Michael Harvey

The Selection of Managers for Foreign Assignments:

A Planning Perspective
The selection of managers for international assignments has frequently been based on an inventory of personal characteristics and technical competence of the manager. Unfortunately, many of these managers have not been successful during their expatriation assignments. To more effectively select overseas managers international human resource managers in MNCs must examine their corporate goals, varying pools of potential candidates, and the personal characteristics of each candidate. This paper develops a planning format which identifies policy, strategic and tactical dimensions which can be used in the selection of managers for international assignments.

The escalating demand for managers to relocate overseas is forecasted the foreseeable to continue future. to grow for The shortage

even more critical than in domestic operations. Therefore, what is needed is research on expatriate selection and the development atic selection of managers assignments.6 There have been a number ables identified which should sidered foreign of varibe conof a systemfor foreign

of qualified international managers to expatriate is considered to be one of the most significant constraints on the expansion of multinational rations (MNCs). The failure corporate,

i.e., terminations, returning early to domestic organization or not meeting performance expectations for expatriate managers, exacerbates the already limited number of managers to relocate to foreign assignments. The rate of failure of expatriate managers relocating overseas from United States based MNCs has been estimated to range between X-40 percent. At the same time, other countries, such as European, Asia and Australia have experienced failure rates of their expatriates well be-

when selecting managers for assignments. Several of these re-

variables continue to be considered significant by international human source managers: (1) technical

compe-

tence and past performance; (2) environmental adaptability; (3) select personality traits; (4) spouse/family issues; and (5) motivation/desire to undertake a foreign assignment. There has been considerably less effort by researchers to integrate these variables into a systematic approach to the selection process. Two early efforts in attempting to develop a more comprehensive process of selecting managers from overseas assignments began by classifying issues that needed to be addressed in the selection process. A consolidation of selection elements into categories of performance variables was developed, those being: (1) environmental factors associated with the national environment to which the expatriate was to be assigned; (2) task factors associated which with the specific job and (3) was to be performed;

Michael Harvey is Puterbaugh Chair of American Free Enterprise at the College of Business Administration, University of Oklahoma.

low those of United States based MNCS.~ It has been estimated that the expatriate failures cost from $150,000-$200,000 per manager or nearly $2 billion a year for American corporations.3 International human resource managers and academic researchers attribute a significant portion of the expatriate failure rates to poor selection of candidates for overseas assignments. MNCs like Bristol-Meyers, Squibb, Colgate-Palmolive, Ford Motor Company and other MNCs have come to the conclusion, the selection criteria and process which had been used by them in the past was fundamentally flawed. Windham International, a New York based global relocation management company found in a recent survey that a poor selection process accounted for a large number of failed expatriate managers. The quality of managers in foreign assignments appears to be

associated with the makeup and situation of the person under consideration. Other researchers developed a selection process focused on four general areas: (1) technical competence on the job; (2) personality traits or relational abilities; (3) environmental variables; and (4) family situation. To these variables, can added the required level of interaction between the position and the host environment. Past research

individual factors

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103

centered managers

on the analysis level of contact

of cultural as well as the with the

selection signments.

of managers

for foreign

as-

triate

failure

was estimated

at over ap-

similarity/dissimilarity host culture. The preponderance tion research acteristics technical

$250,000

per manager.

It would

The Selection Process: A Planning Format The present selection States international personnel is desis to selecting assignments. fire,

pear that the failure States based MNCs elgn assignments of other Just as important costs of failure to the domestic costs include: service place, human quarters inadequate lower proportionate resource spend industrialized

rate of United managers in forthan those countries. return These lower cusromers, levels, disof time from headcandi-

of past selecon the charthe to succeed, upon the exterbe-

is higher

has focused

of the individual, skills necessary

process

of many United

are the implicit or premature organization.

based multinationals mentality

and to a lesser degree, nal environmental tween cultures. methods factors potential signments. In a 1992 survey ternational (IOR) means petence Orientation of Fortune of selecting the domestic merely which

tined to fail.8 In many cases, there a reactionary managers Frequently, company resulting rently for overseas

differences and foreign selection

lost customers,

level with existing coverage supervisory amounts personnel

All too often, identify could

there is little time for a to put out a foreign in an obsession candidates necessary problem.9 with curwho pos-

of the market-

individual asby Inthe

be used to select for overseas conducted

candidates

employed

sess the technical qualifications short-term liberate for overcommanagers, competitors Resources mentioned managers

and managerial to solve the Even when take a more deto their selection a forprocess as may of

on the failing wasting

date, thereby skills needed tional Kodaks source Chairman lection

managerial and addito quantify. human like defend sere-

elsewhere,

500 companies,

these multinationals approach

issues too difficult new worldwide planning supporters

two most frequently seas assignment

they do not follow

were technical

mal, standardized

Kay R. Whitman,

and professional

experience.

