Chapter 1
Introduction
The business and market environment had indeed gone through various transitions. The rises of different opportunities as well as innovations enable various companies to extent and expand their operations in the international market. The changes in the external environment of local firms also led to transition in the business approaches and strategies. To be able to adapt to the demands of the global business operations, specifically the diversity of the people, the management of international companies should modify their business approach. Accordingly, this modern management approach is made of approaches which enable industries to gain foreign market entry and operate effectively alongside with other multinational and international industries. One of the most important factors of international management is the human resources.
Many companies misjudge the complexity of operations involved in international business, and often overlook the mutual infiltration of the above mentioned three dimensions of international human resources management and adopt a lax attitude towards this important department of the organization. Consequently, business failures at international scale are not just a mere possibility but can often be contributed to poor international human resources management. The fundamental elements of the human resources that have to be adapted to local standards at the international market include culture, language, religion, moral codes and habitual practices. In today’s era of competitive markets, those companies which have decided on globalizing their business, have already made their way into the expansion stage and have been mandated to re-engineer the processes in their organizations by means of innovation and by developing new customer relationships. (Maksimovic, 2008)
According to Cartwright & Cooper, (cited in Chapman, 346, 2001) HRM plays an important role in decreasing the number of unwanted turnover, distress and loss of productivity associated with cross border alliances. HRM is vital in determining the scale of cultural fit between organizations prior to finalizing the potential arrangement. Cultural aspect is important to recognize potential problems that may arise as a result of diverse perceptions, values and practices existing between the involved organizations. In Mergers & Acquisitions (International market expansion), it is likely that almost all aspects of the job will be affected such as job security, workload, work relationships and role identity, therefore HRM is important in formulating a strategy which deals with the reasons of merger stress. After International market expansion, it is likely that only a transactional bond which is based on an exchange of effort for economic reward stays in place whereas relational contracts will be terminated. (Chapman, 346, 2001)
International market expansion have issues linked to employees like feelings of identity loss, learning new business rules and acquainting and coming to terms with coworkers from different cultures. HR is important in dealing with the differences associated with workplace cultures that may at times otherwise temporarily overshadow the long-term success of the new entity (Numerof & Abrams, 11, 1998). Companies like Royal Dutch Shell, is one of the companies that must consider a strategic approach in managing their employees specifically in motivating their expatriate employees. In this regard, the main goal of this paper is to investigate the reasons why employees are accepting expatriate assignments. In this regard, the focus will be on analysis of the motivation used by Shell to make the employees accept these kind of assignment.
Background of the Study
As companies grow and move into the global business market, challenges and opportunities are encountered. Necessarily, modern organizations need to focus on developing strategies that could effectively respond to the different threats posed by the internal and external environment and at the same time explore the opportunities the new business environment provides. As such, international strategy is the direction that companies seek to pursue, and these strategies must be geared toward the achievement of the business goals. Internationalization of people is one of these strategies by which organizations are converging into the idea of expatriation. Selmer (1995) maintains that expatriation and inpatriation are the leading strategies where personnel are transported for international posts. Line managers and technical personnel are the most common positions as subjects of expatriation and inpatriation (p. 3).
Part of the role of these managers is to give emphasis on the needs of the employees, may it be expatriate or not. Employees are an organization’s intellectual capital and their importance coupled with the change in demographics and the effort to obtain the best talent is constant so as to attract, retain, motivate and manage the people resource. Today the companies go beyond simply claiming people as their greatest assets but actually make effort to treat them rightly in order to benefit both the individuals and their organizations. If right practices are installed by organizations, performance may be improved over time and in turn individuals may also reap the benefits. (Crainer, 45, 2004)
There is a resource-based view of the firm, according to which internal knowledge and skill both imply vital means of gaining competitive advantage. Then there is also human capital theory, which argues that hard core competencies of a firm should be secured by meant of investment Management of employees through motivation which include benefit packages of salary and benefits to hire and retain them is a priority in companies who require expatriates for international assignments.
