American female expatriates and the Civil Rights Act of 1991: balancing legal and business interests. (Women in Business) Patricia Feltes; Robert K. Robinson; Ross L. Fink.

Brief Summary: Some women at multinational corporations are accepting jobs in foreign countries as a way of advancing their careers, but women still are not accepted as managers in some countries. The Civil Rights Act of 1991 protects women managers in the US.

Full Text: COPYRIGHT Foundation for the School of Business at Indiana Univer 1993

American multinational companies are facing a growing list of conflicting realities as they staff their international divisions. Primary among them is that managers currently based in the United States are reluctant to accept transfers to foreign posts. Meanwhile, an increasing number of managers in any organization are women, many anxious to attain greater status in the firm and interested in accepting positions that will offer visibility and challenge. This interest is legally protected under the provisions of the Civil Rights Act of 1991.

At the same time, companies with operations in many parts of the world must still deal with local mores, customs, and laws. And those local traditions and preferences often differ from--if they are not in total contrast to--American practices. Reconciling these facts while meeting staffing needs adds to the challenges faced by globally oriented companies.

Staffing Foreign Posts

Filling foreign operation positions has long been difficult for many American companies. Upwardly mobile managers have feared that if they were no longer near corporate headquarters for an extended period they would be forgotten. This has been especially true in firms where senior management had historically downplayed the importance of international experience.

There may now be an impetus to reverse this attitude, because the level of vulnerability American firms face from global competitors is changing rapidly. In 1984, 70 percent of firms in U.S. domestic markets faced significant foreign competition; by 1987, the figure was estimated to be 80 percent. As more companies begin to expand their global presence or meet the international challenge domestically, they are finding that a more positive stance may be necessary to encourage the best managerial candidates.

Some U.S. corporations are already beginning to imitate European, Japanese, and Australian firms, which refuse to send any manager on an international assignment unless that person is identified as possessing senior management potential. At Du Pont, for example, almost half of the company's sales are foreign sales. This is making a stint overseas almost essential for promotion to top management.

Women in Management

Women currently account for approximately 41 percent of the managers in the U.S. work force; however, they account for only 6.6 percent of corporate executives. As companies begin to value international experience as necessary for executive positions within a firm, it becomes more expedient for women to participate in those assignments.

Historically, women were discouraged from applying for foreign postings. The differing attitudes of world cultures toward the "male" and "female" role was generally given as the rationale. In addition, there was no legal requirement placed on U.S. companies to consider women for such positions.

Although women still hold a very small percentage of expatriate managerial positions, there has been a marked increase in recent years. A study of American women sent overseas (Taylor et al. 1975) found that a typical assignment lasted less than 30 days. Only one woman of the 291 women transferred overseas by 171 American multinational companies had been assigned to an expatriate position for longer than six months.

Nancy Adler's multi-part study (1984) of expatriate managers showed that of the 13,338 expatriates from 686 U.S. and Canadian firms responding, 402 (3 percent) were female. Adler defined an expatriate as an employee who has been assigned to a professional or managerial position in a country outside the home base of the company for six months or longer.

By 1989, women's representation had risen to 5 percent of American employees on overseas assignments. In a more recent study, J. Stewart Black (1991) found that 6 percent of the 174 respondents who had spent 9 months or more on foreign assignment were female. However, during the same time period, only 1.3 percent of expatriates in the Asian sectors of the Pacific rim were women (Stone 1991). These figures demonstrate increased female participation on longer overseas assignments but do not indicate that their distribution is equal throughout the globe.

Civil Rights Act of 1991

With the passage of the Civil Rights Act of 1964, women and legally defined minorities were granted certain workplace protections. Title VII of the act prohibits discrimination in employment based on gender, race, national origin, or religion. However, until the passage of the Civil Rights Act of 1991, Title VII protections were not relevant to American citizens working abroad for U.S.-controlled firms. A long-standing principle of American law is that Congressional legislation applies only within the territorial borders of the United States unless specifically stated otherwise. Congress used clear language in the 1991 Act to expand coverage by amending the definition of "employee" in Title VII to mean a U.S. citizen employed in a foreign country by an Americanowned or -controlled company. In short, an American now working overseas for a U.S. company enjoys the same equal employment opportunity protection as an American working within the United States. Title VII, however, does not apply to foreign operations that are not owned or controlled by an American employer.