from other countries.

the expenditures process cost of failure age to Kodaks customers, The dollar managers impact

on more complex not on the explicit but rather corporate

It is important to note these are among the most sophisticated international States. companies The underlying methods selection in the United problem process with was has been that needs into the have faclevel a

Failure of a manager to perform in an overseas position has both explicit as well as implicit training benefits his/her housing, relocation the candidate, family, higher costs, goods cost dimenadditional and compensation, differensions. The direct costs include given to the manager

on the damimage with

these selection no managerial identified, selection

suppliers and employees. and cents improvement is training unprepared expatriate or the with a assignbut rather the intangible

not how to justify of having

nor were specific factored Researchers process.

of the corporation

tax equalization, and services

identified a number of contextual tors, i.e., organization structure, of centralization, man resource significant composition programs, as having

tials, schooling, home leave, and other costs associated with the assignment. mated domestic These increased manager costs are estito be three times the cost of a in a comparable

wrong manager overseas. Selection of candidates higher probability

of foreign

of hu-

ment success must become a high priority of multinationals if they are to be successful marketplace. in the long-run 11 An additional global prob-

influence

on expatriate

managers performance. This research is intended to provide a dynamic process for selecting candidates examining mental viduals method planning for a foreign corporate characteristics, of selection perspective position by needs, environ-

domestic posirion.1 Eastman Kodak Company did not have a worldwide human resource plan until the early 1990s. tus for the development international ments which human was the number expectations. The impeplan assignof a formal resource

lem presently faced based multinationals seas managers in the United source process, ments country examining

by United States is selecting overpermanently re-

to work

States.13 This human issue necessitates selection assignposi-

variables,

as well as the indiThe proposed is formatted examining on a poi-

management

of expatriates

the managerial both for expatriate national managers

did not meet corporate Kodak had operations and the cost of expa-

as well as for host and third

icy, strategic

and tactical

issues in the

in 140 countries

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of World Business

Winter 1996

105

tions, i.e., inpatriation in the domestic organization. l4 In an effort to accelerate acceptance of a systematic selection process for expatriate managers, a well entrenched business framework has been adapted for the selection process illustrated in Exhibit One. The formal planning system in most complex organizations consists of three interrelated levels: ( 1) policy levelboard corporate goals, objectives, extended timeframe to accomplish; (2) strategy level-the means to obtain the goals and objectives of the organization, intermediate timeframe; and (3) tactical level-identification of the resources, i.e., capital, persannel, time that are expended in each strategy to accomplish rhe goals/objettives of the organ~zatio~l, shortrun timeframe. The expatriate selection process depicted in Exhibit One follows the identical logic of the formal planning process. The policy phase in the expatriate selection process identifies the needs of the organization in the geographic location where the expatriate is being relocated to by the MNC. The critical organizational characteristicsstructure, conrrol, orientation to marketplace and stage of the corporate life-cycle of the potential post for the expatriate-are examined. The external environn~ent is then analyzed to determine the contextual differences between the host and home environments of the expatriate. The greater the differences between the two environments, the greater the need for a more adaptable, culturally flexible expatriate. The final stage of the policy level analysis is to determine the exact positional requirements of the expatriate opening. The second phase of the systematic expatriate selection process, the 106

