Expatriate Development for Cross-Cultural Adjustment

Abstract

Important cultural differences create the need for expatriates who are culturally intelligent. This article presents and explores a framework of expatriates’ cross-cultural adjustment to advance conceptual understanding and practical applications for cross-cultural approaches to the development of expatriates in multinational corporations and cross-border organizations. Drawing on a diversified literature pertinent to expatriation, cultural intelligence (CQ), and the effects of cultural distance (CD), it is argued that there will be a significant difference in business expatriates on reciprocal transfers in terms of the extent of their socio- and psycho-cultural adjustment, and that CD will moderate the relationship between CQ and expatriate adjustment, such that the relationship between CQ and adjustment is stronger when the direction of cultural flow is from a less authoritarian cultural context to a more authoritarian cultural environment. The proposed framework extends previous CQ and adjustment models and provides guidance for international HRD research on expatriate development, through integrating multiple processes to aid expatriates and HRD practitioners in training for better adjustment on overseas assignments.

Keywords

cross-cultural adjustment cultural intelligence expatriate development

Research Background

International ventures are on the rise. The world is now one big marketplace with over 900,000 global organizations (Odell & Spielman, 2009). An attractive and important staffing strategy adopted by global organizations to support increased international business activity is to send employees to work as “expatriates” to undertake international work assignments away from their home countries. For example, according to Mercer’s Benefits Survey for Expatriates and Globally Mobile Employees, the number of expatriates on international assignments has nearly doubled from 50,000 in 2005-2006 to 94,000 in 2007-2008 (Mercer,2010). Similarly, Global Relocation Trends Report (2008) also indicate that a large portion of multinational firms (68%) expected current and future growth of the expatriate population and future growth in the number of international assignments to increase, despite the economic downturn (GMAC, 2008). This has led to an increasingly globalised business environment, growing mobility within the global workforce, and a “flattening” world (Friedman, 2005).

However, although expatriation represents the most common staffing strategy for corporations to venture into foreign markets, cultural diversity in globalization presents great challenges to constantly test whether multinationals have developed globally competent employees: “Many firms underestimate the complexities involved in international operations, and there has been consistent evidence to suggest that business failures in the international arena are often linked to poor management of human resources” (Dowling, 2008, p. 9). It has been suggested that one of the biggest challenges facing multinational organizations is how to develop a pool of expatiate managers who are able to adjust quicker and easier to new cultural environments (Earley & Ang, 2003; Selmer, 2010). In this sense, training and development of effective and competent expatriates has become a central concern in international human resource development (IHRD) for cross-cultural adjustment on overseas assignments (Dowling, 2008).

In the process of expatriation, as individuals step into foreign settings, there is an immediate requirement for them to deviate from the accustomed behavior reflected in their native culture in order to adjust to new cultural repertoires (Harzing, 1995, 2009; Harzing & Christensen, 2004). Expatriates regularly encounter work and nonwork settings involving cultural differences that test their capability to function effectively in their new circumstances. Indeed, their comfort with new cultural value orientations can be continuously tested (Molinsky, 2007). The problem, however, is that business people acting as expatriates are sometimes not sure on how to deal with their innate-value orientations and self-concept rooted in their origin when confronted with the “Otherness” of people, their cultures, or indeed ethnic groups. A review of the prior studies tends to identify major cultural challenges facing global workforce that create certain behavioral dilemmas for (a) individual paradoxes (Osland & Osland, 2005), (b) professionals in overseas work assignments (Bhaskar-Shrinivas, Harrison, Shaffer, & Luk, 2005), (c) domestic culturally diverse workgroups (Tsui & Gutek, 1999), (d) multinational workgroups (Earley & Gibson, 2002), (e) leaders’ cross-border careers (Van Dyne & Ang, 2006), and (f) senior expatriate leadership (Elenkov & Manev, 2008; Elenkov & McMahan, 2005).

Being confronted by these challenges, expatriate failures are emerging. For example, Hofstede (2001), Adler (2002), Avril and Magnini (2007), and Selmer (2010) each indicate that expatriates have difficulty communicating, functioning, and understanding host country realities in response to temporal, cultural, and situational contexts. Studies of incidences of expatriate failure rates vary but have been frequently cited to be in the range of 16% to 40% of personnel generally returning early for developed countries (Harzing, 2009). The financial loss to multinational companies due to premature return of expatriates on foreign work assignments was estimated as ranging from US$250,000 to US$2.5 billion dollars annually (Hill, 2001; Lissy, 1993) with additional costs enumerated as market share loss, reduction in productivity, damage to relationships with foreign companies, and damage to relationships with foreign governments (Andreason, 2003b; Storti, 2001). It is estimated that the average cost to the multinationals may be as high as US$200,000, per employee failure, in direct costs (Black & Mendenhall, 1991; Mendenhall & Oddou, 1985; Porter & Tansky, 1999; Tung, 1982, 1987).

