Management compensation systems in MNCs and domestic firms: cross-national empirical evidence

Hang Le, Christopher Brewster, Mehmet Demirbag, Geoffrey Wood

    Research output: Contribution to journalArticle

    8 Citations (Scopus)

    Abstract

    This is a study of the relationship between institutional settings and managerial compensation systems, based on extensive cross-national survey evidence.
    We compare differences in practices between Multinational Corporations (MNCs) and domestic firms across a range of capitalist archetypes.
    We find that MNCs are more likely to promote compensation systems that incentivise managers in line with organisational performance compared to domestic firms. Our findings also reveal persistent diversity reflecting firm type and institutional setting. We find that the gap between MNCs and domestic firms in terms of the usage of incentive-related compensation is less pronounced in Liberal Market Economies than in other settings. This suggests that it is a combination of being an MNC and the specific home locale that moulds approaches to managerial compensation. This reflects considerable hybridisation of practices within and between settings.
    Original languageEnglish
    Pages (from-to)741-762
    Number of pages22
    JournalManagement International Review
    Volume53
    Issue number5
    DOIs
    Publication statusPublished - Oct 2013

    Keywords

    • management compensation systems
    • MNCs
    • domestic firms
    • institutional setting
    • shareholder rights

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