Subsidiaries of Multinational Corporations

Abstract

This article analyzes allegiances of three groups of employees in foreign subsidiaries of multinational enterprises—parent country nationals, host country nationals, and third country nationals. Building on, but different from existing work, we broaden the focus of inquiry from expatriates at the managerial level to (a) include other categories of subsidiary employees and (b) incorporate in our analysis host country nationals rather than focus exclusively on expatriates. We explore the notion that the allegiances of subsidiary employees may be conceptualized as being split among three potential objects of allegiance, namely the focal subsidiary, the headquarters, and the subsidiary host country. Our key arguments are summarized in a framework, complemented with a set of theoretical propositions and implications for future research and practice are discussed.