American and European expatriate managers: An empirical investigation

This article compares American and European expatriate managers' backgrounds, job satisfaction, and perception of local work and cultural environment in Turkey in reference to their adaptation to the host country and their job performance. It reports that the sample managers demonstrate differences in all these dimensions. Therefore multinational companies are recommended to develop human resources policies in choosing expatriate managers most likely to adapt to work and host country environments by paying attention to managerial qualifications and local conditions. They should also train and prepare both expatriate and local managers to ensure smooth relationships between two groups. © 1993 John Wiley & Sons, Inc.     

Multinational Enterprise Decision Principles for Dealing With Cross Cultural Ethical Conflicts

Cross cultural ethical conflicts are a major challenge for managers of multinational corporations (MNEs) when an MNE's business practices and a host country's practices differ. We develop a set of decision principles to help MNE managers deal with these conflicts and illustrate with examples of ethical conflicts faced by MNEs doing business in contemporary Russia (DeGeorge, 1994). We discuss the generalizability of the principles by comparing them to the Donaldson (1989) and Buller and Kohls (1997) decision models. Finally we discuss changes in the cross cultural ethical problems facing MNE managers and offer suggestions for future corporate and academic work on these problems.     

Differentiated effects of formal and informal institutional distance between countries on the environmental performance of multinational enterprises

This research examines the influence of environmental institutional distance between home and host countries on the standardization of environmental performance among multinational enterprises using ordinary least-squares (OLS) regression techniques and a sample of 128 multinationals from high-polluting industries. The paper examines the environmental institutional distance of countries using the concepts of formal and informal institutional distances. The results show that whereas a high formal environmental distance between home and host countries leads multinational enterprises to achieve a different level of environmental performance according to each country's legal requirements, a high informal environmental distance encourages these firms to unify their environmental performance independently of the countries in which their units are based. The study also discusses the implications for academia, managers, and policy makers.     

Foreign Direct Investment and Training in the Host Country: The Tariff-Jumping Argument Revisited

We analyze the direct investment versus export decision of a multinational firm in competition with a potential entrant in a host country. We consider a workers' skills asymmetry between the host and the multinational home countries. We also give the multinational the possibility to train all (or a part of) the hired workers when investing. We show that an improvement in the workers' skills in the host country does not systematically increase the multinational incentive to invest. We also demonstrate that the tariff-jumping investment can improve the welfare of the host country even if it excludes the local firm from the market.     

Subsidiary strategy of emerging market multinationals: A home country institutional perspective

We examine the effects of home country institutional factors, namely, home country government support, domestic institutional weaknesses, and state ownership on the subsidiary-level strategy of global integration (I) and local responsiveness (R) of emerging market multinational enterprises (EMNEs). We draw upon the home country institution-based view and the I/R framework to develop our theoretical model. We empirically test our hypotheses using an original new survey data collected from Chinese multinational subsidiary managers supplemented with parent-level and country-level data. We find that home country government support and domestic institutional weaknesses have significant and negative effects on global integration strategy of Chinese multinational subsidiaries. On the other hand, domestic institutional weaknesses push foreign subsidiaries to pursue local responsiveness strategy. Nevertheless, those with greater degree of state ownership in their parent firms are neither willing to disintegrate from their parent firms nor motivated to pursue local responsiveness strategy in order to deal with home country institutional deficiencies and develop new sources of competitiveness in foreign markets. Our findings have advanced the literature on subsidiary strategy in the context of EMNEs, and provide important implications for subsidiary managers and policy makers.     

The acculturative stress of host country managers working at MNC subsidiaries: Determinants and effects

This paper introduces the concept of acculturative stress to indicate a distinct psychological difficulty faced by host country managers working at multinational corporation (MNC) subsidiaries. Drawing on the social identity and self-verification theories, we suggest that host country managers are exposed to acculturative stress due to the challenges they face in verifying their national cultural identity. We identify the perceived cultural incongruence and the lower relative standing of host country managers as proximal determinants of acculturative stress and examine its negative impact on their work engagement. The analysis results of a sample of 643 Korean managers working at 60 MNC subsidiaries in Korea support our hypotheses on the determinants and effects of acculturative stress.     

Legal distance and entrepreneurial orientation of foreign subsidiaries: Evidence from Southeast Asia

How will variation in legal distance influence a foreign subsidiary's propensity to engage in entrepreneurially orientated initiatives within the context of an emerging market environment? We answer this question by combining elements of institutional theory to suggest that legal distance between a foreign subsidiary's parent home and host country, as well as managerial perceptions of deficiencies in the host country legal service sector, will influence EO initiatives. By analyzing 352 multinational enterprise foreign subsidiaries operating in the Philippines and Thailand our results indicate the complexity of these relationships in that there is a curvilinear (U-shaped) relationship concerning the legal distance between a foreign subsidiary's parent home and host country and its propensity to engage in EO initiatives. Our findings also suggest that this curvilinear relationship will strengthen as managerial perceptions of host country legal deficiencies increase, particularly when the parent possess an in-house legal affairs department. Following these insights, we discuss theoretical implications and future research opportunities.     

