Management Development in Ethnocentric Multinational Corporations

by Yoram Zeira



Specific organizational problems face Western European subsidiaries of American ethnocentric multinational corporations (MNC's) and American subsidiaries of non-American MNC's. One of the major causes of these problems is the MNC's policy of reserving the top managerial positions in its subsidiaries and regional headquarters for parent-country nationals (PCN's). One possibility for overcoming such difficulties is through management development programs designed to adapt the managerial behavior of these expatriates to the specific characteristics of their new environment. This article focuses on this aspect of management development in ethnocentric MNC's. The ethnocentric personnel policy limits the opportunity of host-country nationals (HCN's) to be promoted to key managerial positions in the subsidiaries and at headquarters. Since promotion is a high-ranking goal in the U.S. and Western Europe, the reaction of HCN's to this policy is generally negative. The remuneration policy of ethnocentric multinational corporations is an additional major source of morale problems among HCN's.

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