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Zeitschrift für Sozialpsychologie, 33 (4), 2002, 209–218

Ch ristian Stierle et al.: Success or Failure?

ZFS P 33 (4), 2002, © Verlag Hans Huber, Bern

Success or Failure? Personality, Family, and Intercultural Orientation as Determinants of Expatriate Managers’ Success Christian Stierle, Rolf van Dick, and Ulrich Wagner Department of Psychology, Philipps-University of Marburg, Germany

Abstract: One hundred and twenty-six expatriate managers of a large global-operating German company participated in a cross-sectional questionnaire study. Traditionally, personality traits and socio-demographic data have been used as predictors for intercultural success. In addition to these concepts the present study puts an emphasis on classical social psychological concepts, such as attitudes toward acculturation and contact to members of the host society, to explain intercultural effectiveness. Different factors of intercultural success are used as criteria: Self-reported performance, intercultural adjustment, job satisfaction, and identification with the work team abroad. Correlation analyses reveal connections between the personality traits, acculturation-strategies, and interethnic contact on the one hand and the different criteria on the other. Possible implications for international human resource management are discussed. Keywords: international assignments, expatriate managers, intercultural effectiveness, personality, family support, values

Zusammenfassung: 126 Expatriate Manager eines großen, international-operierenden deutschen Unternehmens waren Teilnehmer einer querschnittlich angelegten Fragebogenuntersuchung. Traditionell wurden vor allem Persönlichkeitsfaktoren und soziodemographische Daten als Prädiktoren für interkulturellen Erfolg herangezogen. In der vorliegenden Studie wurde ein zusätzlicher Schwerpunkt auf klassische sozialpsychologische Konzepte wie Akkulturationseinstellungen und interethnischer Kontakt gesetzt, um interkulturelle Kompetenz zu erklären. Daneben wurden verschiedene Faktoren für interkulturellen Erfolg erhoben: selbstberichtete Leistung, interkulturelle Anpassung, Arbeitszufriedenheit sowie Identifkation mit der Arbeitsgruppe im Entsendungsland. Korrelationsanalysen zeigen Zusammenhänge zwischen Persönlichkeitsfaktoren, Akkulturationseinstellungen sowie interethnischem Kontakt einerseits und verschiedenen Erfolgskriterien andererseits. Abschließend werden mögliche praktische Implikationen für ein internationales Personalmanagement diskutiert. Keywords: internationale Entsendung, expatriate Manager, interkulturelle Effektivität, Persönlichkeit, familiäre Unterstützung, Werte

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Personality, Family, and Intercultural Orientations as Determinants of Success of Expatriate Managers Globalization, mergers & acquisitions, diversity and multinational companies are just a few keywords of today’s economic and business developments. According to the ongoing internationalization of many companies (Deller, 2000) there is a high demand for cross-border assignments. The intention and cause of these assignments often include the company’s interest in transferring know-how from the company’s headquarters to the regional departments (e.g., Macharzina, 1992; Pausenberger & Noelle, 1977). Other intentions involve ensuring international management standards (Kiepe, 1984), the control of business activities abroad (Kienbaum, 1984; Sartor, 1984; Wirth, 1992) and the use of international assignments as a mean of executive development (Brewster, 1991). This illustrates that there are various demands and very different situations that expatriate managers are confronted with. It is not surprising that a significant number of assignments end unsuccessfully or are prematurely terminated. Research shows that about five to 30% of all international assignments are terminated prematurely and thus can be perceived as failures (Mendenhall & Oddou, 1985; Kühlmann & Stahl, 2001; Torbiörn, 1982; Tung, 1984). This is often associated with a severe cut in the employee’s professional development, loss of reputation and respect amongst colleagues and even personal crises (Mendenhall & Oddou, 1985). On the company’s side, unsuccessful assignments also have dramatic effects. The estimated costs of an international assignment range from three (Miller, 1989) to six (Stone, 1991) times the original salary size in the home country. Costs of a prematurely terminated assignment are estimated up to 150,000 USD (e.g., Black, Mendenhall & Oddou, 1991). Besides the pure financial costs one can imagine the indirect costs, such as destruction and interference of relationships with the foreign governments and customers, and loss of market shares (Dowling, 1986). Unsuccessful expatriate managers also influence the picture that local colleagues have of future expatriates from the comZFSP 33 (4), 2002, © Verlag Hans Huber, Bern

pany’s headquarters that have negative effects on future intercultural cooperation. In order to prevent such negative effects for employee and company it is essential to implement an effective selection-process and to develop appropriate intercultural competences.