Among the reasons addressing expatriate failures, expatriates’ cross-cultural adjustment (CCA) has been suggested to be a crucial moderator as well as a determinant of expatriate success in global business (Templer, Tay, & Chandrasekar, 2006). An extensive body of research recognized and highlighted CCA as a key reason closely related to expatriate ineffectiveness (e.g., Andreason, 2003a, 2003b; Black, Mendenhall, & Oddou, 1991; Hechanova, Beehr, & Christiansen, 2003; Hutchings, 2003; Selmer, 2005, 2006). Our understanding of the career impact of expatriation will be enhanced by a more refined picture of the adjustment that expatriates experience (Haslberger & Brewster, 2009). In this environment, successfully managing expatriates’ CCA has become an important HRD aspect in multinational and transnational organizations so as to achieve the improvement of expatriate individual effectiveness in new cultures.

Review of Literature

Expatriation

The term expatriate is used in the international management literature to “label” employees on different types of foreign work assignments sent by multinational corporations (Richardson & Mallon, 2005). An expatriate, for the purposes of this article, is defined as someone sent by organizations to manage or cooperate with others on international assignment for at least 6 months, including wide professional coverage of multinational corporations (MNCs), transnational corporations (TNCs), multinational organizations (MNOs), and smaller companies involving different industry sectors.

Expatriates who can function effectively are more likely to be valuable assets for the purposes of competitive advantage for organizations at all times. That is, the effectiveness of international assignments requires not only effective global business and human resource systems but also globally competent people. The human factor here is the very core element in the process because “people” are the actual entity that represent organizations and carry out assigned tasks. Thus, the individuals who work on behalf of organizations in foreign locations must function well across both national and cultural boundaries for organizations to succeed. The process is not simply one of geographic and functional transfer; there are critical cultural and mindset boundaries, which must also be crossed (Fish, Bhanugopan, & Cogin, 2008). Cultural incompatibility has been detected as a major stumbling block and concern in effectively fulfilling cross-cultural HRD objectives (Hofstede, 2001; Selmer, 2010; Trompenaars & Hampden-Turner, 1997; Ward, 1996). Many organizations express the need for expatriates who are capable of adjusting quickly to multiple cultures and who can function well in multinational teams, but unfortunately most organizations do not have a pool of suitable candidates that is large enough to take care of the increasing international operations (Carmel & Nicholson, 2005; Rao, 2004).

Even so, it should be noted that a distinction between “convergence” school and “divergence” school has often been made in the debate on the effects of globalization on strategic business models in the human resource literature. The convergence scholars (e.g., Pascale & Maguire, 1980) hold that as the countries liberalize their markets and world market becomes more alike in this borderless global village, the strategic business behavior would become similar and effective business strategies are universal across cultures because people will embrace common values with regard to economic activity and work-related behavior (England & Lee, 1974). In contrast, the divergence scholars claim that the dominant force in shaping the values, beliefs, and attitudes of managers is rooted in national core cultures, not economic ideology or technological growth (Hofstede, 1980; Kim, Kirkman, & Chen, 2006; Laurent, 1983); thus, cultural difference cannot be leveraged and business strategy should aim to gain differentiated positions and advantages. The implication of this divergent view for expatriate failures is the proposition that growing cultural dissimilarities between host and home cultures would suggest that “cultural distance” (CD) will increase adjustment difficulties and intercultural ineffectiveness (Kim et al., 2006). The overall failure rates may actually be much higher as intercultural ineffectiveness results from marked distance between cultures (Hofstede, 1980; Trompenaars & Hampden-Turner, 1997).

Cross-Cultural Adjustment

The research on expatriates’ CCA has been developing since the 1970s. Some researchers have explored the effect of cultural values on individuals (e.g., Hofstede, 1980, 2001; Trompenaars & Hampden-Turner, 1997) and on the impact of distance between the host and home cultures (e.g., Manev & Stevenson, 2001; Ward & Chang, 1997); on work, societal, and family factors (e.g., Bhaskar-Shrinivas et al., 2005; Black & Gregersen, 1991); on isolation caused by language barriers (e.g., Selmer, 2006), whereas other studies have addressed individual differences in adapting to foreign cultures (e.g., Adler, 2002; Ang et al., 2007; Caligiuri; 2000; Earley & Mosakowski, 2004; McCrae & Costa, 1987).

Seminal studies have often reflected on a broad context and concentrated on possible contextual and individual variables affecting change over time on CCA. Black and Mendenhall (1991) posited social learning theory (SLT) as a way of understanding the process of expatriate adjustment and concluded that an SLT perspective on the expatriate experience is consistent with either a U-curve, J-shaped, or linear processes of adjustment pattern. Bhaskar-Shrinivas et al.’s (2005) meta-analysis of research on the adjustment process added a model of sideways “S” curve, the general form of which is quite similar to the traditional U-shaped curve, calling for more research on adjustment of early months experience.

