Foreign Subsidiaries Of Multinational Companies Research Articles

The mediating role of HRM outcomes in the relationship between employee development and company performance results: A study with a sustainable HRM perspective on Central European MNCs

AbstractThe main goal of the article is to determine the mediating role of human resources management (HRM) outcomes in the relationships between employee development (ED) and company performance results and to establish whether there are any identifiable regularities in this scope in the pre‐pandemic and pandemic period of COVID‐19, the latter being understood as a crisis period, in the headquarters (HQs) and foreign subsidiaries of multinational companies (MNCs). Additionally, the article aims to undertake an interpretation of the obtained research data from the perspective of sustainable HRM. The empirical research encompassed 200 MNCs with headquarters in Central Europe. The research encompassed 200 MNCs headquartered in Central Europe. For statistical analysis, the Partial Least Squares Structural Equation Modeling was used. The results indicate that HRM outcomes serve as a positive intermediary and this mediation is stronger in crisis times. The findings enrich both theory and practice, providing a solid framework for incorporating sustainable HRM into organizational strategic management, including ED, especially in MNCs, to boost performance and resilience. An innovative aspect is the application of employee key performance indicators as the efficiency index to study variable effects.

The effects of shaping employee work engagement and job satisfaction on company performance results: the mediating role of HRM outcomes in Central European MNCs

PurposeThe main goal of the article is to determine the mediating role of human resources management (HRM) outcomes in the relationships between shaping employee work engagement and job satisfaction (SEWE&JS) and company performance results and to establish whether there are any identifiable regularities in this scope in the pre-pandemic and pandemic period in the headquarters (HQs) and foreign subsidiaries of multinational companies (MNCs).Design/methodology/approachThe empirical research included 200 MNCs headquartered in Central Europe. The raw data in the variables were adjusted with the efficiency index (EI) to capture the actual relations between the variables under study. The partial least squares structural equation modeling (PLS-SEM) was used to verify the research hypotheses and assess the mediating effects.FindingsThe research findings show that the HRM outcomes positively mediate the relationships between SEWE&JS and the company performance results. HRM outcomes turned out to be a stronger mediator between SEWE&JS and company performance results in finance and quality in the HQs during the pandemic. By contrast, in the local subsidiaries, they were a stronger mediator of the relationships between the results in innovativeness and quality during the pandemic.Originality/valueIn addition to confirming the results of some other researchers, the research findings also provide new knowledge. They determine the mediating role of HRM outcomes in the relationship between SEWE&JS and the three categories of company performance results, namely finance, innovativeness and quality. In addition, they identify certain regularities in the four studied contexts, which is a novelty in this type of research. A novelty is also the use of employee key performance indicators (KPIs) in the data analysis as the efficiency index in analyzing the effect of the variables under study. The value of the research is also the fact that it covers HRM in MNCs established in Central Europe, which, compared to MNCs from the Western world, is not a frequent subject of research.

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

PurposeThe 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/approachThis 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.FindingsThe 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/implicationsThe training activities of subsidiaries are dependent on the institutional settings of the host country.Practical implicationsAlbeit 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 implicationsSubsidiaries contribute to the local skill base and do not act in a free-rider position, at least in the German variety of capitalism.Originality/valueThe study deepens insights on distanced relations within and how subsidiaries generate scope for action by using this kind of relationships.

The Adoption and Implementation of High-Performance Work System in Subsidiaries of Japanese Multinational Companies in Vietnam: a Qualitative Study

Abstract Background and purpose: Managing human resource in foreign subsidiaries of Multinational Companies (MNCs) has been a challenging task due to the cultural diversity. High Performance Work System (HPWS) has been adopted by headquarters of MNCs in their subsidiaries as a form of control. The current research aims to explore the adoption and implementation of HPWS in subsidiaries of Japanese MNCs in Vietnam. Design/Methodology/Approach: A qualitative research design was conducted with data collected from semi-structured in-depth interviews with 33 managers working in 11 subsidiaries of Japanese MNC in Vietnam. Content analysis was used to analyze the data. Results: The results suggested that although HPWS was not fully implemented in these establishments, ability enhancing, motivation enhancing and opportunity enhancing bundle of HPWS were adopted to a varying extent. In addition, HPWS was adopted as a reactive response rather than a strategic choice. Finally, cost-benefit consideration may provide explanation for the non-systematic implementation of HPWS in affiliations of Japanese MNCs in Vietnam. Conclusion: The research provides some evidences to support the best-fit approach to HPWS adoption and implementation. Although HPWS has the potential to improve organizational performance, it must be internally aligned with the context of the organization.

