MNC subsidiary staffing architecture: building human and social capital within the organisation

Abstract

The purpose of this paper is to examine the level of human and social capital that different archetypes of subsidiary staffing are associated with, and how this influences the management of knowledge stocks and flows within the MNC. We identify four subsidiary staffing archetypes (local–internal, local–external, global–internal, and global–external) and suggest that each of them can be used for different knowledge-related purposes within the organisation. The local-internal archetype may carry a dual role in both exploiting existing knowledge stocks in their local markets and transferring market knowledge to the headquarters, through the co-existence of a high level of market knowledge and external social capital combined with at least some degree of MNC-specific knowledge and social capital. The local-external archetype, in turn, can play a valuable role in the exploration of new non-redundant knowledge. The global-internal archetype serves a key function in transferring knowledge and best practices from the headquarters to the subsidiaries. Lastly, the global-external archetype seems to have limited human- and social-capital related advantages.