolux’s programs are interesting from the standpoint that they are individually adjusted and take the perspective of the employee in consideration. It is our opinion that cross-cultural training is difficult to provide to larger groups of people at the same time. Cultural differences are problem areas that have subjective characteristics, and therefore there is a certain value in adjusting the

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program to each individual, which can be time-consuming and expensive. This is especially true if the numbers of expatriates rise to the level found at Ericsson. We believe that there is a value to be attained if the training and/or difficulties of expatriation could be discussed in a one-to-one session. But, we believe the cost for this should always be weighted against the number of expatriates that can be offered these programs. It is better, in our opinion, that a greater number receive some preparation, then that a few receive a lot. However, it is of great importance to treat the expatriate and the family as special and as important to the company, in order to provide them with a better platform for coping with the stress that can be experienced when on an international assignment.

The general fact that the companies are not using the repatriated employees more in the preparations of future expatriates was a bit surprising to us. We believe that the expatriate has experiences that are useful to the company, at least to future expatriates. The company that has come furthest in using repatriated employees for this purpose, is Ericsson, that arranges a meeting between repatriates and future expatriates. This can be a cheap way of not doing the same mistakes over again. The extra effort on the part of Ericsson of preparing the expatriate by arranging a meeting with former expatriates is in our opinion worthwhile. This will entail the achievement of what we have chosen to call knowledge transfer in the table. By this we mean that the experiences gathered on how to handle international assignments successfully are being transferred back to the company and future expatriates.

6.2 Cross-Cultural Training Programs -Necessity or Contemporary Trend119

In this section, we would like to examine the importance and relevance of cross-cultural training programs and other preparations of the employee before sending him or her abroad, based on information received from the interviews conducted. Are training programs really necessary or merely a flash in the pan, a short lifetime trend of little substance that will soon come to pass?

Based on the information gathered, we would have to conclude that individual preparatory programs of the kind that we have described in this thesis are important for the success of international assignments. We believe, however, that the key term in this issue is individual. We feel that, in order to increase the value and decrease the cost of these programs, more efficient screening of what the employee actually needs is essential. The needs of one employee in this issue might not be the same as the needs of another. It is important that the persons responsible for cross-cultural training realize this at an early stage in the preparation process, so that these costly preparations can be cut down to essentials. We feel that the organizational dimension also is important for the extent to which the preparation program is implemented. Variables like the organizational structure, areas of operations, amount of resources, e g money, time and knowledge, need to be reviewed for the company itself before deciding which approach to take to cross-cultural training programs. If the company is more of a manufacturing company, like ABB, where the individual’s knowledge is linked to a specific and perhaps unique project, the prospective expatriate might need

119 Personnel Directors, International Assignment Managers, Electrolux, ABB, Ericsson, The STC, Björn Ström, Interviews, 1998.

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extensive education in cultural differences before going abroad. The candidate in a knowledge intense organization like the STC perhaps needs less training in these matters, since a higher degree of cross-cultural contacts might already constitute a natural part of the job description.

Regarding the individual’s need of cross-cultural training, we have constructed this diagram, reflecting the need and hence value of training programs and its correlation to previous cross-cultural experience:Figure 17 The Relationship Between Value/Necessity of Cross-Cultural training Programs and Previous Cross-Cultural Experience

The value and necessity of cross-cultural training programs decrease as experience in dealing with different cultures increase. This is illustrated by the curve in the diagram. The curve levels out into a horizontal line at a certain degree of cultural experience, individual to each person, reflecting the need for certain basic training and preparation. This could be in the form of language training, housing arrangements, pension-, tax- and insurance processing et c. The expatriate is dependent on these factors to come from the company.

To illustrate, the example of the engineer at ABB, mentioned earlier in the theory chapter, going into the jungle to set up a power plant after having worked in Sweden most of his career, probably would be placed to the far left, high on the curve, in this diagram. With little or no previous experience of cultural differences, a cross-cultural training program probably would be very valuable to that individual as well as necessary for the successful fulfillment of the assignment. An individual working at the other extreme, at the STC, would probably be placed further to the right, lower on the curve, in the diagram. A higher degree of previous cross-cultural experience, due to the fact that the STC recruits persons with this quality, entails a lesser need for additional training.

