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1 Journal of World Business xxx (2005) xxx–xxx

www.socscinet.com/bam/jwb

3 Reducing inpatriate managers’ ‘Liability of Foreignness’

by addressing stigmatization and stereotype threats

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4
Michael Harvey a,*, Milorad M. Novicevic a, M. Ronald Buckley b, Helen Fung c
5
a
6 332 Holman Hall, Management Department, School of Business Administration,
7 University of Mississippi, Mississippi, MS 38677, USA
b
8 University of Oklahoma, USA

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c
9 Al Akhawayn University, Morocco
10
11

12
Abstract
13
14 The acceptance of ‘others’ in an organization can be a long and protracted process that can take years. Seldom is there a
15
16
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smooth assimilation into the corporate ranks for outsiders. Given the increasing number of inpatriate managers arriving in the
domestic organizations of many global organizations, the issues impacting the acceptance of inpatriate managers by home-
17 country managers will invariably increase. The purpose of this paper is to prescribe a program/process designed to suppress the
18 stigmatization and stereotyping of inpatriate managers located in the home-country organization, as stereotype threats may
19 impact not only the performance of the inpatriate managers but also the performance of an organization that is attempting to
20 globalize its operations.
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21 # 2005 Published by Elsevier Inc.

22 Keywords: Liability of foreignness; Inpatriate managers; Stigmatization; Stigma; Stereotype threats; Diversity; Global mindset
23

24 34
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25
28 ‘‘Stigmatization, at its essence, is a challenge to one’s country organization of multinational corporations 35
29
humanity . . . both the stigmatized person and of the (MNCs). Influenced by additional security concerns, 36
26
30
stigmatizer . . .’’ (Dovidio, Major, & Crocker, 2000, p. 1) home-country nationals tend to develop a checklist of 37
27
questions relative to the incoming foreign managers, 38
such as: Who are these foreigners (i.e., where do they 39
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come from)? What are the foreigners going to do while 40

31 1. Introduction
they are here? Where are the foreigners going to work 41
32
while in the country/organization? Why are the 42
33 The increase in the globalization of management
‘foreigners’ here? How are the foreigners going to 43
34 has brought about the omnipresent evaluative percep-
impact me, my job, and the organization? And the one 44
tions of foreign professionals located in the home-
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central concern relative to the ‘invasion’ of foreigners 45

* Corresponding author. Tel.: +1 662 915 5830;

is: ‘‘When are they going back home?’’ 46
fax: +1 662 915 5821. The phenomenon of ‘collective reservation’ toward 47
E-mail address: mharvey@bus.olemiss.edu (M. Harvey). foreigners, coincides the increase in the utilized of 48

1090-9516/$ – see front matter # 2005 Published by Elsevier Inc.

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doi:10.1016/j.jwb.2005.05.004

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48 96
49 inpatriate managers. Inpatriates are host/third country developed in the paper suggests how a program can be 97
50 nationals relocated to the home organization on implemented to suppress the ‘liability of foreignness’ 98
51 permanent or semi-permanent basis (Harvey & issues and problems that face inpatriate managers. As a 99
52 Buckley, 1997). Inpatriation is becoming an invalu- result, a step-by-step process for implementing a 100
53 able practice of MNCs attempting to enhance their ‘liability of foreignness’ program in global organiza- 101
54 corporate knowledge-transfer, coordination and con- tions is the primary contribution of the paper to the 102
55 trol capabilities in the home-country organization literature. To gain additional insights into the devel- 103
56 (John, Ietto-Gillies, Cox, & Grimwade, 1997). Among opment of a process to address the liability of 104
57 the companies that are pioneering the inpatriation foreignness of inpatriate managers, we first explore 105
58 practice are Italian Fiat (inpatriating French, Belgian, the potential stigma attached to being a foreigner in the 106

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59 Spanish, and Lebanese managers into the senior home-country organization. 107
60 management team) and Dutch Shell (having inpatri-
61 ates of 38 nationalities located at its headquarters)
62 (Feely & Harzing, 2003). Some United States based 2. The rapid globalization of organizations and 108
63 MNCs are presenting even stronger globalization/ the development of a pluralistic global 109

