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The International Journal of Human Resource


Management
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Organizational expatriates and self-initiated


expatriates: who adjusts better to work and life in
Japan?
a b
Vesa Peltokorpi & Fabian Jintae Froese
a
HEC School of Management , Paris, France
b
Korea University Business School , Korea
Published online: 28 May 2009.

To cite this article: Vesa Peltokorpi & Fabian Jintae Froese (2009) Organizational expatriates and self-initiated expatriates:
who adjusts better to work and life in Japan?, The International Journal of Human Resource Management, 20:5, 1096-1112,
DOI: 10.1080/09585190902850299

To link to this article: http://dx.doi.org/10.1080/09585190902850299

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The International Journal of Human Resource Management,
Vol. 20, No. 5, May 2009, 1096–1112

Organizational expatriates and self-initiated expatriates: who adjusts


better to work and life in Japan?
Vesa Peltokorpia* and Fabian Jintae Froeseb
a
HEC School of Management, Paris, France; bKorea University Business School, Korea
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Expatriates are often presented in the cross-cultural adjustment literature as a


homogeneous, broad population. However, recent research that makes a distinction
between organizational expatriates (OEs), those who are dispatched by their home
companies to international posts, and self-initiated expatriates (SIEs), those who
themselves make the decision to live and work abroad, has identified differences
between the two groups. The present study compares the cross-cultural adjustment of
these two groups of expatriates. Survey results of 179 expatriates in Japan show that
SIEs are better adjusted to general aspects of their host country and interactions with
host-country nationals than OEs. Suggestions for practice are provided.
Keywords: cross-cultural adjustment; Japan; organizational expatriate; self-initiated
expatriate

Introduction
An increasing number of people are spending part of their lives living and working in
foreign countries (OECD International Migration Outlook 2007). These people are
frequently either traditional transfers, often defined as organizational expatriates (OEs),
who are dispatched by their home companies to international posts (Edström and
Galbraith 1977), or self-initiated expatriates (SIEs), who themselves make the
decision to move and work abroad (Inkson, Arthur, Pringle and Barry 1997; Suutari and
Brewster 2000; Inkson and Myers 2003; Lee 2005; Myers and Pringle 2005;
Vance 2005).1
While SIEs are alleged to form a larger and more potent global labor market segment
than OEs (Myers and Pringle 2005), little is known about either SIE cross-cultural
adjustment or differences between OE and SIE cross-cultural adjustment. Because of
notable differences between OEs and SIEs (Inkson et al. 1997), more research is called
for to understand issues related to SIEs and their expatriation (Suutari and Brewster
2000; Vance 2005). The present study, examining the cross-cultural adjustment of OEs
and SIEs in Japan, contributes to international human resource management (IHRM)
literature in three ways. First, research is extended from SIE characteristics and career
development issues to actual cross-cultural adjustment. Second, this study further shifts
the focus from the often examined OE adjustment to possible differences between OE
and SIE adjustment. Finally, we provide an update on and contextual account of
expatriate adjustment in Japan.
The rest of this study is organized as follows. Second the next section discusses cross-
cultural adjustment. The third section focuses on cross-cultural adjustment in Japan. The

*Corresponding author. Email: peltokorpi@hec.fr

ISSN 0958-5192 print/ISSN 1466-4399 online


q 2009 Taylor & Francis
DOI: 10.1080/09585190902850299
http://www.informaworld.com
The International Journal of Human Resource Management 1097

fourth section explains differences between OEs and SIEs and reviews research on SIEs.
The fifth section presents hypotheses on OE and SIE cross-cultural adjustment in Japan.
The sample, measures and statistical procedures are presented in the sixth section. The
seventh section discusses study findings. The study ends with practical implications,
limitations and suggestions for future research.

Cross-cultural adjustment
Cross-cultural adjustment refers to the degree to which expatriates are psychologically
comfortable and familiar with different aspects of a foreign environment (Black 1988),
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and can be understood as the degree of ease or difficulty expatriates have with various
issues related to life and work abroad (Takeuchi, Marinova, Lepak and Liu 2005). As a
time-related process (Torbiörn 1982; Black and Mendenhall 1991), cross-cultural
adjustment involves uncertainty reduction and change through which expatriates begin to
feel more comfortable with the new culture and harmonize with it. Expatriates are able
to reduce uncertainty by imitating and/or learning behaviours that are appropriate in the
new culture.
Culturally adjusted expatriates are open to the host culture and thus able to add new
behaviours, norms and rules to the foundation provided by (their) home cultures (Church
1982). In contrast, maladjusted expatriates tend to experience anxiety to the extent that
they may even believe that host country nationals are plotting against and making life
difficult for them (Richards 1996). Limited adjustment to the host culture has various
negative work-related consequences, such as lower job satisfaction and job performance
(Naumann 1993). In the worst case, the expatriate prematurely returns home or leaves the
company (Harzing 1995). Due to these individual- and company-related consequences,
expatriate cross-cultural adjustment has become an important research stream in
international business (see Black and Mendenhall 1990; Black, Mendenhall and Oddou
1991; Hechanova, Beehr and Christiansen 2003; Bhaskar-Shirinivas, Harrison, Shaffer
and Luk 2005 for reviews).
Scholars have identified three interrelated facets of adjustment to living and working in
foreign countries. In the acculturation literature (e.g., Searle and Ward 1990), the facets of
psychological, socio-cultural and work adjustment have been identified. In the expatriate
adjustment literature (e.g., Black 1988; Black et al. 1991), similar facets of adjustment to
the general environment, work and interaction with host country nationals have been
proposed. General adjustment refers to the degree of psychological comfort with regard to
several aspects of the host culture environment, such as climate, food, health care,
shopping and housing conditions. Work adjustment refers to the degree of comfort
regarding different performance standards and expectations, and work values. Adjustment
to interaction with host nationals refers to the degree of psychological comfort regarding
different communication and interpersonal styles used in the host culture. These three
adjustment facets that encompass the work and non-work domains of the expatriation
experience have been validated in several studies (see Bhaskar-Shirinivas et al. 2005).

