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Article
Publication date: 4 January 2021

Naoki Ando

This study aims to explore how a change in the staffing configuration of foreign subsidiaries affects subsidiary performance by focusing on staffing localization.

Abstract

Purpose

This study aims to explore how a change in the staffing configuration of foreign subsidiaries affects subsidiary performance by focusing on staffing localization.

Design/methodology/approach

The relationship between localization and subsidiary performance is analyzed from the perspective of human capital. Hypotheses are tested using a panel data set of foreign direct investment by Japanese multinational enterprises.

Findings

The analysis demonstrates that localization has a positive effect on subsidiary performance when subsidiaries can access a pool of competent local managers in the host country. It also shows that when competent local managers are highly available, localization has a positive effect on subsidiary performance under high cultural distance. In comparison, when the availability of competent local managers is limited and cultural distance is high, localization has a negative effect on subsidiary performance.

Originality/value

Using human capital theory, this study theorizes how localization, which is a change in the configuration of human capital toward a reliance on local-specific human capital, enhances subsidiary-specific advantages. It introduces the effects of changes in the configuration of human capital over time, into studies on subsidiary staffing. In addition, from a different viewpoint than previous studies, this study proposes one possible path where human capital leads to organizational performance. Specifically, it shows that a change in the configuration of human capital affects subsidiary-specific advantages, which eventually impacts subsidiary performance.

Details

Multinational Business Review, vol. 29 no. 3
Type: Research Article
ISSN: 1525-383X

Keywords

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Article
Publication date: 1 August 2018

Manami Suzuki, Naoki Ando and Hidehiko Nishikawa

The purpose of this paper is to address intra-organizational communication between parent firms and foreign subsidiaries and examine how such communication effectively…

Abstract

Purpose

The purpose of this paper is to address intra-organizational communication between parent firms and foreign subsidiaries and examine how such communication effectively facilitates knowledge sharing between parent firms and their subsidiaries.

Design/methodology/approach

This study approaches the relationship between intra-organizational communication and the effectiveness of knowledge sharing from the viewpoint of foreign subsidiaries. The data have been collected from local managers in subsidiaries operating in Japan using a questionnaire survey. The hypotheses are tested by employing a robust regression model.

Findings

This study finds that intra-organizational communication between parent firms and foreign subsidiaries is positively associated with the effectiveness of knowledge sharing. The benefits from intra-organizational communication are greater for service firms than for manufacturing firms. Subsidiaries established through acquisition are found to enjoy a greater positive effect from intra-organizational communication than those established through greenfield investment.

Practical implications

The results of this study suggest that multinational corporations should facilitate intensive intra-organizational communication for knowledge sharing that can lead to the effectiveness of foreign subsidiaries. In particular, service firms should appreciate the value of communication. This study also indicates that foreign subsidiaries established through acquisition should promote communication with their parent firms for successful knowledge sharing.

Originality/value

This study demonstrates that the effect of intra-organizational communication on knowledge sharing differs among industries and among entry modes. This is the initial step to further investigations on the industry and the entry strategy effects of intra-organizational communication.

Details

Management Decision, vol. 57 no. 1
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 15 May 2019

Manami Suzuki, Naoki Ando and Hidehiko Nishikawa

This paper aims to investigate three different orientations of recruitment (profession-sensitive, language-sensitive and interculture-sensitive recruitment) and their…

Abstract

Purpose

This paper aims to investigate three different orientations of recruitment (profession-sensitive, language-sensitive and interculture-sensitive recruitment) and their effect on the foreign subsidiaries of multinational corporations (MNCs).

Design/methodology/approach

This study examines the relationship among three different orientations of recruitment and knowledge transfer from parent firms to foreign subsidiaries. Data are collected from local managers in MNCs’ subsidiaries operating in Japan using a questionnaire. The hypotheses are tested by using ordinary least squares resression (OLS).

Findings

The results of this study indicate that each of the three orientations of recruitment positively influences the knowledge transfer of MNCs. In particular, the positive effect of profession-sensitive recruitment is enhanced when foreign subsidiaries are established through acquisition. The positive effect of interculture-sensitive recruitment on knowledge transfer is also strengthened by offering professional training.

