INPATRIATE MANAGERS: HOW TO INCREASE THE...

INPATRIATE MANAGERS: HOW TO INCREASETHE PROBABILITY OF SUCCESS

Michael G. Harvey

Milorad M. NovicevicUniversity of Oklahoma, Norman, OK, USA

Cheri Speier

Michigan State University, East Lansing, USA

Developing multicultural management teams has gained increasing

importance in many global organizations. One global staffing option Ð

inpatriate managers Ð has the potential to provide a more multicultural

management frame-of-reference when developing global strategies. Inpatri-

ates have social knowledge of global operations and countries facilitating

the modification of organizational strategies to local competitive/market

conditions while ensuring their consistency and coordination with the

existing global strategic thrust. This paper addresses the need to provide an

effective mechanism for increasing the success rate of inpatriate managers

thus improving the global performance of the organization. To achieve

enhanced organizational performance the need for a proactive inpatriate

program is critical to engender long-term commitment and loyalty of

inpatriate managers.

INTRODUCTION

Developing a multicultural, international workforce is considered to be one of

the primary requisites of competing in the global marketplace successfully

(Oddou & Derr, 1993; Frey-Ridgway, 1997). This multicultural management

team can serve as a heterogeneous nucleus providing the global company with

a distinctive competency that is difficult for competitors to replicate (Aguirre,

1997; Reynolds, 1997). To develop this competency, global companies must

formulate new ways to identify, attract, motivate and retain international

management talent (Moynihan, 1993). One of the most importance strategic

competencies of global organizations is the ability to amass the collective

Direct all correspondence to: Michael G. Harvey, University of Oklahoma, Michael F. Price College of

Business, Division of Management, Room 6B, 307 West Brooks, Norman, OK 73019-4006, USA. E-mail:

[email protected]

Human Resource Management Review, Copyright # 1999

Volume 9, Number 1, 1999, pages 51± 81 by Elsevier Science Inc.

All rights of reproduction in any form reserved. ISSN : 1053 ± 4822

management skills to compete globally (Hamel, 1989; Prahalad & Hamel,

1990, 1993; Ghoshal & Bartlett, 1997). Amassing these skills has been

described as a ``contest'' where the prize is providing an organization with a

global core competency (Heene, 1994; Hamel & Heene, 1994; Rumelt, 1994;

Sanchez, Heene, & Thomas, 1997).

It is frequently stated that few expatriate managers can cross cultural

barriers and become wholly accepted by host country managers/employees

(Black, Gregersen, & Mendenhall, 1992; Barnett & Toyne, 1991; Beeth, 1997).

The implication of the ``ideal'' overseas management candidates to be trans-

ferred is for (1) ethnocentric organizations (international) will utilize expatri-

ates management positions; (2) polycentric organizations (multinational) will

use expatriates and local nationals to manage operations; and (3) geocentric

organizations (global) will utilize inpatriates, nationals and third country

nationals in economic and culturally distant assignments and expatriates in

countries with a higher degree of similarity with the home country (EdstroÈm &

Galbraith, 1994; Harvey & Buckley, 1997).

The objectives of this paper are four-fold: (1) presenting issues associated

with the limitations of continued use of expatriate managers; (2) examining the

rationale for the complementary use of inpatriate managers to increase an

organization's global perspective; (3) examining the factors influencing suc-

cessful integration of inpatriate managers into the organization; and (4)

exploring a means to stimulate commitment of inpatriate managers to the

global organization by developing a social support program for inpatriates.

ISSUES IMPACTING THE SUCCESS OF EXPATRIATE MANAGERS

Historically, organizations have relied heavily on expatriates for staffing

critical managerial positions abroad. Expatriates have typically been the

preferred group of managers for overseas assignments for a number of reasons:

(1) their technical/business expertise; (2) political understanding of the head-

quarters organization; (3) ability to transfer the domestic corporate culture to

the foreign operation; (4) communication clarity between headquarters and the

subsidiary; and (5) as a means of social control over the subsidiary (Black et al.,

1992; Harvey, 1996; Martinez & Quelch, 1996; Dowling, Welch, & Schuler,

1998; Vaughen, 1998). The primary function of expatriates has frequently been

as a control representative and secondarily, to provide managerial expertise,

management development, technical expertise and in order to ``qualify'' these

expatriates for advancement into the senior management ranks of the organi-

zation (Adler & Ghader, 1989; Feldman & Thomas, 1992; Feldman & Thomp-

son, 1993). However, there is ample evidence in the literature that expatriate

managers will continue to experience mounting difficulties in adjusting to

cross-cultural management assignments (Black, Gregersen, Mendenhall, &

Oddou, 1991; Birdseye & Hall, 1995; Harvey, 1996). There is also a reluctance

to rely on and to integrate host country and third country national managers

into global operations. This results in an opportunity cost of lost social and

HUMAN RESOURCE MANAGEMENT REVIEW VOLUME 9, NUMBER 1, 199952

political knowledge regarding a subsidiary location (Tung, 1993). Similarly,

researchers have assumed that management expertise and knowledge to

develop effective global management strategies originate within the parent

organization. However, there is growing evidence that subsidiaries can play an

important role in the creation and maintenance of global competitive advan-

tage (Birkinshaw & Morrison, 1996, 1998) suggesting the importance of

alternative candidate pools for overseas subsidiary management staffing.

United States companies employ 5.4 million employees outside the country

and have an additional two million expatriate managers on foreign assign-

ments annually (Solomon, 1995; Paterson, Sargent, Napier, & Shim, 1996).

While there is not a consensus on the rate of failure of expatriate managers

among practitioners and academics, the range of failure is typically stated

between 20 and 40% (Mendenhall, Dunbar, & Oddou, 1987; Solomon, 1994;

Harvey, 1996; Dowling et al., 1998). The large variance in this range is

explained, in part, by the ambiguous definition of expatriate failure (i.e.,

early assignment withdrawal vs. reduced effectiveness in the overseas posi-

tion). Regardless of the definition used, there is sufficient evidence indicating

that ineffective expatriate managers incur large direct and indirect costs. The

direct cost i.e., training, relocation, compensation and repatriation) is esti-

mated as between $200,000 and $500,000 per candidate for MNCs and

United States-based firms lose over $2 billion annually in failed overseas

assignments (Webb & Wright, 1996). In addition, the indirect/implicit cost

(i.e., reduced service to customers, the negative impact on implementing

strategy, strained relations with home country networks and government

officials) are thought to surpass the direct cost of expatriate failure (Fuchs-

berg, 1992; Wederspahn, 1992).

