"Where do I belong?" This problem related to the identity of dispatched employees not only complicates their work and life but is key to a series of social problems, such as social injustice and mass unemployment. Although current research provides different perspectives for exploring the identity confusion of dispatched employees, there has been little analysis of the essential cause of this phenomenon: the complementary and dynamic characteristics of the dual organizational identity of dispatched employees. Therefore, little is known about how dispatched employees manage their complementary and dynamic dual organizational identity. What's more, in the literature of multiple identity management or identity work, many scholars have explored how individuals manage two identities with independent, cross-cutting and nested relationships to achieve self-consistency or integrity. However, management strategies for two identities with a complementary relationship have not been discussed theoretically. This paper mainly adopts grounded theory to collect and analyze data. Through two-stage interviews (consisting of a survey and an in-depth interview), we collected data from 34 dispatched employees in different industries. The first author also collected the observational data during her internship at a labor dispatch company. The first, the third and the fourth author carried out the open, axial and selective step-by-step coding to construct a dynamic development model of the dual organizational identity of labor dispatched employees The results indicate three things: (1) In the comparison of expectations and experiences of dual organizational identity, there are three possible outcomes. " Match-match" promotes the realization of a dual organizational identity, "mismatch-mismatch" causes the rupture of a dual organizational identity, and "match-mismatch" is the main motivation for dynamic management of a dual organizational identity. (2) "Match-mismatch" poses a psychological dilemma called identity embarrassment for dispatched employees; they do not know where they belong. They adopt different identity defense strategies (depending on their attention and valence of interpretation) according to the relative importance of the dispatching unit and the employing unit in their identity. Three of these strategies-identity isolation, identity comparison and identity creation - alleviate identity embarrassment and promote the realization of the dual organizational identity. However, the identity rumination strategy further worsens identity embarrassment, leading to the rupture of the dual organizational identity. (3) "Match-match" promotes positive synergy based on social exchange, and "mismatch-mismatch" leads to negative synergy based on economic exchange. This paper enriches identity theory and organizational socialization in three areas. First, it expands the structural relationship between the two identities by introducing the complementary relationship contained in the dual organizational identity of dispatched employees, which is different from the independent, cross-cutting and nested relationships examined in previous studies. Second, the paper summarizes and refines the concepts of identity embarrassment and identity defense to explain the new identity problem and the identity management strategies adopted by the complementary and dynamic dual organizational identity. Third, the paper introduces the interaction between dual organizational identity and a complementary relationship of those identities, interpreting the positive synergy based on social exchange and negative synergy based on economic exchange. The conclusion of the study has important practical significance. It guides dispatch units and employing units to avoid the identity embarrassment of dispatched employees, and it promotes the realization of dual organizational identity to achieve win-win scenarios among the three parties of labor dispatching.