Accordingly, company increases their productivity through their employee motivation approach. It is said that influencing the employee motivation is frequently made easier if the management tries to integrate employee motivation with their organizational cultures. In the case of international companies like Wal-Mart it is said that the tone of its culture is its being innovation which needs adopting culture of change. In line with employee motivation, it can be said that the company tries to become innovative in making their employee perform better and they use employee motivation approach to do it. To integrate their organizational cultures and employee motivation, the company is using change management approach. The company’s organizational culture consists of three basic beliefs which include the respect for the individual, service to the customers and strive for excellence (ICMRINDIA, 2009).
Shell, is one of the companies that fosters a high level of expatriation (Cameron, 2002). Shell has a long history of expatriate employment because it is fundamental to the nature of the company. Shell believes that expatriate staffs in all the businesses contribute to the growth and success of the company especially through the combination of competences and expertise of local staff and expatriate staff. In 2004, the company launched the New Generation Expatriation program to facilitate and accommodate the needs of the business and the expatiate staff including family issues. The program is intended to sustain and further how expatriate members create values for Shell. These are to move critical skills to places where they are required and develop careers which will supply Shell with globally competent leaders (Hofmeister, 2004).
Research Objectives
The key problem that will be addressed in this study is to analyze why people accept expatriate assignments. Likewise, whether the key reasons for the acceptance of the assignment are dependent on gender and regional considerations is another research problem. In lieu with this, the study will seek to answer the following research questions.
1) What are the initial perceptions of expatriates about expatriate assignments?
2) What are the expectations of the expatriates regarding the expatriate assignments?
3) What are the predictors which contribute to the decision to expatriate?
4) What are the incentives and barriers influencing the acceptance of expatriate assignments?
5) How does the motivation approach of Shell affects the decision of the employees in accepting expatriate assignments?
Aim Objectives of the Study
The main aim of the research is to investigate the motivating factors towards accepting expatriate assignments. To achieve this aim, the study will seek to address the following specific objectives.
§ To evaluate the intentions of the expatriate based on perceived positive and negative consequences in accepting expatriate assignments
§ To assess the reasons and obstructions which heightens the attractiveness of accepting expatriate assignments
§ To investigate demographic and geographical predictors of accepting expatriate assignments.
Conceptual Framework
There are two theories that the research will going to build insights from. The first theory that the research will engage in is McClelland’s theory of needs. David McClelland (1985) states that people have three fundamental needs which exist in different balances: need for power, need for affiliation and need for achievement. People’s need for power centers the inclination for influence and control. Such a way to make other people behave in a way that would an individual with power would behave. As such, an individual could be motivated to perform if they are endowed with key positions or power positions. Our need for affiliation is an emancipation of people’s social nature. Being affiliated with individuals and groups are driven by the desire to keep close international relationships. These affiliations and social recognition with others provides motivation as well. Need for achievement is the people’s drive to excel and to strive to succeed to respond to the challenges and consequences of failing. The analytical nature of a person as well as his/her initiative to take calculated risks are at the center of this need, leading to the motivation to perform well when they are aware of the chances of success.
The second theory that the study will going to make use of is the Porter and Lawler model. This model depends upon the expectancy theory where the basis is the perceived degree of relationship between how much effort an individual expends and the performance that results from that effort (Muchinsky, 2008, p. 380). The Porter and Lawler motivation model emphasizes that actual performance in a job is primarily determined by the effort spent. However, motivation is also affected by the individual’s ability to perform the job and by the individual’s perception of what the required task is. Such performance could lead to intrinsic and extrinsic rewards, in conjunction with the equity of individual, resulting to satisfaction. Thereby, the satisfaction of an individual in performing a task depends upon the justice of rewards (Shah and Shah, 2008). As McKenna (2000) puts it, the message conveyed by the model is that should not only to enrichment through challenge, variety and autonomy but also empowerment achieved through extrinsic rewards (p. 108).
