Toward a Dynamic Process Model of Staffing Composition and Subsidiary Outcomes in Multinational Enterprises

Abstract

Subsidiary staffing composition is defined as the distribution of parent country nationals (PNCs), host country nationals (HCNs), and third country nationals (TCNs) in subsidiaries of multinational enterprises (MNEs). Subsidiary staffing composition varies along the dimension of nationality heterogeneity. The MNE staffing literature has mainly focused on expatriate PCNs and individual-level outcomes. This article develops a dynamic process model in which heterogeneity of staffing composition influences affective, behavioral, cognitive, and strategic outcomes, which in turn affect subsidiary financial performance. Drawing upon organizational learning and social identification theories, this article offers testable propositions regarding relationships between staffing composition and subsidiary outcomes, and changes in these relationships over time. Finally, it proposes a preliminary research program to test the model.