One of the more salient categories of costs of expatriates is that incurred

by expatriate managers who have inadequate performance but remain in

their overseas assignment damaging the organization's performance, reputa-

tion and relationships (Harzing, 1995). Another category of costs that is

frequently overlooked is that related to the career impact of a failed

expatriate assignment as damage to managers' careers (Tung, 1987). This

damage to the self-esteem is carried over to others in the organization

reducing their willingness/enthusiasm to undertake a foreign assignment.

While there has been a multitude of reasons advanced for the high failure

rate of expatriates, e.g., lack of training, inadequate selection criteria, ineffec-

tive compensation programs, ineffective leadership and the like, one dimension

historically has been deemed the primary reason for expatriate failure, that

being expatriate and family adjustment issues (Harvey, 1985; Black, Greger-

sen, & Stevens, 1989; Harris, 1989; De Cieri, Dowling, & Taylor, 1991; Have-

man, 1992; Dowling et al., 1998). To date the majority of the expatriate

assignments have been to developed countries suggesting that the adjustment

issues will be accentuated in the future given the increased need to manage

operations in developing countries, where it is anticipated that 7/8 of the

population will be located by 2025 (World Health Organization, 1995; Webb &

Wright, 1996). From an adjustment perspective, the greater the economic and

INPATRIATE MANAGERS 53

cultural distance, the more likely the family (as well as the expatriate) will

have difficulty in acclimating to the new environment (Feldman & Thompson,

1993; Fish & Wood, 1997).

An evolving issue that will inevitably complicate the overseas adjustment of

the family and expatriate, is the growing number of dual-career couples. Even

in a domestic context, the labor force participation of spouses has greatly

reduced the likelihood of family migration (Arkin, 1993; Blair, 1993). In the

international dual-career situations, there is both a direct and indirect influ-

ence on the couple/family adjustment. The direct impact can be illustrated by

the potential loss of the trailing spouse's income and potential future earning

during the duration of the expatriate assignment. Indirectly, the trailing

spouse can experience heightened stress and tension which may translate into

dysfunctional family conflict which in turn can ``spill over'' into the work

environment of the expatriate manager (Vannoy & Philliber, 1992; Solomon,

1994; Wiggins-Frame & Shehan, 1994; Harvey, 1996, 1997a).

In a recent survey of MNC human resource managers, 88% of the respon-

dents felt that dual-career issues will become a more acute problem in

international assignments in the near future (Solomon, 1994). In addition,

when dual-career couples are expatriated the support required from the MNC

is substantially increased and the productivity of the expatriate is typically

lower than expected (Harvey, 1997a). Frequently, dual-career couples are

entering a commuting relationship during the expatriation of one of the

spouses, attempting to mitigate the negative consequences of disrupting the

other spouse's career. It is estimated that 25% of dual-career couples do not

move the family/spouse but continue to commute between the home and host

countries when one of the members of the couple is relocated overseas (Bunker,

Zubek, Vanderslice, & Rice, 1992; Blair, 1993; Coolidge & D'Angelo, 1994;

Lublin, 1994; Swaak, 1998).

One mechanism for developing a multicultural management team is

through inpatriation Ð the process of selectively transferring and intensive

development of host and/or third country national managers into the domestic/

parent country organization on a semipermanent to permanent basis (Harvey,

1993). Inpatriate managers infuse knowledge of the host country throughout

the global organization and provide a means to enrich the management team

by adding a multicultural perspective or cognitive diversity to global strategy

development (Bartlett & Ghoshal, 1992; Quelch, 1992; Martinez and Quelch,

1996; Harvey, 1997b).

GAINING INSIGHT INTO THE INPATRIATION PHENOMENA

As global organizations move away from a model of multinationalism towards

one of globalization, the development of multicultural management teams has

become critical (Sohn, 1994). Inpatriate managers can serve as ``linking pins''

between domestic and foreign subsidiaries; where they work as boundary

spanners in the global network providing the managerial diversity that is


necessary to effectively compete globally (Harvey & Miceli, forthcoming).

Boundary spanning managers are an important mechanism by which subunits

are linked and through which external data is obtained and interpreted for

those in the organization (Tushman & Scanlan, 1981a). Collecting and inter-

preting communications/signals across organizational boundaries requires a

knowledge of both the local context of business in the host country as well as an

appropriate manner in framing the information for those in the domestic

organization (Tushman & Scanlan, 1981b). In some cases, the inpatriate

manager may be considered a surrogate for structure when decisions/strate-

gies must be adapted to meet the local environmental constraints (Dollinger,

1984). The inpatriate manager provides a degree of formalization of decisions

to gain acceptance in the host country. The environmental constraints of

conducting business globally requires highly knowledgeable boundary span-

ners that can integrate the technical and institutional differences among

multiple environments (Fennell & Alexander, 1987). Inpatriate managers

have the social knowledge and the positional authority in the headquarters

to effectively accomplish the goals of a boundary spanner. Inpatriate managers

can provide the social, political and economic insights into local markets yet

maintain a global network perspective supporting an efficient/effective net-

work of subsidiaries working in concert (Harvey, Speier, & Novicevic, forth-

coming). This combination results in global managers who are capable of

interpreting the complexities of specific global situations and assist in the

development of local competitive strategies that are compatible with the

overall global strategic thrust of the organization. This diversity of perspec-

tives is important throughout the global organization but is of particular value

among the upper-echelon executives (detailed discussion of this phenomenon

can be found in Miller, Burke, & Glick, 1998).

The social and/or cultural control system provided by the inclusion of

inpatriate managers is a valuable alternative to bureaucratic control systems

used when expatriating managers to overseas assignments (Egelhoff, 1984;

Tolbert, 1988). The value of the context-specific knowledge of inpatriate

managers provides for (1) efficient transaction of business with local internal

and external parties; (2) prediction of how local parties would react/behave

under different strategic scenarios; (3) insight into the implicit contextual

dimension of internal/external cultural settings; (4) an expansion of top

management's frame-of-reference for developing strategies, interpreting out-

comes and drawing culturally accurate inferences from signals; and (5) a

means of discrete contextual control that increases the likelihood of in-

creased organizational performance (Frank, 1988; Geringer & Hebert, 1989;

Sohn, 1994).