Cross-cultural adjustment in Japan


Japan provides an interesting setting for cross-cultural adjustment studies due to its
cultural and linguistic uniqueness as well as racial homogeneity.2 Japanese cultural values
have been identified as consisting of relatively high orientation toward collectivism,
masculinity, verticality, and uncertainty avoidance (Hofstede 1980; Trompenaars and
Hampden-Turner 1998; Gudykunst and Nishida 2001). In the context of cross-cultural
1098 V. Peltokorpi and F.J. Froese

adjustment, the cultural values of verticality and collectivism deserve further attention due
to their expected impact on cross-cultural interactions. Verticality refers to hierarchical
relationships that are determined, for example, by age and gender (Nakane 1972). In a
Japanese company setting, verticality is manifested in strict behavioral norms founded on
gender-based differentiated occupations and company tenure, as well as close reliance
on superiors and long vertical chains of superior– subordinate relationships. In Japan,
collectivism is displayed in group-oriented behavior and through strong conformity to
group norms (Nakane 1972; Caudill 1973). There is a tendency among Japanese to show
the ‘right’ attitudes, behavioral patterns and values in order to fit into the group (Nakane
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1972). Caudill (1973) has even noted that Japanese do not have individual identities but
identify themselves mainly in terms of groups. These group identities often lead to a clear
distinction between in-group members, who receive preferential treatment, and out-group
members, who are treated indifferently or are even discriminated against (Napier and
Taylor 1995). These culture-related factors have been listed as some main reasons for
anxiety and depression among expatriates in Tokyo (Skuja and Norton 1982).
Although Japan is the second-largest economy in the world and a challenging country
for foreigners, surprisingly few studies have focused on expatriate adjustment in Japan
(Black 1988; Napier and Taylor 1995, 2002; Japan Institute of Labor 2002; Volkmar and
Westbrook 2005). First, a study by Black (1988) shows that the work adjustment of 67
American OEs was related to work role ambiguity and discretion, general adjustment to
association with host nationals, and the adjustment of the OEs’ families. Second,
examining adjustment issues facing 91 female expatriates in Japan, Napier and Taylor
(1995, 2002) found that their ages and Japanese language skills were the most
important dimensions of successful work-related adjustment. For the female expatriates,
housing and health care were the most difficult aspects of non-work-related adjustment. A
replication of Napier and Taylor’s (1995) research a decade later with 30 female
expatriates indicates no significant differences in the adjustment patterns (Volkmar and
Westbrook 2005). Finally, research on 307 Western OEs indicates relatively high
satisfaction with public safety and morals, but low adjustment to medical care (Japan
Institute of Labor 2002).
While the above studies have provided important information about expatriate
adjustment in Japan, we expect that expatriate type also influences the adjustment process.
Although most of these scholars have not made a conceptual distinction between OEs and
SIEs or examined them as two separate expatriate groups, it may be that there is a
considerable number of SIEs included in their studies. In the Napier and Taylor studies
(1995, 2002), for example, less than 10% of the surveyed females can be classified as OEs.
Perhaps reflecting the low number of female expatriates and/or the reduced usage of
OEs, these scholars noted that only about 5 to 10% of female members in the two surveyed
professional associations (American Chamber of Commerce in Japan and Foreign
Executive Women) were traditional OEs who were sent by their home companies to
postings in Japan (Napier and Taylor 1995). In addition to gender, it is also possible that
expatriate type influences the findings in their expatriate adjustment studies, as well as
those of others.

Self-initiated and organizational expatriates


Expatriates are commonly presented in the adjustment literature as a homogeneous and
broad population, and despite notable differences, SIEs are seldom distinguished from OEs.
A SIE refers to ‘any person who is hired on a contractual basis and not transferred overseas
The International Journal of Human Resource Management 1099

by the parent organization’ (Lee 2005, p. 173). The foreign experiences of SIEs can be
distinguished from a tourist-style holiday because they include paid employment and have
the objectives of cross-cultural experience, adventure, self-development (Myers and
Pringle 2005), and longer-term unification with friends, spouses, or relatives living in the
host country. SIEs who work in foreign countries can thus be distinguished from sojourners,
a term that has often been used to describe a traveller. In contrast, OEs are sent by their home
companies to international posts (Edström and Galbraith 1977). The conceptual and
empirical separation of SIEs and OEs is important due to their differences, and the
significance of SIEs as an increasingly significant part of the global work force (Inkson et al.
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1997; Suutari and Brewster 2000; Myers and Pringle 2005).


