Information about the article
The article, Cross-Cultural Training and its Impact on Expatriate Performance in Australian MNEs, is the article of choice for this practitioner review (full citation as written below).
Shen, Jie, and Lang Brant. “Cross-Cultural Training and its Impact on Expatriate Performance in Australian MNEs.” Human Resource Development International 12.4 (2009): 371-386. Infobase. Web.
I came across the article on the Internet by using the keywords “Cross-cultural training in multinational enterprises.” I chose this article as it complies with the theme of discussion and presents a unique perspective owing to its focus on short-term international assignments using Australia as the case study.
Information about the context
The article explores some of the aspects that comprise elements of cross-cultural training (CCT), including common methodology, rigor, and assessment of success for methods that multinational enterprises (MNEs) use for their training. The article also analyzes in-country training, the advantages of short-term international assignments as a method of CCT over in-country training, and the effects of CCT on expatriates as they conduct business on behalf of their parent companies in alien host environments. The article lays emphasis on pre-departure training of expatriates as a means of avoiding losses emerging from repatriation due to the complications developing from the lack of compliance with local culture in foreign environments.
Information about the international human resource challenge being addressed
The “theme” for the topic is Cross-Cultural Training Issues in International Human Resource Management. The globalization phenomenon has resulted in an increase in international trade. The practice of establishing extensions of corporations in other countries has become increasingly common in the modern world, thus leading to the rising number of multinational and transnational corporations. This dynamic presents numerous benefits for the host countries as well as companies that choose to embrace the move as their investment method of choice. For instance, unlike instances in which companies have to hire out other companies in foreign countries for investment purposes, the establishment of personal branches allows companies to reap maximum profits, reduces expenditure in terms of importation and exportation costs, and allows companies to benefit from government incentives. The host governments benefit from increased employment opportunities, increased tax revenue, and a cheaper source of skill importation.
However, the dynamic also presents some challenges for multinational corporations, particularly with regard to human resource management (HRM) practices such as adoption and incorporation of a foreign culture without compromising the companies’ goals and objectives. Cross-cultural training is one of the strategies that human resource managers apply to counteract the possible negative effects cultural interaction may present. HRM practices involve the creation of organizational culture in aspects such as employer-employee interaction, recruitment and selection, employee development, and performance management. Although, at times, cultural elements between a company and its environment match, sometimes they bear significant differences, thus resulting in problems between the companies and authorities of the host country together with the consumers. Cross-cultural training helps MNEs avoid such problems through pre-departure training of parent-country nationals (PCNs) before deployment to foreign countries and during the period of operation in such foreign environments to aid with adaptability. The article explores the importance of cross-cultural training using MNEs in Australia as a case study.
Authors’ findings and conclusions
Throughout the article, the authors conduct an analysis of earlier research on CCT with regard to MNEs. They note that over the years, most MNEs pay little attention to the CCT process of PNC managers before deploying them to foreign countries to run affairs in subsidiaries for the parent company. For instance, the analysis includes data from research by McFarlan and Sweeney, which indicates that forty percent of MNEs do not provide any particular form of CCT for their expatriate staff, regardless of their knowledge of the financial devastation that such a move is likely to cost the company due to operational failure emerging from poor cultural adaptation. The research further states that small and medium enterprises (SMEs) have it worse, with more than ninety percent offering no pre-departure training to their staff as they embark on establishing subsidiaries in foreign countries.
The authors explain that most MNEs opt to employ parent-country nationals (PCNs) as managers in subsidiaries overseas for various reasons. One of the reasons is that they are easily accessible and provide readily available managerial expertise, which the MNEs can assess properly before employment. Additionally, PCNs understand the objectives, goals, and missions of the parent company, which enable individuals to operate the subsidiaries in host countries appropriately while maintaining contact with the headquarters. However, this choice of individuals also bears its disadvantages, including a lack of cross-cultural business and interpersonal skills. Therefore, this aspect requires companies to provide appropriate pre-departure training for the expatriate managers to mitigate eventualities such as culture shock and fatigue that crop up during the conduct of international operations overseas.
The authors also present the opinion that most companies that recognize the importance of pre-departure training choose in-country training as their training method of choice. Shen and Lang attribute the popularity of in-country training to past research that characteristically focuses on elements of in-country pre-departure training, implementation, and evaluation. The two also term the exclusion of short-term international assignments as part of CCT as a faulty evaluation of available methods. They explain that although the duration of most short-term international assignments (STIA) is brief, the lessons that expatriates learn from exposure to the foreign environment is invaluable.
STIAs boost the adaptability of expatriates and prepare them adequately for any new cultural experiences they may encounter in future assignments overseas. Secondly, they reduce the vulnerability of individuals in new environments by assessing their prevailing situations critically and developing personal strategic solutions specific to their situations. Thirdly, STIAs afford MNEs the opportunity to evaluate the performance of their managers in foreign environments and make appropriate changes where necessary for individuals who adapt poorly. It also gives the organization a chance to evaluate the efficiency and effectiveness of its CCT methods, including those applicable for in-country pre-departure training.
The authors establish that methods of delivery applicable during most in-country training programs such as in-house lectures, mentoring, cultural assimilation, interviews with expatriates, and use of host-country subsidiary partners are effective in their own right. However, they do not compare to the real experience of the host country’s culture that SIATs offer.
The authors prescribe the recognition of STIA as a CCT method. According to their evaluation, such recognition would result in increased usage by MNEs over time. Such use would improve the outcome of most CCT programs for MIEs in Australia and other counties worldwide. Additionally, recognition of STIA as a mode of CCT training would lead to further research on the topic, thus providing objective perspectives on its effectiveness and possible improvements.
Evaluation of the author’s findings and conclusions
The authors present very valid points regarding the topic, especially on the effects of lack of cross-cultural training considerations in corporate operations for MNCs. Culture forms an essential element of both the MNCs and their surrounding environments. In the corporate world, it affects the way people interact depending on their position in the company, the way people dress, expectations on behavior for various individuals, and interaction with the surrounding environment. According to John Adair, organizational culture, which entails training employees before undertaking any task, brings balance and consistency to the company, which allows employees and management teams to adapt and synchronize their activities towards attaining the company’s goal. Martin Parker, in his book, Organizational Culture, and Identity, agrees with Adair’s notion, adding that such organizational cultural practices form part of the organization’s identity. Although it is important to foster such a culture, the cultural practices in the environment surrounding the business are just as important and play a big role in the success of any company.
The authors’ evaluations on the effectiveness of STIAs, especially with regard to their benefits, are accurate. Personal exposure to foreign culture in the host environment presents the most practical mode of CCT available. Most in-country methods are passive in nature, and they only present a certain level of similarity with conditions in the host countries. For instance, in-house lectures and interviews are informative but more theoretical than practical. The success of in-country CCT also depends on the implementation of the same in practical situations that SIATs provide. Lastly, SIATs afford to MIEs the opportunity to conduct objective analyses of their CCT methods and make necessary changes.
However, the authors overlook the cost effect that STIAs have on the financial health of MIEs. STIA is a costly method of CCT in comparison with in-country training. Mistakes made during such assignments present the danger of being irreversible, especially for culturally inexperienced candidates. Therefore, some pre-departure theoretical training may prove necessary. Additionally, even if more research creates more awareness on the method as a valid mode of CCT, most companies are likely to choose modes that provide similar benefits at lower costs, such as in-country training.