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64 diversity signals by posting foreign-born CEOs in management mindset
65 traditional American organizations, such as; McDo- 110
66 nald’s CEO Charles Bell an Australian, Coke-Cola’s The globalization of markets presents a difficult 111
67 new CEO, E. Neville Isdell, an Irish citizen, Kellogg’s challenge for organizations attempting to compete in 112
68 CEO Carlos Gutierrez, born in Cuba, Schering- the global marketplace. In response to global 113
69 Plough’s CEO Hassan, born in Pakistan, are becoming opportunities, organizations are shifting from econo-
DP 114
70 emblematic of the new generation of global managers mies of scale to economies of scope and attempting to 115
71 (White, 2004). develop global mindset through management diver- 116
72 The episodic resistance toward the integration of sity. The development of a pluralistic global mindset is 117
73 inpatriate managers and their career progression to perceived by some to be the ultimate means to 118
74 management positions in the home-country organiza- differentiate an organization’s competitive posture on 119
75 tion might possibly turn into an unspoken but an on-going basis (Kefales, 1998; Kedia & Mukherji, 120
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76 concerted form of ethnocentric stigmatization and 1999; Paul, 2000; Feely & Harzing, 2003). 121
77 stereotyping (Harvey & Buckley, 1997). If such Pluralism evolves when distinct ethnic, religious or 122
78 cultural bias becomes widespread it can impact cultural groups and their alternatives views of 123
79 negatively not only the future contributions of these thoughts, opinions and actions are accepted and 124
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80 inpatriate managers but also the image of organiza- tolerated within a society. When a management team 125
81 tions attempting to infuse diversity into their manage- recognizes pluralism it indicates the acceptance of 126
82 ment perspective. Diversity of management alternative thoughts, opinions and actions within the 127
83 background and experience is rapidly becoming the organization’s culture. The benefit of pluralism is that 128
84 enabler of global reach and scope for organizations it fosters an environment of mutual respect (Tung, 129
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85 (Bartlett & Ghoshal, 1995; Ghoshal & Bartlett, 1997; 1993). Diversity thrives on pluralism when both 130
86 Gregersen, Morrison, & Black, 1998; Hitt, Keats, & domestic and inpatriate managers in the pluralistic 131
87 DeMarie, 1998) Therefore, developing a program to organization embrace shared norms of cooperation 132
88 manage the issues of the inpatriate ‘liability of amongst themselves. This shared mindset is conducive 133
89 foreignness’ becomes a pressing need for organiza- to developing alternatives in solving problems, 134
90 tions committed to developing a global mindset nurturing pride in collaborative work outcomes and
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135
91 (Kefales, 1998; Kedia & Mukherji, 1999; Paul, 2000; ultimately, celebrating successes in global initiatives. 136
92 Feely & Harzing, 2003). Furthermore, a pluralistic climate of diversity-based 137
93 The purpose of this paper is to develop a program/ success is ultimately sustained with increased profit 138
94 process that addresses the issues of the potential of and satisfaction of both consumers and employees. 139
95 ‘liability of foreignness’ of inpatriate managers and the Given the increase in the perceived difficulty 140
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96 problems surrounding their stigmatization. The process associated in inpatriating managers and the associated 141

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141 189
142 risk of their stigmatization, the challenge is to design social perspectives, and diversity of experience should 190
143 an effective training/monitoring program that could be viewed by the local home-country managers as 191
144 elicit pluralism in the home-country organization. A value-added. If such a view is not prevalent, isolating 192
145 program designed for avoiding inpatriate stigmatiza- negative stereotypes will be ascribed to these 193
146 tion and stereotyping should provide answers to the immigrant managers by the home-country manage- 194
147 following four questions: (1) are the stipulated policies ment. Ethnophaulism (i.e., to disparage a national 195
148 and procedures of the organization producing the group or to exclude from social/cultural acceptance or 196
149 desired diverse thinking/behaviors; (2) are the to use ethnic/nationality slurs to refer to out-groups) 197
150 stakeholders (e.g., including employees) within the (Allen, Izmirlieva, & Ivanov, 1996; Mullen & 198
151 organization reducing the limitations on their think- Johnson, 1993; Mullen, 2001) by home-country 199

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152 ing/behavior; (3) is management artificially forcing nationals could undermine the value of ‘importing’ 200
153 boundaries on organization strategy; and (4) is the inpatriate managers’. 201
154 organization consistently re-inventing itself to where If these inpatriate managers are relied upon to 202
155 its culture is never ‘‘settled’’ or static (Novicevic & provide the diverse input necessary to developing a 203
156 Harvey, 2001). The multicultural work environment global mindset for the organization, there should be 204

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157 created by the inpatriation of managers is dependent programmatic efforts to reduce the reaction of local 205
158 upon positive approaches to addressing these four nationals to discounting/dismissing inpatriate man- 206
159 issues. agers and their unique and valuable input to decision- 207
160 When a successful program is designed and making (Welch, 1994; Stroh & Caligiuri 1998; 208
161 implemented ensuring that pluralism is embedded Gregersen, Morrison, & Black, 1998). The level of 209
162 in a domestic organization, home-country managers ethnophaulism and the social distance between
DP 210
163 will ensure that they are treating inpatriates with countries can serve as a broad indicator of a link 211
164 respect and accepting differences in a proactive between how members of the receiving society think 212
165 manner (Feely & Harzing, 2003). By approaching about ethnic/national immigrants and how members of 213
166 newcomers in this fashion, home-country managers the receiving society behave towards these immigrants 214
167 will treat newcomers positively and in a manner (Mullen & Johnson, 1993; Mullen & Nichols, 2000; 215
168 supportive of increasing their level of satisfaction in Mullen, Rozell, & Johnson, 2000; Schneider, Hitlan, 216
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169 the home-country organization. The inpatriate man- & Radhakrishanan, 2000). 217
170 agers, responding positively/proactively to the way in Traditionally, domestic managers were expatriated 218
171 which they were treated, will experience a high level to develop a degree of a global mindset (i.e., 219
172 of satisfaction with the home-country organization, developing and maintaining multiple coherent per- 220
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173 exhibit and accelerated adjustment to the home- spectives to allow them to address complex global 221
174 country, and improve their performance. problems). This capacity will be even more critical in 222
175 In effect, pluralism will likely limit ‘liability of the domestic context because of the increasing need to 223
176 foreignness’ of inpatriate managers that are relocated reduce the potential bias of ethnocentrism when 224
177 to the home-country of the organization. As individual managing in the global market arena (Tung, 1995; 225
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178 inpatriates are accepted in an organization, they will Aguirre, 1997; Harvey, Speier, & Novicevic 1999). 226
179 enjoy both the freedom of diversity and the pluralistic Effectively acculturating inpatriate managers into a 227
180 culture of interactions with domestic managers. The domestic organization is becoming a hallmark of 228
181 nurturing relationship between home-country global leadership development (Hedlund, 1986; 229
182 nationals and inpatriates will be passed along to Harvey & Novicevic, 2001). A lingering issue 230
183 subsequent newcomers to the organization. The result concerns why inpatriate managers are frequently
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184 will be a suppressed stereotype threat and reduced viewed as not being equal to the home-country 232
185 ‘liability of foreignness’ in the culture of the domestic managers but rather stereotyped as out-group mem- 233
186 organization and the potential for improved organiza- bers with the ascribed need to overcome their ‘liability 234
187 tional performance (Ng & Tung, 1998). of foreignness’? To gain insight into why inpatriate 235
188 When inpatriate managers are transferred to the managers might/will experience levels of the ‘liability 236
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189 home-country organization, their knowledge, cultural/ of foreignness’ once relocated to the home-country of 237

