Cultures and institutions: dispositional and contextual explanations for country-of-origin effects in MNC 'ethnocentric' staffing practices

Although the country-of-origin effect on staffing practices of multinational corporations (MNCs) is well-known, its underlying mechanisms are under-theorized. Drawing on the cross-cultural management and comparative institutionalism literatures, we propose an overarching, theory-based framework with two mechanisms, dispositional and contextual, that might explain country-of-origin effects in MNCs’ use of parent-country nationals (PCNs) in their foreign subsidiaries’ top management teams. The tendency of MNCs from some home countries to staff these positions with PCNs is typically labeled as “ethnocentric”, a word imbued with negative intentions referring mainly to the dispositional rationale behind this staffing choice. However, fuzzy-set qualitative comparative analysis (fsQCA) of staffing practices of MNCs from ten home countries shows that both mechanisms – dispositional and contextual – have considerable explanatory power. Our methodological approach enables us to analyze conceptually distinct, yet empirically intertwined, societal-level explanations as a pattern, and thus offers a viable solution to integrate different perspectives in international and comparative research.

Lee H-J, Yoshikawa K, Harzing A-W. Cultures and Institutions: Dispositional and contextual explanations for country-of-origin effects in MNC ‘ethnocentric’ staffing practices. Organization Studies. 2022;43(4):497-519. Copyright © 2021 The Author(s). DOI: https://doi.org/10.1177/01708406211006247
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