Economic Inequality, Cultural Orientation and Base-of-Pyramid Employee Performance at the MNC Subsidiary: A Multi-Case Investigation

Abstract

Research to date on economic inequality and how it affects organizational employee performance is both sparse and generic in scope. Multinational corporations—in particular—can benefit from an extension of empirical inquiry which looks at economic inequality in conjunction with cultural orientation in order to understand the behavior of their cross-border subsidiary employees. To this end, we report on an exploratory, multi-case study using data drawn from interviews, observation and company information with frontline, base of the organizational pyramid employees at the Thai subsidiaries of Anglo-US MNCs. Our findings detail the manifestations of high economic inequality and low worker status, as well as the adverse implications for subsidiary service delivery (e.g., absenteeism, moonlighting, deficient-communication) and broader corporate reputation concerns. We also detail the specific role of vertical-collectivist cultural norms and values in both exacerbating and mitigating the adverse effects observed. Finally, we discuss the implications for international business managers seeking to address (and prevent) subsidiary performance suppression due to economic inequality, focusing on the development of ‘social embeddedness’ as a key competence in the engagement and nurturing of base-of-pyramid employees in emerging Asia.