Electronic Thesis and Dissertation Repository

Degree

Doctor of Philosophy

Program

Business

Supervisor

Jean-Louis Schaan

Abstract

Returnees, those who went overseas for higher education and then returned to their home countries, represent a unique group of employees for multinational enterprises (MNEs). However, they have been ignored in the MNE staffing literature which has developed a staffing typology based on nationality, specifically parent country nationals (PCNs), host country nationals (HCNs), and third country nationals (TCNs). We propose that cultural understanding is a more appropriate criterion than nationality in categorizing staff in MNEs and compare returnees with the existing categorizations of MNE staff. Returnees may be closer to the ‘balanced individuals’ that MNEs need compared with either expatriates or locals. Therefore, they may be a good staffing choice for MNE subsidiaries in China. This study was conducted in two stages. The first stage was qualitative. Ten top executives from multinational subsidiaries in China were interviewed in order to identify and delineate the unique characteristics of returnees. They suggested that returnees understand multiple cultures, possess cross-cultural communication skills, and a global perspective; and act as a “bridge” between expatriates and locals, between a subsidiary and the other units of the MNE (including headquarters and the other subsidiaries), as well as between the MNE and the local environment. The second stage was quantitative. We first developed a theoretical model from an organizational learning perspective. We hypothesized that a subsidiary’s degree of geocentrism, ownership status, top executive background, and subsidiary age may have an impact on the employment of returnees. We further hypothesized that the ratio of returnees in a management team may have a positive impact on subsidiary performance, and that socialization and geocentrism may moderate this relationship. A survey was used to collect the primary data for hypotheses testing. Questionnaires were sent to top executives in multinational subsidiaries in mainland China. We found that joint ventures employ fewer returnees than wholly owned subsidiaries, and that returnee and expatriate top executives are more likely to hire returnees than local top executives. In addition, the relationship between subsidiary age and employment of returnees takes a downward sloping U-shape, which is similar to the relationship between subsidiary age and employment of expatriates in the literature. On the other hand, joint ventures are more likely than wholly owned subsidiaries to have a returnee as the top executive, and subsidiary age has a negative impact on the possibility of a returnee being the top executive. We also found that employment of expatriates negatively impacts employment of returnees. We did not observe any relationship between returnees and subsidiary performance. This study contributes to the literature by proposing a new criterion for staffing categorization in MNEs, by studying a new type of staff – returnees, by focusing on the subsidiary level, and by combining qualitative and quantitative data. It directs us to a promising direction in MNE staffing research and has the potential to help managers develop more effective overseas staffing strategies.


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