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Cross-cultural training: its effects on the satisfaction and turnover of expatriate employees.

As the global operations of a multinational corporation surge, the need for expatriates grows, too. An expatriate, also referred to as an "expat," is a person assigned to work in a foreign country for a certain period of time. Hiring people from another country can aid in completing strategically critical tasks as these people provide and transfer knowledge, skills, and expertise. They might also help companies establish operations internationally and succeed in competitive markets. The role of expats makes it vital to study the factors that increase their overall success level.

In addition to a good salary, the expatriation package can include attractive benefits, such as relocation assistance, a housing allowance, and school tuition for their children. Some expats may accept an assignment abroad simply as a chance for career development. A standardized approach to international assignments is not effective (Collings et al., 2007), but all companies strive for the same result: more employee motivation and retention and less employee dissatisfaction and turnover.

The transfer process can be an emotionally difficult phase for the expat since it involves separation from friends and family and adjusting to an unfamiliar culture and work environment. The focal concerns of expatriates relate to their uncertainties and anxieties (Jassawalla et al., 2004). Employees face many obstacles in the host country such as culture shock, homesickness, and isolation. These challenges can cause them to feel dissatisfied, to underperform, or to quit the assignment all together.

Because of the cross-cultural hurdles that every expatriate confronts, it is imperative for them to understand the factors that influence their adjustment to the new culture. Toward this end, companies seek ways to help their foreign employees adjust, hoping to create a win-win situation through the expatriation process. They may provide training for expats about the new culture and working environment to build cultural awareness and speed the transition process. Training may be pre-departure and post-arrival. Cross-cultural training, according to Ko and Yang (2011), has a positive effect on the individual's expatriation experience. Studying the impact of training on expatriate satisfaction, performance outcomes, and turnover help determine if training is truly essential.

Literature Review

The past three decades have experienced a substantial increase in the number of firms that have, in a way or another, internationalized some of their operations (Hutchings and Kuhlmann, 2010). Hiring the right people with the right skills in the right places is the key to success in global operations (Deresky, 2003). Human resources techniques are considered the base for attaining continual competitive progress (Mockler, 2001). Sparrow and Brewster (2006) state, "It is important for multinational companies to practice effective human resource management practices, because employee quality is the only sustainable source of competitive advantage on the global market." There is a growing challenge to hire expatriates on foreign assignments to accomplish strategically perilous tasks (Chew, 2004). According to Dowling et al. (2008), expatriates can serve as a means of transferring valuable knowledge, providing technical expertise, coordinating and even controlling foreign operations. Even though many multinational companies depend on expatriates for improved operations, the success of these employees has yet to be thoroughly tested (Collings et al., 2007).

In the literature of expatriate management, "expatriate failure" has been a topic of particular interest to several researchers. The term covers a large range of delineations. According to Naumann (1992), it refers to expatriate transfer and turnover, but it can also signify premature return or returning home before the expat's period of employment in a foreign country expires (Harzing, 2002). Expatriate failure also includes underperformance during the assignment (Bruning and McCaughey, 2005) and denotes failure to learn new things and adapt to the new milieu (Lee, 2007).

Both monetary and psychological expenses are involved in expatriate failure. Collings et al. (2007) claim that the cost of sending employees to a foreign country is very high, reaching up to five times the basic salary of the expatriate (Bennett et al., 2000). Therefore, failure is expensive in terms of direct expatriate expenditures as well as the negative effects of a failed overseas project (Harris and Brewster, 1999). The expense of a failed expatriate project can range between $250,000 and $1,000,000 (Vogel et al., 2008). However, according to Terence (1995), when it comes to the failure of expatriates, the costs go beyond these expenses. There is a forfeiture of the expatriate's self-confidence and self-worth, and the loss of prestige among subordinates.