Meanwhile, since time is required to identify inappropriate behavior and learn from host cultures in the CCA process, the term acculturation is generally used in reference to the process of change that occurs as a consequence of continuous, first-hand contact between two or more cultural groups (Berry, 1999; Ward, 1996). It is suggested that there are ascending phases of acculturating stress associated with foreign culture involvement (Berry, 1999). When this stress reaches a level of crisis, an individual is likely to choose among the four strategies of acculturation: (a) integration, high levels of identification with both home and host cultures; (b) assimilation, high identification with the host culture but weak identification toward the home culture; (c) separation, high identification with the home culture but weak identification toward the host culture; and (d) marginalization, weak identification with both home and host cultures. It has been suggested that valuing both acculturation to home and host cultures may be crucial for most favorable adjustment (Berry, Segall, & Kagitcibasi,, 1999). Essentially, the research highlights cross-cultural differences as a key to enhancing efficiency in international operations and calls for greater insight into the understanding of CCA and further investigation into the diverse nature of the expatriate adjustment process.

Nevertheless, Black et al. (1991, p. 293) argue that the tendency for adjustment research is “anecdotal in nature and few scholars have rigorously investigated the phenomenon, empirically or theoretically.” Similarly, in more recent literature, Newman (2000), Suutari and Burch (2001), and Fish (2005) each offered their critiques against existing research, calling for deeper and more precise understanding of poor adjustment and its associated issues. There is still, therefore, considerable room for human resource practitioners and scholars to investigate the multifaceted nature of expatriates’ capabilities, namely, how organizations could maximize the business and career potential of each expatriate. The principal challenge in the adjustment literature is the observation that some individuals adjust more quickly and easily than others cross-culturally. Furthermore, as Earley and Peterson (2004) observed, expatriates are spending shorter periods in any single location, and the frequency of their moving from one country to another makes country-specific knowledge harder to develop and potentially at least, less relevant, generating increasing difficulties for organizations to identify and prepare suitable expatriates for the complexity of cross-cultural work settings. In this respect, the concept of cultural intelligence comes into view pertinent to the research and provides insight and explanations as to why some expatriates adjust to host cultures more effectively than others.

Cultural Intelligence

Cultural intelligence (CQ) is a multifacet individual attribute that “refers to a person’s ability to adapt effectively to a new cultural context” (Earley & Ang, 2003, p. 59). This conceptualization focuses primarily on a specific domain of intelligence, that is, intelligence in intercultural settings.

The increasing interest in “real-world” intelligence has led to the categorization of “intelligence” into various domains, each focusing on a specific “intelligence” aspect. For example, (a) emotional intelligence (EQ; Goleman, 1995), (b) social intelligence (Marlowe, 1986), (c) general mental ability (GMA; Schmidt & Hunter, 2000), and (d) a related but different “intelligence” concept, the intelligence quotient (IQ). Intelligence quotient was originally designed to predict academic performance. Indeed Sternberg and Detterman (1986) argued that “intelligence” could be displayed in places other than the classroom. Earley and Ang (2003) advanced CQ as a basis for explaining individual differences in capability to function in intercultural settings.

CQ conceptually overlaps emotional intelligence (EQ), social intelligence (SQ), and general mental ability (GMA) in that they complement intelligence (IQ), and all are important for an individual to effectively function successfully at work and in various social settings and in personal relationships. CQ is similar to, yet distinct from, these other forms of “intelligence.”

EQ refers to the ability to perceive emotions and to generate and regulate emotions for effective social interactions (Goleman, 1995). Yet the ability to encode and decode emotions in the home culture does not automatically transfer to unfamiliar cultures (Earley & Ang, 2003). Thus, a person with high EQ in one cultural context may not be emotionally intelligent in another culture. In contrast, CQ refers to a general set of capabilities that have relevance to situations characterized by cultural diversity. Second, social intelligence (SQ) is defined as an ability to understand the feelings, thoughts, and behaviors in interpersonal situations and to act appropriately on the basis of this understanding (Marlowe, 1986). Socially intelligent people are able to easily adapt their behavior to a variety of social situations (Cantor & Kihlstrom, 1987). However, social intelligence is culturally bound (Cantor & Kihlstrom, 1987), and because cultures differ, social intelligence cannot adequately explain effective interpersonal behavior across cultures (Earley & Mosakowski, 2004).

EQ and SQ describe individuals’ capability to manage emotions and interpersonal situations in a common cultural setting. In other words, EQ and SQ lack a cultural component. Therefore, they are less informative, and hence, less predictive of an individual’s cognition, motivation, and behavior in culturally diverse settings (Earley & Ang, 2003). Since the norms and value systems for social interaction vary from culture to culture, it is unlikely that individuals with high EQ and SQ in one culture will effectively translate these abilities automatically into different cultural settings, because what is meaningful in one culture may not apply in another (Thomas, 2006).

Third, GMA focuses on cognitive abilities without consideration of cultural context and does not include behavioral or motivational aspects of intelligence (Schmidt & Hunter, 2000). On the other hand, CQ is grounded in the theory of multiple intelligences (Sternberg & Detterman, 1986) and is conceptualized as a four-facet model that includes (a) metacognitive, (b) cognitive, (c) motivational, and (d) behavioral dimensions (Ang et al., 2007).

