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Human capital in multinational enterprises: Does strategic alignment matter?

Chung, Chris Changwha, Park, Hye Youn, Lee, Jeoung Yul and Kim, Kwanghyun (2015) Human capital in multinational enterprises: Does strategic alignment matter? Journal of International Business Studies, 46 (7). pp. 806-829.

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This research proposes a strategic human capital alignment framework to examine whether the alignment between subsidiary strategy (i.e., exportoriented vs local market-oriented strategy) and human capital (i.e., parent firm vs local-specific human capital) is positively related to subsidiary performance in multinational enterprises (MNEs). We further explore two important exogenous (i.e., foreign exchange rate change) and endogenous (i.e., MNE international experience) boundary conditions, since they may adjust the positive effect of strategic human capital alignment on performance. The analysis, based on 5604 subsidiary observations of 423 MNEs from 1990 to 2012, confirms the positive synergic effect of aligning subsidiary strategy and human capital and shows the moderating effects of foreign exchange rate change and MNE international experience. By presenting the importance of subsidiary strategy – global staffing alignment and the roles of external economic environments and internal organizational capabilities as boundary conditions, the strategic human capital alignment framework suggests that what makes human capital valuable for the firm is its alignment with strategic orientation. Thus managers should carefully deploy the appropriate type of human capital to fulfill the requisite organizational strategy and take into account changing external and internal contextual conditions in applying the framework.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
Chung, Chris Changwha
Park, Hye
Lee, Jeoung Yul
Kim, Kwanghyun
Date : 18 June 2015
DOI : 10.1057/jibs.2015.15
Copyright Disclaimer : © 2015 Academy of International Business
Uncontrolled Keywords : Human capital; Multinational corporations (MNCs) and enterprises (MNEs); Strategic alignment; Exchange rates; International experience
Depositing User : Diane Maxfield
Date Deposited : 17 Jun 2019 14:06
Last Modified : 17 Jun 2019 14:06

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