In our research, we came across a study that tried various hypotheses regarding expatriation, expatriation training and repatriation120. One of these hypotheses examined whether previous expatriate experience will lead the participants of cross-cultural training programs to see the training as less useful. The findings were that no differences, regarding the usefulness of these programs, could be found in the responses between the respondents with and those without previous experience. This would mean that our diagram is inaccurate. However, in our opinion, the authors contradict themselves later on in their study by saying that the usefulness depends on in which cultural environment the previous experience has been acquired, which would mean that our diagram, at least partly, is correct. In any case, we believe that the previous experience will facilitate future adaptation regardless of cultural environment. If a routine in adapting, to any culture, can be acquired and facilitated through cross-cultural training programs, which also is their aim, the future value of these programs will thus decrease with previous experience. This would support our opinion that our diagram is accurate.

Regarding whether or not the increase in number, and rigor of, cross-cultural and other training programs among companies today is a trend, we feel that this, in fact, is

120 Brewster, Chris, Juana Pickard. Evaluating Expatriate Training, pp. 18-35. 1994.

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the case. We do not believe, however, that this trend is one of no substance, or that it will vanish soon. Rather, companies have realized the importance of having well-prepared employees working abroad, and continue to do so, which would explain the steady increase in rigor of such programs. From our research, we have gathered that companies are presently coming to terms with expatriation training programs and that one now must concentrate on the repatriation process to complete the circle. Anderzén’s study is among the pioneer works of its kind, which shows that, not until now, there are hard fact figures to accurately and statistically form a base for understanding this dilemma. Therefor, we believe that the progress in the entire expatriation process will continue, and this for some time, mainly focusing on the repatriation and post-expatriation process.

In this section we have given our opinion regarding the necessity of cross-cultural training programs. We have concluded that they in fact are necessary, but that the degree of necessity and value varies depending on individual and organizational factors. We also believe that the development of preparation programs will continue, mainly in the area of repatriation.

6.3 Cross-Cultural Training Programs -A Value Added Approach

In this section we will examine whether a value can be attributed to the expatriation training programs, using the references in our theory chapter as well as the training programs in the study example companies.

From a HRM perspective the terms training and development are better understood as being linked, such that training is seen as both a part of and a precondition for development. 121 Multi-skilled workers like expatriates are valuable organizational assets who cannot easily be replaced. The connection between training and development must be regarded as highly interactive, each facilitating the other, in what may be thought of as a dialectical relationship. It is thus important, for the organization as well as for the individual, that the employees receive training, in order for the latter to develop, and for the organization to benefit from the new, through this training, acquired knowledge of its members.

In our purpose we set out to examine whether a value can be attributed to training programs, and if so, how this value could be measured. In our research, we have found that employees who have partaken in a cross-cultural training program of some kind, seem to think that this has helped them in their adaptation to and understanding of their new cultural environment. We have earlier argued that the more successful the adaptation, the greater the potential is of a more successfully performed assignment. There is apparently a value to be found in such programs, both for the organization and for the individual. Regarding how to measure this value, however, we came to realize that this is harder than what we initially thought. We feel that we are unable to adequately measure the value of such programs in the terms of monetary gains. In fact, we are not sure that this can even be done: how can one measure something that does not yield a gain? Cross-cultural training programs only cost

121 Goss, David, Principles of Human Resource Management, 1996, p.62.

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money, they do not generate profits. In our research, we have not come across anyone that has tried to take this approach either. What can be done, and which is one way to do this, is to try to measure the value in terms of costs. The cost of the programs, and their alternative cost in the aspects of expatriation failures such as aborted assignments, unrealized returns and profits of the IA, delays of the project due to the expatriate returning home earlier than planned, training of another expatriate to fill the position et c, if the cross-cultural programs have not been successfully implemented or implemented at all, can be examined. We have thus created a schematic model of how these costs could be compared and evaluated:Cost of Training Programs Alternative Costs of Training Programs

Figure 18 Comparison of the Expatriation Related Costs

In order to determine which costs are the greatest, we have assigned weights to the different categories, illustrated in the following diagram:

Figure 19 Evaluation of the Expatriation Related Costs

From these models, one can see the importance of adequate cross-cultural training: the costs are greater for the expatriation failure variables. In light of this, it should be argued that there is a value to be derived, in the form of costs, from cross-cultural training programs. It should be noted however, that we come to this conclusion on the basis of several premises. First of all, the training programs need to be adequate for preparing the employee for the IA, in order to avoid expatriation failure or one ends up carrying all the costs mentioned above. Second, this model does not apply to organizations such as the STC, since they do not implement training programs at all but instead rely on their externally recruited expatriates to have acquired the relevant skills elsewhere.