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238 the organization it becomes imperative to examine the contrast to stereotyping, stigma is situation-dependent 283
239 basis of stereotyping and stereotyping threat. because an attribute can be enacted as salient in one 284
situation but not in another. 285
Stigmatization is focused on some easily recogniz- 286
240 3. A psychological foundation of stereotyping able characteristic, such as race, weight, (dis)ability, 287
and stereotype threats gender or nationality (Zebrowitz, 1996), so that 288
241 individuals who process these attributes can be 289
242 The term stereotype is composed of two ancient stereotyped (positively or negatively) according to 290
243 Greek terms—stereos, which is a Greek prefix that some specific societal standards (Fiske, 1998). For 291
244 means rigid and solid, and typos, which means letter, example, femininity is a valuable positive attribute in 292

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245 type, and character (Kubler, 1941). Walter Lipper- nursing or teaching occupations, but not in tradition- 293
246 mann’s book Public Opinion (1922) was the first work ally male-dominated occupations, such as engineering 294
247 that introduced the term ‘‘stereotype’’ into the social or sciences. The entangled relationship between 295
248 sciences. In Lippermann’s book, stereotypes are defined stigmatization and stereotype threat develops ‘‘when 296
249 as ‘‘pictures in our heads’’, i.e. our shared mental members of a stereotyped group (are) in situations in 297

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250 representations that facilitate our individual perceptions which the stereotype could be applied to them – used 298
251 of complex environments. Stereotypes elicit shortcuts to judge them or their ability in some way – their 299
252 that supplement our ‘cognitive efficiency’ when knowledge of the stereotype and the features of the 300
253 forming positive and negative stereotyping categories situation may combine to affect feelings about 301
254 (e.g., foreigners are commonly good in quantitative themselves, as well as stereotype-relevant perfor- 302
255 skills, but poor in interpersonal skills) (Fiske, 1998; mance’’ (Crock & Quinn, 2000, p. 166). Therefore,
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256 Crocker, Major, & Steele, 1998; Link & Phelan, 2001). stigmatization of one’s group cognitive ability is a 304
257 When negative stereotypes are implicitly commu- necessary, but not sufficient condition for individuals 305
258 nicated by the powerful individuals or groups, their to experience stereotype threat because the cues from 306
259 impact on the targeted individual/group becomes the situation need to be relevant for the individual’s 307
260 tangible over time through their declined self-esteem knowledge (Steele & Aronson, 1995). 308
261 and self-efficacy in accomplishing tasks. This decline As a means to illustrate the impact of stereotyping 309
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262 occurs because stereotyping can be inculcated by the threat, researchers have examined the impact of race, 310
263 targeted individual/group to become a permanent socio-economic status (SES) and gender on perceived 311
264 stereotype threat. This may possibly be manifested as cognitive ability. Empirically, researchers have found 312
265 an increased performance pressure exerted upon them that psychological factors could account for the 313
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266 by the powerful others when performing a given task, persistent academic performance gap between black 314
267 for which their competence is socially stereotyped and white students (Jencks and Philips, 1998; Roth, 315
268 (Steele, 1997; Brown & Pinel, 2003). Bevier, Bobko, Switzer & Tyler, 2001). Using 316
269 Stereotype threat is a social-psychological phe- Stanford University undergraduate students, Steele 317
270 nomenon experienced by some individuals and/or and Aronson (1995) reported black students per- 318
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271 groups when performing in a domain where negative formed poorer on a cognitive ability test than white 319
272 stereotypes about their social standing are salient students when they thought it was a diagnostic test. 320
273 (Steele & Aronson, 1995; Steele, 1997; Fiske, 1998). Black students in the diagnostic condition exhibited a 321
274 Situational pressure caused by the stereotype is likely lower performance relative to black students in the 322
275 to provoke anxiety as targeted individuals perceive non-diagnostic condition. However, both black and 323
276 that they are being judged stereotypically, treated white students performed similarly in the non-
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277 stereotypically, or presumed behaving stereotypically. diagnostic condition. Further, high SES students were 325
278 A closely related construct to stereotype threat is generally regarded as more intelligent than low SES 326
279 stigma, which is a social regulatory tactic the majority subjects. A cognitive-ability test performance gap was 327
280 use to identify those who deviate from the majority also found between students from low and high socio- 328
281 standard (Pinel, 1999, Crocker, Major & Steele, 1999). economic backgrounds (Croziet & Clarie, 1998; Roth, 329
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282 According to Dovidio, Major, and Crocker (2000), in Bevier, Bobko, Switizer, & Tyler, 2001). 330

