Situated between headquarters and local environment: local managers’ scope for action in training activities

Abstract

Purpose The purpose of this paper is to explore the scope for action of local human resource managers, who are employed in foreign subsidiaries of multinational companies (MNCs), for implementing training activities. These managers are situated in relationships to headquarters and the local environment. Related to this is the question whether MNCs contribute to the local skill base by implementing training activities or whether they exploit the existing skill formation system. Design/methodology/approach This study focusses on German subsidiaries of MNCs with headquarters in the USA and the UK, France, China and Japan. The study is based on 107 expert interviews with subsidiary managers and representatives of local stakeholder organisations, such as educational organisations, chambers, economic promotion agencies and governmental bodies in Germany. Findings The study reveals that headquarters introduce general schemes for training. In addition to these MNC-internal trainings, local managers use their information advantage over headquarters to implement dual training activities. Research limitations/implications The training activities of subsidiaries are dependent on the institutional settings of the host country. Practical implications Albeit dual training activities are laborious and tie the local managers down for the medium and long term, the future need of the subsidiary for adequately skilled workforce prompts local managers’ engagement in implementing dual training activities. Social implications Subsidiaries contribute to the local skill base and do not act in a free-rider position, at least in the German variety of capitalism. Originality/value The study deepens insights on distanced relations within and how subsidiaries generate scope for action by using this kind of relationships.