Impact of Employees Turnover

A Conceptual Model of Expatriate Turnover Author(s): Earl Naumann Reviewed work(s): Source: Journal of International Business Studies, Vol. 23, No. 3 (3rd Qtr. , 1992), pp. 499-531 Published by: Palgrave Macmillan Journals Stable URL: http://www. jstor. org/stable/155094 . Accessed: 09/10/2012 02:27 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www. jstor. org/page/info/about/policies/terms. jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive.We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email  protected] org. . Palgrave Macmillan Journals is collaborating with JSTOR to digitize, preserve and extend access to Journal of International Business Studies. http://www. jstor. org A CONCEPTUAL MODEL OF EXPATRIATETURNOVER Earl Naumann* Boise State University Abstract. Many factorsmay contributeto the high rate of expatriate turnover experienced by U. S. ultinational corporations. The objective of this article is to present a comprehensive model of the expatriateturnoverprocessby identifyingthe key contributing factors and suggesting intermediate linkages and relationships. The model appears to have both managerial and theoretical implications. The majority of U. S. multinationalcorporations(MNCs) suffer from an abnormally igh turnover ateamongexpatriate anagers, articularly hen h r w m p t T compared o bothforeign-based NCsanddomesticoperations. he turnover M ate commonly falls in the 20%-50%range for expatriatetransfers[Black 1988; Black and Stephens 1989; Copelandand Griggs 1985; Mendenhall and Oddou 1985;Tung 1988;ZeiraandBanai 1985], althoughturnover ay m be as high as 70% for some firns, particularlyn less developed countries i [Desatnick and Bennett 1978; Lanier 1979]. The problem of expatriate i turnovers more evidentamongU. S. -basedMNCs thanamongforeign-based MNCs. Tung [1982] noted that turnoverrates among U. S. MNCs are two to three times higher than foreign MNCs. For example, Tung's research M ndicatedthatonly 3%of European NCs and 14%of JapaneseMNCs had turnoverrates greaterthan 10% of expatriatetransferswhile 76% of U. S. MNCs had turnoverrates exceeding that level. b t Althoughdirectcomparisons etweendomestic(U. S. ) andexpatriateurnover ratesaredifficult,expatriateurnover atesappear o be at leasttwice domestic t t r rates. â€Å"Expatriateturnover†or â€Å"expatriatefailure† typically includes all individualswho quit or transferback to the U. S. priorto the completionof theirexpectedforeignassignments. ome researchersontendthat†expatriate S c turnover†may also occur up to a year or more after repatriation[Adler 1986; Harvey 1989].Conversely,virtuallyall domestic studies of turnover refer to the separationof the emp loyee from the organizationwith the o o t T preponderancef the studiesconcentratingn voluntaryurnover. o illustrate, in McEvoy ndCascio's 1987]meta-analytic a reviewof turnoverndperformance, a [ *Earl Naumannis Professorof Marketingat Boise State University. He received his Ph. D. from ArizonaState University. The authorwould like to thankthe reviewersfor their effort and contributions hich helped signifiw cantly improvesome crudeideas. Received: September1990; Revised: February,June, September1991 & January1992; Accepted: February1992. 499 500JOURNAL OF INTERNATIONALBUSINESS STUDIES, THIRD QUARTER 1992 twenty-four studies involving 7,717 individuals were cited. External turnover rates varied from 3% to 106% annually with a median of 22%. However, the subjects in the studies were drawn from nineteen rather generic job s categories including aerospace employees, pharmaceutical cientists, engineers, navy enlisted personnel, nurses, bank tellers, and small business new hires, for examp le. None of the subjects are directly comparable to expatriate managers. If the assumption can be made that expatriate managers are more similar to individuals such as engineers, scientists, and exempt lectronic employees than to individuals such as nurses, enlisted personnel, or small business new hires, the â€Å"normal domestic† turnover rate is more likely to approximate 10% annually [McEvoy and Cascio 1987]. This figure is consistent with the average of 12% for 303 firms reported by Mercer [1988]. Further, turnover rates typically decline at higher organizational levels so managerial turnover rates are likely to be less than the overall average figure. Thus, while no empirical research exists that directly compares turnover, the expatriate turnover rate appears to be at least twice the domestic rate.The extreme expatriate turnover rate results in high direct and indirect costs to U. S. MNCs. The direct costs associated with each expatriate turnover are estimated to be be tween $55,000 and $150,000 [Copeland and Griggs 1985; Harvey 1985; Mendenhall, Dunbar and Oddou 1987; Misa and Fabricatore 1979; Zeira and Banai 1985]. Therefore, the aggregate direct costs for expatriate turnover for U. S. MNCs are quite high [Copeland and Griggs 1985]. Additionally, the indirect costs associated with expatriate turnover are estimated to be even greater [Harvey 1985].The indirect costs include items such as reduced productivity and efficiencies, lost sales, market share, competitive position, unstable corporate image, and tarnished corporate reputation. While turnover is costly in domestic operations, turnover is apparently even more costly and troublesome in overseas operations. Due to the relatively high frequency of expatriateturnoverand the associated costs, the international business literature has been punctuated with efforts to isolate the factors causing difficulty in cross-cultural-adjustment.The three areas receiving the greatestinteresthave been the sele ction of the â€Å"ideal† expatriate manager [Abe and Wiseman 1983; Church 1982; Mendenhall and Oddou 1985; Mendenhall, Dunbar and Oddou 1987; Tung 1982, 1988; Zeira and Banai 1985], the underdeveloped state of expatriation and cross-cultural training programs [Black 1988; Black and Mendenhall 1990; Brislin 1979; Mendenhall and Oddou 1985; Kohls 1985; Schwind 1985; Torbiorn 1982; Tung 1982, 1984], and the difficulties encountered by the expatriate's spouse and/or family [Black 1988; Black and Stephens 1989; Grain and Cooper 1981; Harvey 1985; Tung 1982].While these factors are undoubtedly contributors to the turnover problem, study of these variables in isolation or jointly is likely to result in very little advancement of the understanding of the expatriate turnover problem. The reason for the low probability of significant improvements flowing from this stream of research is that there are CONCEPTUAL MODEL OF EXPATRIATE TURNOVER 501 t t manyothervariableshatinfluence heturn over rocess. pecifically, onceptual p S c a models of the domesticturnover rocesshave pursued more comprehensive p pproachthan that found in the international usiness literature,and these b r i modelshavebeen generally alidated y subsequent esearchn organizational v b behaviorand appliedpsychology. While there have been numerousattemptsto model the domestic turnover process, two turnovermodels have received the strongestsupportbased on the frequency of citations in subsequentliteratureand on the number of attemptsto empiricallyvalidatethe constructsandrelationships. he model T of Mobley, Griffeth,Handand Meglino [1979] suggestedthatcharacteristics of the organization,he individual, ndthe environmenthapean individual's t s perceptionsand satisfactionleading to the formationof intentionsto stay or quit. The Steers and Mowday [1981] model addedadditionalconstructs of job performancelevel, efforts to change the situation, and non-work influences. In addition, he SteersandMowdaymodel exp andedthe affective t responsesto the job to includejob satisfaction,organizational ommitment, c andjob involvement. The satisfaction,commitment,and involvementof an w t individual ould lead to the formation f intentions o stay or quit. Together, o these models have guided or influencedturnoverresearchfor a decade.In thattime, both models have generallystood the test of empiricalvalidation. Thus,it appearsthatconstructs entralto these models may be generalizable c to the internationalnvironment ndhelp explainexpatriateurnover. y using e a t B theoretical odelsfromthe areaof appliedpsychology,this approach ttempts m a to address the criticisms of the internationalliteraturefrequentlyvoiced [BlackandMendenhall 990;Kyi 1988;Newmann, hattandGutteridge 978]. B 1 1 These authors ave notedthatthe internationalusinessliterature ften is not h b o integratedinto a theoreticalframeworkand appearspiecemeal and ad hoc.The purposeof this articleis to presenta model of expatriate urnover ased t b o n constructs entralto the Mobley,et al. [1979] andthe Steersand Mowday c [1981]models. Additionally,he expatriateurnover odelattemptso integrate t t m t concepts from the international usiness literature here possible. By purb w suing a more comprehensive heoreticalapproach nd recognizingthe comt a plex interactiveand longitudinaleffects, an improvedunderstanding f the o expatriateturnoverprocess may result. This improvedunderstanding ay m contributeto the developmentof retentionstrategiesthat would reduce the high turnoverrate.Lee and Mowday [1987] provided several reasons for the value of comprehensive odelsof turnover. irst,comprehensive odels m F m identify and categorizethe variousfactorsthatpreviousresearchhad found to be important. Second, models provide directionfor empiricalresearch, thus imposing discipline on researchers nd reducingthe occurrenceof an a ad hoc researchagenda. Finally, models help managersthink heuristically about a broaderrange of causes of turnoverrather than concentratingon one or two factors. Therefore,the model of expatriateturnovermay be of value to both researchers nd practicingmanagers. 502 JOURNAL OF INTERNATIONALBUSINESS STUDIES, THIRD QUARTER 1992 THE MODEL The basic rationale that underlies this model is that the fundamentalconcepts associated with the turnover process in domestic situations can be adapted to model the expatriate turnover process. Thus, the discussion of major constructs will summarize the existent body of research where possible although there is an absence of empirical studies of a variety of unique international factors. Also, the model of expatriate turnover is implicitly oriented toward middle to upper level managers.These organizational levels appear to be most commonly represented among expatriates [Tung 1981]. While many of the constructs will also apply to operatives, the propositions and discussions adopt a managerial orientation. The discussion of the model (Figure 1) will flow from the predicto rvariables through intermediate linkages to the turnover decision. The sequence of discussion is intended to follow the direction of predominant causality in this turnover model. Three categories of predictor variables have received general empirical support domestically as being important elements of the o mployee turnoverprocess:job/task characteristics, rganizationcharacteristics, three groups of variables collectively and worker characteristics. These influence an expatriate's degree of job satisfaction, commitment to the organization, and involvement in the achievement of the organization's goals. These attitudes are formed with respect to the parent organization, and, since most expatriates are initially transfers from domestic positions, the attitudes have probably been formulated predominantly in a domestic environment.The expatriate's general satisfaction with, commitment to, and involvement in the organization may be moderated by perceptions of the career path resulting fr om the international assignment or by the overall level of cross-culturaladjustment. The expatriate's satisfaction, commitment, and involvement may also be moderated by the employee's family situation and the family's overall satisfaction with the international experience or by o the characteristics f the countryto which the expatriateis assigned.Collectively these factors will lead to the modification of satisfaction, commitment, and involvement with respect to the organization in the foreign assignment. Due to the developmental state of the international business literature and the small percentage of international human resource articles appearing in leading business journals [Black and Mendenhall 1990; Boyacigiller and Adler 1991; Rosenzweig and Singh 1991], the specific international variables influencing expatriateattitudes are largely unknown.However, these attitudes toward the organization in the foreign assignment may result in the expatriate clarifying the intent to change employers, stay with the same employer but transfer â€Å"home,† or stay in the international assignment. The expatriate's intentions may be modified by perceptions of both external and internal employment alternatives. The intentionsmay result in explicit search behavior, ultimately resulting in an initial turnover decision. The turnover decision, even if the choice is to stay, may result in changes in the employee's job CONCEPTUAL MODEL OF EXPATRIATETURNOVER 03 0~~~~~~~~~~~~~~~~~ 0~~~~~~~~~~~~~~~0c U 0~~~~~~~0 0 .. 