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330 378
331 Stigmatized individual performance was also found like inpatriate managers are critical to the future 379
332 in stereotypical gender performance domains. Brown success of the organization. 380
333 and Joseph (1999) found both genders had poorer In summary, a common finding of these studies is 381
334 mathematics performance in conditions that high- that stereotype threat has a robust effect on 382
335 lighted negative stereotype traits of their respective stigmatized individuals’ performance outcomes in 383
336 gender groups. Spencer, Steele, and Quinn (1999) various settings. This has important implications for 384
337 observed females performed poorer than males on a human resource management because the stereotype 385
338 math test when the test was introduced as one that threat effect could account for the racial and other 386
339 accurately measured gender differences in mathema- types of gaps typically found in occupational cognitive 387
340 tical ability. Recently Kray, Thompson, and Galinsky ability tests (Guion, 1998; Jenck, 1998; Roth, Bevier, 388

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341 (2001) found females performed poorer on a negotia- Bobko, Switizer, & Typler, 2001). Specifically, 389
342 tion exercise when negotiation ability was described stereotype threat might relate to racial/nationality 390
343 as ‘masculine’. Furthermore, researchers observed differences in test taking motivation and behavior. As 391
344 stereotype threat could undermine individuals’ expec- these differences could be the unmeasured variables 392
345 tations of future performance regardless of their initial causing mean performance differences, stereotype 393

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346 ability beliefs (Chan, Schmitt, & DeShon, 1997; threat effect is a potential source of variance for the 394
347 Stangor, Carr, & Kiang, 1998; Chan, Schmitt, & racial/nationality performance gap on cognitive ability 395
348 Sacco, 1998). testing. Therefore, identifying and reducing stereotype 396
349 Stereotype threat was found to have a robust effect threat is an important step in addressing bias and 397
350 on stigmatized individuals’ performance outcomes in adverse impact on inpatriate managers (Guion, 1998, 398
351 a number of settings (Wigdor & Sackett, 1993; Guion, Wigdor & Sackett, 1993), which is of high relevance
DP 399
352 1998). Such an effect can signal important implica- for global organizations striving to improve their 400
353 tions in personnel selection because the stereotype performance through the inpatriation process of 401
354 threat effect could account for the gap typically found increasing the diversity of their management teams. 402
355 in occupational cognitive test taking ability of The central question is how is stigmatization and 403
356 stereotyped individuals, such as inpatriate managers stereotyping fundamental to the ‘liability of foreign- 404
357 to a country (Guion, 1998; Jenck, 1998; Roth, Bevier, ness’ question associated with inpatriate managers? 405
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358 Bobko, Switizer, & Tyler, 2001). Specifically, stereo-

359 type threat might relate to nationality differences in
360 motivation, behavior and resulting performance. 4. The stigma associated with the ‘Liability of 406
361 Stereotype threat could be the causal variable in Foreignness’ of inpatriate managers
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362 performance differences. As stereotype threat is a 407

363 potential source of variance for the performance gap Stigma refers to a mark or an attribute linking an 408
364 on cognitive ability testing of stereotyped individuals individual or a group to undesirable characteristics 409
365 and/or groups; identifying and reducing stereotype that are socially represented by stereotypes (Link & 410
366 threat is an important step in addressing test bias and Phelan, 2001). The stigmatized individual/group is 411
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367 the potential adverse impact (Guion, 1998, Wigdor & assumed to possess some attribute, or characteristic, 412
368 Sackett, 1993). which conveys a social identity of lower value in the 413
369 Stereotyped recipients’ reactions to feedback can eyes of the powerful others in the society (Goffman, 414
370 also affect their motivation, persistence, and effort 1964; Croizert & Claire, 1998). Stigmatization is a 415
371 relative to future assignments (Stevens & Gist, 1997; form of collective representation that is known by 416
372 Colquitt & Simmering, 1998; Elliot, McGregor, & both the stigmatized and the non-stigmatized as
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373 Gable, 1999; Harackiewicz, Barron, Tauer, & Elliot, being different or of less value by the prevailing 418
374 2001, 2002; Steele-Johnson, Beauregard, Hoover & norms in a society (Cooley & Schubat, 1998). 419
375 Schmidt, 2000). If the stereotype threat can not be Stigmatization is contingent on the stigmatizer 420
376 concealed relative to one’s race or nationality, then the having access to power (i.e., social, political, 421
377 threat becomes real to those expected to perform. This economic) that allows the development of the nature 422
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378 is of particular interest if the threatened individuals of the differences to influence the separation of those 423

