A holistic analysis of expatriate failure rates within Swedish development cooperation

Abstract

Expatriate managers have been used ever since nations started to trade across borders. With the rise of globalisation, the role of the expatriate manager has increasingly become more indispensable. However, concern exists due to the high failure rate. Research suggests that up to 40% of expatriates return before their contractual period has expired. The consequence of an expatriate failure is both expensive and time-consuming. It is therefore vitally important to know what percentage of expatriates fail, and what are the common factors that result in expatriate failure. Furthermore, how should companies address this issue? The focus of this research study is all expatriates posted overseas in the last five years by Swedish consulting companies on long-term international development cooperation assignments, with the objective of determining what can be done to reduce their failure rates. This was achieved through the analysis of self-administered questionnaires to establish the failure rate of expatriates working in Swedish development cooperation and to determine the reasons for success and failure. When compared to accredited research, a series of patterns, relationships and learnings were determined, and conclusions drawn to develop an appropriate set of principles for Swedish development cooperation to base a revised expatriate policy upon. The study reveals that the failure rate is 6.2%, which is significantly lower than the failure rates reported in the literature. This can be attributed partly to the limitations of the accredited research and because of the unique nature of the development cooperation industry. Both the firms and the expatriates themselves are more receptive to the demands of working successfully overseas. Controversially, when it comes to the reasons for expatriate failure, the findings of the study do not support Tung's 1982 study that the inability of the spouse to adjust is a major cause of failure, nor that technical competency and skills are not a major contributor. On the contrary, in fact. The study concludes that Swedish firms are significantly more successful than their US, Japanese and European counterparts. But what is plainly evident is that expatriate management is not a one-size-fits-all exercise. This study might only scratch the surface, but it adds a little more breadth and depth to the body of knowledge of the expatriate management literature.