One of the ultimate goals of inpatriation is the internalizing organizational

ability to manage the global dimensions of business using social knowledge.

Social knowledge is defined as one's ability to understand and predict others'

general patterns of behavior in specific national cultural environments and

within multicultural management teams (Tolbert, 1988). The theory of multi-

national group (MNG) functioning (Hambrick, Davidson, Snell, & Snow, 1998)


suggests that when nationality-specific social knowledge of a particular multi-

cultural team member can increase overall team effectiveness. The MNG

theory posits that multicultural team effectiveness increases if a member's

social knowledge increases the diversity of cognitive schemas within the team.

However, this diversity of cognitions is effective only if each member sup-

presses his or her culture-specific, values, demeanors and communicating

idiosyncrasies (Hambrick et al., 1998; p. 196). The cognitive diversity asso-

ciated with team members from different nationalities would result in differ-

ences in possessing social knowledge, assumptions and schemas. Team

management possess ``different information and process new information

through their own base of experience and knowledge'' (Hambrick et al.,

1998; p. 197). Increasing the cognitive diversity of the management team

comes from the different experiences/backgrounds of both inpatriate managers

and their headquarters' counterparts.

Cognitive diversity also reduces the tendency of groupthink that can occur

among more homogeneous groups of decision makers (Lant, Milliken, & Barta,

1992; Wiersema & Bentel, 1992, 1993). One could also argue that the cost of

global decision making would be lower due to the reduced need to bring in

outside experts/consultants on contextual issues of conducting business in

numerous locations (Glick, Miller, & Huber, 1993). The inpatriate managers

represent the contextual frame-of-reference necessary to operate globally and

at the same time compete locally. Having cognitive diversity becomes a

strategic distinctive competency enabling the organization to compete against

global competitors more effectively. Noneconomic governance mechanisms,

such as trust, are built by developing and sharing social knowledge and may

serve to increase economic efficiency in the subsidiary organization (Maitland,

Bryson, & Van de Ven, 1985; Ring & Van de Ven, 1992). Thus, social knowl-

edge provides the understanding of the differences in the cultural clans (Ouchi,

1980) and acts as a primary force in developing ``organic solidarity'' between

culturally different groups (Durkheim, 1964). Therefore, cognitive diversity

increases expertise, reduces the tendency of homogeneous groups to strategize

``narrowly,'' and at the same time allows the global organization to develop

interorganizational trust with subsidiaries as a core competency, increasing

overall effectiveness and making it difficult for competitors to replicate (Miller

et al., 1998).

One means of better understanding inpatriate managers is to compare

and contrast them to expatriate managers. Illustrating these similarities

and differences emphasizes the importance of managing these two unique

sets of managers differently. Five issues have been identified to portray

differences between inpatriate and expatriate managers and the resulting

research propositions.

Difference in Inpatriate Frame-of-reference

The inpatriate managers' personal and professional frames-of-reference will

be distinctly different from those of expatriates. First, due to the number of


different countries from which inpatriate managers may originate, they will be

a more heterogeneous group than a set of expatriates from the same parent

country. This is not to infer that there are no differences among expatriates'

backgrounds and resulting frames-of-reference, but rather the differences

among inpatriates will be greater due to the cultural diversity of their home

countries. The greater the cultural distance between inpatriates' culture and

that of the parent country, the greater the difference in cultural, social and

economic frames-of-reference between the inpatriates and the expatriates. In

addition, the inpatriates' organizational frame-of-reference will be contingent

on the differences between the organization from which they are inpatriating

and the parent organization.

Second, inpatriates' personal means to organize and process societal stimuli

will vary by national culture. These basic organizational frameworks aid the

individual in: (a) categorization Ð means to organize/group information

(Detweiler, 1980); (b) differentiation Ð means to discriminate among subtle-

ties found in a culture and in interaction with others (Brislin & Yoshida, 1994);

(c) in-group and out-group distinctions Ð identification of variables to deter-

mine group membership and social acceptance (Brislin & Yoshida, 1994); (d)

differences in learning styles Ð cultural prevalent orientations to learning

frequently identified as convergent, divergent, assimilative and accommoda-

tive which are influenced by education and profession (Kolb, 1984, 1985); and

(e) attribution Ð the conclusions inpatriates make concerning the motivation

of others' behavior (Hamilton & Hagiwara, 1992). The level of intercultural

sensitivity developed in their own societal and organizational cultures may be

one of the most important aspects of inpatriate managers' frame-of-reference

when interacting with multicultural management team members (Thieder-

mann, 1991; Marquardt and Engel, 1993).

Given the differences in perspectives of inpatriate managers, the following

research propositions are presented:

Proposition 1. The greater the cultural and economic developmentdistance between the home country of the inpatriate manager and thehome country of the headquarters, the greater the degree of difficulty ininpatriate adjustment to the headquarters organizational culture.

Proposition 2. The greater the cultural and the economic developmentdistance between the home country of the inpatriate manager and thehome country of the headquarters the longer the time period of theinpatriate adjustment in the headquarters environment.

Organizational Reaction to Inpatriate

The typical response to expatriate managers when they are brought into a

foreign operation is that they carry the ``weight'' of the ``home office'' with them

(Egelhoff, 1984; Boyacigiller, 1990). Therefore, the expatriate manager has a

``halo'' effect relative to his/her perceived value and importance as a decision

maker. Alternatively, inpatriates often experience the corollary. Frequently,


the inpatriate manager uses English as a second language and is not inti-

mately aware of the customs and politics of the parent country organization.

Thus, members of the parent organization are likely to perceive these man-

agers as less qualified and view inpatriates as less ``acceptable'' as prototypical

managers (Pelissier, 1991; Cvi & Awa, 1992). Inpatriate managers are likely to

experience a perceived status inconsistency (e.g., lower than/relative to their

experience and ability). The lack of acceptance can easily impact the inpatriate

manager's self-efficacy and ability to adjust to the cultural context of the parent

country organization (Harvey & Buckley, 1997). There could be a tendency to

view this inequality of treatment as exploitation of the inpatriate managers but

this would only be the case if the inpatriates were not rewarded appropriately

or were not treated as equals thereby negatively impacting their self-esteem

(De-Shalit, 1998). Therefore, the organization's inpatriating managers must

recognize the need to overcome initial resistance to the diversity brought about

by introducing an inpatriation program (Harvey & Buckley, 1997).

