THE TRAINING OF INTERNATIONAL MANAGERS –
SUCCESS FACTOR IN INTERNATIONAL BUSINESS
Professor PhD Ion BOTESCU
University Ovidius of Constanta
Abstract:
The amplification of extern economic activities made by firms demands new
rules for those people that take part in transcultural actions. They have
to
deal with new challenges regarding the interpretation of actions or
attitudes
made by individuals or firms that have their activity in a cultural
activity
different from what they were accustomed to until that moment.
International
managers come in contact with people that not only have different
objectives,
but they also have different ways of achieving their objectives.
The development of management activities is a laborious process that
starts
with the recurring and selecting of personnel and ends with the training
and
returning to their home country of the managers. The importance and the
phases of the process of training managers that can action with
competence
in an intercultural context have represented the elements which I want to
bring forward in this paper.
Keywords: international context,
international manager, cultural shock, cultural adaptability.
Introduction
Globalization is an objective phenomenon,
which takes place in an accelerated rate, putting more and more its mark on the
lives of most of the world’s population. The rapid progress of technology,
especially in the information domain, the improvement of the transportation of
goods and passengers, doubled by a promotion of a liberal policy by almost all
the world’s states, have determined the global transformation of the global economy.
If under a conceptual aspect globalization has
been treated in time from different angles. In the present time, important are
the debates regarding the takeoff of companies that work on a global level,
regarding the negative aspects generated by the unification of markets, like
the growth of unemployment and the damages to theenvironment, regarding the
activity of international institutions etc.
Regarding multinational firms, we
have to mention that these cannot only be found in developed countries, but in
all of the world’s countries, representing a strong force of cohesion in the
global economy, tying the national economies in the process of globalization.
Actually, in the entire world there approximately
80.000 multinational firms and each has in average 10
affiliates abroad, forming this way a vast planetary net.
On the other hand, the consequences
of the globalization of the economical activity are on cultural values specific
for different countries, some specialists sustain an accentuation of cultural
differences between countries.
The growth of the grade of
internationalization, especially in the activity of multinationals, demandssending
abroad some people, that on one hand have to make proof of good technical
competences, managerial, etc,and on the other must have abilities that can
allow an efficient activity in a foreign cultural environment.
Numerically and valorically speaking,
international businesses have achieved the most powerful growth in history,
during the last two decades. Multinational firms can close business deals in
any region of the globe. In order to be efficient international expansion
implies sending people, capable of coping with technical requirements as well
as particularities set by a new cultural environment, abroad.
The failure recorded by people sent to
work abroad is incarnated by their return to the country of origin before the
expiration of the preset deadline. This is not a cause of technical or
professional incompetence, but of the fact that people are unable of adapting
to the specific lifestyle of another culture. Multinational firms pay special
attention to the casting and training of the personnel that will be sent abroad,
because of the fact that a set-back in this field is pretty costly. Besides the
loss of opportunities determined by the misfit of the personnel abroad,
multinational firms spend, on average, for the training, shift and accommodation
of an employee abroad, approximately $250.000. Statistics show that the rate of
returning from abroad is of 40%, for managers who were not subjected to
adaptability studies and who were not included in cultural orientation
programs. The average dropped to 25% when firms introduced cultural orientation
programs and, to only 10%, when, besides the cultural orientation programs,
firms also endorsed the problems raised by adaptability. The failure rate of American
managers implanted abroad, in comparison to that recorded by European countries
and Japan, is higher than double.
International firms take a series of actions
for the amortization of the cultural shock: recruiting and selecting the personnel
that will work abroad, preparing the international managers, motivating the
personnel and preparing
the repatriation
Selecting the people
that will have the position of manager abroad
According to Raymond J. Stone, in order
for an international manager to achieve success, he must fulfill a series of
requirements, the most important being: the ability to adapt, technical aptitudes, the
family’s adaptability, social aptitudes, will and motivation, international
experience, understanding the culture of the host country, academic studies,
aptitudes for foreign languages and understanding the culture of
the mother country.
Western companies often recruit workforce
within universities, endorsing linguistically competent people with international
experience, meaning people that will easily adapt to another culture.
Geographically speaking, an international firm has three possible recruitment
sources.
