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Contents Introduction

This paper, based on a case study on the affiliates of Microsoft Corporation, examines the roles of ethnic Chinese employees with various backgrounds in Multinational Corporations (MNCs) in China. It shows that in the affiliates of Microsoft Corporation in China, the Taiwan-born and Mainland-born ethnic Chinese staffs, who usually have stronger linkage with the Mainland China than other ethnic Chinese, have been playing significant roles in both the management affairs and R&D activities. In the management affairs, interestingly, there exists a seemingly rival relationship between the Mainland-born ethnic Chinese staffs and the Taiwan-born ones, which changes with the evolution of development stage of Microsoft’s business in China. In general, in the initial period of starting a new business in China and in the period when the importance of inter-regional cooperation of the Microsoft affiliates within the whole Great China Region (including Taiwan, Hong Kong, Macao, and the Mainland) increases, the Taiwan-born ethnic Chinese staffs, who have relatively longer management career and more regional business-network resource, usually play the leading roles. Meanwhile, when the problems for developing domestic market in the Mainland China became serious, the Mainland-born ethnic Chinese staff’s roles usually rise. On the other hand, in the R&D activities, the ethnic Chinese staffs have more decision-making power and more honorable achievements. Particularly, the Mainland-born ethnic Chinese researchers have shown outstanding leadership.