Abstract
Communication between headquarters (HQs) and foreign subsidiaries of multinational corporations (MNCs) is crucial for coordination, control, and knowledge transfer, but language barriers and geographic distance impede this exchange. Hypothesising that MNCs react to these hurdles by appointing subsidiary top managers with adequate communication skills, we investigate how the native language barrier, foreign language barrier, and geographic distance between HQs and a foreign subsidiary influence the choice between parent and host/third country nationals as subsidiary CEOs. Testing our hypotheses on a sample of 101 staffing decisions made by German firms in 33 countries, we find a negligible effect of the native language barrier, but establish that a foreign language barrier enhances and higher geographic distance lowers firms' propensity to staff subsidiary CEO positions with parent country nationals. An MNC's international experience was found to moderate these relationships.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