Another way of ascribing value to cross-cultural training programs is to address the issue of immaterial values. We have, earlier in this section, mentioned the personal development that training, in any form, brings to an individual. If the organization can retain that person within the organization, a clear gain is to be found, derived from the training program. The difficulty then lies in ascribing a monetary value to these gains. We believe that this is a challenge that lies beyond our competence. These gains can, however, be described in terms of human capital, which are presented as follows:

Figure 20 Gains in Human Capital through Expatriation

To summarize, we believe that there is a value to be found in cross-cultural training programs, both for the individual and for the organization as a whole. We feel that this section has clearly shown this. We also hope that this section has presented the difficulties that we feel lie in accounting for how to measure this value in a traditional monetary sense. A comparison of the various costs involved is, in our opinion, the only way to accomplish this. The purpose of this analysis is partly to show that a new way of thinking when evaluating cross-cultural training programs might be necessary

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in order to realize all the advantages and disadvantages in this kind of programs. Although a somewhat abstract concept, the relevance of human capital in this context should not be underestimated, but taken into consideration by the personnel directors when evaluating and drawing guidelines for expatriation training in the future.

6.4 Expatriate vs. Local Employee – an Analysis and Comparison

In the theory chapter we mentioned the reasons for and procedures of selecting and recruiting an expatriate. This took place in the Expatriation section. In the Expatriate Failure section, we mentioned the costs of preparing and training employees for international assignments, as well as the estimated costs for expatriate failures. It is clear that the sending abroad of an employee is a costly affair, with all its implications. Is it not more economic to hire a local employee to do the job? In terms of money, and as it pertains to training, living expenditures and potential expatriation failure, it probably is. Why do companies choose to send in expatriates then? From the reasoning above, it is apparent that it is not of economic reasons. Which these reasons are is what we will try to find out in this section.

In the Expatriation section we listed Ström et al.’s reasons for why an employee from the mother company in the home country is selected for work duty abroad. (See below). We also briefly mentioned what we thought might be the reasons for doing so. We argued that an expatriate is selected because of his knowledge of the mother company, its corporate culture and the national culture of the country in which the mother company operates, which could be said to be the common denominator in at least five of the seven listed reasons. This fact appears thus to be more important to the sending organization than the cost of training and supporting the expatriate abroad. Why is it so? One main reason could be that multinational organizations need to have a strong corporate culture in order to become successful worldwide. This culture should be the same regardless of in which country it is situated. One way of assuring the corporate culture is to have representatives on location, contributing to reinforcing the mother company’s objectives through the stipulated procedures. Another main reason, as we see it, could be the need for the individual specific knowledge and professional skills that the home company knows the expatriate candidate to have, but doubts the other candidates, the local employees, to have. This is probably more common in and pertaining to more project- and profession skill specific organizations, such as ABB, in comparison to general skill organizations such as the STC.

Reasons for why expatriates are used instead of local employees:

· Someone who knows the mother company well is needed in the country of operations.

· It is easier to communicate with someone from the same culture, misunderstandings are fewer that way.

· The person who is to perform the assignment must know and be well acquainted with the cultural spirit and -environment of the company.

· The mother company wants to acquire an overview and control of operations.

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· Well trained personnel is lacking in the country in question.· The international assignment is part of the employees’ development within the

organization (career planning). The company aims to create an international way of thinking.

· One ”knows” the expatriate, which reduces the risk of potential failures.

Let us leave this reasoning for a moment and compare the advantages and disadvantages of each candidate, the expatriate and the local employee, in order to analyze the basis for the decision of who to assign to a position outside of the home country. The table below is made up of what we feel to be key aspects, encountered in our research, and merely reflects our opinion of the pro’s and con’s of each candidate in this matter. However, we believe these aspects to be relevant, and this comparison should serve as an aid in understanding the various aspects of the decision making regarding this issue. Comments on each aspect in the table will be given below.

Expatriate

Con

Con

Con

Pro

Pro

Pro

Pro

Cost of training (administrative)

Cost of living while abroad

Risk of EF due to national cultural differences

Risk of EF due to corporate cultural differences

Knowledge of home company and -country culture

Chance of accurate execution of objectives as set up by the mother company

Individual, project and profession specific knowledge

Local Employee

Pro

Pro

Pro

Con

Con

Con

Con

Figure 21 Comparison of Expatriates and Local Employees

The cost of training is, as argued several times earlier, high in the case of the expatriate. No cultural training is needed for a local employee.

Cost of living while abroad. This aspect is also in favor of the local employee, since the foreign service contract of the expatriate contains more fringe benefits, free trips home and other arrangements, which cost more for the home country.

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The risk of expatriation failure due to national cultural differences is naturally higher for the expatriate, since he is the one experiencing the cultural differences.