Training activities in subsidiaries of foreign multinational companies: Local embeddedness in Germany?

AbstractWhile labour geography notes that subsidiaries of multinational companies (MNCs) exploit workers, studies in vocational education show that the international subsidiaries perform education and training. Often, the latter strand of literature relates to cases of MNCs from countries with ‘dual’ apprenticeships that combine comprehensive vocational education and training (VET) of vocational schools/universities and companies. This is how VET is practiced in Germany, Austria and Switzerland. The VET literature also explores how transfer of ‘dual’ practices from these countries of origin can contribute to skilling employees in the host countries. Starting from these conceptual approaches, this paper takes a different perspective. It asks how training activities of MNCs with headquarters in countries where companies hardly combine their in‐house trainings with vocational schools, perform training activities in Germany where ‘dual’ apprenticeship is the prevalent institutional environment. Besides ‘dual’ VET, the study also includes MNCs’ ‘dually’ coordinated training activities with universities. The topic of MNCs’ training activities in such complex structured institutional environments has hardly been researched until now. Methodologically, the study is based on case studies and uses qualitative research approaches for the evaluation of interviews. The results illustrate a spectrum of different kinds of training by presenting three case studies and show how they relate to the particular institutional context in Germany. The discussion and conclusion integrate the results in further findings of the study and literature.

Influence of Macroeconomic Factors in the Capital Structure of Foreign Subsidiarie

This article examines the influence of macroeconomic factors in the capital structure of subsidiaries of foreign multinational companies (SFM) in Brazil by comparing them with local Brazilian companies (LBC) during the period from 1998–2008. Panel data econometrics was used to analyze the data and test the hypotheses. During this period, exchange rate variation was positively associated with local leverage, which supported the hypothesis of income hedging in the context of foreign currency exposure of the head office. We also found less local leverage for foreign multinational companies when the macroeconomics scenario became more stable. Finally, contrary to the initial hypothesis, differences in financing rates between Brazil and the SFMs’ head office country were positively related to local leverage.

The phenomenon of young talent management in Russia—A context‐embedded analysis

This article describes the particularities of young talent management (TM) in Russia and explains them through a context‐specific analysis. It adopts a multilevel perspective that acknowledges the relevance of context at three levels: the macro environment, the organizational, and the individual. Data were gathered through 46 interviews with HR managers and young talents from six Russian companies and six Russian subsidiaries of foreign multinational companies (MNCs) active in a variety of industries. Following the contextualization approach, this study offers important insights into the interplay between macro, organizational, and individual factors as well as their isolated or interrelated effects on TM. While multilevel contextualization provides the rationale behind certain TM practices and the particular focus on young talents in Russia, it also explains why Russian companies are inspired by global best TM practices. Thus, contextualization allows for explaining the coexistence of a specific environment and nonspecific (global best) TM practices. Important particularities are revealed also when compared to the results of TM studies in other emerging countries. The article contributes not only to the TM discussion, but also to the wider field of international human resource management and the international management literature regarding contextualization.

Human Resource Management of Japanese Companies in Hungary: How do Japanese and Hungarian Styles Blend?

ABSTRACTA qualitative interview-based research with 32 participating companies, this article investigates the human resource management practices of Japanese subsidiaries in Hungary. The findings indicate that human resource management practices in Hungarian subsidiaries of Japanese companies are characterized as a hybrid of Japanese and Hungarian styles. Greater Japanese influence was found in the characteristics of the human resources department, corporate culture, safety practices, and trainings, whereas greater Hungarian influence was found in pay, benefits, and recruitment methods. The findings contribute uniquely to the understanding of whether and how the country-of-origin effect, localization effect, and dominance effect interplay in configuring human resource management practices in foreign subsidiaries of multinational companies.

Transfer of performance appraisal practices from MNC parent to subsidiaries in Serbia

This paper seeks to address one of central issues in the international human resource management literature regarding the extent to which foreign subsidiaries of multinational companies (MNCs) tend to implement performance appraisal practices and policies of the parent company versus those of local companies in the host country. The study conducted in 65 subsidiaries of foreign- owned multinational companies in Serbia found that performance appraisal practices in MNC subsidiaries in this transition country closely resemble parent company practices. The conclusion drawn from the study is that the transfer depends mainly on dependence on parent inputs, the degree of parental control, and subsidiary age, implying that MNCs need to take these variables into consideration when deciding whether to transfer their performance appraisal practices to their subsidiaries in this transition country or to accept local practices.

The labor market regimes of Denmark and Norway – One Nordic model?

The literature on the Danish and Norwegian labor market systems emphasizes the commonalities of the two systems. We challenge this perception by investigating how employers in multinational companies in Denmark and Norway communicate with employees on staffing changes. We argue that the development of ‘flexicurity’ in Denmark grants Danish employers considerably greater latitude in engaging in staffing changes than its Nordic counterpart, Norway. Institutional theory leads us to suppose that large firms located in the Danish setting will be less likely to engage in employer–employee communication on staffing plans than their Norwegian counterparts. In addition, we argue that in the Danish context indigenous firms will have a better insight into the normative and cognitive aspects to flexicurity than foreign-owned firms, meaning that they are more likely to engage in institutional entrepreneurialism than their foreign-owned counterparts. We supplement institutional theory with an actor perspective in order to take into account the role of labor unions. Our analysis is based on a survey of 203 firms in Norway and Denmark which are either indigenous multinational companies or the subsidiaries of foreign multinational companies. The differences we observe cause us to conclude that the notion of a common Nordic model is problematic.

Negative and Positive Aspects of Cross-Cultural Interactions: A Case of Multinational Subsidiaries in Poland

Traditionally, literature and researches on cross-cultural interactions in Multinational Companies (MNCs) and their foreign subsidiaries emphasize typically negative aspects of such relationships. Researchers widely discuss problems faced in a cross-cultural setting and how they affect overseas operations. Less effort has been made so far to study the positive aspects of human interactions in MNCs. Generally, cross-cultural interactions are a peculiar type of social interactions that may contribute to building of social capital of MNCs as well as creativity and innovations, among other positives, which all have a beneficial influence on MNCs’ functioning. Thus, there is a need for a deeper understanding of mutually oriented human behaviors when the borders are crossed. Since the author wants to present a more balanced approach for analysis of human relationship in multicultural settings, the aim of the paper is to identify negative and positive aspects of cross-cultural interactions. The author’s main research was focused on the barriers to cross-cultural interactions while the pilot study also reflects the evidence of positive aspects of such an interaction. The data were collected via a qualitative study in foreign subsidiaries of MNCs in Poland. The analysis provided in the article may contribute to a better understanding of the genuine nature of cross-cultural interactions. There is also emphasized that creativity and innovation may be enhanced in MNCs due to cultural diversity. DOI: http://dx.doi.org/10.5755/j01.ee.25.2.4387

Subsidiary autonomy over industrial relations in Ireland and Spain

This article uses two parallel large-scale surveys in Ireland and Spain to test explanations of the variation in the autonomy of foreign subsidiaries of multinational companies over industrial relations policies, in particular regarding trade union engagement and employee consultation. We bring together three strands of literature: home- and host-country effects, organizational context and international human resources structures. Our results call attention to the significance of institutional effects, along with mode of entry of the subsidiary and the trajectory of new investments.

The expatriates in multinational companies: A trend in Serbia

Expansion of international operations has imposed new demands to multinational companies, especially in the area of human resource management. International human resource management is primarily characterized by movement of employees across the boundaries of one country in order to take various roles in foreign subsidiaries of multinational companies. One of the most important decisions a multinational company has to make refers to selection of employees to fill in positions in its foreign subsidiaries depending on nationality of employees. This paper tends to explore the significance and roles of expatriates in obtaining success of multinational company in international operations in order to emphasize the advantages expatriates may bring to a multinational company. This paper aims to analyze one of crucial issues that multinational companies face in global environment - the process of expatriation, particularly focusing on the number of expatriates (parent country nationals) in subsidiaries of foreign multinational companies in Serbia and the tendency of changing their number in these subsidiaries, as well as nationality of managers in key positions in these subsidiaries (CEO and HR manager). Empirical research performed through a questionnaire has shown certain features of subsidiaries of multinational companies in Serbia, indicating that the number of expatriates has increased since their founding until today (contrary to expectations based on theoretical concepts and results of studies performed in other countries and environments). However, as it was expected, the analysis of results has shown that most subsidiaries in Serbia have replaced their expatriates in the position of CEO (and HR manager), which has brought companies numerous benefits, such as lower expenses.