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423 471
424 with the stigmatized characteristics for disapproval, Any stereotyping engendered by stigmatization of 472
425 rejection, exclusion, and potentially discrimination individuals and groups consists of an array of shared 473
426 (Link & Phelan, 2001). beliefs and attributes that categorize, justify, and 474
427 Stigma is a multidimensional construct consisting maintain the individuals as members of such groups 475
428 of six dimensions, which are: (1) concealablity—the that have devalued characteristics (e.g., race, gender, 476
429 level of visibility of the distinguishing mark or disability, nationality) (Druss, Bradford, Rosenheck, 477
430 attributes used in the stigmatization of the individual; Radford & Krumholz, 2000; Link & Phelan, 2001). 478
431 (2) course of the mark—is the mark increasingly When these arrays of beliefs and values become a part 479
432 debilitating over time to the individual; (3) disrup- of the wider collective representation, the individuals 480
433 tiveness—of the mark in interpersonal interactions; (4) with the stigmatized attributes are likely to be 481

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434 aesthetics—the degree of ‘disfigurement’ or unattrac- inculcated with the ways in which powerful others 482
435 tiveness of the stigma mark or attribute; (5) origin—of perceive their group (Crocker & Quinn, 2001). 483
436 the stigma attribute, for example, is it congenital, Therefore, social stigma with negative stereotypes 484
437 accidental, intentional, or imagined; and (6) peril— may significantly distort the self-concept of members 485
438 the danger associated with the stigmatized individual from a targeted group(s), when their ‘negative’ 486

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439 to others (i.e., AIDS patients, leper or similar attributes are widely shared in a society. One such 487
440 contagious diseases) (Deaux, Reid, Mizrahi, & attribute is ‘foreignness,’ which becomes a liability 488
441 Eithier, 1995; Dovidio, Major, & Crocker, 2000). when inpatriates attempt to construct professional or 489
442 The perceiver’s assessment of these six dimensions managerial role identity in the domestic organization 490
443 capturing the ‘severity’ of the stigma may evoke the of their new country. To gain addition insights into the 491
444 target (e.g., individual or group) of the stigmatization potential for stigmatizing inpatriate managers, the
DP 492
445 to react to the stigmatizing disapproval and stereo- detailed complexities of the ‘liability of foreignness’ 493
446 typing cognitively, affectively and/or behaviorally need to be explored. 494
447 (Gonzales, Blanton, & Williams, 2002; Dovidio,
448 Major, & Crocker, 2000).
449 Some classes of disapproval or stereotyping that are 5. Examining in more detail the complexities of 495
450 culturally based may even be at a preconscious level, the ‘liability of foreignness’ phenomenon 496
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451 often engendered by visual cues or shortcuts for associated with inpatriate managers
452 devaluing individuals by just observing and labeling 497
453 their attributes (i.e., race, ethnicity, nationality). This In line with the most recent research trend (Allison, 498
454 downgrade of status or devaluing of an individual or a 1998; Miller & Major, 2000; Miller & Kaiser, 2001), 499
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455 group in a status hierarchy may become a tangible stigma and stereotype threat can be viewed as stressors 500
456 form of discrimination, as it creates negative stereo- faced by inpatriates. This view accentuates the need 501
457 types of individuals and groups that appear different or for inpatriate ‘‘cognitive appraisals in the experience 502
458 act differently relative to the prevailing cultural norms of stigmas related stress and the coping responses 503
459 (Mullen, Salas, & Driskell, 1989). If labeling and made to that stress’’ (Miller & Kaiser, 2001, p. 73). 504
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460 stereotyping lead to discrimination of stigmatized The ways in which stigmatized and stereotyped 505
461 individuals or groups, a ‘disabling’ social environment inpatriates may cope with the stress engendered by 506
462 is facilitated. This environment can impact the their devalued status in the home-country organization 507
463 performance and limit the potential of the discrimi- could be helpful in designing a process/program to 508
464 nated individual/group (Fine, 1998). The current facilitate effective coping responses (Shih, 2004). 509
465 tendency of Westerners to stereotype and devalue An effective program facilitating inpatriate apprai-
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510
466 Arabic people, following the recent wave of terrorist sals and coping may suppress the consequences of 511
467 acts performed by Muslim extremists, illustrates this stigma-related stressors (e.g., low self-esteem, external 512
468 point. Although the militant extremists deserve both locus of control and depression) to free inpatriate 513
469 stigmatization and condemnation, the systemic risk of adaptive resources for productive use. For the design of 514
470 security concerns has caused a wider spillover of such a program, it is important to bear in mind that stress 515
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471 stigmatization. responses vary not only in nature (i.e., psychological, 516

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516 539
517 cognitive, emotional, and behavioral) but also in ori- The first dimension, the belief that inpatriate 540
518 entation (e.g., voluntary–involuntary, engaged–disen- managers of the similar origin are largely homo- 541
519 gaged, problem-focused or emotion-focused) (Zeidner genous, implies that home-country citizens will 542
520 & Endler, 1996). Consideration of the variety of stress perceive the quality of nations from which inpatriates 543
521 and coping responses is necessary to design a program originate is roughly the same as the home-country. For 544
522 of their effective facilitation with inpatriates. The pro- example, inpatriates from the United Kingdom may be 545
523 gram design should however be extended to ensure the perceived as quality managers. Conversely, inpatriates 546
524 inpatriate acceptance by the home-country nationals. from Zimbabwe may be perceived as lower quality 547
525 Inpatriate stereotyping and stigmatization can be managers than home-country managers. Home-coun- 548
526 moderated by various events including home-country try organizations can use this rough indicator and 549