Given the differences in acceptance of inpatriate managers, the following


Proposition 3. The greater the status inconsistency perceived by theinpatriate manager in the headquarters the lower the performanceappraisals of inpatriate managers in the headquarters.

Proposition 4. The self-efficacy of inpatriate managers is negativelyrelated to the inpatriate's perceived acceptance in the headquarters.

Increased Levels of Stress and Resulting Conflict

New and challenging aspects of the environment can interact with indivi-

duals resulting in stress Ð psychological and/or physiological conditions that

deviate from normal (Bhagat, Allie, & Ford, 1991). Inpatriates who come from

countries that are more culturally distant and/or economically dissimilar to the

parent country of the organization are likely to experience the greatest stress

either directly or due to family adjustment problems. In addition, the stress

experienced by inpatriates will frequently be greater than that experienced by

expatriates due to the likelihood of being stereotyped (e.g., not be as accepting

of a ``foreigner'' into the headquarters of the organization) (Harvey, 1997b).

Stress and the resulting conflict within the work environment may result in

lower performance levels and significantly longer adjustment periods for

inpatriate managers (Cassidy, 1991). The tendency for inpatriates to want to

return to their home country may be greater due to both external and internal

cultural stress experienced during inpatriation.

Given the differences in stress levels associated with the inpatriation

process, the following research propositions are presented:

Proposition 5. The higher the cultural distance between the inpatriatemanager's home country and that of the headquarters the higher theinpatriate's intention to turnover.


Proposition 6. Organizations with support programs for inpatriatefamilies will experience lower turnover rates of inpatriates than thosewithout the program.

Characteristic Learning Processes of Inpatriate Managers

Individual reasoning and learning processes tend to be culturally bound

and are likely to be reflected in inpatriates' preferred framework of learning.

The broadest delineation of learning processes is typically categorized as

deductive vs. inductive. In the United States and in most of Europe, learning

tends toward inductive perspective (i.e., task and/or problem centered);

conversely, much of the remainder of the world's population approaches

learning from a deductive perspective (i.e., topic-centered learning) (Kolb,

1984). Inpatriate managers from deductive cultures focus on general to

specific when learning, whereas those from inductive cultures process inter-

nalizing external stimuli (Thijssen, 1992; Marquardt & Engle, 1993). This

potential clash of internalizing facts and, in the alternative manner, cultural/

social/political inputs needs to be carefully analyzed when assimilating

inpatriate managers into the parent country organization (Riding & Cheema,

1991; Munter, 1993).

Given the differences in learning styles among inpatriates and between

inpatriates and managers in the headquarter's organization, the following


Proposition 7. The inpatriate learning progression is positively relatedto the degree of compatibility between the inpatriate training programand the inpatriate learning style.

Proposition 8. Inpatriates from deductive cultures will have higher jobsatisfaction following task-oriented training whereas inpatriates frominductive cultures will have higher job satisfaction following person-oriented training.

Level of Explicit /Implicit Support for Inpatriate Managers

Just as for their expatriate counterparts, the formal organizational pro-

grams for training and support and informal non-work support network may

not be well articulated for inpatriate managers. The diversity of inpatriate

manager's cultural, religious and social backgrounds necessitates a complex

social support program. These programs are time consuming and, in the case

of formal programs, may be very costly. Variation in salary, benefits and

career opportunities between expatriates and foreign nationals have been

well-documented (Harvey, 1993; GoÂmez-Mejia & Palich, 1997). For example,

only 33% of inpatriate managers received COLA adjustments while 100% of

expatriates transferred overseas received COLA allowances in a 1993 survey

(Harvey, 1993).


Given the historic differences in compensation and benefit programs be-

tween inpatriates and domestic managers, the following research propositions

are presented:

Proposition 9. The greater the difference in compensation betweeninpatriate managers and parent country managers of the same level thehigher the conflict between the two managerial groups.

Proposition 10. The higher the inpatriate's perceived fairness of thecompensation system in the headquarters the higher the inpatriate'sjob satisfaction.

Inpatriates present a unique set of problems for human resource man-

agers in the parent organization and, therefore, it would appear that a

concerted effort needs to be undertaken to insure inpatriate managers'

adjustment is facilitated. Cultural diversity can provide significant global

advantage to an organization particularly when inpatriate managers become

an integral part of the fabric of management. However, cultural diversity

can create conflict and friction within the organization if not managed

effectively, resulting in a lack of stability in the organizational culture

and creating communication mishaps and breakdowns reducing the manage-

rial capabilities of the global organization (Boyacigiller, 1990; Harris &

Moran, 1992; GoÂmez-Mejia & Palich, 1997). Therefore, the differences in

competencies between inpatriate and expatriate managers must be well

understood and effective human resource management practices implemen-

ted, to reduce the interpersonal barriers to cooperation, communication and

teamwork necessary to be successful in the global arena (Glick et al., 1993).

Additional concerns which are frequently considered shortcomings of some

inpatriate managers are: (1) less likely to have formal business education;

(2) difficulty in adjusting to the complexity/sophistication of the domestic

organization (particularly if they are being relocated to developing coun-

tries); (3) the inpatriate managers lack breadth and depth of experience

given the limited scope of some subsidiaries in developing countries; (4) low

level of acceptance in domestic organization and are perceived as outsiders;

(5) lack of social support system for spouse/family (i.e., religious, educa-

tional, national cohorts); and (6) generally have a high level of stress and

dysfunctional impact on adjustment and productivity (Harvey, 1997b; Har-

vey & Buckley, 1997; Harvey et al., forthcoming). Therefore, the develop-

ment of a program to effectively integrate this diverse set of foreign

managers into the domestic operations of the organization becomes essential

for global organizations attempting to capitalize on multiculturalism.