The following four aspects, the risk of EF due to corporate cultural differences, knowledge of home company and -country culture, chance of accurate execution of objectives as set up by the mother company, and individual project or profession specific knowledge, are on the other hand, more negative on the part of the local employee than on the expatriate. This is where the discussion earlier in this chapter comes in. If the local employee is not familiar with the procedures and modes of operations stipulated by the mother company, if he does not fit in the company’s way of acting, or if he does not have the preliminary knowledge necessary, perhaps the desired outcome of the assignment will not present itself.

As we mentioned in section 4.2.1 Cultural Learning, Hoecklin argued that in order for companies to gain an advantage from cultural differences, board of directors need to become more international. We believe, from our research, that not only the board of directors, but all personnel in key positions, should be more international. The intercultural diversity in an organization is something that is becoming more and more relevant and common in the business community today. The example of converging markets in the European Union further underlines this fact. In light of this, and of the costs that an expatriate entails, perhaps the local employee would be more valuable to the organization and therefore be considered the better option. We believe, however, the skills specific to the employee to be of such importance that they outweigh the monetary benefit of the local employee. If an expatriation program could be so designed, that it absorbs the additional experience acquired by the expatriate upon return, this would compensate for the loss of intercultural diversity in the organization.

To summarize, we believe that the reasons for sending an expatriate abroad on an international assignment instead of hiring a local employee, are the amount of control for the mother company regarding the performance of the individual, the completion of the task according to stipulated objectives and procedures, the knowledge of the individual and the desired outcome of the IA. We hope to have shown that, although costly, the expatriate is the safer alternative in terms of reaching the desired outcome. If this is done, the organization will be compensated for the cost of the expatriate.

6.5 Expatriation Failure Rates -an Analysis and Revision

In the theory chapter, the questions of expatriation failure and -rates were brought up, in the terms of definitions and the frequency in occurrence of this phenomenon. This section further elaborates on these issues, with reference to the case study example companies.

The companies in our study could not provide us with any statistics regarding expatriation failures, apparently since the issue is so complex and that the measurements would involve too many variables. This does not come as a surprise,

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given the comments on expatriation failure rates by e g Forster in our theory chapter. Throughout our research, we have not come across many sources who have even tried to measure the EFRs in companies, professional groups, countries et c, apart from what is mentioned in Lane and DiStefano. (See section 4.1.5 Expatriation Failure). Our impression is that there are few expatriation failures occurring in the four organizations. Lars Ilar at the STC, as mentioned earlier, even stated that there have been no expatriation failures to his knowledge in the ten years that he has been a Personnel Director.

Defining and determining what constitutes an EF, as we have already seen, is a difficult issue however, and this might be what lies behind the seemingly low EFRs in the companies. Perhaps the focus should be not on the ”hard facts”, but on the ”soft issues” such as individual work satisfaction and overall well being of the expatriate and the family, during all three stages of the expatriation process. In that case, the statistics, if there were any, would look different. From our research, we have come to realize that personal issues are more determining factors of prevention or occurrence of EFs than what we initially thought. As Ingrid Anderzén pointed out in our interview with her, employees need to feel that there is someone in the home- or in the host country, who is interested in their situation, in order for them to feel better and thereby also perform better. This is currently lacking in the four organizations. According to the persons responsible for personnel at the STC, however, no such needs on the part of the employees have been noted. Even if this is the case, in the other three organizations we feel this need to be present but overlooked: at Electrolux, we got this impression not only from the persons responsible for IAs, but also from the repatriated employees.

As a final comment, we believe to have found few expatriation failures in our study example companies, but that this might be the result of the companies not defining EFs properly. Dissatisfaction with the post-expatriation work situation might, in our opinion, also be considered part of the concept of expatriation failure, and as such, higher EFRs than the personnel managers interviewed have stated there to be, might very well be the case. The personal dimension seems to be neglected, either due to lacking resources in time, or to an incapacity to see this dimension on the part of the personnel directors. We believe that much can be gained for the individual employees and for the organization as a whole if this were to be further looked in to.

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7. Conclusion and RecommendationsIn this chapter we will summarize the findings and results of our research and give recommendations, general and organization-specific, regarding the value of cross-cultural training programs and their implementation.

7.1 External Recruiting vs. Internal Recruiting for International Assignments

As we have mentioned earlier, the STC and the other three organizations in our study have different ways of hiring personnel for international assignments. The STC recruits mostly externally and Electrolux, ABB and Ericsson mostly internally. This section gives a final comment on this issue.

In the empirical research, we found that the STC mainly recruits externally, which is a possibility that the other organizations do not have to the same degree. We believe that this is a distinct difference between the STC and the other companies. The other three companies; Electrolux, Ericsson and ABB, all have the technical working environment in common, probably creating certain recruitment requirements people in general can not meet. The STC, however, may have requirements that are more general, why they more frequently recruit externally than the others.

