Entry mode and HRM strategies of emerging multinationals

Abstract

PurposeThe purpose of this study is to analyze the relationship between entry mode and human resource management in the context of small, emerging, multinationals.Design/methodology/approachThis study surveyed international personnel from Portuguese firms actively present in the Spanish market through different modes, ranging from exporting to direct investment. Usable data on 208 relevant employees from 28 firms was obtained.FindingsFirms selecting weak entry modes tended to prefer country‐specific competences, such as knowledge of foreign languages and capacity to adapt, as well as younger personnel. By contrast, preference for stronger entry modes was significantly related to firm‐specific knowledge and higher management skills.Practical implicationsSuccessful expansion into foreign markets depends on the crucial role played by human resources. This study underscores the importance of hiring and training competent international personnel whose skills fit the selected entry modes. This may be even more important for firms that are younger, smaller and less experienced with foreign markets.Originality/valueThis study extends previous knowledge of the relationship between human resource requirements and the entry modes used by multinational enterprises (MNEs) when they enter foreign markets.