Title
Sending Expatriates to Japan? Executive staffing practice patterns
Abstract
Our empirical study provides the first insights of executive staffing
practice patterns in foreign-owned multinational company (MNC) subsidiaries
based in Japan. We explore determinants for parent country nationals (PCN)
as top managing directors and - new in the International Human Resource
Management (IHRM) literature - also the ratio of PCN found on the board
(Ratio) and examine under which conditions they are prevalent in the subsidiaries.
We sampled the full range of 3,241 foreign companies in Japan. For the
PCN/Ratio, several of our hypotheses were relevant for the PCN and were
tested to be positive.
In regard to the ownership ratio of the subsidiaries, the PCN/Ratio is
highly significant to 1%, supporting the theory that also for Japan high
ownership matters when it comes to sending one's "own" people
to the subsidiary abroad. In contrast to studies for other countries, however,
the size of the subsidiary does not matter for Japan, at least when measured
(like usually done) by the number of employees. Only if we measure size
by capital does the PCN/Ratio prevalence become significant.
The PCN/Ratio also becomes highly significant (by 1%) in countries with
a high Power Distance and a high Uncertainty Avoidance. PCN sending behavior
seems to be somehow a country-specific phenomenon. We, furthermore, show
that it matters whether companies settle down in one of the two big centers
in Japan (Kanto and Kansai), which cultural circumstances for PCN tend
to be more similar than in other areas of Japan. In Kanto and Kansai there
are statistically significant more PCN and, therefore, a higher PCN/Ratio
than in other Japanese areas.
In regard to MNCs, we show that smaller sized MNCs have a lower prevalence
of PCN as their top managing director. These findings are in contrast to
the International Human Resource Management literature. We put MNCs into
two groups and show that MNCs with under 5000 employees have a lower prevalence
of PCN as top managing directors (on average 28%). At the same time however,
the PCN to the whole board (Ratio) is higher in these smaller MNCs (up
to 10%). In other words, bigger companies seem to rely on their PCN as
their top managing director in Japan. In contrast to this, in smaller companies,
Japanese senior managers prevail as the top managing directors (HCN), although
our research suggests that there are more PCN sent to the board of the
bigger MNCs. Finally, we produce evidence that US subsidiaries in Japan
have the lowest PCN/Ratio, with the PCN only counting for 22%, and the
Ratio at 28%. In stark contrast, Asian countries have the highest PCN/Ratio
in our sample, with Korea leading with PCN of 81% and a Ratio of 82%.
keywords: International Human Resource Management (IHRM)
executive staffing practice patterns
Power Distance
Uncertainty Avoidance