Cultures and Institutions: Dispositional and contextual explanations for country-of-origin effects in MNC ‘ethnocentric’ staffing practices

Abstract

Although the country-of-origin effect on staffing practices of multinational corporations (MNCs) is well-known, its underlying mechanisms are under-theorized. Drawing on the cross-cultural management and comparative institutionalism literatures, we propose an overarching, theory-based framework with two mechanisms, dispositional and contextual, that might explain country-of-origin effects in MNCs’ use of parent-country nationals (PCNs) in their foreign subsidiaries’ top management teams. The tendency of MNCs from some home countries to staff these positions with PCNs is typically labeled as “ethnocentric”, a word imbued with negative intentions referring mainly to the dispositional rationale behind this staffing choice. However, fuzzy-set qualitative comparative analysis (fsQCA) of staffing practices of MNCs from ten home countries shows that both mechanisms – dispositional and contextual – have considerable explanatory power. Our methodological approach enables us to analyze conceptually distinct, yet empirically intertwined, societal-level explanations as a pattern, and thus offers a viable solution to integrate different perspectives in international and comparative research.

The potential of virtual global mobility: implications for practice and future research

“…For instance, more VGM may affect the power that the head office wields – local operating units may enjoy more devolved autonomy and task authority – the culture and control mechanisms in organisations and with it the degree of trust and cohesion (cf. Bartlett and Ghoshal, 1998; Lee et al , 2021). In terms of human resource policies and practices, talent sourcing, local and global talent development approaches and global career patterns are likely to be modified to take account of the new ways of global competition.…”

“…On a broad organizational level, changes in global human resource configurations, power, communication and cultural effects are highly likely and will have to be assessed and carefully managed by global organizations (cf. Lee et al , 2021). In addition, reshaping the world of global work has many other effects and opportunities.…”

“…Hence, to achieve this objective, VGM may be less suitable. Other organization applications are culture transfer and socialization, which are important tasks, especially for parent country national expatriates and the socialization of subsidiary staff that is achieved over time (Lee et al , 2021). Although expatriates in situ may most efficiently attain this objective, virtual interactions may also be effective, making VGM partly suitable in this case.…”

“…Although expatriates in situ may most efficiently attain this objective, virtual interactions may also be effective, making VGM partly suitable in this case. Policy transfer and control involve bureaucratic control in MNCs, either by centralization through a more direct headquarters control over subsidiaries or more indirectly through introducing policies and procedures (Lee et al , 2021). While VGM may have a role to play by transferring information about the details of bureaucratic control, the effective application may be best ensured through physical presence of an expatriate at the host location or through frequent visits by international business travelers.…”

Internationalization Issues in Chinese Firms: One Belt, One Road-Based Perspective

“…The most popular method of starting a new industry—acquisitions and mergers—necessitates more effort and management expertise in disseminating and integrating a strategy of the company, values, and practices, which is solely the domain of HRM. HRM has evolved along with firms’ internationalization policies, such as international employment and talent practices which are linked to the whole company’s strategy ( Lee et al, 2021 ).…”