1 I=- I z0 LL †¦Ã¢â‚¬ ¦ E 0 4) ll l la E L, k . ; ~~~~0 , 504 JOURNAL OF INTERNATIONALBUSINESS STUDIES, THIRD QUARTER 1992 and career expectations and influence subsequent performance. A decision to leave may not be manifested for an extended time period and may result in other withdrawal cognitions. To assist in clarifying the expected relationships in the model, research propositions are presented after each discussion. The degree of detail in each propos ition is largely a reflection of the existent body of research.If research is available that suggests specific relationships and the direction of influence, the propositions are relatively detailed. If research is lacking and the expected relationships are based instead on intuitive reasoning, the propositions are stated very generally. Also, although this is a model of expatriate turnover, only a few of the propositions deal explicitly with turnover. The reason for this is that turnover is the behavioral outcome of a complex process and the propositions address the specific antecedent relationships among variables. Each of these variables will be addressed individually.However, clarifying the relatively ambiguous concept of â€Å"turnover† may be useful first. Turnover Turnover among domestic operations typically refers to the separation of the individual employee from the firm. This definition is too narrow for the international environment and must be broadened to include several other dimensions of turnover since expatriate turnover often involves transfers internal to the organization. Turnover may be categorized as external or internal, voluntary or involuntary, and functional or dysfunctional. External turnover occurs when an individual leaves an organization to seek employment elsewhere.While this type of turnoveris most common domestically, there is no research indicating the frequency of external turnover as a component of total expatriate turnover. By any measure, external turnover is costly and results in reduced short-term efficiency, at the very least. Internal turnover occurs when an individual changes positions but remains in the same firm. This situation is apparently more common in international operations than in domestic situations [Tung 1984]. Essentially this occurs when an expatriate manager is transferred back to the U. S. or another internationallocation.Research has indicated that many expatriate managers find the repatriation process much more stressful and frustrating than the initial expatriationand repatriationexperiences may be a cause of subsequent turnover [Adler 1980; Harvey 1989]. Also, many expatriates may develop an intention to quit while on foreign assignment and view the transfer â€Å"home† as simply an intermediate step to leaving the firm [Harvey 1989]. Turnover may also be voluntary or involuntary (from the employee's viewpoint). Voluntary turnover occurs when the employee quits or requests and receives a transfer.Involuntary turnover occurs when an employee is fired or transferred at the will of the organization. By integratingthese concepts, a four-celledmatrixcan be developed (Figure 2). The turnover models of Mobley, et al. [1979] and Steers and Mowday CONCEPTUAL MODEL OF EXPATRIATETURNOVER 505 r [1981] and much of the subsequentdomesticturnover esearchin organizational behavior and applied psychology concentrateon cell 1, voluntary external turnover,and to a lesser degree, on cell 2, involuntaryexternal f turnover. The international usiness literature ocuses primarilyon cells 3 b i a and4, voluntary ndinvoluntarynternal urnover, ith little or no distinction. t e Very little discussionin the international usiness literature xists of cell 2, b involuntaryexternal turnover,or cell 1, voluntaryexternal turnover. The model presentedhere will apply generally to all four types of turnover. f While the model is conceptuallymost appropriateor both types of voluntary turnover,the model also has implicationsfor both types of involuntary w turnover. he implicationsor the varioustypes of turnover ill be addressed T f in subsequentsections of this article.Turnovermay also be conceptualizedas functionalor dysfunctionalto the firm. Functionalumoveris typicallyviewed as beneficialto the organization. t An example might be when a low-performingexpatriatequits or is fired, t thus creatingan opportunity o staff the position with a more capable indit vidual. Anotherexampleo f functional urnover ightbe the internaltransfer m and/or promotionof a high-performing xpatriate. There appearsto be a e dark side of functional turnoverthat may be easily overlooked. When a t â€Å"low performing†expatriate eaves the organization, he departure ay be l m he organization s a resultof the individual'snability o effectively a t viewedby i o make the cross-cultural djustment r as a result of spouse or family proba lems [Tung 1982]. However, it appearslikely that the cause of â€Å"low performance† may be mistakes made by the organizationin many cases. To illustrate,the selection criteriafor expatriatemanagersmay be inappropriate, expatriation raininginadequate or nonexistent),the job may be poorly t ( designed, the performanceexpectationsunreasonable,or the performance W appraisal rocessinadequate. hilethe expatriate ay be a â€Å"low performer,† p m he low performance ay be due to the organization'smismanagednternam i tional efforts,not the expatr iate'sncompetence. ennings[1985] noted that i J companies are often the cause of their high turnoverrates due to poor managementdevelopment and misuse of talented people. Failure by the t organization o use the skills developedin the international nvironment y e b a the expatriates apparently commonsourceof dissatisfactionmongrecently i a repatriated anagers [Harvey 1989]. If an expatriateis viewed as a low m t t perforner,identifying he causesof low performancesppears o be important. a oViewing the departure f a low perfonneras a good thing may, indeed, be very simplistic. Dysfunctionalturnoverdamagesthe firm in some way by having a valued employee quit or requestan early transfer. Dysfunctionalturnoveris most as commonly onceptualized beinginitiated y theemployee lthoughnvoluntary c b a i internaltransfersare also undoubtedly ysfunctionalin the short tenn. d The functional/dysfunctionalonceptualization ould apply to all four types c c of turnoverin Figure 2. The point to be made h ere is that not all turnover 506 JOURNAL OF INTERNATIONALBUSINESS STUDIES, THIRD QUARTER 1992FIGURE 2 Types of Turnover Voluntary (For the Employee) External (To the Organization) Involuntary (For the Employee) I Quit! You're Fired! 12 34 Internal (To the Organization) Transfer Me! You're Transferred! is bad; some turnover may actually be beneficial and afford the organization an opportunityto improve. However, since a significant portion of expatriate managers are initially â€Å"internal transfers† from a domestic assignment rather than â€Å"new hires,† the expatriates are likely to be high performers in the domestic environmentdue to the expatriateselection process.Specifically, a manager's â€Å"domestic track record† is often a major factor in the expatriate selection process [Mendenhall and Oddou 1987; Tung 1981]. Thus, it may be hypothesizedthat dysfunctionalturnoveris more common among expatriates than among domestic managers (i. e. , losing valued empl oyees). A further complication to the traditional approach to turnover research also t appearsnecessary regardingthe appropriate ime horizon. Turnovermay occur significantly after repatriation but be caused by the international experience or the repatriationprocess.An expatriatemanager may become disenchanted while on the international assignment and actually formulate an intention to quit [Adler 1986]. However, the expatriate may simply â€Å"gut it out† until b transferred ack to the U. S. , and a new job is found. Alternatively, a expatriate may become disenchanted with the organization due to events occurring during the repatriation process and subsequently leave the organization. However, turnover after repatriation introduces many issues not addressed in the expatriate turnover model presented here.Therefore, the discussion in this article is limited to turnover that occurs while an expatriate is actually on the foreign assignment. The model does adopt a decidedly tempo ral dimension, however. Steers and Mowday [1981] contend that the intention to quit is usually manifested behaviorally within a year and that the relationship between intention and turnover subsequently weakens. The reason that an extended time horizon is necessary in turnover studies is the existence of gradual changes in worker attitudesleading to behavioralchanges, a phenomenareferredto as â€Å"progression theory† [Rusbult, Farell, Rogers and Mainous 1988].Specifically, declining CONCEPTUAL MODEL OF EXPATRIATETURNOVER 507 workerattitudesdo not instantlyresultin the formationof intentionsto quit. For example,an expatriate ay experiencelow levels of attitudes or several f m monthsbeforethinking boutquitting ndthenultimatelyormingthe intention a a f to quit. Likewise, an employee may have low levels of attitudes,but the t situationmay improve,resultingin an intention o stay with the organization. Since the expatriateturnover ate appearsto be roughlytwice the domestic r ate, a variety of unique internationalfactors apparentlycontributeto a gradualdeterioration f worker attitudesover a period of time for many o expatriates. anyexpatriates ay have positive attitudesinitiallybut graduM m ally develop more negative attitudes. Thus, a longitudinalperspective is t important o the model. t Regardlessof the type or timing of turnover, he ultimateturnoverdecision is precededby antecedent ariablesandintermediateinkages. The predictor v l variablesof job/task,organization, nd workercharacteristics re the initial a a startingpoint in many studies of employee turnover.Job/Task Characteristics Of the threebroadcategoriesof predictorvariables,job/taskcharacteristics have received the most researchattentiondomestically[Glisson and Durick 1988] while receiving very little attention internationally. eceiving the R strongest support as predictorsof employee attitudes are role ambiguity [Teely, French and Scott 1971; Lyons 1971; Abdel-Halim 1981; Bedeian and Armenakis 1981 ] and skill variety [Bartel 1982; Marsh and Manari 1977; Price and Mueller 1981; Dewar and Werbel 1979; Gerhart 1987; Glisson and Durick 1988; Blau and Boal 1989].Thus, the greaterthe role clarity and the more diverse the skills needed, the more likely the worker is to be satisfied,committed,and involved. Additionally,the characteristics of role conflict, task identity, and task significance have received support as predictor ariables. It appears,therefore, hatissues relatedto the specific v t task environmentcan influence the satisfaction,commitment,and involvement of workersat a variety of organizationalevels. l The uniquenessand dynamismof international nvironments ay lead both e m to more role ambiguity and task variety among expatriates.The volatile externalenvironment ay cause MNCs to have less clarityin theirposition m descriptionsas managersrequiremore flexibility to respond to changes. m Therefore, orerole ambiguity ay exist whichmay lead to reducedsatisfacm tion amongexpat riate anagers. owever,overseasassignments ftenrequire m H o managersto use a broaderrange of general managementskills than their domestic counterpartsCzinkota,Rivoli and Ronkainen1989; Edstromand [ Galbraith1977]. This implies that increasedtask varietywill contributeto a higher level of satisfaction among expatriatemanagers.Thus, job/task characteristics ay offset one anotherin theircontributiono an expatriate's m t workattitudes. Withone exception,these constructs enerallyhave not been g investigatedin the international nvironment. e 508 JOURNAL OF INTERNATIONALBUSINESS