Limitation of Protection

The overseas extension of civil rights protections is not universal or automatic. A company is not required to comply with Title VII if compliance would cause the company to violate the law of the host country. For example, if a U.S. company has an operation in a foreign country that has statutes prohibiting the employment of women in management positions, Title VII would not apply. Because the company would be expected to follow the law of the host country, it could not be liable for sex discrimination under Title VII of the Civil Rights Act of 1964. This is in keeping with the well-established international law practice that countries may subject their own nationals to rules of conduct outside national borders as long as there is no conflict between those rules and the laws of the relevant foreign country. However, if the host country had no law explicitly stating such prohibition, the U.S. company is expected to ensure the U.S. mandated equal opportunities and protections of its U.S. employees.

Potential Effects

U.S. multinationals have been concerned about the effect that the extension of equal opportunity protections will have on their foreign operations. They are aware that there is an increased likelihood of litigation as female expatriates seek to protect their overseas employment rights. Note that 70 percent of the respondents in a Business Week survey of 400 female managers thought women should take legal action if they see evidence of discrimination (Segal and Zellner 1992). The Civil Rights Act of 1991 has increased the geographic reach of both the protections and the remedies of women and ethnic and religious minorities.

A big problem for employers, and indirectly for female expatriates, arises when local custom creates gender barriers that are not overtly stated as national law. In such instances, Title VII would prevail and a female expatriate would be given access to the position even though such an assignment was contrary to host country social mores. The result could be the diminution of company/host country relations. This would be particularly likely if exporting U.S. equal employment philosophies is viewed as a form of "cultural imperialism" by the local community.

There could also be undesirable consequences for female expatriates themselves. For example, if a host country's culture makes sharp distinctions between what men are expected to do and what women are expected to do, U.S. female expatriates may encounter resistance if they are performing traditionally male roles. Failure to accept, or resentment of, the female expatriate's authority could hamper her ability to accomplish her assigned overseas mission. The question then becomes: How does a U.S. multinational obey U.S. law, meet its international staffing needs, and maintain good relations with its foreign host governments?

Plan of Action

In the spirit that preparation is better than litigation, we suggest a plan of action to aid employers. Guidelines that are well conceived, communicated clearly, and enforced throughout the organization offer the best prevention against lawsuits. The following action plan is designed to eliminate potential problems before they become cause for litigation.

* A corporation should sponsor reality training for managers who are or will be stationed abroad. Suitable subject matter should include the culture, values, and traditions of the host country and its people and how these facts may affect the manager. This information would be valuable for any potential expatriate, but particularly so to women and other groups who might be faced with special situations. For example, conduct that would be considered sexist here may not have the same connotation in the host culture. Corporate management, however, must be careful that the training is not used (or perceived to be used) to discourage women and minorities from international assignments. The sessions should include tactics to address potential difficulties, not merely an unbroken list of problems. An emphasis on realistic solutions or approaches is especially critical when the foreign environment is expected to be culturally hostile.

* There should be clear and consistent rules for use at the work site. Ongoing training for supervisors and managers already at the foreign location should be held regularly. The meaning and implementation effects of Title VII should be made familiar to all, including locals who hold supervisory positions. When possible, Title VII can be made explicit company policy at the site. Results of the training should be monitored so that appropriate feedback can be given. Every effort should be made to make the foreign assignment a success for all concerned.

* Use local consultants to identify potential problems. No one will understand the traditions and habits of the local populace as well as one of the locals themselves. Consulting with a responsible consultant who is cognizant of the cultural artifacts and the needs of business will help an organization act rather than react to any difficulties.

* Consultants should clarify the legal status of local standard practices. If provisions regarding hiring and promoting are explicitly stated in the host country's laws, the company is not obligated under the Civil Rights Act to extend Title VII provisions to its employees in those matters. In fact, the company may be in jeopardy from the host country authorities if it imposes U.S. standards.

