Multinational Firm Knowledge,Use of Expatriates,and Foreign Subsidiary Performance

The impact of knowledge transfer on foreign subsidiary performance has been a major focus of research on knowledge management in multinational enterprises (MNEs). By integrating the knowledge‐based view and the expatriation literature, this study examines the relationship between a multinational firm's knowledge (i.e. marketing and technological knowledge), its use of expatriates, and the performance of its foreign subsidiaries. We conceptualize that expatriates play a contingent role in facilitating the transfer and redeployment of a parent firm's knowledge to its subsidiary, depending on the location specificity of the organizational knowledge being transferred and the time of transfer. Our analysis of 1660 foreign subsidiaries of Japanese firms over a 15‐year period indicates that the number of expatriates relative to the total number of subsidiary employees (1) strengthened the effect of a parent firm's technological knowledge (with low location specificity) on subsidiary performance in the short term, but (2) weakened the impact of the parent firm's marketing knowledge (with high location specificity) on subsidiary performance in the long term. We also found that the expatriates' influence on knowledge transfer eventually disappeared. The implications for knowledge transfer research and the expatriate management literature are discussed.     

Transnational HR network learning in Korean business groups and the performance of their subsidiaries

This study explores (1) how two distinct dimensions of transnational human resources (HR) network learning, i.e. globally linked and locally leveraged learning, are related to the performance of the foreign subsidiaries of Korean business groups (chaebols) and (2) how strategic HR learning mediates the relationship between these two dimensions of transnational HR network learning and the performance of foreign subsidiaries. We propose that each dimension of transnational HR network learning is related independently and jointly to the performance of a chaebol's foreign subsidiaries. Our results suggest that locally leveraged HR learning has a stronger relationship with the performance of sales subsidiaries, whereas globally linked HR learning has a stronger relationship with the performance of manufacturing subsidiaries. In addition, we find that the interaction between the two dimensions of transnational HR network learning has a weaker positive relationship with the performance of foreign manufacturing subsidiaries than that of foreign sales subsidiaries.     

The cost of capital in the international firm

This paper argues that the international firm should use the firm's global weighted average cost of capital to evaluate investment decisions, domestic and international, and to judge the performance of affiliates at home and abroad. The paper discusses the adjustment necessary to quantitate exchange risk and to account for financing that is subsidized or tied to particular investments. Foreign subsidiaries, it is argued, do not have an independent capital structure because their liabilities are explicitly or implicitly the obligation of the parent firm.     

Firm Productivity Moderated Link Between Human Capital and Compensation: The Significance of Task‐Specific Human Capital

The human capital of a firm as manifested by employee knowledge and experience represents a key resource of a firm's capabilities. Prior empirical studies have found that firms composed of high levels of human capital experience superior firm performance. Human capital theory proposes that an individual's general or firm‐specific human capital is positively related to compensation. However, empirical studies examining firm‐specific human capital's association with higher employee compensation have been inconclusive. The current study proposes that firm‐specific human capital be categorized as task‐specific and non‐task‐specific. Employees accumulate task‐specific human capital through duties conducted in their current position. Non‐task‐specific human capital represents experiences gained in prior positions to an employee's current job within the firm. Utilizing human capital data from 38,390 employees representing 76 firms in the IT sector, this study examines the association between forms of human capital and employee compensation at different levels of firm productivity. Results show that task‐specific human capital is associated with higher employee compensation. In addition, firm productivity moderates this association.     

When collaborative HR practices may not work well: the moderating role of social capital in the Chinese life insurance industry

In this study, we examine the main and interaction effects of insurance agent-focused collaborative HR practices and insurance agents' social capital on their sales performance. Data from 984 participants were collected in five subsidiaries of a large Chinese life insurance company. The results show a strong relationship between social capital and objective sales performance. More importantly, we found a negative interaction effect of collaborative HR practices and network size on individual performance and a positive interaction effect of collaborative HR practices and network range on objective sales performance. The study is unique in that it looks at the interaction between HR and social capital, investigates how HR practices affect individual performance and not firm performance as has been more commonly done, and focuses on one industry to be able to capture the unique aspects of HR practices in that industry. Theoretical contributions, managerial implications, and limitations are also discussed.     

