Academic journal article International Review of Management and Business Research

Relationship between Competencies, Cultural Adjustment and Job Performance in the ICT Sector

Academic journal article International Review of Management and Business Research

Relationship between Competencies, Cultural Adjustment and Job Performance in the ICT Sector

Article excerpt

Introduction

Today's global workplace is more complex and as the competition for international talent picks up steam, companies are increasingly looking to enhance their mobility policies to attract and retain key global talent (KPMG, 2012). The implementation of global strategies depends on selecting the right people but global organizations are facing strategic challenges (Dewhurst, Harris, & Heywood, 2012). The essential component in creating such competitive advantage is the human capital that encompasses competencies and abilities of the workforce (Dewhurst et al., 2012). For competitive advantage, organizations depend on the performance of expatriates (Palthe, 2004). Expatriates may face challenges in intercultural effectiveness in a multi-cultural country like Malaysia and inter-cultural skills and competencies are important (Solomon & Schell, 2009). Researchers attest to the importance of some individual factors and competencies in predicting cultural adjustment and performance in global assignments (Bhaskar, Harrison, Shaffer, & Luk, 2005; Arthur & Bennet, 1995).

Malaysia is opening its market towards globalization. In 2014, MSC Malaysia recorded an increase of 9,497 jobs and the total number of jobs stood at 147,568(MSC, 2014). However, in the ICT sector in Malaysia, the availability of innovative local talents for research and innovation activities is a major challenge and this problem is being addressed by importing foreign talents (PIKOM, 2012). Malaysia is still a difficult place for expatriates to integrate (HSBC Explorer Survey, 2012).

Having the right people to manage businesses is a critical success factor in international operations (Dowling, Festing & Engle, 2008). Many companies find deploying talent in emerging markets to be a major challenge (Dewhurst et al., 2012). Failure in global assignments is not only very risky but also costly (Perkins, 2006). A survey found that more than half of the companies in USA had failure rates of 10% - 20% (Tung, 1982). Based on a survey by KPMG (2012), 55% of the respondents stated that up to 5% of assignees were recalled from the host country or dismissed because of inability to perform effectively. Direct costs of expatriation may be as high as three times the domestic salary (Dowling et al., 2008). The indirect costs are harder to quantify but can be more expensive (Dowling et al., 2008). Failure also leads to negative organizational outcomes such as delayed productivity (Bennett, Aston, & Colquhoun, 2000).

Prior research on job performance and cultural adjustment has established that several factors such as relational skills, personality and technical skills are important predictors of expatriate success (Templer, 2010; Suutari & Brewster, 1997). Researchers have generally focused on specific issues without examining holistically the impact and relationship of expatriate competencies towards job performance and cultural adjustment (e.g., Arthur & Bennet, 1995). This has led to piecemeal understanding of cultural adjustment and performance rather than as an integrated theoretical framework. Despite the growing interest in expatriates, several gaps remain in understanding the relationship between competencies, job performance and cultural adjustment. It is still not certain whether competencies is a determinant of performance in the ICTS sector in Malaysia and whether there is a mediating effect of cultural adjustment in the relationships.

For this research, a survey involving respondents from the ICT sector in Malaysia was undertaken. The objective was to examine holistically how competencies can lead to successful cultural adjustment and performance of expatriates' in the ICT sector. This study established the best competency indicator to measure expatriate performance and examined the mediating role of cultural adjustment. A clear understanding of which competencies contribute to expatriate adjustment and job performance would aid decision makers and human resource professionals in the design of appropriate human resource practices, selection mechanism and training programs. …

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