Lessening the divide in foreign subsidiaries: The influence of localization on the organizational commitment and turnover intention of host country nationals

Azusa Hitotsuyanagi-Hansel, Fabian Jintae Froese and Yong Suhk Pak

International Business Review, 2016, vol. 25, issue 2, 569-578

Abstract: The retention of host country nationals (HCNs) has become a key challenge for many foreign subsidiaries of multinational enterprises. This study examines whether localization, the replacement of expatriates with HCNs, could serve as a counter-strategy to increase the organizational commitment and reduces the turnover intention among HCNs. Based on social identity theory, we have developed a model to explain the heterogeneous nature of this influence on HCNs depending on different individual-level characteristics, e.g., gender, educational level, organizational tenure, and managerial position. Survey results from 197 Chinese white-collar employees showed that localization increases organizational commitment, which in turn reduces their turnover intention. This tendency was the strongest among male and highly educated employees. Practical and theoretical implications are further discussed.

Keywords: Localization; Turnover intention; Organizational commitment; Social identity theory; China; MNC subsidiaries; Gender; Education; Organizational tenure; Managerial position (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:25:y:2016:i:2:p:569-578

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DOI: 10.1016/j.ibusrev.2015.09.011

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