STUDIES, THIRD QUARTER 1992 While most of the studies cited above utilized domestic U. S. subjects, Black [1988] found that role ambiguity, conflict, overload, and discretion were related to the cross-cultural adjustment of American expatriates in Japan. The direction of Black's findings was generally consistent with the domestic literature.A potentially importantconsideration in the international situation is the similarity of the domestic and foreign jobs performed by the expatriate [Dowling and Schuler 1990]. If the foreign job requirementsare quite similar to the domestic position previously held, the transition and work adjustment should be easier. If the domestic and foreign positions are highly divergent, the expatriate must adjust to both a new work environment as well as a new cultural and physical environment. Another job/task characteristic that may be of importance internationally is the concept of work grouphomogeneity. Althoughusing a domestic U.S. sample frame, O'Reilly, Caldwell, and Barnett [1989] found that aspects of work group homogeneity were related to the degree of social integration which was negatively related to turnover. Since foreign work groups in U. S. MNCs are often composed of U. S. expatriates, host country nationals, and third country nationals, a good deal of work group heterogeneity is likely to exist. This diversity is likely to inhibit the individual soci alization process and result in lower levels of cohesiveness. The lower level of social integration may contributeto reduced attitudesthat would ultimately lead to increasedturnover.Work group homogeneity may also be conceptualized on a broader, more macro level. In addition to the fit between the expatriate and other job associates, the degree of homogeneity between the foreign subsidiary and parent corporation may be important [Brittain and Freeman 1980; Lincoln, Olson and Hanada 1978]. The more similar the composition and functioning of the foreign work group to the parent, the more positive the expatriate's attitudes are likely to be. Milliman, Von Glinow and Nathan [1991] contend that MNCs attempt to apply isomorphism to foreign subsidiaries as a mechanism of control and continuity.Based on the literature that addressed job/task characteristics, both domestically and internationally, the following propositions were developed. Proposition 1 There is a positive relationshipbetwee n skill variety, task identity, autonomy, and task significance and expatriate satisfaction, commitment, and involvement. b Proposition 2 Thereis a negativerelationship etweenrole ambiguity and role conflict and expatriate satisfaction, commitment, and involvement. Proposition 3 The degree of similarity between the expatriate's domestic and foreign jobs is positively related to xpatriate atisfaction,commitment,and involvement. s CONCEPTUAL MODEL OF EXPATRIATETURNOVER 509 Proposition4 There is a positive relationship between work group homogeneity and expatriate satisfaction, commitment,and involvement. OrganizationCharacteristics Behavioral, structural,and demographiccharacteristicsof organizations have received researchattentionas predictorsof satisfaction,commitment, and involvement. Behavioralissues such as participationn decisionmaking i have received strong support [Gladstein 1984; Glisson and Durick 1988; Millerand Monge 1986].Leadership onsideration as also receivedsupport c h [Morrisand Sherman1981;Batemanand Strasser1984; Glisson andDurick 1988; Blau and Boal 1989]. Dimensions of organizationstructuresuch as centralization Child 1972; Hage and Aiken 1969], differentiation Redding [ [ and Hicks 1983; Bimbaum and Wong 1985], and formalization[Redding andHicks 1983;Child1972;HageandAiken 1969]havealso beenempirically validatedas predictors f attitudes. emographic rganizationalactorssuch o D o f as organization ge, workgroupsize, andtype of industry ave receivedweak a h upportas predictive variables. Cotton and Tuttle's [1986] meta analytic review providesa more comprehensive eview of these variables,and their r findings indicated U. S. studies differed from non-U. S. studies in several ways. In U. S. studies, an employee's genderhad less impacton satisfaction and unions had more influence on turnover. Satisfactionwas less reliably tled to turnoverin non-U. S. firms. In the internationalnvironment varietyof othervariables ppear otentially e a a p A import ant. s Dowling and Schuler[1990] noted, a firm's structure, ontrol c echanisms, and human resource policies are linked to the evolutionary P processof globalization. ucik[1985] also notedthatthe evolutionary rocess p is continuousas organizationscontinuallyadapt to dynamic international environments. Although there are several organizationchange models, the concept of organizationlife cycles (OLC)has been applied internationally Adler and [ Ghadar1989; Milliman, Von Glinow and Nathan 1991]. As organizations progressfrom one stage to another fouror five stages are typicallyincluded) ( an MNC's strategy, structure,and human resource policies also need to change.Milliman, Von Glinow and Nathan [1991] noted that change is needed so that MNCs can optimizetheir â€Å"fit. † There is a need to optimize the externalfit of the foreign subsidiaryto the local environmentand the parent ompanyto the domesticenvironment. hereis also a need to optimize c T the internalfit between the parent and foreign subsidiary. Complicatingthe optimizationof both externaland internalfit is the need for flexibility due to environmental ifferencesand changes. For example,Black, Mendenhall d and Oddou [1991] noted that flexibility in the work environmentis related to aspects of cross-cultural djustment. illustratethe importance f these T a o concepts, when an organization becomes more experienced internationally, 510 JOURNAL OF INTERNATIONALBUSINESS STUDIES, THIRD QUARTER 1992 the amount of role conflict and role ambiguity may be reduced as the a s organization trategically daptsmore effectivelyto the foreignenvironment. ( c m Also, the adaptation ay lead to a differentstructural onfiguration foreign sales agent versus foreign sales office versus vertically integratedforeign operation)that could enhance satisfaction,commitment,and involvement though improvedjob design. t uThe open systems approach sed by manyorganizationalheoryresearchers [Lawrenceand Lorsch 1967; Pfeffer and Salancik 1978; Thompson 1967] d clearly implies that the natureof the environment ictates the appropriate e w S structure. ince most researchers ould agreethatinternationalnvironments a t relative o the U. S. , thenmoreflexible,decentralized,utonomous aredynamic, T foreign structureswould be appropriate. his view of more decentralized foreignsubsidiariesis also consistentwith the trendtowardflatterstructures in the U. S. and with the trend of workerempowerment. Specifically, as a rganizations ttemptto become more innovativeand responsive,decisionl making authorityis often forced to lower organization evels. While these variablesare intuitivelylogical predictorsof satisfaction,commitment,and e involvementand may be relatedto a firm's multinational volution in the been very little empiricalinvestigationor international ontext, there has c validationof these constructs. h training ave receiveda good deal of attention a Expatriationnd cross-cultural D business literature. espite the rapidincreas ein world in the international o e tradeflows in the pasttwentyyearsandtherelated mergence f multinational f e corporations, xpatriation rainingfor managersin U. S. multinationalirms is still in its infancy. Specifically, in multinationalcorporations,training a programs re generallysuperficialand incompleteor nonexistent. In Tung's [1981] study, only 32% of respondingfirms had formalizedtrainingprot t grams. Furthermore,he focus of the formaltrainingprograms endedto be t c on environmental oncerns. Country-level rainingin cultureand language was uncommon. DunbarandEhrlich[1986] and Schwind[1985] also found t that the majorityof firms had no formalexpatriation rainingfor managers. i thatthe stateof expatriation rainingn U. S. multinational Tung [1981]suggests corporationsis a major reason for expatriateturnoverrates in U. S. firms a being two to threetimes the level of those in European nd Japanesefirms. That is, the resultof underdeveloped xpatriationrainingprograms ay be m t e that expatriate anagers xperiencevery high levels of initialrole amtbiguity m e f P s and conflict which in turnreduces workattitudes. roviding upport or this t position is Black and Mendenhall's[1990] review of cross-culturalraining i research. They noted that cross-culturalraining s positivelyrelatedto skill t a development, djustment,ndperformance. t c An additionalfactorthatmay be an important ontributoro turnoveris the c t conceptof corporate ulture. Organizationsypicallydevelopa predominant, identifiableculturealthoughit is rarelystatedexplicitly [Wilkinsand Ouchi 1983]. Also, an organization'sculture can vary across functional areas, CONCEPTUAL MODEL OF EXPATRIATETURNOVER 511 operatingdivisions, or geographicallocations [Gregory1983; Wilkins and Ouchi 1983]. Since most expatriatemanagersare internaltransfersrather than new hires, the assumptionprobably can be safely made that most i xpatriates ave been socially integrated nto the parentfirm's predominant h culture. If the work gro up at the foreign location has developed a unique and differentcorporateculture,the expatriatemay experience adjustment c difficultiesdue to the divergent otporate ulture. pecifically,the expatriate's c S w valuesandorganizationaleliefs may be incongruent ith the local operation, b hence decreasedwork attitudesmay result. While this issue is conceptually similar to work group homogeneity, subunit corporateculture is a more p b training rograms. pervasiveconceptandcouldbe influenced y cross-cultural bProposition5 There is a significantrelationship etween dimena sions of a foreign subsidiary'sstructure nd expatriatesatisfaction,commitment,and involvement. t The moredecentralizedndautonomoushe foreign a subsidiary,the more positive the work attitudes. b Proposition 6 Thereis a positiverelationship etweenthe quality of expatriationrainingand expatriate atisfaction, t s commitment,and involvement. b Proposition 7 Thereis a positive relationship etween an organization'sstageof multination al evolution, articipation p in decisionmaking,leadershipconsideration,and s a expatriateatisfaction,ommitment,ndinvolvement. Proposition8 There is a positive relationshipbetween the similarity of a firn's predominantcorporateculture and local foreign corporatecultureand expatriate satisfaction,commitment,and involvement. Worker Characteristics o Empiricalinvestigationdomesticallyof characteristics f the workerhave o a c yielded mixed resultsas predictors f satisfaction, ommitment, nd involvement. Personality[Staw and Ross 1985; Staw, Bell and Clausen 1986], age [Dewar and Werbel 1979], being female [McNeely 1984], and job tenure [Coverdaleand Terborg1980] have received weak supportas predictorsof satisfaction.However, personality [Hulin and Blood 1968; Steers and Spencer 1977], marital status [Porterand Steers 1973], age [Morris and Sherman1981], tenurein the organization Stevens,Beyer and Trice 1978], [ and education[Steers 1977] have received strong supportas predictorsof commitm ent. Age, tenure, and maritalstatus (being married)are usually y w positivelyassociatedwith commitment hile yearsof education, earsin the samejob, and alternative mployment pportunitiesre negativelyassociated o a e with commitment. Althoughmicro level contingencytheory models would contend that individual characteristicswould be importantpredictorsof 12 JOURNAL OF INTERNATIONALBUSINESS STUDIES, THIRD QUARTER 1992 attitudes in different work contexts, there is apparently little research that provides consistent direction in this area [Glisson and Durick 1988]. The level of performance of the employee is also a possible predictor of satisfaction, commitment, and involvement. Research has generally supported the contention that performance leads to satisfaction [Ivancevich 1978; Lawler and Porter 1967; Sheridanand Slocum 1975]. Therefore,an individual's performance level is generally thought to be positively associated with satisfaction, commitment, and involvement.In the international context, a variety of worker characteristics have been discussed or empirically investigated. Worker characteristics postulated as important to expatriates are technical competence [Hawes