Another aspect is the question of control and the preservation of the corporate culture. It is clear to us that the international assignees are used as ambassadors for the mother company. Therefore, using an internally recruited employee who knows the corporate culture is desirable. The STC, in our opinion, differs from the other three in this aspect as well, since it is a government agency, it is probably not as dependent on a homogeneous corporate culture as the others. Since it is a government agency, a majority of the employees are Swedish citizens, which results in a homogeneous group culture with the Swedish national culture as a sort of corporate culture. The purpose of the STC is to promote Swedish companies abroad which, in our opinion, does not require the corporate culture to be as distinguished as with the other organizations. This fact would entail that the employees do not necessarily need to come from within the organization, but could be recruited externally.

To conclude, we believe that the need for and value of the recruitment, be it internally or externally, is dependent on the organization type, structure and aims. No one way can be generally suggested, but one has to analyze each case separately. We feel however, that the positive performance of the international assignees at STC might provide the other organizations with the incentive to explore the opportunity of recruiting externally for international assignments.

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7.2 The Value of Using Expatriates vs. Local Employees

In the analysis chapter, we compared the advantages and disadvantages of using an expatriate and hiring a local employee for the international assignment. This section contains a final comment on and a value added approach to this issue.

In our analysis, we found several positive as well as negative aspects for both of these options. Expatriate training and recruiting is more costly than using a local employee, but a higher degree of control by the home company is thereby achieved.

The general trend, at least in the region of the countries of the European Union (EU), is to make the labor market more homogeneous for both citizens and companies. This fact should make the locally employed individual the more interesting alternative, considering the legal restraints that no longer are in effect.

The cost for sending an employee abroad has been estimated to lie between (SEK) 1 million and (SEK) 1,5 million a year. It might seem hard to justify such a cost if other alternatives were feasible, but if the mother company can achieve a higher degree of control of the foreign operation in terms of performance and probability of desired outcome, this option would outweigh the monetary disadvantages of the alternative. A greater value then lies in choosing the expatriate.

What option to use is up the organization, but our recommendation is that a well structured and successfully implemented expatriation training program, although costly, is to prefer in most cases. If there is no inherent value due to the organizational type and mode of operations of the organization in using an expatriate, or if the assignment does not require specific professional skills originating from in-house professional experience, then the local employee option is more advantageous. The majority of multinational organizations, in our opinion however, would probably benefit from using expatriates instead of local employees in the long run.

7.3 The Necessity of Cross-Cultural Training Programs

We will now discuss whether these training programs really are a necessity or just a trend that will eventually disappear.

The experience from our studies is that a person can be better or worse prepared for international assignment based upon certain individual characteristics. We conclude from our empirical research that people that are curious, self-going, independent and secure about themselves perform better than individuals that lack those characteristics. A good platform, as well, can be previous international experience, not only in business. The experience can be achieved through traveling, interacting with people of other nationalities et c. Is it necessary then to train people using programs like the ones that we have examined? Our research has shown that these programs serve their purpose even for people with vast international experience. The use of these programs is probably more than just a trend, since, according to us, they add value to the organization. These programs should, however, be individually

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adapted to expatriates, taking factors such as former international experiences into consideration. Otherwise, there is the risk of the programs decreasing in efficiency.

We also believe that despite the general globalization, these programs will become more important in the future. The cultures of countries or regions do not know of geographic boundaries or borders, but exist in the people who feel that they share a common history and culture. One could argue that these cultural expressions, and with them the necessity of cross-cultural training programs, become even greater along with the increase in globalization.

7.4 The Value of Cross-Cultural Training Programs

We will now discuss the earlier reasoning, in the analysis and empirical research chapters, concerning the value aspect of the cross-cultural training programs.

We showed and discussed the difficulties in trying to value these programs in monetary terms. We found it hard to measure this value in terms of monetary gains, but instead tried to measure it in terms of its costs. The costs of expatriation failure are higher than the costs for cross-cultural training. Considering the risk of expatriation failure, according to us, cross-cultural training should be implemented. It is hard to prove, however, that the training reduces this risk of the costs, mentioned earlier, in all cases, since the reason for why these additional costs occur is hard to determine.In section 6.3 Cross-Cultural Training Programs –A Value Added Approach, we discussed this dilemma, and from this, we draw the conclusion that the chances for and possibilities of cross-cultural training to reduce the risk of expatriation failure, and thereby these additional costs, are great enough for us to recommend these programs to be implemented. We argue that the costs for these programs are insignificant compared to the costs of an expatriation failure.

