Nationality, social network and psychological well-being: expatriates in China

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1 Int. J. of Human Resource Management 15:4 June/15:5 August Nationality, social network and psychological well-being: expatriates in China Xiaoyun Wang and Rabindra N. Kanungo Abstract Expatriate social networks constitute an under-emphasized area in expatriate literature. The current study contributes to the expatriate adjustment literature by empirically testing the relationship between expatriate personal networks and psychological well-being. The current study also investigates the hypothesis that expatriates from different cultural backgrounds will establish different social networks and adjust differently in China. A survey of 166 expatriates in China from North America, Europe and other countries in Asia showed significant support for the hypothesis that expatriate network characteristics have a direct and significant influence on expatriate psychological well-being. In addition, as predicted, expatriates in China from different cultural backgrounds (Overseas Chinese, other Asian, North American and European) established personal networks with different characteristics. Keywords China. Expatriate social network; expatriate psychological well-being; expatriate in Introduction Human beings have a fundamental need to belong, which motivates the establishment of significant interpersonal relationships and frequent contacts with other people (Baumeister and Leary, 1995). Expatriates entering foreign countries will experience deprivation in relation to this need, since they have been cut off from their previous interpersonal relationships and established social networks. This deprivation, in addition to the perception of uncertainty in the new local environment, will significantly threaten the expatriate s psychological well-being, and may even cause severe illness (Kuo and Tsai, 1986; Wang, 2002). Although the expatriate can keep in contact with his/her home social network through communication technologies such as , telephone or fax, this type of social interaction is usually not helpful at all due to long distances (Wellman and Wortley, 1990). Therefore, it is very important for expatriates to take action in various ways to initiate social networks in local country and thereby reduce uncertainty and stress (Caligiuri and Lazarova, 2002; Kuo and Tsai, 1986; Wang, 2002). A social network is broadly conceptualized as a finite set or sets of actors that are connected by one or more specific types of relational ties (Hall and Wellman, 1985; Wasserman and Faust, 1994). According to this definition, actors can be individual Xiaoyun Wang, Asper School of Business, University of Manitoba, Winnipeg, Manitoba R3T 5V4, Canada ( Rabindra N. Kanungo, McGill University, Montreal, Quebec, Canada. The International Journal of Human Resource Management ISSN print/issn online q 2004 Taylor & Francis Ltd DOI: /

2 776 The International Journal of Human Resource Management persons, such as the expatriate, peer expatriates, local working partners and local friends. Network ties serve as channels for social resources, such as informational, emotional, instrumental and appraisal support (House, 1981; Pattison, 1994). A personal network possesses a certain number of characteristics, such as size, diversity, closeness and frequency. A large, diversified and active personal network will help the expatriate to obtain social resources that will aid him/her in adjusting to the local environment (Kuo and Tsai, 1986). In the expatriate adjustment literature, expatriate psychological well-being and its predictors have received some attention (e.g. Aycan, 1997; Black, 1990; Searle and Ward, 1990; Selmer, 2001b). The expatriate social network, however, has long been underemphasized (Manev and Stevenson, 2001; Wang, 2002). Some scholars (e.g., Aycan, 1997; Caligiuri and Lazarova, 2002; Thomas, 1998; Mendenhall and Macomber, 1997), in critiques of the expatriate literature, have called for more attention to the interactions and complexity of the expatriate adjustment process. As early as 1979, Stening warned that cross-cultural adjustment literature lacked a significant number of interpersonal level studies. Unfortunately, this gap still exists. Although there are some studies linking aspects of social interaction, such as interpersonal skills and interactional adjustment, with psychological outcomes (Black, 1988; Black and Gregersen, 1991; Black and Stephens, 1989; Ones and Viswesvaran, 1999; Tung, 1998a), there have been almost no in-depth investigations examining the nature of interpersonal relationships. In a notable exception, Manev and Stevenson (2001) explored the formation of expatriate social networks within one multinational enterprise (MNE) and found that expatriates tended to form social networks with colleagues from similar cultural backgrounds in different subsidiaries of the MNE. For example, instead of networking with colleagues from other cultural backgrounds in the same subsidiary, an Indian manager is more likely to establish a personal network with other Indian managers in other subsidiaries for support, even though this necessitates long-distance interaction. It is argued here, however, that, while a long-distance informal network might be helpful to expatriates in exchanging information about the parent company s policies, it will not be helpful at all in reducing uncertainty and stress caused by the unfamiliar local environment or in adjusting to the local living, working and social interaction conditions (Black et al., 1991). Consequently, the current study focuses on the personal network the expatriate will form in the local environment. The first objective of the current study is to test empirically the relationship between characteristics of the expatriate social network and expatriate psychological well-being (Wang, 2002). Even though this is a general argument that potentially applies to expatriates in all cultures, the current study will focus on expatriates in China. Expatriates have experienced difficulties working in China (Forster, 1997). Despite these difficulties, MNEs are still sending a significant number of expatriates to China for various reasons, such as managerial control, position filling, management development and organizational development (Clegg and Gray, 2002; Edstrom and Galbraith, 1977; Harzing, 2001). This study will investigate whether establishing social networks in local environment will help expatriates to overcome these difficulties and strengthen their psychological well-being. The second objective of the current study is to explore how expatriate groups in China from different regions of the world will form personal networks with different characteristics. Due to the fact that expatriates from different regions, such as European and Asia, will experience varying degrees of cultural distance in relation to Chinese culture (Black et al., 1991; Parker and McEvoy, 1993), they will therefore be expected to adjust differently and form different types of personal networks. Although there have been other studies focusing on differing levels of adjustment of different expatriate groups in China (e.g. Selmer, 2001a, 2001b; Selmer and Shiu, 1999),