The impact of corporate and national cultures on decentralization in multinational corporations

We develop and test a model of multinational corporation (MNC) decentralization in which the allocation of decision rights to subsidiaries is explained by aspects of both internal corporate culture as well as external national cultures. We extend the literature on MNC decentralization by testing the impact of both of these factors as determinants within the same model. Drawing on management control theory as a conceptual platform, we argue that the assignment of decision rights to a subsidiary in the MNC is impacted by corporate innovativeness and shared values, as well by aspects of home and host country cultures. We test our model on a sample of 119 MNC subsidiary managers drawn from a diverse range of industries and locations. The findings provide support to the proposition that corporate innovativeness positively impacts the decision to decentralize, whilst also indicating that home country individualism and host country uncertainty avoidance have a significant influence. The findings challenge established international management logic with respect to shared values—this variable is found to have a negative relationship with decentralization. Overall cultural distance is not found to be significant.     

Ethics and Australian International Business which way to Asia?

In an era of domestic and economic reform wherein deregulation/privatisation becomes a priority, short shift has too often been given to evaluative analyses of business activities. Evaluative monitoring and oversight are especially needful in highly competitive international business environments, where the temptations are very strong to adjudge individual effectiveness by the sole criterion of the bottom line. But what additional or alternative criteria should be administered, and by whom, is less clear. That any but the most vague Judeo-Christian or secular ethical standards are applicable (e.g. notions of fairness) is widely contested. The debate is significantly only widened when doing business across national borders involving peoples from different cultures and languages. This section is devoted to explicating the normative role of international codes of conduct for guiding the decision making of managers involved in multinational operations, and clarifying what ethical frameworks are available to the international manager for taking decisions which require selecting actions inconsistent with either home or host country demands.Daniel W. Skubik is a lecturer in the College of Liberal Arts, Florida Atlantic University; and is also an independent consultant. He holds the PhD (philosophy), a JD (law), and an MA (Hons.).     

Beauty is in the eye of the beholder

This study investigates the internal ideational foundation underlying the host country public relations of multinational corporations by explicating the thinking of various public relations actors about what counts as good public relations work. It uses an abductive approach that combines theoretical deduction and qualitative induction. Data were collected through ethnographic fieldwork conducted in the subsidiary of an American multinational in China. Interpretation of the data reveals a global localism-informed orientation reflected in the views of expatriate managers, and a local pragmatism-rooted orientation in the perceptions of other public relations actors hired from the host country.     

International work experience: Is it really accelerating the way to the management board of MNCs?

International work experience is often claimed to be a prerequisite for managers in an MNC. This paper investigates how international work experience affects those managers who reach upper echelons. Drawing on both human capital theory and elite theory, we argue that stays abroad not only have beneficial, but also adverse effects on managers’ ascent to the top. By analysing the careers of 212 management board members from Germany, we find that once a certain threshold of international work experience is exceeded, being away from home impedes managers’ long-term career advancement. However, it is not only longer stays abroad that show a negative time effect; we are also able to reveal that being in countries with high geographic and cultural distance to the home country significantly decelerates managers’ speed of being appointed to the management board. Our findings demonstrate that conflicting interests exist between MNCs and high potentials who consider an international career. We stress that these conflicts call for being solved in managerial practice.     

A race to lower standards? Labor standards and location choice of outward FDI from the BRIC countries

Scholars argue that multinational corporations tend to locate their investment in countries with lower labor standards, but empirical results are highly inconsistent. In this paper, we investigate the effect of differential labor standards on the location choice of outward greenfield foreign direct investment (FDI) from Brazil, Russia, India and China (i.e. the BRIC countries). We find robust evidence that while there is a tendency toward the attraction of FDI by lower labor standards in developed countries, such a “race” is absent in FDI directed to developing countries. Location choice is highly path dependent upon previous trading relations between the home and the host country, which hampers the MNCs’ ability to arbitrage. Conversely, capital mobility at the industry level is found to intensify the race to lower standards.     

Transfer or localize? International reward and compensation practices of South Korean multinational enterprises in China

International reward and compensation has received little academic attention, but past research was mainly conducted in advanced Western economies. This study explores the extent to which multinational enterprises (MNEs) from an emerging economy, South Korea, transfer reward and compensation practices from business headquarters to a transitional economy, China and the determining factors for transfer. Using a qualitative approach to analysing 10 South Korean MNEs in China, this study reveals that the sample companies adopt home-oriented focal reward and compensation policies and practices (including base pay and performance-based pay) and an integrative approach to peripheral components (including allowances and benefits) for expatriates. However, the companies adopt an integrative approach to focal components of reward and compensation and a localized approach to peripheral components for host country nationals (HCNs). These findings indicate that Korean MNEs adopt different approaches to reward and compensation for expatriates and HCNs, as well as to focal and peripheral components of reward and compensation practices. The transfer of reward and compensation is due to the dominance effect resulting from the fact that the home economy is relatively more advanced than the host economy. On the one hand, the tendency to localize reward and compensation results from contextual differences between host and home nations, such as economic development, living costs and compensation traditions.     