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527 managers’: (1) motivation to form and maintain recognize the potential problems of accepting 550
528 positive intercultural relationships; (2) efforts to inpatriate managers from diverse countries (i.e., 551
529 promote counter-stereotypes; (3) focus of attention; acceptable/similar/unacceptable compared to the 552
530 and (4) contextual cues (Blair, 2002). One way to home-country). 553
531 frame these moderators associated with inpatriate The second dimension, the perception of manage- 554

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532 managers working in the home-country of an ment education, training and experience, may vary 555
533 organization is to examine how they could counter from country-to-country, suggests that France’s rank- 556
534 the country-of-origin/liability of foreignness effects ing of inpatriate managers will differ from those of the 557
535 that Hooley, Shipley, and Krieger (1998) claim are United States for the same set of inpatriate managers. 558
536 contained in the four dimensions surrounding the As the United States system may not be perceived as 559
537 relationship between the image of a country and the international, this point may appear to be moot.
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538 image of products and/or individuals that come from However, because of the diversity of the United States 561
539 that country (see Fig. 1). population and the reality that certain ethnic groups 562
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Fig. 1. Country-of-origin and impact on acceptance of inpatriate managers.

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562 610
563 are congregated in certain areas of the country (e.g., agers being relocated to the home-country organiza- 611
564 the French speaking population in New Orleans, tion (Matsuo, 2000; Mezias, 2002a). The body of 612
565 Louisiana), there will be cultural differences in these research on expatriates in subsidiaries focuses on the 613
566 areas that depart from traditional national perceptions adjustment of expatriate managers and the cultural/ 614
567 (Tung, 1993). Thus, organizations located in these social backlash/negative reactions to the expatriate 615
568 specific areas of the country could take into account manager (Mexias, 2002b; Calhoun, 2002; Sethi & 616
569 the differences in perception which may lead to Guisinger, 2002). The issue is whether the importation 617
570 exceptions to the level of acceptance of inpatriate of inpatriate managers will follow the same adjust- 618
571 managers’ education and experience. ment pattern experienced by expatriates. There are a 619
572 The third dimension, denoting that the passage of number of issues that need to be explored relative to 620

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573 time can significantly change the perception of this ‘reverse liability of foreignness’ trend found in the 621
574 managers over a timeframe, illustrates that the home-country organization. There is some indication 622
575 home-country’s perception of inpatriate managers that the reaction may be stronger in the home-country, 623
576 today can change over time. Home-country organiza- as illustrated by a recent backlash experienced by 624
577 tions cannot assume that the perception of inpatriate major airlines in the United States that have out- 625

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578 managers remains constant over time. Thus, constant sourced customer service/reservations to foreign 626
579 monitoring of perceptions specific to inpatriate entities. We would suggest that implementing a 627
580 mangers will allow home-country organizations to structured process to reduce the ‘liability of foreign- 628
581 target inpatriate managers from those countries ness’’ would add competitive advantage to an 629
582 perceived to be more acceptable to the home-country organization. That process is examined in detail in 630
583 nationals. the following section of the paper.
DP 631
584 The fourth dimension implies that home-country
585 management could give preferential treatment to
586 domestic managers over inpatriate managers. Gen- 6. A program/process for managing the 632
587 erally, there will be a preference for home-country ‘liability of foreignness’ associated with 633
588 nationals due familiarity and track record of these inpatriate managers
589 managers in the home-country organization. But this 634
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590 option may be less advantageous in the future in which Home county organization should make a sustained 635
591 the tacit knowledge of the inpatriate managers is effort to reduce the impact of the ‘liability of 636
592 necessary in order to develop a global approach to foreignness’ through recognizing the tendency for 637
593 performance. In addition, management diversity home-country nationals to judge newcomers to an 638
EC

594 becomes the means to develop and adjust competitive organization on their perceived degree of difference. 639
595 strategy on a constant basis (Simpson, 1995; Palich, Fig. 1 illustrates the need to determine which countries 640
596 Hom, & Griffeth, 1995; Novicevic & Harvey, 2001). to recruit inpatriate managers from based upon the 641
597 Addressing these four issues will assist organiza- probability of acceptance by home-country managers 642
598 tions in their attempts to develop a model for targeting recognizing that acceptance can and more than likely 643
RR

599 inpatriate managers that will have less difficulty in will vary by country (Fiske, 1999; Bigoness & 644
600 being accepted in the home-country environment and Blakely, 1996; Calhoun, 2002). In addition, it is 645
601 organization. These issues compel organizations to noted in Fig. 1 that perceptions can change over time 646
602 prioritize their recruitment of inpatriate managers on given exposure to incoming inpatriate managers, 647
603 these four different issues and therefore begin to therefore, an on-going monitoring of the program is 648
604 attempt to limit and then reduce the ‘liability of necessary. Therefore, Fig. 1 can be used in the
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649
605 foreignness’ that inpatriate managers will experience development of a program to more effectively 650
606 during their entry into a domestic organization. integrate inpatriate managers into the domestic 651
607 The ‘liability of foreignness’ problem has primarily organization. 652
608 been experienced in foreign subsidiary environments The inpatriate program developed below should 653
609 (Calhoun, 2002). Thus, very little research has allow inpatriates to both cope as well as empower 654
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610 explored the issues associated with inpatriate man- them by recognizing that overcoming their potential 655

