Distributive Justice and Interpersonal Interaction Across Cultures in the Context of Expatriate Pay Disparity in Multinationals

Abstract

A defining feature of international business is the necessity for people from diverse cultural backgrounds to interact and collaborate but intercultural interaction is difficult and may give rise to disagreement and conflict. I have been working on the dynamics that promote positive intercultural interaction in the international business context, and two streams of my research, one empirical and the other conceptual, are reviewed here. The first stream is concerned with fairness issues surrounding the pay disparity between locals and expatriates in multinational enterprises operating in China, which has implications for MNC operations in other emerging economies. My research has shown that the pay disparity is associated with negative reactions from local employees but some management practices associated with the relationship between locals and expatriates, attributions made by locals, and salient norms about the pay disparity can buffer such negative reactions. In this research program, the focus is not on the actual interaction between locals and expatriates. To address this gap, a conceptual framework is presented, which provides insight about the factors that contribute to positive interaction between locals and expatriates. This paper ends with implications for future research on intercultural interaction in the MNC context.

Citation

Leung, K. (2014), "Distributive Justice and Interpersonal Interaction Across Cultures in the Context of Expatriate Pay Disparity in Multinationals", Multidisciplinary Insights from New AIB Fellows (Research in Global Strategic Management, Vol. 16), Emerald Group Publishing Limited, Leeds, pp. 29-55. https://doi.org/10.1108/S1064-485720140000016000