Career development for host country nationals: a case of American and Japanese multinational companies in Vietnam

Abstract

This paper focuses on how multinational companies (MNCs) localize human resources within their subsidiaries in the context of developing countries. It uses a qualitative research method and looks at a US and a Japanese automotive MNC operating in Vietnam. This paper identifies both home and host countries as significant moderating factors on MNCs' global staffing policies. An ethnocentric global staffing approach is evident in the Japanese MNC, while a polycentric one prevails in the US MNC. These global staffing approaches dictate possible career paths for local managers. Early selection of high potential staff and fast track systems to move them quickly through organizational ladders are evident in the US MNC. Meanwhile, in the Japanese MNC, identification of talent is primarily based on a ‘wait and see’ tactic. Local managers advance through a single ladder system and their promotion possibilities are strictly limited within the subsidiary. The paper suggests that while a developing host country possesses few formal constraint mechanisms relating to the implementation of staffing practices, informal constraint mechanisms present a complex and challenging situation for MNC operations and require from them a very high level of flexibility when implementing transferred managerial practices.