Case06 Andrew Robinson Teaching Notes

Case 6 Teaching Note: Andrew Robinson: The Challenges of a Short Term Assignment 1

Case background The case covers the period November 2000-August 2001. The case was researched using a variety of methods: 1) interviews with the main participants mentioned in the case; 2) participant observation; 3) analysis of internal company documents, email correspondence and intranet. The name of the companies involved, as well as the names of the people mentioned in the case, have been changed at the request of the interviewees, however the case reports real events and situations. The exact location of Telequip in Australia, or its headquarters in Europe, is also not specified for this reason. Precise details about the product being developed, or about the business activities of Telequip and Taicom, are also omitted in order to preserve confidentiality.

Case synopsis Andrew Robinson was a software engineer employed by the Australian subsidiary of a multinational telecommunications equipment supplier, Telequip. Telequip Australia had plans to transform a network management platform it had developed for a local customer into a global product, and their first foreign customer was a telecommunications carrier in Taiwan, Taicom. The project soon ran into problems and Andrew Robinson was asked to go to Taipei on a short-term assignment to help deal with the technical issues that had arisen. The case details the challenges Andrew faced during his assignment and his

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Copyright © C. Welch, University of New South Wales, 2003.

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attempts to adjust to living and working in Taipei. In the end, Telequip’s project failed, with Andrew Robinson attributing some of the blame to the company’s inattention to the cross-cultural and human resource dimensions of the project.

Suitability of case for teaching purposes Types of courses: The case is suitable for courses in International Management, International Human Resource Management and Cross-Cultural Management. Level: The case is aimed at MBA, postgraduate and upper-level undergraduate students. Teaching strategy: The case has been written to stimulate class discussion.

Student assignment questions 1. Did Telequip provide Andrew Robinson and his colleagues with sufficient support for their international assignments in Taipei? 2. Telequip Australia has appointed you as a consultant to conduct an audit of its management of short-term assignments. What recommendations would you make to the company? 3. Was Andrew Robinson a suitable person to send on an international assignment to Taiwan? 4. Is Andrew Robinson liable to pay tax in Taiwan, despite the existence of an International Taxation Agreement between Australia and Taiwan? 5. Andrew Robinson is part of a new breed of expatriates – namely those on short-term assignments of between a month and a year. What are the advantages and disadvantages of short-term assignments over their more traditional variant? In your answer, consider the issues for both employer and employee.

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Case analysis Theoretical background to case: The case reports on a new trend in expatriate management: the use of non-standard assignments, such as commuter, virtual and short-term assignments (see Chapter 3 of Dowling and Welch). Short-term assignments are usually defined as lasting between one and twelve months. They are therefore longer than a business trip but shorter than the traditional expatriate assignment. Short-term assignments involve some of the traditional problems of traditional expatriate assignments, but pose some additional challenges of their own. Moreover, the terms and conditions for these employees tend to be different than those for traditional expatriates.

The case is somewhat unusual in two ways. Firstly, it explores human resource issues concerning an international project - a subject that has not been widely researched. The case introduces some typical problems encountered by companies managing international projects. As well as facing the challenge of cross-cultural communication, Telequip needs to manage development work occurring in two countries, and complaints from the customer that there are too few Telequip staff ‘on the ground’.

Secondly, the case explores issues surrounding expatriate management in the subsidiary of a multinational enterprise, rather than the more typical headquarters perspective. The subsidiary is trying to expand its mandate and take on world product responsibilities (see eg. Delany 2000). The evidence from the case is that expanding a subsidiary mandate has significant HR implications. While the case makes reference to the fact that Telequip does

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have company guidelines on short-term assignments, the evidence suggests these guidelines were not properly implemented by the inexperienced Australian subsidiary.

Other issues covered by the case include: •

expatriate selection (1): there is no evidence that Andrew Robinson, Jonathan Samuels, Malcolm Donaghue or other Telequip employees (eg. the Indian subcontractors) were selected on the basis of their cross-cultural suitability or language abilities (although Malcolm had worked in Hong Kong). Rather, they were selected solely on the basis of their technical ability and availability. Prior research shows that Telequip’s emphasis on technical skills is not uncommon. However, the problem is that a person with high technical abilities at home may not be able to function at the same standard abroad.