strategic djrn~r~s~ons of relocation, details the characteristics of the position and where potential candidates could be found to fill the vacancy (see Exhibit One). From this strategic assessment a pool of candidates is derived. The tacticat phase (STAGE THREE) evaluates the candidates generated in the candidate pool from the Second Stage. The tactical assessment compares candidates among their counterparts to make the final expatriate selection decision. STAGE ONE: Policy Level Analysis The criteria for selecting a manager in a foreign assignment, must reflect the needs of the organization in a particular environmental setting. The assessment of rhe foreign organization must encompass both its external and internal environments. The external en~~ironment in the host country must be analyzed, comparing both domestic and foreign environments to derermine how they differ. The grearer the differences between the host and dotnestic business environments, the more likely the selected candidates will have to possess skills which will permit them to adapt to those differences. This may require a successful candidate to devote an inordinate amount of time and effort interfacing with agents in the external environment. Procter & Gamble has about 1200 expatriates throughout the world. In the mid-l 980s Proctor Sr Gamble switched from a strictly technical focus for selecting expatriate managers to assessing the cultural flexibility and ability to interface with different cultures as a primary factor in their selection process. The increased emphasis on cultural adapt-

ability forms a critical element in the expatriate selection process for such MNCS as Dow Chemical, Mobil Corporation, Johnson & Johnson and NCR. One major MNC, Walt Disney Co., failed to take the cultural sensitivity issue into account when they were selecting expatriate managers for EURO their Disney project. In hindsight, executives of Disney attribute a large portion of the failure today of the project on not sending the right managers to France. The level of economic development in the foreign country can have an influence on the operations of the company in that market. The level of infrastrucr~re development within a host country can directly influence the operations of a foreign subsidiary and, rhus, the skills needed by expatriate manager. The level of government regulation, and/or intervention, in company operations can be an additional external en~ironmentai influence. The more intrusive the local government, the higher the interaction/communication ievel needed by managers assigned to that host market. There may also be govert~r~~ent requirements relative to the human resource functions in that counrry; for example, there may be quotas on the number of expatriates allowed to work, or a predetermined percentage of managers rn~~nda~ed to be host country nationals. Such requirements may directly influence the selection process and the candidate pool for an expatriate position. The cultural simi~arity/dissin~iiarity between host and home countries of the organization may also play a significant role in managerial selection for the vacant position. I6 In many cultures, selection of a female candidate to directly interface with her host country counterparts would

The Columbia journal

of World

Business

not be advisable due to cultural mores. The most qualified candidate may not fit culturally in the host country, thus, the level of cultural diversity may strongly influence the selection of personnel from inside or outside the company. Although sexual stereotypes are still held relative to the relocation of females internationally, a recent survey of The Conference Board found that United States based MNCs anticipate that by 2010, twenty percent of their expatriates will be women. Some MNCs like GTE, Honeywell, Ford Motor Company, ITT, Corning are developing a global competency inventory of male and female managers who are prepared to relocate internationally well prior to the need for them. An inherent level of risk to managers in certain host countries can directly affect the selection of replacement personnel. If there is a negative image of American companies or resentment toward United States foreign policy, the selection of a host country national over an expatriate may help to reduce this risk. The same level of risk in the external market may directly influence the compensation/benefit package necessary to attract certain categories of managers. In many countries, the threat of terrorism against American executives can influence the selection process from both the companys and managers viewpoints.l* The external environment has a direct impact on candidate appropriateness for a position in a particular country; regardless of the other qualifications of the candidate, he/she may not be an appropriate choice. At the same time, the host country environment affects candidate selection, so does the internal host organizational
Winter 1996

environment. The consistency or fit between the domestic and foreign organizations can alter who is an appropriate candidate.19 The organizational structure of the foreign subsidiary can influence the degree of autonomy and decision making latitude given to the manager. At the same time, a similarity in human resource policies can provide the relocated manager with a familiar infrastructure to reduce uncertainty and stress in the new position. Without these commonly held policies, the new foreign assignment can be more difficult and increase the adaptation time. Lack of familiarity with corporate policies will reduce productivity and satisfaction with the overseas position.20 The ownership and formal structure of the foreign operation should be taken into consideration when selecting employees. The foreign operation may be a joint venture, strategic alliance, or some other form of organization that combines two operating entities.21 The freedom to assign employees to these joint operating subsidiaries is reduced due to the ownership structure. An additional dimension of the organization structure to be considered in staffing decisions is the degree of centralization of decision-making, inherent in the corporate network. If there is a high level of centralized decision making, managers assigned to foreign operations may not have to be as experienced or may be promoted into their positions, i.e., higher level of responsibility. Decentralized structures that allow more contextual decision- making change the qualifications for the expatriate position. The fit,-similarity of policies, procedures, assessment, and struc-

