The review of relevant literature resulted in the selection of Thailand as a suitable setting for this study for three reasons. Firstly, the review of the literature indicated that the Thai government gives priority to foreign investment, especially allowing foreign private businesses to develop domestically without exerting government control (Puapondh, Thienpreecha & Rattanopas 2009; BOI 2008b; Boonsathorn 2007).
Secondly, Thailand is regarded by many foreign MNCs as a preferable location for investment. The Ease of Doing Business Index ranked Thailand as the eleventh most attractive economy for FDIs out of 183 economies (BOI 2008b), although it has dropped to the 17th spot in 2012 it remains an attractive investment location. This argument is further strengthened by Thailand’s ranking as 4th amongst all Asian countries (The World Bank 2012) for foreign investments.
Thirdly, investors continue to show confidence in Thailand. Thailand’s economy managed to maintain a high rate of foreign investors continuing to send their investment application forms to Thailand for registration with the BOI despite facing significant obstacles such as flooding, political unrest and the negative repercussions of a threatening global recession (Maliwan & Mujtaba 2012; The World Bank 2012).
However, uncertainties about the country’s future outlook, which relate to possible
Characteristics to Complement Requisite Managerial and Leadership Attributes Duangrat Tandamrong 80
higher unemployment rates following, though in a deferred manner, the global economic recession, may cause existing and potential new investors to lose confidence in Thailand and move their investment targets to other countries. Therefore, to strengthen foreign investor confidence, the important of the study will provide much needed information to MNCs. This will allow MNCs to tailor preparations to the needs of their expatriate managers in order to increase the prospect of a successful assignment in Thailand. Moreover, selected expatriate managers will be able to use the outcomes of this study as a guideline to build their capabilities and cultural sensitivity to fit the Thai management style and business environment.
2.8.1 Implications of Previous studies
There are numerous predictive factors leading to successful overseas assignments, such as personal characteristics tests, other individual related factors, organisational support factors, and cultural and environmental factors. Depending on the particular situation, however, there is uncertainty about which factors can reliably predict successful outcomes in international assignments. Caligiuri (2000b) proposed that, whereas personality characteristics contain openness and sociability, the factors which facilitate US expatriate managers to successfully live outside their home country are: cross- cultural adjustment; language skills; foreign work experience; pre-departure training;
adjustment of family members to the new culture; length of time on the assignment, and the extent to which the country they are being sent to varies in culture and practices from their home country. Similarly, Holopainen and Bjửrkman (2005) maintained that personal characteristics of successful expatriates include stress tolerance, relational ability and communicational ability. Other factors contributing to success consist of previous international experience, cross-cultural training, cultural distance and gender.
Both the studies of Caligiuri (2000b) and of Holopainen and Bjửrkman (2005) indicated that US-based companies intend to solve the issues expatriate managers face in managing host country subsidiaries that lead to failure by selecting appropriate staff and providing them with suitable education and training at the home parent company site prior to assignment . The findings confirmed that personality characteristics and other factors have a positive impact on the achievements of US expatriates on overseas assignments and emphasised that not everyone is suitable for global assignments.
Characteristics to Complement Requisite Managerial and Leadership Attributes Duangrat Tandamrong 81
In contrast to the US approach, studies conducted on Japanese expatriate managers and their overseas MNC subsidiaries are seen to focus on the subsidiary site by assessing the cause of the inability of expatriate staff to adjust and change when confronted with new situations (Onishi & Mondejar 2011; Rose & Kumar-Subramanian 2007; Paik & Sohn 2004; Swierczek & Onishi 2003; Katayama, Sirichan & Hiraki 1999). Moreover, studies of Japanese expatriate managers are more likely attempt to solve the problem at their MNC subsidiaries, rather than take a proactive approach that attempts to reduce the cause of expatriate failures by selecting appropriate staff and training them as studies reveal is the approach taken by US MNCs. In fact, results of studies of Japanese expatriate managers demonstrated that the adjustment of host-nation subordinates to their expatriate manager may facilitate the effective conduct of overseas subsidiaries.
This is because Japanese expatriate managers would prefer to transfer their management system completely to their foreign subsidiaries (Swierczek & Onishi 2003). If this were the case, adjustment becomes the responsibility of the Thai national staff, rather than of the visiting Japanese manager. However, some elements are less compatible with the host country’s value than are others. Transferring machines and tools may be easy;
however, cultural elements are not easy transferred and thus required Japanese managers to consider load the culture of local workers (Swierczek & Onishi 2003).