Personality Variables as Predictors of Success There are a number of studies dealing with appropriate selection criteria for expatriates and their intercultural effectiveness. Research can be roughly divided into three target groups under study: Volunteers of the US Peace Corps, developing aid workers, and employees of industrial companies (Deller, 2000). Although many studies have investigated selection criteria of expatriate managers, only very few were able to gather valid results. A number of studies have emphasized the analysis of personality variables as predictors of expatriates’ success. Arthur and Bennett (1995) asked more than 300 expatriate managers for their personal beliefs about the most important factors that influenced their intercultural effectiveness and success. The results revealed that family situation, job knowledge and motivation, relational skills, flexibility/adaptability and openness to extra-cultural experiences were seen to be essential. Although these results were limited because the study only raised the expatriate manager’s subjective perceptions of what were important key factors for intercultural success, there have recently been other studies that assessed predictors and criteria variables more objectively. Caliguri (2000), for example, used the Big Five Model of Personality (e.g., Buss, 1991; McCrae & John, 1992) in order to predict expatriates’ success. The Big Five Personality factors are Extraversion, Agreeableness, Conscientiousness, Neuroticism (or inverse Emotional Stability) and Openness. Caliguri examined two criteria of intercultural success, namely the wish to terminate the assignment early and job performance as rated by supervisors during the international assignment. She obtained data from 143 expatriate employees of an US-based IT company. Correlation and regression analyses showed that extraversion and agreeableness were negatively related to the expatriate’s wish to terminate the assignment while

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neuroticism showed a positive relation with this criterion. Supervisors’ performance ratings were correlated only with conscientiousness. Although not all of her hypotheses were confirmed, Caliguri’s study provides support for the crucial role of personality traits for intercultural effectiveness. Deller (2000) conducted a study with 83 German expatriate managers in Korea. Besides performance rated by supervisors and self-rated performance he also used the Alienation Adjustment Scale (Ruben & Kealy, 1979) as a measure of intercultural adjustment. Extraversion and conscientiousness were positively related to self-rated performance while neuroticism showed a negative, although not significant relation. Intercultural adjustment measured by the Alienation Adjustment Scale was positively related to openness and negatively to neuroticism. These results again demonstrate that personality seems to play a role in intercultural business success. In the present study the Big Five were used as predictors of intercultural effectiveness. Using the German version of the NEO-PI-R (Ostendorf & Angleitner, 2001), we expected that extraversion, agreeableness, openness and conscientiousness would be positively related to intercultural success while neuroticism would be negatively related. Although personality plays a widely acknowledged role for intercultural success, it cannot explain intercultural competence alone. Therefore, the present study included a number of traditional social psychological concepts as additional predictors of intercultural success.

Family Stability, Intercultural Orientation, and Contact as Predictors of Success Many authors argue that, in addition to personality traits, family situation/family stability plays a crucial part in expatriates’ adjustment and performance (e.g., Arthur & Bennett, 1995). Ward and Kennedy (1992) found personal relationship satisfaction to be a predictor of of psychological distress for New Zealand sojourners in Singapore. Thomas (2001) also points out that many expatriates perceive family and spousal support as a crucial aspect for their intercultural effectiveness. Therefore, we included the concepts of perceived family stability and support as predictors of intercultural success. We propose that expatriate man-

