Commitment to a parent company and a local operation: A comparison between local employees and Western expatriates working for multinational companies

Abstract

Purpose

The purpose of this paper is to investigate the nature of commitments of local employees to a parent company and a local operation in comparison to the nature of commitment of Western expatriates to the two foci.

Design/methodology/approach

Data were collected by questionnaire from 532 local employees and 471 Western expatriates currently working for the subsidiaries of multinational companies (MNCs) in Vietnam. Hypotheses were tested using exploratory factor analyses, confirmatory factor analyses, correlation analyses, t-test, generalized linear models and hierarchical regression.

Findings

The results confirmed two distinct commitment foci and revealed that the commitment to the local operation was stronger than the commitment to the parent company for local employees. Remarkably, retention and absenteeism are more driven by local operation commitment than by parent company commitment for the local employees. In contrast, these outcomes are more driven by parent company commitment for the Western expatriates. Working conditions (job autonomy, job variety, transformational leadership and remuneration) positively predicted affective commitment to the local operation for both groups; particularly job variety and leadership were better predictors for local employees than for Western expatriates.

Practical implications

The comparison shows effective and specific ways to sustain and reinforce the commitments of each employee group with regard to two foci. This information may help to reduce the rate of turnover intention and absenteeism in MNCs.

Originality/value

By using a multifaceted approach, this study provided a comparison of dual organizational commitment for different categories of employees working in MNCs. Second, this study shows that the stronger commitment focus has a stronger influence on related outcomes (i.e. retention and absenteeism). If so, MNCs can focus on reinforcing the selected commitment focus in order to reduce the costs of management. Third, the study has initially pointed out that some work factors exert a specific influence on different commitment foci in the two groups. Controlling these work conditions is recommended to sustain and develop commitment levels of the two groups.

Citation

Nguyen, P., Felfe, J., Fooken, I. and Ngoc, H.T. (2015), "Commitment to a parent company and a local operation: A comparison between local employees and Western expatriates working for multinational companies", Evidence-based HRM, Vol. 3 No. 2, pp. 181-204. https://doi.org/10.1108/EBHRM-05-2013-0013