The transfer of HRM policies and practices to a transitional business system: the case of performance management practices in the US and Japanese MNEs operating in Vietnam

This paper focuses on employee performance management (PM) to explore how multinational enterprises (MNEs) localise their human resources within their subsidiaries in a developing country. It uses qualitative research methods to examine four US and four Japanese MNEs operating in Vietnam. The paper identifies both home and host country effects as significant factors in the transfer of MNEs' PM policies and practices. The US firms emphasised financial and non-financial measurements and utilised a wide range of PM management tools and techniques. These techniques, despite being unfamiliar in Vietnam and possibly considered incompatible with Vietnamese culture, were transferred successfully to the Vietnamese subsidiaries. The Japanese firms' PM approach was characterised by a more informal form of regular performance review, within a strictly top-down process and which suffered from accusations of bias and lack of transparency by Vietnamese respondents. This paper argues that the transitional period in Vietnam from a centrally planned economy to a market-oriented one has made the national business system more receptive to new and seemingly contrasting practices. It provides no evidence to support the argument that transfer of practices is more likely, where the cultures of the countries involved are relatively similar.     

The liability of mimicry: Implementing “global human resource management standards” in United States and Indian subsidiaries of a South Korean multinational enterprise

There is increasing evidence that multinational enterprises (MNEs) from less dominant economies tend to mimic and disseminate human resource management (HRM) practices sourced from a dominant economy, usually the United States, to overcome their “liabilities of origin.” However, our understanding of the specific challenges involved in the implementation of such practices by firms across different national and subsidiary contexts remains limited. Drawing on evidence from a case study of a South Korean MNE, we examine the extent to which, and ways in which, global HRM policies mimicking U.S. practices are implemented across its sales, manufacturing, and research and development subsidiaries in the United States and India. We find discernible differences in the implementation of the global policies both between the two host country sites and across the three function-specific subsidiaries in each country, identifying a range of national and subsidiary-specific factors that inform these variable implementation outcomes. In addition to legitimacy challenges related to the source, appropriateness, and process of transfer, we note a unique form of legitimacy challenge—“the liability of mimicry”—whereby local actors can challenge head office policies on the basis of a claim to superior expertise in the dominant practices, as a particular concern of MNEs from emerging economies.     

International performance appraisal practices and approaches of South Korean MNEs in China

International performance appraisal of multinational enterprises (MNEs) in foreign subsidiaries has received inadequate research attention. The current study investigates the international performance appraisal practices, including procedures and methods, criteria and feedback, of South Korean MNEs in China and the extent to which these practices are localized or/and ethnocentric. Results of analyzing the in-depth interviews with local and expatriate managers show South Korean MNEs tend to adopt an ethnocentric approach to managing performance appraisals for expatriates and an integrative approach for host country-nationals by transferring their home appraisal practices to their Chinese subsidiaries. These approaches can be attributed to relative strength effects, i.e. the relative economic strengths and contextual differences between China and South Korea. This study adds to the knowledge base of how MNEs manage performance appraisals in their foreign subsidiaries.     

Conditional altruism: Effects of HRM practices on the willingness of host‐country nationals to help expatriates

The assistance of host‐country nationals (HCNs) both within the workplace and in the external environment plays a significant role in expatriate adjustment and work performance on international assignments. Extant research exploring antecedents of HCNs' attitudes and behaviors toward expatriates focuses on personal and intrapersonal factors but overlooks organizational contextual effects. In this study, we propose and test a model that HCNs' willingness to help expatriates is influenced by HRM practices in international subsidiaries of multinational enterprises (MNEs). Results of analyzing data collected from Chinese subsidiaries of South Korean MNEs showed that high‐commitment HRM practices directly and indirectly influence HCNs' willingness to help expatriates through the mediation of perceived organizational support (POS). Socially responsible HRM indirectly influences the criterion variable through the mediation of organizational identification. Moreover, POS and organizational identification sequentially mediate the effect of high‐commitment HRM on HCNs' willingness to help expatriates. These findings shed some light on organizational antecedents that go beyond personal and intrapersonal factors of HCN attitudes and behavior toward expatriates.     

A comparative study of performance appraisals,incentives and rewards practices in domestic and multinational enterprises in the country of Brunei Darussalam

Very little work in the past has focused on the comparative analysis of human resource management (HRM) practices between domestic and multinational enterprises (MNEs). The majority of the work in this area has instead concentrated on comparing the HRM practices utilised by the subsidiaries of MNEs, and has mostly been conducted in the context of developed countries. In this paper, we examine how the HR practices of appraisals, rewards and incentives are offered, explained and monitored in domestic enterprises (DEs) versus MNEs, and how they are similar or different in nature. This paper is based on primary data collected from a cross-section of firms operating in the country of Brunei Darussalam – a context within which no previous work of this nature has been undertaken. An analysis reveals several interesting results: HR practices are more advanced and better structured in MNEs that conduct performance appraisals (PA) more frequently than DEs, and their feedback system is also rapid; incentives and rewards systems in MNEs follow market ethos and principles; the HR directors and employees of MNEs are more receptive to PA than those in DEs whilst, in contrast to DEs, incentives and rewards systems in MNEs follow market ethos and principles. Furthermore, with regard to size, younger firms are more likely to be following market principles in terms of explaining incentives and rewards systems to their employees, whilst older firms claim that working for them carries social and psychological benefits for employees.     

Adoption of High‐Performance Work Systems by Local Subsidiaries of Developed Country and Turkish MNEs and Indigenous Firms in Turkey

High‐performance work systems (HPWSs) are seen as important in helping strengthen competitive strategies of developed‐country multinational enterprises (DC MNEs). Commensurate with global competitive pressures and internationalization strategies, emerging‐country MNEs (EC MNEs) and indigenous firms are also increasingly adopting HPWSs. HPWSs are not only seen as simply performance enhancing systems, but also as facilitators of internationalization. MNEs represent an important test bed for the HPWSs and their applicability in different national contexts. In this article, we contribute to the extant literature by focusing on HPWS adoption level within domestic subsidiaries of DC MNEs and EC MNEs along with stand‐alone indigenous firms in a single‐country setting by keeping the host‐country environment as constant. © 2015 Wiley Periodicals, Inc.     

A Blessing and a Curse: Institutional Embeddedness of Longstanding MNE Subsidiaries in Emerging Markets

This article examines the institutional strategies of multinational enterprises (MNEs) operating in an emerging market, drawing attention to how longstanding foreign subsidiaries proactively negotiate their involvement with socio-political actors. We build on institutional logics to explain how MNE subsidiaries develop sustained political, cultural, and cognitive embeddedness. Using an inductive, interpretive study of four century-old Dutch MNE subsidiaries with a colonial legacy in Indonesia, we examine these three dimensions of the institutional environment, finding that local employees embedded in both the MNE and the host country sets of logics ‒ rather than expatriate managers ‒ most effectively facilitated sustained institutional embeddedness. Our findings also suggest that embedding practices in host institutional contexts and developing structures that align with host institutional expectations provided a platform for the unfolding of institutional strategies by local employees. However, MNE subsidiaries face contrasting logics between home and host country institutions, placing significant strains on MNEs’ ability to enact change.     

Managerial mindset as the mechanism of the country-of-origin effect: evidence from Chinese multinational enterprises’ approach to employer associations

The country-of-origin effect (COE) on employment practices in multinational enterprises (MNEs) has become an important area of international human resource management research. However, research on the mechanisms of the COE, a fundamental and critical aspect of the country-of-origin phenomenon, is scant. This study seeks to empirically explore the mechanisms through which country-of-origin influences Chinese MNEs’ approach to host-country employer associations. Analysis of qualitative data from 13 Chinese MNEs revealed that country of origin affected the approach of Chinese MNEs to host-country employer associations in the form of transfer of managerial norms. It also revealed that it was the mindset of those home-country nationals who were key decision-makers at subsidiaries that enabled the COE in Chinese MNEs. This paper highlights the importance for future studies of international strategic human resources management to pay attention to micro-foundations of cross-border practice transfer and to incorporate analyses of managerial cognition in the investigation of MNEs’ management practices.     

Variances in staff-related management practices at eight European country subsidiaries of a global firm

The purpose of this study was to explore possible variances and commonalities in staff-related management practices at different country subsidiaries of the same multinational corporation (MNC). The study was exploratory, using data from ninety-six semi-structured interviews about current practices of management within eight European country subsidiaries. Results were based on 12,000 statements about management practices from staff in different countries. Analysis of the statements evidenced variances and commonalities in management practices in the country subsidiaries studied. It is suggested that variances are attributable to cultural factors, institutional pressures and other societal forces, and that commonalities might be explained by a common organizational culture. A theoretical model has been adapted to explain the conditions under which management practices take place in different country settings.     

跨国公司与东道国腐败程度相互影响机制研究

本文对于跨国公司所面临的腐败问题做了一个探索性的研究,首先指出发展中国家普遍存在的腐败问题会对进入该国的跨国公司产生影响;然后给出跨国公司与东道国制度环境(腐败)相互影响的机制;接着论述跨国公司在东道国的分公司的特殊角色,指出在应对腐败现象时它同时受到多方面的影响;第四部分论述东道国的腐败现象通过哪些方式会给跨国公司造成影响,产生成本;最后论述跨国公司又是通过怎样的途径反过来影响东道国的腐败商务环境的。     

Vive les différences? Voice in French MNCs' overseas workplaces: a comparative study of voice in French,German and US subsidiaries in the UK

Foreign-owned firms help to disseminate management practices across UK companies; this includes the ability of indigenous firms to learn improved human resource management (HRM) practices from leading foreign companies. Analysing the transfer of HRM policies forms an important strand of the international HRM and comparative capitalisms literatures; however, large-scale, comparative studies of voice patterns in German, US and, in particular, French subsidiaries in the UK are limited. This paper draws on a major survey that includes the, to date, largest sample of French MNC subsidiaries. It does not simply identify the existence of different kinds of voice mechanisms, but examines how these different practices come together in the implementation of subsidiaries' voice policies. This enables the detection of subtle, but important, differences in the subsidiaries' voice practices. French subsidiaries are significantly less likely to pursue a partnership approach to voice than their German and US counterparts. French and US establishments are significantly more likely to adopt a ‘bleak house’ approach than German ones. Importantly, these key differences only emerge at a fine-grained level of analysis that examines how subsidiaries implement voice practices.     

Examining the ‘black box’ of human resource management in MNEs in China: exploring country of origin effects

We examine the impact of HPWS on the attitudes and retention of Chinese employees in multinational enterprises (MNEs) operating in China. More specifically, we examine the extent to which the degree of HPWS and the impact of these practices differ according to the country of origin of the MNE. We surveyed a sample of 410 Chinese employees currently working in Western and Asian MNEs. The findings indicate significant ‘country of origin’ effects, where employees of Western and Asian MNEs perceive different levels of HPWS are in operation in their respective organisations. Employee trust, job satisfaction and affective commitment are all important factors in the retention of Chinese employees of MNEs, with high levels of commitment being the most significant factor. However, the relative impact of these factors on employee retention differs by country of origin of the MNE.     

Similar,but still different: how US multinational companies in Germany and Switzerland use host‐country training and skill practices

We examine in how far US subsidiaries in Germany and Switzerland display characteristics of a strategic fit with their host country and mostly find support for our predictions. Subsequently we determine each subsidiary's host‐country fit and test for within country differences in using local training and skill practices. We find the extent of continuing vocational education and training and the extent to which training on the job is important to vary with host‐country fit in Germany, while in Switzerland, as predicted, we find no such relations.     

Hybridization: striking a balance between adoption and adaptation of human resource management practices in French multinational corporations and their Tunisian subsidiaries

International management research has tended to approach the transfer of human resource management (HRM) practices by examining the one-way transfer from parent companies to their subsidiaries, their adaptation to the subsidiaries’ local context and, more recently, the reverse transfer of HRM practices from subsidiaries to their headquarters. This article aims to analyse the transfer of HRM practices from headquarters to their foreign subsidiaries through the process of hybridization. Although numerous studies focus on the transfer of HRM practices between economically developed countries or from these countries to transitional economies, few have considered French multinational corporations (MNCs) operating in ex-colonized countries. This paper addresses the ways in which the HRM hybridization process is implemented in two French subsidiaries operating in Tunisia. It focuses on the dual perspectives of managerial staff at headquarters and subsidiaries as well as shop floor employees in the subsidiaries. A range of HRM practices (recruitment and selection, compensation, performance appraisal and career management) is analysed from their transfer to their reinterpretation. The results show the importance of the concept of hybridization on HRM practice transfer through a multi-level analysis of the strategies used by various stakeholders during the hybridization process. The paper also provides useful insights into the factors of hybridization that may foster or inhibit the transfer and adoption of HRM practices by foreign subsidiaries. These include the relational context, the type of practices transferred, the interests of different professional categories and their social interactions. Based on these factors, several hybridizations are identified. The study points out the specificity of the Tunisian context and shows that institutional factors have less influence on the transfer of HRM practices in ex-colonized countries than cultural factors that have a transversal influence on different HRM practices. Key cultural factors constraining the transfer include emotional relationships and interpersonal trust. Moreover, the international transfer of HRM practices from MNCs to ex-colonized transitional countries requires taking into account the post-colonialism and fascination effects.     

Overcoming the ethnocentric firm? – foreign fresh university graduate employment in Japan as a new international human resource development method

Abstract

This article analyses a new and, by international comparison, distinct recruitment trend – the systematic hiring of foreign fresh university graduates (FFGs) into Japanese multinational enterprises’ (MNEs) operations in Japan. Our explorative research, which is based on interviews with HR managers and FFGs, offers three major findings related to international HR development methods. Firstly, the inpatriate literature has identified the roles of foreign (subsidiary) staff as knowledge conduits and boundary-spanners between headquarters and subsidiaries. While such objectives do not drive Japan’s FFG hiring trend, we find similar challenges in terms of the absorptive capacities of headquarters. Secondly, following a Varieties-of-Capitalism perspective, we argue that FFG hiring is an institutional answer to the particularities of Japan’s employment system. Aiming at internationalizing headquarters from within, it contributes to resolving the internationalization conundrum of Japanese MNEs, but rather than overcoming the existing ethnocentric HR model it accommodates this orientation. Thirdly, we advance the general HR literature by proposing a new framework that addresses the viability of international personnel development methods in dependence of the workforce diversity and distinctiveness of employment practices in headquarters. We locate FFG hiring, inpatriation and self-initiated assignments within this framework.     

Country‐of‐origin,localization, or dominance effect? An empirical investigation of HRM practices in foreign subsidiaries

This article contributes to two recurring and very central debates in the international management literature: the convergence vs. divergence debate and the standardization vs. localization debate. Using a large‐scale sample of multinationals headquartered in the United States, Japan, and Germany, as well as subsidiaries of multinationals from these three countries in the two other respective countries, we test the extent to which HRM practices in subsidiaries are characterized by country‐of‐origin, localization, and dominance effects. Our results show that overall the dominance effect is most important (i.e., subsidiary practices appear to converge to the dominant U.S. practices). Hence, our results lead to the rather surprising conclusion for what might be considered to be the most localized of functions—HRM—that convergence to a worldwide best practices model is clearly present. The lack of country‐of‐origin effects for Japanese and German multinationals leads us to a conclusion that is of significant theoretical as well as practical relevance. Multinationals might limit the export of country‐of‐origin practices to their core competences and converge to best practices in other areas. © 2007 Wiley Periodicals, Inc.     

An analysis of recruitment,training and retention practices in domestic and multinational enterprises in the country of Brunei Darussalam

This paper studies the behavioural differences in the recruitment, training and retention practices of domestic enterprises (DEs) versus multinational enterprises (MNEs) in the country of Brunei Darussalam. Hypotheses from literature survey predict MNEs to be more stringent in their recruitment and training and rigourous with promotion practices. Results show this is to be largely true. MNEs are found to be more rigourous in recruitment and place more emphasis on such traits as candidates' ‘devotion to task’, ‘self-motivation’ and ‘independent judgement’. MNEs were found to rely more on internal appointments. MNEs place more emphasis on training; they also emphasise a stronger work culture by relying on ‘induction by socialisation’ and ‘buddy system for mentoring’. When analysed by age, older firms were found to place more importance on language and commitment. They also rely on training via the buddy system and on external appointments for senior posts. Large firms place emphasis on employees' willingness to travel and on work experience in other countries as the main recruitment criteria. Large firms also believe in external appointments for senior positions. The study, which is one of few of its kind conducted in non-Western environment, and the only one in the context of Brunei, adds to our understanding of human resource practices in the context of two different genres of enterprises and has implications for future research.     

Multinational Enterprises and the Competitiveness of Transitional Host Economies

Abstract

The paper re-examines a hypothesis that multinational enterprise (MNE) subsidiaries in Poland make a significant contribution to host country competitiveness by raising overall export performance. Multiple indicators based on UNCTAD methodology are used by the authors to analyze Poland's export competitiveness and link this competitiveness to MNE subsidiaries export propensity and innovativeness. They find a confirmation of the positive impact of MNEs on the Polish export sector that has substantially strengthened the country's capacity to compete in world markets and speeded up the transition process to the market-led system.     

A Communication‐Based Theory of the Choice Between Greenfield and Acquisition Entry

This paper develops a communication‐based theory of the choice by multinational enterprises (MNEs) between greenfield and acquisition entry. It argues that MNE parents communicate with their subsidiaries for reasons of knowledge exchange, coordination, monitoring, and socialization. The expected communication costs arising from these activities are argued to increase with the verbal communication barriers existing between a prospective subsidiary and its parent, but this increase is argued to be larger for acquisitions because they require more extensive parent–subsidiary communication than greenfields. I therefore hypothesize that verbal communication barriers have positive effects on the likelihood that MNEs choose greenfield over acquisition entry. I also hypothesize that these effects are weaker for prospective subsidiaries that will have more autonomy or local co‐owners. An analysis of 231 entries by Dutch MNEs into 48 countries lends substantial support to these hypotheses, indicating that geographic and linguistic barriers to verbal communication play important roles in MNEs' establishment mode decisions.     

Out of India: Towards a conceptual framework on internationalization motives,parenting styles and human resource management practices among Indian MNE subsidiaries in Ireland

The significant growth of Asian multinational enterprises (MNEs) in western economies in recent years, in particular in smaller advanced economies such as Ireland, has led to calls for a deeper understanding of the drivers of location choice among these MNEs and for more compelling accounts of the parenting and management of the subsidiaries being established. In this conceptual contribution, we focus on the specific case of Indian MNEs with subsidiaries in Ireland. Assembling theoretical insights from the literature on parenting styles and headquarter-subsidiary interactions, coupled with practice-led observations garnered from Indian MNEs, we develop a conceptual framework elucidating key variations in headquarter-subsidiary relationships and the HR policy and practice mix. We reason that the preferred approach to corporate parenting, vested in adding value to the subsidiary, extracting value from it, or seeking a balance in the overall exchange, results in a range of interactions between headquarters and subsidiaries, encompassing integration, collaboration or local responsiveness. Furthermore, we postulate that the preferred headquarter-subsidiary interactions influence the subsequent HR recipes adopted in the subsidiary setting as it seeks to build its strategic position within the broader MNE network. In order to deepen lines of inquiry around these different interactions, we advance a series of propositions for testing.