Staffing managerial positions in emerging markets: a cultural perspective

Abstract

PurposeThis paper examines the challenges facing multinational enterprises (MNEs) in finding competent managers to staff operations and subsidiaries in emerging market economies (EMEs).Design/methodology/approachThe key question examined is – who is going to manage the business expansion of MNEs in EMEs? Will it be host country nationals who know and understand the local business environment; parent country nationals (PCNs) who are sent on an overseas assignment by the parent corporation; or third country nationals (TCNs) recruited for their unique set of skills and expertise?FindingsThere is no “one size fits all” solution; for most multinational corporations (MNCs), a combination of strategies will work. One approach is to seek out EME nationals that are currently working or studying in the MNCs home country. Other MNCs seek recruits directly in the EMEs and then put the recruits through an intensive training program. An alternative is to improve the cross‐cultural training provided to expatriate PNC and TNC managers. However, despite calls for improved training that have been made over decades, there is little evidence that MNCs are investing the necessary resources in training their expatriates in the soft skills that are essential to success. With a growing need for good managers to staff their overseas operations and not enough local managers to do the job, at least in the short to medium term, MNCs will continue to use a combination of staffing strategies, in the hope that they will be able to build up a cadre of culturally competent international managers, regardless of national origin, who can operate effectively in EME environments.Research limitations/implicationsUnless there is a marked shift in the quality and rigor of the cross‐cultural training programs currently being provided to PCNs and TCNs, we foresee plenty of storm clouds developing in the blue skies of emerging markets.Originality/valueThis paper provides a current and practitioner focused discussion of the specific cultural challenges of EMEs and develops the concept of managerial cultural competence.