Influences on HRM practices in MNCs: a qualitative study in the Australian context

Abstract

This paper uses data from interviews with HRM managers of the Australian operations of overseas multinational companies to critically question the analytical utility of a number of standard factors that have traditionally been claimed, in the international HRM literature, to influence decisions concerning the appropriate balance between centralization and localization in HRM. The variables reviewed are primarily structural: industry sector, strategic role of the subsidiary, administrative heritage and formal organizational structure. The data suggest that the firms modify their formal structures frequently in response to environmental turbulence and have evolved towards structural forms that are radically asymmetrical. Two variables that have received limited academic attention to date but which critically mediate the pattern of intended changes are identified. First, the perception by key actors in subsidiaries of HR competence elsewhere in the MNC network, particularly head office. Second, the propensity of the staff in the subsidiary to lobby politically against changes they did not perceive to be rational.