Bruning and McCaughey (2005) Define Expatriate Failure

Bruning and McCaughey (2005) define expatriate failure as "an expatriate's premature return from the international assignment or underperformance whilst conducting the assignment". Utilization of poor expatriate selection methods are one reason to expatriate failure (Chen & Tye, 2005). Another reason to the high rate of expatriate failure could be inappropriate expatriate training and development programs (Farner & Luthans, 2002). According to Medich (1995) the most frequent reason for expatriate failure is the expatriate's and/or spouse's inability to adjust to the foreign environment. The expatriates' inability to handle relations with people from other cultures and poor personal adjustment to the new environment is other reasons that lead to a premature return (Medich, 1995). The failure rate for expatriatesworking in a developed country are between 25 and 40 percent, whilst the failure rate for expatriates in still developing countries are around 70 percent. The costs associated with expatriate failure are high and are dependent on the work location. The estimated direct costs of premature return of expatriates are between $250.00 and $1 million. The premature return of expatriates also yields indirect costs like missed opportunities of market development and revenues abroad (Farner & Luthans, 2002). Expatriate failure increases the cost for the home country company in form of additional recruitment cost, relocation expenses, premium compensation, repatriation and replacement costs, and the cost of poor job performance. Expatriates that choose to return home before the assignment is finished might face consequences as lost self-esteem and selfconfidence.

The expatriates' consequences lead to more problems for the parent company, like reduced productivity and reluctance among other employees to accept international assignments (Medich, 1995). Harzing and Ruysseveldt (2004) argue that when addressing expatriate

...