To preclude failure, adjusting the expatriate to the host country is indispensable. Takeuchi et al. (2002) express cross-cultural adaptation as "the degree of comfort, familiarity and ease that an individual feels toward a new cultural environment." Cross-cultural adjustment embodies a significant area of scholarly inquiry due to the large effect it has on both the expatriate and the corporation. Lack of adaptation has been recognized as the chief root of various expatriate anxiety reactions (Pires et al., 2006). According to Che Rose et al. (2010), not every maladjusted expatriate leaves his or her job prematurely. Nevertheless, roughly half of these maladjusted expatriates who stay perform below par (Caligiuri, 1997). Expats experience apprehension and stress when they feel out of control or when they are not sure how to behave or cannot predict how other individuals will act toward them. The necessity of adaptation for success goes back to Rhinesmith's 1970 theory that projected three patterns for dealing with an unfamiliar environment: flight, fight, and adaptation. Flight is when a person rejects everything around him, withdrawing from any chance of interacting with anyone new. Fight occurs when the person tries to fight the new environment, wanting to change its culture instead of trying to accept and understand it. Adaptation occurs when the person tries to understand, acclimatize, and fit into the new atmosphere.

According to Mendenhall et al. (1995), expatriates should be sufficiently flexible and willing to adapt to the new culture's norms to survive the cultural shock of living in a foreign country. A cultural shock occurs when expatriates are not aware of the social rules that distinguish between acceptable and unacceptable behavior at the workplace and in society. Lack of understanding of a different culture may also result in unsuitable usage of language. Moreover, expatriates are usually not conversant with the details regarding the local labor market, the local education system, and other local practices of the host country (Hutchings, 2002). When expats are incapable of swiftly adapting to another country and its culture, they lose their effectiveness.

Lately, attention has been directed toward training programs as a way to enhance expat effectiveness (Tharenou et al., 2007). According to Morris and Robie (2001), a cross-cultural training context leads to better adaptation and eventually amplifies expats' performance and decreases turnover. Bennett et al. (2000) connotes that the most common form of cross-cultural training is bringing together the expatriates in a classroom for a few weeks after their arrival in the country to learn proper behavior in the different cultural setting. Yavas and Bodur (1999) recommend pre-departure training programs for the expatriates, while Waxin and Panaccio (2005) believe that the kind of cross-cultural training received matters. In sum, cross-cultural training helps expatriates develop the feeling of being comfortable residing and working in a different nation, augmenting their cross-cultural adjustment (Caligiuri et al., 2005). Nonetheless, the effectiveness of training expatriates is still questioned by some researchers (Litlrell and Salas, 2005; Selmer, 2005).

Min et al. (2013) point out that the efficacy of cross-cultural training for an expatriate's adaptation to the host country has been debated for over two decades. Several researchers posit that training may not be useful to the adjustment process. Hu et al. (2002) and Puck et al. (2008) affirm that there is no momentous variance in the extent of adaptation between expatriates who receive cross-cultural training and those who do not.

According to Koteswari and Bhattacharya (2007), the expatriate's family also experiences cultural shock and anxiety. Children will attend a new school and have to make new friends. This unfamiliarity is a foremost cause of stress for the children. Moreover, several researchers proclaim that the spouse goes through the most extreme changes, facing a different language, different shopping habits, a delayed career, and a lack of family and friends to rely on (Avril and Magnini, 2007). According to Harvey (1985), the expatriate employees usually adjust quicker than the spouses since they become familiar with the work environment and are less exposed to the culture outside their jobs. The spouses are expected to take care of settling in at the new place. They may feel helpless and exasperated as they try to find out where to buy food and other necessities and attempt to locate good doctors and other important service providers. Furthermore, Harvey and Wiese (1998) report that tension is greater in nontraditional families of dual-career partners. The spouse has to leave her job to accompany her husband to the destination country. The adjustment of the expatriates' families to the new culture can be hard since they may feel isolated by their inability to fit into the new environment. Hence, adapting to a foreign culture can be a lengthy and excruciating process (Selmer and Leung, 2003). In addition, when the family or the spouse goes through a grim time endeavoring to adapt, pressure on the expatriate intensifies. The expat will suffer a lack of support in his household. Avril and Magnini (2007) confirm that the family and the spouse affect the expatriate's efficacy at the job, yet only a few corporations have been attentive to this issue and most do not typically encompass families in the assortment process. Partners are time and again overlooked due to the paucity of research on the matter. Bauer and Taylor (2001) agree that experiential research proof is limited on multicultural adaptation of expatriate families.

