Paying both globally and locally: An examination of the compensation management of a US multinational finance firm in the Asia Pacific Region

Using the compensation information from 10 subsidiaries of a US-based financial multinational corporation (MNC) in the Asia Pacific region, I have quantitatively explored how one MNC balanced two competing logics: localization, which allows variation across subsidiaries, and strategic alignment, which promotes standardization among subsidiaries. My empirical analysis has revealed that the way this MNC balanced the two logics varied according to the aspects of compensation management and employee groups. While this MNC incorporated local contexts when determining pay level in its foreign subsidiaries, it primarily emphasized the strategic alignment logic when determining pay mix in its subsidiaries. This MNC emphasized the strategic alignment logic to a greater extent when determining the pay level for managers than it did when determining the pay level for non-managerial employees.