ture-between the domestic and foreign organizations should be used as a quasi indicator of the degree of adjustment the manager will encounter upon relocation .22 The greater adjustment and internal organizational difference, the more likely a higher failure rate or time required to acclimate to the new assignment.23 The differentiation and integration questions initiated by ownership and control over decision making are important ones because they not only impact the effectiveness of the organization, but also the characteristics needed in managers. Because differentiation and integration of operating units can directly influence the operating style of a multinational corporation, these decisions are considered to be of strategic importance.24 Therefore, they also become pivotal in the selection of managers for foreign assignment. The human resource management functions also need to be analyzed for their impact on assignees to foreign positions. Familiarity with the functional aspects of a human resource system-pay levels, bonuses, promotion, review processes, and the like-in the domestic organization establishes a frame-of-reference for candidates, as opposed to candidates hired from outside the firm or transferred from one foreign assignment to another. Candidates use their frame-of-reference as a stabilizing influence when relocated; but, if there are significant differences in the human resource functions, candidates may lose one of their fundamental touchstones in the organization. These parameters of human resource issues typically focus on principles of boundary, identity, specialization, opposition, tension, and extension.25 A more global human resource manage-

107

ment orientation would provide a common denominator for expatriates to reduce acculturation stress and the time to adjust in a foreign organizational setting. An additional set of policy level dimensions needs to be taken into consideration during the selection process; those being, organizational orientation to markets and the stage of the organizational life-cycle. The organizational orientation has been classified into a myriad of different categories but two methods are used extensively. An organization may have domestic, international, multinational, or global orientation. Each perspective or strategic stage will influence the type of manager selected for assignment in foreign positions.6 These categories present a progression from low importance of international markets to a high level of awareness/intent in the total global market for a companys products/services. Another schemata used to classify a companys orientation to foreign markets has been from an ethnocentric, polycentric, regiocentric and geocentric point of view. The EPRG schemata identifies these four types of attitudes or orientations toward internationalization that are associated with successive stages of evolution within the international operations and human resources departments. These differing perspectives on the future of international opportunities will infiuence personnei selection. The more important the potential and the greater the emphasis on international markets, the more significant the personnel decision becomes to the human resources department. The higher the corporate growth expectations and the organizations readiness (orientation to interna-

tional growth opportunities), the more strategic management decisions center on the selection and training components for foreign assignments. It is important to note that, at the policy level, both the internal and external environments influence the selection process. The corporate mission, or objectives of the MNC, in the international marketplace should provide the basic parameters for the selection process and play an important role in the placement of the right candidate in overseas positions. A temporal dimension of the environmental influence on the policy decision level is how important the international market is going to be for the company in the future. Personnel decisions in the foreign context must take into consideration anticipated changes relative to the future emphasis being piaced on the foreign markets. Generaliy, five concerns or goals can be identified for companies involved in international operations: (I ) global effectiveness; (2) local responsiveness; (3) efficiency; (4) flexibility; and (S) organizational Iearning.zs Accommodating these policy concerns is directly related to the personnel selected to serve the corporation in overseas assignments.
STAGE TWO: Strategic Level Analysis

to cluster candidates into homogenous groups. There are some MNCs-Marriott, Allstate, IBM, USSprint, Johnson &Johnsonfrequently cluster candidates to increase the effectiveness of both training and relocation destination of expatriates. To accomplish this categorization, the following variables were selected: ( 1) candidate pools inside/outside of the organization; (2) management level of the position to be filled; (3) labor pool, i.e., home country, host counrry, and third country nationals; (4) line/staff focus of the position; (5) total cost of candidates by labor pool; and 16) host government restrictions on filling position. By analyzing the vacant position, using these various indicators, a strategic decision can be made as to where to search for potential candidates. The assumption is that these groupings of potential candidates are beneficial in selecting the right individual candidate. The background-training, cultural adaptability, compensation, career path-will be different by group and, therefore, one group will better fit the requirements of the position in the foreign market. Arguments can be made that any effort to cluster/classify candidates limits or omits important variables that could be used to identify qualified candidates. The use of the predictors recommended in this stage of the planning model are frequently used by human resource managers. Will this classification scheme be foolproof? No, but the clustering methodology should identify groups of ~ndividuais who have the basic qualifications to best fulfill the requirements of the international position. Given some of the inherent limitations of this clustering scheme, the