INPATRIATE MANAGERS' ADJUSTMENT, ACCEPTANCE AND LOYALTY

One of the primary goals of integrating inpatriates into the MNC is to

incorporate their contextual social knowledge of host countries/operations into


the development of global strategies. In addition, increasing management

team cultural diversity accelerates ``global thinking'' of parent country na-

tionals. There are a number of issues that should be addressed in order to

merge inpatriate managers into the domestic organization effectively: (1)

adjustment/support; (2) acceptance/trust; and (3) commitment/loyalty. Each

of these issues will be discussed separately and an appropriate theoretical base

applied to aid in understanding these complex points.

Inpatriate Adjustment and Need for Social Support

Personal and professional adjustment occurs anytime an individual moves

from one country or job to another (Black et al., 1991). The adjustment process

is typically divided into two phases: anticipatory and in-country adjustment.

First, anticipatory adjustment involves an individual's previous experience

and training plus any training program that has been instituted by the

organization to facilitate adjustment. Secondly, in-country adjustment focuses

on non-work adjustment (e.g., family, cultural and social adjustment), organi-

zational adjustment (e.g., formal support, on-going training, conflict with past

practices and degree of latitude or discretion the manager is allowed in a

specific position) and the individual's ability to adapt to culture/positional

requirements in the foreign country (Black & Gregersen, 1991; Black et al.,

1991, 1992).

International adjustment is a complex, multifaceted process due to the

language, cultural, social, political and economic differences that often exist

(Torgiorn, 1982; Black & Gregersen, 1991; Black et al., 1991). This complexity

is shaped by the existence of a new work environment and position, ongoing

interactions with foreign nationals and a need to acclimate to the general

cultural, social, political and economic environment (Reichers, 1985; Black &

Gregersen, 1989). Existing norms and programs have been identified for

facilitating cross-cultural adjustment (Black et al., 1991). However, it is

anticipated that these expatriate-tailored cross-cultural adjustment norms

will be convoluted and ineffective for inpatriate managers, potentially result-

ing in a loss of self-efficacy.

Social cognitive theory (SCT) suggests that the basis of managerial effec-

tiveness is the manager's self-efficacy (i.e., an individual's belief in his/her

capabilities to control activities in a given environment in ways that produce

desired outcomes) (Bandura, 1997). Unless managers perceive that they can

access and/or develop the necessary behavioral, cognitive and motivational

resources to be successful, they frequently dwell on the formidability of

the task/position, exerting insufficient effort and doom themselves to the

self-fulfilling prophesy of failure (Stajkovic & Luthans, 1998). Because of the

magnitude of cultural adjustment, inpatriate managers have the potential for

losing self-efficacy resulting in adjustment problems.

In most relocation circumstances, the inpatriate is eventually moving to

headquarters Ð a more important/prestigious organizational entity Ð that

may result in reduced inpatriate self-efficacy. An inpatriate manager's


self-esteem may falter because he/she does not have the experience base

to assume/understand how to interact in the headquarters environment

effectively. Furthermore, the inpatriate may have played a significant role

within a subsidiary operation exerting his/her control and decision making.

Within the context of the parent organization, the inpatriate is likely to exert

less authority and ``be one of many'' (e.g., small fish in a big pond). Inpatriates

relocating from collectivist cultures where a lower level of self-esteem is

accepted are more susceptible to this type of adjustment problem (Diener,

Sch, Smith, & Shao, 1995).

In the situations where there is a devaluation of self-esteem, there may

also be a concomitant reduction in satisfaction and ability to perform in the

position (the self-fulfilling prophesy) (Triandis, 1989; Veenhoven, 1991; Di-

ener & Diener, 1995). This inability to perform may carry over to the

ineffective use of the inpatriate's social knowledge regarding culturally and

economically distant countries/operations Ð the primary competency they

bring to headquarters.

In addition to adjustment difficulties related to self-esteem, it is anticipated

that many inpatriate managers will experience a significant level of status

inconsistency after being relocated to the parent country organization. Status

inconsistency occurs when an individual has status indicators (e.g., authority)

that are inconsistent with each other or some expected value (Blalock, 1964,

1967; Hope, 1975; Smith, 1996). Specific to inpatriation, status inconsistency

might occur in the following manner: inpatriate managers are likely to be

selected based on their superior performance in the foreign subsidiary result-

ing in a great deal of foreign organization adulation and support. Because of

this strong performance, the inpatriate receives personal rewards/perks and

are accorded a high level of esteem/respect within the foreign subsidiary. After

the transfer to the parent country organization, the status of many inpatriates

may be transformed due to the prevailing stereotyping attitudes of domestic

managers/employees: (1) the inpatriate is relocating from a less ``important''/

foreign subsidiary; (2) the inpatriate is ``different''/foreign in a behavioral sense

and speaks English as a second language; (3) frequently the incentives and

compensation for inpatriates are not sufficient to reach parity with domestic

managers (Harvey, 1993); and (4) inpatriates do not understand the informal/

political dimensions of the parent country organization and therefore appears

as a naive novice to their peers and subordinates.

The adjustment problem associated with status inconsistency relates to the

``appropriate'' means by which individuals resolve the conflicting inconsistency.

It has been hypothesized that if the inpatriate transferees are inconsistent on

ascribed status characteristics, they will attempt to modify their perceptions of

the organizational culture to which they have been transferred. Whereas,

when inpatriate managers are inconsistent on achieved status characteristics,

they will focus the changes to themselves to become attuned to the new

organizational culture (Smith, 1996).

The resolution of the inpatriates' conflict state is imperative to insure

the successful relocation and integration of the inpatriate manager into the


domestic organization. It is important to note that this adjustment stress

from status inconsistency is not associated with expatriates because of

their assumed ``superior'' background coming to the subsidiary from the

headquarters organization. Therefore, organizations must create adjust-

ment programs tailored for inpatriates and not rely on regurgitated

expatriate adjustment programs to enhance the development and success

of inpatriate managers.