Research limitations/implications

This study is subject to several limitations. The sample size is small, and the data were collected from a single country. In addition, the respondents’ positions in an organizational hierarchy have not been taken into account. Despite these limitations, this study can be considered the first step toward future research on the relationship between different orientations of recruitment and intra-organizational knowledge transfer.

Practical implications

The results of this study indicate that not only profession-sensitive recruitment but also language-sensitive and interculture-sensitive recruitment are important for intra-organizational knowledge sharing. This study suggests that local employees with intercultural competence have the potential to improve subsidiary performance through knowledge sharing with parent firms if they are provided with professional training.

Originality/value

This study has empirically examined the complex mechanism of the three important factors (professional, language and intercultural competence) in recruitment and their influence on knowledge transfer. In particular, this study emphasizes language-sensitive recruitment and interculture-sensitive recruitment, which have received less attention than profession-sensitive recruitment in international business research. Moreover, this study focuses on the relationship between recruitment and knowledge sharing in a cross-border setting, which few studies in the human resource management area have examined.

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Article
Publication date: 9 March 2015

Naoki Ando

The purpose of this paper is to fill the following research gaps. First, few studies have examined isomorphic behavior of multinational corporations (MNCs) with respect to…

Abstract

Purpose

The purpose of this paper is to fill the following research gaps. First, few studies have examined isomorphic behavior of multinational corporations (MNCs) with respect to foreign subsidiary staffing. Second, the adoption by an MNC of its internally preferable practices, which is referred to as internal mimetic behavior, has been less extensively investigated when compared with the imitation of practices adopted by a large number of peer firms. Lastly, factors that facilitate internal mimetic behavior have not been extensively explored.

Design/methodology/approach

This study hypothesizes that internal mimetic behavior is affected by both formal and informal institutional distance. The hypotheses are tested using the panel data set that consists of 3,981 foreign subsidiaries of Japanese MNCs.

Findings

This study finds that as the formal institutional distance between the host country and the home country increases, MNCs are more likely to adopt internal mimetic behavior. Furthermore, it demonstrates that as the informal institutional distance increases, the likelihood that MNCs adopt internal mimetic behavior decreases.

Practical implications

This study suggests that MNCs need to consider the consequences of internal mimetic behavior when they adopt it without having economic rationale. It also suggests that when uncertainty can be mitigated, MNCs should avoid internal mimetic behavior.

Originality/value

This study fills the aforementioned research gaps by examining what factors facilitate internal mimetic behavior. It suggests that both economic rationale and isomorphic behavior need to be considered to advance an understanding of foreign subsidiary staffing.

Details

Journal of Global Mobility, vol. 3 no. 1
Type: Research Article
ISSN: 2049-8799

Keywords

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Article
Publication date: 3 June 2014

Naoki Ando and Yongsun Paik

The purpose of this paper is to examine the relationship between foreign subsidiary staffing and subsidiary performance by focussing on two staffing practices: first, the…

Abstract

Purpose

The purpose of this paper is to examine the relationship between foreign subsidiary staffing and subsidiary performance by focussing on two staffing practices: first, the ratio of parent country nationals (PCNs) to foreign subsidiary employees and second, the number of PCNs assigned to the foreign subsidiary.

Design/methodology/approach

Hypotheses predicting curvilinear relationships between the assignment of PCNs and subsidiary performance are tested using a panel data set consisting of 4,858 foreign subsidiaries of Japanese multinational corporations (MNCs).

Findings

The results demonstrate that the two staffing practices have different effects on subsidiary performance. The ratio of PCNs to foreign subsidiary employees has an inverted U-shaped relationship with subsidiary performance, while the number of PCNs assigned to the subsidiary has a linear and negative effect on subsidiary performance.