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expatriate selection (2): what are the ideal attributes of an expatriate? Students should be encouraged to consult the selection criteria listed in Dowling and Welch. Andrew certainly had some of these qualities, despite his lack of prior experience. Interestingly Malcolm’s prior experience in Asia did not in the end help him overcome the complexities he faced in leading the multi-country project.

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lack of predeparture training: Andrew Robinson and others on the project received no training prior to their assignments, and were sent to Taiwan at very short notice. Research has found that many expatriates do not receive training, yet the lack of training can increase the risk of expatriate failure.

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cross-cultural adjustment: Black et al. (1991) suggest the cross-cultural adjustment is multi-dimensional in nature, involving adjustment to work, adjustment to interaction with host-country nationals and adjustment to the general nonwork environment.

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While Andrew Robinson adjusted fairly well to living in Taipei, Malcolm Donaghue, Herbert Nguyen and Jonathan Samuels are examples of poor adjustment. Andrew Robinson developed a range of coping strategies and he occasionally did things that were out of character eg. his night-club escapade. However, he proved willing to adapt, was able to integrate himself into local society to some degree, and displayed the ‘openness’ deemed an important quality in an expatriate. The evidence from the case is that short-term expatriates still face significant cross-cultural adjustment issues, yet due to the short duration of their assignment, never have the chance to feel ‘at home’ in their new location. •

degree of stress: high stress levels and burnout are often reported to be part of the expatriate experience (Sanchez et al. 2000), and Malcolm Donaghue is the obvious example of this in the case. Malcolm is an example of a ‘commuter’ assignment, ie. commuting regularly between Australia and Taiwan. The PWC report on nonstandard assignments (2000) found this to be the most stressful form of non-standard assignment. While Malcolm did have prior experience of working abroad, the management demands of the project exacted a high personal toll.

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compensation: Andrew Robinson continued to be paid his home salary in his home country, but with a bonus per diem on top of his normal salary. A PWC survey (2000) found that home country salaries delivered via the home country payroll are the norm for short-term assignments.

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taxation: while Australia and Taiwan have a double taxation agreement, this did not prevent Andrew Robinson from incurring a tax liability in Taiwan as well as Australia. Additional taxation is an emotive issue for expatriates (see Dowling and Welch, Chapter 6), and in the case Andrew Robinson and his wife begin to feel that

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the incentives Telequip was offering them were being eroded. Telequip eventually decide to equalise Andrew Robinson’s tax (ie he does not need to pay more than he would at home), however HR did not inform him of this decision until after the assignment had ended (see epilogue). •

Telequip neglected to provide their employees with timely relocation and ‘logistical’ assistance (cf. ‘best practice described by Black et al. 1999) eg. Andrew Robinson found his own accommodation, used his personal credit card to make payments and enrolled himself into a Chinese language course at his own initiative.

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repatriation: usually an issue considered in the context of a traditional assignment, repatriation turns out to be difficult and traumatic for the Telequip Australia employees, since their repatriation comes as a result of the failure of their international project.

Short -term assignments avoid some of the problems of traditional assignments, eg.: •

relocation of spouse: those Telequip employees who were relocated to Taipei left behind their families. This means they could relocate without also relocating their families. However, short-term assignments still cause disruption to the family. While this meant that Andrew Robinson’s wife was able to continue working in Australia, she felt a negative impact on her life and the separation caused tension between the couple.

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flexibility: allows for the company to relocate the employee in a shorter time frame. This meant Telequip was able to respond quickly and flexibly to the needs of their Taiwanese customer. Short-term assignments are therefore suited to international

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projects. However, it also meant that the company did not have time to set up a suitable system for supporting the staff it sent abroad at such short notice. •

cost: short-term assignments are seen as less costly than the traditional assignment ie. some costs, such as relocating the family, are avoided altogether, and there is a cost saving in terms of the duration of the assignment. Moreover, companies need to keep in mind the fact that employees still need a high degree of support in making their cross-cultural adjustment. Yet short-term expatriates may not receive the support and preparation that is more standard practice in the case of the more traditional assignment. The perception may be that because of the short duration of the assignment, such assistance is not required.

Short-term assignments are often portrayed as a potentially attractive alternative to longterm assignments (eg. Foster 2000). The case, however, suggests the reality of short-term assignments is more complex. While short-term assignments are often seen as a more cost-effective solution for the company and also a way to avoid the problems of dual careers and family disruptions, their potential downsides also need to be taken into consideration by companies.