3 Wang and Kanungo: Nationality, social network and psychological well-being 777 there has been no study that explores expatriate social networks in China. The current study will be the first to explore how expatriates from different cultures form different social networks in a given context. Expatriate social networks and psychological well-being Expatriate psychological well-being Scholars have variously defined expatriate adjustment as an acculturation process (Aycan, 1997), a U-curve process (Black and Mendenhall, 1991; Oberg, 1960) or a coping process (Folkman et al., 1986; Folkman and Lazarus, 1980; Selmer, 2001a). The indicators of the adjustment process have been variously proposed to be level of psychological adjustment (e.g. Aycan, 1997; Searle and Ward, 1990), the acceptance of the customs of the host country and psychological comfort (e.g., Black, 1988, 1990) or the emotional status of expatriates (e.g. Folkman et al., 1986; Folkman and Lazarus, 1980; Selmer, 2001a). Although the different perspectives mentioned above view the expatriate from different angles, there is a general consensus among them that expatriation is a stressful event and that adjustment is needed to reduce stress. Furthermore, as reports on expatriate overseas adjustment demonstrate, it is obvious that a main cause of crosscultural assignment failure is the stress and uncertainty experienced by the expatriate (Forster, 1997; Tung, 1981). Logically, if expatriation is a stressful event, adjustment to this stressful event would be indicated by a reduction in experienced stress or higher levels of psychological well-being. Moreover, as mentioned above, when expatriates enter foreign countries, their psychological well-being will be threatened not only by the uncertainty of the environment and culture, but also by the loss of their previous social networks. If we define expatriate psychological well-being as the positive psychological functioning of individuals (Ryff, 1995), it becomes apparent that it is very important for expatriates to re-strengthen their psychological well-being in order to carry out their overseas assignment effectively. However, psychological well-being has not yet been defined in the literature as an indicator of expatriate adjustment, and its important role in promoting expatriate performance has not yet been emphasized. The construct of psychological well-being developed by Ryff (e.g. 1989, 1995) will be adopted in this study. According to Ryff, psychological well-being is not equal to freedom from stress, happiness or satisfaction. Psychological well-being is the state in which an individual can function psychologically well enough to realize his/her true potential. Ryff further proposes six key dimensions of psychological well-being. These dimensions are self-acceptance, positive relations with other people, autonomy, environmental mastery, purpose in life and personal growth (Ryff, 1989, 1995). Network characteristics The expatriate network structural characteristics are the patterns of ties among network partners, which can be described in terms of size, diversity, localization, closeness and frequency (Burt, 1983; Hall and Wellman, 1985; House and Kahn, 1985; Marsden, 1987; Marsden and Campbell, 1984). For the expatriate personal network, size is the total number of local friends, colleagues and/or peer expatriates. A large personal network in the host country signals that the expatriate has re-rooted his/her network in the new environment (Kuo and Tsai, 1986). With a large number of network partners around the expatriate, he/she will know where to obtain different kinds of support and will feel more certainty and less ambiguity about staying overseas (Caligiuri and Lazarova, 2002; Wang, 2002). In domestic literature, it has been demonstrated that large