Due to the potential level of crossnational diversity among the various pools of candidates for a position in a foreign location, it becomes necessary to group candidates into more or less homogeneous pools prior to relocation.zy The strategic level of the analysis in the selection planning model focuses on identifying means

108

The Columbia Journal of World Business

human want

resource to modify

management and/or replace used to cluster

may some candi-

tel joint ventures plished tionals

could

be accomna-

tion of candidates-home, third country. The national origin

host or of potential

by selecting

third county

of the variables

for the assignment.

dates. The intent was to cluster potential managers to allow in-depth analysis of individual candidates at the tactical ess. The first step in clustering dates focuses ation-inside company. on their corporate or outside the process candiaffilitypilevel of the selection proc-

Identification of an ample pool of qualified candidates may take an extensive amount of time, specialized knowledge, and may need to be recruited globally; therefore, corporations have retained experts in external candidate searches. To subdivide the primary clustering of potential candidates beyond the first grouping (external and internal to the organization), the management level in the organization will also influence the process. The level of management position being filled in the foreign operation will directly influence the process. The importance of the position toward accomplishing the goals/missions of the foreign operation may be affected by a higher level manager, making selection of these individuals much more criticaL31 Exhibit Two illustrates the location, levels of management potential, as well as the national affiliation of candidates for vacant positions in international locations. The resulting matrix identifies eighteen different combinations of the variables used to locate potential candidate pools for filling vacant international positions. Each of these candidate categories may have different means of identification or contact, as well as, ramifications on training and compensation, once the candidate is selected.32 For example, if the vacant international position is a middle management position, the international human resource manager has two options for inas developing a pool of candidates, side or outside the organization

candidates has been critical in the selection process for decades. Potential candidates cultural backgrounds help to further classify their potential strengths and weaknesses. Exhibit Three summarizes potential implications of hiring candidates from each of the three primary labor pools based on national origin.33 While each candidate will not exhibit all of the characteristics highlighted in the Exhibit, it is assumed there will be greater homogeneity among members of the three groups than between the groups. The Exhibit also provides commonly held stereotyping for each pool of candidates. The issues depicted represent comparisons among the three pools; for example, the relative costs of candidates would vary from high cost of home country and third country nationals to low cost of host country nationals. The information could be interpreted that, in general, when selecting candidates, the cost of compensation and support packaging will be significantly higher third country for home nationals country and than for the

The selection

cally will start with candidates presently employed by the corporation. The candidates identification should encompass managers in both the domestic and the international operations of the organization.30 More well-developed international human resource programs will have a defined succession plan for most managerial positions in the companys international operations. If an adequate pool of internal candidates obtained, for a position cannot be then the human resource

managers must undertake an external search. It is generally more difficult to identify qualified candidates outside the organization. For example, they may come from a variety of different potential sources-a competitor, a supplier, a distributor, or a customers employees. In addition, potential candidates may be sought from nonrelated industries or, in some rare cases, directly lege. Intel Corporation out of colthe im-

host country managers. There will be exceptions to these generalizations by country-of-origin ters. Therefore, of candidate country-of-origin clusbe-

comes a useful means to segment the aggregate number of potential candidates into pools of more or less homogeneous clusters. The need for MNCs to establish a cohesive global corporate culture is directly of candidates. impacted Global by the selection

learned

portance of sourcing expatriate managers from outside the corporation after a number of joint ventures went bad. It was felt by Intel human resource managers, that it was too difficult to anticipate what new ventures the company would undertake to keep expatriate managers on the payroll. Outside expertise for critical In-

both pools may be examined simultaneously. The next subdivision of the candidate pool is the national loca-

companies need to align their recruitment/selection policies to support this corporate culture regardless of the level of cultural diversity between the home and host countries.34

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109

Labor Pool Location and National Origin

Parent Country LevellLabor Pool Top Mgt. INSIDE CORPORATION Middle Mgt. National

Host Country National

Third Country National

OUTSIDE CORPORATION

Middle Mgt. Supervisory Mgt.