SIEs have been distinguished from OEs along several work-related dimensions
(Inkson et al. 1997; Suutari and Brewster 2000). First, in contrast to SIEs, OEs are
normally sent by multinational companies (MNCs) to a related unit in a foreign country to
accomplish a specific job or organization-related goal, usually within a pre-designated
time period ranging from 6 months to 5 years. Instead of being assigned to work in a
foreign country, SIEs themselves make the decision to move and work abroad. Second,
SIEs tend to perceive their overseas experience as a means of self-development or part of
some other personal agenda, and consequently do not follow the often structured career
path of OEs. Achieving specific company goals thus is not their primary reason to become
an expatriate. In contrast, OEs are motivated to go abroad due to the related financial
benefits, increased opportunities for career progression, and/or personal interests in
international experience (Miller and Cheng 1978). Among these factors, the enhanced
chances for career progression are often most important because international work
experience is one of the major requirements for promotion to higher-level managerial
positions in MNCs (Carpenter, Sanders and Gregersen 2001). Third, SIEs are likely to
fund their own relocation, while OEs receive often generous relocation packages.
Although SIEs are being identified as an increasingly important part of the global work
force (Myers and Pringle 2005), only a few scholars have focused on them (Inkson et al. 1997;
Suutari and Brewster 2000; Inkson and Myers 2003; Lee 2005; Myers and Pringle 2005;
Vance 2005). First, interview studies with SIEs in New Zealand indicate that overseas work
experiences provides SIEs several benefits, such as increased self-confidence and self-
reliance and a clearer career focus when returning to the home country (Inkson et al. 1997;
Inkson and Myers 2003). Another interview study with 26 female and 24 male SIEs in New
Zealand shows that overseas experience provides accelerated career development
opportunities for both female and male SIEs, but females often have deeper and more
integrated work-related experiences than males (Myers and Pringle 2005). In particular, the
need for security and stability provides females greater cumulative work experience because
they tend to stay overseas longer and return to the same or similar employment after their
overseas trips. Another interview study with 48 American SIEs in five East Asian cities
reveals further that a large portion of SIEs are married to host country nationals (Vance 2005).
Second, survey research with 147 SIEs and 301 OEs shows that SIEs are slightly younger and
more frequently female, and that their main motive for employment abroad is to gain
international experience (Suutari and Brewster 2000). SIEs are further more willing to stay
abroad than OEs. Finally, quantitative research among 302 SIEs in Singapore indicates that a
lack of job autonomy, job suitability and job variety as well as lack of fit with the
psychological contract contribute to the perceived underemployment of SIEs (Lee 2005).3
This finding suggests that organizations need to assign jobs that fit the SIE’s level of skills,
abilities, and experience to enhance both SIE and organizational success.
1100 V. Peltokorpi and F.J. Froese

While the above studies have been important in that they indicate that SIEs and OEs
are separate groups of expatriates that should be distinguished in conceptual and empirical
accounts, to our knowledge, no study so far has focused on OE and SIE cross-cultural
adjustment. This lack of research is unfortunate because SIEs, as an increasing part of the
global work force, provide a potential alternative for costly OEs and because of possible
differences in OE and SIE cross-cultural adjustment patterns. The present study thus
extends previous SIE and cross-cultural adjustment research by (1) distinguishing OEs and
SIEs as two expatriate types, (2) identifying possible differences in OE and SIE cross-
cultural adjustment, and (3) providing a context-specific account of expatriate adjustment
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in Japan. A set of hypotheses related to OE and SIE cross-cultural adjustment in Japan is


provided in the following section.

The cross-cultural adjustment of the OE and SIE in Japan


Adjustment to interaction with host country nationals
Well-functioning social relationships with host country nationals have been identified as
important predictors of cross-cultural adjustment (e.g., Torbiörn 1982; Adelman 1988).
In addition to being basic components of a satisfying daily life, social ties when living in
foreign countries are proposed to be an important part of adjustment because they provide
emotional support for dealing with the associated stress and anxiety (Adelman 1988).
Expatriates are able to develop social relationships and receive the needed social support
from a variety of sources, such as from other expatriates facing similar situations or from
host country nationals (Johnson, Kristof-Brown, van Vianen, de Pater and Klein 2003). An
inability and/or unwillingness to form social relationships is likely to produce social
loneliness characterized by boredom and alienation (Weiss 1973).
Empirical studies suggest that creating well-functioning social relations with Japanese
is challenging because of group-oriented behaviour, negative attitudes toward foreigners,
indirect and suppressed expression, and different social manners and relationships with the
opposite gender (Tanaka and Fujihara 1992; Hsiao-Yuin 1995; Jou and Fukada 1996). One
possible reason for the low frequency of intercultural interactions in homogeneous Japan is
the limited integration and deferential treatment of foreigners. Ebuchi (1991), for example,
proposed that Japanese tend to give foreigners the red-carpet treatment by being polite on
the surface but distinguishing them clearly as out-group members. This red-carpet
treatment is likely to make long-term foreign residents, in particular, feel that they are
guests who are unable to integrate into Japanese society no matter how hard they try. This
categorization as out-group members can explain why the average foreigner has been
found to suffer from culture shock as late as his or her third year in Japan (Hsiao-Yuin
1995), and why expatriate mental problems are frequently related to loneliness and social
isolation in Tokyo (Skuja and Norton 1982).
Despite these pessimistic prospects for well-functioning intercultural interactions in
Japan, it is possible to identify several differences between OE and SIE motivation to
interact and in their actual interaction adjustment with host country nationals. First, SIEs
who personally have made the decision to move and work in Japan are likely to be more
motivated to interact as well as more tolerant of possible behavioral differences during
intercultural interactions. SIEs might even seek to interact more with Japanese than other
foreigners because of their personal interest in Japanese culture. It is likely that Japanese
spouses or partners also play an important role in introducing SIEs to host nationals
(cf. Vance 2005). SIEs can consequently be more knowledgeable of the challenges
in social interactions with host nationals than OEs who seldom receive adequate
The International Journal of Human Resource Management 1101

