"Opportunity, Threat, and Asymmetric Moderating Effects on Multinational Firms' Staffing Strategies"

Abstract

Organizations respond to threat and opportunities differently. In this paper we apply the threat-opportunity framework developed in organization studies to understand how an multinational enterprise (MNE) adjusts its expatriate staffing at foreign subsidiaries when faced with both threats and opportunities in a host country. An MNE is likely to appoint expatriates at subsidiaries if its parent competes in a global industry or has sole ownership in the subsidiary. Such relationships are asymmetrically moderated by environmental threat and market opportunity. Specifically, the relationships become stronger when MNEs perceive more threats, but weaker when MNEs perceive more opportunities in a host country. Our analysis on 353 foreign subsidiaries by Japanese firms in the manufacturing industry in China between year 1979 and 2000 largely supports these ideas.