Adaptation of the expatriate's family to the culture can be an immense problem and may lead to the failure of a corporation's project (Koteswari and Bhattacharya, 2007). Tung (1981) believes that the lack of family support is accountable for the assignment failure. In fact, some studies find that family adaptation challenges to the new culture are one of the fundamental reasons for terminating an assignment prematurely (Black et al., 1991; Stroh et al., 2005). Stroh et al. (2005) assert that "many executives have no idea that the expatriate's spouse or family is a legitimate consideration in preparing the expatriate for the experience abroad." Therefore, when it comes to foreign projects, most human resources departments plan and develop practices tailored to the needs of the expatriate, excluding the family. Most firms that offer training for expatriates do not offer it to their partners (Waxin and Panaccio, 2005). Hogan and Goodson (1990) and Stroh et al. (2005) also highlight the significance of the partner's involvement in expatriate training. According to Black et al. (1991), the wise firm conducts a study of the partner's probability to adjust overseas and provides the proper training for him or her.

Since the corporation seeks added value for its operations, it wants the expatriate and family to thrive in the new environment (Harzing and Christensen, 2004). The human resources strategy should include appropriate compensation packages when sending employees on international assignments (Simeon and Fujiu, 2000). According to Bonsche (2006), research on expatriate compensation is quite rare. A few studies indicate that an expat's readiness to approve a project abroad is contingent, mainly, but not solely, on financial factors (Jokinen et al., 2008). Compensation elements such as housing, children education, and health services in the foreign nation affect the employee's choice as well. These factors, however, may be outside the company's control (Sims and Schraeder, 2005). That is why, in order to persuade an employee to take a project in what is considered a relatively 'difficult' nation, higher pay ought to be presented (Baruch, 2004). Harzing (2001) argues that the expatriation process should not be viewed in a one-size-fits-all way.

The firm's ability to offer employees effective inducements to accept a job and to motivate them is generally central to creating a positive and rewarding working environment (Adler, 2008; Brooks, 2006). If the expatriate is suitably compensated and trained, affecting his or her preliminary motivation will be easier, leading to better performance and retention and lower turnover. A study by Griffet et al. (2000) shows that one of the most crucial components for lower turnover is job satisfaction. The expat will experience higher job satisfaction when supported by the corporation, which can be provided by cross-cultural training. This kind of organizational support has been undertaken to have a major influence on the expatriate's adaptation, which massively affects job satisfaction (Ghafoor and Khan, 2011).

Hypotheses Formulated

Since the main purpose of the study is to show the importance of cultural training for expatriate employees, the following hypotheses are formulated to test the impact of cross-cultural training, in its different forms, on the adaptation, satisfaction, performance, and project-turnover of expatriates.

Hypothesis 1: Cross-cultural training results in lower expatriate project-turnover.

Hypothesis 2: Overall adaptation differ among expatriates who receive dissimilar types of cross-cultural training.

Hypothesis 3: Outcomes of the assignment differs among expatriates who received and those who did not receive cross-cultural training.

Hypothesis 4: Cross-cultural training increases the likelihood of the take another international assignment.

Hypothesis 5: Cross-cultural training results in higher overall satisfaction of the expatriation process.

Hypothesis 5a: Cross-cultural training results in a stronger positive association with work at host location.

