Title: Selection of Local and Expatriate Managers of MNEs in the Post-Entry Phase

Authors: Rebecka Nilsson and Tilda Nithenius

Level: Master thesis, 30 HP

Keywords: Post-Entry Phase, Managerial Selection Strategy, Foreign Activities, Multinational Enterprises, Local Manager, Expatriate Manager  

Background: The internationalization of companies contributes to competitive advantage as well as challenges for the companies. In foreign activities enterprises exist in different phases, which might have an impact on the management requirements. This makes the strategy of managerial selection relevant because it will ease the overall foreign activities.  

Research Question: Which are the underlying factors that influence the selection of host-country managers in the post-entry phase?

Purpose:The purpose of this study is to develop the understanding for companies’ managerial selection strategies in the post-entry phase. In addition, the purpose of this study is to develop a model that will work as a theoretical guideline for managerial selections.

Theoretical Framework:Theories of firms’ internationalization process, different phases for companies that operate internationally and challenges for companies operating abroad, are presented. Further theories of managerial selection, international human resource management and management of international companies are discussed.  

Methodology:This study is made with a qualitative research method and a multiple case-study design, with an abductive approach. Eight Swedish companies operating in China were interviewed through semi-structured and low standardized interviews. The respondents from the companies are top managers operating in China.

Findings:There are three underlying factors; trust, knowledge gap and legitimacy, that influence the managerial selection of host-country managers in the post entry-phase. Each underlying factor is indirect influenced by different factors. The underlying factors are also all influenced by an overall factor, social capital. This study implies that the selection of managers, except top managers, changes in the post-entry phase compared to the entry-phase as they recruit host-country nationals.