The Problem Of Expatriation And Repatriation Management Essay
According to Vance & Paik (2010) as new businesses start to venture beyond domestic countries borders and more international companies increase their international activities; increased global business opportunities present themselves and more foreign assignments arise because businesses overseas need to be handled. This means that new challenges in international business arise. Organizational and individual challenges crops up because expertise is required to be provided to handle these challenges and this can only originate from individuals. What this means is that individuals who are conversant with the parent company operations will have to be posted in foreign countries to work there. The expansion of business to global stage is the vision of every single company and as a result expatriation and repatriation of employees is not a new phenomenon but it has been there and it’s expected to continue. However changes are expected in the future on expatriation of employees due to advances in technology and the costs associated with repatriation an expatriation. Increased use of telecommunication in international assignments, teleconferencing and short-term assignment minimizes expats and helps to reduce the impacts of the international assignments to the employee’s families.
Its becoming recognized that to compete in the global market place effectively managers, executives and other professionals need to develop global competencies, skills and experience beyond that can be offered in the domestic arena. The professionals thus require new knowledge, skills and competencies that are global due global competition being presented in the domestic market in this era that requires fast decision making, data analysis and changes in technology. For this reason companies need expatriate and repatriate professionals to get exposure and experience in their fields so that they can as well be able manage local firms effectively and competitively in the market (Vance& Paik, 2010). Repatriating and expatriating processes in businesses is thus expected to be a common practice in the 21st century. This topic is thus very relevant in the international business as it provide the human resource managers and executives with the knowledge and the challenges they are likely to encounter as they expand their businesses internationally. It provides the theoretical knowledge that can be actualized in the event of business expansion.
While expatriation refers to posting of professionals from the domestic company country to foreign country repatriation is the vice versa that the expatriated staff will have to come back home one day from their international assignment. The two processes can not thus be separated. Research findings from Pricewaterhousecoopers LLP and Crane School of Management suggest that expatriation and repatriation should not be strictly divided in to two separate phases but instead expatriation should be considered the start and repatriation as the completion of the same phase (Vladi, 2008). It’s this combination that motivates companies to retain their staff after repatriation. This is considered important because as the expatriates gain experience from their international assignment they become competitive and the new emerging companies would like to hire them, or in some cases the expats opt to stay in foreign country and take new jobs. It’s thus important for businesses to ensure that once they expatriate they repatriate to avoid losses associated with expatriation and once the staff have experience they leave the company for other preferred jobs in other companies.
Often repatriation is considered simpler exercise than expatriation. However, repatriates often experience problems similar to those encountered in the initial cross cultural entry to foreign environment. This involves readjusting in to the home country environment both at work as well as interacting again with the nationals. Since repatriation is considered relatively easier process very few firms develop definitive transition strategies for their returning managers. This phenomenon presents unanticipated challenges to repatriates and their new families to the extent that repatriation is considered as a reverse or re-entry culture shock. Repatriation is a problem such that it keeps many returning employees from accepting a second overseas assignment. As a result the question that arises is whether repatriation and expatriation has benefits to an individual or not. The logic behind this is that while an employee gains skills abroad he misses developments at home country which are gained by domestic employees. At the same time while repatriated managers struggle to settle back the domestic mangers continue to learn and gain more experience smoothly (Dotson, 2007).
From a cross cultural theory perspective when employers invest in the development of their own human capital by expatriating and repatriating, it means that they reward expats for the international competencies they acquire. Consequently, better job performance is also rewarded with high level jobs and salaries. For instance in the United States scientists who repatriated after the second world war were better paid than those who remained abroad. This is interpreted that employees from international assignment are considered to have developed skills and competencies that are not possessed by the domestic employees or by those who are still abroad for their assignments. Expatriation is thus considered as an on job training since expats are considered more knowledgeable, skilled and competent on the job hence privileges are added to such individuals in terms of perks, allowances or promotions once they are repatriated to the parent country (Baugh & Sullivan, 2009). Regardless of this positive view of competency development and future career advancement expatriates may sometimes get dissatisfied with their job or leave their employers all together especially on repatriation. This may be explained by employer’s failure to look over their employees well while abroad or employees fail to get the promotion they had anticipated on repatriation. Repatriation further presents the employees with culture shock making their re-integration problematic. If the repatriates do not gain what they expected on their return they are likely to leave their firms after short period of time meaning that their expertise doesn’t help the mother company much as expected. For instance after ten years of service as CEO in Kenyan’s leading mobile telephone Company as an expatriate Michael Joseph decide to stay in Kenya rather than return to parent company.
