First foreign executive at TOYOTA’s headquarters quits after 3 months

Yet another foreign executive has made global media headlines: TOYOTA’s first foreign executive at the Japan headquarters has resigned.

As is typical, such headlines come in pairs: First when a foreign executive is appointed by a local organization, and a second time when that relationship falls apart shortly after. This is unfortunate as such disastrous high profile cases bias perceptions about the foreign executives in local organizations (FELO) phenomenon. Such biased perceptions can obscure the view on what management research can learn from FELO cases.

TOYOTA appointed Ms Julie Hamp only three months prior to her resignation. She was TOYOTA’s first senior ‘western’ executive, and also its highest ranking female executive. Ms Hamp was appointed as chief of global communications / public relations. Different from other senior appointments, Ms Hamp’s move to Tokyo was the first time a foreign Toyota executive had relocated to the Japan headquarters.

Julie Hamp resigned after being arrested for illegally importing a prescription painkiller drug from the United States. Following her arrest on June 18 2015, TOYOTA announced the resignation on 1 July while she remained in police custody. Ms Hamp, a 55 year old US citizen, had notified the company through a lawyer of her intention to resign. The reputational damage, both to the company and Ms Hamp, is enormous. Japanese police, for example, searched TOYOTA’s headquarters in connection with their inquiries. The reputation loss will be a setback to TOYOTA’s diversity push, initiated by chief executive, Akio Toyoda. A Japanese executive, Shigeru Hayakawa, will take over Ms Hamp’s duties and head the public relations group.

The TOYOTA case is a reminder of similar short-lived FELO cases, including the short stint of Chip Goodyear as CEO of Singapore’s Temasek Holdings.

For management researchers, these high profile FELO failures are a mixed blessing. On the one hand, they draw attention to the continued difficulty of successful cross-cultural management in top management teams. The cases remind us that integrating foreign executives into local organizations continues to be an enormous challenge. Local organizations that aim to increase national diversity in their top management teams, bring in foreign expertise, or gain new perspectives to counter ‘group think’ are worried about the recruitment of foreign executives for good reason. The media reporting about failed FELO relationships may contribute to such worries.

On the other hand, those high profile cases may distract us from the realization that much can be learned from the FELO phenomenon. Multiple success stories exist among unreported FELO cases. Prior research in international human resource management has focused on multinational companies and expatriates posted to their subsidiaries. Cross-cultural research, in turn, primarily utilizes large-scale quantitative methods to investigate workplaces representing median (and mediocre?) behaviours and management styles. In contrast, the FELO research project is particularly interested in the few individuals that successfully bridge cultural distance in exceptional circumstances.

In essence, academic research on FELOs focuses on a fascinating group of statistical ‘outliers’. This group of exceptional individuals can aid our understanding of management styles and behavioural strategies that are effective in cross-cultural interactions involving significant cultural distance. For example, cross-cultural effectiveness involves occasional incongruence with expected ‘culturally endorsed’ management styles (e.g. the CLTs in the GLOBE study series).

Literature on the FELO phenomenon can be found here.