HRM structures and subsidiary discretion in foreign multinationals in the UK

Abstract

This article uses a large-scale representative survey to examine a key aspect of control in multinational companies (MNCs): the extent of central influence over human resource (HR) policy formation in subsidiaries. This is a crucial aspect of behaviour, relevant for example for the cross-border diffusion of policies and practices and for the institutional distinctiveness of practice within a given host environment. The article assesses how far policy is determined by corporate headquarters or some other higher-level organizational structure. Its novelty lies primarily in its exploration of the influence of the structure of the HR management (HRM) function on subsidiary discretion. It finds, first, that the degree of central control is influenced for different HR issues by nationality of ownership and by international product/service standardization. Second, there is some variability in the antecedents associated with discretion on different HR issues. Finally, aspects of the structure of the HRM function significantly affect discretion, notably the networking of HR managers across borders and the direct reporting relationships within the function between the UK and higher organizational levels.

Crossing the streams: HRM in multinational enterprises and comparative HRM

“…Indeed, there appears to be an implicit assumption in much of this research that a key objective for MNEs is to standardise their HRM policies and practices and that they are only prevented from doing so by local contextual constraints that require them to compromise (Edwards & Kuruvilla, 2005). The debate is sometimes couched in terms of affecting the degree of headquarters centralization versus subsidiary autonomy or 'discretion' over HRM decisions (Ferner et al, 2011) and sometimes in terms of the external and internal variables that explain why MNEs may want to standardise/transfer HRM ('desirability'), or why this is not possible ('feasibility') (Dickmann, 2003). The reverse case, i.e.…”

Are MNCs norm entrepreneurs or followers? The changing relationship between host country institutions and MNC HRM practices

“…Dore (2008: 782) This does not mean that the subsidiary necessarily plays a passive role in such a process. Ferner et al (2011) note that the relative strategic role and autonomy of the subsidiary may mould the nature and extent of innovation. Kostova and Roth (2002) argue that the adoption of organizational practices within particular national settings is dependent on both host country institutions and internal relations within the MNC.…”

Miners, politics and institutional caryatids: Accounting for the transfer of HRM practices in the Brazilian multinational enterprise

“…We turn now to examine power relations at the 'micro' level of the MNE. We draw on Lukes' (2005) conceptualization of the different dimensions of power (see also Hardy, 1996 andFerner et al, 2011; the italicized terms below are derived from the former). The first dimension refers to instances where power is used to attain one's observable aims in (Edwards, 2006).…”

“…Further they are nested in international or transnational domains wherein they encounter trade agreements, international regulations, competitive pressures and managerial 'best practices' (Morgan, 2011;Tempel & Wagenbach, 2007). Finally, they are nested in a complex of industrial relations (IR) institutions and processes in which managerial workforce relations are played out at multiple levels and points of interaction: subsidiary-HQ, MNE-state (home and host) authorities, and MNE-global hegemonic influences (Ferner, Edwards & Tempel, 2012;Ferner, Tregaskis, Edwards, Edwards, Marginson, Adam & Meyer, 2011). Thus MNEs are embedded in a complex constitution of varying ecosystems and are inherently constituted as "transnational social spaces" (Morgan, Kelly, Sharpe & Whitley, 2003).…”