Although expatriation is considered to have positive impacts on career development of an individual some people feel that expatriation can be equated to demotion. A study was done by Derr & Oddou in 1991 on Finnish repatriates on their feelings on career development after repatriation and the responses showed that different feelings on the topic. Some viewed expatriation as promotion while others viewed it as having no impact in their careers development as shown in the table below (Harris & Chris, 1999).
Career impact of the assignment
Table 1.Career impact of the international development expatriate experience among finish repatriates (adopted from Harris & Chris, 1999).
Yadav (2009 observed that a third of the expatriates who return home, leave their organization within one year and nearly half of them leave the organization within two years. This issue is very important because organizations spend a lot of money on developing and sending expatriates and they fail to utilize and learn from the international experience of expatriates. The repatriated employees mainly leave their organizations because of the problems they face once thy return home. These problems include: less personal finances and problems related with adjustment to home environment, for instance on return from an international assignment as principal of a constituent college of St.Pauls university In Nigeria, Professor William Johannes could not take a teaching job in the main campus; instead he opted to go in to private practice as media consultant in Nigeria.
While inducing employees for abroad assignment organization pay huge sums in terms of perks which are withdrawn once such employees are repatriated making them unable to retain the status they were used to when working overseas. In terms of work employees abroad have flexibility and responsibility which are different but when they return home they find changes and sometimes feel that their experience overseas is not needed. At times they find their peers promoted more than them and they regret having gone to work abroad. Re-adjustments at home are also problematic because of different cultures at home and in the foreign country when where the expatriate worked for along time. For instance an expatriate in USA finds it difficult to make queue in banking hall to pay a bill in India something that is not common in the USA (Misra & Yadav, 2009).
Case study of expatriation repatriation process
An American telecommunication multinational (AT&T) organizes an expatriation process where the employees are sent to foreign countries. Before leaving home the expatriates are counseled by psychologists on issues that may arise when on international assignment. For instance the spouses may get jobs and find themselves and their children permanent adapted to that new environment. In addition to this where the expatriates in foreign country are expected to call up professionals to inform them about the new experience. During the assignment the company organizes mentor programmes where the expatriates get connected with colleagues in their home country. The company also organizes periodical visits in the home office where they hang around and hold meetings to discuss their new experience in foreign countries.
The expatriates go through preparation programme for returning home where the psychologist and a human resource representative visit expatriates family and prepare them for the return by helping to update the expatiates resume, planning further career moves and arranging for moving household goods and arranging for schools and housing. After the expatriates returns home seminars are conducted to socialize the repatriates with the new environment in the office. The company also gives bonuses to repatriates who stay in the company six months after their return (Klaff, 2002).
Analysis of the case study in relation to theory
The expatriation repatriation policy of the AT&T Company recognizes that the process of repatriation is equally challenging to expatriation process. The policy doesn’t assume that one is relatively easier than the other. As it’s evidenced in the study employees are adequately psychologically prepared before they are sent on foreign assignment and before they come back home. In fact psychological services are available to them even when they are overseas. This kind of preparation ensures the employees are socially prepared to face the challenges ahead of them. On top of the psychological services offered the company facilitates the socialization process of the employee once they return home for instance through the welcome seminars and the privilege to appoint the person to spend time with in the organization and exchange ideas on what expectations expat had on return (Wilharzing & Van, 2004).
The arrangements made by the company for its expats abroad to provide basic needs such as housing and transport of their belongings makes things easier for the expats financially. The provision of bonuses to repatriates after six months also provides material benefits and ensures that they do not leave the firm abruptly before the company benefits from the experience of such employees. This policy ensures that the expatriates are looked over well by the company and they are likely to be retained in the company even after the repatriation. Having discussed this following discussion will expound on the strategies that can be used to deal with problems associated with repatriation and expatriation (Wilharzing & Van, 2004).