Research limitations/implications

The results of this study are subject to limitations. First, the sample used in this study consists solely of the foreign subsidiaries of Japanese firms. This research design limits the generalizability of the findings of this study. Second, other decisions related to subsidiary staffing such as the ratio of PCNs in the subsidiary's top management team need to be examined to advance understandings of the relationship between subsidiary staffing and subsidiary performance.

Practical implications

MNCs need to identify the appropriate number of PCNs at which they can achieve the optimal trade-off with the PCN ratio to enhance the competitiveness and the performance of a foreign subsidiary. In doing so, they need to take into consideration that an increase in the number of PCNs has an immediate negative effect on the workplace morale of host country nationals.

Originality/value

This study incorporates two staffing practices into its analyses and shows that they have different implications for subsidiary performance. The results suggest that focussing on one staffing practice alone limits understanding of the complex relationship between foreign subsidiary staffing and subsidiary performance.

Details

Journal of Global Mobility, vol. 2 no. 1
Type: Research Article
ISSN: 2049-8799

Keywords

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Article
Publication date: 21 May 2009

Naoki Ando and Dong Kee Rhee

The primary purpose of this study is to explore the antecedents of interorganizational trust within an international joint venture (IJV) context. In exploring how…

Abstract

The primary purpose of this study is to explore the antecedents of interorganizational trust within an international joint venture (IJV) context. In exploring how interorganizational trust is developed during the course of managing IJVs, we will look at fair action as a key factor in building interorganizational trust. Based on the existing literature, we propose the fair joint decision‐making process, cultural adaptation and the fair distribution of bargaining power as being antecedents of interorganizational trust within the IJV context. After developing hypotheses about the relationships between these three antecedents and interorganizational trust as well as causal relations between the antecedents, an empirical study is conducted using a sample comprised of 109 IJVs located in Korea. The findings show that perceived fairness in the joint decision‐making process and the distribution of bargaining power directly affects trust‐building between IJV participants; and also reveal the indirect effects of cultural adaptation on the development of interorganizational trust.

Details

Journal of Asia Business Studies, vol. 3 no. 2
Type: Research Article
ISSN: 1558-7894

Keywords

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Article
Publication date: 17 May 2013

Naoki Ando and Nobuaki Endo

The purpose of this paper is to examine how service firms determine foreign subsidiary staffing, emphasizing the joint effect of an attribute specific to the service…

Abstract

Purpose

The purpose of this paper is to examine how service firms determine foreign subsidiary staffing, emphasizing the joint effect of an attribute specific to the service sector and the institutional environment of the host countries.

Design/methodology/approach

This study develops hypotheses regarding the joint effect of human capital intensity and institutional distance on the ratio of parent country nationals to foreign subsidiary employees. A Tobit regression is conducted to test the hypotheses, using a sample that consists of 1,067 foreign subsidiaries of Japanese service firms.

Findings

This study finds that the human capital intensity of a service firm has a positive impact on the ratio of parent country nationals to foreign subsidiary employees. The study also finds that the institutional distance between the host country and the home country is negatively associated with the ratio of parent country nationals. In addition, this study finds that the positive impact of human capital intensity on the ratio of parent country nationals becomes weaker as the institutional distance becomes greater.

Originality/value

This study explores the factors that affect the decisions regarding foreign subsidiary staffing in the service sector. It advances the understanding of the foreign subsidiary staffing of service firms by examining the joint effect of an attribute specific to the service sector and the institutional environment of the host countries. This study shows evidence that the effect of an attribute specific to the service sector is more complex than a linear relationship.

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Article
Publication date: 3 May 2011

Naoki Ando

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

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.

Details

Cross Cultural Management: An International Journal, vol. 18 no. 2
Type: Research Article
ISSN: 1352-7606

Keywords

Content available
Article
Publication date: 3 June 2014

Jan Selmer

Abstract

Details

Journal of Global Mobility, vol. 2 no. 1
Type: Research Article
ISSN: 2049-8799

Content available
Article
Publication date: 3 May 2011

Jan Selmer and Vesa Suutari

Abstract

Details

Cross Cultural Management: An International Journal, vol. 18 no. 2
Type: Research Article
ISSN: 1352-7606

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