Answer

The Acculturative Stress of Host Country Managers Working At MNC
Subsidiaries: A Critical Review

Living in another country encompasses a change in the environment, culture and values that impact workers in many ways. Those working in foreign countries face the need to assimilate and adapt to the host cultural practices that could be inconsistent with their native cultural practices, often accompanied by psychological difficulties. Consequently, research has revealed that similar psychological impacts are faced by host country managers who need to acculturate to the organization’s practices adopted from abroad. In a recent (2019) research paper by Lee, Bae, Lee, and Choi titled The acculturative stress of host country managers working at MNC subsidiaries: Determinants and effects, the psychological difficulties that host country managers working for multinational corporations (MNCs) face when adapting to the foreign organizational cultural values and practices are explored. In this paper, a critical review of this article, elucidating its strengths and weaknesses, are presented.

Research Questions

RQ1: Do host country managers working in foreign subsidiary firms face psychological difficulties associated with incorporating the cultural norms and practices of the parent MNCs?

RQ2: What are the determinant factors influencing the exposure to such psychological difficulties?

RQ3: How do the psychological difficulties affect the work engagement and attitude of the country managers? 

Evaluation of the Paper

With the effects of globalization and rapid growth in international trade, many corporations have utilized the opportunities to grow beyond their county borders and establish their subsidiaries in other countries. This has resulted in increased trade, revenues, and the creation of job opportunities in the host countries. However, the most outstanding challenge in establishing foreign subsidiaries has been the difficulty faced in adjusting the organization practices to conform to the host countries’ cultural environments while also maintaining the corporate norms, beliefs, and values to reflected the cultural background of the company and original country. Additionally, MNCs are characterized by heavy exchange and movement of workers from one country to another. These are normally part of most company’s strategies to exchange knowledge and increase employee’s productivity across the subsidiaries.

In this article, the concept of acculturative stress was employed to explore the distinct psychological difficulties facing foreign subsidiary workers, specifically high-ranked host managers (Lee, Bae, Lee, & Choi, 2019). This is a type of stress in which the stressors emanate from the acculturative process. The acculturative stress concept has been applied to study similar challenges of both international and local immigrants, international students, and organizations undergoing mergers and acquisitions. For instance, the rural-to-urban migrants in China reportedly face varying acculturative stress characterized by psychological difficulties (Zhong et al., 2016). The previous successes in the above studies better positioned the concept as a promising approach for studying the similar impacts on country managers working for MNCs subsidiaries. Nevertheless, no literature evidence was presented to demonstrated the usefulness of this concept in investigating the psychological difficulties faced by country managers working for MNCs. This may impact the obtained results, especially when a direct comparison with similar research is desired. 

On the other hand, a combination of social identity and self-verification theories was used to elucidate the leading factors causing acculturation and how it may impact country managers’ work-related attitudes. Based on the literature evidence, such as that presented by Falavarjani et al. (2019) on how acculturative stress affects the relationship between two nations, these theories significantly contributed to finding answers to the research questions. Moreover, the sample size comprising of 643 managers working in 60 Korean MNCs was sufficient for obtaining valid data that could result in more accurate and relevant results. Nevertheless, the use of a single hist country may compromise the acceptability of the findings.

             The arguments presented in the paper revolve around the identity negotiation framework based on the self-verification theories that focus on answering the research questions (Lee et al., 2019). The findings indicated that acculturative stresses are mostly due to the psychological difficulties that the country managers face while acculturating the organizational foreign corporate practices. Typically, the management of MNCs comprises foreigners, with the majority representing the native practices of the company. It is, therefore, natural for host country managers to experience significant difficulties in identifying themselves with their native cultural practices in foreign firms, especially when interacting with their bosses. Country managers are more susceptible because, unlike other employees of lower ranks, they are directly under the influence of the foreign MNCs management.

            Some of the key factors considered to be the main determinants of acculturative stress are presented and include the differences in the foreign organization policies and host cultural environments. Generally, people know of the existing cultural differences when they face difficulties in varying their salient cultural identities. An increase in identity incongruence leads to low-quality exchange relationships amongst different people (Froidevaux et al., 2018, p. 23). For example, when country managers act like they have inferior standing relative to foreign management, they are likely to experience more acculturative stress that can directly impact their work attitudes and performance. This indicated a positive correlation between acculturative stress and the perceived lower standing of the country managers.

