The role of interaction and general adjustment in expatriate attitudes: evidence from a field study of global executives on assignment in South Korea, Japan and the Netherlands.

• Author: Palthe, Jennifer

INTRODUCTION

The success of global corporations is increasingly dependent on the effective management of expatriates. It has been estimated that more than 250,000 employees of US firms work on overseas assignments (Kraimer, Wayne, and Jaworski 2001). According to the latest GMAC Global Relocation Trends (GRT) (2008), conducted by GMAC Global Relocation Services, sixty-seven percent of companies reported an increase in the size of their expatriate population, and sixty-eight percent anticipated an increase in the number of employees they have on assignment. International work experience is also continuing to be widely recognized as a critical asset to sustaining the competitiveness of global firms (Bhaskar-Shrinivas, Harrison, Shaffer and Luk 2005) and (Spreitzer, McCall and Mahoney 1997).

Although the ongoing globalization of business markets has increased the number of expatriates (GRT, 2008), the direct and indirect costs associated failed assignments remains a serious concern (McCaughey and Bruning 2005) and (Shaffer, Harrison, Gregersen, Black, and Ferzandi 2006). The GRT report concluded that retaining expatriate talent remains problematic and that attrition rates for expatriates are at least double those of non-expatriate employees (2008). Failed assignment rates have been reported to range between 25 and 40 percent (McCaughey and Bruning 2005) and (Sanchez, Spector, and Cooper 2000), and cost organizations approximately one million dollars per expatriate (Shaffer and Harrison 1998) and (Shaffer, Harrison, and Gilley 1999). While the high failure rates measured as premature returns home have been challenged (Forster 1997), it can be disputed that expatriates who don't adjust but remain abroad could have an even more detrimental effect on organizations (Selmer 1998). Organizational turnover may represent the most costly effect of expatriate failure but intentions to quit, decreased commitment, and dissatisfaction represent harder to measure costs associated with reduced individual self-esteem, interrupted careers, and damaged corporate relationships and reputations (Templer, Tay, and Chandrasekar 2006).

Past research has been fairly extensive in generating and testing factors that contribute to cross-cultural adjustment (Bhaskar-Shrinivas et al. 2005; Beehr and Christiansen 2003). The purpose of this research was to explore certain attitudes and mediating effects associated with the expatriate adjustment process. Specifically, this study aimed to examine the relationship between the three facets of cross-cultural adjustment (work, interaction, and general) and expatriate work related attitudes (job satisfaction and non-work satisfaction) and to examine the role of cross-cultural adjustment in mediating the relationship between family adjustment and expatriate attitudes. Aycan and Kanungo (1997: 250), in their review of the expatriate literature, argued that research has not paid sufficient attention to the "expatriate process mediators." Also, while research measuring cross-cultural adjustment outcomes such as commitment and intentions to quit has been fairly extensive (Bhaskar-Shrinivas et al. 2005) numerous scholars have argued that empirical work demonstrating the influence of cross-cultural adjustment on work-related attitudes is negligible (Bonache 2005) and (Van Dyne and Ang 2000). Bonache (2005:111) specifically suggested that studies focusing on expatriate satisfaction remain a "relative rarity" compared to the exploration of other outcome variables.

Moreover, where studies that have explored the relationship between cross-cultural adjustment and expatriate outcomes, most have provided empirical evidence of the correlation between work and general adjustment, and expatriate outcomes (Florkowski and Fogel 1999) and (Takeuchi, Yun and Russel 2002a) and (Takeuchi, Yun and Tesluk 2002b), but the role of interaction adjustment in expatriate outcomes has received less attention. Merely focusing on the consequences of work adjustment and general adjustment does not capture the full expatriate experience nor the powerful effect that successful interactions with locals has on the overall satisfaction of expatriates. Therefore, a key objective of this research was to attempt to illuminate this reality and encourage global corporations to consider these findings in their pursuit of achieving a greater competitive advantage through their global assignees.

