This paper proposes a conceptual framework and empirical validation to explain how a culturally differentiated application of the procedural justice theory may enhance the functioning of a multinational corporation (MNC). Using original survey data on 103 managers of international corporations who are strongly involved in headquarter-subsidiary relationships, we study how power distance and individualism-collectivism dimensions of culture moderate the relation between the constituents of procedural justice and the trust subsidiaries have in their headquarters. The analysis suggests that for managers originating from a ‘low power distance’ culture, the perception of changeability in the strategy process has much more impact than for managers stemming from a ‘high power distance’ culture. Also, towards managers with a more ‘collectivist’ background, ensuring that expectations and decisions are clear enhances trust more than for managers with a more ‘individualist’ background.
Through a longitudinal case study of a financial services company offshoring services to Poland, this paper provides insight into the barriers that prevent offshore team members to learn their tasks effectively. Findings also reveal that using expatriates and inpatriates to facilitate the learning process may in fact act as a double edge sword. While helping bridging the distance between onshore and offshore operation, over-parenting by expatriates may create detachment from the part of offshore members who are then less motivated to think independently and learn. And if inpatriation at first helps create social ties between onshore and offshore colleagues - thereby reducing the risk of onshore colleagues hoarding information - and opens careers opportunities that motivate offshore staff to learn; over time it may create frustrations by making offshoring, and in particular associated status and career path differences, visible to all.
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