Acceptance and Trust in Inpatriate Managers

Permanently relocating inpatriate managers to the parent country orga-

nization requires specific measures and programs to insure the acceptance of

these individuals. To facilitate the development of a multicultural strategy

and management team, the organization should encourage the development

of inpatriate trust that heightens their acceptance, resulting in higher levels

of decision discretion for the inpatriates. The acceptance of inpatriate

managers is likely to be contingent on three broad categories of factors: (1)

inpatriate characteristics Ð cultural background, race, country-of-origin, age,

gender, religion, disability; (2) inpatriate experience Ð behavior character-

istics, personality, expressed attitudes, prior experience in social/professional

contexts, position and linguistic ability in parent country organization's

language; (3) cultural/relocation experience Ð international context-related

variables (e.g., level/degree of ethnocentrism in majority population, stereo-

typing of inpatriates type of background) and organizational factors (e.g.,

support for inpatriation by top management and their policies, proximity of

inpatriates to majority population) (Adler, 1991; Greenhaus & Parasuraman,

1993; Powell, 1993; Tung, 1993; Witte, 1993; Tayeb, 1994; Mamman, 1996).

The complex set of variables that can influence the acceptance of outsiders

into an organization complicates the process of encouraging organizational

inpatriate acceptance (Louis, 1980; Jackson, Brett, Sessa, Cooper, Julin, &

Peyronnin, 1991; Motwani, Harper, Subrammian, & Dreglar, 1993).

The process of formalizing the development of inpatriate manager trust is

important because it demonstrates both the organization's willingness and

the inpatriates' intentions of making a commitment to the inpatriate/

organization. Trust refers to the willingness of a manager to be vulnerable

to the actions of another manager based upon expectations that the former

will perform a particular action important to the trustor, irrespective of the

ability to monitor or control the other party (Gambetta, 1988; Mayer, Davis,

& Schoorman, 1995). Without trust in inpatriate managers, effective social

control of global operations will be overridden by formal bureaucratic

controls which are frequently ineffective in a global context (Sohn, 1994).

Therefore, creating a program to develop trust between the inpatriate and

parent country managers should focus on the degree of difference between

the individual manager being transferred and the degree of homogeneity of

the organization's culture (Lengnick-Hall & Lengnick-Hall, 1988; Barnett &

Toyne, 1991). The acculturation process (i.e., a multidimensional process


resulting from intergroup contact with individuals whose primary learning

has been one culture take over characteristic ways of living from another

culture; Hazuda, Stern, & Haffner, 1988) can be conceptualized as varying

along two underlying dimensions Ð the degree of acceptance of the host

country/culture and retention of one's original culture over time.

Prior research suggests that there is a positive relationship between

acculturation, organizational socialization and headquarters career progres-

sion of inpatriate managers (Barnett & Toyne, 1991). Successful career

progression is contingent on new skill acquisition that can only occur if an

inpatriate manager has been socialized into the parent country's organiza-

tional culture. Although all inpatriates need to go through a socialization

process, the process itself will vary based on the inpatriate manager's national

culture and other individual characteristics, their hierarchical level within the

organization and the disparity in economic development between the two

countries (Feldman, 1981, 1988; Berry, 1990; Barnett & Toyne, 1991; Cox,

1993; Alkhazraji, Gardner, Martin, & Paolillo, 1997). In addition, there are

four phases of socialization that an inpatriate manager can progress through

relative to the parent country organization's culture (see Fig. 1): (1) segrega-

tion Ð maintaining social distance, identifying differences and assessing the

social cost of not becoming more socialized; (2) assimilation Ð modifying the

inpatriate cultural/social behavior through increased communication, develop-

ing clearer understanding of informal organization and social networks; (3)

integration Ð influencing the organization's culture and recognizing the

contextual/global social knowledge the inpatriates provide to parent country

management; and (4) individualization Ð blending both inpatriate and parent

country cultures facilitating the development of global strategic perspectives

by using the local contextual social knowledge necessary to develop competi-

tive strategies.

Over time, an effective socialization process results in an increased level

of trust between the top management of the parent organization and the

inpatriate. Trust component is a critical dimension of any inpatriate

program, in part, due to top management's need for a high level of

confidence in managers who control the global operations. Until inpatriates

are accepted as members of the managerial ``in-group,'' they will frequently

be thought of as outsiders, having an unpredictable level of loyalty/commit-

ment resulting in a belief that they cannot to be trusted with an important

responsibility (Labianca, Bran, & Gray, 1998).

Another stream of research has emerged that recognizes the role of trust

in interpersonal rights and obligations. When embedded in the organiza-

tion, the concept of trust is the relationship between individuals in each of

the organizations, i.e., the home and host country organizations (Grano-

vetter, 1985). This network or ``radius'' of trust is the willingness to extend

trust to others and it has been shown that trust varies by culture and may

also differ by level of economic development in a society (Fukuyama, 1995).

Therefore, inpatriates having the social knowledge of the host country and

the knowledge of the parent country are ideal to bridge cultural boundaries


Fig

ure

1.

Life

-cycle

Phases

of

Inpatr

iate

Inclu

sio

n


of the two organizations better than alternative staffing pools. Their social

knowledge and organizational acceptance in both the home and host

countries provides them with a unique position to maintain recurring

relations and interdependence which are built on trust (Ring & Van de

Ven, 1992). Trust becomes social capital between institutions and/or networks

that provides them with a distinct competitive advantage and allows them to

cooperate and share resources necessary for developing and implementing

global strategies (Koehn, 1996).

A model of trust building has been developed based on the centrality of

interpersonal trust in the implementation of an inpatriate program (see

Fig. 2). The inpatriates' trustworthiness is a composite of their cultural

distance from the parent country culture, their repertoire of past organiza-

tional experiences in both the foreign and parent country organizations,

the level of socialization and their expertise and knowledge. The estab-

lished level of past experience and perceived integrity of the inpatriate

represents a cornerstone of continued trust (Mayer et al., 1995). In

addition, characteristics of the trustors (i.e., both in the home and host

countries) also influence trust building. The primary characteristic identi-

fied in the model is the cultural background of those entering the trust

relationship with the inpatriate. The predisposition to trust is likely to be

based on the interactions between trustors and the inpatriate manager and

will be influenced by past experience in each of their cultures. The cultural

stereotyping tendency of the trustor is often a strong barrier to trusting

and therefore plays a significant role in the building of a trusting relation-

ship with inpatriates. These cultural dimensions of the trustor tend to

identify the cultural propensity to trust in general as well as to trust

others based upon their cultural heritage.