pre-departure training (Black and Mendenhall 1990). The interaction and possible
formation of social relationships with Japanese allows SIEs to gain insights into cultural
norms, facilitating further intercultural interaction. In contrast, often living for a restricted
period in residential areas with a dense concentration of OEs can limit their non-work-
related interactions to other OEs or to a limited number of Japanese interested in
interacting with foreigners. While these social interactions might be fulfilling, they tend to
reinforce the division between in-group and out-group members, reducing interactions
with host nationals (Takeuchi et al. 2005). Thus, we suggest the following hypothesis:
Hypothesis 1: OEs experience a lower degree of interaction adjustment with host
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country nationals than SIEs.

General adjustment
Adjustment to several general aspects of the host country, such as healthcare, shopping
and housing conditions, is also likely to vary among the two groups of expatriates. While
possibly being motivated to live in Japan and interested in Japanese culture, SIEs often
lack the non-work-related support (e.g., education for their children and housing
allowances) that OEs receive from their companies (Suutari and Brewster 2000; Vance
2005). For example, OEs are likely to live in areas with a high concentration of foreign
residents and have housing with Western-standard utilities. SIEs, on the other hand, are
usually not willing or able to finance such residences. If SIEs seek to rent private
apartments they are often discriminated against partly because many apartment owners in
Japan refuse to let their apartments to foreigners. A survey by the Tokyo Metropolitan
Office shows, for example, that only 11% of owners did not attach conditions to foreign
tenants (Mori 1996). Some reasons offered for the discrimination are different customs,
language problems, and additional people living in and sub-lending apartments to friends
(Mori 1996). In contrast to SIEs, who often need to live in places that are not in demand by
Japanese, OEs receive assistance and financial support from their companies so as to
maintain the same standard of living abroad as at home (Konopaske and Werner 2005).
Due to the concentration of OEs in certain areas, surrounding restaurants, hospitals, and
shops often accommodate their services to foreign customers. International schools are also
normally located in near proximity to OE residential areas. In contrast to the services
accommodating foreigners in certain areas, a limited number of studies suggest that services
on the average are not designed for foreign customers in Japan. Research covering 1024
Japanese nurses, for example, reveals that most nurses have very low confidence in providing
nursing care to foreign patients due to a lack of language ability and knowledge of other
cultures (Hasegawa, Takeda, Tsukida and Shirakawa 2002). While these nurses are
increasingly exposed to culturally diverse patients, they lack sufficient preparation for
providing nursing care to such patients. In addition, only a limited number of restaurants,
hospitals and shops in non-foreign residential areas consider the needs of foreign customers.
Taking these differences into account, it can be hypothesized that:
Hypothesis 2: OEs experience a higher degree of general living adjustment than SIEs.

Work adjustment
Expatriate ability to adjust effectively to work-related aspects in a given host country is
influenced by perceived ethnocentrism among host country nationals and differences in
1102 V. Peltokorpi and F.J. Froese

work values (Black et al. 1991; Richards 1996; Florkowski and Fogel 1999). Research on
250 expatriates shows, for example, that a perception of local ethnocentrism has a negative
impact on work adjustment and commitment to the host unit (Florkowski and Fogel 1999).
Western expatriates often value open communication, individual accountability, and clear
performance expectations and feedback. In contrast, Japanese employees are accustomed
to following top-down directives and tend to hesitate to express their opinions without
reservation because of the cultural values of collectivism and verticality (Gudykunst and
Nishida 2001; Peltokorpi 2006). These differences in work values have been found to
frustrate Western expatriates and increase chances for intercultural conflict in Japan
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(Peltokorpi 2007).
In addition to the general impact of perceived ethnocentrism and value differences on
expatriates, it is possible to identify several variations in OE and SIE work-related
adjustment. While OEs are sent by their home companies to local subsidiaries to
accomplish a specific job and/or organization-related goals (Edström and Galbraith 1977),
SIEs normally have to find a new job at a new company (Suutari and Brewster 2000).
SIEs, therefore, not only have to cope with the cross-cultural complexities of working in
Japan, but also need to adjust to a new job at an unknown company. Company
socialization can be a difficult process and previous studies have found that even a
significant number of Japanese recruits leave within the first year(s) of employment
because they are unable to adjust to the new company environment (Debroux 2003). OEs,
in contrast, are more familiar with the company policies and human resource (HR)
practices, albeit these HR practices differ to a certain extent across countries (Ferner and
Quintanilla 1998).
Another reason why SIEs can experience lower work adjustment lies in the nature of
the job. OEs are often sent abroad to occupy important management positions and/or
because they possess special skills that are needed in the foreign subsidiary (Edström and
Galbraith 1977; Selmer 1998). Accordingly, they usually have specific objectives and job
descriptions that were defined prior to their departure. However, this does not necessarily
mean that OEs are better adjusted when it comes to various aspects of working with
Japanese. Studies show that Western expatriates are often frustrated with low risk taking,
resistance to new ideas, lengthy decision making, and receiver-centered communication
(Peterson and Schwind 1977; Peltokorpi 2007), which may interfere with the achievement
of their work-related objectives. The inability to fulfill headquarters’ objectives has further
been found to cause anxiety and frustration, especially among Western expatriates who
are accustomed to achieving their work objectives in their home countries (Skuja and
Norton 1982).
However, SIEs are likely to be in an even worse situation since they often occupy a job
that does not suit their educational and professional background, skills and interests, partly
due to discriminatory and introduction-based hiring practices in Japan (Kurata 1990). In
order to secure employment and finance themselves they might accept jobs in which they
are not particularly interested, such as language teacher, or recruiting consultant (Kurata
1990; Skuja and Norton 1982). SIEs are likely to become frustrated over time by the
limited chances to find a satisfying job and the significantly lower status of their work
when compared to OEs (Skuja and Norton 1982). Additional frustration might be caused
by differential treatment and limited chances for career advancement in Japanese
companies (Kurata 1990). Some consequences of long-term underemployment in terms of
underutilized skills and abilities are increased frustration and negative work attitudes
among SIEs (Bolino and Feldman 2000; Lee 2005).
The International Journal of Human Resource Management 1103

