With the global rise of nationalist movements, general managers (GMs) are of greater importance in navigating foreign subsidiaries through the turbulent environment. However, little is known about whether GMs would stay or leave during the nationalist movement against foreign subsidiaries’ parent country. Building upon the social identity theory, we argue that GMs’ affiliation with the foreign subsidiaries from the target country enables them to be perceived as outgroup members and suffer severe outgroup biases during the nationalist movement, forcing them to leave. Compared with local GMs, expatriate GMs are more inclined to leave because their foreign national identity complements their organizational identity, and further strengthens their perceived outgroup membership and generate greater outgroup bias. Moreover, GMs are more likely to leave in foreign subsidiaries with greater perceived outsidership but less likely to leave in cities with more intergroup contacts with the target country. Using the anti-Japan nationalist movement in 2012 out of the Diaoyu/Senkaku Islands issue in China as the research context, we analyzed the stay-or-leave decisions of 4009 GMs in Japanese subsidiaries based on the survival analysis and found support for our propositions. We contribute to the research on executive changes in foreign subsidiaries by standing on the side of GMs (supply) to study their responses to the nationalist movement. We also contribute to social identity research by showing that the nationalist movement is an important impetus for individuals’ identity-deviant activities and explicating the varying interaction effect of the dual identities of local and expatriate GMs. We extend the literature on the impact of nationalism by showing its influence on managerial careers in multinational enterprises.
