Some Structural and Cultural Factors in Ethnocentric Multinational Corporations and Employee Morale

Abstract

IntroductionTHE difficulties encountered by headquarters personnel who manage overseas branches are a central problem of multinational corporations.l Differences between the environment of the headquarters (parent country organization) and that of the subsidiary (host country organization), impose serious constraints on managerial behaviour. These differences frequently make it necessary for headquarters to reshape its managerial style and content to fit the local branch requirements. Adaptations must be made to suit specific conditions in many spherespolitical, legal, economic, international, as well as cultural.The role played by cultural differences is a controversial issue in the management literature. Reports vary in their conclusions between:( I ) Those which de-emphasiTe the influence of cultural differences on expec-( 2 ) Those which remgnixe the effect of culture but warn against attributing ( 3 ) Those which emphasixe the central importance of the effect of c u l t~r e .~ tations and behaviour in complex organizations. to it greater importance than is empirically warranted.3 Richman, Barry M. and &pen, Melvin, International Management and Economic Development, Wire, M., et al., Managerial Tbin&nj: An Intrmotional Study, New York Wiley, 1966. Both studies found that there were many similarities across nationalities. Yet, there were also differences which patterned in clusters of countries, suggesting the effect of cultural differences in their conclusions. The former emphasized the differences and the latter the similarities. 3 Ajiferuke, Musbau and Boddewyn, J., 'Culture and Other Explanatory Variables in Comparative Management Studies', Academy flMunagement]oml,

Rethinking Ethnocentrism in International Business Research

“…For example, Leiba‐O'Sullivan (, p. 718) refers to “ethnocentric thinking traps” and Banai () describes ethnocentric attitudes as part of an evil cycle that deliberately needs to be broken. Likewise, Zeira et al (, p. 82) hold that “it requires an external force, such as pressure from the environment which threatens the survival of the organization, to break the vicious circle of inappropriate leadership by parent country nationals.” Caligiuri and Tarique (, p. 613) emphasize that “reducing ethnocentrism is a worthwhile developmental goal for future global leaders.” A number of authors also outline strategic actions and measures that can steer MNCs away from ethnocentrism. With this goal in mind, Malnight (), for instance, uses a case study of Eli Lilly and Company to identify a series of gradual adjustments of directing, supporting, and coordinating international activities within and across functions to move away from ethnocentrism.…”

“…Illustrative quotes Zeira, Harari, and Nundi (1975) Particularly host country nationals perceive HQ ethnocentrism to be detrimental. They "were significantly more dissatisfied with current policies and practices in the organization than were the parent country nationals.…”

What locals want: Jordanian employees' views on expatriate managers

“…Locals complain that expatriates always occupy the higher ranking managerial positions (Zeira, Harari and Nundi 1975). The feeling that locals are treated worse than foreigners in their own countries may create a hostile behaviour that often leads to lower performance of both locals and expatriates (Jureidini 2003).…”

The expatriate myth: Cross‐cultural perceptions of expatriate managers

“…These are all crucial issues for a local manager employed in, for example, a developing country with a distinct cultural identity and national character. An early study by Zeira, Harari, and Nundi (1974) found that local employees were dissatisfied with ethnocentric staffing policies whereby senior management positions were always filled by expatriates; expatriate managers believed such an ethnocentric approach had some unique strengths.…”