Trust comes from the antecedent characteristics of both inpatriate and

the trustor. Inpatriates must be able to develop trust relationships with

both home and host country trustors, thereby, illuminating the true

boundary spanning role the effective inpatriate manager plays in a

global organization. The organization can influence the speed at which

trust relationships develop between managers by creating a culture and/

or formal programs to enhance the creation of trust. The culture/

programs will influence individual perceptions of trusting and the like-

lihood of being betrayed or not trusting and losing the value of the

relationship with a trustworthy individual. As with socialization, the

trust relationship will evolve over time and will change the nature of

the trust relationship based upon prior outcomes. Within the organiza-

tion, building trust with parent country counterparts allows the inpatri-

ates to perform control activities on behalf of the global operations based

upon their understanding and acceptance in the parent country organi-

zation. Trust built with host country nationals allows the inpatriate to

exercise the control necessary to insure successful contextualization of

strategies, yet insure these strategies are consistent strategies with the

global network.


Fig

ure

2.

Inpatr

iate

Modelof

Tru

st

Rela

tionship

s


Commitment and Loyalty of Inpatriate Managers

Organization commitment encompasses the comparative strength of an

individual's identification with, involvement in and compliance to a particular

organization (Cohen, 1993; Heimann & Pittenger, 1996). While commitment to

domestic organizations has been extensively researched (see Mathieu & Zajic,

1990; Randall, 1993), only recently have researchers begun the arduous task of

examining commitment in an international context (Boyacigiller & Adler,

1991; Randall, 1993). A guiding question for international human resource

managers is how to accommodate, control and obtain commitment and loyalty

of managers transferred from one culture to another (Ricks, Toyne, & Mar-

tinez, 1990). As with adjustment and trust, inpatriate commitment is also

influenced by his/her background. Researchers have found commitment differ-

ences varying by the level of economic development, with individuals in less

industrialized economies showing a high level of normative commitment to the

organization (Hofstede, 1980; Randall, 1993).

Inpatriate manager commitment to the organization is a central issue in the

development of a fully articulated inpatriation program. Four factors appear to

contribute to an inpatriate's commitment based on existing theory and cross-

cultural research (Avery, Bhagat, & Salas, 1991; Doktor, Tung, & Von Glinow,

1991; Luthans, Welsh, & Rosenkrantz, 1993; Welch, Luthans, & Sommer,

1993; Sommers, Bae, & Luthans, 1996): (1) demographic characteristics Ð

(e.g., age, position/level in the organization, education level) (Luthans, Black,

& Taylor, 1987; Mathieu & Zajic, 1990); (2) organizational factors Ð (e.g., size,

structural characteristics, degree of centralization of decision making, the level

of formalization of conflict resolution) (Payne & Pugh, 1976; Morris & Sher-

man, 1981); (3) management style Ð (e.g., degree of openness in management

decision making, degree of individualism allowed in decision making); and (4)

organizational culture Ð supportive, compatibility of the individual in an

organization's culture, consistency with the personal beliefs of the individual

(Mathieu & Zajic, 1990).

The longitudinal corollary to commitment is the development of loyalty to

the parent country organization. Loyalty focuses on the inpatriate managers'

on-going willingness to identify with the parent country organization's goals

and recognition that their future career opportunities are in the domestic

organization. The following section explores a means to increase commitment

and loyalty of inpatriate managers to the parent country organization.

SOCIAL SUPPORT PROGRAM FOR ACCOMPLISHING INPATRIATION GOALS

In an effort to encourage inpatriate commitment and loyalty, differences

between inpatriate managers must first be understood by human resource

managers responsible for developing inpatriation programs. In an effort to

distinguish among inpatriates, three variables can be used: (1) cultural

distance between home and host country of the inpatriate manager and the


subsequent clustering of cultures that exhibit similarities (Hofstede, 1980);

(2) the level of economic development and the resulting influence on the

inpatriate's economic frame-of-reference for making decisions (Rostow, 1971;

Hofstede, 1980); and (3) the organizational level that the inpatriate man-

ager is going to be assigned to in the parent country organization (Harvey

et al., forthcoming). These dimensions can be used in classifying inpatriates

into more or less homogeneous clusters that are depicted in Fig. 3.

Fig. 3 illustrates the various categories of inpatriate managers and

consequently the anticipated different levels of social support to facilitate

adjustment to the parent country organization. For example, a supervisory

manager from a host country with low cultural distance and a high level

economic development would require less complex training and support due

to the similarity of home/host countries and the requirements of their

position. A more complex adjustment and, therefore, the need for a more

elaborate program would be the case of a top management inpatriate from a

culturally distant country with a low level of economic development. This

top manager's cultural, organizational and personal frame-of-reference

would probably not be sufficiently well articulated to manage in the home

country organization effectively. Therefore, intensive assimilation and a

formalized training/development program would be needed. Inpatriate man-

ager would be relegated to making decisions in a ``cultural vacuum'' without

attending to the ``differences'' amongst inpatriate types.

The clustering of inpatriates allows for the customization of support/train-

ing/development programs for each category of inpatriate. These programs can

be delivered in a series of modules appropriate for the category of inpatriate

manager. It is important to recognize that inpatriate managers need varying

levels of support and on-going training/development or the likely probability of

success of an inpatriate program would be diminished.

The critical nature of inpatriate managers' contribution to globalization

would be lost without a comprehensive inpatriate manager ``support'' program.

An inpatriate's concept of self-efficacy will play a major role in their motivation

and task performance necessitating formalized support to assimilate them into

the parent country organization effectively. Self-efficacy may be reduced

during periods of complex learning (e.g., when inpatriate managers are

relocated to the domestic organization). The ability to learn and maintain

one's self-efficacy, motivation and integrative skills is an important considera-

tion for developing an inpatriation program (Mitchell, Hopper, Daniels,

George-Falvy, & James, 1994).

In order to gain inpatriate managers' commitment and loyalty over time,

a psychological contract of trust must be forged between the inpatriate and

the home organization's management. Creating trust in the organization

entails providing the inpatriate managers with: (1) the global vision held for

the organization; (2) the basic core values of the global organization; (3) a

clear understanding of the home organizational climate/culture; (4) the

differences in human resource management processes and how the varia-

tions have an immediate as well as long-run impact on the inpatriate; and


(5) the career opportunities for the inpatriate manager in the parent country

organization (Rogers, 1995a, 1995b). These psychological contracts help

support the inpatriates' beliefs about the reciprocal obligations between

them and the parent country organization and represent a cornerstone of

an enduring employment relationship (Rousseau, 1989; Morrison & Robin-

son, 1997). Variation in the psychological contract on the part of the parent

Fig

ure

3.

