Cultures and institutions: dispositional and contextual explanations for country-of-origin effects in MNC 'ethnocentric' staffing practice

Hyun-Jung Lee, Katsuhhiko Yoshikawa and Anne-Wil Harzing

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Although the country-of-origin effect on staffing practices of multinational corporations (MNCs) is well-known, its underlying mechanisms are under-theorized. Drawing on the cross-cultural management and comparative institutionalism literatures, we propose an overarching, theory-based framework with two mechanisms, dispositional and contextual, that might explain country-of-origin effects in MNCs’ use of parent-country nationals (PCNs) in their foreign subsidiaries’ top management teams. The tendency of MNCs from some home countries to staff these positions with PCNs is typically labelled as ‘ethnocentric’, a word imbued with negative intentions referring mainly to the dispositional rationale behind this staffing choice. However, fuzzy-set qualitative comparative analysis (fsQCA) of staffing practices of MNCs from ten home countries shows that both mechanisms – dispositional and contextual – have considerable explanatory power. Our methodological approach enables us to analyse conceptually distinct, yet empirically intertwined, societal-level explanations as a pattern, and thus offers a viable solution to integrate different perspectives in international and comparative research.

Keywords: ethnocentrism; country-of-origin effect; global staffing; multinational corporations (MNCs); fuzzy-set qualitative comparative analysis (fsQCA) (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2022-04-01
New Economics Papers: this item is included in nep-lab
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Published in Organization Studies, 1, April, 2022, 43(4), pp. 497 - 519. ISSN: 0170-8406

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