Hypothesis 5b: Cross-cultural training will motivate the expat to complete the assignment to the end.

Methodology

Research design

The results of the quantitative study were measured numerically and analyzed using specialized statistical software packages. Moreover, the paper is both descriptive and explanatory, but explanation is emphasized since the research establishes a causal relationship between cultural training and the satisfaction, retention, and performance of the expatriate employee. The research is cross-sectional since it involved a one-time interaction with the sample.

Sample and questionnaire

The target population of the research was employees who have worked abroad on foreign assignments. A questionnaire was distributed to expatriates from India, England, Finland, Mexico, and Lebanon, who were hired for assignments by 10 different companies. Of the 200 questionnaires distributed via e-mail, 96 were returned, yielding a response rate of 48%.

A one-page questionnaire was created, which included 15 fixed-alternative questions of both a choice determinant and Likert scale type. The first four questions addressed demographics, including gender, age category, level of education, and marital status. Then a filter question asked about the type of cross-cultural training, if any, that the expats had received. If the expats had received training, they answered questions on how the training helped them cope at the host location. The next set of questions asked all the participants about the level of positive association felt toward the host location. They also asked whether the outcomes of the assignment benefited both the expat and the company. Questions about taking another assignment and the motivation to complete the assignment were also included. The final question asked the expats if they had, in fact, completed their assignment to the end.

Statistical Analysis Results and discussion

The collected data revealed that the majority of the survey participants were male, and only 25% were female. Half of the respondents were between the ages of 25 and 34, 24% were between 18 and 24, and 26% fell into the age category of 35 years and above. Pertaining to the level of education, 50% were holders of a Bachelor's degree and 49% had a Masters or a Doctorate degree. Half of the participants were single, 44.8% were married, and 5.2% were either divorced or widowed.

Results showed that when the expatriates were asked if they had received any kind of cross-cultural training once they were hired for the foreign assignment, 28.1% reported that they had not. The remaining had received various kinds. The majority (36.5%) received training after arriving at their host location, making this type of training dominant and supporting Bennet et al.'s assertion (2000). One-fifth received training prior to their departure, and only 14.6% received cross-cultural training both pre- and post-arrival at the host location.

To test Hypothesis 1, which states that cross-cultural training results in lower expatriate project-turnover, a cross tabulation was conducted between having received training or not, and completing the assignment. Of the expatriates who had received cross-cultural training, 95.7% completed their assignment and 4.3% did not. Of those who had not received any training, 77.8% completed their assignment till the end and 22.2% decided to quit. This variability is statistically significant (chi-square value of 7.298 and a P-value of 0.007), and provides strong evidence that cross-cultural training leads to lower expat project-turnover. This finding accords with Morris and Robie's (2001) view.

To test whether adaptation differs among expatriates who receive dissimilar types of cross-cultural training (Hypothesis 2), various statistical techniques were employed using the related elements of adaptation. First, helpfulness in managing the expat's expectations for host location is considered. The results reveal that when both pre- and post-arrival cross-cultural training were present, the expat's expectations for the host location (92.9%) were better managed than when only pre-departure training (80%) or only post-arrival training (82.9%) was offered. However, the variability in these groups was not significantly different (chi-square value of 7.971 and a P-value of 0.240). Second, the ease of the expats settling-in process was considered. The results showed that when both pre- and post-arrival cross-cultural training were offered, the settling-in process was eased more (92.8%) than when only pre-departure training (65%) or only post-arrival training (68.6%) was offered. The variability in these groups was almost significantly different, at a level of 0.05 (chi-square value of 15.036 and a P-value of 0.058). Third, the ease of communicating with colleagues at the host location was considered. When both pre- and post-arrival cross-cultural training were present, the expat's ease of communicating with co-workers (92.9%) was a little higher than when only pre-departure training (75%) or only post-arrival training (74.3%) was offered. The variability in these groups was not significantly different (chi-square value of 7.435 and a P-value of 0.282.

