By Peter Muijres – Culture Class
Increased global activity has led companies around the world to seek new markets for their products, new sources of raw materials, as well as new, more cost-effective locations for manufacturing. According to a report by the Economist Intelligence Unit in 2006, transnational collaboration will be of decisive importance in an increasingly global competition. Expatriates are employed for reasons such as transfer of expertise, facilitating entry into new markets, or development of international management competencies.
Some of these foreign ventures succeed, but many do not. A high percentage of expats fails to meet expected standards of performance abroad. Studies have found that as much as 40 to 55% of expats ‘fail’ to adjust to living and working abroad and many cut their assignment short. Out of the American expats who stay at their international assignments, approximately 30 to 50% are considered ineffective or marginally effective by their firms and do more harm than good.
The costs of expatriate ineffectiveness and turnover are intimidating. Studies on American companies have shown that every early return of a manager costs companies as much as $250,000 to $1 million per individual, depending on the level of the manager and the urgency of their replacement. The direct costs of failed expatriate assignments to U.S. firms are estimated at over $2 billion a year, the costs of psychological suffering, damaged corporate reputations and lost business opportunities not taken into account.
The multiple and sudden losses and challenges that expats are faced with make them a particularly vulnerable group. Challenges may include a loss of language, social support network, possessions, knowledge of laws and rules, and of geographical orientation. Expats who feel out of touch with local customs and conduct, and who are unaware of culturally accepted styles of communication and problem solving may feel unable to prevent embarrassing or frustrating incidents with host nationals whilst living and working abroad. The inability of expats to adjust to the demands of an international business environment has been identified as a primary cause of international business failures.
Intercultural training addresses the demand for an interculturally competent workforce. It makes sure that expats set off and return with realistic expectations and it provides them with the knowledge, skills and attitude they need to develop rewarding collaborative relationships and to meet standards of functioning abroad.
Various independent studies have confirmed the effectiveness of intercultural training. Empirical evidence has shown that intercultural training helps expats to develop important intercultural skills, to facilitate intercultural adjustment, and it improves their professional performance and their well-being. Intercultural training is an indispensable prerequisite for the return on investment that organisations increasingly seek in international ventures and an expatration of their staff and provides a bedrock they can rely on in times of global opportunities and change.
Culture Class develops and provides intercultural training and coaching for expats