Human resource management and the performance of Western firms in China

The study examines the relationship between human resource management and organizational performance in sixty-two manufacturing Chinese-Western joint ventures and wholly owned subsidiaries located in different parts of the People's Republic of China. A positive relation was found between firm performance and the extent to which firms used a 'high-performance' HRM system as well as the degree to which they engaged in the integration of HRM and firm strategy.     

Global talent management and inpatriate social capital building: a status inconsistency perspective

Distinct to expatriate managers at the subsidiary-level, inpatriate managers' influence at the headquarter (HQ)-level is controlled by the extent to which an inpatriate manager is able to ‘win’ status from HQ personnel. The primary goal of the paper is to conceptualize how organizational support, in the form of global talent management (GTM) practices, can alleviate inpatriates' difficulties in building social capital at HQ. Building social capital at HQ is vital for inpatriates to attain status in order to build the inter-unit social capital that enables them to pursue their boundary-spanning role across HQs and subsidiaries. Status inconsistency theory is put forward to recognize the personal, professional and structural incongruence of events and activities at HQ carried out with respect to inpatriates. We argue that inpatriate managers become empowered at HQ only when social capital is accumulated whereby social capital is driven by an acknowledgment of inpatriates as a legitimate staffing option. The relationship between GTM practices and social capital building needs to be managed properly by inpatriates themselves as well as by the organization. A future research agenda helping to build social capital of inpatriates through GTM infrastructure is discussed and propositions are offered throughout.     

Impact of nationality composition in foreign subsidiary on its performance: a case of Korean companies

This study explores how the nationality compositions of management teams and employee groups in foreign subsidiaries can affect subsidiary performance. By analyzing firm-level data on 401 South Korean subsidiaries across 35 countries in the period between 2005 and 2007, we found that balanced compositions in both subsidiary management teams (SMTs) and subsidiary employee groups (SEGs) were positively associated with subsidiary performance. The results suggest that the benefits of balanced composition are higher for both innovative and coordinative tasks conducted by management teams and for simple computational tasks conducted by employee groups. The effect of the SMT and SEG compositions on subsidiary performance, however, may depend on the host country's institutional conditions. These findings have practical implications for multinational staffing strategies in order to ensure high performance in subsidiaries and for host country policies used to attract high quality foreign direct investments.     

Advancement along a career path: the influence of human capital and performance

Following the path metaphor of careers along with signalling and human capital theories, we examine important factors that predict individuals' advancement in a career. With a unique sample of American football players, we tested the influence of individuals' human capital on their performance, value and advancement along a career path. Our findings indicate that individuals' human capital assessed in the first stage of the career path is positively related to individuals' performance in the second stage of the career path and the value placed on individuals in the third stage of the career path. We also found that performance in the second stage mediated the relationship between human capital assessed in the first stage and the value placed on individuals in the third stage of the career path.     

Human Capital Investment and Work Incentives

Traditional human capital theory based on the work by Gary Becker shows that firms do not invest in general human capital but offer firm‐specific training that is only useful for the training firm. I extend the traditional approach by adding two natural assumptions—workers cannot be forced to acquire new knowledge, and they exert unobservable effort to produce valuable output for their employer. I show under which conditions firms do not offer firm‐specific training but invest in general human capital, which increases the workers' outside option. This investment behavior is well in line with the documented prevalence of industry‐specific and occupation‐specific human capital over firm‐specific human capital.     

The half-life of knowledge and strategic human capital

The strategic human capital literature has largely overlooked the fact that knowledge stocks depreciate and that the speed of depreciation varies across settings and over time. We argue that the value of knowledge has a half-life and that numerous core predictions from the conventional human capital analysis change as the half-life shortens. This applies to the ability to extract rents from human capital, employee mobility patterns, employees' disincentive to invest in firm-specific human capital, and more. We also show that, at the limit, a sufficiently rapid rate of knowledge depreciation eliminates the importance of the distinction between general and firm-specific human capital for appropriation and employee mobility.     

