International Human Resource Management - Expatriate Success Factors and Failure Factors in Japan - Coursework Example

International Human Resource Management Executive Summary In this paper, discussions are made regarding the success factors as well as the failure factors of expatriates in Japan. The organizations of the host country are highly responsible for the success or failure of an overseas assignment. Among the failure factors includes the improper selection of expatriates, inefficient training provided to the expatriates before sending them to Japan, short length of assignments creating difficulty to adapt in the new culture of Japan, inability of the expatriate to handle large employees in Japan and poor remuneration that discourages the expatriates to improve their work performance. Therefore, for the success of expatriate in Japan, it is necessary for the host country organizations to make proper selection of the expatriate and conduct pre-departure preparation that would help them to adjust easily in the environment of Japan. Moreover, providing sufficient remuneration and maintaining a continuous contact with the host country organization would also contribute to the success of the expatriates in Japan. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Expatriate Failure Factors 5 Adaptability 5 Length of Assignment and Cross Cultural Adjustment 5 Improper selection of the Expatriates 6 Inefficiency of Proper Training 7 Responsibility Overload 8 Expatriate Success Factors 8 Proper Expatriate Selection 8 Pre-Departure Preparation 9 Providing Proper Remunerations 10 Establishing Good Communication with the Host Country 10 Example of Major Success and Failure Factors In Japan 11 Recommendation 11 Conclusion 12 References 13 Introduction An expatriate is an individual who is living in other countries rather than the home country in a temporary or permanent basis generally for work purpose. There are several challenges that may be faced by an expatriate, which includes emotional breakdown due to staying away from friends and family, difficulty in adjusting in the new working environment and culture among others. However, expatriate failure has become one of the most challenging and growing concerns for the multinational companies because of the high failure rates by the expatriates who are sent to foreign countries for any assignment (Pranvera 2012, 70). Studies reveal that expatriate failure all over the world has increased to about 50 percent and therefore involves various financial costs as well as societal costs (Laine 2013, 13). Moreover, the failure of the expatriates also weakens the moral and confidence of the employees. However, in this paper discussion will be made regarding the expatriate success factors as well as the failure factors in Japan (Develioğlu 1998, 4). There are various reasons behind the success or failure of expatriates in Japan among which includes the cultural adjustments, language skills, interaction ability with the local people, hardship of foreign services and even the length of a particular assignment. Expatriate failure therefore refers to the underachievement of the assignment and thus it is the failure of the organization in managing an efficient human resource management (Edstrom and Jervfors 2007, 53). As in majority of the cases the failure factors are highly related with the cultural adjustments, therefore it is necessary for the multinational companies to focus mainly in providing training regarding cultural awareness to employees that would help them to adjust in the environments of not only Japan but also others. Moreover, it would also be beneficial for the organizations to replace their ethnocentric policy with some effective policies and focus on the cultural orientation of Japan, which can lead to the success of the expatriates (Theenanondh, 2005, 16). Expatriate Failure Factors Adaptability According to various studies, it has been found that one of the major reasons behind the failure of expatriates is the inability of the individual to adapt the social as well as the physical environment of the foreign country. The adaptation problems would negatively affect the job performance of the expatriate. However, the differences in the living habits as well as value system are considered as the major causes of the adaptation problems in Japan and the inability of the expatriate to communicate with people of Japan make the situation worse. Moreover, among other major reasons behind the failure of expatriates in Japan includes the differences in organizational as well as managerial principles of Japan and other foreign countries. Every country possesses their own organizational policy and thereby going to other foreign countries may create difficulty to understand the organizational policy being implemented. This creates difficulty for the expatriates to cope up with that aspects followed in Japan, which ultimately leads to the expatriate failure (Przytuła 2009, 127). Length of Assignment and Cross Cultural Adjustment Length of assignment as well as cross-cultural adjustments is also considered as the major factors that lead to the failure of expatriates in Japan. According to surveys, it has been found that on an average the length of a particular assignment in Japan is about 4.5 years, whereas in the United States the average length is less than three years. Therefore, if the assignments are of short duration it would become difficult for the expatriates to adapt in the new environment of Japan and thereby the job performance is hampered. When the expatriates would be starting new assignments in Japan, it is also necessary for the families of the expatriates to adapt in the new environment of the country. However, in general the adaptation is categorized into four stages, which are divided in to a period of six months (Wagner 2012, 7). The first phase involve the period of newly arrival to the foreign country in which the