The difference staff positions amassing sonnel

between

line and in

ing by line/staff personal more important

helps to clarify the deemed of due to the nature

process, lection evidence varies

but rather, of candidates.

to improve failure

the serates

may also be helpful to select.

skills/attributes

The empirical to forty perby time and for the assignCorporation of St.

an adequate

pool of candiLine perin

on expatriate

dates from which set of attributes staff positions. managers cation tural flexibility,

may have to have a different than individuals For example, heightened line communistyles to and to a forIn concompeconsidwithin

the management position. The cost of each cluster tial candidates interviewing tion process. cost dition support culated. among bor pools

from twenty-five

of potenbefor in total laIn ad-

cent and is influenced level of preparation ment.s Louis, menting Monsanto Missouri,

must be delineated is sent forth The difference

fore a final pool of candidates

may need to have more cul-

in the selec-

assessed prior

the rate to impleselec-

and cost of failures tion/screening the explicit for adopting plex, costly rather reputation motivating of expatriate and, therefore, committee a failure success

skills, and compatible manage others

of candidates

from different

a new expatriate process.

decision-making/leadership effectively make critical trast, decisions

may be significant.37 of benefits

Interestingly,

to the differences infrastructure

in salary, the and family has to be calmay be but This cost offered the national

costs were not the reason their new more comselection process, but was the costs expatrithat such expatrito from each role in may have to the companys The implicit suited believes among

total package

eign environmental staff personnel where task oriented tence becomes eration tional pacity be required

context.3S technical

may be more

The base salary differences pools of candidates cost difference

the damage force.

with its customers failures better

the overriding

the most obvious differential to different national

for selection. employees

Staff may not with host naca-

one of the least significant. in the package candidates origins

were too great If the selection

to interface

in a management business between designing

from various

ates had to be found. strongly rate exists

and may have more limited to the external The distinction when

may increase home country national.j*

exposure community.

cost two to three times more than for a comparable or a third country

ates, then cost estimates rates of candidates pool could the selection nically

relative

line and staff should into consideration training programs from different

also be taken

The cost of failure selection process;

of candidates into the

play a significant process.40 candidates

for candidates This cluster-

may also need to be factored

The most tech-

cultures.36

not to bias the

qualified

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the highest a particular variable tions, attempt

failure foreign

rate and, therecandidate for environment. level decision would be limitain forcountries

fore, not be the best The last strategic host government or quotas to reduce eign companies. on foreign

candidates has been accrued, the selection planning model moves to the tactical stage, assessing the individual of the candicharacteristics/attributes dates in the pool. STAGE THREE: Tactical Analysis The tactical level of analysis

the requirements phase veloped dates. frequently will employ to identify

of the position. selection qualified most biotests, tools

This de-

candi-

Some of the tools data,

to be considered

used are detailed standardized and assessment personal performance other

restrictions, on managers Frequently,

Level

graphical work ters.41

samples,

cenwork his-

their dependence and, at the quality manageinhabias-

starts

The candidates tory or past work would which highlight the candidate

companies

with the pool of potential

candidates

same time, provide ment positions tants. sessed These before externalities

for indigenous governmental

must be carefully

identified by the first two steps in the dynamic selection planning model. The focus of this stage is the assessment of individual candidates to identify those who have the optimum personal skills and attributes to fulfill

relocations had experienced

and his/her resulting performance, training programs, personality assessment by supervisors, performance demoevaluations, and standard

the final pool of candiOnce the pool of

dates is determined.

Winter 1996

graphic data which could be used to better understand the basic dimensions of each candidate. The most frequent attribute determined by this stage of the analysis is the technical competency of managers. As illustrated by a recent survey of United States companies, future senior executives indicated that an outstanding overall managerial track record is the most important criterion for selection of top management for foreign assignments.42 Personality and psychological standardized tests are becoming more frequently used in the selection of personnel to ascertain personal artributes that are considered to be predictors of success.43 There seems to be a resurgence of interest in personality as well as psychological testing as predictors, or at the least moderators, of behavior in organizations. The difficulty in summarizing the psychological dimensions of a personality is compounded in an international context. The reliability and validity of these summaries are questioned by many researchers. Their concern centers on the tests being culturally bound. At the same time, other researchers indicate that some useful characteristics, e.g., conflict-reduction style, willingness to communicate, communication competence, and cultural flexibility cannot be accurately tested by using standardized instruments.44 The predictive validity of assessment centers has been questioned in that center assessors do not seem able to accurately judge whether assessments measure the specific traits (personality/psychological) or managerial skills being analyzed. Notwithstanding the limitations of psychological testing, some MNCs are forging ahead with psychological

