Lessening the divide in foreign subsidiaries: The influence of localization on the organizational commitment and turnover intention of host country nationals

Azusa Hitotsuyanagi-Hansel, Fabian Jintae Froese, Yong Suhk Pak

Research output: Contribution to journalArticle

12 Citations (Scopus)

Abstract

The retention of host country nationals (HCNs) has become a key challenge for many foreign subsidiaries of multinational enterprises. This study examines whether localization, the replacement of expatriates with HCNs, could serve as a counter-strategy to increase the organizational commitment and reduces the turnover intention among HCNs. Based on social identity theory, we have developed a model to explain the heterogeneous nature of this influence on HCNs depending on different individual-level characteristics, e.g., gender, educational level, organizational tenure, and managerial position. Survey results from 197 Chinese white-collar employees showed that localization increases organizational commitment, which in turn reduces their turnover intention. This tendency was the strongest among male and highly educated employees. Practical and theoretical implications are further discussed.

Original languageEnglish
Pages (from-to)569-578
Number of pages10
JournalInternational Business Review
Volume25
Issue number2
DOIs
Publication statusPublished - 2016 Apr 1

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Turnover intention
Localization
Host country nationals
Foreign subsidiaries
Organizational commitment
Employees
Multinational enterprises
Social identity theory
Educational level
Organizational tenure
Replacement
Expatriates

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Finance
  • Marketing

Cite this

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