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655 673
656 stigmatization is not a depleting process but rather a the need for varying viewpoints/perspectives from 674
657 replenishing and enriching process (Shih, 2004). A globally diverse sources of information. This is of 675
658 comprehensive program should have elements that particular importance in situations where there is a 676
659 enable the inpatriate to overcome as well as empower need for globally diverse tacit knowledge in order to 677
660 them to more effectively address stereotyping and develop effective strategies for the organization. The 678
661 stigmatization in the future. Therefore, a step-by-step greater the cultural distance and the level of difference 679
662 process of addressing the ‘liability of foreignness’ in economic development between two countries the 680
663 could provide the foundation for developing a higher the need for inpatriate input. Moreover, as 681
664 proactive program of the home-country management. organizations globalize their operations, the need for a 682
665 Fig. 2 illustrates specific steps in the process and each wider variety of input/knowledge will grow (see 683

OF
666 step will be briefly discussed (see Fig. 2). special issues of Strategic Management Journal, 1996; 684
Journal of International Management, 2002; Organi- 685
667 6.1. Assessment of present/future level of need for zation Science, 2002; as well as, Nonaka and 686
foreign nationals Takeuchi, 1995; Nonaka & Teece, 2001; Orlikowski, 687
668 2002). 688

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669 The need for foreign nationals as inpatriates will The first step in managing the ‘liability of 689
670 vary based upon: (1) the type of organization and (2) foreignness’ in global organizations is to ascertain 690
671 the stage of globalization of that organization. The the present information needs of the organization and 691
672 demand for diversity and the resulting increase in the to anticipate the need for diverse input in the short-run 692
673 ‘liability of foreignness’ is contingent to a degree upon and in a longer time horizon. It is logical to surmise 693
DP
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EC
RR
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Fig. 2. A managerial process for addressing inpatriate managers’ ‘Liability of Foreignness’ in home-country organizations.

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10 M. Harvey et al. / Journal of World Business xxx (2005) xxx–xxx

693 739
694 that the greater the need for information/input, the is heightened due to the greater cultural/economic 740
695 grater the willingness of management to commit distance between the inpatriate and domestic man- 741
696 resources to the transfer of inpatriate managers to the agers. Frequently, the abilities of the inpatriate 742
697 home-country organization. At the same time, the manager(s) will be discounted because the domestic 743
698 potential negative outcome of introducing inpatriate manager(s) perceive the inpatriate as different (there- 744
699 managers into the domestic organization needs to be fore less quality). This discounting of inpatriate 745
700 recognized by management (Harvey & Buckley, 1997; managers shadows the stigmatization of outsiders 746
701 Harvey, Speier, & Novicevic, 1999). This initial because of a lack of knowledge as well as lack of 747
702 recognition of the ‘liability of foreignness’ can help to acceptance of individual differences (Fiske, 1999; 748
703 increase the awareness of management as to the Calhoun, 2002). 749

OF
704 potential negative impact of introducing foreign
705 managers into the domestic organization. As well 6.3. Assessment of cultural acceptance of 750
706 as, to underscore the potential negative reactions and diversity in the home-country organization
707 stereotyping of foreign managers by domestic 751
708 employees (Lou, Shenkar, & Nyaw, 2002). As was depicted in Fig. 1, there can be a derived 752

RO
targeted pool of inpatriate candidates that are more 753
709 6.2. Determination of strategic markets and likely to be accepted in the home-country. These 754
cultural distance/novelty targeted countries will more than likely be less 755
710 culturally novel and have a more similar level of 756
711 The need for information will vary by stage of economic development. By targeting the countries 757
712 globalization and the realization that the need for input where inpatriate managers are recruited from, there
DP 758
713 will be most valuable for certain markets of strategic will be less likelihood of domestic managers to 759
714 importance. This recognition of the variance in the stereotype and ultimately stigmatize incoming inpatri- 760
715 importance of information needed is the basis for the ate managers (Brown & Pinel, 2003). One of the 761
716 classification of countries/markets concerning from primary considerations in the development of a 762
717 which countries inpatriate managers could be trans- program for addressing the inpatriate ‘liability of 763
718 ferred to the home-country. Once these target countries foreignness’ is to undertake a benchmarking of where 764
TE

719 are determined, the level of cultural and economic the organization stands relative to diversity and 765
720 distance can be determined and used as a quasi indicator acceptance of foreigners in the organization. Any 766
721 of the level of foreignness that the inpatriate managers program that is to be developed to socialize inpatriate 767
722 might expect in the home-country (Hofstede, 1983). managers into the home-country organization is 768
EC

723 The level of diversity among the foreign nationals to be predicated on the ‘vision’ of diversity and the existing 769
724 ‘imported’ to the home-country will also serve as a climate of acceptance of difference in the organization 770
725 guide to the support needed to overcome the difficulties (Tung, 1993; Ng & Tung, 1998). While there are legal 771
726 in socializing the incoming inpatriate managers to both parameters stipulated in most developed countries 772
727 the internal and external environments (Tung, 1995). relative to diversity and discrimination, the informal 773
RR