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agers who perceive their family situation as stable and supportive are more successful during their assignment. A relatively new approach concerning predictors and determinants of intercultural effectiveness has been made by Fish (1999). Fish argues that besides personality traits, technical skills, competence and environmental factors, «values» and «value-orientation» are crucial factors for intercultural success. He points out that it is important to understand how and why a manager «values» the cross-border business involvement and how these «values» direct his or her cross country business-behavior. He further emphasizes that the way an expatriate manager values his or her own cultural identity and how and why he or she values personal and professional experiences are important. Based on Berry’s model of acculturation (e.g., 1997) Fish developed a theoretical model with four different types of cross-cultural citizenship taking the expatriates’ own cultural identity and his cross-border business focus into account. Several studies showed relationships between acculturation attitudes and interethnic attitudes and behavior (e.g., Wagner, van Dick, Petzel & Auernheimer, 2001; Zick, Wagner, van Dick & Petzel, 2001). These studies investigated acculturation attitudes of German citizens toward the acculturation of ethnic minorities in Germany and dealt with interethnic behavior or behavior intentions toward these minorities. A positive and integrative attitude goes along with more positive interethnic behavior (Zick et al., 2001). We believe that attitudes toward acculturation also play an important role when expatriates are confronted with foreign cultures. These attitudes might determine interethnic and intercultural behavior and expatriates’ attempts to adjust and cooperate with members of the host society. Ward and Kennedy (1994) for example, examined the acculturation strategies of 98 expatriates. They were able to show that expatriates with integrative and assimilative acculturation attitudes experienced less adjustment difficulties during their international assignment than expatriates with attitudes toward marginalization or segregation. For the present study, we expected that positive attitudes toward acculturation (i.e. support for multiculturalism) would be positively related to intercultural success. Interethnic contact has been the focus of research for many years (Pettigrew & Tropp, 2000; ZFSP 33 (4), 2002, © Verlag Hans Huber, Bern

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van Dick, Wagner, Pettigrew, Christ, Jackson, Petzel, Smith Castro & Wolf, 2001). People who have more contact with ethnic minority group members show less prejudice and hostile behavior toward these foreigners (Brown, 1995). Tung (1982) compared percentages of prematurely terminated assignments amongst US-American, European and Japanese companies. She showed that American companies have a higher percentage of prematurely terminated assignments compared to European and Japanese companies. In the US, nearly 75% of all companies have ratios of more than 10% prematurely terminated assignments, whereas the ratio of companies having more than 10% early terminated assignments is only 3% for European and 14% for Japanese companies. Tung (1988) argues that compared to the USA, Europeans have more contact with people of different nationalities. Thus, they have the chance to gain more intercultural experience, which leads to a better adjustment in intercultural encounters. These assumptions are supported by empirical studies (e.g., Searle & Ward, 1990), that show that quantity and perceived quality of intercultural contact are connected with positive intercultural adjustment and adaptation. Furthermore, expatriates with more intercultural contact are described as more satisfied with their assignment (Torbiörn, 1982). Thus, we believe that the amount of contact expatriates have with members of their host society during their time abroad plays an important role in their intercultural adjustment and performance and thus improves the success of their international assignment.

Method Procedure and Participants As a first step, 260 potential participants were contacted by phone to give them information about the content and purpose of the study and to ask for their willingness to participate. After having received approval of most of the contacted expatriates (N = 250) the questionnaires were sent to the participants via e-mail. Completed questionnaires were then sent back via company house-mail. Questionnaires were mailed only to participants with German citizenship. Two hunZFSP 33 (4), 2002, © Verlag Hans Huber, Bern

dred-fifty questionnaires were sent, 126 returned (response rate = 50.4%). One hundred and fifteen of these managers were assessed during their assignments, while 11 had recently returned to Germany (none of them longer than four months after return). The expatriate managers spread over 41 countries (with an emphasis on the USA, Japan, France, and Brazil but also including countries like China, Korea, and Spain). Ninety-six percent of the respondents were male and 89% lived in a steady partnership, 64% had at least one child. Fifty-four percent received a technical university education, 29% had studied Business Administration. Their jobs included positions in research and development, quality assurance to marketing, and sales. Sixty-three percent reported to have had earlier intercultural experience (e.g., other international assignments or internships abroad). At the time of the survey participants had been in their assignment at an average of 32 months.