interviews to aid in the expatriate selection process. American Telephone and Telegraph Co. recently hired psychologists to assist in the selection of foreign transfer candidates. McDonnell Douglas Corp. and Nynex Corp. have also begun the practice of psychological evaluation of both the employee and his/her spouse.4S The practice of using psychological evaluation has been used for a number of years by MNCs located outside the United States with limited success.4h One standardized test which appears to provide human resource personnel with valuable insights is the Foreign Assignment Selection Test (EAST.). This instrument appraises candidates along six critical dimensions: (1) cultural flexibility; (2) willingness to communicate; (3) ability to develop social relationships; (4) perceptual abilities; (5) conflictresolution style; and (6) leadership style, GTE tests each potential candidate for expatriation is tested to assess their values, ethics, interpersonal skills, and social intelligence by giving them the Overseas Assignment Inventory, the Relocation Intercultural Services Inventory or the CrossCultural Adaptability Inventory. Almost without exception, the variables which impact spouse/family are not only difficult to identify or measure, but the complex relationship between personality/psychological factors and ability to adjust to another culture is not well documented. notwithstanding the limitations of these models, they should provide insight into managers adaptive characteristics which might influence ones ability to successfully complete a foreign assignment.4y The family life-cycle concept can provide valuable insights into potential candidates for foreign assign-

ment. Each stage of the family life-cycle provides human resource personnel with potential family/spouse complications related to a relocation. The family life-cycle will influence allowances particularly as related to travel, housing, educational costs, and return trips to the home market. There are also repatriation issues that increase the intricacy of families with children in certain stages of the family life-cycle. It has also been shown that dual career families have greater difficulty successfully adapting to a foreign assignment.-? The family life-cycle may become one of the more productive tools in selecting expatriate managers but its usefulness in predicting success among host and third country nationals may be less productive. Two companies that have adapted the use of the family life-cycle are Allstate and CIGNA insurance. Their use of the family life-cycle is not only to determine selection but it is also used in the development of expatriate compensation and benefit programs. A lack of interpersonal skills and capabilities has been identified as one of the primary reasons why American managers are not being sent on expatriate assignments. This problem will continue to plague companies attempting to use expatriate managers on foreign assignments. International awareness and language competency found in graduates of American universities and in the younger population has been defined as scandalously low. There are those who argue that, due to the importance of language skills to successfully competing in the global marketplace, more host and third country nationals will be hired in the future. Coupled with the cost differThe Columbia Journal

122

of World

Business

ential typically associated with expatriates, host and third country nationals will continue to be a growing source of international managers.s4 A critical facet of determining the right candidate among qualified candidates may be their language capabilities and assessment centers can be used to test their skills. An additional factor to be diagnosed during selection among the candidate pools is the level of each candidates motivation to internationally relocate. This motivation to undertake a foreign assignment can vary by candidate as well as by candidate pool. The concept of motivation to relocate is a very complex issue involving not only the candidate but, also, the spouse and family.ss The candidates decision to relocate centers on five interrelated issues: (1) relatively stable personality characteristics-locus of control, extroversion, cultural flexibility, decision making, and leadership style; (2) selected demographic data on the candidate and spouse/family-stage of family life-cycle, age/education level of children, dual career family, number of previous relocations; (3) specific attributes of the relocation opportunity-cultural similarity, level of economic development, environmental risk; (4) attributes of the relocation package-income increase, incentives, goods/services allowances, vacation and service time; and (5) impact on career and career path-promotion to relocate, acceleration of advancement after returning from foreign assignment, reassignment from staff to line position, match between individual and organizational career plans. As MNCs broaden their selection guidelines for expatriate managers, a larger number of female candidates

are forecasted to be selected for overseas assignments. This one trend may exacerbate assignment acceptance and relocation problems more than any one factor.56 The motivation to relocate must be analyzed on a temporal basis, examining both the short-run and longrun. Candidates must be evaluated on their enthusiasm or the intrinsic excitement of a new position overseas; but at the same time, the longrun relocation package and career benefits offered to the candidate must also be assessed.57 If there is no sustaining dimension to the candidates motivation, the probability for burnout, early return and failure are increased.s8 Once the pool of acceptable candidates has been reduced, one additional dimension of the selection needs to be undertaken. Each candidate must be tested and assessed relative to additional skills that would increase the probability of success in his/her new international position. Two candidates may have equally attractive backgrounds/attributes for the assignment; but, to effectively manage in the future, what developmental activities will each candidate have to undertake before rising to another level of responsibility in the organization. The candidate who will need the least additional training might be preferred over the otherwise equal candidate.