How leveraging human resource capital with its competitive distinctiveness enhances the performance of commercial and public organizations

Although scholars agree that complex relationships between organizations' actual human resources (i.e., human capital stock) and means of leveraging these resources may influence performance, little empirical work has tested such propositions directly. We collected two primary data sets from privateand public‐sector organizations in Israel. The multiplicative interaction between perceived human resources capital and distinctive value derived from that HR capital was significantly related to various measures of perceived and objective organizational performance. Having higher levels of human resources capital was strongly associated with performance only when top managers perceived that these resources provided distinctive value in terms of being highly valuable, inimitable, rare, and nonsubstitutable. We discuss the implications of these findings for research on strategic human resource management and the resource‐based view of competitive advantage, as well as for practical efforts to develop firm‐specific human resource capital that is inherently distinctive. © 2005 Wiley Periodicals, Inc.     

Vive les différences? Voice in French MNCs' overseas workplaces: a comparative study of voice in French,German and US subsidiaries in the UK

Foreign-owned firms help to disseminate management practices across UK companies; this includes the ability of indigenous firms to learn improved human resource management (HRM) practices from leading foreign companies. Analysing the transfer of HRM policies forms an important strand of the international HRM and comparative capitalisms literatures; however, large-scale, comparative studies of voice patterns in German, US and, in particular, French subsidiaries in the UK are limited. This paper draws on a major survey that includes the, to date, largest sample of French MNC subsidiaries. It does not simply identify the existence of different kinds of voice mechanisms, but examines how these different practices come together in the implementation of subsidiaries' voice policies. This enables the detection of subtle, but important, differences in the subsidiaries' voice practices. French subsidiaries are significantly less likely to pursue a partnership approach to voice than their German and US counterparts. French and US establishments are significantly more likely to adopt a ‘bleak house’ approach than German ones. Importantly, these key differences only emerge at a fine-grained level of analysis that examines how subsidiaries implement voice practices.     

International performance appraisal practices and approaches of South Korean MNEs in China

International performance appraisal of multinational enterprises (MNEs) in foreign subsidiaries has received inadequate research attention. The current study investigates the international performance appraisal practices, including procedures and methods, criteria and feedback, of South Korean MNEs in China and the extent to which these practices are localized or/and ethnocentric. Results of analyzing the in-depth interviews with local and expatriate managers show South Korean MNEs tend to adopt an ethnocentric approach to managing performance appraisals for expatriates and an integrative approach for host country-nationals by transferring their home appraisal practices to their Chinese subsidiaries. These approaches can be attributed to relative strength effects, i.e. the relative economic strengths and contextual differences between China and South Korea. This study adds to the knowledge base of how MNEs manage performance appraisals in their foreign subsidiaries.     

The influence of international human capital on global initiatives and financial performance

The major aim of this study is to investigate the relationships among international human capital (input-based international human capital, transformational, output-based, and competency of top management team), global initiatives (global learning and global marketing) and financial performance. The open systems view is introduced to develop a comprehensive measurement of international human capital, the human capital that enables a firm to compete globally. The structural equation modelling technique is then employed to investigate the proposed relationships. The results support our expectation that international human capital is positively associated with a firm's global initiatives and financial performance. The importance of the role of top management team competency is identified because it is positively associated with the other three international human capital components. It also indirectly fosters a firm's financial performance and global initiatives through its positive association with input-based, transformational, and output-based international human capital.     

