Challenging the cross-national transfer of diversity management in MNCs: Exploring the ‘identity effects’ of diversity discourses

Abstract

I develop a critique of the cross-national transfer of diversity management in multinational companies. Adopting a critical approach to diversity management, and considering diversity as a discourse, I examine how and why employees in an overseas subsidiary challenged the diversity practices transferred by their foreign parent company. Drawing on a case study of a Sri Lankan knowledge work firm that was in the process of implementing its Western parent company’s Diversity Management agenda, which they had had little input in shaping, I highlight how challenge is triggered by a desire to reject unfavourable subject positions attributed to individuals in transferred discourses of diversity and to reposition the self more favourably. My contribution involves showing how dynamic power relations between parents and subsidiaries shape the global transfer of diversity across MNCs, depicting subsidiary employees as agentic subjects as opposed to passive recipients.

A Systematic Review of Power in Global Leadership

“…This line of research commonly views power as stemming from a position of authority. Indeed, among the global leadership studies referencing Weber explicitly (e.g., Neeley & Reiche, 2022), or those conceptualizing power as an influence process in more general terms (e.g., Fernando, 2021;Moeller et al, 2016;Schmidt & Yeh, 1992), power derives from hierarchical position, expert knowledge, or by association as a referent for another entity.…”

“…Paunova's (2017) study further supports the role of nation-of-origin and language as a basis of referent power and finds that the level of development of an individual's nation-of-origin and English language proficiency predicts leadership emergence and deference received from peers. In a critical study of cross-national transfer of diversity management practices, Fernando (2021) argues that top-down transfers from parent organizations to subsidiaries reproduce existing power relations in ways that frame the Western providers of best practices as "modern and superior" and the non-Western recipients as "disadvantaged and inferior" (p. 2127), which serves to protect the referent power of global leaders in their interactions with local subordinates. Fernando writes, "Power differentials between the companies are heightened as diversity is employed as a tool to position employees of the subsidiary in unfavourable occupational terms" (p. 2146).…”

“…In the research to date, much of the attention has been on global leaders' demographic or experiential attributes as sources of power. In particular, nation of origin, MNC of origin, international experience, and language proficiency have either been conceptualized as sources of power in their own right (e.g., Ciuk et al, 2019;Fernando, 2021;Iwashita, 2021;Paunova, 2017) or as attributes that can enhance global leaders' position, expert, referent, or information power (e.g., Tenzer & Pudelko, 2017). In contrast, very little attention has been paid to personality traits and individual differences.…”

Theorizing Diversity in Management Studies: New Perspectives and Future Directions

“…Whether and how MNCs adapt to host countries’ labour market policies while maintaining effectiveness in diversity management is a pressing topic for research. For example, we need much better understanding of how and why employees in an overseas subsidiary may accept or challenge the diversity practices transferred from their home company (e.g., Fernando, 2020). The dynamics of home–host power relations, as the mechanism shaping the global transfer of diversity practices across MNCs, also requires in‐depth study.…”

Decolonizing international business

“…Bothello et al, 2019;Filatotchev et al, 2020;Smith and Kaminishi, 2019;Vaara et al, 2019). Several studies have also deployed postcolonial/decolonial theory to critically examine processes of knowledge and practice transfer between the global North and the global Southinside MNEs and more generally (Alcadipani and Caldas, 2012;Boussebaa et al 2014aBoussebaa et al , 2014bFernando, 2021;Srinivas, 2008;Yousfi, 2014).…”