We can also conclude that there is a value in the aspect of the increased personal development that can be derived from a successfully implemented training leading to a successful international assignment for the expatriate. If the company can retain this transfer knowledge, there is a value for the company in the increase in human capital, which will then follow. This is a value that is hard to measure, but should not be overseen.

7.5 Comments on Improvements of Expatriation Training Programs

In this section we would like to present a concluding comment on the negative critique on the part of the repatriated staff members, accounted for in the Empirical Research section, regarding the structure and implementation of cross-cultural training programs, as well as to present our own reflections regarding this matter. It has become clear to us, after having talked to Ingrid Anderzén and the persons responsible for personnel in the various organizations, that there have been, and are

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still occurring, improvements and changes in the way that cross-cultural training programs are structured and implemented. One obvious example of this is the Electrolux relocation program, which has radically been changed since the beginning of 1998. It is still too early to draw any conclusions regarding the improvement in the expatriate and trailing family situation, but judging from the organization’s objectives, the response should be positive. It seems that all the organizations in our study which offer these kinds of programs, all are constantly evaluating and developing their programs, albeit to different degrees and in various directions.

We can also conclude that these organizations seem to know their weaknesses in terms of what is lacking in these programs, which is positive. What we feel to be negative, however, is that the same companies do not seem to have a structured plan for enforcing the improvements regarding these weaknesses. In the Empirical Research section, we showed that Electrolux, ABB, and Ericsson all have different preparatory programs with, each in its own way, satisfactory objectives for dealing successfully with new cultural environments. They also seem to recognize the importance of a more thorough follow-up and support service when the expatriate and family are abroad. The personnel managers we have talked to agree that evaluations, in the form of surveys, telephone calls or even e-mail messages on a regular basis, serving to find out how their employees are doing and to the preparations of the post-expatriation work situation, provide a good means of support and feedback for the expatriate as well as for the company. None of them, however, has designed a plan of action for implementing this. The same situation is found in the post-expatriation stage debriefing and hence the seizing of valuable transfer knowledge from the repatriated employee in the companies. The STC, regarding this matter however, believe that their organization does not need to implement such services, due to the cultural and professional skills and proficiency of the staff. Nor are there any plans to alter this policy in the future.

In general, what was lacking in the handling of expatriates in these companies was, in our opinion, the taking in consideration of the soft, human resource issues. What is curious, is that such simple things as a telephone call every so and so many months, or a Christmas greeting card sent directly to the home of the expatriate instead of to the office, could mean so much to the foreign contract employee, but that the cost of this for the organization is negligible122. Implementing these routines and procedures will, in our opinion, enhance the well being of the expatriate and thus also that person’s performance. Neglecting these human resource issues, however, the value of the cross-cultural training and the entire expatriation process, is diminished.

7. 5 Comments on Expatriation Failure

In the theory and analysis chapters, the question was raised of how to define expatriation failures, alternative ways of doing so were presented, and it was argued that these might not be as frequently occurring as was believed to be the case. This section presents our concluding comments on these issues.

122Anderzén, Ingrid, Research Associate, Doctoral Student, Interview, 1998.

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In our research, we have found indications of the aspects regarding EFs in the theory chapter to be true. Forster raised the question of how to define expatriation failure, as well as argued that they are more scarce than what the business community and the experts have previously believed. We believe that this is a complex issue, which can not be fully accounted for through numbers and statistics. The companies in our study do not have any statistical material concerning the failures of expatriates on international assignments: in some cases, their guess seems to be as good as ours. Neither do they seem to fully realize how to measure EFRs. No or little attention is directed towards the pre- and post-repatriation aspects of the international assignments. From what we can gather, there are, and have been, few EFs in these particular organizations: the STC even claimed to have had none in the last ten years. This might very well be the case, but we feel that perhaps a new way of looking at EFRs could be in order, and maybe even necessary, to understand the whole concept of expatriation failure. By doing so, perhaps the expatriation failure rates will change. We do not claim to know how to accurately measure this phenomenon, but suggest that a more thorough analysis of the employee’s pre-repatriation preparations and post-expatriation work situation, and satisfaction with it, would bring down the potential of dissatisfaction with the employee. In section 5.5 an Employee Perspective on Expatriation and Repatriation at Electrolux, we discussed this approach and gave a few recommendations on how to implement it. In the end, this could entail less ”brain-drain” and loss of transfer knowledge, through employees leaving an unsatisfactory work situation, as well as increase the knowledge capital of the organization. Realizing that the most important gains are to be found on the personal level would put the situation in a different perspective: the implementation would not be costly, but require more input in terms of time for each expatriate on the part of the personnel director.