Additional factors decreasing work-related adjustment are initiated by the considerably


lower job security of SIEs, who are often hired on 1-year contracts in Japan (Kurata 1990).
The inability to find an employer who will sponsor a work permit forces many SIEs to leave
Japan. Studies also suggest that SIEs tend to receive less mentoring and social support from
their local colleagues in Japan than OEs (Skuja and Norton 1982; Kurata 1990). In addition
to strong in-group and out-group categorization in Japan, the exclusion of SIEs from social
support and informal information networks in Japanese companies is also caused by
their specialist positions, lower status, and temporary employment (Kurata 1990). In the
end, one of the primary motives of SIEs is living and working abroad (Inkson et al. 1997;
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Suutari and Brewster 2000), which often comes at the expense of a less ideal job and
work conditions in Japan. As a consequence, SIEs are likely to find it more difficult to adjust
to both their job and work environment than OEs.
Hypothesis 3: OEs experience a higher degree of work-related adjustment than SIEs.

Methods
Sample
Data were collected from SIEs and OEs in the greater Tokyo area. International surveys
tend to have low response rates that may bias their results (Harzing 1997). For example, an
effective response rate of the Japan Institute of Labour survey on work and life of
expatriates in Japan was only 8.4% (Japan Institute of Labour 2002). To prevent this
potential problem, we drew on personal contacts similarly to previous expatriate
adjustment studies to collect data from expatriates (e.g., Richardson 2004; Richardson and
Mallon 2005). In order to reduce sampling and response bias, we used several
intermediaries to collect the data and avoided direct interactions with the respondents.
Altogether, we received 191 questionnaires, of which 12 were excluded due to missing
information resulting in 179 usable questionnaires. Among those respondents, 124 (69%)
held a local contract (SIE). Compared to Suutari and Brewster’s study (2000), which
reported a SIE ratio of 33%, the number of SIEs is higher in our sample. This can be partly
attributed to the Finnish specificity of their sample, our snowball sampling method, the
specific case of Tokyo as one of the main commercial centres in Asia attracting foreigners
(Napier and Taylor 1995; Vance 2005) (more Asians in the SIE group, see Table 1), or the
general trend towards an increasing number of SIEs (Myers and Pringle 2005). For the
purpose of this study, we compared SIEs with OEs.
On average, OEs were 34.3 years old (SD ¼ 8.4) and had worked for 37 months
(SD ¼ 43) in Japan. Most of them were male (73%), not married (69%), and roughly half
held managerial positions (Table 1). In line with the importance of American and European
companies in Japan (Japan Institute of Labour 2002), most came from the USA, Germany,
France and the UK. In total, the respondents represent 24 different nationalities. Among
them, 73% were working for foreign-owned companies and 33% had a Japanese partner
(married or not married). Despite relatively similar age (32.5 years, SD ¼ 10.2), percentage
of males (67%) and marital status, SIEs had worked longer in Japan (59.7 months,
SD ¼ 61.9) and only 37% held managerial positions. More SIEs were working for Japanese
companies (54%) and also slightly more were involved with Japanese partners (46%).

Control variables
Eight control variables – age, gender, marital status, job level, length of stay in Japan,
company nationality, partner nationality and cultural distance – were included in the
1104 V. Peltokorpi and F.J. Froese

Table 1. Background information (n ¼ 179).

OE (n ¼ 55) SIE (n ¼ 124)


Frequency Percentage Frequency Percentage
Gender (male) 40 73 82 67
Married 18 33 38 31
Managerial position 28 52 37 30
Nationality
US 9 16 36 30
German 13 24 14 11
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French 4 7 14 11
British 9 16 13 11
Australian 5 9 5 4
Asian countries 4 7 13 11
Other 11 21 29 22
Foreign company 40 73 57 46
Japanese partner 18 33 50 43