THEORETICAL FRAMEWORK

The general framework for this research is anchored in the works of Black, Mendenhall, and Oddou (1991). Bhaskar-Shrinivas et al. (2005) suggest that Black et al's (1991) model is the most influential theory in this area. Drawing from Black et al.'s (1991) model, the cross-cultural adjustment process is conceptualized as comprising three distinct facets namely, work adjustment, interaction adjustment, and general adjustment. This multidimensionality of cross-cultural adjustment is well recognized in the international assignment literature (Bhaskar-Shrinivas et al. 2005). Cross-cultural adjustment is defined as the amount of psychological comfort and familiarity an individual has living in a foreign nation (Black 1990).

Work adjustment, the first dimension, involves the adaptation to new work roles, job tasks, and the new work environment. The second dimension, interaction adjustment, involves the comfort achieved in interacting with local nationals in both work and nonwork situations. It is derived from successful adaptation to job requirements abroad and from the effective development of interpersonal relationships with host country nationals (Shaffer and Harrison 1998). Black et al. (1999) argue that interaction adjustment is the most difficult of the three facets to achieve, as differences in mental maps display themselves in interactions with host nationals. This is a critical observation of theirs and could explain why, to date, empirical evidence of its role has been limited. General adjustment, the third dimension, is the overall adaptation to living in a foreign nation including factors such as housing, health care, and education facilities (Black 1988) and (Black and Stephens 1989).

As cross-cultural adjustment is multifaceted, it follows logically that the various outcomes of each facet of adjustment may have different degrees of impact on expatriate attitudes. It makes sense that work adjustment is likely to be associated with job-related expatriate attitudes such as satisfaction, and general adjustment is likely to be associated with non-work related expatriate attitudes such as nonwork satisfaction. Following this logic, it is expected that because interaction adjustment captures both job-related and non-work related interactions, it is likely to be associated with both job and non-work related expatriate attitudes, especially given that worker attitudes are created through interaction with other workers within the context of the work environment (Pfeffer and Salancik 1978). It seems feasible that expatriates are likely to develop attitudes based on both the new work environment and the hosts in the foreign nation, whether co-workers, customers, or suppliers. Therefore, with the unique situation created by the foreign location, not only does the new job and new organizational characteristics engender the development of attitudes, but also the interaction with foreign host nationals. This interaction with host nationals is a key component of the expatriate experience and logically plays a role in influencing the non-work satisfaction and job satisfaction of the assignee. Consistent with this logic, Homans (1950) suggested that interactions between different people lead to the development of positive feelings toward others. Hence, it is expected that interaction adjustment will be positively related to both job satisfaction and non-work satisfaction. The contact hypothesis posits that increasing the frequency and number of interpersonal relationships across group members will reduce intergroup conflict. This in turn, suggests that as expatriates interact more frequently with host nationals, their interaction adjustment will increase and the development of positive feelings toward host nationals will also increase. This plausibly should enhance both the expatriate's work and non-work satisfaction in the host nation. Hence, the following hypotheses are offered:

Hypothesis 1a: Interaction adjustment will be positively associated with job satisfaction.

Hypothesis 1b: Interaction adjustment will be positively related to non-work satisfaction.

Job satisfaction is defined as the positive emotional state resulting from the overall evaluation of one's job (Shaffer and Harrison 1998). An aversive psychological state, on the other hand, is likely to create negative evaluations of the expatriate experience and induce work stress. Non-work satisfaction includes a positive emotional state toward non-work factors such as living conditions, family relocation, and modifications in daily non-work activities abroad. It is well recognized that job satisfaction is linked to employee turnover (Hom and Kinicki 2001) and intent to return early from an expatriate assignment (Takeuchi et al. 2002b), (Parker & McEvoy 1993) and (Shaffer & Harrison 1998). General adjustment and work adjustment have been shown to influence both general and job satisfaction (Takeuchi et al. 2002b) using spillover theory as an explanation. A fundamental assumption of much of the expatriate literature is that poor adjustment may spillover to poor expatriate attitudes (Shaffer & Harrison 1998). Spillover theory asserts that an individual's experiences at work can carry over into the home, and experiences at home can affect one's work (Caliguiri., Hyland, Joshi, and Bross 1998). Hence, problems in non-work domains will generate stress for a person and will, in turn, impact their adjustment in the work environment. Also, an inability to adjust effectively...