Our recommendation is thus for the international assignment managers to focus on the personal involvement in each expatriate in terms of support, follow-up and post-expatriation planning while abroad, as well as on more thorough and structured debriefings, knowledge transfer possibilities and follow-up upon return. As previously mentioned, these actions are not costly, but do entail a more time-consuming agenda for the personnel department, but on the whole this will add value to the organization in terms of increased knowledge capital, decreased brain-drain and decreased loss of transfer knowledge in the organization.

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8. Critical Review In this chapter we will critically examine the material gathered during the research process in terms of reliability, validity and self-criticism.

8.1 Validity

We believe that we have accomplished what we set out to do in our purpose and that we have presented solutions to the problems given in the introductory chapter in a satisfactory manner.

The flaw in our purpose validity might lie in the fact that we have only looked at a handful of expatriates. We realize that a greater number would provide for more accurate and statistically valid results. Our conclusions rely on the case studies of four companies, three of which that are using preparation programs, and a fourth organization that takes an alternative approach regarding expatriation and repatriation. From these case studies, we draw general conclusions regarding the concept of expatriation and repatriation. We believe these conclusions, drawn from the case studies, to be quite accurate, but as always in the case of generalizations, deviations might occur. The reader should be aware of this when he evaluates the conclusions.

The flaw in the validity of our solutions to the problems might lie in the fact that we have made what we believe to be necessary limitations to the problem area in order to reach these conclusions. We believe that such limitations are needed in order to be able to conduct any research. By doing so, however, we might have missed important factors. We believe however, that we have covered most of the relevant aspects, and that the solutions to the problems in fact are accurate.

8.2 Reliability

In our research, we could not find sources or references criticizing the theories that we have presented. Although it might be hard to criticize these particular theories, we realize that this could be a flaw in our reliability.

We feel that we did not receive the answers to all of the questions put to the various interviewees, and that, since the interviews were held in the form of discussions, difficulties in compiling the information arose. Therefore, it was difficult to make certain that all the information from the interviews found its way into the thesis.

When it comes to the issue of our objectivity, we would like to stress the fact that, when regarding the case studies, we have only examined them in the perspective of the expatriate and of the company. Therefore, there has only been one or two views presented to the situation at hand. We would like the reader to be aware of this.

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8.3 Self-criticism & Reflections

Always when writing a thesis, the amount of information and the relevance of it can be questioned. We realize that we only have interviewed one personnel director from each company, but, on the other hand, these persons were the most relevant ones for the purpose of our thesis, holding strategic information. There are additional persons that we would have liked to interview, such as expatriates from other companies, a greater number of expatriates at Electrolux, or of expatriates with families. With the limited time at our disposal, however, we would like to think that we have made a sufficient effort in this area.

When we interviewed all the company representatives about the issue of value regarding these programs, we soon realized that this was a difficult issue due to its abstract nature. The respondents had not considered the issue of value regarding training programs, which made the information hard to retrieve. Therefore, we might not have been able to retrieve certain pieces of information that could have shed light on other aspects pertaining to our problem area.

The objective of our study was not to present yet another thesis that discusses or presents expatriation preparatory programs based on their content. We wanted to examine how they add value to the individual participants, and to the organization. It is up to the scrutiny of the reader of this thesis to assess if this was truly accomplished.

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9. Future Research AreasIn this chapter we will suggest areas of further studies and issues for future research that have surfaced during the course of writing this thesis.

Finally, we would like to present different areas of the re- and expatriation problems where further studies could be conducted. These are subjects that we came across during the course of our research and the writing of this thesis, and that we found interesting. We hope that these topics can serve as an inspiration to others for future theses.

· How more open economic regions like the European Union affect the special privileges that the expatriate community obtains today.

· How the introduction of information technology further can enhance the control and contact with future expatriates and their families while abroad.

· Whether cross-cultural problems will diminish due to the overall growing internationalization in the world community, or if the opposite will occur.

· If the growing number of mergers will affect the overall numbers of expatriates.· If Swedish companies have a greater number of expatriates than other

international companies or Groups.· Differences in applications of cross-cultural training programs between

manufacturing- and knowledge intense organizations.

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10. References

Literature

Adler, Nancy J, International Dimensions of Organizational Behavior, Kent Publishing Company, 1986.

Albaum Gerald, Jesper Strandskov, Edwin Duerr, Laurence Dowd. International Marketing and Export Management, 2nd ed. Addison-Wesley, 1994.

Anderzén, Ingrid, The Internationalization of Work, -Psychosocial Predictors of Adjustment to Foreign Assignments, Karolinska Institutet, Stockholm 1998.

