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Caught in a Dilemma: The Impacts of Dual Organizational Identification on Host Country Nationals in the Face of Ethical Controversies

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Abstract

Dual organizational identification (DOI) is generally considered beneficial to multinational corporations (MNCs) and their employees. However, this study challenges this consensus by exploring the potential negative impacts of DOI in the ethical controversy context when MNCs and host countries have conflicting views on a business decision and both feel that they are ethically correct. Integrating role identity theory, we propose that the DOI of host country nationals (HCNs) may create conflict in their work-related perceptions and behaviors amid an ethical controversy. In Study 1, we interviewed 51 HCNs from MNCs’ Chinese subsidiaries and found that HCNs’ DOI caused their role conflict during ethical controversies, which in turn affected their perceptions (i.e., perceived isolation, ethical pressure) and behaviors (i.e., procrastination, exit, voice, headquarters (HQ)–subsidiary cooperation). We also found that the job level of HCNs played a key role in moderating the above relationship. In Study 2, we tested the theoretical framework developed in Study 1 using a multi-wave survey from a sample of 300 HCNs working in MNCs’ Chinese subsidiaries. The results generally validated the Study 1 model. Theoretical and practical implications are discussed.

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Data availability

The Study 2 survey data is available from the first author upon reasonable request.

Notes

  1. Our research design is set in the context of the Xinjiang cotton controversy. A detailed description of the controversy is presented in Appendix 2.

  2. https://www.bbc.co.uk/news/extra/nz0g306v8c/china-tainted-cotton.

  3. https://www.scmp.com/economy/china-economy/article/3101536/us-issues-restrictions-import-xinjiang-cotton-and-apparel.

  4. https://hmgroup.com/sustainability/fair-and-equal/human-rights/h-m-group-statement-on-due-diligence/.

  5. http://www.xinhuanet.com/english/2020-12/03/c_139561496.htm.

  6. https://apnews.com/article/china-boycott-hm-over-xinjiang-9e9a27b7179bd7a34330b8325ac37cdb.

  7. https://edition.cnn.com/2021/03/25/business/hm-nike-xinjiang-cotton-boycott-intl-hnk/index.html.

  8. https://www.globaltimes.cn/page/202103/1219474.shtml.

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Funding

This study was funded by National Natural Science Foundation of China (72272049), the MOE Layout Foundation of Humanities and Social Sciences (22YJA630112), Natural Science Foundation of Hunan Province of China (2022JJ20019), The Science and Technology Innovation Program of Hunan Province (2023RC3263), and National Natural Science Foundation of China (71790593).

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  1. Business School, Hunan University, 2 Lushan South Road, Yuelu District, Changsha, Hunan, 410082, China

    Ya Xi Shen, Chuang Zhang & Long Zhang

  2. Graduate School of Management, Kyoto University, Yoshida-Honmachi, Sakyo-ku, Kyoto, 606-8501, Japan

    Ting Liu

  3. School of Economics and Management, Tongji University, Tongji Building A, Siping Road 1500, Shanghai, 200092, China

    Sijia Zhao

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Correspondence to Long Zhang.

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The authors certify that the study was conducted strictly in compliance with ethical standards in the treatment of all participants. The ethical aspects of this research were approved by the Hunan University Business School Research Ethics Committee. All subjects in Study 1 and 2 provided their (online) informed consent to participate.

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Shen, Y.X., Zhang, C., Zhang, L. et al. Caught in a Dilemma: The Impacts of Dual Organizational Identification on Host Country Nationals in the Face of Ethical Controversies. J Bus Ethics (2023). https://doi.org/10.1007/s10551-023-05586-8

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  • DOI: https://doi.org/10.1007/s10551-023-05586-8

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