The first source is the local one, the country
where an international firm’s branch is registered and functions. Selecting
local managers is the most appropriate condition if the dynamics of the exchanges
on the host market grows. Local managers are well acquainted
with the environment conditions of their own countries and thus, they
can correctly interpret situations that may surface. Local managers are
accustomed to the environmental conditions in their own country and
thus, they can correctly interpret any situations that may surface. The
international firm does no longer have to provide for a numerous managerial
body, saving significant amounts of money from personnel expenses. By
hiring local managers, the international firm has the opportunity of discovering people with special abilities in
this field, whom they wouldn’t meet in their own country, this way satisfying the
interest of the host country in regard to the promotion of its citizens. In a cultural
aspect, there is the risk that the global control and coordination may be affected,
because of the fact that local managers have received their education and part
of the professional training in a very different way from what was insured for
them in the firm’s country of origin.
The advantage of internal recruitment
is that all candidates are accustomed to the way of operating and to the
culture of international firm. The option for managers originating from the country
where the international firm has its quarters depends on: the nature of the
activity field, the stage of the product’s life cycle, the availability of managers
from other sources etc. currently, the number of such managers, working abroad,
is much larger in the services field in comparison to the manufacturing sector.
One of the main sources of the competitive
advantage of large multinational companies is their possibility of recruiting
personnel from all corners of the world. Using managers from another third
country is a strategy of the firms that have orientated themselves towards a
global philosophy. One such example is the Dutch concern, in the field of electronics,
Philips, which promoted managers from a third country in its branches from
abroad. These are career managers, who are usually transferred to manage new
units opened in countries with similar cultural affinities.
A manager working abroad has to tackle with a
more complex number of problems than a manager deploying activity in his own
country. The international manager leads the activity under the circumstances
of a higher level of independence. In order to deploy his activity abroad, a
manager must be superior to his local competitors. He must have solid experience
and make proof of excellent previous performances.
During the selection process, special
attention is given to the candidates’ cultural knowledge. It is essential that
the manager, who is to work in a foreign country, knows the language. He can of
course use translators, but that would mean that he doesn’t have total control
over the activity he is coordinating. Most Japanese managers, working in branches
that were established in the US, speak English, but few of the Americans
representing national firms in Japan speak Japanese. Managers that are to work
in a foreign country must know certain aspect concerning: the degree in which
the local government is involved in business, the way of operating on the local
market, the importance of holidays in the context of the local socio-economic
life.
International managers must bring proof
of a good adaptability to the cultural conditions of the host country. They
must show a positive and flexible attitude toward changes crossing from the
factual elements of the new culture to its interpretative elements, as they try
to achieve a better integration in the local environment. Problems regarding
the manager’s family must not be neglected. For example, an American firm hired
American managers for an Italian branch. One of the managers’ wives had
problems adapting to the new country. She managed to also induce this state to
the other managers’ wives. After a while, the situation created, lead to the
repatriation of the American managers before deadline.
The training of international managers
In most cases, the training program for
managers that are about to work abroad, takes months. It is important that we
establish, from the beginning, the differences between what managers currently
do and what they will do in the future.
International
managers are faced with hardships regarding not knowing an adequate foreign
language and other cultural elements that will insure the efficiency of the
decisional act. A study made by UNESCO in regard to 10-14 year old pupils from
various countries, placed the US on the last spot, in what understanding
foreign cultures is concerned, statement that was upheld by the fact that 61%of
the schools that endorse training for international business, did not include
disciplines that will approach intercultural elements of the economic life, in
their curriculum. Although the selection operation was given all the necessary
attention, 30-50% of the international managers did not rise up to
expectations, mainly because they were unable to adapt to the new life and work
conditions.
Specialists
say that there must be two stages in the training program of the future
international manager. The first stage takes place before the departure and the
manager’s family is also concerned. The second stage takes place in the host
country. Experience from practice shows a need for a third training stage with
the purpose of facilitating the return to the country of origin.
The first
aspect that the firm, in need of an international manager, need to consider is
the selection process. In this phase you can eliminate most of the problems
that should be solved afterwards and this is why the interviews that the
candidate is subject to are carefully elaborated. Once a person is chosen,
their missing attributes are determined in order to establish a complex and
efficient training process. The study made by Rosalie Tung about several
European, American and Japanese firms, shows that there are six categories of
training problems:
1.
General information
within seminars or workshops regarding the geographical area, climate,
educational system, accommodation conditions, chain stores etc;
2.