When considering all of these factors, an overall adaptation score was used to conduct the ANOVA test that determines if adaptation differs among expatriates who receive dissimilar types of cross-cultural training. Results display that the variability in these groups was significantly different (chi-square value of 3.424 and a P-value of 0.038). This difference is shown in the mean scores of the types of training received. The average score of receiving both pre- and post-training (4.5179) is greater than the average score of receiving only pre-departure training (3.95) and receiving only post-arrival training (4.0143). Thus, the test presents evidence that supports Hypothesis 2 that the overall adaptation to host location differs among expatriates who receive dissimilar types of cross-cultural training. This agrees with Waxin and Panaccio's (2005) finding that the type of cross-cultural training matters.

Next, the related elements of performance were used to test whether the performance of the assignment outcomes differs among expatriates who receive and those who did not receive cross-cultural training (Hypothesis 3). First, personally benefiting from the outcomes of the project was considered. Results reveal that 92.7% of the expats who had received some form of cross-cultural training felt that they benefited from the project's outcomes, and only 48.1% of the expats who did not receive training felt that they benefited from the assignment. The variability in these two groups was significantly different (chi-square value of 28.203 and a P-value of 0.000). This provides solid evidence that cross-cultural training leads to higher personal benefit from the outcomes of the assignment. This result corresponds to Ko and Yang's (2011) finding. Second, benefits from the outcomes of the assignment for the company were considered. Results show that 94.2% of the expats who had received some form of cross-cultural training felt that the company benefited from the project's outcomes, and 59.2% of the expats that did not receive training felt that the company benefited from the assignment. The variability in these two groups is significantly different (chi-square value of 26.738 and a P-value of 0.000). This provides overwhelming evidence that cross-cultural training leads to greater benefit for the company. Moreover, to test Hypothesis 4, which states that cross-cultural training increases the likelihood of taking another expatriate assignment, a cross tabulation was conducted between having received training or not, and the consideration of taking another expatriate assignment. Of the expats who had received cross-cultural training, 73.9% would consider taking another project, while only 22.2% of the expats who did not receive any kind of cross-cultural training would consider accepting another expatriate assignment. The variability in these two groups is significantly different (chi-square value of 29.036 and a P-value of 0.000). This provides overwhelming evidence that cross-cultural training increases the likelihood of taking another expatriate assignment.

The respective elements of satisfaction were considered to determine whether cross-cultural training results in higher overall satisfaction with the expatriation process (Hypothesis 5). A cross tabulation was conducted between having received training or not and the feeling of a positive association with work in the host country. The results show that the respondents who had received any kind of cross-cultural training felt a stronger positive association with their workplace (81.2%) than did those who had not received any cross-cultural training (22.2%). The variability in these two groups is significantly different (chi-square value of 36.878 and a P-value of 0.000). This presents strong evidence that cross-cultural training leads to the feeling of a stronger positive association with work at the host location (Hypothesis 5a). Moreover, to test Hypothesis 5b, which states that receiving cross-cultural training will motivate the expat to complete the assignment to the end, a cross tabulation was conducted between having received training or not and feeling motivated to finish the assignment. The results disclosed that most of the expats who had received training felt motivated to finish their assignment (79.7%) and only 22.2% of those who did not receive training felt motivated to complete the project. The variability in these two groups is significantly different (chi-square value of 39.387 and a P-value of 0.000). This provides strong evidence that cross-cultural training leads to the motivation of expatriates to finish their assignments.

Furthermore, when considering the above factors tested, the ANOVA test was conducted to examine if the overall satisfaction differs among expatriates who receive dissimilar types of cross-cultural training. Results disclosed that the variability in these groups was significantly different (chi-square value of 3.178 and a P-value of 0.048). This difference is shown in the mean scores of the types of training received. The average score of receiving both pre- and post-training (4.5179) is greater than the average score of receiving only pre-departure training (3.975) and receiving only post-arrival training (4.1643). This provides evidence that the overall satisfaction differs among expatriates who receive dissimilar types of cross-cultural training.

