On-Site Adjustment Support for German Expatriates in the Republic of Ireland: An Exploratory Study

By Hippler, Thomas | IBAR, July 1, 2000 | Go to article overview

On-Site Adjustment Support for German Expatriates in the Republic of Ireland: An Exploratory Study


Hippler, Thomas, IBAR


Introduction

Given the favourable investment conditions of comparatively low corporate taxes and a reasonably well skilled but - in a Western European context - still less expensive labour force, it is unsurprising that the Republic of Ireland continues to attract a considerable amount of foreign direct investment (FDI). The number of companies supported by the Irish Industrial Development Authority (IDA), whose task it is to attract mobile international investment to Ireland, has continuously grown from 670 in 1987 to 1117 in 1997 (IDA, 1996, 1997).

Among the overseas investors in Ireland, Germany is the second most important (German-Irish Chamber of Industry and Commerce, 1997). Depending on the definition employed, there were about 230250 German companies in Ireland in 1997 (German-Irish Chamber of Industry and Commerce, 1997; O'Mahony, 1997). The number of IDA supported German companies grew from 117 in 1994 to 151 in 1997 (IDA, 1994, 1997). The year 1997 saw the highest level of German inward investment into Ireland ever recorded. Around 17 new greenfield projects and 10 expansions of existing operations were secured by the IDA (German-Irish Chamber of Industry and Commerce, News Release, 7 October 1997). A 1997 survey among German investors in Ireland found the corporate tax rate, manufacturing costs and financial packages/incentives to be the three most important location advantages of the country. The vast majority of German investoys increased their investment in Ireland between 1994 and 1997 and another 62 per cent plan to do so over the next three years (GermanIrish Chamber of Industry and Commerce, 1997). Between January 1998 and January 1999 eight new projects with a volume in excess of IRL (English pound)100m have been announced (IDA, 1999). Ninety-eight per cent of all German investors surveyed endorsed the Republic of Ireland as an investment location (German-Irish Chamber of Industry and Commerce, 1997).

Entering a foreign environment

In most cases internationalisation involves the establishment of a temporary or permanent presence in a country other than that in which the company is based, bringing with it a need for international managers. Horsch (1995) found that 11 of the 20 German multinational companies (MNCs) he interviewed expected an increasing need for expatriates in their overseas operations within the next ten years.

Once the decision to use parent-country nationals (PCNs) has been taken, a structured expatriate management approach, including procedures for selection, training and support (predeparture, onassignment and re-entry) of expatriates, should be developed (cf. Figure 1). The `on-arrival' and `on-site' support in particular deserve greater attention than they are usually accorded in practice. Arriving in a foreign country, an expatriate enters a socio-cultural environment which is entirely different to that which he grew up in, has been educated and trained in and has lived and worked in. This new environment consists of numerous challenging variables such as a different work environment (workforce structure, management style, decisionmaking process, motivation), a different private sphere (accommodation, acquaintances, leisure facilities, isolation), different social realities (family structures, structure of human relations, social hierarchy, wealth and poverty), different norms and values (right and wrong, good and evil, law, religion, ethics), different educational values (traditional education, autonomy, dependence), a different factual culture (type and style of construction, art, traditional technologies) and a different economy (Lober, 1992). A successful assignment is dependent upon the ability of the expatriate to adjust to these critically important variables. Adjustment has been defined by Dawis et al (1964: 8) as "the process by which the individual (with his unique set of abilities and needs) acts, reacts, and comes to terms with his (. …

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