4 778 The International Journal of Human Resource Management networks are associated with better mental health (Barrera, 1981; House and Kahn, 1985; Walker et al., 1994). Diversity can be defined as social heterogeneity, or how many kinds of actors exist within the expatriate personal network. This includes to what extent the network comprises both local partners and peer expatriates (cultural diversity) (Wang, 2002). Since expatriation is a highly stressful and uncertain event, it is reasonable to assume that social support from different sources, such as local nationals and peer expatriates, is extremely important in helping expatriates adjust to this stressful environment (Caligiuri and Lazarova, 2002). Because the focal expatriate s uncertainty and stress mostly come from his/her unfamiliarity with the local culture and environment, local nationals can be an extremely important source of informational, instrumental and feedback support. At the same time, peer expatriates are also important sources of emotional and feedback support. Because the focal expatriate can share his/her positive or negative experiences with similar others, interaction with peer expatriates will decrease the level of the focal expatriate s frustration (Caligiuri and Lazarova, 2002; Lin et al., 1985; Mehra et al., 1998). Localization is defined as to the extent to which expatriates have local nationals as their supporters in their personal network. This construct is unique to the expatriate population. Expatriation is a highly stressful and uncertain event. It is expected that social support from local nationals is extremely important to help expatriates adjust in the stressful environment. Even though expatriates were more likely to socialize with peer expatriates (Gudykunst, 1983; Spector, 1977; Tung, 1998b), local nationals will be an extremely important source of social support (Caligiuri and Lazarova, 2002; Wang, 2002). Localization is similar to cultural diversity in terms of the involvement of local nationals in the expatriate personal network. However, this variable captures the extent to which the expatriate has either local nationals or peer expatriates (low localization) as supporters, while cultural diversity captures the balance of having both local nationals and peer expatriates as supporters. It is expected that higher localization will associate with higher expatriate psychological well-being. Closeness refers to the intensity of ties among network partners (Marsden and Campbell, 1984). It describes the dyadic relationship and the emotional intensity between the expatriate and his/her partners. Frequency represents the number of times that the expatriate contacts his/her partners within a limited time frame. The overall closeness and frequency of ties between the expatriate and his/her partners will indicate the level of establishment of a social network in the local society. Network closeness with peer expatriates will provide the expatriate with trust, communication and emotional social support in the same way that strong ties with others do in the domestic context. Network closeness with local nationals can provide outside informational and instrumental resources just as weak ties do in the domestic context, because local nationals closely networking with the expatriate will also have access to other local social network cliques (Wang, 2002). Network frequency will have a similar positive impact on expatriate psychological well-being. Black s (1990) study demonstrated that expatriate interaction frequency (from annually to daily) with local national friends, home national friends and social groups will facilitate their crosscultural adjustment. Hypothesis 1: The following expatriate social network characteristics will positively influence expatriate psychological well-being: (a) size, (b) cultural diversity, (c) localization, (d) closeness and (e) frequency.

5 Wang and Kanungo: Nationality, social network and psychological well-being 779 Nationality and social network Expatriates in China come from a variety of countries and global regions. When they enter China, they bring with them different cultural values and working customs. These values and customs will encounter the host cultural values and customs, which might or might not be congruent with them. Therefore, it is reasonable to assume that expatriates from different countries/regions will adjust differently in China. There are empirical studies supporting this assumption (Selmer, 1997, 1999, 2001b; Selmer and Shiu, 1999). Selmer (2001b) reported that Western European managers were less well adjusted than their North American counterparts in China. Selmer (1997, 1999) also found that North American expatriates adjusted even better than Western Chinese expatriates in China (Chinese from Western countries sent by MNEs to China). It is also reasonable to assume that expatriates from different countries/regions will establish different social networks in China. This study will investigate differences in social network characteristics among expatriates from different countries/regions. The subjects in this study will be categorized into four groups, i.e. Overseas Chinese (Chinese from Hong Kong, Taiwan and elsewhere), Other Asian (from other countries in Asia, such as Japan or Korea), North Americans (US and Canada) and Europeans. The logic of this grouping is based on Hofstede s (1980) cultural mapping and other previous studies on cultural clustering (Leung et al., 1996; Ronen and Shenkar, 1985; Selmer, 2001b). Asian cultures, such as those of China, Japan, Korea and Singapore, are under the influence of Confucianism, whereas Western cultures (European and North American) are not (Leung et al., 1996). In empirical studies, Asian cultures are found consistently clustered together (Hofstede, 1980; Ronen and Shenkar, 1985). However, grouping expatriates in China into only two groups, i.e. Asian and Western, would be too general. Therefore, Asian expatriates are grouped more specifically to differentiate overseas Chinese expatriates (hereafter referred to as Overseas Chinese ) from other expatriates from Japan and Korea (hereafter referred to as Asian ). Chinese expatriates from Hong Kong, Taiwan and Singapore have the same cultural roots as the Chinese in Mainland China, but are from different economic, political and historical backgrounds. As expatriates, these overseas Chinese still need to take some time to adjust to the local culture, even though they do not have language problems. However, due to cultural similarity and absence of language barriers, these overseas Chinese expatriates should easily make friends and establish social networks during their assignment in Mainland China. Asian expatriates from other countries in Asia, such as Japan and Korea, will be less likely to do so due to historical and language issues. The Western expatriate category is grouped more specifically to separate North American expatriates from European expatriates. Based on Hofstede s (1980) study, North American (Canada and US) cultures are very similar to each other, while European cultures have their own similarities. Moreover, China has been dramatically exposed to North American culture over the two decades since open-door policy implementation in the late 1970s. Chinese culture (on the mainland) has been transformed to a certain extent towards North American assumptions, and Chinese cultural awareness of North American culture has increased (Wang, 1994; Zhao, 2000). Selmer (2001b) actually found in his empirical study that North American expatriates were better socio-culturally adjusted than European expatriates in China, which might be explained by the abovementioned Chinese cultural awareness of North American culture. The above-mentioned four groups of expatriates face different degrees of cultural distance when they enter China (Hofstede, 1980; Leung et al., 1996). Since cultural distance will significantly influence social interactions with local people