The four factors of CQ mirror the contemporary views of intelligence as a complex, multifactorial individual attribute (Ang et al., 2007). First, meta-cognitive CQ reflects the mental capability to acquire and understand cultural knowledge. Second, cognitive CQ reflects general knowledge and knowledge structures about culture. Third, motivational CQ reflects individual capability to direct energy toward learning about and functioning in intercultural situations. Finally, behavioral CQ reflects individual capability to exhibit appropriate verbal and nonverbal actions in culturally diverse interactions. CQ is another complementary form of intelligence that can explain variability in coping with diversity and functioning in new cultural settings (Ang & Inkpen, 2008).

More important, knowledge about the expected benefits of CCA that can be produced from the development of CQ in individuals has evolved gradually over the past decade (e.g., Ang et al., 2007; Ang & Inkpen, 2008; Earley & Ang, 2003; Earley & Mosakowski, 2004). Organizations and individuals who recognize and appreciate the strategic value of CQ are more likely to be able to leverage cultural differences for a competitive advantage (Sawhney, 2008). Accordingly, Kim et al. (2006) posit that individuals with higher levels of CQ will be better adjusted to work and nonwork environments in the host country because it is possible that individuals with higher CQ gain more appropriate emotional and informational support within their adapted environment. Templer et al. (2006) also examined and predicted a positive relationship between motivational CQ and the three components of sociocultural adjustment (work adjustment, general living condition adjustment, and host-country national interactional adjustment). CQ, as a new research area, has been attracting increasing attention from scholars and practitioners.

Theoretical Development

Different home and host cultures play a significant role in the adjustment process. The importance of applying knowledge of cultural differences to improve expatriate adjustment, and international assignment effectiveness, has been repeatedly emphasized (e.g., Adler, 2002; Hofstede, 2001; Selmer, Chiu, & Shenkar, 2007). Notably, a considerable body of the research on expatriate adjustment (e.g., Adler, 2002; Black et al., 1991; Church, 1982, 2000; Hutchings, 2003; Mendenhall & Oddou, 1985; Osland & Mendenhall, 2006; Selmer, 2007; Trompenaars & Hampden-Turner, 1997) implicitly assumes a remarkably similar theoretical positioning suggesting that increasing cultural dissimilarity between host and home culture, that is, “cultural distance” (CD), will increase adjustment difficulties.

Nevertheless, this positioning rests on a presumption of symmetry in CD (Selmer, 2007). In other words, by using “distance” as a predictor of adjustment, the literature has neglected the direction of the adjustment required by the assignment, meaning, for example, the assumption that an Australian expatriate in China faces the same hurdles as a Chinese expatriate working in Australia. As indicated by Selmer, current literature implicitly assumes a symmetric impact of CD on expatriate adjustment. This article takes up two countries as examples to further specify the asymmetric proposition, Australia and China. Australia has been chosen as one of the two examples because of its economic standing in APEC and its remarkable less authoritarian cultural characteristics according to Hofstede’s (2001) cultural dimensional model. China has been chosen as a comparative anchor vis-à-vis Australia because of its strong trade position with Australia and noted authoritarian cultural characteristics in the cultural dimensional model.

This article proposes, for the purpose of better expatriate adjustment, that such impact is asymmetric. In other words, the impact of CD is contingent on the direction of the assignment; that is, the CD experienced by an Australian expatriate in China would not be the same as that of a Chinese expatriate working in Australia. This is because the home and host environments are variably situated in the cultural space. Hence, individuals need to adjust to their environment rather than the other way round (Selmer, 2007).

Research Proposition 1: There will be a significant difference in the extent of CCA of business expatriates on reciprocal transfers.

Furthermore, expatriate adjustment could be viewed from two distinctive facets: (a) sociocultural adjustment (Black et al., 1991; Fish, 2005), and (b) psychocultural adjustment (Fish, 2005; Ward & Kennedy, 2001). These two facets are theoretically interconnected but hold distinct nuances. Sociocultural adjustment refers to an individual’s willingness and capability to become involved in, fit in, or effectively interact and interrelate with the host country nationals (Black et al., 1991; Fish, 2005). This type of adjustment relates to variables that uphold and smooth the progress of culture learning, behavioral competence, and social skill acquisition in the host culture (Searle & Ward, 1990) and consists of three aspects of being able to function successfully on the job (work adjustment), to adapt to everyday living conditions (general living condition adjustment), and to interact well with people in the country where assigned (interaction adjustment; Black et al., 1991). This notion of adjustment is drawn from cultural learning theory and emphasizes social behavior and practical social skills underlying attitudinal and strategy factors (Black & Mendenhall, 1991; Fish & Bhanugopan, 2008; Molinsky, 2007) and has been taken up in previous research on the process of an individual’s ability to function in a different culture (Selmer, 1999; Ward & Searle, 1991).