present study, owing to their possible relation to cross-cultural adjustment. First, older
expatriates are argued to be more satisfied with their lives and work in foreign countries
due to an adjustment attrition effect (Van Oudenhoven, Mol and Van der Zee 2003).
Second, female expatriates have been found to have higher interaction and work
adjustment than their male counterparts due to their visibility and interpersonal skills
(Selmer and Leung 2003). Third, the adjustment of family members of married expatriates
may ‘spill over’ and influence their cross-cultural adjustment (Black et al. 1991). Fourth,
job level has been found to moderate the effects of several determinants on cross-cultural
adjustment (Shaffer, Harrison and Gilley 1999). Job level was controlled also because OEs
are more frequently employed at the managerial level than SIEs (Suutari and Brewster
2000; Hechanova et al. 2003). Fifth, the U-curve hypothesis and the related conceptual
discussions suggest that cross-cultural adjustment is a time-related process and that
expatriates need time to learn and become accustomed to the host country culture
(Torbiörn 1982; Black and Mendenhall 1991). Sixth, company nationality might influence
work adjustment because Japanese companies either do not consider cultural diversity or
are inexperienced in managing it (cf. Kurata 1990; Debroux 2003). Seventh, a significant
proportion of SIEs in Japan is reported to have local partners that can influence their cross-
cultural adjustment (Vance 2005). Finally, cultural distance has been found to have a
negative impact on interaction and general adjustment (Parker and McEvoy 1993).
In principle, the greater the cultural distance between the norms and values of the
expatriate’s home country and those of the host country, the greater is the degree of
difficulty in work and non-work related adjustment.
We used ANOVA to test whether the eight control variables were significantly
different between the two groups of expatriates. To measure cultural distance and take into
account the different nationalities of respondents, we used Kogut and Singh’s (1998)
cultural distance index. Other control variables were assessed by categorical data (gender,
marital status, job level, company nationality and partner nationality) and continuous
data (age in years and length of stay in Japan in months) provided by the expatriates.
Among control variables, only length of stay in Japan (F ¼ 5.91, p , 0.05), managerial
position (F ¼ 8.13, p , 0.01) and company nationality (F ¼ 13.93, p , 0.001) were
significantly different between the two groups. Due to the relatively small sample, the
The International Journal of Human Resource Management 1105

non-significant control variables were dropped in further analyses in order to improve


the efficiency of the estimates and the statistical power of the results (Aiken and
West 1991), while not significantly altering either their magnitude or direction.
Some findings among the statistically significant control variables are similar to
previous studies. OEs were first found to occupy higher management positions similar
to the Suutari and Brewster (2000) study. The higher proportion of OEs working for MNCs
is further in line with previous research findings (Suutari and Brewster 2000). However,
unlike Inkson et al. (1997), who described SIEs as adventurous young people who look for
a temporary experience abroad, the average length of stay of SIEs in the present study was
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significantly higher than that of OEs. It can thus be assumed to be parallel with previous
studies that show a significant number of SIEs belong to the group of localized
professionals who prefer to stay for an extensive time in a foreign country rather than
return home (Suutari and Brewster 2000; Vance 2005). OEs on the other hand, are usually
restricted by their contract to a stay of 6 months to 5 years.

Measures
The three dimensions of expatriate cross-cultural adjustment were measured using the 14-
item scales developed by Black (1988). Respondents were asked to evaluate on a 5-point
Likert scale from 1 (not adjusted at all) to 5 (very well adjusted) how adjusted they were to
the general environment, interaction with locals, and work in Japan. In order to confirm the
postulated three-factor structure, we conducted a confirmatory factor analysis using
AMOS 6.0. After deleting one item from the interaction dimension, the model reached
satisfactory fit levels (x2 ¼ 136.8, df ¼ 62, p , 0.001, CFI ¼ 0.93, TCI ¼ 0.90,
RMSEA ¼ 0.08). Correspondingly, all Cronbach’s alpha values were at a satisfactory
level, with 0.78 for the general adjustment dimension, 0.85 for the interaction adjustment
dimension, and 0.86 for the work adjustment dimension (cf. Nunnally 1978).

Results
Descriptive results and correlations of the adjustment dimensions and the three control
variables are depicted in Table 2. As expected, these variables show some significant
correlations yet no correlation reaches a level that would cause any serious concern for
multicollinearity in our following data analysis (Nunnally 1978). Despite cultural
differences between their home countries and Japan, the expatriates were relatively
adjusted to work- and non-work-related aspects of their lives in Japan (between 3.57 and
3.98, which is well above the mid-level of a 5-point scale with 5 being very well adjusted).

Table 2. Means, standard deviations and correlations among the variables (n ¼ 179).
Variable Mean SD 1 2 3 4 5
a
1 Company nationality 1.45 0.50 1
2 Job levelb 1.64 0.48 0.26** 1
3 Months in Japan 52.39 56.91 0.17* 0.14 1
4 Interaction adjustment 3.57 0.85 0.10 0.02 0.22** 1
5 General adjustment 3.89 0.60 0.02 0.16* 0.06 0.44*** 1
6 Work adjustment 3.98 0.83 2 0.11 0.17* 0.05 0.34*** 0.6***
Note: aCompany nationality is coded as 1 ¼ foreign and 2 ¼ Japanese; bJob level is coded as 1 ¼ staff and
2 ¼ manager; *p , 0.05; **p , 0.01; ***p , 0.001.
1106 V. Peltokorpi and F.J. Froese

These adjustment levels are similar to those reported in Black’s (1988) and Napier and
Taylor’s (1995, 2002) studies. Both OEs and SIEs felt more adjusted to the general
and work environment but less to interaction with Japanese. Parallel to a previous study
(Shaffer et al. 1999), hierarchical rank or job level was positively correlated with general
and work adjustment. The correlations suggest further that social interaction adjustment is
a time-related process because those who have stayed longer in Japan tend to be more
adjusted to interaction with Japanese.
To test the hypothesized differences in OE and SIE cross-cultural adjustment, we
conducted MANCOVA and ANCOVA analyses with length of stay in Japan, job level,
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and company nationality as covariates. MANCOVA revealed that there were significant
differences between OEs and SIEs in regard to cross-cultural adjustment (F ¼ 3.82,
p , 0.01, also see Table 3). Subsequent ANCOVA revealed that SIEs were significantly
more adjusted in terms of interaction adjustment (F ¼ 10.89, p , 0.001), providing
support for Hypothesis 1. SIEs were further found to express higher levels of general
adjustment, although these differences were meaningful only at the p , 0.10 level of
significance. Since this result was in opposition to our original assumptions, Hypothesis 2
was rejected. Furthermore, since no significant differences were observed for work
adjustment, Hypothesis 3 finds no support.

