A dominant theme of the 1990's has been and continues to be the issue of globalization. Globalization encapsulates a description of a rapid and pervasive diffusion around the world of production, consumption, investment and trade flows in goods, services, capital and technology.
Globalization has yielded such crucial worldwide trends as privatization and free trade agreements. In addition, it has increased access by oil and gas countries to exploration and development rights. Nowhere is this more apparent than in the former Communist world. Even countries such as China, who maintain a highly centralized Communist system, acknowledge the need for investment and are opening acreage to outsiders. Coupled with the increase in exploration acreage is a decline by many countries of "government take", or the percentage that a government earns of gross revenues less investment and operating costs.
In Canada, conventional oil and gas reserves have declined over the last ten years. Over the same period, production levels have been steadily increasing while prices have remained relatively stagnant. In part, this has fueled the interest of Canadian firms to explore abroad. As a result, increasing numbers of energy sector professionals are experiencing some period of living and working abroad.
The cost of such expatriate assignments is commonly in the millions of dollars. At the same time, only about 20 per cent of participants in one Canadian study were rated as being highly effective in the overseas environment. Overseas effectiveness comprises three elements: professional expertise, adaptation and intercultural interaction. Much of the explanation for the high level of expatriate failure lies in poor selection practices and improper preparation.
Traditionally, an individual's skills in a specific technical area has been the primary concern to staff screening potential expatriates. But expertise includes more than just an individual's own training and work experience; it also includes his /her ability to assess the technical capabilities of the overseas job situation and to be innovative.
A number of personality characteristics are associated with success in living and working overseas including empathy, interest in the local culture, flexibility, tolerance, initiative, open-mindedness, sociability, and positive self-image. These characteristics need to be screened for in the recruitment and selection stage.
There are many factors which impact upon an expatriate's effectiveness. These include: age, gender, family situation, language ability, nationality, motivation, attitudes and expectation, and culture shock. These, too, need to be considered at the recruitment and selection stage. Appropriate preparation would include an initial orientation involving assignment and cultural briefings, relocation requirements, predeparture and arrival orientation, and language training. Support would continue throughout the assignment and would include compensation support, family assistance support, mentor support and repatriation support.
Recruitment processes need to be aligned with the significant demands of overseas assignments. Furthermore, appropriate preparation and training are a necessary requirement for firms who wish to succeed in the highly competitive overseas environment. They are also essential for the explorationist who wishes to include such assignments in his /her career portfolio.
About the Author(s)
David Mitrovica obtained his BASc. and Engineering (Geophysics), in 1980, from the Engineering Science division of the University of Toronto. He obtained his MSc. (Management), Sloan Fellowship Programme, in 1993, from the London Business School, University of London, UK.
David has lived and worked in Alberta for approximately 20 years. He has also worked in South America, Asia and Eastern Europe. In 1980, David joined Canada-Cities Service Limited as a Geophysicist. In 1985, he joined London and Scottish Marine Oil (LASMO) as Senior Exploration Geophysicist.
During 1990, David traveled extensively in South America and the Middle East. These experiences broadened and deepened his appreciation of cultural differences and their impact on communications, team building, negotiations and management styles. In 1991, David returned to Canada as a Consultant Geophysicist and worked for a number of industry clients.
During 1992-93, David completed further education at the London Business School, taking particular interest in economies in transition and human resource development. His MSc. thesis, entitled 'Expatriate Recruitment and Effectiveness' earned a 'Distinction.' Indeed, the United Nations Development Programme (UNDP) accepted this work as an effective learning and training resource.
Upon his return to Canada, in 1994, David joined a major international management consulting firm and specialized in Comparative Performance Benchmarking, Business Process Improvement and Strategy Development. He worked on assignments in Latin America, Asia and Eastern Europe.
In 1997, he launched Miredita Consulting, specializing in international recruitment, cross-cultural training and repatriation. Within this capacity, he assisted Price Waterhouse Gerencia de Processos, Venezuela, in recruiting oil and gas professionals. At the same time, David maintains his interest in exploration geophysics by continuing to consult in this area.