Applying the Modified Delphi Method and DANP to Determine the Critical Selection Criteria for Local Middle and Top Management in Multinational Enterprises

Abstract

Traditionally, multinational enterprises provided middle and top management from the mother country. They would only hire entry-level employees, such as workers, from the domestic country to control the subsidiary. However, local managers benefit from a shared background and culture with the local employees. Local managers can communicate and cooperate more effectively and smoothly with local employees than foreign mangers can. Therefore, multinational enterprises are increasingly selecting middle and top management from the local market. In this study, we aimed to determine the decision factors that influence the selection of local middle and top management from the perspective of human capital. We attempt to help multinational enterprises to choose and hire middle and top management from local markets. We first identified four dimensions and fourteen criteria according to the literature using the modified Delphi method. Then, DANP (decision making and trial evaluation laboratory (DEMATEL)-based analytic network process) was employed to determine the weights of each criterion or sub-criterion. Academic experts and top managers in multinational enterprises (Taiwanese companies in Vietnam) provided their opinions for data analysis. The results showed that positive psychological capital, managerial competencies, integration, and professional competencies were the four important factors that multinational enterprises consider when they select middle and top management from the local market. We further discussed the theoretical and practical implications of the results.