Cultures and Institutions: Dispositional and contextual explanations for country-of-origin effects in MNC ‘ethnocentric’ staffing practices

Abstract

Although the country-of-origin effect on staffing practices of multinational corporations (MNCs) is well-known, its underlying mechanisms are under-theorized. Drawing on the cross-cultural management and comparative institutionalism literatures, we propose an overarching, theory-based framework with two mechanisms, dispositional and contextual, that might explain country-of-origin effects in MNCs’ use of parent-country nationals (PCNs) in their foreign subsidiaries’ top management teams. The tendency of MNCs from some home countries to staff these positions with PCNs is typically labelled as ‘ethnocentric’, a word imbued with negative intentions referring mainly to the dispositional rationale behind this staffing choice. However, fuzzy-set qualitative comparative analysis (fsQCA) of staffing practices of MNCs from ten home countries shows that both mechanisms – dispositional and contextual – have considerable explanatory power. Our methodological approach enables us to analyse conceptually distinct, yet empirically intertwined, societal-level explanations as a pattern, and thus offers a viable solution to integrate different perspectives in international and comparative research.