In contrast, psychocultural adjustment is associated with individuals’ psychological state and potential health in the new cultural environments (Fish, 2005; Ward & Kennedy, 2001). This notion connects with subjective well-being such as individuals’ emotional state, cognitive perceptions, and personal characteristic variables. It concentrates on attitudinal factors of the adjustment process and can be measured by assessing self-reported psychological symptoms and perceived distress (Ward & Kennedy, 2001). Nonetheless, as studies (Fish, 1999, 2005; Fish & Bhanugopan, 2008) indicated, these two sets of critical adjustment variables, that is, sociocultural and psychocultural adjustment, have not been fully explored for their far-reaching business implications.

In search of the relevant literature, most studies center mainly on the correlations between CQ and sociocultural adjustment, and research on the relationship between CQ and psychocultural adjustment is sparse. A recent study (Templer et al., 2006) found there was a positive relationship between motivational CQ and the three components of sociocultural adjustment—work adjustment, general living condition adjustment, and host-country national interactional adjustment. This article is noteworthy because the researchers provide initial evidence of the discriminant validity and practical significance of CQ. In this article, the researchers employed the motivation facet of CQ (Earley & Ang, 2003) to represent individual differences and sociocultural adjustment (Black & Stephens, 1989) to develop a cross-cultural model of adaptation, and investigation was carried out into the relationships between CQ, realistic job preview, and realistic living condition to assess sociocultural adjustment. The sample for the study consisted of expatriates in Singapore, the majority of whom (56%) were from collectivistic cultures (India, Southeast Asia, and Singapore). Further research is necessary to determine whether the same relationship holds true for expatriates’ psychocultural adjustment and whether it is true for expatriates from individualistic cultures living in collectivistic cultures.

Addressing the subject matters of expatriate adjustment, the propositions of this article acknowledged the potential roles of individual differences represented by CQ in a cross-cultural context and proposed a theoretical model on how cultural differences asymmetry and CQ influences expatriate adjustment. Specifically, it is postulated that

Research Proposition 2: Higher levels of cultural intelligence are positively associated with both sociocultural and psychocultural adjustment.

The theoretical research model in this article covers four dimensions of CQ (Earley & Ang, 2003) to represent individual differences and measures the asymmetry effects of CD (Selmer et al., 2007), and thus, expands both the model of CQ and cross-cultural adaptation by examining psychocultural adjustment (Ward & Kennedy, 1992, 1999, 2001), in addition to sociocultural adjustment (Black et al., 1991).

Furthermore, Hofstede’s (1980, 2001) seminal research on country cultures identified five dimensions of cultural values that have far-reaching implications for business and organizations. These dimensions are (a) power distance, (b) individualism/collectivism, (c) uncertainty avoidance, (d) masculinity/femininity, and (e) long/short-term orientation. Using Hofstede’s (2001, p. 500) cultural indices, the scores for the two national cultures are displayed in Table 1 below. Whereas Australia has a Western, Anglo-Celtic cultural background, China follows Confucian culture. In these terms, Australia shows significantly different cultural characteristics compared with China, especially in terms of long-term orientation where the China’s score is notably higher than that of Australia, but the reverse is true for individualism.

Table 1.

Cultural Characteristics of Australia and China.

	Power distance index	Uncertainty avoidance index	Individualism index	Masculinity index	Long-term orientation index
Australia	36	51	90	61	31
China	80	30	20	66	118

Source: Hofstede (2001, p. 500).

Citing data from the Australian Bureau of Statistics (ABS) and International Monetary Fund (IMF), China was Australia’s second largest trading partner in 1999 but overtook Japan as Australia’s largest trade partner in 2007 (Australian Government, 2007; Austrade, 2007). Displayed in Figure 1 (DFAT, 2010) below, China remains Australia’s largest trade partner in two-way trade with total trade volume reaching 78.135 billion Australian dollars in 2009 as well as being recorded among the highest rate of expatriate assignments (ABS, 2009; Austrade, 2009; Commonwealth Government of Australia, 1995; USCBC, 2009). There is a trend of increasing business potential between the two countries. However, despite the obvious rising worth of China to Australian organizations through recent decade, a large proportion of Australian expatriate managers assigned to work in China do not succeed in their tasks. China is frequently regarded as the most foreign of all foreign places from a Western perspective (Selmer, 2010). Stuttard (2000) estimates that the expatriate failure rate in China could be twice that of other countries and that only about 20% of the expatriates sent to China are successful.

Figure 1.

Australia’s merchandise trade with China (2004-2009).

Meanwhile, Hutchings (2002) points out that Australian organization should pay more attention to the expatriate selection process for cross-cultural preparation and adaptability. Australian managers have been ranked poorly in their cross-cultural skills and a high return rate from an overseas assignment has been reported compared with managers from the United States, the United Kingdom, Germany, and Japan (Hutchings, 2003).

On the other hand, research also shows that there is a profound effect of individuals’ personal characteristics on CCA process (Ang & Inkpen, 2008; Church, 2000; Ward, 1996; Ward, Fischer, Lam, & Hall, 2009).