Independent Variables In order to consider important factors of intercultural competence we investigated four different «types» of independent measures, namely personality traits, family stability, attitudes toward acculturation, and contact with members of the host society. To assess personality traits, the German version of the NEO-PI-R (Ostendorf & Angleitner, 2001) was used. 240 items were used to measure the Big Five Personality factors and to assess six sub-facets per factor. A five-point response scale was used to assess the participant’s answers. Perceived family stability and support was obtained with a four-item scale designed by our own research team, asking the expatriate to estimate how satisfied, motivated, and happy his or her spouse was with the international assignment. We also asked how often arguments or problems occurred during the assignment. A six-point scale was used to assess the respondent’s answers (e.g., «very unsatisfied», «very satisfied»). In order to measure the participant’s attitudes toward acculturation a scale developed by van Dick, Wagner, Adams, and Petzel (1997) was used. This scale was originally constructed to measure Germans’ attitudes toward the acculturation of ethnic minorities living in Germany. Some items of the

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original scale were reformulated and adjusted to fit the expatriates’ situation. A factor analysis showed that the original structure of the acculturation scale could not be replicated and therefore a three-item short-scale was constructed (Items: «Children of diverse ethnic origin should also attend different schools» measuring segregation in the original scale, recoded for further analyses; «If members of ethnic groups want to keep their own culture, they should keep it to themselves and not bother other people in this country», measuring segregation in the original scale, recoded for further analyses; «Teachers should promote contact between children of different ethnical backgrounds» measuring integration in the original scale). Participants had to indicate their agreement on a six-point answering scale (endpoints: «totally disagree», «totally agree»). Higher values indicate a positive attitude toward a multicultural society whereas lower values indicate preferences for assimilation and/or separation of ethnic minorities. Finally, quantity of contact was measured as amount of contact in 5 different domains. («Please indicate whether you personally have contact to members with the host society in the following areas: 1. in your family; 2. in your neighborhood; 3. among your friends; 4. among your circle of acquaintances; 5. at work»). Two further items were included that measured participants’ general attitude toward contact with members of the host society and subjective importance of intercultural contact in general. Again, a sixpoint response scale was used («no contact at all» to «almost exclusively contact»; for importance: «not important at all» to «very important»). After conducting factor and reliability analyses quantity and quality-items were combined to one scale.

Dependent Variables A diverse picture of intercultural success and effectiveness was intended to be obtained. Thus, we included self-reported performance, job satisfaction, adjustment, the wish to terminate the assignment early, and identification with the workgroup abroad. A four-item scale was used to assess the expatriate’s performance. The expatriate managers were asked to evaluate their performance on a four-item scale during the assignment (e.g., «Dur-

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ing my assignment I have worked efficiently»; endpoints: «totally disagree» and «totally agree»). Items included questions of efficiency, effectiveness, reaching goals, and creativity/innovation. In 59 cases we were able to correlate this self-assessment with performance rated by the supervisor and found sufficient validity (r = .41**). Job satisfaction was obtained with three items for three different dimensions, namely overall job satisfaction («Generally speaking I am satisfied with this job»), task-related job satisfaction («I am generally satisfied with the kind of work that I do in this job»), and turnover intentions («I frequently think of quitting this job»). For all three items a six-point response scale was used (endpoints: «totally disagree», «totally agree»). We analyzed these dimensions separately at the item level. In order to measure intercultural adjustment the Alienation Adjustment Scale (Ruben & Kealy, 1979) was used as translated by Deller (2000). Items were slightly reformulated in order to fit the expatriate’s situation in this study. This instrument was constructed to measure subjectively perceived alienation and adjustment concerning the situation abroad. Of the original six items, only five were used in this study using a six-point answering scale (endpoints: «totally disagree», «totally agree»). One item was used to assess the expatriate’s intention to terminate the assignment prematurely («Sometimes I am thinking about terminating my international assignment early», 6-point scale with endpoints: «totally disagree» and «totally agree»). In order to measure identification with the work team abroad, a six-item scale was used. Items for this scale were derived from van Dick, Wagner, Stellmacher, and Christ (2001), slightly reformulated and adjusted to fit the expatriate’s situation. A six-point response format was used to assess the participant’s answers (endpoints: «totally disagree», «totally agree»). As opposed to the common approach of assessing identification as a predictor-variable, we used it as a dependent variable in this study (cf. Van Dick, 2001). This derives from the fact that identification with the workgroup abroad cannot be assessed in advance of an international assignment and therefore cannot be used as a selection criterion. Rather, we conceptualize identification with the workgroup abroad as a result of adjustment and intercultural success. ZFSP 33 (4), 2002, © Verlag Hans Huber, Bern

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Table 1. Means, standard deviations, and intercorrelations between the concepts.

