The choice between host country nationals and expatriates to manage a foreign subsidiary of multinational corporation.

Abstract

The Choice Between Host Country Nationals and Expatriates to Manage a Foreign Subsidiary of Multinational Corporation. Cases: Kone Corporation, Canon Inc. and Nordic Cjf Oy.

Objective of the study The aim of this thesis is to examine how multinational corporations choose a suitable manager to control a foreign subsidiary. The focus of this thesis is on the opinions of the multinational corporations instead of the measurements of the performance of the managers. We will investigate the choice between a host country national manager and an expatriate manager in the foreign subsidiaries of multinational corporations. This topic was chosen because expatriate and host country national managers have rarely been compared in previous researches.

Methodology and Theoretical Framework The data for the qualitative multiple-case study was collected through personal and phone interviews. The subjects of the interview were a marketing manager from Canon Inc and Area HR Director from KONE Corporation and the CEO and assistant manager for Nordic Cjf Oy. The theoretical framework was mainly based on Perlmutter’s staffing policies (1969) and Volkmar’s theory (2003) as well as derived from the empirical results.

Findings and Conclusions The results of this thesis revealed that the case companies were irrelevant between the choices of manager based on the nationality. The multinational corporations are more concerned in the individual competences of the managers. The suitability of the manager to the subsidiary role and market situation is more important.

Key words Expatriate manager, host country national manager, headquarters –subsidiary relationship, IHRM staffing policy, multinational corporation, control, cultural distance.