6 780 The International Journal of Human Resource Management (Black and Stephen, 1989; Porter, 1972; Parker and McEvoy, 1993; Searle and Ward, 1990; Ward and Kennedy, 1993), it is expected in this study that expatriates from the different groups will have social networks with different characteristics and adjust differently in China. Logically, overseas Chinese will experience the least cultural distance and uncertainty. The same cultural roots and absence of language barriers will facilitate their adjustment in China. Therefore, it will be easier for them to re-establish social networks in Mainland China compared with the other three groups of expatriates. It is expected that they will typically have larger network size, more diversified network composition, closer network relationships and more frequent contact with members of their networks. The group that will have the most difficulty reestablishing social networks in China is expected to be European expatriates. Due to their higher cultural distance and less understanding from local people compared to North American expatriates, European expatriates have more difficulty establishing social networks and adjusting in China. Other Asian and North American expatriates will fall somewhere in between the Overseas Chinese and European expatriates in terms of ease of social network establishment and psychological adjustment. However, Selmer (1997, 1999) found that American expatriates adjusted even better than overseas Chinese, which contradicts the above logical expectations. Given the mixed finding, it is still too early to predict the differences among these four expatriate groups based on the above reasoning. Moreover, because this is the first study to explore the expatriate social network differences among these four expatriate groups, it would be prudent to predict only that these four expatriate groups are different from each other in terms of their social network characteristics and psychological well-being. We shall leave the relative differences to be determined by our data set. Hypothesis 2: Hypothesis 3: Overseas Chinese expatriates, Asian expatriates, North American expatriates and European expatriates will establish social networks that differ in size, cultural diversity, localization, closeness and frequency. Overseas Chinese expatriates, Asian expatriates, North American expatriates and European expatriates will differ in their level of psychological well-being in China. Control variables As discussed earlier, scholars have identified many important factors that influence expatriate cross-cultural adjustment. It has been demonstrated that cross-cultural training has a positive influence on skill development, adjustment and performance (Black and Mendenhall, 1990; Caligiuri et al., 2001; Deshpande and Viswesvaran, 1992). Compensation has also been found to be an important factor in expatriate adjustment and performance (Bonache and Fernandez, 1997; Parker and McEvoy, 1993; Suutari and Tornikoski, 2001). Overseas experience is also regarded as an antecedent of expatriate adjustment and performance (Birdseye and Hill, 1995; Parker and McEvoy, 1993). Demographic factors such as gender and marital status are also discussed in expatriate literature as antecedent factors of expatriate adjustment (e.g., Adler, 1984; Caligiuri et al., 1999; Caligiuri and Tung, 1999; Parker and McEvoy, 1993; Selmer, 2001c; Takeuchi et al., 2002). Other factors, such as duration of the current assignment and size of organization, have an important influence on expatriate adjustment (Birdseye and Hill, 1995; Parker and McEvoy, 1993; Selmer, 2001c). It is expected here that these factors will also influence expatriate personal network

7 Wang and Kanungo: Nationality, social network and psychological well-being 781 establishment and psychological well-being. Therefore, the effects of these factors will be controlled. Since cities in China differ in terms of size, living condition and level of commercialization, expatriates in different cities are expected to experience different difficulties. Therefore, the cities from where the data was collected will be another control variable. Method Sample and procedure Expatriates working in four cities in China (Beijing, Shanghai, Dalian and Suzhou) were sampled. The reasons for choosing these four cities is that these four cities are commercialized at different levels; two are large cities and two are medium-sized cities; two are located in the north and two in the mid-south of China. With these four cities, the size, the commercialization and the location of the cities can be controlled. One hundred and sixty-six (166) usable responses were collected, with a response rate of 41.5 per cent. The descriptive characteristics of this sample are reported in Table 1. The participants were asked to fill out a questionnaire containing items measuring psychological wellbeing and to indicate the names and relationships of the people who had provided them support over the previous six months in China. The language of the questionnaire was English. Because all sampled expatriates were from multinational corporations, and their working language was English, there were no language difficulties in the English version questionnaire. Table 1 Sample characteristics Demographic characteristics Numbers Percentage Gender Male Female Marriage Single/divorced Married Nationality background Asian (speak Chinese) Asian (others) North America Europe Length in China, 18 months months months Organization size Small (,200) Medium ( ) Large (.700) Satisfaction towards salary Mean 4.06 SD 1.13 Training before arrival No Yes Previous overseas experience No Yes Cities Suzhou Dalian Shanghai Beijing

