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Expatriate managers and MNC's ability to control international subsidiaries: the case of Japanese MNCs

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  • Paik, Yongsun
  • Sohn, Junghoon Derick

Abstract

Building upon the notion of behavioral means of control, this paper contends that the level of cultural knowledge of expatriates plays a critical role in determining the effectiveness of expatriates as a means of control over international subsidiaries of multinational corporations (MNCs). An empirical investigation with a sample of Japanese MNCs indicates that while expatriate personnel with adequate cultural knowledge of the host country contribute to the MNC's control ability, those without cultural knowledge do not.

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  • Paik, Yongsun & Sohn, Junghoon Derick, 2004. "Expatriate managers and MNC's ability to control international subsidiaries: the case of Japanese MNCs," Journal of World Business, Elsevier, vol. 39(1), pages 61-71, February.
    • Handle: RePEc:eee:worbus:v:39:y:2004:i:1:p:61-71
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    2. Jean-Pascal Bassino & Marion Dovis & Pierre van der Eng, 2015. "Do Japanese MNCs use expatriates to contain risk in Asian host countries?," Asia Pacific Business Review, Taylor & Francis Journals, vol. 21(3), pages 383-402, July.
    3. Karhunen, Päivi & Löfgren, Joan & Kosonen, Riitta, 2008. "Revisiting the relationship between ownership and control in international business operations: Lessons from transition economies," Journal of International Management, Elsevier, vol. 14(1), pages 78-88, March.
    4. Martina Sageder & Birgit Feldbauer-Durstmüller, 2019. "Management control in multinational companies: a systematic literature review," Review of Managerial Science, Springer, vol. 13(5), pages 875-918, November.
    5. Powell, K. Skylar & Lim, Eunah, 2017. "Investment motive as a moderator of cultural-distance and relative knowledge relationships with foreign subsidiary ownership structure," Journal of Business Research, Elsevier, vol. 70(C), pages 255-262.
    6. Naoki Ando & Dong Kee Rhee & Namgyoo Park, 2008. "Parent country nationals or local nationals for executive positions in foreign affiliates: An empirical study of Japanese affiliates in Korea," Asia Pacific Journal of Management, Springer, vol. 25(1), pages 113-134, January.
    7. Bücker, Joost‏ JLE & Furrer, Olivier & Lin, Yanyan, 2015. "Measuring cultural intelligence: a new test of the CQ scale," FSES Working Papers 461, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    8. Tony Edwards & Olga Tregaskis & David Collings & Patrice Jalette & Lourdes Susaeta, 2013. "Control over Employment Practice in Multinationals: Subsidiary Functions, Corporate Structures, and National Systems," ILR Review, Cornell University, ILR School, vol. 66(3), pages 670-695, May.
    9. Peltokorpi, Vesa, 2020. "Host Country National Employees’ Prosocial Behavior toward Expatriates in Foreign Subsidiaries: A Common Ingroup Identity Model Perspective," International Business Review, Elsevier, vol. 29(2).
    10. Moreira, Márcia Zabdiele & Ogasavara, Mário Henrique, 2018. "Formal and informal institutions and the expatriation assignment: The case of Japanese subsidiaries in Latin America," Japan and the World Economy, Elsevier, vol. 47(C), pages 18-26.
    11. Liu, Xiaohui & Gao, Lan & Lu, Jiangyong & Wei, Yingqi, 2015. "The role of highly skilled migrants in the process of inter-firm knowledge transfer across borders," Journal of World Business, Elsevier, vol. 50(1), pages 56-68.
    12. Jesper EDMAN & Riki TAKEUCHI, 2021. "Do Japanese Expatriates Matter for Foreign Subsidiary Performance? A Role-Based Analysis of Three-Wave Panel Data," Discussion papers 21046, Research Institute of Economy, Trade and Industry (RIETI).
    13. Johannes Meuer & Marlies Kluike & Uschi Backes-Gellner & Kerstin Pull, 2018. "Using expatriates for adapting subsidiaries' employment modes to different market economies: a comparative analysis of US subsidiaries in Germany, the UK and Switzerland," Working Papers 372, University of Zurich, Department of Business Administration (IBW).
    14. Yamao, Sachiko & Sekiguchi, Tomoki, 2015. "Employee commitment to corporate globalization: The role of English language proficiency and human resource practices," Journal of World Business, Elsevier, vol. 50(1), pages 168-179.
    15. Tomoki Sekiguchi & Fabian Jintae Froese & Chie Iguchi, 2016. "International human resource management of Japanese multinational corporations: Challenges and future directions," Asian Business & Management, Palgrave Macmillan, vol. 15(2), pages 83-109, April.
    16. Murad Muzafer HAMZE, 2020. "The Challenges Facing Expatriate Managers Working in Foreign Countries," Management and Economics Review, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 5(1), pages 160-173, June.
    17. Lauring, Jakob & Selmer, Jan, 2018. "Person-environment fit and emotional control: Assigned expatriates vs. self-initiated expatriates," International Business Review, Elsevier, vol. 27(5), pages 982-992.
    18. Emma Stendahl & Svante Schriber & Esther Tippmann, 2021. "Control changes in multinational corporations: Adjusting control approaches in practice," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(3), pages 409-431, April.
    19. Kostova, Tatiana & Marano, Valentina & Tallman, Stephen, 2016. "Headquarters–subsidiary relationships in MNCs: Fifty years of evolving research," Journal of World Business, Elsevier, vol. 51(1), pages 176-184.
    20. Williams, Christopher & Colovic, Ana & Zhu, Jiqing, 2017. "Integration-responsiveness, local hires and subsidiary performance amidst turbulence: Insights from a survey of Chinese subsidiaries," Journal of World Business, Elsevier, vol. 52(6), pages 842-853.

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