Significance of the Study
The rationale behind this study is to understand why, in the first place, people accept expatriation delegations albeit the benefits and risks and/or detriments as well as the pressure to succeed along with many challenges inherent to the assignment. The role of motivations regarding expatriation decisions is not yet explored thus this study. Shell is known for its reliability in terms of expatriation employment. How Shell as a company and as a brand contributes to the motivation as well as other intrinsic and extrinsic motivations about expatriation is likewise unexplored. In addition, whether gender and location of host organization are also determinants of the expatriation motivations is another area that needs investigation.
As such, the completion of this dissertation will provide understanding of the concepts presented so as to generate data and information that Shell International BV could use in order to come up with new expatriation plans and designs that will strategically position the expat community in a more value-creating schema. It may also be important for Shell as the research may help them to assess their expatriation employment strategies and through the study’s results, be able to adjust their strategies for the better or determine key points to help them improve the implementation. The study is also significant to MBA students as it may serve as useful reference for future researchers and those who will seek information about expatriation implementation and management. Overall, it may help boosts the growth of motivation and international HRM research.
Scope and Limitations
This dissertation aims on investigating the reasons why employees accept expatriate assignments. For this research, primary and secondary data will be considered. Primary research will be done through questionnaire survey which will be provided to the employees of Shell. This will be used to collect quantitative data. The secondary sources came from government publications and reports, newspaper articles, journals by professional bodies as well as academic resources of qualitative and quantitative studies.
In this study, the research considered time as greatest challenge to achieve a more generalized result. Environmental factors, such as socioeconomic factors, are beyond the control of the researcher and can create many variables within the research. In addition, as this study considered small sample of participants, the outcome of this research may not represent the general population.
Dissertation Outline
The dissertation shall be divided into five chapters in order to provide clarity and coherence on the discussion of the relationship of stress and diseases. The first part of the dissertation will be discussing the problem uncovered by the researcher and provide ample background on the topic. The chapter shall constitute an introduction to the whole dissertation, the hypothesis, and the statement of the problem in order to present the basis of the study. Moreover, the chapter shall also have a discussion on the scope of its study as well as the significance of the study to society in general and specific effects on individuals.
The second chapter shall be discussing the relevance of the study in the existing literature. It shall provide studies on human resource management, organization behaviour, and employee needs. After the presentation of the existing related literature, the researcher shall provide a synthesis of the whole chapter in relation to the study.
The third part of the study shall be discussing the methods and procedures used in the study. The chapter shall comprise of the presentation of the utilized techniques for data collection and research methodology. Similarly, it shall also contain a discussion on the used techniques in data analysis as well as the tools used to acquire the said data.
The fourth chapter shall be an analysis on the tabulated data. After the said tabulation, the data are statistically treated in order to uncover the relationship of the variable involved in the study. With the said data, the chapter seeks to address the statement of the problem noted in the first chapter.
The last chapter shall comprise of three sections, the summary of the findings, the conclusions of the study, and the recommendations. With the three portions, the chapter shall be able to address the verification of the hypothesis stated in the initial chapters of the study.
Chapter 2
Review of relevant Literature
Introduction
This part of the paper discusses different context of international human resource management, which include the concept of employee motivation. In addition, this paper will also provide discussion of the Expatriation programme of Shell.
International Human resource management
Human resource management maybe defined as “the policies and practices involved in carrying out the ‘people’ aspects of a management position including recruiting, screening, training, rewarding and appraising”. (Dessler, 2, 2007) The core activities of the human resource function remain the same whether a company is operating in one place or more than one place but the context and scale of the activities change; as a result the role of human resource in international business gives rise to the international human resources management, which is said to be based on three dimensions. The first dimension is related to the distribution and use of human resources, and includes pertinent planning, personnel selection, training and development, performance evaluation, compensation and work relations. The second dimension involves the different groupings of countries which are involved in the international activities of human resources management; the three grouping of the country are host country, parent country and the “third” countries. The last dimension is distinguished by the types of employees working for an international company; these are host-country nationals (HCNs), parent-country nationals (PCNs) and third country nationals (TCNs). (Maksimovic, 2008).