8 782 The International Journal of Human Resource Management Instruments Network characteristic instrument and data treatment The network characteristic measurement for expatriates was developed using Burt s (1998) name generator methodology for network structure instrument. The expatriate participants were asked to recall people who had helped them in the previous six-month period. This measurement has twenty items composed along with informational support, instrumental support, emotional support and appraisal support (House, 1981). Overall, 691 names were generated by the 166 participants. After the name generation, the participants were asked to report other information about each person they had named. For example, beside each name, they reported the person s nationality, and evaluated on 4-point scales how close they felt to the person (1 distant; 2 not close; 3 close; 4 intimate) and how frequently they had contact with the person (1 more than once a month; 2 monthly; 3 weekly; 4 daily). The network data for each participant were saved in a separate file in order to calculate network characteristic variables. The independent variable network size is simply the number of people reported by each expatriate participant. Participants were asked to name three to fifteen people who had helped them. The variable of localization is the percentage of local partners in each participant s support network. If, for example, among ten people named by an expatriate, eight were local Chinese, the localization of this expatriate s network would be.80. Cultural diversity is defined as the extent to which an expatriate s support network has both local Chinese and peer expatriates. The variable of cultural diversity is calculated by multiplying the respective percentages of local Chinese and peer expatriates in the support network. For example, if an expatriate s network size was ten, composed of eight Chinese partners and two peer expatriates, this individual s network cultural diversity would be.16 (.8*.2). The closeness and frequency of the expatriate network is the average score of the expatriate closeness and contact frequency with all partners. It should be noted that the above three network variables, network size, cultural diversity and localization, are algebraically related to each other. As described above, the localization is the number of local friends divided by the total network size, and the cultural diversity is the product of localization times the percentage of peer expatriates. However, these three variables are theoretically independent from each other and represent different network characteristics of the expatriate network as stated in previous sections. Moreover, from the Table 2, it is clear that, even though these three variables relate to each other, the correlation coefficients are only modest. Therefore, it is interesting to explore their independent and different impact on expatriate psychological well-being. Psychological well-being Ryff and Keyes (1995) eighteen-item 6-point Likert scale for psychological well-being was adopted in this study. Reported reliability of this scale was.86 (Wang, 2001). Demographic data and other control variables Respondents were asked to provide demographic data, such as gender, marital status, nationality and mother language. Other factors, such as duration of the current overseas assignment, size of employing organization and satisfaction with salary were also measured by single-item questions. Data on whether expatriates received training before arrival and whether they had overseas experience were also collected with single-item questions. The sources of data (cities) were recorded by the researcher.

9 Wang and Kanungo: Nationality, social network and psychological well-being 783 Table 2 Description, reliability and correlation table M SD a Control variables Gender n/a Marriage status n/a 2.22** Length in China (months) n/a ** Organizational size n/a * 2.03 Satisfaction of salary n/a * * Training before arrival n/a *.10 Overseas experience n/a 2.20** *** Cities n/a * ***.14 Dependent variables Psychological well-being ** ***.26***.04 Independent variables Network size n/a * *** Cultural diversity n/a **.22** Localization n/a *** *.14 Network closeness *** ** Network frequency * Notes p,.10, two-tailed; *p,.05, two-tailed; **p,.01, two-tailed; ***p,.001, two-tailed.

10 784 The International Journal of Human Resource Management Results Descriptive and reliability analyses and correlation coefficients of all variables are presented in Table 2. All the means and standard deviations are within reasonable ranges. The reliability coefficients of psychological well-being and two network variables are also acceptable. The reliability coefficients for network closeness and frequency were calculated based on Marsden s (1993) formula for network variables that treated network closeness and frequency as composition measures. The remaining variables are either single-item measures or counting measures (network size, cultural diversity and localization), where the reliability analysis was not applicable. All correlation coefficients are low to modest, ranging from.01 to.44. Due to the fact that network characteristic variables and psychological well-being were measured with totally different instrument formats and network characteristic variables were calculated from factual reporting, common method variance is not a major concern in this study. Hierarchical regression analyses were conducted to test hypothesis 1. With the hierarchical regression procedure, the controlling variables effects on expatriate psychological well-being can be removed before checking the contribution of independent variables (network characteristics) against the explanation of the dependent variable (expatriate psychological well-being) (Cohen and Cohen, 1983). The controlling variables, such as gender, marriage, length of stay in China, organization size, satisfaction with salary, training, overseas experience and cities were entered into the models at the first step. These variables explained 16 per cent of the variance of expatriate psychological well-being. At the second step, all five network characteristic variables were entered together to test the overall influence of network characteristics on expatriate psychological well-being. Altogether, the network characteristics explained 16 per cent of the variance of expatriate psychological wellbeing (DR 2 ¼ :16; DF ¼ 7:18; p, :001). In order to test the independent influence of each network characteristic on expatriate psychological well-being (hypotheses 1a to 1e), regression models 1 to 5 were conducted (Table 3). The R-square change and F-value change at the bottom of Table 3 indicate whether the main variables contribute in an additive fashion, beyond the controlling variables, to the explanation of the variance of the dependent variable. As shown in Table 3, network size has the most significant and positive influence on expatriate psychological well-being (b ¼ :31; p, :001; DR 2 ¼ :09). Hypothesis 1a is thus confirmed. Hypothesis 1b and 1e, which predict the positive influence of network cultural diversity and network frequency on expatriate psychological well-being, are also confirmed (b ¼ :16; p, :05; DR 2 ¼ :03 and b ¼ :14; p, :05; DR 2 ¼ :02; respectively). However, network localization (H1c) was not found to have significant influence on expatriate psychological well-being. Hypothesis 1c is therefore not supported. Network closeness was found to significantly, but negatively, influence expatriate psychological well-being (b ¼ 2:16; p, :05; DR 2 ¼ :02). Hypothesis 1d, which predicts the positive influence of network closeness on expatriate psychological well-being, was thus rejected with an opposite sign. In order to test hypotheses 2 and 3, the data were examined with univariate analyses of variance (ANOVAs) to test the differences among four expatriate groups along with dependent and independent variables (see Table 4 for the results). As indicated above, the four groups of expatriates are Overseas Chinese, Asian, North American and European expatriates. Hypothesis 2 predicts that these four groups of expatriates will establish different types of social networks in the local environment. In other words, the characteristics of their social networks will differ from each other. The results, shown in Table 4, confirmed this hypothesis. Among the five network characteristics, the four