Relational capital,environmental knowledge integration,and environmental performance of small and medium enterprises in emerging markets

Although several prior studies have examined associations between firm social capital and environmental sustainability, the links between relational resources (i.e., relational capital and ties strength), environmental knowledge integration, and environmental performance have yet to be well established at the micro-level. This study, therefore, aims to determine (1) how environmental knowledge integration serves as a mediating mechanism for the relationship between relational capital and environmental performance and (2) how this impact differs at different levels of ties strength. A quantitative approach has been adopted to examine the main hypotheses using a structural equation model (SEM) technique. Two groups of actors were surveyed, including chief executive officers (CEOs) and financial officers of small and medium-sized enterprises (SMEs) operating in Dubai, United Arab Emirates. In total, 216 survey responses were gathered, suggesting a response rate of 73.22%. Our findings suggest that environmental knowledge integration is a vital mediating mechanism for the relationship between relational capital and SMEs' environmental performance. Also, we find that ties strength moderates the indirect effect of relational capital on SMEs' environmental performance via environmental knowledge integration. Our empirical evidence provides recommendations for SMEs' managers and policymakers to promote environmental sustainability in the emerging market context.     

e-HRM: A meta-analysis of the antecedents,consequences, and cross-national moderators

Using information technology, a growing number of companies have adopted a digital approach to human resource management (i.e., e-HRM). This meta-analytic review systematically integrates research on the antecedents, consequences, and moderators of e-HRM. Our results show that system usefulness, organizational resources, users' knowledge, and social influence could facilitate the adoption of e-HRM; in addition to the technology, organization, and people factors, the social factor can also predict e-HRM adoption and has incremental validity in predicting e-HRM adoption after controlling for the other three factors. Further, the findings indicate that e-HRM positively relates to the overall organizational performance as well as three specific organizational performance categories and that the predictive power of e-HRM for organizations' operational performance is significantly higher than that for their relational performance and transformational performance. Furthermore, the findings also show that the positive link between e-HRM and organizational performance is stronger in countries with higher ICT development levels and countries with lower human capital quality. The theoretical and practical implications for future research and e-HRM practitioners are discussed.     

What Determines Employee Perceptions of HRM Process Features? The Case of Performance Appraisal in MNC Subsidiaries

Against the background of Bowen and Ostroff's ( 2004 ) human resource management (HRM) process theorization, this study explores influences on individual employee perceptions of the visibility, validity, and procedural and distributive justice of performance appraisal in subsidiaries of multinational corporations, and at what levels these influences reside. The study adopts an embedded, multiple‐case design with interview data from 33 managers and professionals in six subsidiaries of three corporations. The findings show that perceptions of the performance appraisal process are driven by a number of influences pertaining to the unit, relationship, and individual levels. Further, the study highlights differences and similarities of influences across four performance appraisal process features, and identifies overlaps and inter‐linkages between the process features suggested by Bowen and Ostroff ( 2004 ). For practitioners, the value of our study lies in the identification of steps that can be taken to increase the likelihood that HRM practices are perceived positively and as intended by the organization. © 2014 Wiley Periodicals, Inc.     

The role of human capital on the performance of manufacturing firms in Bangladesh

The efficiency determinants of manufacturing firms in developing countries have received increasing attention over the past few decades. This study examines the role of top managers' human capital and other exogenous determinants of the efficiency of manufacturing firms in Bangladesh by using heteroscedastic single‐step stochastic frontier analysis. We find that general human capital represented by educational qualification and specific human capital formed by work specific experience show different ways of impact on firm performance. Specifically, education has both a direct impact on firm outputs and an indirect impact as an efficiency determinant, whereas experience affects only technical efficiency.     

The role of cultural values on a firm's strategic human resource management development: a comparative case study of Spanish firms in China

This paper attempts to better understand the role of cultural values as a human resource contributor to a firm's strategic development. Comparative case studies of two Spanish subsidiaries in China were made using on-site, in-depth qualitative research in both Spain and China. We then examine how this difference in management affects the firm's overall strategic development and, hence, its performance. The results of the study suggest that cultural values, as a human resource contributor, do indeed affect a firm's overall strategic development and, hence, the firm's resulting success or failure. Throughout the paper, the management by values (MBV) framework is used as a lens to further examine and better understand this process.