All the elements that measure satisfaction were combined to come up with an overall satisfaction score. When the ANOVA test was conducted to examine cross-cultural training in terms of satisfaction, results revealed that the mean of the expats who received some kind of training (4.1812) was greater than the mean of those who did not receive any cross-cultural training (2.8426). The variability in these two groups is significantly different (F-value of 48.872 and a P-value of 0.000). This provides strong evidence that cross-cultural training leads to greater expatriate satisfaction.

Finally, all the elements that measure performance were combined, and the ANOVA test was conducted to examine the existence of cross-cultural training in terms of performance. Results show that the mean of the expats who received some kind of training (4.4062) is greater than the mean of those who did not receive any cross-cultural training (3.2348). The variability in these two groups is significantly different (F-value of 43.128 and a P-value of 0.000). This provides strong evidence that cross-cultural training leads to better performance.

Among those who completed the assignment, the average satisfaction score (4.00) was significantly higher than those who did not (average satisfaction score of 1.89). Similarly, among those who completed the assignment, the average performance score (4.28) was higher compared with those who did not (2.07). This is strong evidence that higher satisfaction and better performance lead to a higher likelihood of completing the assignment.

Conclusion and Recommendations

In today's global market, multinational corporations aspire to keep up with competitors and to grow. They search for the right people who could assist in achieving their goals, whether they reside next door or a thousand miles. However, people hired to work abroad might not always succeed in accomplishing the purpose of their employment, which can negatively affect both the expatriate and the multinational company. The desire to avoid assignment failure is the main reason why some firms choose to offer cross-cultural training in its different forms. One of the findings of this research paper is that cross-cultural training results in lower expat turnover. This study also shows that cultural training leads to higher benefits from the outcomes of an assignment and greater expatriate satisfaction and performance. Another finding reveals that expatriates who had received cross-cultural training were more willing to consider taking another foreign assignment. Moreover, results show that the overall adaptation and satisfaction levels differ among the diverse kinds of cultural training offered.

Despite the relevance of the findings, the study has some limitations. It did not take into consideration the host country itself. Many factors other than training and demographics can affect an expatriate's ability to succeed in a new country, such as the economic or political situation, or even the location and climate of the host country. Additionally, this study did not reflect on the expatriate's country of origin and its cultural effects on the expat and his or her performance. Even though the paper identified the employees who were married, it did not address if their families had accompanied them to the new culture. It did not tackle the issue of the expat's spouse receiving any cultural training. Moreover, this study did not engage in seeking the kinds of compensation packages that might have been offered to the expatriates and could be yet another reason for the satisfaction of the employees in a foreign country. Further research should deal with all these limitations, focusing on the effects of the differences in cultures of the country of origin and the host country. Finally, this quantitative study can be followed up by a qualitative one to reach deeper findings.

Abdul Nasser Kassar, Lebanese American University, Beirut, Lebanon

Amal Rouhana, Lebanese American University, Beirut, Lebanon

Sophie Lythreatis Lebanese American University, Beirut, Lebanon

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Dr. Kassar has published in many peer-reviewed journals and conference proceedings. His research interests include production planning and inventory control, quantitative business analysis, security, abstract algebra, and number theory. Mrs. Rouhana has published in the management field and conducted workshops in seven countries. In addition, she has consulted for organizations and served on Lebanese government examining boards in marketing and management areas. Sophie Lythreatis, a recent MBA graduate and current research assistant, has published in several conference proceedings and international journals.
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Author:Kassar, Abdul Nasser; Rouhana, Amal; Lythreatis, Sophie
Publication:SAM Advanced Management Journal
Article Type:Report
Geographic Code:1USA
Date:Sep 22, 2015
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