Abstract
AbstractThis article examines the relationship between the capabilities of HR departments and the level of adoption of corporate HRM practices in MNC subsidiaries. To explain this relationship, we leverage paradox theorizing, still rare but gaining increasing attention in HRM research, and integrate the studies of practice transfer, organizational ambidexterity, and absorptive capacity. First, we establish the conceptual linkages between the implementation and internalization dimensions of practice adoption and the potential and realized absorptive capacities of HR departments. Second, we re‐define the operational and strategic activities of HR departments in terms of the learning paradox of exploitation and exploration. Third, we introduce the concept of HR ambidexterity to describe HR departments that possess high levels of capabilities in both operational (exploitative) and strategic (explorative) task‐domains. Finally, we hypothesize that ambidextrous HR departments are more adept at adopting corporate HRM practices. An analysis of the survey data from 105 foreign subsidiaries of 12 MNCs supports this single hypothesis. The main contribution of this research is in leveraging paradox theorizing to explain the nature of HRM capabilities and their role in the adoption of HRM practices.
Highlights
Embedded within multiple institutional and competitive contexts, multinational corporations (MNCs) face an inherent tension between pursuing consistency in their global operations and adapting to local environments
Given that a unit's absorptive capacity (AC) depends on its existing related knowledge (Cohen & Levinthal, 1990), we propose that HR departments that possess high levels of both exploitative and explorative capabilities are more adept at absorbing transferred human resource management (HRM) practices
While we focused on HR departments as the central actors in the more technical aspects of practice adoption, it would be of great benefit to consider a wider range of HR stakeholders in these processes (e.g., Keegan, Huemann, & Turner, 2012)
Summary
Embedded within multiple institutional and competitive contexts, multinational corporations (MNCs) face an inherent tension between pursuing consistency in their global operations and adapting to local environments. Once new routines are assimilated, unit HR actors combine them with the existing practices, transform and explore their elements in search of synergies and innovations, and adapt them to the needs of their unit (ibid.; Fosfuri & Tribó, 2008) These activities depend on strategic HRM capabilities to create new linkages between the acquired and existing practices, evaluate their fit, and align the resulting HRM configurations with a unit's context and business goals. Given that AC is a function of prior related knowledge (ibid.), we argue that ambidextrous HR departments that develop high levels of capabilities in both operational and strategic HRM domains are more adept at adopting (implementing and internalizing) the corporate HRM practices. We empirically test the following single hypothesis: Hypothesis 1 The higher the level of HR ambidexterity (the multiplication of operational and strategic HRM capabilities), the higher the level of HRM practice adoption (the multiplication of practice implementation and internalization) in MNC subsidiaries
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