Developing managerial talent : Exploring the link between management talent and perceived performance in multinational corporations (MNCs)

Purpose – To examine the association between talent management (TM) and perceived subsidiary performance. Focus is given to the development of one key talent group – line managers – in subsidiaries of multinational corporations (MNCs). Specifically, the paper examines: whether there is a positive relationship between Management Development (MD) and perceived subsidiary performance; and whether national context mediates any link between MD and perceived subsidiary performance. Design/methodology/approach – A multi‐respondent survey was undertaken generating a sample of 143 UK‐owned MNCs. For each organisation, interviews were completed with the Head of HR at corporate Head Quarters; the HR Manager/Specialist and a line manager in both the domestic and foreign subsidiaries of the sample organisation. A total of 5 respondents per organisation is used in the analysis. Findings – The link between the MD variables and perceived subsidiary performance is consistently positive and robust in all of the models estimated. HR having a strategic role in the organisation is positively associated with perceived subsidiary performance; the interaction between strategic HR and the level and extent of MD and perceived subsidiary performance is also highly significant and positive. National context significantly mediates the relationship between MD and perceived subsidiary performance. Practical implications/limitations – Investing in talent management, specifically the development of the key talent group of line managers, is positively associated with perceived subsidiary performance. The national context in which this investment is undertaken is found to affect the associated returns. The sample analysed is for UK owned MNCs only and, thus, the potential for “country of origin” effects is not examined. Practical implications – In previous economic downturns, training and development budgets have often been drastically reduced. While any such slashing in MD budgets will reduce expenditure – given the positive association found in this analysis between the level and extent of MD and perceived subsidiary performance – this approach is likely to only have short‐run benefits and could jeopardise future competitive advantage. Continued investment in talent is likely to be pivotal for sustained competitive advantage. Originality/value – The multi‐respondent and multi‐location methodology used is highly original and the findings contribute to the expanding literature on the relationship between MD and performance/perceived performance of organisations.