Grounded in the theory of multiple intelligences (Sternberg & Detterman, 1986), CQ asserts that individuals differ in their cultural adaptation capacity, and their model is especially appropriate to represent individual differences in expatriates due to a strong and comprehensive theoretical basis of individual differences (Ang & Van Dyne, 2008; Ang, Van Dyne, & Koh, 2006; Earley & Mosakowski, 2004). As an individual difference capability, CQ manifests what a person can do to be effective in culturally diverse settings. Thus, it is distinct from stable personality traits that describe what a person typically does across time and across situations (Costa & McCrae, 1992). Given the relative newness of the concept, the potential of CQ to advance expatriate adjustment research and practice need to be further explored and empirically examined. Accordingly, CD asymmetry could be proposed to be a moderator of CQ–expatriate adjustment relationships and that CQ–expatriate adjustment relationships may be qualified by CD asymmetry between home country and host country. Specifically, it is hypothesized that CD will moderate the relationship between CQ and expatriate adjustment, such that the relationship between CQ and adjustment is stronger when the direction of cultural flow is from a less authoritarian cultural context to a more authoritarian cultural environment; reversely, the relationship between CQ and adjustment is weaker when the direction of cultural flow is from a more authoritarian cultural context to a less authoritarian cultural environment.

This moderating-effect hypothesis is based on cultural tightness-looseness theory and the trait activation theory. That is, individual characteristics (e.g., CQ) have a stronger effect on individual decision (attitude and behavior) when the cultural context is loose rather than tight and when the cultural context activates cues related with the characteristics (Crossland & Hambrick, 2011). For this study, these theories suggest that CQ will have a stronger effect on the expatriates’ adjustment if the focal person has sufficient discretion. Besides individual discretion as an outcome of nation-level institutions, the trait activation theory also sheds lights on the potential moderating mechanisms. For instance, Ng, Ang, and Chan’s (2008) research suggests that three facets of leader personality (e.g., neuroticism, extraversion, and conscientiousness) have significant effect on leader effectiveness through leadership self-efficacy when job demand is low rather than high. Applying this rationale to the current study, it suggests CQ has significant effect on expatriate adjustment through the expatriate’s efficacy beliefs when the direction of cultural flow is from a less authoritarian cultural context to a more authoritarian cultural environment. Thus, it is argued that

Research Proposition 3: CD moderates the relationship between CQ and expatriate adjustment such that the relationship between CQ and adjustment is stronger when the direction of cultural flow is from a less authoritarian cultural context to adjust to a more authoritarian cultural environment.

Implications for HRD Research and Practices

Globalization has brought about rapid increases in workforce mobility in the last decade and is unlikely to abate in the foreseeable future. Successful preparation for the adjustment of the expatriates on overseas assignments continues to be an increasingly important HRD issue for cross-border business in international companies and multinational organizations (Harzing, 2009). CCA is a difficult and costly exercise if not carried out successfully. To aid in this task, more focused research needs to be conducted to improve and encourage expatriate development and expatriate effectiveness. By narrowing the gaps in our understanding of how cultural environments and personal differences relate to CCA, the expatriate development process may benefit. To that end, this conceptual article is important for both theoretical and practical considerations.

On the theoretical side, previous HRD research in CCA seems to focus primarily on personality factors, such as the Big Five personality traits (extroversion, agreeableness, conscientiousness, neuroticism, and openness; McCrae & Costa, 1987), rather than investigating other factors such as motivation and actual behaviors in the target culture. Although the Five-Factor model has received criticism (Block, 1995), in the search for cross-cultural HRD literatures, considerable research has focused on the role of the Big Five personality variables, and it has been the most popular measurement among the HRD scholars in this regard (Nesbit, 2012; Zhang, 2006). For example, Openness has been reported to be positively correlated with successful adjustment (Smith & Bond, 1999), whereas Neuroticism seems to impede adjustment (Gao & Gudykunst, 1990). Others linked to individual values (Fish et al., 2008; McGuire, Garavan, O’Donnell, Saha, & Cseh, 2008) have also considered this issue. The increasingly evident need is that a comprehensive, holistic, or multidimensional approach is crucial if we are to fully comprehend expatriate adjustment in the HRD literature. Responding to this need, the present article intends to overcome this limitation and incorporates the use of CQ (Earley & Ang, 2003), which covers all four dimensions of meta-cognitive, cognitive, motivational, and behavioral capabilities, to investigate personal characteristics, thus providing a more comprehensive picture beyond personality traits.

