Does It Really Work? Re-Assessing the Impact of Pre-Departure Cross-Cultural Training on Expatriate Adjustment

Cultural adjustment is considered to be a prerequisite for expatriate success abroad. One way to enhance adjustment is to provide employees with knowledge and awareness of appropriate norms and behaviors of the host country through cross-cultural training (CCT). This article analyzes the impact of pre-departure CCT on expatriate adjustment and focuses on variations in participation, length and the comprehensiveness of training. Unlike previous research, the study focuses on the effectiveness of pre-departure CCT for non-US employees expatriated to a broad range of host country settings. Employing data from 339 expatriates from 20 German Multinational Corporations (MNCs) the study finds CCT has little if any effect on general, interactional or work setting expatriate adjustment. However, a significant impact of foreign language competence was found for all three dimensions of expatriate adjustment. We used interviews with 20 expatriates to supplement our discussion and provide further implications for practice

Accruals, Cash Flows and the Post-Earnings-Announcement Drift

Several prior studies have shown that cash flows have significantly greater impact on stock prices than accruals. We examine the implications of these findings for the post-earnings-announcement-drift anomaly. We argue that, if investors under-react to earnings news, then the larger price impact of cash flows causes the cash flow component of earnings news to predict future returns better than the accruals component. Consistent with this argument, we show that unexpected cash flows are more positively related to future returns, than are unexpected accruals. Also, unexpected cash flows are found to predict future returns above and beyond that predicted by earnings surprises. Finally, we show that a strategy that decomposes earnings news into its components significantly outperforms strategies based on earnings news alone. The results support under-reaction explanations for the drift. Copyright Blackwell Publishers Ltd, 2006.