* If at all possible, avoid "token" situations. Fill multiple positions with women or minorities. A single appointment is often construed as a company's response to a perceived legal requirement, rather than as a commitment to promote the best regardless of gender or race. Additionally, filling multiple positions offers some protection against the necessity of maintaining a questionable employee from fear of lawsuit. The fact that others of the employee's gender or race are successfully remaining at the work site can offer some defense for the corporate action.

* Some foreign sites can be identified in advance as culturally hostile environments for certain groups of American citizens. These societies impose severe restrictions--not necessarily written into law-on certain groups of people based on gender, religion, race, or national origin. A U.S. company can only protect its employees' rights within its jurisdiction. In a practical sense, that jurisdiction ends at the company "gate."

* Hiring locals for all management positions represents one method that would virtually eliminate the risk of assigning women and other minorities who may be doomed to failure by the severity of cultural circumstance. In the most culturally hostile environments, reliance on native-born managers may be the best answer. However, this must not be a halfhearted measure. The potential for charges of discrimination remains if the corporation fills lower-level positions with locals while the highest management positions are still reserved for the company's home office personnel. Remember that women constitute a growing number of such "home office personnel"; as such, they would therefore expect to be considered for the relevant positions.

Every day U.S. multinationals face increasing constraints in the development of their foreign operations. Many of their domestic-based managers are reluctant to accept international posts because of perceived disruptions in their personal and work lives.

At the same time, women managers are beginning to recognize the dearth of promotion opportunities within their companies and to see foreign posting as potentially beneficial. Their position for such advancement has been strengthened by the passage of the Civil Rights Act of 1991, which extends the Title VII rights of U.S. employees to work sites outside the boundaries of the country. These sites may be located in the midst of societies with strong cultural values that happen to conflict with U.S. standards.

Employers are, therefore, realistically concerned with their ability to balance the various constraints placed upon them. The guidelines we have proposed in this article should help provide those employers with a plan for action.

References

Nancy J. Adler, "Women in International Management: Where Are They?" California Management Review, 26, 4 (1984): 78-89.

Nancy J. Adler, "Women in Management Worldwide," International Studies of Management and Organization, 16, 3 (1986): 3-32.

J. Stewart Black, "Coming Home: The Relationship of Expatriate Expectations with Repatriation Adjustment and Job Performance," in Jerry L. Wail and Lawrence R. Jauch, eds., Academy of Management Best Papers Proceedings 1991, pp. 91-95.

Joy Chefjan, "Protecting Workers Overseas," Journal of Commerce and Commercial, November 25, 1991, p. AS.

Susan B. Garland, "Throwing Stones at the 'Glass Ceiling'," Business Week, August 19, 1991, p. 29.

Mariann Jelinek and Nancy J. Adler, "Women: WorldClass Managers for Global Competition," The Academy of Management Executive, 11, 1 (1988): 11-19.

Lex K. Larson, Civil RightsAct of 1991 (New York: Times-Mirror Books, 1992).

Kathryn E. Lewis and Pamela R. Johnson, "Preventing Sexual Harassment Complaints Based on Hostile Work Environments," SAM Advanced Management Journal, 56, 2 (1991): 21-26.

"Managers Balk at Overseas Assignments," Wall Street Journal, June 16, 1992, p. 1.

Amanda Troy Segal and Wendy Zellner, "Corporate Women," Business Week, June 8, 1992, pp. 74-83.

Raymond J. Stone, "Expatriate Selection and Failure," Human Resource Planning, 14, 1 (1991): 9-18.

Marilyrn L. Taylor, Mariane Odjogov, and Eileen Morley, "Experienced American Professional Women in Overseas Business Assignments;" Academy Of Management Proceedings, 33 ( 1975): 454-456.

Rosalie Tung, "Career Issues in International Assignments," The Academy of Management Executive, I 1, 3 (1988): 241-244.

Joseph Weber, "Farewell, Fast Track," Business Week, December 10, 1990, pp. 192-200.

Patricia Feltes is an assistant professor of management at Southwest Missouri State University, Springfield, Robert K. Robinson is an assistant professor of management at the University of Mississippi, Oxford. Ross L. Flnk is an assistant professor of management at Bradley University, Peoria, Illinois.