Another HRD research implication would relate to the development of a comprehensive cross-level examination on the conceptual representation of CD asymmetry effects presented in this article. It helps to further explain whether micro-level expatriates’ individual differences and macro-level CD matter in expatriates’ CCA process. HRD research could be advanced by integrated cross-level exploration. The cross-level analysis developed in this article initiates to question the assumption underlying many earlier expatriate adjustment studies (e.g., Adler, 2002; Black et al., 1991; Church, 2000; Hutchings, 2003; Mendenhall & Oddou, 1985; Osland, Bird, Mendenhall, & Osland, 2006; Osland & Mendenhall, 2006; Selmer, 2007; Trompenaars & Hampden-Turner, 1997), that many models of CCA apply equally well to all expatriates in all circumstances, ignorant of factors that expatriates carry with them to their overseas assignments. In this regard, it is argued that expatriates’ CCA process and the type and level of stress that expatriates would encounter vary with factors such as changing cultural flows, CD, and their individual differences in CQ.

The focus on comparing expatriates on reciprocal transfers adapting to the target cultures also provides new perspectives for HRD research. Existing HRD research implicitly assumes a symmetric impact of CD on expatriate adjustment and rests on a presumption of symmetry in CD (Jan, Randy, & Oded, 2007). In other words, by using CD as a predictor of adjustment, the literature has neglected the direction of the adjustment required by the assignment, meaning, for example, assuming that an Australian expatriate in China faces the same hurdles as a Chinese expatriate working in Australia. This research proposes to that such impact is asymmetric. In other words, the impact of CD on expatriates’ sociocultural and psychocultural adjustment is contingent on the direction of the assignment; that is, the CD experienced by an Australian expatriate in China would not be the same as that of a Chinese expatriate working in Australia. This is because the home and host environments are variably situated in the cultural space. Hence, individuals need to adjust to their environment rather than the other way round (Jan et al., 2007). The theoretical propositions developed in this article thus extend the CQ model (Earley & Ang, 2003) and CCA model (Templer et al., 2006) by examining important CD asymmetry effects on the CQ and adjustment relationships under new circumstances and looking into the additional psychocultural adjustment construct.

Particularly, analyzing Australian and Chinese expatriates on reciprocal transfers in this article may be especially momentous in HRD literature due to the significant CD between the two countries because culturally distant countries can serve as better comparative sites. National cultural dissimilarity plays an important role in comparing the two-way flow reciprocal transfers of expatriates (Ward et al., 2009). This article uses the CD asymmetry concept on two geographically and culturally distant countries that are showing big gaps in terms of cultural characteristics. By doing so, a much clearer and likely more complete picture should emerge of the CD effects on the interaction of individual differences, namely, CCA.

On the practical side, it is apparent from the propositions developed in this article that HRD practitioners in multinational organizations should (a) pay more attention to their expatriates’ individual differences, (b) make an effort in understanding of cultural distance between home and host countries, and (c) instill in their potential expatriates a strong motivation for carrying out the international assignment through improved CQ as HRD strategies. The improved awareness of HRD managers in this regard should contribute to their personnel pool building for international assignments.

Another significant dimension of expatriate development course derived from this article would be to focus on the involvement of CD asymmetry (i.e., direction of cultural flows in expatriation) that has strong influence on the relationships between expatriate’s CQ levels and their sociocultural and psychocultural adjustment. This should motivate HRD management to explore ways and means to differentiate different criteria for preparing expatriate for different managerial or technical roles overseas and focus more on the predeparture training for expatriate managers assigned from authoritarian to egalitarian countries who would face additional adjustment difficulties associated with less availability of managerial discretion because the latitude of managerial action is restricted to managers in low-power-distance cultures as compared to the reverse direction of cultural flows.

More important, insights from the propositions developed in this article could also be incorporated into expatriate training decisions and existing expatriate development programs. Higher levels of CQ of individuals indicate better sociocultural and psychocultural adjustment; hence, recognizing the importance of CQ for their business expatriates to overpass CD on reciprocal transfers should stimulate many MNCs, MNEs, and MNOs that do not offer any CQ training for their expatriates at the moment to contemplate that such training and preparation are crucial for successful expatriates’ adjustment and very much needed. To illustrate, it is suggested that, first, CQ should be accounted over emotional and social intelligence as crucial for expatriates’ predeparture preparation elements. Second, individuals high on CQ may catch up on other aspects of cross-cultural capabilities more easily and quickly and, therefore, deserve more attention when it comes to prioritizing and optimizing the preparation and training programs. Third, training programs should focus primarily on building up CQ (including meta-cognitive, cognitive, motivational, and behavioral capabilities) for individuals to adjust their existing cognition, motivation, and actions according to different cultural distances. Fourth, for expatriates who are likely to experience higher levels of CCA difficulties caused by the destination environment, the direction of cultural flows of the international assignment should require more extensive predeparture training in CQ and in-country support to provide the foundation for more informed adjustment and performance levels. Fifth, individual differences, cultural settings, and assignment directions intertwine in this regard and need to be identified and considered comprehensively in the design of training that would seek to enhance expatriate development capacity in overseas assignments. Last but not least, management awareness and HRD programs should take into account differences between various expatriate groups, cultural environments, and assignment directions.

