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The antecedents and consequences of successful localization

Author

Listed:
  • Kenneth S Law

    (Department of Management, The Chinese University of Hong Kong, Shatin, NT, Hong Kong)

  • Lynda Jiwen Song

    (Business School, Renmin University of China, Beijing, PR China)

  • Chi-Sum Wong

    (Department of Management, The Chinese University of Hong Kong, Shatin, NT, Hong Kong)

  • Donghua Chen

    (Institute of Accounting and Finance, School of Business, Nanjing University, Nanjing, PR China)

Abstract

Localization in the corporate setting is the extent to which expatriate managers are replaced by local employees originally held by expatriate managers. We sampled 229 multinational enterprises (MNEs) in the People's Republic of China and investigated the antecedents of localization success based on resource dependency theory. We developed a 40-item scale to measure human resource (HR) practices determined to contribute to successful localization. We also identified parent company support and top management's commitment as two sets of factors that predicted localization success. It was the first study that found a significant relationship between localization success and top management ratings of company performance.

Suggested Citation

  • Kenneth S Law & Lynda Jiwen Song & Chi-Sum Wong & Donghua Chen, 2009. "The antecedents and consequences of successful localization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(8), pages 1359-1373, October.
    • Handle: RePEc:pal:jintbs:v:40:y:2009:i:8:p:1359-1373
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    Citations

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    Cited by:

    1. Jack Pegram & Gioia Falcone & Athanasios Kolios, 2019. "Quantitative and Qualitative Assessment of Job Role Localization in the Oil and Gas Industry: Global Experiences and National Differences," Energies, MDPI, vol. 12(6), pages 1-22, March.
    2. Song, Sangcheol, 2020. "Actualization of growth potential in international joint ventures: The moderating effects of localization strategies," Journal of World Business, Elsevier, vol. 55(2).
    3. Shad Morris & Scott Snell & Ingmar Björkman, 2016. "An architectural framework for global talent management," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(6), pages 723-747, August.
    4. Marina Anna Schmitz & Fabian Jintae Froese & Anna Katharina Bader, 2018. "Organizational cynicism in multinational corporations in China," Asia Pacific Business Review, Taylor & Francis Journals, vol. 24(5), pages 620-637, October.
    5. Newburry, William & Gardberg, Naomi A. & Sanchez, Juan I., 2014. "Employer Attractiveness in Latin America: The Association Among Foreignness, Internationalization and Talent Recruitment," Journal of International Management, Elsevier, vol. 20(3), pages 327-344.
    6. Hitotsuyanagi-Hansel, Azusa & Froese, Fabian Jintae & Pak, Yong Suhk, 2016. "Lessening the divide in foreign subsidiaries: The influence of localization on the organizational commitment and turnover intention of host country nationals," International Business Review, Elsevier, vol. 25(2), pages 569-578.
    7. Bebenroth, Ralf & Froese, Fabian J., 2020. "Consequences of expatriate top manager replacement on foreign subsidiary performance," Journal of International Management, Elsevier, vol. 26(2).
    8. Jack Pegram & Gioia Falcone & Athanasios Kolios, 2018. "A Review of Job Role Localization in the Oil and Gas Industry," Energies, MDPI, vol. 11(10), pages 1-18, October.
    9. Kunisch, Sven & Menz, Markus & Birkinshaw, Julian, 2019. "Spatially dispersed corporate headquarters: A historical analysis of their prevalence, antecedents, and consequences," International Business Review, Elsevier, vol. 28(1), pages 148-161.
    10. Li, Chun-Sheng Joseph & Lee, Po-Yen & Liou, James J.H., 2018. "Exploring the staff localization of Taiwanese MNC subsidiaries in China: Effects of size, operation time, location, and local-market focus," Journal of Business Research, Elsevier, vol. 88(C), pages 20-27.
    11. Bich Ngoc Le & Dirk Morschett, 2023. "Employer Attractiveness of EMNEs: The Role of CSR in Overcoming Country-of-Origin Image Constraints in Developed Host Countries," Management International Review, Springer, vol. 63(2), pages 313-346, April.
    12. APJM Editorial Team, 2020. "Making contributions beyond theory-based studies: From the APJM editorial team," Asia Pacific Journal of Management, Springer, vol. 37(1), pages 1-6, March.
    13. Chun-Sheng Joseph Li & Tser-Yieth Chen & Phil Yihsing Yang, 2016. "Local Embeddedness, Market Focus, and Productivity: Evidence of Taiwanese Manufacturing MNE Subsidiaries in China," Growth and Change, Wiley Blackwell, vol. 47(4), pages 596-611, December.
    14. Liu, Xiaohui & Gao, Lan & Lu, Jiangyong & Lioliou, Eleni, 2016. "Environmental risks, localization and the overseas subsidiary performance of MNEs from an emerging economy," Journal of World Business, Elsevier, vol. 51(3), pages 356-368.
    15. Geoffrey Wood & Tamer K. Darwish & Abdullah N. Alanezi & Satwinder Singh, 2020. "Indigenization of staffing in MNEs: The case of Saudi Arabia," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 879-898, September.
    16. Naoki Ando, 2016. "Similarity to successful peers and the implications for subsidiary performance," Asian Business & Management, Palgrave Macmillan, vol. 15(2), pages 110-136, April.
    17. Yan Jin & Liyun Zhang & Lu Feng, 2022. "Success Factors of Cross-Border Agricultural Investments for Opium Poppy Alternative Project under China’s Belt and Road Initiative," Sustainability, MDPI, vol. 14(23), pages 1-16, November.
    18. Yong Suhk Pak & Qinglu Sun & Yi Yang, 2019. "Influences of expatriate managerial styles on host-country nationals’ turnover intention," Asian Business & Management, Palgrave Macmillan, vol. 18(4), pages 263-280, September.
    19. Li, Ying & Shou, Yongyi & Ding, Ronggui & Sun, Tao & Zhou, Qing, 2019. "Governing local sourcing practices of overseas projects for the Belt and Road Initiative: A framework and evaluation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 126(C), pages 212-226.
    20. I-Chieh Hsu & Yi-Ju Shih & Fan-Yun Pai, 2020. "Applying the Modified Delphi Method and DANP to Determine the Critical Selection Criteria for Local Middle and Top Management in Multinational Enterprises," Mathematics, MDPI, vol. 8(9), pages 1-21, August.

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