Cla

ssifi

catio

nof

Inpatr

iate

Manager

Cate

gories


country organization will decrease the inpatriates' trust, satisfaction, per-

formance and likely success in their critical dimensions of global manage-

ment (Robinson & Rousseau, 1994).

The parent country organization must also commit to a social/psychological

support program for reducing inpatriate manager's stress during his/her

adjustment to the parent country's external and internal cultures. The infra-

structure of support has two primary aspects, one which is related to the

inpatriate work environment and the other which is designed to assist the

inpatriates' families (see Fig. 4). The social/psychological support at work is to

assimilate the inpatriate into the working culture as quickly as possible,

reducing the potential amount of dysfunctional behavior and increasing the

rate of learning. The support program should be constructed with the char-

acteristics of the inpatriate clusters that were discussed in Fig. 3. This would

allow the components of support and the resources allocated to supporting

different clusters of inpatriate managers to be variedly dependent on the

cluster needs.

One of the most important aspects of inpatriate manager support is the

perceived equity associated with the organization's efforts. While there will be

differences in the support programs for each cluster of inpatriates, each cluster

must recognize why there are differences and accept these differences as being

equitable. The process by which support is allocated to each support cluster

(i.e., procedural justice) will significantly influence the inpatriate manager's

perceived satisfaction with support (Lind, Kuntz, Musante, Waller, & Thibant,

1980; Greenberg, 1990).

Inpatriate managers will more than likely look to the equity of procedures

for input about their social identity and value in the parent country organiza-

tion. If they do not perceive that they are legitimate, full-fledged members of

the organization, the level of commitment and loyalty will be in question (Lind,

Tyler, & Huo, 1997). If inpatriate managers perceive/feel they are being

treated fairly, they will have a higher probability of committing to the

organization and accepting the authority of decisions resulting from the

established procedures (Tyler, Degoey, & Smith, 1996). It could be argued

that the value and identity of the inpatriates would be communicated through

the procedural justice process where their ``worth'' is demonstrated by the

equitable treatment they receive (Grienberger, Rutte, & van Knippenberg,

1997). In summary, the support for inpatriates must vary by cultural/economic

cluster and by their level in the organization but at the same time the support

must be viewed as equitable by inpatriates based upon the procedure for

distributing support to the inpatriates and their families.

SUMMARY/CONCLUSIONS

In this paper, the contextual issues contributing to the success of inpatriate

development program have been examined. A particular focus of this research

has been on (1) customizing the program to the inpatriate frame-of-reference


Fig

ure

4.

Modelof

Socia

l/P

sycholo

gic

alS

upport

for

the

Inpatr

iate

sand

Fam

ilies


that is dependent on the inpatriate national culture and its level of economic

development; (2) enhancing inpatriate's status and self-efficacy in the parent

organization's environment; (3) providing the inpatriate a formal support for

stress reduction and learning conflict resolution; (4) customizing the program

to the inpatriate learning style; (5) designing an equitable inpatriate compen-

sation program; (6) formalizing the program to enhance the inpatriate's

commitment, loyalty and trustworthiness; and (7) developing a social support

program for inpatriate and family. As a result, these contextual issues impose

a specific set of demands on the corporate human resources department in an

MNC headquarters to design inpatriate development programs in a different

manner from that of expatriates.

The guiding processes and expected outcomes of the inpatriate develop-

ment programs are explicated in the figures to this paper, which summarize

the contributing findings of this research. The Fig. 1 shows the four phases

(segregation, assimilation, integration and individualism) of the inpatriate

value-adding role to the organization outlining the characteristics, critical

issues and barriers associated with each phase. The Fig. 2 illustrates the

formal iterative process of developing trust in inpatriate relationships

taking into account the antecedent factors influencing inpatriate trust-

worthiness (cultural distance, organizational experiences, socialization level,

expertise level, social capital and perceived integrity) and the moderating

effect of individual trustors in the headquarters (cultural background, level

of interaction with inpatriate, tendency to stereotype, past experience in

developing inpatriates and propensity to trust). The trust resulting from

interaction of these two sets of factors and organizational inpatriate pro-

grams leads to development both at the individual and at the headquarters

levels with the goal of increasing the inpatriates' discretionary latitude in

actions over time.

Fig. 3 depicts how the level of complexity in designing inpatriate devel-

opment programs increases with inpatriate management level in the orga-

nization as well as with cultural distance and the difference in the economic

development level between the home country of the headquarters and that

of the inpatriate. Finally, Fig. 4 portrays a proposed model of social/

psychological support for inpatriates and inpatriate families. As is indicated

in this figure, it is necessary to fit the informal aspects of family social

support into the formal organizational support program to meet the in-

patriates' needs where the support program encompasses emotional, instru-

mental and informational dimensions.

Specific organizational policies should address how dimensions of the

informal and those of the formal support programs may be combined into a

specific support program for a cluster of inpatriates. The concrete options in

these policies could include such items as: (1) separation of the organization

and family domains by establishing non-permeable boundaries; (2) integration

of informal and formal support by erasing the boundaries between the two

domains; and (3) respect for the inpatriate family need for moving this

boundary during different phases of inpatriate development program. In


summary, Fig. 4 provides the general framework that delineates specific

components and dimensions of both the informal and formal social support

aspects, which can be customized for each chosen strategy among the three

options for the organization/family ``fit'' within the program.

Future research on inpatriation should address a broader set of contextual

influences on the design of the inpatriate development program. The United

States is the largest market for human capital and is the country which has

received the largest number of highly trained professionals over the past

decade (Cheng & Yong, 1998). In particular, the influence of the configuration

of the firm's resources, corporate culture and organizational learning as well as

the influence of the controls employed in global diversification strategies may

influence the design of the inpatriate development program. A more specific

line of research should address the design of inpatriate development programs

in terms of their structure, incentives, communication processes and inpatriate

composition. In our opinion, the proper integration of nationality construct in

the inpatriate development program research will be one of the most intriguing

future research topics.

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