Overcoming Culture Shock
Italian companies have more the 27,000 subsidiaries abroad, where they employ almost 1.5 million people, for a total turnover of €565 billion in foreign revenues (Italia Multinazionale, Banca dati Reprint, 2012 data). It is then not surprising that there is growing interest around the issue of multicultural human resource management.
Business organizations must be able to attract, train and retain people with the highest potential, no matter their geographical and cultural provenance. Consequently, their personnel must me able to work in international and multicultural business environments. It is not just major multinational corporations that have this management problem: increasingly, medium firms are expanding abroad; they are the so-called micro-multinationals. Effective HRM in international business, and the effectiveness of managers placed in international positions, are determining factors in the success or failure of foreign operations.
Management choices in HRM depend on the organizational model and the stage of internationalization attained by a given company. In this framework, managing the expat employees remains the central task, although the traditional model of foreign missions lasting 3 to 5 years is no longer exclusive. The number of expats hasn't gone down, but they now go abroad in several different ways that are less costly for firms, so that a kind of internatioanl HRM portfolio has come into being. There are short-term foreign missions (less than one year), frequent business travelers, dual desks etc. Corporate expats are on average younger and more female than in the past. This suggests higher flexibility in benefits and compensation packages, which can be rich but not modular enough to suit the needs of the employee and his/her family going abroad.
As for traditional management missions abroad, personnel selection is key. Recent research studies point to the fact that in recruiting for short-term missions abroad, selection rarely occurs on the based of formalized criteria, but rather on the basis of informal networks of trust, and by assessing technical, rather than cross-cultural, traits of expertise.
Cross-cultural training needs to be introduced in Italian firms to increase the likelihood of success, especially for non-conventional business expats, who have less time to adapt to the new culture but still suffer from the culture shock of having to work in a different country different. Policies for the selection and recruitment of personnel, multicultural training, development of career paths, compensation packages, performance evaluation, and support to returning employees, must be all implemented according to a transnational frame of mind.