11 Wang and Kanungo: Nationality, social network and psychological well-being 785 Table 3 Hierarchical regression analysis for hypotheses testing Psychological well-being General model Model 1 Model 2 Model 3 Model 4 Model 5 Gender Marriage status Length stayed in China Organizational size * 2.17* 2.19* 2.17* 2.19* Satisfaction of salary Training before arrival 2.21** 2.22** 2.23** 2.23** 2.23** 2.23** Overseas experience.16*.15*.17*.22**.17*.19* Cities Network size.33***.31*** Network cultural diversity.05.16* Network localization.15*.11 Network closeness 2.15* 2.16* Network frequency.17*.14* Step 1 R Step 1 F 3.69*** 3.69*** 3.69*** 3.69*** 3.69*** *** Step 2 DR Step 2 DF 7.18*** 18.79*** 4.72* * 3.76* Adjusted R Control and independence variables Notes p,.10, two-tailed; *p,.05, two-tailed; **p,.01, two-tailed; ***p,.001, two-tailed.

12 786 The International Journal of Human Resource Management Table 4 Means (standard deviations), ANOVA F values and p values for nationality Nationality* Comparison of means G1 (n ¼ 31) G2 (n ¼ 24) G3 (n ¼ 46) G4 (n ¼ 58) F (df ¼ 158) p Dependent variable Psychological well-being 4.41 (.73) 4.00 (.56) 4.52 (.58) 4.62 (.61) Independent variables Network size 3.55 (1.34) 3.67 (1.71) 4.72 (2.75) 5.04 (2.99) Network cultural diversity.11 (.11).08 (.09).16 (.09).11 (.11) Network localization.66 (.34).43 (.38).45 (.29).29 (.31) Network closeness 3.00 (.70) 2.92 (.46) 2.85 (.42) 2.74 (.44) Network frequency 3.08 (.75) 3.00 (.80) 3.44 (.57) 3.27 (.48) Note * For nationality, G1 Asian expatriates from Taiwan and Hong Kong who speak Chinese; G2 is Asian expatriates from Japan, India or Korea; G3 is expatriates from North America; and G4 is expatriates from Europe. expatriate groups differ in four of them (size, cultural diversity, localization and frequency). However, the four groups are not significantly different from each other in network closeness (F ¼ 1:53; p. :10). For network size, European expatriates reported the highest number of people who have helped them, while the overseas Chinese group reported the lowest number (M ¼ 3.55 and 5.04 for the Overseas Chinese group and for the European group, respectively). For network cultural diversity, which indicates the extent to which the expatriate network is composed of both peer expatriates and local partners, North American expatriates reported the most balanced personal network (M ¼ :16; SD ¼ :09), while the Asian expatriate group reported the least balanced (M ¼ :08; SD ¼ :09). For network localization, which indicates the extent that the expatriate networks with local partners, the Overseas Chinese group reported the most (M ¼ :66; SD ¼ :34), while the European expatriates reported the least (M ¼ :45; SD ¼ :29). For network frequency, the North American group reported the most frequent contacts with their network partners (M ¼ 3:44; SD ¼ :57), while the Asian group reported the least (M ¼ 3:00; SD ¼ :80). Hypothesis 3 predicts that the four expatriate groups will differ in psychological wellbeing. As demonstrated in Table 4, these four groups do indeed differ on the psychological well-being score (F ¼ 5:99; p, :001), with the European expatriates scoring the highest and the Asian expatriates the lowest (M ¼ 4:62; SD ¼ :61; M ¼ 4:00; SD ¼ :56; respectively). Hypothesis 3 is thus also confirmed. Discussion This paper not only brings social network perspective into expatriate adjustment literature, but also empirically confirms the important impact of social network characteristics on expatriate psychological well-being. Upon arrival in the foreign environment, the expatriate s previous social network is interrupted and his/her psychological well-being is threatened. The establishment of a personal network in local environment will signal the settlement and will facilitate the maintenance of psychological well-being. The results confirmed most of the hypotheses that expatriate social network characteristics, such as network size, network cultural diversity, network closeness and contact frequency, both as a set and separately significantly influence expatriate psychological well-being. A more extensive network, a balanced network

