The key to expatriate success. (an analysis of overseas managerial assignments)

The Key to Expatriate Success

Up to 40 percent of U.S. "expatriate" managers fail in their overseas assignments. The missing link is preparation. Here are some guidelines for success.

Overseas operations are big business for multinational corporations, or MNCs. In one recent year, Exxon, America's largest MNC, produced overseas sales representing 72 percent of the company's total revenue and almost 75 percent of its total profit. Given the revenue at stake, it is to any company's advantage to staff overseas foreign divisions with effective expatriate managers.

Unfortunately, many companies do not realize the potential bottom-line impact of expatriate success and fall short in their efforts to prepare expatriates for their assignments. Overseas assignments are notorious for their high failure rate. An article in the Academy of Management Review estimated that from 1965 to 1985, the expatriate failure rate fluctuated between 25 percent and 40 percent, with an average cost per failure to the parent company of $55,000 to $150,000.

What is the missing link? One significant consideration is a lack of understanding of the new country's culture and a lack of "acculturation" --that is, efforts to adopt the cultural traits or social patterns of the host country. Acculturation can mean the difference between a profitable success and a costly failure. "The inability of expatriate managers to adjust to the host culture's social and business environment is costly in…