Andreas Weber s Reward for Success in an International Assignment

Transcription

1 INSEAD Andreas Weber s Reward for Success in an International Assignment Teaching Note This teaching note was prepared by Günter K. Stahl, Assistant Professor of Asian Business at INSEAD and Mark E. Mendenhall, J. Burton Frierson Professor of Leadership at the University of Tennessee. It is intended to aid instructors in the classroom use of the case Andreas Weber s Reward for Success in an International Assignment (A & B). 01/2003- Financial support for the project Expatriate Careers (INSEAD research grant # R) is gratefully acknowledged. N.B. PLEASE NOTE THAT DETAILS OF ORDERING INSEAD CASES ARE FOUND ON THE BACK COVER. COPIES MAY NOT BE MADE WITHOUT PERMISSION.

2 INSEAD 1 Case Summary Andreas Weber was selected as a high potential manager in a large German bank early in his career. One part of that designation was the expectation that he take an overseas assignment to globalize his perspective. An assignment to the U.S. came sooner than expected, and upon arrival in New York he discovered that the assignment had been poorly planned. He decided to stay and make the best of a less than ideal situation. Over time, he progressed swiftly in the New York office. Due to family issues, he and his wife decided that after spending more than six years in the U.S., it would be best to return to Germany. However, headquarters was not able to find a position for him back in Germany that was requisite with his experience and skills. The only position they could find for him was essentially a demotion, and in a part of Germany that was far away from corporate headquarters. The case ends with Andreas wondering what he should do. (see A Case) This case is based on a real person; circumstances, people, and the name of the company have been altered to protect the anonymity of everyone involved in the actual situation. What happened to Andreas? After several days of consideration, he reluctantly decided to accept the job offer. As soon as he was transferred back to Germany, he immediately looked for a new position. Four months after his return to Frankfurt, he joined a large insurance company headquartered in Germany. (see B Case) Teaching the Case Assignment Questions 1. Should Andreas go back to the position offered? 2. If Andreas accepts the job, what should his career plan be? 3. If he doesn t accept the job, what should he do? 4. Who is to blame for the current situation? What factors contributed to Andreas reentry problems? 5. What can the organization do to avoid the kind of problems illustrated in the case? From an HR perspective, what would be a more systematic approach to repatriation planning and international career development? The sequence of the assignment questions forces students to analyze the nature of Andreas dilemma, and of the likely implications of the options that are available to him. Students must place themselves in Andreas shoes to see if anything can be done to remedy the situation. Finally, students must reflect on the factors that contributed to reentry problems, and explore approaches to improve international career management and repatriation practices.

3 INSEAD 2 1. Should Andreas go back to the position offered? Have the students discuss the reasons for both returning and staying that Andreas is wrestling with. As they develop and discuss these reasons, one option is to guide the discussion into an evaluation of the pros and cons of each of the reasons the students bring up. The paramount issues are listed in the table below. At the end of the discussion of this question, emphasize that the reasons and their pros and cons do not mesh well they are apples and oranges, with no clear win-win combinations for the participants involved. To illustrate this it would be useful to have the students brainstorm what a possible win-win strategy would be. Help them to remember that the issues are not just between Andreas and his wife and his career, but that these dimensions interact with his children and the children s grandparents as well. PROS (reasons for accepting the job and returning to Germany) CONS (reasons for rejecting the job and staying in the U.S.) His wife wants to return home; he needs to look after her needs. If he doesn t, remaining in New York will be a nightmare for his family. His children are losing their German heritage and identity and if he doesn t go back, they will be Americans in their culture and mindset. He has been out of sight and out of mind from the home office for six years. Taking this position will only worsen his career chances in Germany by remaining cut off from headquarters. If after 8 months this is the best they can offer, does he really have a future in this company? It would be better to stay and build a career in the U.S. He knows that he will miss the freedom and authority he had in his job as head of the corporate finance department. His children feel at home in New York. They found new friends and enjoy the high standard of living in New York, and the prospect of moving from New York to the Eastern part of Germany is not very appealing to them. From a professional point of view, Andreas knows that it doesn t make much sense for him to return home The most important reasons for going home have to do with the future of the children and the situation with his wife.