Strategies to solve problems of expatriation and repatriation
In order to solve these problems of expatriation and repatriation organizations should come up with different adjustment strategies in order to absorb the repatriated employees satisfactorily. First organizations should enter in agreements with the employees before sending them abroad. This kind of agreement should specify the period for which they will remain on foreign assignment and the job which they will be getting back home on return (Tucholks et al, 2007). For instance the organization may guarantee the same job or a higher level job on return of expatriates back home.
Secondly the organization may make a higher level executive back home as the sponsor of the expatriate manager. Such a sponsor takes care of the expatriates’ manager home career interests such that on repatriation the sponsor works in the organization to ensure that there is suitable job for the repatriated employee. This helps in ensuring repatriated managers are not frustrated by the new responsibilities assigned to them motivating them to leave the company. The aspirations of the expats in career development are taken in to account even when they are on an international assignment (Tucholks et al. 2007).
The organization may also maintain regular communication with the expatriate managers and keep them aware of the developments at the headquarters. In this case when the expatriates are in the home nation, on leave or for extended periods, then they try to involve themselves in certain short period projects at the headquarters. This eliminates the strange feeling of being are aliens when expat returns after completion of the foreign assignment (Tucholks et. al., 2007).
Fourthly, Van & Wliharzing (2007) recommends that expatriate managers should be provided with opportunities for settling down and working out through the personal difficulties by providing them enough flexibility in the initial period of their job at home. For instance in Monsanto, a US multinational enterprise, the expatriate mangers on returning home meet for three hours at work with colleagues of their choice, and this continues up to three months. The idea is that expatriate manager is able to share his intentional experiences and is also able to adjust easily once again in the organization at home.
Expatriation and repatriation of employees cannot be separated as two different processes, but this is a single process in that when one employee is expatriated there still possibilities of coming back home (Vladi, 2008).It should be noted that this process exist and will continue to be experienced even if changes are expected due to technological advancements. These processes play important role in cross cultural management of the companies especially due the increased competition for business globally. The companies that expatriate its employees should ensure that they are well taken care of when abroad. This way they are satisfied and encouraged to continue to work in the company even after repatriation. This reduces the losses when repatriates leave the company before their experience is utilized. The process of expatriation and repatriation should be made easier by the effort of the organization and those of the individual by ensuring that each of them is ready for it and through psychological, material and social preparation. Though this process has some problems it’s inevitable in the international business and its importance in cross cultural management cannot be overlooked.
The paper has discussed the problems of expatriation and repatriation of employees and suggests the solutions to such problems. In the introduction part the paper emphasize on the importance of this topic in the international business. This shows that the rise of multinational companies and the ambition of all companies to expand international has necessitated for the expatriation of staff to mange businesses overseas. This is as result of companies requiring their employees to gain exposure in international management skills hence increasing their competitiveness both in domestic market and in the foreign n markets.
The theoretical review of the process of repatriation and expatriation has observed that the process of expatriation and repatriation can’t be separated as expatriation is the start of a process and repatriation the end (Tonski, 2009) It has also outlined some of the problems associated with the expatriation repatriation process such as repatriates leaving the mother company once they return home as well as social and psychological problems associated with the process.
The case study of the AT&T expatriation and repatriation policy and its analysis in relation to the theory found that if the needs of expatriates are looked over there is little probability of such expats leaving the company. In addition the paper has looked into the strategies that may be applied to solve the problems of the repatriation and expatriation. Some of these include prior agreements between the expats and the organization before leaving for foreign assignment, preparing of expats for the international assignments and as they prepare for repatriation, providing incentives that enable them to settle down easily in foreign lands and upon return and giving them responsibilities that ensure that the skills gained abroad are required in their new assignments upon their return. If these conditions are not checked expatriates have to leave the company to look for other jobs where such experiences will be utilized. Last but not the least financial privileges and promotions upon return are very important to solve the problems of the repatriates. In conclusion the paper has observed that these processes are in international business to stay and there is need to solve the problems associated with them since they are inevitable in intercultural management of businesses.
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