Suggested answers to student assignment questions: 1. Andrew Robinson and his colleagues received very little preparation prior to leaving Australia and almost no support upon arrival in Taipei. Andrew had little warning about his short-term assignment and did not really know what to expect. He did not receive the terms and conditions for his assignment until the evening before his departure. Once in

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Taipei, he found an apartment on his own and enrolled himself into Chinese classes on his own initiative.

2. Possible recommendations for Telequip Australia: - selection of short-term expatriates on the basis on cross-cultural as well as technical qualifications. -

introduction of pre-departure programmes. Students could also be encouraged to discuss what sort of pre-departure training they would recommend (referring to the Black et al figure in Dowling and Welch, Chapter 5.

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relocation and ‘logistical’ assistance, especially suitable housing arrangements.

- language training while in Taipei. - security guidelines: ie managing the personal risks expatriate staff may face (ie. typhoon). - post-return debriefing of expatriates. - benchmarking: while Telequip Australia had little experience of running international projects, other parts of the company did. They therefore could have provided examples of ‘best practice’ against which the Australian subsidiary could have benchmarked itself. Telequip Australia is an example of a ‘tactical-reactive’ rather than ‘strategic-systemic’ approach to short-term international assignments (Black et al. 1999).

3. Andrew Robinson’s technical abilities are strong, and while in Taipei he seemed to perform well at a technical level. However, he did not have prior experience in working abroad, had not visited Taiwan before, and did not speak Chinese. He did not know what to expect, assuming that because he liked Chinese food and had Chinese friends he would

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be able to fit in. Nevertheless, he did fit the profile of a successful expatriate in many ways. He was open-minded, adaptable, and was the only member of his project who seemed to enjoy socialising with local colleagues and learning about the local culture.

4. Andrew’s stay in Taiwan exceeded 90 days (c.30 days + c.60 days + c.40 days = 130 days) but was less than 183 days in a calendar year. Therefore, Andrew needs to lodge a Taiwanese tax return and pay tax on the income he earned, although in theory he is eligible for a refund. In practice, obtaining a refund is complex and expensive, and may not be successful.

5. Advantages of short-term assignments (for employees and employers): - family can stay at home – less disruptive to partner, children at school etc (family commitments are a major reason why employees turn down assignments). - more flexible option for employer, not such a long-term commitment, well-suited to the demands of an international project. - good introduction to working abroad for people without prior experience; allows for ‘globalisation’ of staff. - potentially lower cost to employer. Disadvantages of short-term assignments (for employees and employers): - potentially, high degree of stress and uncertainty. - disruption to family life. - employees still require support for cross-cultural adjustment and ‘logistical’ assistance, ie. short-terms assignments not an ‘easy fix’.

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- employees may not work effectively or confidently, due to ‘culture’ shock and poor adjustment. Because the term of the assignment is so short, they may never overcome their culture shock and feel they have adjusted to their new environment.

Additional reading: J S Black, H B Gregersen, M E Mendenhall and L K Stroh 1999. Globalizing people through international assignments. Reading, Mass.: Addison-Wesley.

J S Black, M Mendenhall and G Oddou 1991. Toward a comprehensive mode of international adjustment: an integration of multiple theoretical perspectives. Academy of Management Review, 16, 2: 291-317.

E Delany 2000. Strategic development of the multinational subsidiary through subsidiary initiative-taking. Long Range Planning, 33: 220-244.

N Forster 2000. The myth of the ‘international manager’. International Journal of Human Resource Management, 11, 1: 126-142.

H W Lane and J J DiStefano. 2000. The global manager. In P W Beamish, A J Morrison, P M Rosenzweig and A C Inkpen (eds) International management: text and cases, 4th edn, pp. 178-195. Boston: Irwin McGraw-Hill.

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G W Latta 1999. Expatriate policy and practice: a ten-year comparison of trends. Compensation and Benefits Review, 31, 4: 35-39.

J I Sanchez, P E Spector and C L Cooper 2000. Adapting to a boundaryless world: a developmental expatriate model. Academy of Management Executive, 14, 2: 96-106.

S C Schneider & J-L Barsoux 1997. Managing across cultures. London: Prentice Hall.

Epilogue Andrew Robinson’s tax liability in Taiwan was paid by Telequip. Less than six months after the failure of its Taiwanese venture, Telequip announced a major new contract with another overseas telecommunications carrier. Early indications were that the company had not sought to learn from its mistakes in Taiwan.

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