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Isomorphism and foreign subsidiary staffing policies

Naoki Ando (Faculty of Business Administration, Hosei University, Tokyo, Japan)

Cross Cultural Management: An International Journal

ISSN: 1352-7606

Article publication date: 3 May 2011

Abstract

Purpose

The purpose of this paper is to explore determinants that affect foreign subsidiary staffing policies by employing institutional theory as a theoretical foundation.

Design/methodology/approach

Hypotheses are developed regarding determinants of the ratio of parent country nationals (PCNs) to foreign subsidiary employees. To examine the hypotheses, Tobit regressions are run using a sample of 1,998 foreign subsidiaries of Japanese manufacturers in 40 countries.

Findings

The PCN ratio of foreign subsidiaries is positively associated with the parent firm's taken‐for‐granted PCN ratio and the PCN ratio adopted by other Japanese firms in the same cognitive category. In addition, the positive relationship between the PCN ratio adopted by other Japanese firms in the same cognitive category and the PCN ratio of foreign subsidiaries is moderated by the international experience of the parent firm, such that the positive relationship is weaker as the parent firm accumulates international experience.

Originality/value

The study described in this paper incorporates a sociological perspective into a framework that explains foreign subsidiary staffing decisions. In addition, it shows that under conditions of uncertainty, foreign firms adopt a normatively rational staffing policy, although this does not necessarily guarantee economic rationality.

Keywords

Citation

Ando, N. (2011), "Isomorphism and foreign subsidiary staffing policies", Cross Cultural Management: An International Journal, Vol. 18 No. 2, pp. 131-143. https://doi.org/10.1108/13527601111125987

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited