Varieties and variability of employee relations approaches in US subsidiaries: country-of-origin effects and the level and type of industry internationalisation

This article investigates the relative importance and variability of the country-of-origin effect in employee relations approaches of US subsidiaries within the context of diversity of employee relations patterns in home- and host-country business systems and the influence of important industry forces. It is based on a representative survey of US subsidiaries and indigenous firms in the UK. The cross-sectional comparison with indigenous UK firms confirmed a distinct US country-of-origin imprint in employee relations patterns in US subsidiaries. However, the magnitude of such an effect cautions against assumptions of popular stereotypes and reflects, inter alia, the diversity of employee relations approaches among US parent companies as well as developments in the UK industrial relations landscape over the last decades. The intra-US analysis revealed the importance of both the level and type of industry internationalisation in shaping the strength and nature of the country-of-origin influence. On the basis of the findings, the article highlights lessons to be learned for the study of cross-border policy-transfer issues in MNCs.     

Impact of nationality composition in foreign subsidiary on its performance: a case of Korean companies

This study explores how the nationality compositions of management teams and employee groups in foreign subsidiaries can affect subsidiary performance. By analyzing firm-level data on 401 South Korean subsidiaries across 35 countries in the period between 2005 and 2007, we found that balanced compositions in both subsidiary management teams (SMTs) and subsidiary employee groups (SEGs) were positively associated with subsidiary performance. The results suggest that the benefits of balanced composition are higher for both innovative and coordinative tasks conducted by management teams and for simple computational tasks conducted by employee groups. The effect of the SMT and SEG compositions on subsidiary performance, however, may depend on the host country's institutional conditions. These findings have practical implications for multinational staffing strategies in order to ensure high performance in subsidiaries and for host country policies used to attract high quality foreign direct investments.     

Do Foreign Greenfields Outperform Foreign Acquisitions or Vice Versa? An Institutional Perspective

abstract Prior studies of the comparative performance of greenfields and acquisitions have advanced competing arguments, with some arguing that greenfields should outperform acquisitions because acquisitions are costlier to integrate, and others that acquisitions should outperform greenfields because greenfields suffer from a liability of newness. Moreover, while the costs of integration and the liability of newness are at their greatest during a subsidiary's first years, prior studies have tested their competing arguments on samples containing older subsidiaries. We extend these prior studies by (1) developing an institutional theory‐based framework that simultaneously considers the costs of integration and the liability of newness, (2) recognizing that both types of costs vary with the level of subsidiary integration, and (3) focusing on the stage of their life during which subsidiaries predominantly incur these costs. To measure subsidiary performance, we ask managers of Dutch multinationals how their ex ante performance expectations compare to the subsidiary's ex post performance during its first two years. Analysing a sample of 191 foreign subsidiaries and controlling for entry mode self‐selection and other factors, we find that acquisitions outperform greenfields at low and intermediate levels of subsidiary integration, but that greenfields outperform acquisitions at higher integration levels.     

The Americanisation of the European business system?

This article examines the impact of contemporary business practices within the American business system on established patterns of industrial relations (IR) management in European subsidiaries of US multinationals, specifically how established firm‐level settlements for the management of IR may or may not combine with host‐country effects to constrain such innovations. The empirical material leads us to evaluate subsidiaries of US multinationals as a contingent factor indicating that institutional effects at the level of the national business system are likely to be more embedded than the effects of ownership on employment and IR at firm level.     

Liberalising the German model: institutional change,organisational restructuring and workplace effects

Institutional change at supranational, European Union level affects national and firm level institutions in various ways. This article traces effects of liberalisation measures in the airport industry enacted in two airport firms in Germany. The study, based on qualitative empirical research, found that EU liberalisation facilitated company creation of subsidiaries (subsidiarisation) and elevated shareholder interest in corporate governance. These factors affected institutional practices and cultural norms within the German industrial context that in turn influenced significant alterations in employment and workplace relations. Considerable disruption of the German social partnership model of corporate governance and industrial relations was observed. However, in addition to patterns of convergence towards neoliberal practices and outcomes frequently observed in Anglo‐Saxon systems, the study found some elements of effective retention of cultural institutional resources of the German model. Both ‘path departure’ and social embeddedness appear to coexist.     

An institutional perspective of public policy and network effects in the renewable energy industry: enablers or disablers of entrepreneurial behaviour and innovation?

This study extends theory on the effects of public policies stimulating technology demand and of industry network ties on firm-level entrepreneurial behaviour. We take an institutional perspective to develop a theoretical model examining the mechanisms through which public policies, regulatory uncertainty, and industry network ties affect firm-level entrepreneurial decision-making processes and the ability to introduce highly innovative products and to sustain superior performance. We focus on firm-level effects, which enables the study of the tension between institutional pressures of homogeneity and competitive pressures of heterogeneity for entrepreneurial decision-making processes in environments characterized by policy-induced market demands. To test our hypotheses, we draw on data from a large-scale survey among German renewable energy firms. Our results show that public policies can constrain firm innovativeness and risk-taking behaviour because they steer firms towards a more conservative attitude and discourage the pursuit of high-risk innovation projects. However, firms can counteract these influences and enhance their innovativeness by maintaining close network ties with research associations as we find that innovativeness and a highly innovative product portfolio are key success factors. In summary, these findings provide important implications for the study of public policy effects, industry network ties and entrepreneurial behaviour.     