Cultural orientation programs for the
perception and correct evaluation of cultural
values and norms from the host country;
3. Cultural
assimilation programs, which imply the simulation of certain situations in
which the international manager might be while in contact with the new cultural
environment;
4. Training courses for learning a certain foreign
language;
5. Programs for the development of attitude
flexibility;
6. Practical experience programs, realized by making
journeys to the host country and making direct contact with the environment.
Based on her study, Tung realized that 69% of the
researched European firms have such programs, followed by Asian firms with 57%
and American firms with only 32%. This explains the large number of failures
recorded by multinational American companies. The firms that were questioned
paid special attention to learning the language spoken in the host country and
getting to know the environment and the cultural orientation.
A person from the host country be assigned to run a
foreign branch if the given situation demands it. The future manager will make
contract with a new culture, that of the multinational company. Under these
circumstances the training may take place within the branch or at the quarters
of the mother society.
The achievements of the communication technology, the opportunities
of the intercultural education provided by universities and the extension of
computer networks lead to the growth of the multicultural training efficiency,
reducing by 30% the time reserved for this process in comparison to the use of
traditional methods.
The motivation of international
managers
Beside the salary, the rewards, given to managers sent
to work abroad, include accommodation requitals, facilities and work under
harsh conditions. Expenses such as the
chauffeur’s salary, the maintenance of the service vehicle,the payment of a
club membership fee etc, are also supported by the firm. Basically the firm must
compensate the discomfort created by the departure. For this we take into
consideration favorite foods,friendship and family relations, educational
opportunities etc. Usually a manager that is about to deploy activity abroad,
wishes to have a standard of life, that will remind him as much as possible of
the one he had in his own country.
The costs generated by the salary payment for managers
working abroad are twice as big as those for managers with similar attributions
in the country of origin. A series of increments are paid in order to determine
the manager to work abroad.
The increments cashed in by the international manager
depend from 0 to 50% on the basic salary, the environments in which he will work
and where his family will live. It is one thing to be a foreign manager in
Paris and another to run a branch in Brazavire
The rewards given to international managers also
depend on the performances they have recorded in achieving the established objectives.
The fundamental factor in the evaluation of an international manager is the dimension
of the achieved profit, although there are cases when the main objective is
closing contracts or establishing personal relations with the decisional
factors from the host country.
Preparing the repatriation
If it is not well administered, a manager’s return to
the country of origin may raise a series of problems. There were cases, when,
upon retuning, the manager realized that he is no longer alone in the office,
that the firm’s employees do not know him and that he did not have prestige in
his interpersonal relations. All this affect the efficiency of a manager’s
activity.
There are cases
when a manager’s family has trouble readapting in the country of origin, after
spending a long period abroad. Many American families were surprised, upon returning
in the US, by the high standard of living and education costs in their country
of origin. Approximately 20% of the managers who worked abroad leave the firm
after repatriation. Loosing competent managers, with international experience,
is not at all comfortable for a firm and this is why it must undertake all
things necessary in order to cushion the shock caused by the return in the country.
Preparations for the repatriation of the international
manager should begin six months ahead. There must be well grounded reasons for
attributing new tasks for the manager. The firm must give financial compensations
for his resettlement in the country of origin as well as a sufficient period of
time to move and prepare to resume the activity. This way the work made by the international
manager within the firm is recognized.
The problems raised by the cultural shock must be
identified and analyzed immediately. This way, the measures that will lead to the
attenuation of the traumas, generated by the change of the cultural
environment, can be established.
Conclusions
The managerial act is characterized by a special
complexity. In the moment when we transpose the managerial act in the
intercultural context, its problematic becomes even more complex, the
complications amplify, having the tendency to evolve exponentially.
The significant costs necessary for the training of a
manager that will deal with working abroad and especially the immense damages
that he can do in the case in which he doesn’t adapt to the new cultural
environment are arguments that determine multinational firms to give a special
attention to the process of selecting and training future international
managers.
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Ronen S. (1988), „Training the International Assignee”, Training and Career
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Rosalie L Tung (1982), Selection and Trening Procedures of US, European and
Japonese Multinationals, California Management Review, Fall.
Stèphane Olivesi (2005), Comunicarea managerială, Ed. Tritonic: Bucureşti.