To individuals in a company, the knowledge attained by them is important. Knowledge and skills are important factors in influencing how the employees perform; therefore, the imparting of quality education and training to employees of companies is significant and can guide the way for achieving the corporate aims. Thus by providing a great share of human capital, appropriate knowledge management generates basic conditions needed for adjustment, survival and competitive advantage required by an organization when confronting a rising number of changes in a new business environment. (Stebe & Andolsek, 2006)
As Burack, et al (1994) pointed out, human resource management had transformed itself as more emphasis is stressed on commitment and control. Quality, competence and flexibility among the employees had efficiently replaced quantity of task accomplished and dumb obedience. Furthermore, the objectives of the management become concentrated on the adoption of modernization, quality and cost reduction. As human resource management requires and demands more from their employees, work is then intensified resulting to less slacking of the management.
Aside from globalization, changes in the HRM management have occurred due to cross-national dissimilarities. The diversities among nations are likely to develop practices that are different from other countries (Gooderham, Nordhaug & Ringdal, 1999). In reality, human HRM practices are subject to distinctive sets of national rules as well as sensitive analysis of labor unions whose strength and thoughts towards management differ. Thus, this concept is contrary to the idea of HRM as a high managerial autonomy (Fisher, Schoenfeldt & Shaw, 1993; Dessler, 1997).
Acculturation abilities and global staffing orientations are two factors to consider. Padilla (1980) defines acculturation as the process of adapting patterns of the surrounding culture; thus a candidate for expatriation must be well-acquainted with his/her capabilities to easily adapt the other culture. There are specific orientations to measure the mutinationality preparedness of the business and the people. These are ethnocentric, polycentric, geocentric and regiocentric. The first is home country oriented whereas the second approach is host-country oriented. The last two approaches are boundary and locational oriented, respectively. Scullion and Collings (2006) contend that the management’s orientation is crucial for international staffing as it guides the process of choosing through weighing its benefits and costs while taking into consideration innovations, skills, costs and corporate goals (pp. 18-23).
As Mossler (2003) asserts, there are benefits and risks/costs with regards to employing an expatriate. Basically, expatriates facilitate an open communication between the foreign operation and the home country. Expatriation also served as means of personnel development and knowledge transfer and transmitter of corporate culture. Overcoming lack of qualified host country nationals is also possible with expatriation. However, expatriation conforms to culture shocks for the individuals and costs including failure rates and repatriation.
According to Furnham and Bochner (1986), there are four stages of culture shock: euphoric or honeymoon, irritation and hostility or disillusionment, integration or gradual adjustment and acceptance or biculturalism. Euphoric stage is the initial reaction of enchantment, enthusiasm, admiration and other superficial relationships with hosts. Disillusionment is the crisis wherein initial differences are realized that eventually leads to anxiety, homesickness and depression. Adjustments are recovery mechanisms that may lead to biculturalism as sojourners started to blend in and adapt some cultures and values (p. 131).
Deresky (2005) stresses the importance of preparations and learning about the challenges and consequences of expatriation as well as reducing the risk for culture shock. Further, expatriate packages which compensate expatriate by means of home and family visits plan or sponsorships, equalization of standard of living and compensations for inconvenience and qualitative losses shall be a priority to the host organization. Apart from learning about the culture and lifestyles in host countries, an external effort of investigating managerial value systems and decision styles as well as discussing preferences with respect to degree of participations must be accomplished (Ali, Azim and Krishnan, 1995). Vance and Ring (1994) also noted that preparing the host country workforce for the arrivals of expatriate managers must be also considered. through a model-based discussion of instructional systems development regarding the exchange, participation, corporate social responsibility and strategic human resource planning.
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