Operationalization

of the

Selection Planning Process

The first step in designing an international selection process is to develop a relevant planning format that integrates environmental variables, key corporate characteristics, and the individual attributes of potential candidates like the systematic expatriate selection described in the last section of this paper. The worksheets illustrated in Exhibits Four and Five divide the systematic expatriate selection process into two sequential operational steps. The first worksheet represents the clustering of internal and external environmental issues. These strategic variables are then aggregated into a cluster characteristic for both the internal and external environment (see column headed Corporate Issues). These cluster dimensions are then matched with the mission/objective of the organization in the market where the vacant position exists; for example, if the organizations objectives are to grow their market share in a developing Latin American country, where human resource management policies/procedures are consistent with the headquarters of the organization and the subsidiary has an international perspective. These corporate issues are evaluated in the context of cluster characteristics to highlight critical issues that the management individual selected must deal with during his/her assignment. The second stage of the selection process focuses on potential candidates identified by stage one, relative to their personal backgrounds/characteristics and the requirements of the overseas position (see Exhibit Five). Key personal traits and family demographics can be used to select among

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the candidates

in the pool.

This stage

process.

The process process

also expands beyond individat-

of the selection process could follow the traditional assessment of candidates used by some MNCs the systematic today. expatriIf followed,

the selection ual candidate tempts

cessitate identifying/selecting ple number of international

an ammanag-

characteristics,

to incorporate

the future in each counof

goals of the company try, and considers nesses of different potential candidates.

ate selection process for selecting personnel for overseas assignments should alleviate a variety of problems which have plagued addresses human resource apmanagers approach praisal in the past. This planning a systematic of the multifaceted/interrebe analyzed selection a personnel

the strengths/weakclusters

ers. Many MNCs have had difficulty in selecting managers for overseas assignments. The importance of selecting the best candidates for expatriation should not be underestimated. Not only do these candidates directly influence the international competitiveness of the MNC, but are they also valued assets relative counterparts. to their domestic If the

Summary/Conclusions The global casted the future village and the foreof global trade in will ne-

lated issues that should in designing

importance

of most companies

right candidates for international relocation are not selected, the prob-

114

The Columbia Journal of World Business

ability of higher than normal turnover among these expatriates can be expected.59 The planning perspective recommended for expatriate selection builds on a well established infra-

structure which is accepted by most managers. By using this existing philosophy, managers and human resource personnel can identify with and support a more complex selection process. The planning perspec-

tive of viewing the selection process is different than numerous reported methods for designating overseas managers. Many selection processes focus on the attributes and skills of candidates with less attention given

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to how the mission of the corporation and the internal/external environments will impact the manager selected to supervise in a foreign location. Regardless of which research findings on expatriate failure rate one subscribes to, it would be difficult to not conclude that the rate of turnover and substandard effectiveness continues to plague United States MNCs. There have been a limited number of systematic selection processes detaited in the academic literature to assist human resource man-

agers. This research effort sought to accomplish the following objectives: (1) to identify an integrated process which could improve selection; (2) to identify key clustering variables to reduce the heterogeneity of candidate pools; and (3) to detail a pragmatic procedure for managing the data collected during the selection process. Expatriate selection must go beyond the unidimensional notion of technical expertise as being the control decision variable in determining which managers to expatriate. With-

out some systematic means to organize the data for selection of managers to go overseas, human resource managers may be relegated to ad hoc decisions based upon job performance in a domestic position. Frequently, the carryover of domestic expertise to international assignments does not predict success for expatriates. Hopefuliy, by adopting the planning perspective, the rate of expatriate failures can be substantially reduced.

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116

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Impacts

Global

Suc-

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New ideas for Internntionul Greenwood 59

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E. Naumann,

Model of Expatri499-531; E. NauJob Busmax Retenrmn

ate Turnover, SIltdies (Thwd Satisfaction, Stntegy24 A Multifaceted in International tionirl Stndies

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of Intermrtrtni~i to Expatriate 461-485.

H. Gregersen and S. Black. Grorrp und Orguuzo

Approach Assignments,

1S,No.4 t 1990):

Tbe Columbia Journal

of World Business