Examining Experience Portfolios of Subsidiary Executives in Multinational Firms

[We’re pleased to welcome author Dr. Marketa Rickley of the University of Iowa. Dr. Rickley recently published an article in Journal of Management entitled “Cultural Generalists and Cultural Specialists: Examining Experience Portfolios of Subsidiary Executives in Multinational Firms,” which is currently free to read for a limited time. Below, Dr. Rickley reveals the inspiration for conducting this research:]

JOM_44.1_72ppiRGB_powerpointWhat motivated you to pursue this research?

How multinational companies (MNCs) allocate executives to manage foreign subsidiaries located in diverse and challenging markets has long fascinated researchers. However, the emphasis of this research stream has largely been on the antecedents and consequences of selecting expatriates versus local managers. Based on the observations that both expatriate and local managers often have substantial international experiences to draw on to manage a foreign subsidiary, this study sought to move away from placing foreign subsidiary executives into just two distinct categories, which are often insufficient and may be potentially misleading in characterizing these individuals’ experiential backgrounds. This study instead analyzed the depth and breadth of foreign subsidiary executives’ previous international experiences relative to the institutional distance between the MNC headquarters country and the foreign subsidiary country.

In some cases, the MNC headquarters country and the foreign subsidiary country are quite similar. In other cases, the foreign country is quite different along economic, political, and cultural dimensions, making the market presumably more difficult to manage from the perspective of MNC headquarters. The main focus of this research was to determine whether in these more “institutionally distant” foreign subsidiary markets MNCs select executives with (i) a broader or (ii) a more relevant set of previous international experiences. In other words, do they select cultural generalists or cultural specialists to manage more distant foreign markets

What has been the most challenging aspect of conducting your research? Were there any surprising findings?

The answers provided by this study to the research questions above were quite surprising to me personally. I expected that MNCs would select executives whose previous international experiences matched the specific challenge at hand. But instead, the results showed that MNCs reach for cultural generalists – that is, for individuals with a broad set of previous cultural experiences that are not necessarily relevant to the headquarters—subsidiary country pair. Interestingly, this finding is true in both the expatriate and local manager sub-sample.

In what ways is your research innovative, and how do you think it will impact the field?

Apart from digging deeper into the experiential backgrounds of expatriates and local managers, this study is innovative in the way that it measures generality and specificity of previous international experience. Generality is measured as the cultural distance between the country where the experience was earned, and the executive’s country of origin. Specificity is measured as the cultural distance between the country where the experience was earned, and the “other” country in the headquarters—subsidiary country pair. That is, for a French-owned foreign subsidiary in Romania, its Romanian executive’s specificity international experience would be measured against France – which is the “other” country in the headquarters—subsidiary country pair. The same Romanian executive’s generality of international experience would be measured against Romania – his/her country of origin. Particularly novel about this approach is the fact that each international experience is time-weighted by the number of years the individual spent abroad. Few other studies have been able to analyze international experience at this fine-grained level of detail.

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This entry was posted in Management, Management Theory and tagged , , , , by Cynthia Nalevanko, Senior Editor, SAGE Publishing. Bookmark the permalink.

About Cynthia Nalevanko, Senior Editor, SAGE Publishing

Founded in 1965, SAGE is the world’s leading independent academic and professional publisher. Known for our commitment to quality and innovation, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students across a broad range of subject areas. With over 1500 employees globally from principal offices in Los Angeles, London, New Delhi, Singapore, Washington DC, and Melburne, our publishing program includes more than 1000 journals and over 900 books, reference works and databases a year in business, humanities, social sciences, science, technology and medicine. Believing passionately that engaged scholarship lies at the heart of any healthy society and that education is intrinsically valuable, SAGE aims to be the world’s leading independent academic and professional publisher. This means playing a creative role in society by disseminating teaching and research on a global scale, the cornerstones of which are good, long-term relationships, a focus on our markets, and an ability to combine quality and innovation. Leading authors, editors and societies should feel that SAGE is their natural home: we believe in meeting the range of their needs, and in publishing the best of their work. We are a growing company, and our financial success comes from thinking creatively about our markets and actively responding to the needs of our customers.

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