Global business is an age old phenomenon which allowed humans to transact with one another. The oldest international business can be dated back 1135 as Knights Templar conducted the first international banking. The cross-border transactions have been conducted since those olden days, but now these international business transactions have increased immensely with the change in the landscape. And the wave globalization is not only flowing from the developed countries to the developed countries. Many of the developing countries are also entering in the developed economies by acquiring the companies there. For example Corus was taken over by Tata steel in 2007 (Collins & Scullion 2008).
With this modernization, for all the global and local organization it is necessary to have a workforce which is competitive in nature. And that explains the major reason why international assignments happen. But sending someone on an international assignment is not cheap. An expatriate earns around two to three times the regular salary they would otherwise be earning at home. The cost of living adjustments in an expatriate salary can cost anything from $300,000 to $1 million annually, For most of the company this is the biggest expenditure that they make after the CEO.Despite this the returns on the investment is quite low(Black & Gregersen 1999).
The past research has shown alarming results. The Harvard paper indicates that 10-20% of the international assignee returns early from their assignment because of the job dissatisfaction or difficulties faced in the assignment. One-third of those who stay are not able to perform as per the expectations of their seniors. And around one-fourth of these expatriates after completion of their assignment, leave the company and join the competitive company. This makes it the single largest erosion of the manpower. This is double the attrition of the home-manpower for the company(Black & Gregersen 1999).
Furthermore, such situation can result in the poor relations with the host country. The expatriate failure can also be the reason for the lowered employee morale and poor performance in the home location itself(Onosu 2012). These kinds of problems not only owe company a huge amount of money, but also results in loss of talent in the competitive world. That’s the motivation for this literature review. There have been many research conducted on the subject and each of these research focus on different areas(Onosu 2012).
This paper focuses on the qualitative and quantitative research conducted on the subject and presents an integrated view about the management of international assignees with the human resource perspective. This paper tries to understand the best way to manage the international assignees so that both employees and the organizational expectations are fulfilled. For this purpose the literature review is conducted to understand the various concerns associated with the factor.
During the course of research, certain terms will be used ubiquitously. Following are the major definitions of the terms encountered in the course of Literature Review:
1) Expatriate: An expatriate is a person who lives and works in a foreign country for a given period of time (Andreason 2003). The similar definition had been earlier given by Cohen who described the expatriate as a temporary migrant to the host nation with the fixed time frame and aim of returning back to the home country once the assignment is finished (Cohen 1977). The two definition clearly indicates that the expatriates need to live and work in a foreign country. These foreign countries might have a completely different socio-economic and cultural background, and in order to perform successfully, the expatriate will need to acquaint and adjust themselves with the culture (McGinley 2008).
2) Culture: As discussed in the definition of expatriate that the these expatriates have to adjust and adapt to the culture of the environment, but the question arises about what culture is. Culture is the set of values, beliefs, aspirations etc. (Onosu 2012) or the set of collective beliefs (Onosu 2012) which are transferred from one generation to another. Thus the definition clearly explains that such a cultural environment can be traumatic for the expatriates, and hence special care needs to be taken to ensure that they are adjusted to the culture.
3) Adjustment: This brings to the next definition and that is the word adjustment, specifically the cross-cultural adjustments in the case of expatriates. Adjustment refers to the degree of comfort, psychological as well as the physical, an expatriate feels when in the host country (Takeuchi 2010). These adjustments have been further divided into general adjustment, work adjustment and interaction adjustments depending upon the kind of comfort the expatriates need. Similar definition is also provided by Huan et. al, who explained that cross cultural adjustment allows the expatriates to relate with the environment of the host country easily (Huang, Chi & Lawler 2005). They have established that the familiarization and adjustment is necessary for expected job performance from the expatriates.
4) Job Performance: Job performance is a well known word in organization, but the same takes an additional meaning when performed in a foreign country. The performance of an expatriate is not only dependent upon the expertise of the expatriate, but also on the adjustment the expatriate enjoys with respect to the host country (Lin 2014). The job performance is the result of the task performance and contextual performance which allows the expatriate to interact with the host nation.
5) Communication: Communication is the keystone for the adjustment and job performance of the expatriate. Communication means that the expatriate is able to convey their views and carry on interaction with the individuals in host country. The success rate of communication will decide the level of adjustment of the expatriate (Takeuchi, Yun & Russell 2002).
For the purpose of the literature review, the paper focuses on the following themes to study:
i)Changing face of Human Resource Management in terms of international assignments: As the global environment has changed, so has the human resource management process. This theme studies the changes that have taken place in the global market place which affects the human resource management of international assignees.
ii) International Assignee management and their challenges: The idea behind this theme is to develop a basic knowledge about the kind of challenges faced by international assignees on their assignments.
iii) Prevention of Expatriate failure: This theme studies the research papers which studies and explains the kind of measures or policies that can be constructed to prevent the failure of expatriate.
Keeping these themes in mind, a wide variety of the papers is selected to explain and understand the themes clearly. These papers are selected to substantiate the definitions and understand the research already conducted on the subject. Knowledge of such research will help in identifying the themes of the paper in a better way.
For the ease of understanding, the literature review is divided into different chapters. The first chapter introduces the topic and the reason why this topic was selected. The second chapter explains the themes with respect to the literature sources selected. Chapter 3 is focused more on the methodology selected in the literature sources to discuss the issues. Chapter 4 discusses the implication and recommendation that can be incorporated in organization to better manage the international assignment. Chapter 5 focuses on what more needs to be researched and what future avenue shall be explored in order to gain a better understanding of the international assignee management. Last Chapter, i.e. Chapter 6, concludes the chapter by summarizing all the findings of the literature review.