Multinationals and the evolving contours of their human management practices in Central and Eastern Europe and the former Soviet Union

Abstract

PurposeWe explore the effects of three organizational variables (country of origin of the multinational company (MNC), the timing of entry into the European Union and the mode of establishment of the MNC subsidiary unit) on the human resource management (HRM) practices being pursued by subsidiaries of large MNCs operating in selected countries in Central and Eastern Europe (CEE) and the Former Soviet Union. Furthermore, we examine whether the degree of autonomy afforded to the subsidiary over its preferred HR recipes is related to overall local unit performance.Design/methodology/approachWe profile the HRM practices of 379 foreign owned subsidiaries located in Bulgaria, Croatia, The Czech Republic, Kazakhstan, Poland, Hungary, Russia, Romania, Serbia and Slovakia. Using descriptive statistics, we present the general characteristics of the sample and we then use bivariate statistical analysis to test our hypotheses relating to the impact of different organizational factors on the HR practice mix implemented in the MNC subsidiaries covered in our survey.FindingsWe find a significant correlation between the annual training budget, the importance of knowledge flow from headquarters (HQs) to the subsidiary and the perceived criticality of training and development and whether the subsidiary is a greenfield site or an acquisition. A correlation was also found between the national timing of EU membership (older members, newer and then candidate countries and non-EU members) and three HR practice variables: the use of expatriates, external service providers and employee relations practices.Research limitations/implicationsOur research calls attention to the issue of balancing the efficiencies of standardization with the local preferences and traditions of customization which results in more successful MNC control and ultimately higher levels of performance. It also calls attention to the challenges in pursuing research of this nature over time in the CEE region, especially given the dynamic nature of the MNC mix in each of the countries.Practical implicationsOur findings serve to reduce the information gap on foreign-owned companies in CEE and the Former Soviet Union.Originality/valueDespite some 30 years of transition, there remains a paucity of empirical research on the HR practices of MNCs across a number of countries in the CEE region. For a decade and a half, the CEEIRT group[1] has been systematically gathering empirical evidence. The combination of the breadth (10 countries) and depth (numerous items related to MNC subsidiary relationships with corporate HQs and patterns of HR practices and roles) characterizing the ongoing research effort of the CEEIRT collaboration serves as a mechanism for augmenting the empirical base on HRM in the region.

The Rise and Fading Away of Charisma. Leadership Transition and Managerial Ethics in the Post-Soviet Media Holdings

“…Thirty years after the fall of the Berlin Wall, doing business in post-communist countries remains largely persona-based and dependent on informal practices. Poór et al (2020) point at the inconsistency between HR policies and HR practices in the newly emerged post-socialist market economies. The informal HR practices are persistent and influential even in MNC subsidiaries operating in Central and Eastern Europe, Russia and Central Asia because local HR departments often experience autonomy in decisionmaking and implementation (Poór et al, 2020).…”

“…Poór et al (2020) point at the inconsistency between HR policies and HR practices in the newly emerged post-socialist market economies. The informal HR practices are persistent and influential even in MNC subsidiaries operating in Central and Eastern Europe, Russia and Central Asia because local HR departments often experience autonomy in decisionmaking and implementation (Poór et al, 2020). These informal practices, may, for instance, affect the hiring process, workload management arrangements, and workers' rights for a vacation that may lead to favouritism.…”

Organization culture types and the replication of transferred human resource management practices in multinational subsidiaries in Nigeria

“…Multinational companies (MNCs) generally face pressure to transfer best human resource (HR) practices from headquarters to overseas subsidiaries to drive desired HR outcomes and achieve sustainable advantages (Poor et al ., 2020). However, achieving a successful replication of HR practices in subsidiaries can be problematic due to institutional, cultural and organizational factors (Latukha et al ., 2020).…”

“…This stream of the literature ascertains that transfer and local responsiveness are both beneficial (Latukha et al ., 2020). Thus, when MNCs adopt global best practices in subsidiary units, they are usually adapted to local institutional environments to some extent (Poor et al ., 2020).…”

“…Culture is a critical predictor of variation in managerial behavior and human resource practices between countries (Poor et al ., 2020; Vaiman and Brewster, 2015). Theoretically, the cultural distance-the difference between the cultures of the host and home countries–determines the extent of transfer and replication between two cultural contexts (Latukha et al ., 2020).…”