            Generally, work-related stress is among the factors affecting employees’ behaviors and attitudes towards the organization (Ramlee et al., 2016). Similarly, and as far as the operations of foreign subsidiaries are concerned, acculturative stress affects the engagement and productivity of employees, especially those of higher ranks (Lee et al., 2019). The greater identity-related stress amongst host country senior managers was attributed to their lower standing perceptions. This may lead to racial stereotypes where one tends to associate more with managers of similar identity, thus hindering the good work relationship and potentially resulting in poor performance of the MNC subsidiaries.

 Moreover, host country managers who have worked for foreign firms for a long time may possess individual self-views and perceptions similar to those of foreign cultural values and practices. Therefore, they may not experience much difficulty when interacting with other foreign managers, unlike those who have worked for a short period. 

Contributions of the Paper

            The study uncovered the psychological difficulties that the host county managers face in managing the MNCs subsidiaries. Building on the previous studies that mainly concentrated on exploring the external factors facing the growth of foreign subsidiaries, this study was the first to validate the psychological implications of working under the direct influence of foreign management. It elucidated the psychological struggles that host country managers undergo to adapt to the corporate values that are inconsistent with their cultural norms. Based on the social and self-verification theories, the paper presented a thorough understanding of the effects of the discrepancy of the salient social identities between the host managers and other social groups within the organization.

By identifying the vital factors leading to acculturative stress, the study also uncovered the appropriate actions that MNCs can adopt to mitigate the effects of acculturative stress on domestic and foreign employees. Such measures include promoting the local adaptation of the MNCs policies and practices and developing effective strategies for better integration of the foreign culture with the host country’s cultural environment to minimize the potential impact on the local workers.  

The Connection between the Article and the Course Materials

            The course materials provide deep insights into the impact of globalization and international. This includes the different factors favoring the penetration of foreign markets through the creation of subsidiaries and their resulting impact on both businesses and employees on a global scale. Generally, the organizational structure of multinational enterprises comprises top executive management and country heads that are in charge of the different subsidiaries across the world. According to (Peng & Meyer, 2019, p. 416), MNCs operate in various contexts, and their ability to integrate the local and foreign contexts is crucial in excelling in global markets. Conceptual frameworks such as the integration-responsive framework (p. 417) have been used to explore the strategies used by MNCs to manage their operations and enhance competitive advantages in the global market. 

            Despite the useful information, the class materials did not cover the determinants and effects of psychological difficulties faced by MNC employees in adopting the organizational cultural norms and practices. The paper bridges the gap between the class materials and literature because such effects have significant impacts on employees’ attitudes and behaviors that may further affect their performance. Therefore, the paper acts as a complement to the class materials.

Empirical Evidence

The authors provided enough evidence to support the research findings. The use of acculturative concepts is key to obtaining reliable results because it has been extensively used in measuring the psychological difficulties faced by people in different contexts that are almost similar to the one discussed in the paper. This includes immigrants, international students, and company mergers and acquisitions. Since acculturation is an important characteristic of MNCs, the concept was more appropriate for use in the context of MNCs. Consequently, the study argued that acculturative stress could negatively impact the work engagement and performance of host country managers is directly and indirectly supported by numerous research evidence presented in the literature that has investigated the relationships between work engagement, attitudes, and behaviors. Furthermore, the literature work on self-verification and social identity theories employed to explore the psychological difficulties supported the reliability of the obtained findings.

Recommendations for Further Research

Like most research studies, the study has some limitations that can be improved through further research. On this account, some recommendations provided below would be useful for future research. First, the authors based their arguments on salient national identity and collective self-verification among foreign firm workers. However, the degree to which it varies amongst host country managers and its potential ramifications on acculturative stress is lacking and should be researched further. Second, more insights are necessary to explain and thoroughly understand the relationship between acculturative stress and the perceived constraints that influence the country managers’ abilities to strive for national identities and collective self-verification.

Lastly, the sample was drawn from a single host country, and the results may not reflect the real picture from a global perspective. Thus, it is imperative to replicate the study using different host countries in different continents because the characteristics and cultural background of the host countries may affect the abilities of their citizens to adapt to external cultural values and practices.