This paper develops an integrative theory explaining multinational firms' staffing decisions ... more This paper develops an integrative theory explaining multinational firms' staffing decisions in initial foreign entry situations from agency theory, transaction costs theory, and resource-based theory, and it offers a set of theoretically-grounded, testable propositions concerning these staffing decisions. In particular, we maintain that staffing decisions are influenced by (1) the value that expatriates and local hires could potentially add to the firm, and (2) the relative contractual risks associated with the use of expatriates and local hires. This paper indicates that the use of expatriates can improve contractual efficiencies in at least four ways. First, the use of expatriates helps align the economic incentives between the parent firm and its foreign affiliates. Second, the parent firm knows better the characteristics of expatriates relative to local hires. The use of expatriates reduces the uncertainty of the parent firm in recruiting managers and relieves the incomplet...
This paper develops a new integrative framework explaining and predicting multinational firms'... more This paper develops a new integrative framework explaining and predicting multinational firms' international staffing decisions based on resource-based, agency, and transaction costs theories. In this framework, a firm considers (1) the relative values that expatriates / local managers can bring to the firm, and (2) the relative control that the firm is able to exercise over expatriates and local managers through managerial contracting, when making strategic international staffing decisions. Accordingly, we identify a set of target industry characteristics and multinational firm characteristics that are predicted to influence international staffing decisions, and we examine these decisions on a sample of 365 Japanese manufacturing subsidiaries in the United States.
Managers face risk in explorative decision-making and those who are better at such decisions can ... more Managers face risk in explorative decision-making and those who are better at such decisions can achieve future viability. To understand what makes a manager effective at explorative decision-making requires an analysis of the manager’s motivational characteristics. The behavioral activation/inhibition system (BAS/BIS), fitting the motivational orientation of “approach” or “avoidance,” can affect individual decision-making. However, very little is known about the neural correlates of BAS/BIS orientation and their interrelationship with the mental activity during explorative decision-making. We conducted an fMRI study on 111 potential managers to investigate how the brain responses of explorative decision-making interact with BAS/BIS. Participants were separated into high- and low-performance groups based on the median exploration-score. The low-performance group showed significantly higher BAS than that of the high-performance group, and its BAS had significant negative association ...
... In addition to hiring and training new managers, a firm can gain access to additional manager... more ... In addition to hiring and training new managers, a firm can gain access to additional managerial resources by reassigning managers from ... expansion project are determined by the number of expatri-ates (adjusted for employment size), allocated to the foreign affiliate (EXPAT). ...
... it has been recently stated that virtually all of the research studies exploring staffing dec... more ... it has been recently stated that virtually all of the research studies exploring staffing decisions ... managerial abilities, and could be shaped by managerial self-interest-seeking behavior (Schaan, 1988). ... an ex post course of action such as selecting and training expatriates (eg Snell ...
Journal of International Business Studies, May 1, 2011
Abstract Foreign investors access local knowledge by co-locating with other foreign direct invest... more Abstract Foreign investors access local knowledge by co-locating with other foreign direct investment (FDI) firms. However, different aspects of local knowledge can be obtained from different local businesses. Thus some foreign investors co-locate with FDI firms from the same country of origin, while others co-locate with foreign industry peers. We argue that, relative to industry FDI agglomeration, country-of-origin agglomeration provides an effective channel for the sharing of sensitive and tacit knowledge about local business ...
This paper develops an integrative theory explaining multinational firms' staffing decisions ... more This paper develops an integrative theory explaining multinational firms' staffing decisions in initial foreign entry situations from agency theory, transaction costs theory, and resource-based theory, and it offers a set of theoretically-grounded, testable propositions concerning these staffing decisions. In particular, we maintain that staffing decisions are influenced by (1) the value that expatriates and local hires could potentially add to the firm, and (2) the relative contractual risks associated with the use of expatriates and local hires. This paper indicates that the use of expatriates can improve contractual efficiencies in at least four ways. First, the use of expatriates helps align the economic incentives between the parent firm and its foreign affiliates. Second, the parent firm knows better the characteristics of expatriates relative to local hires. The use of expatriates reduces the uncertainty of the parent firm in recruiting managers and relieves the incomplet...
This paper develops a new integrative framework explaining and predicting multinational firms'... more This paper develops a new integrative framework explaining and predicting multinational firms' international staffing decisions based on resource-based, agency, and transaction costs theories. In this framework, a firm considers (1) the relative values that expatriates / local managers can bring to the firm, and (2) the relative control that the firm is able to exercise over expatriates and local managers through managerial contracting, when making strategic international staffing decisions. Accordingly, we identify a set of target industry characteristics and multinational firm characteristics that are predicted to influence international staffing decisions, and we examine these decisions on a sample of 365 Japanese manufacturing subsidiaries in the United States.
Managers face risk in explorative decision-making and those who are better at such decisions can ... more Managers face risk in explorative decision-making and those who are better at such decisions can achieve future viability. To understand what makes a manager effective at explorative decision-making requires an analysis of the manager’s motivational characteristics. The behavioral activation/inhibition system (BAS/BIS), fitting the motivational orientation of “approach” or “avoidance,” can affect individual decision-making. However, very little is known about the neural correlates of BAS/BIS orientation and their interrelationship with the mental activity during explorative decision-making. We conducted an fMRI study on 111 potential managers to investigate how the brain responses of explorative decision-making interact with BAS/BIS. Participants were separated into high- and low-performance groups based on the median exploration-score. The low-performance group showed significantly higher BAS than that of the high-performance group, and its BAS had significant negative association ...
... In addition to hiring and training new managers, a firm can gain access to additional manager... more ... In addition to hiring and training new managers, a firm can gain access to additional managerial resources by reassigning managers from ... expansion project are determined by the number of expatri-ates (adjusted for employment size), allocated to the foreign affiliate (EXPAT). ...
... it has been recently stated that virtually all of the research studies exploring staffing dec... more ... it has been recently stated that virtually all of the research studies exploring staffing decisions ... managerial abilities, and could be shaped by managerial self-interest-seeking behavior (Schaan, 1988). ... an ex post course of action such as selecting and training expatriates (eg Snell ...
Journal of International Business Studies, May 1, 2011
Abstract Foreign investors access local knowledge by co-locating with other foreign direct invest... more Abstract Foreign investors access local knowledge by co-locating with other foreign direct investment (FDI) firms. However, different aspects of local knowledge can be obtained from different local businesses. Thus some foreign investors co-locate with FDI firms from the same country of origin, while others co-locate with foreign industry peers. We argue that, relative to industry FDI agglomeration, country-of-origin agglomeration provides an effective channel for the sharing of sensitive and tacit knowledge about local business ...
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Papers by Danchi Tan