The practical contributions of this article are also extended to the career development of expatiates themselves. Individuals can benefit by having a greater understanding of themselves, including their own CQ, the effects of CD, and direction of international assignments, and thus work to compensate for personal differences while on a variety of overseas assignments in new cultural environments. This will help expatriates to be prepared to take greater ownership of their careers. An international assignment is an opportunity for expatriate to build career capital, which depends considerably on the expatriate’s CCA, because international assignments lead to a restructuring of career capital with overall net gains in knowing-whom, knowing-how, and knowing-why for the well-adjusted expatriate (Haslberger & Brewster, 2009). Therefore, there is a broad connection between expatriate adjustment and their career development. Successful adjustment offers career advantages.

These wider implications of this article toward HRD practice can reduce huge costs associated with expatriate failure, premature return, or ineffective performance that is caused by maladjustment, and serve as valuable inputs in developing future training and promotional strategies.

Future Research Directions

One observation worth addressing at this point is the fact that most existing literature on adjustment has been written from the perspectives of the Western business community, and many of the theories and models attributing for adjustment can at best only be applied to managers from the West (e.g., Adler, 2002; Andreason, 2003b; Black & Gregersen, 1999; Hutchings, 2002, 2003; Hutchings & Murray, 2002; Selmer, 2002, 2005, 2006, 2010; Tung, 1982). Leading figures in this area have been Jan Selmer and Kate Hutchings, who published 20 and 9 articles, respectively, on Western expatriates working in China since 2002, and Adler, who released a book titled From Boston to Beijing: Managing With a World View applying Hofstede’s (1980, 2001) cultural dimensions and its impact on Western expatriates’ adjustment and performances in China.

In contrast, the research records on the Eastern business communities are thin and unsystematic. The possible explanation for this would be that expatriate operations traditionally tended to move from the better-off and more advanced countries to the impoverished and developing nations. However, in recent decades, the flow of expatriates has become global and multifaceted. For instance, since China’s accession to the World Trade Organization (WTO) in 2001, it has been increasing international Foreign Direct Investment (FDI) in the world, and Australia is of particular strategic importance to China for expanding its Asia Pacific operations. China’s FDI in Australia in 2008 has reached 3.048 billion Australian dollars in areas of architecture, banking, consulting, transporting, education, medical and health services, mineral processing, and environmental products and services, and so on, slightly less than Australian FDI in China with a figure of 3.877 billion Australian dollars (DFAT, 2010).

Even so, research for the reverse situation, that is, Eastern expatriates working in the West, is almost nonexistent, at least in English language. In particular, little attention has been given in the relevant literature to analyzing the CCA of Chinese expatriates working in Australia. It is proposed to expand the scope of research geographically and socially by looking into the relatively underresearched group of Chinese expatriates working in Australia. This could offer a broader research base and thereby further enhance our understanding of the CCA process for successful international assignment.

In a study undertaken by Ang, Van Dyne, Koh, and Ng (2004), as noted above, a four-factor CQS-Cultural Intelligence Scale (cognitive, meta-cognitive, motivational, and behavioral) was used for studying a group of domestic students. These results were later validated in an empirical study by Ang et al. (2007), which provided evidence for construct and external validity of the CQS across samples (students, managers, and professionals) in Singapore and the United States.

Although the study has presented encouraging results, both the construct and the assessment of CQ are comparatively new. In this sense, further examination in additional settings (in the case of this article, China and Australia) could challenge the geographic scope limitations of the model and test its cross-cultural equivalence.

Hence, this article is calling for a mirror study of Chinese nationals adapting to Australian culture and Australian nationals adapting to Chinese culture in order to draw comparisons between the sample groups of Australian and Chinese expatriates. More important, the cultural intelligence survey instrument CQS-Four (Factor Cultural Intelligence Scale; Ang, Van Dyke, & Koh, 2004) is already available in Chinese language; hence, employing the scale will not be a difficult task and the scale will not need to be translated and pilot tested for the purposes of potential language problems. More important though, the proposed study is calling for using of actual expatriates in data samples rather than the more easily accessible participants such as students in further testing the efficacy of the model in helping to explain more effective adjustment.

Summary

It is vital for multinational organizations and their expatriates to understand the cultural and social factors that may facilitate or restrain their business operations (Pruetipibultham, 2012). This article provides deep insights into the important issues as to whether individual differences are related to CCA and how does cultural heterogeneity come into play in the relationship between CQ and expatriate adjustment. The topic is important and timely, as many companies are operating across cultural boundaries and the number of expatriates is on a rapid rise. Adequate understanding toward the potential effects of CQ and CD in CCA process is critical at this time for effective international HRD investigation. The proposed framework of expatriates’ CQ and CCA relationships in this article can guide the design of appropriate cross-cultural training programs for preparing employees for cross-border business in multinational organizations.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Author Biography

Ying Zhang, PhD in IHRM, Charles Sturt University, Australia. She has published two books in cross-cultural studies and has been a senior lecturer in Yunnan University of Finance & Economics. Her academic research interests include cross-cultural management, CQ psychology, and SEM research methods.

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