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Results Reliability analyses are conducted to prove the stability of the scales used. Reliability coefficients are provided in Table 1, ranging from α = .60 to .89. In order to test the associations between concepts, Pearson correlations are calculated. Results are also presented in Table 1.

Impact of Personality Variables There is substantial support for the notion that personality factors play an essential role in intercultural efficacy. Neuroticism as well as extraversion and openness are especially related to several of the criteria of intercultural success. The important criterion performance, for example, is significantly related to these three personality factors. All other correlations also point in the predicted directions.

Family Stability, Attitudes Toward Acculturation, and Contact Perceived family support shows a significant relation with intercultural adjustment (r = .19*) and with the wish to terminate the assignment prematurely (r = –.36**). This indicates that family stability plays an important role in providing a secure

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foundation for an intercultural assignment. A positive and integrative attitude toward acculturation is related to several intercultural success factors. Significant relations emerge between acculturation attitudes and performance (r = .18*), the wish to terminate the assignment prematurely (r = –.32**), and identification with the workgroup abroad (r = .33**). Expatriates with a more multicultural attitude also show lower turnover intentions (r = –.23**). Contact with members of the host society is related to performance (r = .21*) and general job satisfaction (r = .19*). All other correlations, while not reaching significance, are in the predicted direction. In order to test whether social psychological concepts, in addition and above to personality variables, have explanatory power, multiple regression analyses are conducted using the seven effectiveness indicators as criteria. Predictors are entered in two blocks. The first block includes the Big Five personality factors, the second block (social psychological concepts) contains attitudes toward acculturation, contact and perceived family stability. Results are summarized in Table 2. As can be seen in Table 2, social psychological concepts explain no additional variance in performance, job satisfaction and work group identification. However, in addition to the personality factors, social psychological concepts predict turnover intentions, premature termination, and intercultural

Table 2. Results of hierarchical regression analyses. General Job Satisfaction Step 1: R2

Task Specific Job Satisfaction

.11+

.12*

Personality Variables Neuroticism –.24* Extraversion Openness Agreeableness Conscientiousness

.05

–.30*

Step 2: R2, R2-Change .13, .02

.14, .02

Social Psychological Variables Acculturation Contact Family Stability +

Turnover Intentions

Performance Premature Termination .14*

.15**

–.26*

.15+, .10*

Identification Adjustment

.19**

.33*

.17*, .03

.29**, .14** .21*, .02

.19** –.29*

.30**, .11**

–.32*1

–.25* –.28*

.24*

1

Notes. p < .10, *p < .05, **p < .01, unexpected direction, might be due to a suppression effect

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adjustment. To be more concrete, acculturation attitudes predict turnover intentions negatively, family stability predicts also negatively the wish to terminate the assignment prematurely, and family stability predicts adjustment positively. The relation between adjustment and acculturation is unexpectedly negative but might be due to suppression effects and should not be overinterpreted here. Personality variables are unable to explain a significant part in turnover intentions; this concept is predicted only with the social psychological concepts measured here. The results of the regression analyses support our assumptions that social psychological concepts are useful predictors for some facets of intercultural success.

Discussion Extraversion and openness have been considered as important factors in intercultural settings in previous research (e.g., Caligiuri, 2000). In the present study, these two personality traits also show connections to the way expatriate managers identify with their workgroup abroad, indicating that managers who are more extraverted and open identify stronger with their fellow workers abroad. This is not surprising considering the fact that extraversion and openness are important key-factors in establishing personal relationships with other people (e.g., Buss, 1991). Extraversion is also connected to subjectively perceived adjustment to cross-cultural settings measured by the Alienation Adjustment Scale, suggesting that more extraverted expatriates perceive better adjustment to the host country. Neuroticism seems to play a very important role for intercultural efficacy and shows significant correlations with all criteria variables except identification for which the relation is only marginally significant. According to these results, expatriate managers who are emotionally less stable are interculturally less successful, indicated by less satisfaction, lower performance and poorer adjustment. Of course this could be interpreted in the other direction as well. That is, managers who do not do well abroad become emotionally unstable. But considering the trait-characteristic of neuroticism and the stability of personality in general, this interpretation seems unlikely. Surprisingly, agreeZFSP 33 (4), 2002, © Verlag Hans Huber, Bern

