The relationship between MNCs’ strategies and executive staffing

Abstract

Purpose

The purpose of this paper is to examine the relationship of business strategies with executive staffing of multinational companies (MNCs).

Design/methodology/approach

Based on in-depth interviews conducted with top executives of 22 MNCs’, the authors identify important connections between international business strategies and staffing orientation. The authors used the qualitative research approach of building theory from interviews; thus, creating theoretical propositions from empirical evidence.

Findings

The authors find that when the pressure for global integration is high, MNCs use more parent-country national (PCNs) (ethnocentric staffing) as against the use of host-country managers (HCNs) (polycentric staffing) when this pressure is low. Additionally, MNCs using a global strategy are more likely to use an ethnocentric staffing approach, those using a multi-domestic strategy use a polycentric approach and firms using transnational strategy adopt a mix of ethnocentric and polycentric approaches.

Research limitations/implications

Although the authors derive theoretical patterns based on rich qualitative data, their sample is relatively small and comprises mostly of French MNCs. Generalizability to a broader context is limited. However, the authors’ findings have critical implications for future research.

Practical implications

The authors’ findings provide critical managerial implications for MNCs in matching their HR strategies with business strategies. These are important for effective strategy implementation.

Originality/value

Although MNC staffing orientations have been studied for a long time, their relationship to international business strategies is still not clearly understood. The authors contribute to the literature by investigating the relationship between MNCs’ business strategy types with staffing orientations.

Citation

Lakshman, S., Lakshman, C. and Estay, C. (2017), "The relationship between MNCs’ strategies and executive staffing", International Journal of Organizational Analysis, Vol. 25 No. 2, pp. 233-250. https://doi.org/10.1108/IJOA-10-2015-0913