Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9719633 | Scandinavian Journal of Management | 2005 | 26 Pages |
Abstract
This paper analyzes staffing decisions in foreign subsidiaries from the perspective of transaction cost theory. We focus on the ex post transaction costs of the employment relation. Specifically, we look at the monitoring, bonding, maladaptation, and bargaining costs of conducting activities in specific subsidiaries in a foreign country. We hypothesize that the transaction costs of using expatriates are lower than those generated by local employees, especially in the higher managerial echelons of foreign subsidiaries, but also that costs can be reduced as individuals become more experienced. We also conjecture that ex post transaction costs are influenced by cultural differences between the host and the home countries, and by characteristics of the companies and their subsidiaries. The framework is empirically corroborated by survey data on a sample of 145 Norwegian MNCs.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Strategy and Management
Authors
Gabriel R.G. Benito, Sverre Tomassen, Jaime Bonache-Pérez, José Pla-Barber,