Context, market economies and MNEs: The example of financial incentivization

Abstract

This is a study of the impact of variety on the relative utilization of reward systems within and between capitalist archetypes: The study includes not only a closer focus on variety within and between coordinated market economies, but pays specific attention to the Japanese case, and a systematic comparison of the reward practices adopted by Multinational Enterprises vis-à-vis their local peers. The study uses the most recent wave of the international Cranet survey of HRM, and contrasts this with studies based on previous waves.

The effect of employee share ownership on employee commitment and turnover: comparing the cases in Britain and South Korea and the role of the economy

“…However, there is no evidence of the behavioural outcomes capturing the golden path or golden handcuff effect associated with ESO schemes in these contrasting institutional contexts. This is despite the fact that it is widely acknowledged that both cultural and institutional factors account for variations in the outcomes associated with ESO schemes (Caramelli and Briole, ; Walker et al ., ; Gooderham et al ., ; Poutsma et al ., ).…”

“…The most obvious way in which shareholder value can be maximised and risks to be transferred to employees is through the alignment of shareholders, managerial and employee interests through the adoption of ESO schemes. Therefore, ESO schemes are more likely to be prevalent in LMEs (Croucher et al ., ; Gooderham et al ., ; Walker et al ., ). Furthermore, in the absence of institutional arrangements such as seniority‐based pay and job security, ESO schemes may be used by firms as a tool for retaining employees.…”

“…There is compelling empirical evidence using cross‐country samples from the Cranet survey suggesting that ESO schemes are more prevalent in LMEs (Croucher et al ., ; Walker et al ., ). However, there is no evidence of the behavioural outcomes capturing the golden path or golden handcuff effect associated with ESO schemes in these contrasting institutional contexts.…”

“…Hence, there is growing support within the ESO and the wider management literature for the view that contextual factors are key to determining outcomes of management practices. Indeed, it is widely suggested that systematic differences in culture, institutional conditions and period effects could explain the differences in the results (Caramelli and Briole, ; Croucher et al ., ; Gooderham et al ., ; Jones et al ., ; Kornelakis ; Kim and Patel, ; Newman and Nollen, ; Walker et al ., ).…”

“…A national institution refers to negotiated legal frameworks and social and economic structures, which are subject to change (Hall and Soskice, ). Although most cross‐national management research has almost exclusively focused on cultural reasons for cross‐national variation in the effectiveness of management practices (Wright and Van de Voorde, ), there is an evidence and theoretical arguments pointing to the significance of national institutions in explaining cross‐national variations (Gooderham et al ., ; Schuler and Rogovsky, ; Walker et al ., ).…”