4 INSEAD 3 2. If Andreas accepts the job, what should his career plan be? Now, the discussion can more fully evaluate the implications of the two major options that Andreas faces: to stay or to return. Option 1: Springboard. Use the position to get back to Germany, but then look for a job in another company in Germany. This is the actual option that the real Andreas Weber took; but, have the students consider the risks of this option (e.g., perhaps he will be viewed as a hasbeen, a failure overseas, one who has lost a bit of his luster to other German employers after all, why is he in the eastern part of Germany instead of Frankfurt?) Option 2: Patience. He needs to remember he is a fast tracker. The company will likely not keep him there forever. Just be patient and do a good job and good things will happen. Possible risks: he might remain out of sight and out of mind, in eastern Germany and it may take a long time to achieve his goal using this strategy. Also, his wife and children and himself! may experience reentry shock coming from New York to a small city in a relatively unattractive part of Germany. 3. If he doesn t accept the job, what should he do? Option 1: Stay in the U.S. Global finance companies need people like him. Make the U.S. his base for his career, and make a strategic decision as a family to have the children become world citizens rather than traditional Germans. Possible risks: emotional fallout from giving up their heritage, disconnection from family roots and ties, and lack of feeling a deep belongingness to a location. Option 2: Look for a job in Germany from the U.S. Reject the position, stay in the job in the U.S., but get in touch with a headhunting firm. He would be a great find for a U.S., Japanese, etc., bank starting up or expanding operations in Germany. Possible risks: no attractive offers might be found, and now the family is stuck in the U.S. for good. It is important to point out that there are risks associated with each of the options. For example, if he decides to stay in New York, this may jeopardize his marriage; his children may suffer in the long term; he and his family may be stuck in the U.S. for good; his contract will likely be localized; etc. On the other hand, if he accepts the job offer he may remain out of sight and out of mind from corporate headquarters, and his family may experience reentry shock 4. Who is to blame for the current situation? What factors contributed to Andreas reentry problems? Andreas His naivete to have thought that the company would look after him and tailor his entire career for him in the firm. He did not check out how an international assignment really impacted careers in the bank he simply took top management s word that it would be an important step to take in terms of his career.

5 INSEAD 4 If he wanted to go back to Germany, he should have done so sooner when his three years were up. If he wanted a promotion back to Germany, he should have been seriously networking with colleagues back in the home office during the entire six years in the U.S. He is to blame for the out of sight, out of mind phenomenon. The Bank They should have not let him stay for the promotion in the U.S., but should have brought him back to headquarters and continued to guide him along the bank s fast track. They should have known that he deserved and expected a promotion given his performance over the past six years and planned for it. They should have contacted him when a suitable promotion was available and then asked him to return. Factors that Contributed to Reentry Problems In the case of Andreas Weber, the company s international workforce planning system apparently did not function effectively. Although he performed more than adequately in his foreign assignment, he was offered a reentry position that neither built on his experiences abroad nor enhanced his career. What went wrong? Before analyzing this case study, it is important to note that reentry problems such as Andreas are by no means an exception. Repatriation of corporate managers and their spouses is not something that happens easily. Research (e.g., Adler, 2002; Baughn, 1995; Black, Gregersen, Mendenhall & Stroh, 1999; Caligiuri & Lazarova, 2001; Hammer, Hart & Rogan, 1998; Napier & Peterson, 1991; Stahl, Miller & Tung, 2002) has shown that, from the perspective of the returning expatriate, the experiences upon repatriation and the career implications of an international assignment are often frustrating: the majority of expatriate managers experience some degree of culture shock during repatriation, one out of every five employees who finishes an overseas assignment wants to leave the company when they return, less than half of returned expatriates receive promotions upon return, two-thirds of returning expatriates feel their overseas assignment had a negative impact on their careers, at least half of returning employees feel their reentry position is less satisfying than their overseas assignment. In the case of Andreas Weber, several factors contributed to reentry problems. Firstly, while the New York branch of the bank was in the middle of a booming phase, business conditions in Germany were far less favorable. There were extensive staff cutbacks at corporate headquarters, especially on the middle management level. Consequently, the number of attractive and challenging positions that were available for returning managers was limited. Many repatriates had to be put in a temporary job or in a lateral position.