Innovation Management in Russia's Foreign Manufacturing Subsidiaries: A Pilot Exploration of Creation and Implementation of Effective Innovation Routines

The extant literature acknowledges the role of overseas subsidiaries in the growth and development of multinational companies (MNCs). Such subsidiaries are viewed as critical players in the innovation process at MNCs. Although this topic has gained importance, it remains largely under-researched in the Russian context. This study aims to fill this gap by examining the dynamics of the innovation process in Russian-based subsidiaries of global MNCs. It seeks to explore and understand motivation and drivers of innovation, key participants, and impact and outcomes of innovation, with a specific reference to the peculiarities of the Russian institutional environment. We present qualitative findings from several case studies of Russian manufacturing subsidiaries of foreign MNCs, which indicate that Russian subsidiaries are not only recipients of knowledge and technology developed elsewhere in the MNCs, but are active developers of innovative products and solutions that are later applied in other units of the respective MNCs.

Human Resource Management strategies for overcoming the barriers in cross-border acquisitions of Multinational Companies: the case of multinational subsidiaries in Poland

The aim of the paper is to portrait some winning as well as failing strategies in human resource management (HRM) in cross-border acquisitions in Poland. The focus is on barriers to interactions in cross-border acquisitions that affect personnel management. There is an assumption that the effective overcome of these barriers reduces tensions in interpersonal relationships in acquisitions and thus contributes to the winning HRM strategies. The author tries to identify the determinants of successful approaches to managing interactions of people within foreign subsidiaries of multinational companies (MNCs) established via acquisitions, basing on the cases from Poland. DOI: http://dx.doi.org/10.5755/j01.ss.77.3.2009

National embeddedness and calculative human resource management in US subsidiaries in Europe and Australia

This article presents a study of the degree to which national institutional settings impact on the application of management practices in foreign subsidiaries of multinational companies. Applying the national business systems approach our study centres on the use of calculative human resource management (HRM) practices by subsidiaries of US multinational companies in the UK, Ireland, Germany, Denmark/Norway and Australia, respectively, in comparison with these countries’ indigenous firms.The analysis indicates that while US subsidiaries adapt to the local setting in terms of applying calculative HRM practices, they also diverge from indigenous firm practices.

Government and the creation of the Celtic Tiger: Can management maintain the momentum?

Executive Summary From the late 1980s, government policies and actions have influenced the remarkable rise in Ireland's economic fortunes. Will Irish business be able to maintain this outstanding performance in the face of a world economic slowdown, and problems brought on by success itself? These questions of sustainability are examined, alongside the implications for management of public policy and of foreign-owned and indigenous Irish enterprises. The model of the ‘flexible developmental state’ (FDS) is applied to Ireland.1 New forms of industrial organization—like transnational networks with their fluid global movements of money, information, and resources—are especially appropriate in the FDS. The FDS government plays a key role in integrating local and global business in three ways. One is to attract foreign direct investment (FDI) and then build local networks of production and innovation around the subsidiaries of foreign multinational companies (MNCs). FDI, in the context of a global economy, was the catalyst that animated the developmental process in 1990s Ireland. The second FDS thrust is to cultivate indigenous networks of innovation and encourage them to internationalize. The third element of the FDS is the creation of a stable macroeconomic and financial environment that fostered Irish adaptation to, and participation in, the global economy.2 The ‘flexible’ component of the FDS is that the Irish government, working through state agencies, shaped the organizational cultures and capabilities of both indigenous firms and MNC subsidiaries, but without directly dictating their activities.

Globalization, corporate identity and European technology policy1

Abstract The globalization of competition in key high technology sectors has confronted European policy‐makers with a dilemma. While the promotion of high technology sectors has become a major priority of European policy in recent years, the growing physical presence of subsidiaries of foreign multinational companies (MNCs) in the European Union (EU) has complicated the issue of what the promotion of ‘European high technology industry’ means. In practice, a large number of ‘foreign’ subsidiaries from EFTA and the US gain access to important European technology programmes such as ESPRIT, RACE, BRITE and EUREKA, as well as some national programmes. However, this has not been true for most subsidiaries of Japanese firms, despite the increasingly large presence they have in the European economy. This article asks what can explain this outcome. Two important cases which have brought issues of foreign firm access to the fore of European technology policy‐making, IBM and ICL‐Fujitsu, are examined. Both European ...

International human resource management: an environmental perspective

The paper focuses on management of human resources in international environments. A conceptual model capturing environmental influences on HRM is outlined and applied as a basis for discussing the management of human resources in foreign subsidiaries of multinational companies. Finally, implications for practice research are derived.