environment and the culture of the foreign country would seem thrilling for the expatriate. The next phase is the disillusionment phase that generally takes place after two months. During this phase, the newness of the environment and culture of the foreign country diminishes and the expatriate confronts with various inconveniences such as difficulty in communication. However, according to this scenario, the expatriates would face difficulty in communication skills as the language of Japan is quite different and therefore it would create hindrances to communicate with the people out there. The third phase is regarded as the ‘cultural shock phase’ which lasts for two more months and during this phase the expatriates have the willingness to go back to their own country. However, the final or the last phase is known as ‘positive adjustment phase’ during which the expatriate learns how to adapt in the foreign environment and positive feelings about the assignment in this stage. Therefore, during all these stages, the expatriate would not provide satisfactory job performance and productivity because of the time taken by the expatriate to adapt in the environment of Japan (Christensen & et.al. 2004, 5). Improper selection of the Expatriates Another major factor that leads to the failure of the expatriates in Japan is considered as the improper selection of the expatriates by the organization of the host country. Irrespective of their managerial and technical skills that are inherently necessary for the expatriates to work in the competing environment of Japan, focus should also be given on their interpersonal skills that will help them in cross-cultural adjustment. Moreover, it is also necessary to consider the motivation and enthusiasm of employees towards the international assignment because the employees with high motivation would consider the assignment as an opportunity in their carrier development and therefore try to overcome various cross-cultural hindrances (Wagner 2012, 6). It is also necessary to understand the feelings of the family members of the expatriate because in majority of the cases it is found that the resistance from their spouse creates a great challenge for them (Gupta and et. al. 2012, 23). However, when an organization would decide to send their employees as expatriates to Japan, various types of direct as well as indirect costs are incurred by the organization. Thus, failure of the expatriates results in huge loss for the foreign organization. Among direct costs includes the salary of the expatriate, training costs, reallocation as well as travelling expenses. Whereas the indirect costs includes loss of potential markets and customers of Japan, damaging relationships with customers, replacement cost and even damaging good terms with the authorities and government of Japan. Therefore, improper selection of the expatriates would lead to the failure of expatriates in Japan (Chang 1992, 150). Inefficiency of Proper Training Not providing proper training to the expatriates by the organizations is also referred to one of the most important factors that lead to the failure of the expatriates in Japan. Since, the organizational culture and environment of Japan are different from other countries it is the responsibility of the host country organizations to prepare them for cross-cultural adaptability (Wen 1998, 1). Majority of the organizations follow ethnocentric policy in which they refer that their organization is the best. This approach of the organizations often leads to the failure of the expatriates because of the negative perception being created among the expatriates regarding the organizations of other countries (Okpara and Kabongo 2011, 26). Responsibility Overload Responsibility overload is also considered as a major factor that leads to the expatriate failure in Japan. It is a normal fact that the expatriates of foreign countries have to possess a greater responsibility than what they used to have in their home country organizations. Five to ten times more supervision is required from the part of the expatriate than before. Majority of the times it is seen that an expatriate who used to manage 50 employees in the home country, he/she has to manage 200 employees in Japan. Thus, the increase in responsibility to such a great extent creates difficulty for the expatriates to handle the situation efficiently. In addition, there are also certain other challenges including the managing expectations of the managers and clients of Japanese organizations, who do not want to understand that the cultural differences are affecting the performance of employees. All these factors may lead to the expatriate failure in Japan (Vojinić and et. al. 2014, 143). Expatriate Success Factors Proper Expatriate Selection One of the most essential factors for the success of the expatriates is considered as the proper selection of the expatriates. Organizations that highly focuses on the interpersonal skills of the expatriates during their selection in addition to the technical and managing skills contributes to the expatriate success. It is necessary to consider the perception and motivational level of the expatriate going to overseas countries like Japan. According to studies, it has been found that there are four main factors contributing to proper selection of expatriates (Harzing 1995, 463). These factors include personality traits of the expatriate, technical competencies, family situations and environmental variables. However, further studies revealed that for an effective expatriate selection five major factors are necessary to be considered that includes job factor, motivational state, relational dimensions, language skills and family situation. The job factors include the technical, managerial and administrative skills possessed by the expatriate that helps in managing effectively the headquarters of Japan and the host country. Relational dimensions consists of behavioral