and Kealey 1981; Tung 1982], relational abilities [Tung 1982; Mendenhall and Oddou 1986], and stress reduction [Abe and Wiseman 1983; Hammer, Gundykunst and Wiseman 1978; Barrettand Bass 1976; Ratiu 1983]. Other possibly important workercharacteristics re personality[Torbiom 1982; Dapsin 1985; Mendenhall a and Oddou 1986] and tolerance for ambiguity [Hammer, Gundykunst and Wiseman 1978; Ratiu 1983].Another worker characteristicthat may be positively associated with intemational success is the individual's years of previous international experience [Black and Stephens 1989; Church 1982]. An individual who was unsuccessful in a previous international ssignmentwould likely limit subsequentinternational a assignments. Conversely, an individual who has experienced success internationally may be more re ceptive to subsequent international assignments. Thus, simple trial and errormay result in an expatriate's years of international experience being positively related to satisfaction, commitment, and involvement.Somewhat related to internationalexperience, particularlyin a specific country, is an expatriate's linguistic ability. The more fluent the expatriate in the language of the host country, the easier the social integration to both the work and general environment. Thus, linguistic ability should be positively related to work attitudes. Two other rather controversial types of worker characteristics exist, an expatriate's sex and marital status. The majority of expatriates are male, 97% in Adler's [1984] study, and most are married [Black 1988].Since most expatriatesare male, does the high turnoverrate caused by an expatriate's gender, coincidentally vary with it, or is it totally unrelated to it? Unfortunately, this topic has not been empirically investigated in an international environment. Thai and Cateora [1979] noted that being a woman expatriate can be a significant liability due to the culturalbias in some foreign countries (i. e. , in the Middle East, Latin America, and Japan). However, Adler [1984, 1986] and Adler and Izraeli [1988] contend that cultural bias against women in management often does not apply to expatriates.Cultural views of women are often restricted primarily to women of that country. A woman expatriateis usually viewed predominantlyas a foreigner,who also incidentally happens to be a woman. In some cases, being a woman was enough of a CONCEPTUAL MODEL OF EXPATRIATETURNOVER 513 novelty to be viewed as a positive asset. As Adler and lzraeli [1988] noted, the overwhelming conclusion about women expatriatesis their scarcity. While there are more U. S. women managersand expatriates(as a percentage of the total workforce) thanin most countries,the proportion f women o anagersin almost all countriesis low due to the same general reasons: culturalsanctions, educationalbarriers,legal restrictions,corporateobstacles, and women's disinterestin pursuingmanagerialcareers. Due largely to the scarcity of women expatriates,there is no data that suggests that women would have more, or less, positive work attitudesthan men. Maritalstatus has also received researchattention,but with mixed results. i Some authors ontendthatbeing marrieds a stabilizing actorfor expatriates, f c while otherscontendthatspouse and family problemsare the leading cause of expatriate ailure[Tung 1984].While some MNCs develop cross-cultural f f i trainingprograms or an expatriate's pouse, the assumption s usuallymade s thatthe expatriate s male andthe spouse is female [Adlerand Izraeli 1988]. i t o Unfortunately, he literature f the impact of maritalstatus is scarce so no directionof relationshipcan be inferred. SteersandMowday[1981]contended hatworker xpectations ay be related t e m to subsequentattitudes. Their discussion focused on â€Å"met expect ations,† or the extent to which pre-employmentexpectations were subsequently fulfilled by job expenrences. n arguingfor realismin pre-employmentnterI i iews, Steersand Mowdayfelt that â€Å"met expectations† nd workerattitudes a were positively related. The same concept may apply internationally. f a I manager's pre-international xpectations differ greatly from subsequent e experiences,an expatriate'sattitudeswould likely decline. While expatriation trainingmay provide an opportunity or a realisticjob preview, other f techniquessuch as preview trips, may also help clarify expectations. Proposition9 Thereis a positive relationship etween an expab triate's tenure, organizationlevel, performance, yearsof previousinternationalxperience, inguise l tic ability,age, andrelational bilityand expatriate satisfaction,commitment,and involvement. Proposition10 Thereis a positiverelationship etweenthe degree b to whichan expatriates9sre-intemational p expectaaremetin subsequentnterna tional tions i experiences and satisfaction,commitment,and involvement. a T t C Satisfaction, ommitmen4nd Involvement owardhe ParentOrganization a i l Satisfaction,commitment, nd involvementare importantntermediateinkages between predictorvariablesand employee tumoverdecisions. Because of theirimportance, hese constructs ave receivedextensiveconceptualand t h empiricalattention. Models of employee turnover ave explicitly addressed h heirrole [Blau and Boal 1987; Bluedom 1982; Mobley, et al. 1979; Steers 514 JOURNAL OF INTERNATIONALBUSINESS STUDIES, THIRD QUARTER 1992 and Mowday 1981; Price 1977]. Additionally, over one hundred empirical studies have validated these constructs and have indicated the strength and direction of intermediate linkages (see Miller and Monge [1986] and Cotton and Tuttle [1986] for meta analytic reviews). Therefore, only a brief definition and discussion of these variables will be presented here. Job satisfaction has been defined as â€Å"the positive emoti onal state resulting from the appraisalof one's job or job experiences† [Locke 1976].Organization commitment is defined as the worker's â€Å"strong belief in the organization's goals and values, a willingness to exert considerable effort on behalf of the organization, and a strong desire to remain a member of the organization† [Mowday, Porter and Steers 1982]. Job involvement is defined as â€Å"the extent to which an individual identifies psychologically with her/her job† [Blau 1985]. Although these constructs are related, each is distinct due to measurement of attitudes about the individual (satisfaction), the job (involvement), or the organization (commitment) [Blau and Boal 1987; Morrow 1983].For example, employees with high job satisfaction may feel positive about their jobs due to fulfillment of personal needs and values [Miller and Monge 1986]. For individuals with high levels of job involvement, the job is important to the worker's self-image [Kanungo 19 82]. Workers with a high level of organizational commitment feel positive about their employer, identify with the organization,and wish to maintain membership in it [Porter, Crampton and Smith 1976]. While these constructs are conceptually distinct, interactive effects have been shown to exist between commitment and involvement [Blau and Boal 1989], nd satisfaction and commitment [Glisson and Durick 1988] and satisfaction, commitment, and involvement [Lee and Mowday 1987]. However, satisfaction, commitment, and involvement generally complement one another as intermediate linkages between predictor variables and turnover [Blau and Boal 1987]. Attempts have been made to identify a causal orderingbetween these attitudinal variables. The implicit assumptionof these attemptsis thatsince satisfactioncan be formulated quickly, satisfaction leads to commitment and involvement which are more long lasting and enduring [Steers 1977; Stevens, Beyer and Trice 1978].Attempting to test this conten tion, Williams and Hazer [1986] found strong interaction between satisfaction and commitment but could not infer causality due to the cross-sectional nature of the data. However, Farkas and Tetrick [1989] used a longitudinal design but were unable to identify causal direction. They did identify that satisfaction and commitment are differentially related over time, and the relationship may be cyclical or reciprocal. Therefore, the model presented here assumes that these variables are strongly and positively related to one another, but does not assume any causal relationship.Since the majority of expatriates are internal transfers ratherthan new hires, the workers have probably achieved some degree of social integration into CONCEPTUAL MODEL OF EXPATRIATETURNOVER 515 the organization. Accordingly,the argumentis made that expatriatesstart theirinternational ssignmentwith attitudesthatare reasonablywell formua lated. Also, as transfers,expatriates ay have reasonablypositive attitudes m initially. Althoughthereis no empiricalsupportfor this contention,it seems intuitivelylogical that a disgruntled mployee would be an unlikely candie t date for an internationalransfer.The situationfor new hires is more complex. While new hires apparently constitutea small portionof expatriates,new hires' attitudesare probably more formative than internaltransfers. Since new hires would have little i b t opportunityo achievesocial integrationntothe organization eforedeparting for the foreignassignment, he local foreignorganization ould be relatively t w i more importantn shapingworkattitudes. Also, pursuingthe logic of Steers and Mowday [1981], pre-employmentexpectations would be relatively more importantin shaping new hires' work attitudessince expectations w a regarding oththe organization ndthe foreignassignment ouldbe clarified. Whetherthe expatriateis an internaltransferor a new hire, the expatriate initially arrives in the foreign assignmentwith some level of satisfaction, b co mmitment nd involvement. dditionally, ased on the domesticresearch, a A these three attitudesare positively relatedto one another. Proposition 11 Thereis a positive elationshipmongan expatriate's r a satisfaction,commitment,and involvementwith respectto the organization. Attitudestowardthe Organizationin the Foreign AssignmentThe traditionalturnovermodels of Mobley, et al. [1979] and Steers and Mowday [1981] postulatethat satisfaction,commitment,and involvement collectively result in an employee formulatingintentions to stay in the organization r to quit. In the international ontext,an expatriate anager's o c m a family situation,the careerpathingperceptions,countrycharacteristics, nd the degree of cross-cultural djustment ppearto be moderatingvariables. a a Thus, the employees' attitudetowardthe parentorganization ay be modim fied to resultin attitudestowardthe organization n the foreign assignment. These attitudeswould still conceptuallyinclude satisfaction,commitment, and involve ment,but the constructswould be more directlyinfluencedby the international xperience. e Supportfor the changes in an expatriate'sattitudestowardthe organization in the international ontext is providedby Gregersonand Black [1990a]. c Their researchindicatedthat expatriatesare often differentiallycommitted to the organization nd local foreignoperations. urthermore,on-jobfactors a F n were significantly related to local commitment. These findings appearto f t and c rovide upportorthecontentionhatcountry haractenrstics an expatriate's s family situationwill affect the expatriate'ssatisfaction,commitment,and involvementwith respectto the organizationn the international ssignment. i a 516 JOURNAL OF INTERNATIONALBUSINESS STUDIES, THIRD QUARTER 1992 Unfortunately,the concept of dual commitments, or dual attitudes in general, has received very little research attention internationally. Therefore, it is unknown whether attitudes toward the parent organization or attitudes toward the local f oreign organization would dominate in the formation of behavioral intentions.However, the model explicitly assumes that the expatriate's initial attitudes do not remain constant. As suggested by the high expatriate turnover rate, the expatriate's attitudes generally deteriorate due to a variety of unique internationalfactors. Some of the factors were discussed previously within the three categories of predictor variables. The remaining unique internationalfactors of family situation, country characteristics,career pathing, and cross-cultural adjustment appear quite important and will be addressed individually in the following sections.The assumption is made, however, that there is a â€Å"spill-over effect† between an expatriate's attitudes toward the parent organization (probably formulated domestically) and attitudes