Discussion
The purpose of this study was to make a conceptual and empirical separation between OEs
and SIEs and to examine potential differences in their cross-cultural adjustment in Japan.
Drawing from previous research (e.g., Inkson et al. 1997; Suutari and Brewster 2000), it
was hypothesized that SIEs are more accustomed to interacting and motivated to interact
with host country nationals but less adjusted to general aspects of living and working in
Japan than OEs due to lower organizational support. Controlling for differences between
OEs and SIEs, the results of this study show that these two expatriate types are different
mainly because SIEs are more adjusted to interactions with host country nationals than
OEs. As a consequence, the results highlight the importance of conceptual and empirical
separation of these two expatriate types.
While interaction adjustment with host nationals for both expatriate types appears to
be a time-related process, the significantly higher interaction adjustment of SIEs can be
attributed to the differences in motivation and frequency of cross-cultural interaction. For
example, SIEs can be more accustomed to interacting and motivated to interact with
host country nationals because of their preexisting social relations (Vance 2005)
and knowledge of culture-related challenges in interacting with Japanese (Gudykunst and
Nishida 2001). Indeed, self-initiated expatriation is often motivated by interest in a given
foreign country and possible previous social interactions with host country nationals

Table 3. MANCOVA and ANCOVA for adjustment and job satisfaction by expatriate type.
OE (n ¼ 55) SIE (n ¼ 124)
Mean SD Mean SD Multivariate effect F-ratios
Interaction adjustment 3.18 0.89 3.76 0.93 3.51* 9.34**
General adjustment 3.79 0.58 3.91 0.65 3.00†
Work adjustment 3.99 0.83 3.96 0.76 0.07
Note:† p , 0.10; *p , 0.05; **p , 0.01; ***p , 0.001.
The International Journal of Human Resource Management 1107

(Inkson et al. 1997). These preexisting social networks may enable SIEs to establish
further social relations with host country nationals. In contrast, OEs often arrive in host
countries with little preparation and limited or non-existing social relationships with host
country nationals (Hechanova et al. 2003). They may know little about Japanese society
and its people. For example, they might have little understanding and sympathy for
frequent direct inquires by Japanese about their age or reasons for not being married
(Peltokorpi 2006). Their social interactions, at least initially, tend to be limited to other
OEs and the limited number of host country nationals they meet in their work places,
professional clubs, residential areas, etc. It can further be assumed that significant
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differences in social interaction styles and difficulties for foreigners in integrating into
Japanese society can explain why expatriates in general are less adjusted to interacting
with host country nationals than to general aspects of life and work in Japan.
Contrary to our expectations, SIEs were more adjusted to general cultural aspects of
Japan. The findings are slightly surprising because OEs tend to receive more assistance
from their organizations to maintain the same standard of living abroad as at home in
expensive Japan (Suutari and Brewster 2000). The better housing conditions and
residential areas with services that tend to accommodate the needs of foreigner customers
in which OEs often live do not explain general adjustment differences, at least not in Japan.
However, it is conceivable that SIEs can even initially appreciate differences in the various
aspects of life in Japan related to housing, food and shopping. Because the personal
intentions behind expatriation are found to facilitate socio-cultural adjustment (Selmer
1998), it is likely that SIEs who personally have made the decision to move to Japan are
also more motivated to live there and therefore adjust to general aspects related to
expatriation there.
Controlling for differences between the two expatriate types revealed, contrary to our
hypothesis, no statistically significant differences in terms of work adjustment. This
finding is surprising given that OEs tend to be socialized into the foreign subsidiary,
receive mentoring and work with host country nationals who are more accustomed to
interacting with foreigners than SIEs (Suutari and Brewster 2000; Lee 2005). Several
factors can explain the finding. First, OEs may not have been properly prepared or may
have had unrealistic expectations of their expatriation assignment. Once in Japan, OEs
might not be able to achieve their work goals as expected due to cultural differences
resulting in disappointment and lower work adjustment (Skuja and Norton 1982). SIEs can
also be more motivated to adjust to work conditions in Japan partly because they perceive
them as important parts of the international work experience that help them to find a better
position in the future (cf. Vance 2005). In addition, SIEs’ work adjustment can be subject to
spill-over effects from their relatively high interaction adjustment (Bhagat 1983). That is,
SIEs whose needs are satisfied outside of work may be better able to tolerate poor fit at work
(cf. Bizot 1993). Finally, SIEs can be motivated to remain and adjust to their work because of
bleak employment opportunities in their home countries or unwillingness to return there.
Taken together, the results suggest that OEs and SIEs are two expatriate types whose
differentiated cross-cultural adjustment should be taken into consideration in conceptual
and empirical accounts. Despite several notable differences (e.g., Inkson et al. 1997;
Suutari and Brewster 2000), these two expatriate types have often been lumped and
examined together with possibly misleading empirical results and the consequence that
very little is known about SIE adjustment and differences in OE and SIE cross-cultural
adjustment. If researchers do not make a distinction between OEs and SIEs and their
research data consists mostly of SIEs, their findings are unlikely to provide accurate
presentation of OE cross-cultural adjustment. It is also likely that research on OE
1108 V. Peltokorpi and F.J. Froese

adjustment does not provide accurate information on SIE adjustment, for example, due to
notable differences in individual background variables (e.g., age and gender), motivation
for expatriation and the consequent employment in host countries, career paths,
organizational support, and compensation practices (cf. Inkson et al. 1997; Suutari and
Brewster 2000; Inkson and Myers 2003; Myers and Pringle 2005). It is hence
recommended that scholars take into account the existence of SIEs in their data sets and
discuss possible differences in OE and SIE cross-cultural adjustment.