flexibility, cultural empathy and non- judgementalism and interpersonal skills among others. Motivational state includes the interest in the host countries cultural and overall experience, willingness of the expatriates to adopt new culture and behaviors (Develioğlu 1998, 4). Moreover, the expatriate should have an effective communication skill as well as thorough knowledge of the language of Japan. All these factors would help the management of the organizations in the effective selection of expatriates that would lead to the expatriate success in Japan (Kishori and Kumar 2014, 131). Pre-Departure Preparation After the selection of expatriate, it is necessary for a company to conduct pre-departure preparation in which the expatriates are trained in order to ensure success in the overseas assignment. There are certain major activities necessary to be considered in this phase that includes cross-cultural adjustment, career counseling and training them about the languages of Japan. Making the expatriate and the spouse prepared for cross-cultural acceptability in Japan as well as their career counseling is very important for ensuring success in the overseas assignment. Moreover, training the expatriates by the host country organization regarding the languages would serve beneficial for easy adaptability in environment of Japan. Through surveys, it has been found that about 60 percent of the companies conduct an effective pre-departure preparation that ensures the success of the expatriates (Ko and Yang 2011, 164). Providing Proper Remunerations In Japan, the cost of living is higher in comparison to other countries and thus the expatriates should be provided with sufficient remuneration by their host country organization that would help them to sustain in the country. Moreover, remuneration also acts as an important motivational factor that encourages the expatriates to accomplish their assignment sincerely. The amount of salary and other allowances should be much higher in Japan than that of what he/she used to receive in the host country. Therefore, providing sufficient remunerations to the expatriates in Japan is one of the most important contributing factors for their success (Sims and Schraeder. 2005, 100). Establishing Good Communication with the Host Country There should exist, a continuous and effective communication between the management of the host country and the expatriates staying in Japan that would ensure healthy and productive outcome of the overseas assignment. The expatriates should convey the problems and opportunities that are being faced in Japan related to the assignment based on which the HR personnel in the host country would suggest strategies to overcome them (Gojer 2012, 54). Example of Major Success and Failure Factors In Japan For example, when the expatriates of the United States from Toshiba America came to Japan for any work assignments, they highly faced difficulty because of the cultural differences between the two countries (Rehfeld, 2015). Culture of the United States is highly individualistic where individualism is less in Japan. Moreover, boasting is highly prevalent in the US as success factor but in Japan the culture does not accept boasting. Thus, the expatriates coming from the US face difficulty in adapting to the culture of Japan that leads to the failure. Expatriates belonging from individualistic cultures expect their success on the basis of achievement and merits and they believe on self reliance and egalitarianism that leads to performance based compensations and quick promotions. Whereas in the collectivist culture such as Japan the advancement in the job are based on certain attributes including education, experience and performance. These differences in the cultures of both the countries lead to the failure of the expatriates in Japan. These are the major factors of failure. On the other hand, proper training and understanding of culture leads to the success of the expatriates. For example, MNC’s have people from diversified culture and therefore sending employees with proper training to other countries does not affect the individual as they are well accustomed with the culture. Recommendation However, it is recommended that in order to gain expatriate success in Japan there are certain factors that are necessary to be considered by the host country organizations. The expatriates should be selected after properly analyzing their enthusiasm and motivation of working in Japan. Moreover, the organizations should also consider their interpersonal and social skills, as they have to adjust in the new culture of Japan. It is also recommended to provide sufficient remuneration and incentives to expatriates in order to sustain in the higher cost of living in Japan. Pre departure preparation is most significant with cross-cultural adaptability. Moreover, a continuous communication should be established between the management of the host country organization and the expatriate staying in Japan for greater efficiency. Conclusion Thus, it can be concluded that the success and failure of the expatriate are dependent upon various factors that are to be followed by the host country organizations before sending the expatriate to Japan. Factors that contributes to the expatriate failure in Japan includes, improper selection of expatriates by the host country organizations, inability of the expatriate to adapt in the new culture, inefficiency of proper training, poor remuneration and responsibility overload. For the success of an expatriate, the host country organization plays the most significant role because training the employees regarding the culture, language and environment of Japan would result in taking less time for adapting in the environment of the new country. Moreover, the expatriate is also required to possess a positive mentality to complete the assignment in the new country. 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