6 INSEAD 5 Expatriates are often equipped with a so called reentry guarantee in their foreign service contract, stating that the relocating department or division guarantees a reentry position at least the same level as the one they are leaving or in some companies the one that they previously held in the foreign country. In the case of Andreas Weber, such a repatriation agreement did not exist because he had been transferred to New York as part of an international trainee program, not as a regular expatriate. Additionally, the fact that he was promoted three times during his six-year assignment made it extremely difficult to find him a lateral position upon return, let alone a higher-level job. Andreas reentry problems were further intensified by the fact that the salaries that were paid to bankers in New York were considerably higher than in Germany. As a result, the compensation package that Andreas received while overseas (including an overseas bonus, generous allowances, etc.) was much higher than the one offered to him on returning. For managers who stay for a long time in a foreign subsidiary it is often difficult to transfer back to corporate headquarters since they have not been able to keep up with developments in their home country. Moreover, the longer an expatriate is in a foreign culture, the greater the probability that he or she might adapt host country patterns of thinking and behaving thus creating readjustment problems. Conscious of this fact, Andreas company had a policy of recalling expatriate managers after a three-year assignment. In Andreas case, however, the HR department had deviated from this policy because the New York branch had urgently requested an extension of his foreign-service contract. In postponing his return twice, Andreas had severed ties with his social networks in Germany. When he approached the end of his foreign assignment, he had almost become a stranger at corporate headquarters. On a more psychological level, research indicates that unrealistic expectations are often at the base of reentry problems (e.g., Adler, 2002; Black et al., 1999; Black, Gregersen & Mendenhall, 1992; Kühlmann & Stahl, 1995; Martin & Harrell, 1996). This was also true in the case of Andreas Weber. Because he had substantial proof of his good performance during his overseas assignment after all he had been promoted three times Andreas was confident that he would be rewarded with a challenging position upon return. Unfortunately, domestic job assignments have usually less responsibility and authority than positions in foreign subsidiaries. When Andreas was finally offered a reentry assignment that did not appear as challenging as he expected but was in fact roughly on the same management level than his previously held position in New York he felt extremely disappointed. Returning from the financial center of the world to a position as deputy head of a medium-sized branch of the bank in the eastern part of Germany appeared to him like a demotion. 5. What can the organization do to avoid the kind of problems illustrated in the case? From an HR perspective, what would be a more systematic approach to repatriation planning and international career development? Several practical implications can be drawn from this case study. Firstly and probably most importantly, it shows that an incongruence between the expatriate manager s career expectations and the reality back in the home country can cause serious reentry problems. This finding is consistent with research indicating that expatriate managers who have accurate expectations adjust and perform better after repatriation than those with inaccurate expectations (e.g., Black, 1992; Black et al., 1992). Consequently, repatriation programs must be designed to help expatriates form accurate reentry expectations.