Despite attempting to reduce incompatibilities between Japanese expatriate managers and the local workforce in many countries, studies of Onishi and Mondejar (2011), and Swierczek and Onishi (2003) found that many Japanese expatriate managers have faced problems due to misunderstanding of the cultural expectations of their MNC subordinates, particularly in Thailand. Swierczek and Onishi’s (2003) study found that Japanese managers do not view attending to Thai culture and values as important. Thai subordinates, however, believe that their Thai culture is an indispensable part of a Japanese manager’s work in their interaction with Thai subordinates. This frequently resulted in dissatisfied and stressful work environments that were counterproductive to production. Accordingly, the length of appointment of expatriate managers tended to be shorter than expected, adding unnecessary costs to their companies in finding and retaining suitable replacements. This also meant that new expatriate managers were
Characteristics to Complement Requisite Managerial and Leadership Attributes Duangrat Tandamrong 82
constantly attempting to adjust to the Thai work environment, but not remaining long enough to master this skill and contribute to sustainable performance improvement.
Unfortunately, without proper training based on developing a full understanding of Thai employees’ expectations, the same problems were tending to be repeated. Importantly, Onishi and Mondejar (2011) found that Japanese copmanies have difficulties in attracting and retaining the expatriate employees that they need. They also lack knowledge in equipping them to be capable of resolving cultural conflicts at foreign sites. Although Furuya, Stevens, Bird, Oddou and Mendenhall (2009, p. 200) carried out an investigation into 305 Japanese repatriates and found that organizational support, intercultural personal characteristics, self-adjustment and repatriation policies lead to outcomes of global competency learning and transfer, leading to subsequent leading to high levels of work performance. This view supported the four predictors, personal characteristics, experience in facilitating cross-border work, organisational support, and cultural and environmental factors, which a lot of research used as factors which can predict the likelihood of the expatriate’s success and failure based on expatriates coming from the west. In fact, there is little reliable research into the criteria used for selecting Japanese expatriates that are suited to effectively managing overseas subsidiaries and no evidence that their headquarters see it important that they provide expatriate placements with training for adaption to the management styles required in overseas MNCs subsidiaries.
Although a multitude of studies have attempted to identify future prospects and difficulties experienced by Japanese offshore manufacturers in Thailand (Onishi &
Mondejar 2011; Petison & Johri 2008; Brimble & Urata 2006; Sriussadaporn 2006;
Swierczek & Onishi 2003; Katayama et al. 1999) including the areas of culture and conflict, the results of these studies have not generally addressed the attributes that are significant for MNC expatriate managers to equip themselves so as to be capable of resolving cultural conflicts on foreign sites, including Thailand. Moreover, no studies have examined the attributes of leaders/managers for Japanese managers in Thailand.
Boonsathorn (2007) indicates that “Even though Thailand qualifies as a collectivistic, high-context, and a high-power distance culture, there are many unique characteristics of Thai culture that need to be explored if one is to have a good understanding of how
Characteristics to Complement Requisite Managerial and Leadership Attributes Duangrat Tandamrong 83
Thais manage intracultural and intercultural conflict.” Hence, selecting and dispatching Japanese expatriate managers suitable for overseas assignments in Thailand becomes an important concern, which requires careful consideration in accordance to personal attributes as well as other factors that have been deemed to be or are perceived necessary for expatriate success in the cultural environment of host countries. In addition, the study by Jokinen (2005) shows that numerous managers who were successful in their parent company did not necessarily experience the same success in their international assignments for unknown reasons. The question is: Why? And, what are the extra attributes or qualities required to operate successfully in specific overseas environments?
With an everlasting corporation or under supervision of Japanese expatriate managers (Onishi & Mondejar 2011), Thai employees may perceive the Japanese management style as organisational management automatically as long-time working in a sequence leading to an automated perception (Tenenbaum & Land 2009). On the other hand, misunderstandings or conflict may happen related to cultural distance (Selvarajah et al.
2013; Onishi & Mondejar 2011; Colakoglu & Caligiuri 2008; Hofstede 2007; Caligiuri 2006; Hofstede et al. 1990). Besides, employees’ acceptances in terms of differences in culture and management practices were influenced by their backgrounds and experiences (Pattie & Parks 2011; Avril & Magnini 2007; Helms & Stern 2001), and levels of education (Vakola et al. 2004). While some studies have found that employees’ acceptances may vary widely, the acceptance may not be different even if employees worked across hierarchical levels (Helms & Stern 2001) or came from different gender groups (Vakola et al. 2004). For this reason, five main groups, based on employees’ gender, backgrounds, educations, experiences and hierarchical levels, drive evaluation of the qualities needed by expatriate managers to effectively deal with their onsite local challenges.