ableness is not connected to the intercultural criteria variables at all. These results are in line with the results of Deller (2000) who found no significant correlations between agreeableness and performance, and agreeableness and adjustment measured with the Alienation Adjustment Scale as well. Results also provide support for the importance of family stability as a crucial factor for intercultural success. The results support the hypothesis that employees’ orientations play an important role for intercultural efficacy. Considering the correlations with turnover intentions and premature termination intentions, attitudes toward acculturation are crucial for these intentions. The impact of acculturation attitudes on the prediction of turnover intentions was also confirmed in a regression analysis after controlling for the whole set of personality variables. The positive correlation between acculturation attitudes and identification seems very logical, considering that an acculturation-strategy orientated toward integration simplifies the process of establishing relationships with members of the host society and thus enables identification with the new workgroup. The connection between acculturation and performance could be explained by the fact that an integrative attitude toward acculturation enables the expatriate to build a network of important business contacts with members of the host society, which is essential to do well in a professional business context. The covariation of contact and performance could also be explained by the network-idea presented above. Surprisingly, contact showed no significant relations with adjustment and identification. Further studies should be conducted to investigate these results.

Summary and Implications The results support the assumptions that personality variables, family stability, attitudes toward acculturation, and contact with members of the host society are related to factors of intercultural effectiveness. Not all of the assumed correlations reached significance, but are still pointing in the predicted direction. Looking at the results as a whole it seems that intercultural efficacy cannot be explained by one concept alone. There is substantial evidence that

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personality is important in the explanation of cross-border success. There is, however, also evidence that family stability and the other social psychological concepts play a crucial part in intercultural adjustment and stability of the whole international assignment. Although the presented effects are of only low to medium size they lend essential practical impact, particularly in view of the extremely negative consequences of unsuccessful assignments. But what practical implications do the findings suggest for an effective international human resources management? Considering the stability of personality variables, it seems obvious that these cannot be permanently changed with a few days of intercultural training. Rather, organizations should consider a more systematic and long-term intercultural development of their future expatriates, especially by promoting and training of the probably less stable attitudes and values of their employees. Furthermore, organizations should also introduce and support situations in their home countries with positive intercultural encounters in order to promote successful expatriate behaviors. Concerning the selection process and training for an actual assignment it seems to be crucial to involve the expatriate’s social surrounding, i.e. his or her spouse, providing them with intercultural training and considering their needs and concerns within the selection process.

Limitations and Future Perspectives Because of the correlational character of this study, limitations and caution concerning the interpretation of causality have to be taken into account. To get some more security concerning the causal relation of variables, longitudinal and experimental studies are needed. Because of sample size we had no chance to calculate culture-specific results as, for example, comparing predictors for the expatriates sent to the USA or Japan. Comparisons like these, however, would be interesting to determine culture specificity and differences between host-cultures. Further research is necessary to develop effective selection and training procedures in a practical context. Although we had the chance to validate the self-rated performance with performance-ratings by supervisors, this study relies primarily on data gained from the expatriates

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themselves, the perspective of the regional company and co-workers abroad could not be considered. Using, for example, a 360 degree feedback procedure would increase validity of the data. This might be a fruitful perspective for future research.

Acknowledgment The authors are grateful to Klaus Boll, Jürgen Deller, Fritz Ostendorf, and Patricia Zapf for their helpful comments and recommendations. We also thank Klaus Jonas and two anonymous reviewers for their detailed suggestions on an earlier version of this article.

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Rolf van Dick FB Psychologie Gutenbergstr. 18 D-35032 Marburg Germany Tel. +49 6421 282-6632 Fax +49 6421 282-4281 E-mail [email protected].