7 INSEAD 6 A number of policies and procedures may be helpful in facilitating the repatriation process by shaping accurate expectations (Adler, 2002; Black et al., 1999; Caligiuri & Lazarova, 2001; Dowling, Welch & Schuler, 1999; Harvey, 1982; Martin & Harrell, 1996; Stroh, Gregersen & Black, 1998; Sussman, 1986): Providing career counseling and clearly delineating difficulties expected upon return can lessen reentry problems. Educating candidates about potential risks of a foreign assignment can help reduce inaccurate expectations and foster candidates self selection in the pre-expatriation phase. For example, HR executives may communicate that managers will have less authority upon returning as they enjoyed during their foreign assignment. It is also important that no firm promises are made to candidates as to what their position would be upon return. Too often such promises are outdated within a few years. Time away from the home country can significantly inhibit the formation of accurate anticipatory expectations. A policy of recalling expatriates after a three- or four-year assignment may thus be helpful in reducing reentry problems. This suggestion does not exclude the possibility that under certain circumstances, e.g., in countries that are particularly difficult to adjust to, expatriate assignments must be considerably longer. Expatriates who are aware of both the positive and negative changes in the organization are able to anticipate difficulties upon returning. Consequently, management should regularly inform expatriate employees of current organizational policies, strategic shifts, projects, staffing changes, etc. The information gained from visits back to the home country can also be useful in updating expatriates company-specific knowledge. Assigning sponsors or mentors back in the home office may be helpful in reducing reentry problems. The mentor s task is to keep in touch with the expatriate and convey important information to him throughout his overseas assignment. In addition, the mentor monitors his performance, compensation and career paths and evaluates job opportunities that will exist when the expatriate returns to the home organization. Giving expatriates, where possible, project assignments back at corporate headquarters can be helpful in keeping them sensitized to the differences in environment that exist between the domestic organization and the more decentralized remote operations. It also enables expatriates to cultivate their social network in the home organization. These shortterm assignments could be timed to fit in with home leaves or other business visits. Additionally, an approach that may be called the shadow system can be helpful in shaping accurate reentry expectations. This system is widely used in German MNCs [multinational corporations] (Kühlmann & Stahl, 1995). It aims at giving expatriates feedback about the development of their (fictional) job level and salary in the home organization throughout their foreign assignment. The HR department determines the shadow position and shadow salary of an expatriate by continuously comparing his/her development with the career path of equally performing colleagues in the home organization. This enables expatriates to form more realistic expectations about their prospective job level and salary upon returning. While the aforementioned policies and procedures may facilitate the repatriation process by helping expatriates form accurate expectations, there are a number of approaches to improve international career management and repatriation practices of MNCs (Adler, 2002; Black et al., 1999; Brewster, 1991; Caligiuri & Lazarova, 2001; Dowling et al., 1999; Evans, Pucik &

8 INSEAD 7 Barsoux, 2002; Harvey, 1982; Mendenhall, Kühlmann, Stahl & Osland, 2002; Selmer, 1999; Stroh, 1995; Black & Gregersen, 1999). These recommendations include: A closer tie-in of international assignments with long-range manpower planning and career development. Attention throughout the foreign assignment to the question of repatriation in conjunction with annual performance reviews of the expatriate. Continuous monitoring of the expatriate s training needs to reduce deficits and enhance professional skills prior to returning. Systematic examination of alternative reentry positions for the expatriate at least six months ahead of the proposed repatriation date. Development of a formal orientation or de-briefing program, including the introduction of the returning expatriate to key persons in the home organization. Identification of job skills acquired or enhanced overseas, and identification of ways in which those skills can be integrated and productively used in the home organization. What is probably more important than having an arsenal of repatriation and career development tools is making the international assignment an integral part of the career development process. Implementing a valid selection process is a first important step towards this goal. Unless a company selects the best people for an international assignment, repatriation will be extremely difficult. A properly designed repatriation program can remedy many of the problems associated with returning home after a foreign assignment. However, even the most sophisticated policies and procedures can be an ineffective solution to the problem of no-job-on-return under certain conditions, such as a highly fluctuating economy and deteriorating business conditions abroad. Moreover, no repatriation program can guarantee an outgoing expatriate manager a specific job on his return. Therefore, shaping accurate reentry expectations and creating an awareness of potential difficulties expected upon return appear to be crucial. It is also important to note that approaches that are proposed to benefit the repatriation process may well inhibit the expatriation process and vice versa. For instance, the typical salary increase associated with international assignments tends to artificially raise the social status of the expatriate. While this may facilitate his/her adjustment in the host country, the probable downward shift upon returning home would be expected to inhibit repatriation adjustment. This was exactly what happened in the case of Andreas Weber: the higher salaries that were paid to bankers in New York, together with generous expatriate allowances and bonuses, led to a sharp decrease in available income upon return. The fact that Andreas was promoted several times during his foreign assignment created a similar counteracting effect. Thus, as Adler (1981) pointed out, in some respects the more outstanding a performer the executive was overseas, the more uncomfortable his return will be (p. 344). Such paradoxical effects must be kept in mind when designing an international career development program.

