Multiculturals as strategic human capital resources in multinational enterprises

Multiculturals – individuals with notable cultural knowledge, skills, abilities, and other characteristics (KSAOs) – are widely assumed to contribute to MNE performance leading, ultimately, to global competitive advantages. We nuance this general belief by arguing that what matters for an MNE’s comp...

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Bibliographic Details
Published inJournal of international business studies Vol. 53; no. 1; pp. 95 - 125
Main Authors Hong, Hae-Jung, Minbaeva, Dana
Format Journal Article
LanguageEnglish
Published London Palgrave Macmillan UK 01.02.2022
Palgrave Macmillan
Subjects
Advantages
Business and Management
Business Strategy/Leadership
Comparative advantage
Competition
Competitive advantage
Employment
Ethnography
Human capital
International Business
Language policy
Leadership
Management
Multiculturalism & pluralism
Multinational corporations
Organization
Resources
Teams
Transformation
competitive advantage
multiculturals
qualitative method
strategic human capital
ethnographic field study
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Summary:Multiculturals – individuals with notable cultural knowledge, skills, abilities, and other characteristics (KSAOs) – are widely assumed to contribute to MNE performance leading, ultimately, to global competitive advantages. We nuance this general belief by arguing that what matters for an MNE’s competitive advantage is not the employment of multiculturals per se, but rather the MNE’s ability to transform multiculturals’ KSAOs into strategic human capital resources by creating complementarities between KSAOs and emergence-enabling factors. Using a 12-month in-depth ethnographic study over the span of two years in two MNEs, we identified five emergence-enabling factors that enable the transformation of multiculturals’ KSAOs into human capital resources and strategic human capital resources: (1) a global mindset, (2) a differentiated HR architecture, (3) the language policy and practices, (4) team diversity, and (5) multicultural team leadership. We suggested that a global mindset and differentiated HR architecture are emergence-enabling factors that enable the transformation of KSAOs into unit-level strategic human capital resources that are relevant for competitive advantage, while team diversity and multicultural team leadership are emergence-enabling factors that enable the transformation of KSAOs into unit-level human capital resources relevant for performance parity. Finally, the language policy and practices were relevant for both processes.
ISSN:0047-2506
1478-6990
DOI:10.1057/s41267-021-00463-w