Representation at Suncorp – what do the employees want?

It is apparent from existing research that little is known about the effectiveness of non‐union employee representation (NER) voice arrangements in Australian firms. This article examines both the non‐union Suncorp‐Metway Employee Council (SMEC) and union voice arrangements at an Australian financial services firm, Suncorp, and assesses their effectiveness in representing the needs of employees. This study is unique because it is one of the few examples of dual representation channels at a single firm. Overall the findings suggest that the effectiveness of union and NER arrangements is dependent on the union and NER voice channels being perceived by the workforce as both representative and able to act effectively or independently. However, while trade unions may provide greater voice than non‐union arrangements, the strength of voice is dependent on the legitimacy and effectiveness of trade unions in representing employees' interests at the workplace. The findings also suggest that the marginalisation strategy used by the union in excluding SMEC from its industrial campaigns, coupled with employees' perception of a lack of effective union voice, could impact negatively on the influence that unions may have on management decision‐making. This could also be perceived by employees as an inappropriate response by the union to management substitution strategies. As a consequence, any changes to industrial relations policy or trade union strategies regarding NER should be considered in the light of these findings.     

The Puzzle of Firm Performance in China: An Institutional Explanation

China has achieved phenomenal economic growth in an institutional environment that defies conventional economic rationales. Researchers offer different theories to explain this puzzle. But so far, due to the lack of data, little effort has been made to test these theories at the firm level. We develop a framework of endogenous institutional change to explain this puzzle and we test our framework with firm-level data. We argue that the decentralization from the central to the local governments and from government to firms are the driving forces behind China's institutional changes that have shaped the roles of government and market, which in turn significantly affect firm performance. We then submit our theory to a vigorous empirical test using data from China's industrial census, covering all 2000 counties and over 500 manufacturing industries. The test shows that two results of decentralization, the involvement of low-level governments in business and the process of privatization, positively affect firm performance.     

Union commitment and participation among Hong Kong firefighters: a development of an integrative model

This paper examines the factors influencing members' intent to participate in their union, drawing on a study of Hong Kong firefighters. As in Western studies, the main direct predictor of intent to participate is affective union commitment, but instrumentality is a relatively more important antecedent of affective union commitment and participation than in the Western studies. We found some evidence of frustration-aggression effects on intent to participate in ‘militant’ and ‘general’ union activities, although the latter was significant only among individuals who perceive management–employee relations as co-operative and trusting.     

A mutual gains perspective on workplace partnership: Employee outcomes and the mediating role of the employment relations climate

Recent years have witnessed increased research on the role of workplace partnership in promoting positive employment relations. However, there has been little quantitative analysis of the partnership experiences of employees. This article examines how the kinds of attributions employees make regarding indirect (union‐based) and direct (non‐union‐based) employee participation in workplace partnership might influence the process of mutual gains. It uses employee outcomes to reflect partnership gains for all stakeholders involved (i.e. employees, employers and trade unions). The article contributes to existing knowledge of workplace partnership by examining the potential role of the employment relations climate as an enabling mechanism for the process of mutual gains. The findings suggest mutual gains for all stakeholders are varied and mediated through the employment relations climate.     

The impact of large-scale employee share ownership plans on labour productivity: the case of Eircom

Large-scale employee share ownership plans (ESOPs) have been a distinctive characteristic of Irish public enterprise reform, with shareholdings of 14.9% being allocated to employees as part of firm restructuring and privatisation programmes. This paper presents a case study analysis of a large-scale ESOP in Eircom, Ireland's former national telecommunications operator. We identify changes in labour productivity (LP) during 8 years before and after the establishment of the company's ESOP and use a framework based on Pierce, Rubenfeld and Morgan (1991, The Academy of Management Review, 16, 121–144) and Pierce, Kostova and Dirks (2001, Academy of Management Review, 26, 298–310) to explore the role played by the ESOP. The ESOP was found to play a key role in enabling firm-level reform through concession bargaining and changes in employee relations, and thereby indirectly affecting LP. However, despite the substantial shareholding and influence of the ESOP, we find that it has failed to create a sense of psychological ownership among employees, and thereby further impact on productivity.     

What,when, and who: Manager involvement in predicting employee resistance to acquisition integration

Applying sensemaking research to acquisition integration, we outline factors that influence employee resistance to acquisitions. While integration is widely viewed as important to acquisition outcomes, there is limited systematic study of how employees react to the integration process. Using survey data from Chinese acquirers and applying partial least squares structural equation modeling, we examine what changes with human and task integration with the speed of when changes are made to explore relationships with employee resistance. Consistent with a temporal perspective of acquisition processes and sensemaking we find slower task integration may mitigate employee resistance to acquisition integration. However, employee resistance to the speed that changes are made likely varies for who is involved, suggesting different roles for top and middle managers. Specifically, middle management involvement with slow human integration and top management involvement with fast task integration reduces employee resistance following an acquisition.     