Arbnor, Ingeman, Björn Berke. Företagsekonomisk Metodlära, Studentlitteratur, Lund, 1994.

Borg, Malcolm, International Transfers of Managers in Multinational Corporations, University of Uppsala, 1987.

Czinkota Michael R, Ilkka A Ronkainen, Michael H Moffet. International Business, 4 th ed. Dryden Press, 1996.

Goss, David, Principles of Human Resource Management, Rutledge, London, 1996. Hoecklin, Lisa, Managing Cultural Differences, - Strategies for Competitive Advantage, Addison-Wesley, 1995.

Hofstede, Geert, Organisationer och Kulturer, -om Interkulturell Förståelse, Studentlitteratur, 1991.

Hofstede, Geert, Culture’s Consequences, Sage Publications, 1984 Lane, Henry W, Joseph J DiStefano. International Management Behavior, 2nd ed. PWS-Kent Publishing Company, Boston MA, 1992.

Lekvall, Per, Claes Wahlbin. Information för Marknadsföringsbeslut, IHM Förlag AB, Göteborg, 1993.

Lundahl, Ulf, Per Hugo Skärvad. Utredningsmetodik för Samhällsvetare och Ekonomer, Studentlitteratur, Lund, 1992.

Patel, Runa, Bo Davidson. Forskningsmetodikens Grunder 2nd Etd, Studentlitteratur, Lund, 1994.

Ström, Björn, Rolf Berggren, Björn Carle, Roland Polgren. Utlandstjänst, Industrilitteratur, 1995.

Torbiörn, Ingemar, Att Leva Utomlands, SN&S, 1976.

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Tung, Rosalie, The New Expatriates, Ballinger Publishing Company, 1988.

Articles

Anderzén, Ingrid, Stress and Sensitization in Children: A Controlled Longitudinal Study of Children Exposed to International Relocation, Journal of Psychosomatic Research, 43:3, Elsvier Science Inc, 1997.

Brewster, Chris, Juana Pickard. Evaluating Expatriate Training, International Studies of Management and Organization, 24:3, pp. 18-35, UMI Company, 1994.

Forster, Nick, ”The persistent myth of high expatriate failure rates”: a reappraisal, The International Journal of Human Resource Management, 8:4, pp. 414-433, GH, 1997.

Forster, Nick, Mette Johnsen. Expatriate management policies in UK companies new to the international scene, The International Journal of Human Resource Management, 7:1, pp. 177-205, Routledge, 1996.

Hammer, Mitchell R, William Hart, Randall Rogan. Can you go home again? An analysis of the repatriation of corporate managers and spouses, Management International Review, 38:1, pp. 67-86, Gabler, 1998.

Harvey, Michael, Dual career couples during international relocation: The trailing spouse, The International Journal of Human Resource Management, 9:2, pp. 309-331, Routledge, 1998.

Other Literature

Andersson, Maria, Petra Johansson. Förberedelse av personal inför utlandstjänstgöring –en casestudie av Electrolux, Stockholms Universitet, School of Business, ht-96, 1996.

Annual Report, ABB Group and Parent Companies 1997.

Annual Report, Electrolux, 1997.

Annual Report, Ericsson, 1997.

Lindgren, Christer, Metodkompendium, Företagsekomiska Institutionen, Stockholm, 1994.

Review of Operations, Organizational Annual Statement, The Swedish Trade Council, 1997.

Vetenskapsteori för Ekonomer, Stockholm University 1998.

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Interviews

Anderzén, Ingrid, Doctor, Research Associate, Karolinska Institutet, Department of Neuroscience, Division of Psychosocial Factors and Health.

Göthlinder, Karin, International Assignment Manager, Ericsson.

Ilar, Lars, Personnel Directors, The Swedish Trade Council.

Majdalani, Margareta, International Assignment Manager, ABB.

Ström, Björn, Corporate Resources Group.

Wahlström, Johan, International Assignment Manager, Electrolux.

Repatriated Staff Members, Electrolux.

11. Appendix

Electrolux Relocation Program

Electrolux Repatriate Questionnaire

Electrolux Expatriation Policy (GEP 96)

Questionnaire, Electrolux, ABB, Ericsson

Questionnaire, Electrolux’ Repatriated Staff Members

Questionnaire Björn Ström

Questionnaire Ingrid Anderzén

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Documents

D-uppsats - s u exemplar.doc · Web view1.2 Background 3. 1.3 Purpose 3. 1.4 Problem Area 3. 1.5 Method 4. 1.6 Limitations 5. 1.7 Disposition 5. 1.8 Keywords 6. 2 RESEARCH METHODOLOGY