toward the international assignment. Expatriates with very positive attitudes toward the organization in general are also likely to have more positive attitude s internationally. Expatriates who possess lower levels of attitudes toward the organization in general are likely also to have lower levels of affective responses internationally.This explicitly assumes that each of the three attitudes can be formulated at a more macro level toward the organization in general or at a micro level that is more closely related to the foreign assignment. While the dual levels of commitment and satisfaction have been well identified in the domestic literature, it seems intuitively logical that the same could be said for job involvement. For some expatriates, attitudes toward the organization may remain positive while negative international attitudes may develop. Such a situation may result in an internal transfer.For other expatriates, initially positive attitudes toward the organization may deteriorate internationally leading to external turnover. Proposition 12 There is a positive relationship between job satisfaction,commitment,and involvement (with respect to the organization) and expatriate satisfaction, commitment, and involvement (with respect to the international assignment). Expatriate's Family While an employee's family situation may not be central to the domestic turnover process, the family situation is apparently a critically important oderatingvariable in the expatriateturnoverprocess. Harvey [1985] contends that the family situation may be the most important contributorto expatriate turnover. Supportfor Harvey's contentionis providedby Tung's [1982] research that indicated that two of three most frequently cited causes for expatriate failure were family related. Specifically, â€Å"the inability of the expatriate's family/spouse to adjust to a different physical or cultural environment† and CONCEPTUAL MODEL OF EXPATRIATETURNOVER 517 â€Å"otherfamilyrelatedproblems†receivedstrongsupport. espitethe apparent D mportanceof the family, less than half of MNCs interviewthe spouse in the expatriate election p rocess [Black and Stephens1989; Tung 1981] and s expatriation rainingfor the family is very rare [Black and Stephens 1989]. t If a spouse or family memberis undergoingcultureshock or experiencing t difficulty in makingthe cross-cultural djustment, he morale,performance a and work attitudesof the expatriatemanagermay be adversely affected [Harvey 1985; Mendenhall,Dunbarand Oddou 1987; Tung 1982]. Since the majority of expatriatemanagers are male [Adler 1984], the greatest impact of a foreign relocationmay be experiencedby the wife [Gaylord 1979].The wife may experiencehigh levels of stress due to a disruptionof i children'seducation,loss of self-worthand identity,particularlyf she was previouslyemployed, lack of contactwith friends and relatives, and social or culturalostracism in the foreign country [Harvey 1985]. Furthermore, children are often resistantto moving, even domestically. The problems faced by childrenregarding ducation,linguisticdifferences,social relatione ships, and c ulturalvalues also can be the sourceof stress and conflict. Thus, the greaterthe numberof children,the more likely adjustment roblemsare p o occur. Also, older children such as teenagers are more likely to have t developedstrongpeer social relationships nddisrupting hose relationships a for an internationalransfer ay have negativeresults. Despite the apparent t m importanceof these variables,there is apparentlyittle empiricalinvestigal on expatriateturnover. tion of the impactof the family situation However,as noted by Black and Stephens[1989], the family situationis an e t intuitivelyimportant lementof the expatriate urnover rocess. They noted p t hatthereappearso be botha positiveandnegative†spillovereffect†between expatriatesand their spouses' perceptionsof an international ssignment. a w Specifically, expatriateand spouse adjustment ere significantlyand positively correlated, nd were relatedto the expatriate'sintentionto stay in the a foreign assignment. Even if an e xpatriatemanageris very positive about the foreign assignment, a transfer â€Å"home† may be the result of family dissatisfaction. Conversely,a positive family situationis likely to enhance an expatriate's attitudes and cross-culturaladjustment,and increase the probabilityof a successful foreign experience.Theredoes appearto be a potentialproblemin evaluatingthe impactof the spouse or family situationon turnover. Attributingexpatriateturnoverto the failure of the spouse to adjustmay be simplistic [Dowling and Welch 1988]. Expatriatesmay use their spouses as scapegoats,ratherthan admit theirown failuresto adjust. This may reducethe negativecareerimplications of an early transferhome. Likewise, top level corporateexecutives may attributeexpatriatefailure to the expatriate'sfamily ratherthan critically evaluatetheir own firm's expatriation rogramswhich may be deficient. p There are many dimensions of an expatriate'sfamily situation that may w oderate orkattitudes. nfortunately, ost of these variables ave received h m U little or no researchattention. Therefore,the following propositionhas been 518 JOURNAL OF INTERNATIONALBUSINESS STUDIES, THIRD QUARTER 1992 stated very generally as a global measure of â€Å"family satisfaction,† which is undoubtedly a multifaceted concept. Proposition 13 The expatriate's family satisfaction with the international experience has a positive moderating influence on the expatriate's job satisfaction, commitment, and involvement with respect to the organization in the foreign assignment. The more ositive the expatriate's family attitudes, the more likely the expatriate is to develop positive work attitudes internationally. Proposition 14 The fewer the number of children that relocate with the expatriate, the more positive the expatriate's work attitudes. Proposition 15 The younger the children that relocate with the expatriate, the more positive the expatriate's work attitudes. CountryCharacteristics All foreign assignme nts are not created equal. Dramatic differences exist both between and within countries that can influence expatriates', and their families', cross-cultural adjustment and their subsequent attitudes.In many cultures, foreigners are viewed with distrust and skepticism. As a result, building social relationships with local nationals may be impossible. For example, few western women find the Arabic countries enjoyable due to the constrained role of women in those societies [Thai and Cateora 1979; Dowling and Schuler 1990]. As a result, some companies may prefer to select managers who are unmarried for foreign assignments in the belief that a single person will have fewer adjustments.However, many single male expatriates are socially ostracized, and they may have a more difficult social adjustment than a married couple who can provide each other mutual support. In addition to social and cultural factors, expatriates can experience dissatisfaction due to living conditions and health prob lems. A foreign oil company executive with extensive international experience expressed his preference for having Americans on international projects because they were always the first to get sick if a health problem existed. The Americans were his â€Å"miner's canary† that served as an early warning of potential health problems.Issues such as these have been referred to as â€Å"cultural toughness† and â€Å"cultural novelty† [Black and Stephens 1989; Mendenhall and Oddou 1985; Torbiorn 1982]. Cultural toughness describes the difficulty that a western expatriate would have adapting to certain cultures. For example, Torbiorn [1982] noted that western expatriates experienced higher levels of dissatisfaction with assignments in India, the Middle East, North Africa, CONCEPTUAL MODEL OF EXPATRIATE TURNOVER 519 East Africa, and Liberia. Thus, some cultures are very different from western cultures and are also very difficult to adjust to.Other countries may have a ve ry different culture, but are much easier to adapt to for expatriates and their families. The concept of culturaldifferences influencing the cross-cultural adjustment process is intuitively logical. However, there appears to be a lack of consensus regarding conceptualizations of this factor. For example, the terms â€Å"cultural toughness,† and â€Å"cultural novelty,† appearin the international business literature. Unfortunately, tightly developed definitions and consistent research operationalizations are generally lacking. Hofstede [1980] perationalized â€Å"cultural distance† along four indices of work-related values, but most researchershave used a broader,more macro level approach. Harbison and Myers [1959] conceptualized cultural differences in stages of economic development and the role of the firm in that process. Farmer and Richman [1980] conceptualizeddifferences along socio-cultural,legal-political, economic, and educational dimensions. Nath [1988] described behavioral differences that included cultural factors such as attitudes, beliefs, value systems, behavioral patterns, and management philosophies.Negandhi and Prasad [1971] evaluated differences in the task environment such as distributors, suppliers, employees, consumers, government, and community. Consensus regarding the appropriatedimensions to use in measuring cultural differences is lacking, but there is apparently strong support for the general concepts of cultural toughness, cultural novelty, and/or cultural distance. Each country presents the expatriate, and the expatriate's family, with a unique set of adjustmentproblems. The more divergent a foreign assignment and location from the home country environment, the greater the potential of experiencing culture shock.Indirectly supporting this contention was Beamish's [1985] finding that MNCs are more likely to be dissatisfied with the performance of operating units located in less developed countries that are likely to be â€Å"culturally tough. † The more â€Å"culturally tough† a foreign country, the more likely the expatriate's work attitudes will be negatively affected. Therefore, the following proposition was developed. Proposition 16 The culturaland environmentalsimilarity of home and host countries has a positive, moderating influence on expatriate satisfaction, commitment, and involvement (with respect to the international assignment).The more similar the foreign culture and environmentto the home environment, the more positive the impact on expatriate satisfaction, commitment, and involvement with respect to the organization in the foreign assignment. Career Pathing Research on the career value of foreign assignments in MNCs is inconsistent. The inconsistency may result from the fact that the human resources function constitutes the weakest link in the overall strategic planning process in 520 JOURNAL OF INTERNATIONALBUSINESS STUDIES, THIRD QUARTER 1992 most U. S. MNCs [L orange and Murphy 1983; Tung 1984].Thus, many foreign assignments appear haphazard rather than part of a planned process to develop certain managerial skills. As a result, international assignments appear to be avoided by some high performing managers due to potential negative career consequences [Adler 1980]. For example, Edstrom and Galbraith [1977] suggested that expatriates often viewed the purpose of their overseas assignment as development for future executive responsibility. However, Gonzalez and Negandhi [1966] found that about half of former expatriates were in low level positions fifteen years later.Howard [1973] and Harvey [1989] found that a good deal of uncertainty and conflict surrounded the expatriation and repatriation process and skills developed by expatriates were seldom used after their return home. These results led Mendenhall, Dunbar and Oddou [1987] to note that the â€Å"overseas assignment is a haphazard, ill-planned affair that is usually accompanied with vertical advancement. † They concluded that the impetus for overseas staffing seems to be more to meet immediate manpower needs than to create an integrated career development strategy for future corporate executives.This lack of career path clarity may cause expatriate managers to reevaluate their own career goals and the congruity of those goals with the organization. Since career counseling is very rare regarding international transfers, many expatriates are probably unaware of some career issues until they are actually on foreign assignment.

