Title: Problem Perceptions in Distant Subsidiaries: Does Manager Expatriation Matter?
Abstract: Expatriate managers play key roles in multinational companies as they deal with cross-cultural problems and uncertainties. They are also expected to bridge the gap between headquarters’ strategies and subsidiaries’ realities in the local context. We test whether expatriate CEOs, confronted with conditions in subsidiaries in culturally distant countries, perceive problems differently from the way local CEOs do. The study is longitudinal and mainly empirically driven in that it started with interviews in 1995 with Danish subsidiary CEOs in Germany and East Asia; these were followed by surveys in 1995, 2005, and 2012. To facilitate generalization, the study also includes other Scandinavian subsidiaries in East Asia, for a total of 205 subsidiaries. Data are analyzed using structural equation modeling. The results indicate that expatriate managers significantly more often report problems of equivocality. As opposite to this, perceived problems in headquarters–subsidiary interactions in East Asian subsidiaries are not significantly associated with CEO expatriate status, but are instead significantly associated with (i.e., moderated by) MNC use of cultural modes of control. The study also shows that problem perceptions remain fairly stable over time.
Publication Year: 2013
Publication Date: 2013-01-01
Language: en
Type: article
Indexed In: ['crossref']
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