Capital


Foreign investment is encouraged by the Ethiopian Government and there are specific policies in place to make the entry into the Ethiopian market attractive, including tax holidays. The sectors foreigners are allowed to invest in, are specified as well as the minimum amounts of capital required for individual investments and joint ventures with Ethiopian companies. Once the requirements are fulfilled, the licensing process is rather straight forward and a residence permit is issued instantly. With foreign investments come foreigners, who will set up, manage and work with the business, also referred to as expatriates. Expatriates are not new to Ethiopia and Addis Abeba, as they have been working with embassies, donor organizations, NGO’s, schools and churches for many years. Over the past few years we have seen an increased influx with the arrival of many more expatriates, working in road construction, horticulture and telecommunications, just to mention the most obvious. An expatriate is defined as someone who works and lives in a foreign country and I suppose that includes me, although I have spent now almost half of my life away from my mother country. Being an expatriate myself and having managed organizations with multicultural workforces, I have seen some of the complexities of men and women from different backgrounds working together. Some of the challenges in managing a multicultural organization are provided by the expatriates and their families who have taken the very bold move to leave their familiar environment behind and face a new world. It is therefore important for companies and organizations who employ expatriates and for managers, who work with expatriates, to have some insight in the challenges that come with employing foreign workers. This is so for foreign companies and organizations deploying workers to this part of the world but also for Ethiopian companies deploying personnel to other African countries, the America’s, Europe or Asia. Expatriates often face problems when entering a foreign culture and the expatriate work assignment follows a typical cycle. It all begins with the initial shock after the employee is informed by the company of the foreign posting. The nature of the recruitment, selection and orientation provided during this stage can have an important influence on the assignment’s eventual success. Ideally, the employee, along with spouse and family, is allowed to choose whether or not to accept the opportunity. Also, ideally, proper pre-departure support and counselling (including an exploratory visit) are available to give the employee realistic expectations as to what is to come. As the foreign assignment begins, the expatriate and the family now face the challenge of adjusting to the new country. There are three phases of adjustment, stretching over several months. First is the so called tourist stage, in which the expatriate enjoys discovering the new culture. Second is the disillusionment stage, in which the expatriate’s mood descends as the difficulties with the new culture become more evident. These difficulties typically include the inability to converse well in the local language, difficulty in obtaining certain products and food supplies of personal preference and so on. Third, the expatriate’s mood often hits bottom in the stage of culture shock, at which point frustration and confusion result from the continuing challenge of living in a foreign environment. If the culture shock is handled successfully, the expatriate begins to feel better, to function more effectively and to lead a reasonably normal life. If not, the expatriate’s work performance may continue to deteriorate and he or she will eventually return home, having not really done the job well or enjoyed the time spent abroad. A proactive and progressive employer can minimize the possibility of performance problems in expatriate assignments by: ·Carefully recruiting and selecting employees who have the appropriate skills and motivation to go abroad. ·Providing adequate training and orientation in preparation for life in the foreign culture. ·Actively supporting employees while on assignment abroad, particularly during the first few months. ·Paying careful attention to the needs of the employees’ spouses and children since many failures are due to their inability to adapt to the new country. At the end of the expatriate assignment, perhaps after 3 or 4 years, the employee returns home. Surprisingly, this re-entry process can be even more stressful than was the adaptation to the foreign culture. There are two major reasons for this problem. One is that after an extended period away, the expatriate and his or her family have changed. The home country has changed as well. So, rather than just falling back in it, it takes time to get used to living at home again. The second problem is that, often, little thought is given to assigning the returned expatriate a job that matches his or her current skills and abilities. While abroad, the expatriate has often developed the ability to function with a great degree of independence – something that may or may not be permissible at home. This issue is an important concern for serious international employers. Two strategies can help minimize re-entry shock. One way is to plan for re-entry as carefully as for the initial assignment. The second way is for the company to recognise the skills and abilities gained during the foreign assignment and to assign the returned expatriates to jobs that match their abilities. There are two factors that are important in considering taking expatriate assignments more serious than is often done. In the first place, employees working abroad are far more expensive than at home and again much more expensive than local employees. The expatriate must therefore have added value and high performance must be facilitated as much as possible. In the second place and perhaps even more important, it is people, their spouses and their children that we are dealing with and their happiness can be seriously affected as a result of poor expatriate human resources management. Effective expatriate HRM may instead lead to added value indeed for the company and to a rich experience for the family which enjoyed living abroad.