Internationalization performance of Chinese multinational companies in the developed markets

This study investigates the relationship between prior cooperation experience with partners from the developed markets and internationalization performance of emerging multinational companies. Based on the knowledge-based view, this study sheds light on the crucial role of knowledge base, organizational learning in the home country, and acquisition possibility of knowledge in the host country. Employing a sample of Chinese international firms, this study demonstrates that international experience accumulated by learning through linkage with partners from the developed markets improves the performance of companies from the emerging market. Organizational learning in the home country and acquisition possibility of knowledge in the host country moderate the effect of international experience. The implications of these findings for theoretical development and future research are discussed.     

Safety and Ethics in the Global Workplace: Asymmetries in Culture and Infrastructure

This study described and analysed the circumstances surrounding a fatal car accident involving personnel of a multinational corporation in a developing country. For some companies, road accidents are the leading cause of work-related fatalities in developing countries. This reality highlights the ethical dilemmas encountered in a global workplace. Questions as to how a company addresses safety concerns outside the standard work environment, the ethics of operating in a risky environment and the requirements for international consistency in compensation standards for loss of life were addressed. The authors argued that multinational companies should localize health and safety practices to address the important asymmetries between different regions of the world regarding social, cultural and infrastructural issues. Furthermore, the authors analysed the leadership role that should be played by multinational companies to help and support national governments to reduce traffic fatalities in developing countries. From this perspective, the article represents a contribution for the body of knowledge dealing with the business–society relations. The authors used an action research approach to address these issues, both in response to the particular incident and to contribute to the body of research in this field.     

On the Marketing of Nations

Abstract

Deciding on how and where to begin a new regional expansion is a highly important and complex task for multinational companies. The importance and complexity stems from the fact that these decisions involve relatively high uncertainty (i.e., risk) and, at the same time, require an intensive multidimensional evaluation process. Many countries, however, particularly in emerging markets, work to encourage multinational companies to establish a base of operations there or to enlarge existing regional headquarters. Consequently, multinationals and countries have a common interest in identifying key elements in this multidimensional decision process and estimating the likelihood that a particular country will be more suitable to fill this task than others. In order to gain a deeper understanding as to the attractiveness of a host country for establishing a base of operation (BOO) of multinational corporations, we explore the perceptions of corporate managers of different Mediterranean countries. Our analysis highlights the different country characteristics that contribute to the difference in perceptions. In addition, we find specific attributes that contribute the most to these differences. We conclude with a discussion of actions that can be taken by a specific country to close, or expand, some perception gaps.     

New sociopolitical forces: the globalization of conflict.

Not only must multinational corporations deal with governments of their home countries and various host countries, they must now contend with the pressures of change exerted through international organizations such as U.N.-based agencies and public interest groups. The Nestle infant formula controversy, more so than any other event, has crystallized the growing internationalization of conflicts.     

An exploratory examination into the challenges to technology transfer in the transitional economy of Croatia

In this study, the transfer of technology between foreign multinational corporations (MNCs) and Croatian subsidiaries is explored under a dynamic capabilities perspective. Insights from 80 managers of Croatian subsidiaries are used to explore the issues facilitating and inhibiting technology transfer. The findings suggest that while technology transfer is desired by MNCs, home and host governments, and Croatian subsidiaries, limitations in MNC capabilities to transfer technology, limited governmental assistance, and the inability of Croatian subsidiary managers to apply new technology may hinder effective technology transfer. Implications for academics and practitioners are addressed. © 2005 Wiley Periodicals, Inc.     

Returnee managers as an asset for emerging market multinational enterprises: Chinese cross-border acquisitions (2008–2017)

Returnee managers, a scarce human resource for emerging market multinational enterprises in the past, are becoming increasingly abundant, and their value is at risk of diminishing. The analysis of Chinese cross-border acquisitions (2008–2017) reveals that only returnee managers from the same country in which an acquisition is targeted facilitate the acquisition, whereas the others fail to make a difference. The impacts are stronger when the acquiring company has less international experience and when the target country has a weak institutional environment. Thus, returnee managers as an asset should be deployed where they are most needed and least substitutable.     

A Taxonomy of Potential Contributions of the Host Country National Local Liaison Role in Global Knowledge Management

This article builds on the existing conceptualization of multinational corporation (MNC) knowledge management by exploring the critical liaison role played by host country nationals (HCNs), especially those working directly with expatriate managers. We first discuss this proposed HCN local liaison role between expatriate and local employees within theoretical constructs of network theory and absorptive capacity. Then we present a model of five possible important HCNL role componentsÑincluding cultural interpreter, communication manager, information resource broker, talent manager, and internal change agentÑand related specific behavioral functions for each component. We also consider benefits and limitations of this HCN local liaison role, as well as areas for future research to help elucidate and validate this present model of the HCN local liaison role. This model also provides some practical guidance to assist multinational organizations in taking advantage of this potentially valuable liaison role for enhancing performance in host‐country operations. © 2014 Wiley Periodicals, Inc.