Strategic Training and Development of Local Managers in Multinational Enterprise Subsidiaries: Evidence from Saudi Arabia

Foreign direct investment (FDI) has increased significantly into developing countries in recent years; however, the quality of human capital development (HCD) in many of these countries remains relatively limited. Consequently, multinational enterprise (MNE) subsidiaries often face challenges in finding sufficiently skilled and well-trained local labour, particularly local managers, in host developing countries such as Saudi Arabia despite ongoing investments in education, training, and HCD initiatives. To address this challenge, MNE subsidiaries provide training and development (T&D) programs aimed at enhancing the capabilities of local employees and managers. Grounded in Human Capital Theory, Knowledge Transfer Theory, and FDI Spillover Theory, this study examines how MNE subsidiaries contribute to HCD in a host developing country context. Specifically, the study investigates the types, locations, durations and perceived impacts of MNE subsidiaries’ T&D programs for local managers in Saudi Arabia. A qualitative multiple case study approach was adopted. Semi-structured interviews were conducted with managers from MNE subsidiaries and local organisations operating in the Saudi service sector. Qualitative data were analysed using inductive thematic analysis. The findings demonstrate that MNE subsidiaries provide a wide range of T&D programs, including soft skills training, technical and functional training, leadership development, and talent management initiatives. The findings further indicate that these programs positively influence local managers through the development of knowledge, skills, managerial capabilities, motivation, and organisational understanding. In addition, MNE subsidiaries benefit through improved organisational performance, productivity, knowledge sharing and managerial effectiveness.