Practical implications
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Our findings have two implications. First, there are implications with regard to employee
staffing in foreign subsidiaries. Taking into account the high cost of OEs and the
competition between MNCs to recruit and retain high-quality local staff (Collings,
Scullion and Morley 2007), SIEs may provide a viable alternative to OEs and host country
nationals. In particular, SIEs can be used for functional positions and as cross-cultural
intermediaries in subsidiaries due to their higher adjustment interactions with host country
nationals. A recent study in Japan suggests further that SIEs are more efficient than host
country nationals at establishing well-functioning work relations with foreign-based
headquarters (Peltokorpi 2007). Although it might be beneficial for MNCs to continue to
use OEs for control purposes and as a part of future manager career development (cf.
Edström and Galbraith 1977; Selmer 1998), SIEs as a previously invisible group of
potential job candidates in host countries can be included in IHRM policies.
Second, there are implications for SIEs and the potential issues they may face in
foreign countries in general and specifically in Japan. While SIEs may be motivated to live
and work for a prolonged period in Japan, their chances for employment beyond certain
positions, such as language teachers and recruitment consultants, are relatively limited due
to an inflexible job market and discriminatory recruitment practices against foreigners
(Kurata 1990). This problem is not unique to Japan but applies to some degree to other
industrialized countries (Ang, Van Dyke and Begley 2003). While their interaction
adjustment with host nationals was relatively high, it is likely that work conditions in
Japan for SIEs in comparison to OEs are still quite harsh. SIEs should thus think carefully
through the issues of career opportunities, work conditions and chances for career
progression in Japan. In fact, persistent long-term attempts to find a suitable job in Japan
can put SIEs into disadvantaged positions vis-à-vis to their host country (Japanese)
counterparts and home country OEs (cf. Kurata 1990; Mori 1996; Tezuka 2005).

Limitations and suggestions for future research


Our findings have to be interpreted in light of some limitations associated with the study.
First, all measures were collected via self-reports, which may artificially increase the
strength of some relationships. To reduce potential problems in this respect, the items
measuring three adjustment facets were assigned similarly to previous studies in random
order (Black 1988; Selmer and Leung 2003). A manual check of the data did not show
signs of a compressed response range that have been claimed to appear in single-method
studies (Podsakoff and Organ 1986). In order to cope with this limitation, future studies
could utilize performance evaluation archives or ask host country nationals to assess the
level of expatriate work adjustment.
Second, the relatively small sample size confined to a Japanese context raises
questions of how well the results of the present study will generalize to broader samples of
expatriates. The strength of this study is that respondents represented 24 nationalities
The International Journal of Human Resource Management 1109

suggesting that their experiences can be applicable to a wide range of people living and
working in Japan. We believe that the findings that SIEs adjust more easily to interacting
with host country nationals and do not necessarily show lower work adjustment can also
hold in other countries. Further studies are encouraged to test these relationships in other
countries, especially non-Asian settings.
Third, the three facets of cross-cultural adjustment can be influenced by several
additional factors (see e.g., Black and Mendenhall 1990; Black et al. 1991; Hechanova
et al. 2003; Bhaskar-Shirinivas et al. 2005). However, our objective in the present study
was to examine potential differences between OE and SIE adjustment. Therefore, future
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research may benefit by integrating more antecedents that explain differences in OE and
SIE adjustment. Given the unexpected results in regard to work adjustment, studies
focusing on work adjustment and related work attitudes, such as job satisfaction, might
help to provide further insight into this under-investigated area of expatriates’ job attitudes
(Ang et al. 2003).

Acknowledgements
We thank Ingmar Björkman for his comments on a previous draft of this study, and all those people
who helped us to collect the data and participated in this study. Fabian Jintae Froese gratefully
acknowledges financial support from Korea University (New faculty research grant, no. K0719081).

Notes
1. Overseas work experiences of self-initiated expatriates (Lee 2005) have been described in
previous studies as overseas experiences (OEs) (Inkson et al. 1997; Inkson and Myers 2003;
Myers and Pringle 2005; Vance 2005) and self-initiated foreign work experiences (SFEs)
(Suutari and Brewster 2000).
2. In 2004, registered foreigners accounted for 1.97 million of Japan’s total population of 127.4
million (Tezuka 2005). Most of these foreigners were special permanent residents (465,619),
permanent residents (312,964), and long-term residents primarily from Chinese and Korean
families that have lived in Japan for several generations. Only 145,570 foreigners were living in
Japan with a working permit.
3. Perceived underemployment refers to an individual’s perception that he is working in an
inferior, lesser, or lower quality type of employment or in a situation where individuals feel that
their skills and abilities are not fully utilized (Lee 2005).

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