Cricket

Cricket is a sports game which is being played in between two teams. The real origin was South-East-England in the 16th century. The central organization of the game is International Cricket Council having almost 100 affiliates from all over the world. In this subject, we will talk about some of the most fascinating facts about the cricket that you may be familiar with.13 Most Interesting Facts about Cricket Game?South Africa cricket team nicknamed as Proteas (National Flower of South Africa). An Interesting fact about them that they played world cup final four times but badly failed to succeed. Cricket was started in the 16th century from South East England. England cricket players are the cricket originator but not able to achieve a single world Cup Trophy So far. Sir Don Bradman was the youngest player to score a triple century in the Test Cricket series. Sir Don Bradman (27, August 1908) was Australian cricket team Player mentioned as â€Å"The Don† of the Cricket. Another interesting fact about Don Bradman he smashed only six sixes in his whole career. The cricket history will always recognize him as all-time favorite sportsmen. Indian Cricket team is the only team who had played and won World Cup match of 60, 50 and 40 over in that order. It is significant to let you know that from 1971 to 1983 all the ODI matches were in the sequence of 60 overs Kapil Dev is the only Indian Cricket player, who never had a single no ball in his entire career of Cricket. Kapil Dev a very famous former Indian cricket player. He won the Cricket World Cup of 1983. He also remained the coach of Indian Cricket Team for one year. He is the Indian cricket player, who took highest wickets In the Cricket game, 111 Score reflects Nelson in the Cricket; It means the tragic position (a batsman without the bails that is no more in the game). Nelson signifies the Admiral Nelson the flagman of the British Army, who had only one eye, one leg, and one arm at the end time of his existence. So 111 supposed to be unlucky Cyrus Gayle is the only player, who smashed the first sixes on the first ball of a test match. Christopher Henry Gayle (born 21 September 1979). He is the only player who was honored to make two triples centuries in test series. (317 Against South Africa in 2005 and score 333 Against Sri Lanka 2010) Vinod Kambli's test match average is better than his childhood fellow Sachin Tendulkar. Vindo Kambli is the former Indian first-class cricket player. He was the middle order batsman in Cricket team. Another interesting fact is that he is the only player, who made a century on his birth date Saourve Ganguli and Rohit Sharma are the two best players of Indian Cricket. They had smashed century in knock Out World Cup. The only Cricket rule of the Cricket that has never changed since the game is started i.e. pitch length (22 yards / 20.12 m long and 3.05m wide) Peter Siddle is the only player, who recorded a hat-trick on his birth date. Peter Siddle is the cricket player from Australian cricket team. 25th November 2010 on his 26th birthday he did his hat-trick By considering balls bowled. World's shortest cricket test match was being played among West Indies and England. That was of only 10 balls at North Sound Ground on 13th Feb 2009. The match had drawn. The very world's first Cricket World Cup was being organized for women's in 1973 and thus, the men's World Cup was being organized in 1975 A very interesting fact that most of the people think that cricket rules were made by the ICC. But in actual, cricket rules were made by the Mel burn Cricket Club MCC

Men are better managers as compared to the women for a variety of Essay

Men are better managers as compared to the women for a variety of reasons - Essay Example There has been a lot of debate about the effectiveness of women as managers. Women are stereotyped to be too delicate to give their best in the position of a manager since most organizations require the managers to be rough and tough in order to be effective. â€Å"W[omen] managers could be $13,500 a year better off a year on average if only they had a sex change. That is the penalty managers pay simply for being female† (Horin, 2009). A vast majority of the contemporary organizations are quite unlike the misogynist workplaces that were omnipresent in the 1960s. Despite that, there is a significant discrimination on the basis of gender in the workplace today, with the women full-time managers earning 25 per cent lesser as compared to the male managers. Although men working more hours than women is frequently identified as a causal factor of this disparity in earning between the women and male managers, yet it is not the only factor that explains the difference in earning. In s pite of the women’s empowerment over the decades, gender-based discrimination is still a common factor that influences the organizational culture in the present age. Leila Abdalla is a General Manager who shares her experience of management in these words: â€Å"It’s never been a walk through the park to get to the top – and the challenges are more when you are up there because there are some people, who were not very comfortable working for me† (Kibakaya, 2011). There are many factors that make women too weak to be good managers. This paper discusses the gender issues at the workplace and supports the belief that women lack the strength for management. Women are very concerned about their impression on others. â€Å"Professional women often come to executive coaches to work on their perceived "weaknesses" in the workplace, with an express wish to change an undesirable behavior or pattern† (Doyle-Morris, 2007). It matters to the female managers a l ot how others think of them. While it can be a good thing for a woman in her personal life because this lets her adjust herself according to people’s expectations to gain their love and admiration, this attitude is not quite suitable for a manager. Managers need to know what they are doing and should not care about what others think of them. Otherwise, they are not in a position to do what they think is right for the organization. Female managers display a lack of confidence in their abilities particularly when the circumstances become too tough. Men least care what others think of them. They do what they think is right and it does not matter to them how it affects their image. Such an attitude helps the male managers get through in tough times. Female managers are put off by the criticism that surfaces as a result of their actions while male managers are stubborn and determined. A manager has to take a lot of criticism for his/her actions. Every strong manager takes bold ste ps that may be found offensive by many employees and stakeholders. These steps are necessary in order to execute the strategies made by the manager. This requires a lot of boldness. One has to take full responsibility for one’s actions as a manager. In such circumstances, a woman manager is often not able to take the criticism. She backs off when the stakeholders threaten her. Bullying at workplace is not

Ethics in Criminal Justice Essay Example | Topics and Well Written Essays - 500 words

Ethics in Criminal Justice - Essay Example When a convict or a person charged and accused of committing a crime approaches a criminal justice personnel; this is the main quality that the latter needs to possess. Performing one's duty, which is that of administering justice or striving to obtain justice for an innocent convict in this case, is of prime importance. When the justice personnel is dutiful towards his professions and maintains the ethics and morals of criminal justice, he automatically begets qualities like honesty and loyalty, since he is committed to performing his Duty sincerely. Discretion comes by, in the process too, as he becomes well aware in the process of differentiating right from wrong, while catering to his Duty. Thus, being dutiful is the most important quality, as it brings along with it, a multi-quality persona! The topic for my research is Ethics governing Cyber Laws. The advent of the Internet has created a revolution worldwide and has made life easy for man. However, there are numerous problems and ethical issues cropping up globally, due to the undeniable access and percolation of the Internet into almost every sphere of our activity.

Assessing Brilliance in Innovation Case Study Example | Topics and Well Written Essays - 2500 words

Assessing Brilliance in Innovation - Case Study Example It would be within the next year that Enron would begin to go through some major financial difficulties. It will be argued here that the basic tenets of a successful company require three key aspects: profit; sustainability of innovation; and good leadership. First, one should begin with a short history of Enron. In the case of the Houston-based Enron Corporation, a multi-billion dollar institution encountered a crisis situation. The denial of top corporate executives Kenneth Lay and Jeffrey Skilling led to Enron making excuses such as blaming Arthur Andersen, its accounting firm, for its failure. An integral part of understanding Enron's demise comes from learning a little bit about the company and how it grew over the years to its existing status. Houston Natural Gas merged with InterNorth, in July 1985, to form the Enron Corporation. Over the next fifteen years, Enron expanded rapidly, establishing many new businesses worldwide. The first sign of an innovative corporation is that it shows a profit. In about fifteen years, Enron grew from nothing to being America's seventh largest company. Enron employed over 21,000 individuals in more than forty countries. Enron's executives transformed this company, without actually building a company that made significant business profits. By doing this, Enron executives could exaggerate the company's cash flow. To create these profits, Enron's executives also used many accounting procedures that seemed to confuse watchdogs-and, to make themselves look better, they blindsided everyone who thought that Enron was on top of the world, by creating hundreds of fake companies. To prevent anyone from seeing any loss from Enron, they would transfer their debt to the fake companies. By doing this, Enron's debt would seem a lot smaller than they actually were. Like many large companies, Enron had its good and its bad side. In 2002 Enron's bad side was exposed to the nation. So the question is raised, what did Enron make' Enron didn't really make anything. Enron acted as the "middleman" in large natural gas and electricity deals. Enron always admitted it was hard to define their "business" in one sentence, but they finally came up with an explanation that they make commodity markets so that they could deliver physical commodities to their customers at a predictable price. Enron seemed to have trapped employees that worked with the company. The employees were forced to put their pension money into the Enron stock, which was overvalued. The employees at Enron were just doing their jobs, and in fact should not be held to blame. "Such high turnover [at the top of corporations such as Enron] suggests that the real problem isn't a lack of innovation-it's sustained innovation."1 Although many of the future business people attend curriculums that require business law classes, the Enron scandal has proven that corporate corruption is alive and well. Also, the company proved that it could not sustain its innovation over time, because its biggest innovation, mark-to-marketing accounting, was a fraudulent innovation. It was brilliant, in the sense that profits could be estimated and then banked upon, but it was also an illegal practice to put profits on the books that were not truly there. In addition, Enron

The Importance of Strategy Process and Strategy Context in Determining Research Paper

The Importance of Strategy Process and Strategy Context in Determining Strategy Content - Research Paper Example As the paper outlines, strategy context deals with impact of macro environment in strategy formulation. Researchers have pointed out that the strategy process is complemented with three variables such as strategy formation, strategic thinking, and strategic change. They have argued that three variables of strategic process work in an overlapping manner instead of working in an individual manner. Academic scholars such as Bob De Wit and Ron Meyer have stated that strategic content can be viewed as the end product of the strategy process. Strategic content is complemented with four levels of strategy such as Functional Level, Corporate Level, Business Level, and Network Level. Bob De Wit and Ron Meyer have pointed out that strategy context can be classified as the external circumstances directing the implementation and outcome of strategy process. They have differentiated external environment into three segments such as organizational context, industry context and international context . Various research scholars have tried to create a link between triplets of the strategy process, strategy context, and strategy but unfortunately, the majority of them ended with an abstract model without much coherence with industry requirement. In 1986, Miller and Friesen have argued that strategy content is directly proportional to strategy context and strategic initiatives are more successful for electronic goods industry, manufacturing industries and paint industry in comparison to another industry environment (Miller and Friesen, 1986, pp. 37-55). In 1983, Hambrick argued that Porter’s Generic Competitive Strategies have little significance for small level firms while four levels of strategy such as Functional Level, Corporate Level, Business Level, and Network Level have importance for only firms having sufficient resources (Hambrick, 1983, pp. 213- 230). In 1989, Bryman has argued that strategy content works in accordance with organizational resources. For example, P orter’s generic strategy would not be applicable to organizations suffering from resource crisis (read human capital, financial, marketing and IT) (Bryman, 1989, p. 169). Various research scholars have agreed that the validity of three steps such strategy process, strategic content and strategic context is unquestionable. In 2005, Torgovicky’s has tested the validity of strategy content in e-business and concluded that synchronization of strategic content and strategy process can help a firm to achieve a competitive edge over other competitors (Eldring, 2009, p. 10-15).