13 Wang and Kanungo: Nationality, social network and psychological well-being 787 composed of both local people and peer expatriates and an active network with frequent contact, indicate the social integration of expatriates in the local environment. This integration is highly correlated with expatriate psychological well-being and may facilitate the success of the expatriate assignment in China. Moreover, expatriates from different cultural groups did establish different types of social networks and adjusted differently in China. Unexpected findings in this study include the non-significant influence of network localization and the significant, but negative influence of network closeness on expatriate psychological well-being. Network localization in this paper is defined as the extent to which expatriates include local people in their social network. This network characteristic is unique to the expatriate network and it reflects the expatriate s interactive adjustment with local people. The more comfortable the expatriate feels about interacting with local people, the better adjusted he/she is likely to be (Black, 1988; Caligiuri and Lazarova, 2002). However, in this study, we did not find a correlation between the network localization variable and expatriate psychological well-being. The reason for this lack of correlation could be that socializing only with local partners is not sufficient for the expatriate to adjust to the local environment. Support from other sources, such as peer expatriates, is also important to make the focal expatriate feel certain and confident. Since the local partners and the peer expatriates will provide the focal expatriate with different forms of social support, as mentioned previously, support from both sides is more beneficial than from single side. This speculation was actually confirmed by the finding of the positive relationship between network cultural diversity and expatriate psychological well-being. It was found that the extent to which the expatriate network includes both peer expatriates and local people as partners (cultural diversity) significantly and positively influences expatriate psychological well-being. The negative and significant relationship between network closeness and expatriate psychological well-being is also an unexpected finding. Network closeness refers to the intensity of ties and describes the dyadic relationship between the expatriate and each partner in his/her personal network. This intensified relationship is defined by mutual trust and attraction between the expatriate and his/her partners. It was predicted that close partners will be willing to give the expatriate more and better support to help him/her deal with stress and uncertainty (e.g. Amato, 1990; Caligiuri and Lazarova, 2002; Walker et al., 1994). However, the data in this study did not show this relationship, and even indicated that expatriate network closeness relates negatively to expatriate psychological well-being. To explain this surprising finding, it is necessary to bring in another argument concerning network closeness and its relationship with social support. This argument emphasizes that, although close/strong ties provide individuals with emotional support, weak ties (low-closeness) are sometimes more helpful in providing the individual with informational and instrumental support (Granovetter, 1973; Lin, 1982, 1983). The reason that weak ties are more helpful, according to this view, is that weak ties usually have more access to outside information and other resources. For expatriates, while emotional support from close ties is helpful, the informational and instrumental support from less close ties might be vital in reducing stress and uncertainty caused by the unfamiliarity of the local environment. The results of this study also lend support to the idea that, for expatriates, weak ties are more helpful than close ties. Moreover, the current study also confirmed that expatriates from different cultural backgrounds tend to form different types of networks and adjust differently in China. It was found that European and North American expatriates formed larger networks than their Asian counterparts. Meanwhile, the North American expatriate group s network