Human resource strategy and unionization: evidence from Taiwan

Over the past two decades, industrial relations (IR) have seen the continuous decline of trade unions and a growing interest in high performance work practices (HPWPs). Human resource researchers, examining the traditional adversarial IR strategies, are increasingly calling for more co-operative and innovative HPWPs in employment relations. Can traditional union adversarial strategies exist along with HPWPs or does one necessarily exclude the other? To answer this question, this study, using questionnaires collected from locally owned and multinational corporations in Taiwan, investigates the association between unionization rate and HPWPs. Contrary to most findings from the Western context, HPWPs were found to have a positive and statistically significant impact on unionization at the firm level in Taiwan. The positive impact may be result of close and friendly relationship between employers and unions and the practices of ‘employer-sponsored’ unions in Taiwan. Furthermore, traditional Confucian culture and institutional factors have strengthened the influence of HPWPs on unionization.     

Changing the Rules of the Game

Abstract

This article examines the impact of privatization on the relative bargaining strength of management and trade unions. Findings are based on a study of Ireland's largest telecoms provider, Eircom, which has been privatized since 1999. The privatization of Eircom adopted a stakeholder approach, under which employee share-ownership and management–union partnership played an important role in firm restructuring. Findings show that despite this approach privatization has resulted in a significant decrease in the perceived bargaining strength of unions and an increase in the perceived bargaining strength of management.     

Through the Looking‐Glass: The Impact of Regional Institutional Logics and Knowledge Pool Characteristics on Opportunity Recognition and Market Entry

This study investigates how regional variations in institutions and knowledge pools impact new firm entry into emerging industry sectors. Using the cleantech industry sector as a research context, we hypothesize and find that supportive regional institutional logics – shared meaning systems in a community that confer legitimacy upon particular goals and practices – generate cognitive schemas (mental models) that facilitate opportunity recognition and increase new firm entry rates. Drawing from research on socially situated cognition, we demonstrate that supportive institutional logics have a greater impact on new firm entry when a regional knowledge pool is larger, but a reduced impact on new firm entry when the knowledge pool is more specialized. These findings integrate previously distinct perspectives from institutional theory and knowledge economics, while contributing to research on how new industry sectors emerge.     

The German model of employee relations on trial: negotiated and unilaterally imposed change in multi‐national companies

This article investigates the effects of negotiated and unilaterally imposed change on employee relations in the German subsidiaries of a Finnish and a German multi‐national company (MNC). We look at how the strategies affect the sustainability of the current German model of employee relations and highlight some of the disadvantages of this model for global MNCs.     

The significance of human resource management: a reconsideration of the evidence

Since the publication of the seminal American texts in the early-to-mid-1980s, we have witnessed several years of debate about the academic significance of human resource management (HRM). The debate has been made difficult by the definitional confusion surrounding the term itself. It would be wrong, however, to dismiss HRM on the basis of this confusion. This paper offers a review of the seminal and important works in the HRM canon. It organizes the literature into two broad strands of meaning. The first sees HRM as a practitioner movement or new pattern of management strategy in employment relations, typically emphasizing employee commitment and union substitution. The second sees HRM as a broadly based theoretical development concerned with the relationship between employee relations and strategic management in the firm. While recognizing the links between the two strands, this paper assesses the academic merits of each approach and reaches a series of conclusions on the problems and potential of the subject.     

Building from below: subsidiary management moderation of employment practices in MNCs in China

The international human resource management literature has a long tradition of examining the impact of institutional differences on the employment practices adopted by multinational corporations (MNCs). The question of how actors make sense of institutional differences, however, has received less research attention. This study examines the enactment of employment practices as institutional differences are translated, contextualized and deployed by managers at subsidiaries of MNCs. Based on intensive case studies at two Japanese–Chinese joint-venture manufacturing plants, the study first shows that distinctive employment practices were adopted to manage the boundaries between employee groups. These distinctions are then explained by the institutional difference between the home country (Japan) and the host country (China) as well as the way that institutional differences were represented by the managers in the process of designing, developing and executing employment practices. The study therefore argues that country differences are not only assumed spaces, but are also a reservoir of management resources that are moderated, in the case of employment practices, by actors’ strategic choices and political actions before they are enacted in the subsidiary.     

Co-operation and conflict in industrial relations: what are the implications for employees and trade unions?

This article explores the effects on employees of co-operation and conflict the workplace, outlining six workplace types. A survey of union representatives UK steel industry reveals evidence of co-operative industrial relations linked to superior terms and conditions, employee involvement and health and safety outcomes. However, it fails to find evidence that co-operative industrial relations are associated a broader HRM package of workplace restructuring, high performance work teams security provisions. Nor is any association revealed between co-operation and a greater role for trade unions. These findings suggest workplace co-operation in this industry remains part of a traditional gainsharing package and an 'alliance of insiders' than an HRM partnership or union incorporation. This raises broader questions the ability of co-operation to deliver important aspects of organizational competitive advantage.