Schizophernia Essay Example | Topics and Well Written Essays - 750 words

Schizophernia - Essay Example ioning for six months accompanied with disorganized behavior, mixture of psychotic symptoms (hallucinations and delusions), disorganized speech, motivational impairment and emotional disturbance. The disorder typically begins during early childhood or adolescence. Here, patients may not show symptoms or may show mild traits like mild cognitive disorganization, impaired social competence and anhedonia (diminished capacity to feel pleasure). Such traits may only be recognized in retrospect. They may be noticed more with impairment of academic, social and vocational functioning (Noll, 2007). In this phase, subclinical signs and symptoms may emerge. Such symptoms include isolation or withdrawal, unusual thoughts, irritability, perceptual distortions, suspiciousness, and disorganization. The onset of clear Schizophrenia (hallucinations and delusions) may be slow and insidious (over years) or sudden (over weeks or days) (Noll, 2007). In this phase the individual experiences psychotic symptoms such as delusions, grossly disorganized behavior and hallucinations (Noll, 2007). It is the state of full development of the disorder. The behavior of the patient may be so bizarre and extreme that it is necessary to hospitalize them. This phase may last for many weeks or months in case the patient is not treated with medication. In this phase obvious psychosis subsides but the patient still exhibit negative symptoms like lack of emotion, social withdrawal, and extremely low energy levels. The patient continues to hold strange beliefs, supernatural intelligence (Noll, 2007). The signs and symptoms of the disorder fall into three broad categories: negative symptoms, positive symptoms and cognitive symptoms. The positive symptoms refer to psychotic behaviors that are not seen in healthy individuals (Noll, 2007). Patients with positive symptoms usually lose touch with reality. Such symptoms include Individuals have trouble organizing their thoughts or connecting them logically.

Legal-business auto accidents Term Paper Example | Topics and Well Written Essays - 1250 words

Legal-business auto accidents - Term Paper Example Honda Motor Company, â€Å"where the court ruled that the regulation foreclosed the filing of injury suits under the state law by the people contending that manufacturers had made the wrong choice† (Liptak). II. Facts of the Case: Petitioner, Alexis Geier, was driving a 1987 Honda Accord, which collided in a tree and caused the petitioner serious physical injuries, despite the fact that the shoulder and lap belts were fastened at the time the accident happened. The car was not also equipped with airbags. Petitioner, together with her parents, sued American Honda Motor Company, Inc. before the District of Columbia tort law, on the ground that Honda negligently was remiss in its obligation as a car manufacturer for failure to set an airbag at the driver’s side. The Court dismissed the case on the ground that it was the discretion of Honda to whether or not install an airbag in its car models. Hence, this ruling concluded that it was not mandatory for the automakers to ins tall a passenger-side airbag, and shall not be liable for a personal injury case based on such ground. The Court of Appeals reaffirmed the decision of the District Court which resulted to a dismissal of the case. Thus, an appeal to the Supreme Court was filed by the petitioners. ... s in conflict with the existing provisions of FMVS 208 Act, particularly on the express pre-emption provision Ruling: The Supreme Court ruled that: With regard to the first issue, the court held that the ordinary principles of pre-emption shall not apply in the case of the petitioners. The provision contained in the Act states that the federal safety standard does not relieve a person from any liability on the basis of the common law. Hence, the petitioners are not precluded from setting up a claim against American Honda. The language of the provision clause enacted by Congress does not prohibit common-law actions. The spirit of the law must be followed and not its literal meaning of the law. In case of doubt, the intention of the law must prevail over the strict context of the law. Thus, â€Å"express pre-emption provision that excludes common-law tort actions gives actual meaning to the saving clause’s literal language, while leaving adequate room for state tort law to oper ate† (Cornell). For the second issue, the Court held that ordinary pre-emption principles apply in the case of the petitioners. In its decision, the Court anchored its conclusion on the basis of â€Å"the express pre-emption and saving provisions when taken together, shall create a â€Å"special burden,† which a court must impose â€Å"on a party† who claims conflict pre-emption under those principles. A â€Å"special burden† would also promise practical difficulty by further complicating well-established pre-emption principles that already are difficult to apply† (Cornell). In one of the dissent of the justices, one justice commented that if the â€Å"special burden† would be made applicable in such a case, where the state law penalizes the requirement of the federal law which is an absolute

Argumantative Resarch Paper - Feminism Research

Argumantative Resarch - Feminism - Research Paper Example Issues related to women rights and equality, which are yet to be achieved form the basis of justifying that feminism is still relevant in today’s world. Feminism is classified into three waves, which have taken place in different times. Each wave has had its main advocacy in attempts to fight for women equality in the society. Some of the objectives within each wave have been achieved while others have been unachievable, making the debate of feminism continue (Aikau et al 23). Feminism is derived from a Latin word â€Å"Femina†, which refers to a woman. The first wave of feminism was mainly focused on fighting for women rights in relation to voting processes. In early days, women were not given the right to vote during elections. In the UK, a feminist movement referred to as Suffragettes fought for voting rights of women. Members of this group engaged in violent demonstrations and even went to the extent of fasting to ensure that women got the right to vote. Today, it is difficult to see such violent feminism movement. During the early days of feminism, there was less support for feminist movements (Tandon 13). In relation to the first wave of feminism, many countries later accepted to allow women to participate in the voting process. Australia was among the first nations to allow women to vote, but other nations were reluctant is issuing their women the right to vote. Of most surprising is countries such as Saudi Arabia and Brunei still deny their women the right to vote. Considering that it is only a few countries, which still deny women the right to vote, one can sum up that the first wave of feminism has achieved its objectives. Therefore, feminism has lost its relevance as far as women voting rights are concerned (Aikau et al 28). The second wave of feminism began in the 1960s with the main objective of ensuring that men and women were equal in all aspects of life.

The quadrennial Olympics Essay Example for Free

The quadrennial Olympics Essay His athleticism was displayed when he was tapped to join the United States judo team who competed in the 1964 edition of the quadrennial Olympics. And because of that, there are biographical notes that described him as â€Å"world famous,† considering that a stint in the Olympics and a chance to represent the U. S. is something that does not come anybody’s way all the time. Contributing to this is skill, dedication and passion for the sport, which reflected in Campbell’s early achievements during his early judo career prior to his selection to the United States Judo team. For three times, Campbell was considered as the countrys best when it comes to judo. He bested the competition during the 1963 edition of the Pan-American Games. After that, he earned the honor in becoming the captain of the squad that the United States sent to Tokyo to compete in the judo event of the Olympics, even earning a more honorable status in the international judo scene by acting as coach for the judo team of the US after he was done actively fighting . Jeweller The most significant development in the life of Campbell which was also the turning point of his financial capability was Campbell’s move towards jewellery designing. Campbell possessed a deadly combination; in one hand, he has the tradition of Native American art passed on to him by his culture; and on the other hand, his talent and skill in fine arts which he learned in school and developed personally through self practice. Using these advantages that he possessed, Campbell hit the jackpot with his new line of expertise. His works was received by the consumers with a high level of interest, while left and right critics are giving his works positive reviews while his personal art received honors and accolades. Campbell made full use of his artistic instincts, the art form of his Native American heritage and the techniques that he learned from Japan and from the US as well, to become one of the most heralded artists for jewellery during his time. He focused on every type of jewellery. He had designs for bracelets and rings as well as for pendants, and many of these designs are award winning to boot. In fact, the ranch measuring to up to 120 acres located in the Southern Ute Indian Reservation, located close to Ignacio in Colorado, was something that Campbell was finally capable of buying because of the increase in money and wealth that he achieved after the good sales of the jewelleries that he made and designed and sold. He did not just try to reproduce what was already considered as existing art and sell it to consumers of the contemporary time. He tried to do something different, what others even defined as bold artwork. Campbell built up a successful business making jewellery of his own bold design . His Life in Congress His first experience serving the public happened not when he was elected in the United States House of Representatives when the then-Congressman Campbell was elected to represent the third congressional district of Colorado, where Campbell served in this capacity starting in 1987 and ending in 1993. Before that, he was first an elected official for the fifty ninth house district office of Colorado, a public servant office. He did not pursue the position intentionally but was just a product of coincidence starting from a bad weather that led to him being unable to fly his small plane to deliver jewelleries and instead leading him to a meeting of the Democrats in Colorado where he eventually run for public office for the first time. To the surprise of the many, he won after beating an opponent whom many believe was more popular than Campbell when it comes to politics . Before his election to the third congressional district of Colorado, Michael Strang was the congressman of Colorados third congressional district; and following Campbells tenure was the election of Scott McInnis. While serving in Congress, Campbell slowly gained a reputation that can be good or bad, complimentary or insulting depending on who is looking and who is interpreting. In the aspect of financial management, he was considered as a conservative; but the same cannot be said when it comes to social issues, which showed Campbells more liberal side. For example, he supported the idea that women who are pregnant should have the choice and the option on whether to continue with the pregnancy or to just simply abort it, making Campbell a supporter of prochoice for this matter . Campbell, all in all, held office in the Colorado General Assembly for a length of two terms before moving forward and serving in the United States House of Representatives, where he worked as an elected official from 1987 up to 1992 . Another significant action made by Campbell when he was still a congressman is a move that helped many Native American Indians and will still help many more. This is his co-authoring of what is now known as the Indian Gaming Regulatory Act, which proposes the setting of several important guidelines, as well as standards that affect directly how the lands and reservations designated for Native American Indians are being used and will be used in the future . Campbell also participated in talks, discussions and problem solving endeavors inside his political sphere to address the problems of the people from his own culture and heritage. He (Campbell) has become a symbol of recognition and reasonable discussion for tribal interests. For example, water rights dispute occurring among Native Americans was settled because of his role and participation in the discussion that enabled for all parties concern to adopt a system favorable to all stakeholders. There were also symbolic efforts, like the renaming of the Cuter Battlefield Monument to Little Bighorn Battlefield National Monument in the belief that the Native American Indians who fought in that battle should be the ones honored in these hallowed grounds. It was also in this point of his career wherein he worked on the establishment of what is now known today as the National Museum of the American Indian . His Role in Establishing the National Museum of the American Indian Senator Campbells work, influence and contribution to the creation of the National Museum of the American Indian (NMIA) did not go unnoticed; this applies positively and negatively. Those who believed that he was instrumental in realizing this very important step towards culture preservation and presentation to the people expressed their feeling of gratitude to Senator Campbells efforts. For example, the address of Lawrence M. Small, the Smithsonian Institution Secretary, during the Opening Ceremony of the National Museum of the American Indian made mention of senator Campbell whom he described in the address as skillful advocates and someone who Small considered as a person who was the with group who created the museum from the ground up every step of the way . Small expressed his personal gratitude, as well as the gratitude of those who appreciated the museum, by saying how the people cannot thank Senator Campbell enough for his work towards the creation of the museum, a work Smart described as extraordinary . At the opening of the NMAI, Senator Campbell once again flashed his pride for his culture and heritage by coming to the opening ceremonies in full regalia fitting a prominent leader of one of the American Indian tribes and fitting to one of the individuals who muscled the government and made efforts so that this particular museum is realized. During the opening day, Campbell came wearing traditional American Indian outfit. He was donning a feathered headdress, while the rest of his body was covered by the traditional white leather worn by Campbell’s ancestors, along with the beads and other decorations adorning the costume that represents the culture and heritage of Campbell and many other American Indians in the US and around the world who will finally be able to communicate their culture and heritage to the greater, bigger audience through the opening of the museum. This is just one, and a special one of the many incidences wherein Campbell uses his clothing to tell the world about his heritage and culture, considering the significance of the occassion and Campbell dressed according to what he believed is proper and what was dictated by his sense of propriety. His regular working days as an elected public official was no better (although less loud and flamboyant than his traditional Indian attire during the NMAI opening) especially since he was considered as a bull headed individual when it comes to dress codes He opts to wear what he believes he has the right to wear for his own reasons, and that includes sentimentality over culture and heritage and how he wanted to shout to the world this message every time Campbell Insists on dressing western style, neckerchief instead of tie, even in Washington .