9 INSEAD 8 References Adler, N. J. (2002). International dimensions of organizational behaviour (4 th ed.). South- Western College Publishing. Baughn, C. (1995). Personal and organizational factors associated with effective repatriation. In J. Selmer (Ed.), Expatriate management: New ideas for international business (pp ). Westport: Quorum. Black, J. S. & Gregersen, H. B. (1999). The right way to manage expats. Harvard Business Review, 77, Black, J. S. (1992). Coming home: The relationship of expatriate expectations with repatriation adjustment and job performance. Human Relations, 45, Black, J. S., Gregersen, H. B. & Mendenhall, M. E. (1992). Toward a theoretical framework of repatriation adjustment. Journal of International Business Studies, 23, Black, J. S., Gregersen, H. B., Mendenhall, M. E. & Stroh, L. K. (1999). Globalizing people through international assignments. Addison-Wesley Longman. Brewster, C. (1991). The management of expatriates. London: Kogan. Caligiuri, P. M., & Lazarova, M. (2001). Strategic repatriation policies to enhance global leadership development. In M. E. Mendenhall, T. M. Kühlmann & G. K. Stahl (Eds.), Developing global business leaders (pp ). Westport: Quorum. Dowling, P. J., Welch, D. E., & Schuler, R. S. (1999). International human resource management: Managing people in a multinational context (3 rd ed.). Cincinnati: South- Western College Publishing. Evans, P., Pucik, V. & Barsoux, J.-L. (2002). The global challenge: Frameworks for international human resource management. New York: McGraw-Hill. Hammer, M. R., Hart, W. & Rogan, R. (1998). Can you go home again? An analysis of the repatriation of corporate managers and spouses. Management International Review, 38, Harvey, M. G. (1982). The other side of foreign assignments: Dealing with the repatriation dilemma. Columbia Journal of World Business, 17, Kühlmann, T. M. & Stahl, G. K. (1995). Die Wiedereingliederung nach einem Auslandseinsatz. In T. M. Kühlmann (Ed.), Mitarbeiterentsendung ins Ausland (pp ). Göttingen: Verlag für Angewandte Psychologie. Martin, J. N. & Harrell, T. (1996). Reentry training for intercultural sojourners. In D. Landis & R. S. Bhagat (Eds.), Handbook of intercultural training (2nd ed., pp ). Thousand Oaks: Sage. Mendenhall, M. E., Kühlmann, T. M., Stahl, G. K. & Osland, J. (2002). Employee development and expatriate assignments. In M. J. Gannon & K. L. Newman (Eds.), Handbook of cross-cultural management (pp ). Oxford: Blackwell. Napier, N. K. & Peterson, R. B. (1991). Expatriate re-entry: What do repatriates have to say? Human Resource Planning, 14,

10 INSEAD 9 Selmer, J. (1999). Corporate expatriate career development. Journal of International Management, 5: Stahl, G. K., Miller, E. & Tung, R. (2002). Toward the boundaryless career: A closer look at the expatriate career concept and the perceived implications of an international assignment. Journal of World Business, 37, Stroh, K. L., Gregersen H. B. & Black, J. S. (1998). Closing the gap: Expectations versus reality among repatriates. Journal of World Business, 33, Sussman, N.M. (1986). Re-entry research and training: Methods and implications. International Journal of Intercultural Relations, 10,

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