14 788 The International Journal of Human Resource Management had the highest cultural diversity score and the most frequent network contacts. On the other hand, the Asian expatriates scored lower on most of these network characteristics. The Asian expatriates also scored the lowest on psychological well-being, in contrast to Overseas Chinese expatriates (further analysis found that the psychological well-being of overseas Chinese expatriates was not significantly lower than that of Western expatriates; F ¼ 1:21; p ¼ :30). This is an interesting finding, which adds support to Selmer s (1997, 2001b) studies that found that North American and European expatriates adjusted better in China than expatriates from Asia. A possible reason for this could be that North American and European expatriates have different physical characteristics than local people and therefore draw more attention in China. This explanation is based on Adler s (1984) study (see also Adler, 2002), in which she found that female expatriates adjusted better than their male counterparts in their overseas assignments. She proposed that this difference was due to the fact that female expatriates are more eye-catching and attractive than male expatriates. Since Asian expatriates, especially Japanese and Korean expatriates, look similar to Chinese locals, they might not attract as much attention from local people as Westerners. Another explanation for the poorer adjustment of Asian expatriates might be the use of different coping strategies (Lazarus and Folkman, 1984). In other words, American and European expatriates may take a problem-focused coping strategy to actively initiate social interactions and to establish a balanced and active social network, while Asian expatriates may take a symptom-focused strategy and passively form network cliques with smaller size and less frequency of contact. However, since we did not measure the coping strategy of expatriates in this study, the above explanation is only a speculation, even though the statistical means of Asian network characteristics indicated this passiveness. In future research, it would be meaningful to test this speculation. For Overseas Chinese expatriates, even though their networks were smaller, closer and less active than those of the Western expatriate groups (see Table 4 for the means), they adjusted as well as their Western counterparts (there was no significant difference from Western expatriate groups in psychological well-being). However, if we take a closer look at the network characteristics of the Overseas Chinese, we see that this group has the highest localization score of the four groups. It is possible that the Overseas Chinese, since they have the least cultural distance from the local Chinese culture, are able to obtain all the informational, emotional, instrumental and feedback support that they need from the local Chinese. While other expatriates may find it hard to obtain emotional and feedback support from local people due to the language barriers and cultural dissimilarity (Lin et al., 1985; Mehra et al., 1998), Overseas Chinese expatriates do not have this problem. They do not need a network as culturally diversified as other expatriates do to obtain various forms of support. Post hoc hierarchical regression analysis for only the Overseas Chinese group supports this proposition and indicates that, while all other network characteristics have no significant effect on their psychological well-being, network localization does (b ¼ :46; p, :05; DR 2 ¼ :19). Overall, the current study confirms that expatriate social network establishment is very important for expatriates to re-strengthen their psychological well-being. It was found that social network size positively predicts expatriate psychological well-being. Network size signifies the establishment of a social network in the local environment by the expatriate. Moreover, the current study also suggests that the expatriate should socialize not only with peer expatriates, but also with local people. The existence of both peer expatriates and local partners in the expatriate s personal network guarantees social support from different sources. Active social networks with frequent contacts with partners are also helpful to expatriates in adjusting to the local environment.

15 Wang and Kanungo: Nationality, social network and psychological well-being 789 However, a network clique with high closeness and low cultural diversity will not be helpful to expatriates in their psychological adjustment process. This study has great practical implications for organizations sending expatriates overseas. As demonstrated in this study, social network establishment in the local environment is very important for expatriates because it has a direct effect on their psychological well-being. This finding suggests that organizations should select expatriates with social skills and design their training programme to help the expatriate to socialize and establish a network in the local culture. The current study also suggests that North American and European expatriates in China do not necessarily have more difficulty adjusting than Overseas Chinese; however, other Asian expatriates seem have a more difficult time. Another interesting finding of this study is that a balanced network with both local people and peer expatriates involved is more helpful to expatriates in obtaining support from different sources and in helping them adjust to the local environment. This finding suggests that, especially for expatriates with significant cultural distance from the local environment, it is not necessary to associate only with local people in order to adjust to the local culture. It is also important to have peer expatriates as friends (Caligiuri and Lazarova, 2002) although this is usually natural (Tung, 1998b). In addition, the current study suggests that, in order to adjust to the local environment, the expatriate should take a proactive role in involving him-/herself in interpersonal interactions in the new environment. Establishing a social support network composed of people from different backgrounds will help them to learn more and adapt more quickly to the local environment. The current study contributes theoretically to the expatriate adjustment literature by clarifying the relationship between expatriate personal networks, psychological wellbeing and performance. It is assumed the expatriate s previous social network is interrupted and his/her psychological well-being is threatened upon arrival in the local environment. The expatriate will take the initiative to re-establish a personal network in order to facilitate the adjustment to the foreign environment. This interactive process of social network establishment will facilitate the maintenance of psychological well-being. This article proposes that psychological well-being is an important indicator of expatriate adjustment. Psychological well-being will have a direct and strong effect on expatriate work performance. Other factors at the cultural, organizational and individual levels will interact with the expatriate personal network to influence psychological wellbeing and enhance performance. The conceptual model proposed in this study is testable and should be verified with future empirical studies. The principal limitation of this study is that it has a cross-sectional design. This design constrains us to report the above causal relationships with caution. Even though we found that expatriate psychological well-being and social network characteristics significantly correlate with one another, we cannot interpret this correlation as showing a unidirectional influence from network characteristics to expatriate psychological well-being. We admit that an expatriate s psychological well-being before arrival could have an influence on expatriate social network building in the local environment. However, it is not possible to test this interactive causal relationship between network characteristics and psychological well-being with the current cross-sectional design. In a future study, a longitudinal design would resolve this problem and the above-mentioned causal relationship between network characteristics and expatriate psychological well-being would be clarified. However, as a first step in testing the relationship of social networks and psychological well-being for expatriates, the current study does contribute to the literature as an exploratory empirical study yielding statistical results supporting the hypotheses.

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