Factors That Affect the Market Price of Oil

Factors That Affect the Market Price of Oil THE FACTORS THAT AFFECT THE MARKET PRICE OF A PRODUCT SUCH AS THE WORLD PRICE OF OIL IN THE PAST TWO DECADES. BRIEF: 103737 INTRODUCTION In order to have a good understanding of the factors that affect the market price of a product, one will first need to grasp the meaning of what a market is. A market can be defined as an area over which buyers and sellers negotiate the exchange of some product or related group of products. It must be possible, therefore, for buyers and sellers to communicate with each other and to make meaningful deals over the whole market. Individual markets differ in the degree of competition among the various buyers and sellers. In some cases where the number of buyers and sellers is sufficiently large no one of them will have any appreciable influence on price. This is what is known as a perfectly competitive market. However, for the purposes of this essay we will stick to the concept of a market. Using the table below we will show how the market price of a product (bread) is affected. Demand and supply schedules for eggs and equilibrium price From the table above we can see that the quantity demanded is much higher than the quantity supplied at 110 and 5 and the price is  £0.50. This shows an excess demand of 105. When the quantity demanded is 90 and the amount supplied to the market is 46, we have excess demand of 44 we correspondingly have a market price of 1. However, when the quantity demanded is 77.5 and the quantity supplied is 77.5, the market price for bread is  £1.50. At this point the quantity demanded is the same as the quantity supplied. At such a price consumers wish to buy exactly the same amounts as the producers wish to sell, this is known as the equilibrium price. At prices above  £1.50 the quantity supplied exceeds quantity demanded. Furthermore, the higher the price, the lower the excess of quantity demanded over quantity supplied. The amount by which the quantity demanded exceeds the quantity supplied is called the excess demand, which is defined as quantity demanded minus quantity supplied (qd à ¢â‚¬â€œ qs). This is shown in the last column of the table. Finally, consider prices higher than  £1.50. At these prices consumers wish to buy less than producers wish to sell. Thus, quantity supplied exceeds quantity demanded. Furthermore, the higher the price, the larger the excess of one over the other. In this case there is negative excess demand (qd – qs Now that we have understood the factors that affect the market price of a product, we can now move on to talk about the factors that affect the fluctuations in the price of oil for the past two decades. In 1985, the price of oil (Saudi Arabian Light) was $27.53 per barrel[1] (yearly average). The price of oil during this period was falling, in which in 1986, the Saudi’s abandoned the swing producer role because they had the largest reserves of oil and capacity utilization to stabilize the price of oil when there was a shortage in the world oil market. By 1987, the price of oil had dropped to $16.95. In 1988, it dropped further to $13.27 and $15.62 in 1989. In 1990, Iraq invaded Kuwait in what turned out to be a huge blow to the stable price of oil. The oil price rose to $20.45 per barrel. The major reason for this is that both Iraq and Kuwait were members of OPEC and due to the war there was a shortage of oil in the world oil market which led to an increase in the price of oil. Between 1990 and 1991 America launched operation desert storm, which was to help Kuwait against Iraq. This also contributed to the rise in the price of oil as America is the largest consumer of oil, an d they needed it during the military campaign of operation desert storm. In 1991 and 1992, the price of oil decreased to $16.63 and $17.16 respectively. In 1993, it fell again to $14.95 and $14.74 in 1994. In 1995, the price rose to $16.10, and in 1996 it shot up to $18.52. In 1998, the price initially dropped to $12.21 but shot back up again to $17.25 in 1999. The main reason for this during this period was that there was an Asian economic crisis; the Iraq oil-for-food programme which helped in stabilizing the price of oil in 1998. In 2000, the price of oil leaped to an astounding $26.20. The reason for this was that due to the decline in the price of oil OPEC members decided to cut back production in order to stabilize the price of oil, before it went below the amount various member countries of OPEC will be able to cover the cost of producing oil. In 2001, the price decreased to $22.81, and in the same year (Sept. 11th) there was an attack in the US which destroyed the world trad e centre. In 2002 to 2003, the price of oil rose to $23.74, and $26.78 respectively. This came about due to strong demand growth mainly from countries like China, and India, in which in 2004, the price of oil jumped to an ecstatic $33.64. In the present year of 2005, the monthly average of the price of oil has reached $63 a barrel. However, for reasons to do with accuracy, we have decided not to use 2005 figures since we are still in the year. The following graph represents the trend in the world price of oil over the past two decades. Data source: BP Statistical Review of World Energy, June 2005. On the supply side, the main players in the crude oil market are OPEC, which currently provides about 40 percent of world supply and hold about 70 percent of proven oil reserves, and non-OPEC producers who own the rest. OPEC as the marginal supplier does act like a cartel in most cases, i.e. they collude to restrict the output of oil and raise the price far above their cost. In recent years, its policy has been to balance the market while allowing for an appropriate level of crude oil inventories in consuming nations. Non-OPEC producers, on the other hand, have relatively limited reserves and spare capacity, and generally behave as price takers. Currently, the estimated reserves of OPEC are 890 billion barrels, as opposed to 177 million barrels for non-OPEC members. In the latter years, world events such as the Iran and Iraq war, the Asian economic crisis, the invasion of Kuwait by Iraq, and corporate social responsibility such as country legislation which regard environmental pollut ion as high on the agenda (in some country’s environmental pollution is stricter than others in order to produce oil, e.g. Nigeria has a less stricter environmental pollution legislation compared to Saudi Arabia) have all contributed to the fluctuations in the world price of oil. However, of recent, the strong demand growth from Asia and China in particular can be said to be the reason why the price of oil is rising. The consumption of oil in 2004 grew by 2.9 million barrels a day (mbd) (3.7 percent of which China contributed about 1 mbd) relative to 2003, which can be said to be the largest increase in the past 20 years. With notable exceptions of Iraq, Russia, and Saudi Arabia, the world’s oil producers may be close to their short-run output capacity. Thereby, continuing increases in demand and the possibility of even minor disruptions (Hurricane Katrina (US), Industrial disputes (Nigeria), environmental concerns (Nigeria)) in supply thus help in explaining the high market price for oil. Investment in refining capacity has been too low, and a mismatch has emerged between the type of refining capacity now required and what is available. For sometime, world oil demand has been driven by high-quality light crude (oil of low density or containing a low wax content, which makes production and refining easier) and by sweet crude (oil with a low sulphur content). Recent additions to production capacity by OPEC have though largely been in the heavy and sour grades of crude, which are more difficult and costly to refine. This lack of investment in appropriate refining capacity and limited substitution possibilities has pushed the retail price of oil up. Another reason which can be said to this lack of investment by OPEC members is a price collapse. When demand falls and the quotas allocated to member OPEC countries breaks down, the price can drop dramatically. For example, in 1997, OPEC raised its production ceiling by 2.5 million barrels per day in ant icipation of growing Asian demand, but the currency crisis of late 1997 instead caused Asian demand to fall. The result was a market price in 1998 that dipped to as low as $12.21 per barrel, the lowest level since 1973, and a $51 billion year over year reduction in oil revenue. In addition given continued uncertainty over the pace of China’s economic development, OPEC may be cautious in expanding supply capabilities due to this. This uncertainty of slow or minimal investment contributes to high futures prices for oil delivery several years ahead. One should also note that since 1986, most oil exporting countries have been burning more oil than they have discovered and since 1998, there has been a fragile balance between supply and demand. Oil is being found at a lower rate than what has been consumed, i.e. we are finding reserves at 7 billion while consuming oil at 30 billion barrels per annum (Exxon-Mobil estimates), hence the law of price adjustment and equilibrium can be s aid to have taken place. SUMMARY AND CONCLUSION This paper has looked at the definition of what a market is. We have also mentioned the concepts of demand and supply with regards to equilibrium and the law of price adjustment. The erratic movement in the price of oil in the past two decades are also looked at. Issues of what factors cause fluctuations in the price of oil such as, the lack of investment by various OPEC member countries into oil production so as to keep up with the world demand of oil, the increasing demand of oil from Asia and the Peoples Republic of China, and the uncertainty of the oil market are all mentioned. It will be worthwhile to conclude that although at present these factors seem to be the norm that affects the price of oil, one should be more cautious into the future, as with hindsight these factors could become obsolete with time passing by. Potential factors which could turn out to be embedded in the future range from alternative sources of energy to synthetic fuels, in which in the long term the demand of oil will continue to exceed supply until the previous mentioned becomes entrenched in most economies. BIBLIOGRAPHY Asian Development Outlook, (2005), The challenge of higher oil prices. BP Statistical Review of World Energy, (2005), Putting energy in the spotlight. Berkmen, P., Ouliaris, S., and Samiei, H., (2005), The structure of the oil market and causes of high prices, research department, International Monetary Fund. Chrystal, K.A., and Lipsey, R.G., (2004), Economics, Tenth Edition, Oxford printing press. International Energy Agency, (2004), Analysis of the impact of high oil prices on the Global economy. www.iea.org/textbase/papers/2004/high_oil_prices.pdf. International Monetary Agency, (2004), Analysis of the impact of high oil prices on the global economy, research department, December. Saxton, J., (2005), Explaining the high price of oil, Joint Economic Committee, Research Report, United States Congress. Serrapere, J., (2005), Crude Oil – Energy and Market Outlook, September. APPENDICES Source: BP Statistical review data 2005 The following table since 1999 shows that there has been no ‘Real’ excess oil supply. Estimated Annual World Oil Demand Growth 2000 – 2005 (million barrels daily) % Change Source: IEA monthly oil report July, 2005. 1 Footnotes [1] The reason we have used US dollars is that it is predominantly used internationally as the currency to benchmark trade.