728 The mix of incoming inpatriate managers/families will climate needs to be evaluated and the level of potential 774
729 also underscore the level of complexity of the ‘stigmatation of foreignness’ determined. In doing so, 775
730 newcomer problem for the human resource manage- human resource management professionals can 776
731 ment function in the home-country. determine the level of change that must take place 777
732 The greater the cultural/economic distance of for the successful integration of inpatriate managers 778
733 countries that inpatriate managers are recruited from into the organization.
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779
734 the higher the probability of managers being
735 stigmatized by domestic managers (e.g., the more 6.4. Development of dual socialization process for 780
736 novel the culture from that of the home-country the inpatriates/home-country nationals
737 lower level of acceptance by domestic managers) 781
738 (Harvey & Buckley, 1997; Novicevic & Harvey, It is obvious that there needs to be a socialization 782
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739 2001). The tendency to stereotype out-group members process established for the inpatriate managers to 783

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M. Harvey et al. / Journal of World Business xxx (2005) xxx–xxx 11

783 834
784 assist them in adjusting to the home-country/organi- of this stage are the balance between the two 835
785 zation. For the socialization process of inpatriate cultures (e.g., home-country and inpatriate man- 836
786 managers to be effective, a complementary training ager), the blurring of norms and acceptance of the 837
787 program should be put in place for the home-country ‘hybrid’ culture by both groups. The critical 838
788 nationals. This cultural sensitivity training would have juncture being a blending of organizational 839
789 as its goal to reduce the level of stereotyping and culture acceptable to both groups; and 841
840
790 stigmatization which domestic managers could (4) Individualism—home-country organization 842
791 develop toward inpatriate managers (Brown & Pinel, acceptance or difference in frame-of-reference 843
792 2003). While the inpatriate managers will recognize of inpatriate managers and valuing their input to 844
793 the need to be socialized into the home-country the strategic direction of the organization. The 845

OF
794 organization, there will be a concomitant level of value of tacit knowledge of the inpatriate 846
795 reluctance exhibited by domestic inpatriate managers managers is acknowledged and their input to 847
796 to accept newcomers/outsiders into the informal social strategic thrust is support by the home-country 848
797 network of the organization. managers. The barrier to accomplishing this stage 849
798 The process developed for the home-country in the process is maintaining a coherent cultural 850

RO
799 nationals could be based on the four phases that the historical perspective or frame-of-reference to 851
800 inpatriate managers will go through in the process of demonstrate the impact/value of inpatriate man- 852
801 successfully entering the home-country organization, agers to the globalization of the organization. The 853
as follows: critical juncture in this stage of the process is the 854
802
803 inclusion of inpatriate managers into formal/ 855
804 (1) Segregation—social distance maintained and is informal networks in the organization.
DP 856
805 characterized as a period of learning and 857
806 acceptance of differences. Barriers to moving to Training the home-country nationals to be more 858
807 the next level in the process of socialization being receptive to the inclusion of foreign nationals may be 859
808 overt hostility between groups, lack of a common as difficult learning process as having the inpatriate 860
809 body of knowledge and an inability to effectively managers understand the level/type of adjustment they 861
810 communicate. The critical juncture in the stage will need to make to be successful in the transition to 862
TE

811 being the recognition of the value of tacit the home-country organization. 863
812 knowledge of the inpatriate managers to the
813 success of the global organization; 6.5. Development of support package for 864
814 (2) Assimilation—modification of behavior by the expatriate/family
EC

815 inpatriate managers, recognition of the informal 865

816 structure and environment in the home-country Every inpatriate manager that is going to enter the 866
817 organization and increase level/quality of com- home-country organization will require a formal as 867
818 munication between home-country and inpatriate well as informal support of those in the organization. 868
819 managers. Barriers to the successful completion The human resource management task is to develop a 869
RR

820 of the phase are different rates of acceptance of flexible support mechanism that can be adjusted and/ 870
821 inpatriate managers by clusters of countries of or be customized to the incoming inpatriate 871
822 origin and fear on the part of the home-country managers (Harvey, 1985, 1997). The importance of 872
823 nationals of loss of power and decision-making to this support infrastructure can measured in the length 873
824 inpatriate managers. It is critical to reduce tension of time that it takes the inpatriate manager to adjust 874
825 between the home-country managers and the to the organizational as well as general societal
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875
826 inpatriate managers; culture shock that each will experience upon 876
827 (3) Integration—some remaining conflict over adap- relocating (Black et al., 1991). The support should 877
828 tation to the home-country organization culture encompass external support for the family and the 878
829 and dominant cultural norms resulting in a manager, as well as internal support system or 879
830 growing recognition of the value of diverse infrastructure for the manager. The formal support 880
UN

831 perspectives. Barriers to successful completion mechanism should be augmented by encouraging an 881

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881 924
882 informal recognition by home-country managers that Uncited references
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884 social activities and informal organizational events Bartlett (1986), Brown and Eisenhardt (1998), 926
885 (Harvey, 1985, 1997). D’Aveni (1995), D’Aveni (1997), D’Aveni (1999), 927
Elsayed-Elkhouly and Buda (1997), England (1967), 928
886 6.6. Monitoring/auditing of the ‘Liability of England (1975), Erez (1986), Guth and Tagiuri (1965), 929
foreignness’ processes and program Hymer (1960), Ireland and Hitt (1999), Jensen and 930
887 Meckling (1976), Pfeffer (1994), Rumelt (1994), 931
888 Once in place, the program for assisting inpatriate Shapiro et al. (1998), Thomas (1996). 932
889 managers to adjust to the local domestic macro and

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890 organizational environments will need to be assessed
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