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Strategic management staffing decisions among German subsidiaries in Japan

Agency concerns and resource endowment issues

  • ZfB-Special Issue 3/2011
  • Published:
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Abstract

This study discusses the composition of strategic management teams in foreign subsidiaries beyond decisions solely about the general manager, i.e. encompassing third-country nationals; locally hired “foreigners” as well as managers on short-term assignments. We extend the discussion about expatriates by developing hypotheses about those issues based on the resource-based view of the firm and the principal agent theory and find that both are important for understanding staffing decisions. This research analyses these issues by means of a data set on German subsidiaries in Japan and shows that recent changes in the global environment are providing multinationals greater latitude when staffing foreign-based subsidiaries, including choices that have not been given due weight in IHRM literature.

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Notes

  1. In our sample, the status of TCNs is similar to expatriate PCNs sent from headquarters. As an example, we found no reason to assume that the Spanish-citizen GM of a leading German carmaker’s subsidiary in Meguro, Tokyo, receives less salary and fringe benefits than do German parent-country-national GM expatriates. However, for other senior management team members, it is conceivable that a TCN, on average, does not receive as favourable conditions as a German PCN. The reason is that a PCN sent from headquarters at least in some cases will enjoy a better negotiation power vis-à-vis the headquarters than a TCN.

  2. This could, for instance, be a German citizen who years ago came to Japan through one of the study and research programs (Bebenroth 2007). As this person is living in Japan already, he/she will be contracted to the subsidiary, not by headquarters.

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Authors and Affiliations

  1. Research Institute for Economics and Business Administration, Kobe University, 2-1, Rokkodai, Nada-ku, Shinkan 304, 657-8501, Kobe, Japan

    Ralf Bebenroth

  2. Mercator School of Management, University of Duisburg-Essen, 47048, Duisburg, Germany

    Werner Pascha

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  1. Ralf Bebenroth
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  2. Werner Pascha
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Correspondence to Ralf Bebenroth.

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Bebenroth, R., Pascha, W. Strategic management staffing decisions among German subsidiaries in Japan. Z Betriebswirtsch 81 (Suppl 3), 5–25 (2011). https://doi.org/10.1007/s11573-011-0452-0

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