Subsidiaries Of Multinational Companies Research Articles

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.

Understanding employer branding within MNC subsidiaries: Evidence from MNC hotel subsidiaries in Indonesia

Employer branding is an important process in marketing to ensure the smooth delivery of branding strategies. Nevertheless, research focusing on the process of employer branding within international subsidiaries is scant. Thus, this research explores the process of developing employer branding for international subsidiaries to suit the multinational company (MNC) hotels' branding strategies. In particular, the current study examines the critical factors that could support and forestall employer branding within MNC hotel subsidiaries in Indonesia. Using a qualitative approach, semi-structured interviews were conducted with three different actors (i.e., expatriate manager, local manager, and regional executives). The results reveal that the company employer branding process is being influenced by several factors that exist only in the country of the MNC hotel subsidiaries. This study is important to explain the contextual factors of stakeholder preferences in the management of internal marketing within international MNC subsidiaries.

Ausländische Direktinvestitionen und lokale Wissensbasis: Die Einbettung von Niederlassungen in die deutsche duale Ausbildung

Dual vocational education and training systematically combines the learning of apprentices (in vocational schools) or students (in applied universities) with the ‘learning venue’ of the company. The dual vocational education and training exists in Germany, Austria and Switzerland and stands for regional competitiveness as well as for job opportunities of young people on the local labour market. Outside of these three countries, the dual system hardly exists, but dual practices are subject of international skill transfer policies. While this transfer is well researched, it is hardly known to what extent (in mirror image) subsidiaries of foreign companies take part in the dual system of German speaking countries. This question was examined, by focussing on subsidiaries of multinational companies in Germany. Theoretically, the contribution relates to research on local knowledge bases and the embeddedness of foreign subsidiaires. The study pursues a qualitative method. The results show that the local training managers have freedom for decision-making and use this in favour of getting involved in dual vocational education and training. However, the effort turns out to be high. Dual activities take place primarily as a strategy for adapting to the institutional environment, not as a way of shaping the environment. The local stakeholders are mostly reactive in this regard. This points to possible future fields of research on local knowledge bases and local embeddedness and, with regard to practice, to the relevance of mutual coordination.

Capital Inflows and Working Children in Developing Countries: An Empirical Approach

International capital flows and the operation of multinational enterprises (MNEs) are influenced by several socioeconomic and political factors. Among them, low labor cost is listed among the determinants that attract foreign capital, primarily foreign direct investment (FDI) inflows, which in various cases is attributed to unskilled employees, including working children. Working children, mainly in developing countries, remain an important social issue which has attracted increasing research interest, as well as the coordinated efforts of international organizations. The present research aims to empirically investigate the interaction between FDI inflows and child labor in developing countries using panel data analysis. The paper includes an extensive literature review of related empirical research on the association between child labor and FDI inflows in developing countries. The novelty of the study is attributed to its effort to empirically investigate the causality between FDI and child labor in two geographic regions that present high rates of working children, namely sub-Saharan Africa and Latin America. A sample of 42 developing countries from a period ranging from 1980 to 2019 was used and Granger causality tests were applied. The study concludes that there is a unidirectional causal relationship from FDI inflows to child labor in these regions and no causality was observed from child labor on macroeconomic independent variables. Several policies and proposals that will reduce or prevent child labor in the subsidiaries of multinational companies are included.

Pengaruh Kebijakan Peraturan Suatu Negara Dalam Implementasi Multinasional Capital Budgeting


 This journal examines the Influence of a Country's Regulatory Policy in the Implementation of Multinational Capital Budgeting with the aim that writers and readers know what influence a state regulation can have in the implementation of multinational capital budgeting. In compiling this journal the author uses descriptive qualitative research methods where research references are taken from written notes, typed interview transcripts, and video or audio recordings containing related information. Meanwhile, the data collection technique used by the researcher is by using various references from previous studies, books, and the internet. The main result of this study is the evidence that capital budgeting for domestic companies in Kenya differs significantly from the structure adopted by multinational companies operating in the country. In this journal, the authors argue that differences in capital budgeting border on capital-intensive and host country laws. Due to different operating policies around the world, subsidiaries of multinational companies adopt unique capital budgeting techniques to reflect the regulatory policies of the host country. In addition, the net present value guides how MNCs determine their capital budgets as each business entity's objective is to remain afloat and competitive.
 Keyword : Policies, Regulations, Multinational, Capital Budgeting

Organization culture types and the replication of transferred human resource management practices in multinational subsidiaries in Nigeria

PurposeGiven that institutional and cultural factors affect the transfer of HRM practices between multinational companies (MNCs) and their subsidiaries, the paper set out to investigate the explanatory mechanism for the replication of transferred HRM practices and the factors likely to influence the choice of transfer mechanisms.Design/methodology/approachUsing an exploratory qualitative approach, 40 interviews were conducted with senior managers and employees in two MNC subsidiaries located in the alcoholic beverage and oil industries in Nigeria.FindingsThe findings suggest that organizational culture (OC) was the mechanism for MNC HRM replication and inhibition. In addition to explaining the mechanisms for HRM practice replication, the authors developed a conceptual framework to explain how clan and hierarchical OC influence the extent to which human resource (HR) practices are replicated or inhibited and how institutional and cultural factors influence the choice of OC.Originality/valueThe study uncovered that MNCs deploy hierarchical OC to oversee the replication of transferred practices. Interestingly, the authors found that institutional and cultural environments were key factors that influenced the choice of mechanism for overseeing the replication of HR practices. The conceptual framework can help managers of MNCs to understand how to replicate transferred HRM practices in developing countries.

Driving Innovation Initiatives in a Multinational Company Subsidiary: A Case Study and Conceptual Framework for Further Application

This study aims at identifying factors that facilitate the development of the capacity to generate innovations in a subsidiary of a multinational company. Based on the understanding that innovation management deals with the establishment of organizational routines and the investigation of environmental factors that affect the success of the innovation process, the purpose of this work is to contribute toward identifying these factors. For this, a single case study was carried out in a Brazilian subsidiary of a German multinational company, having as incorporated objects the two Business Units of the subsidiary. The results include 20 potential factors to drive the innovation process in the subsidiary company organized as a tree-like structure with three categories: reasons to innovate, spontaneous factors and induced factors. The structure serves as a conceptual framework to address future research, as well as to help subsidiaries’ managers to leverage innovative potential. The study opens room for further implementation of open innovation in the company, as the innovation process is now more stable and robust. Excellent alternatives for open innovation projects are available in the local market and can now be implemented by the company.

Contrasting union orientations and engagement with international private regulation: The agency and role of labour in MNC subsidiaries in Ghana

AbstractThis article focuses on multinational company subsidiaries in Ghana with contrasting approaches to international private regulation. The findings explore the nature and outcomes of international private regulation but also the agency of unions and their orientations in terms of whether they valued and engaged with international private regulation or otherwise. Local union orientations and industrial relations dynamics are key influences on whether international private regulation is meaningfully applied or perceived as useful, and these contrasted notably within the research underpinning this article.

Human Resource Management, Employee Participation and European Works Councils: The Case of Pharmaceutical Industry in Greece

Employee participation is a broad notion that encompasses sets of practices that enable employees to participate in the decision-making process on issues affecting them leading to a committed workforce. According to the 2009/38/EC Directive, a European Workers’ Council (EWC) is established in all undertakings and all community-scale groups of undertakings for the purpose of informing and consulting employees. This study investigates the impact of employee participation on employees and organizations and more specifically the potential benefits and the added value of participation for employees and organizations, the potential costs and threats of employee participation and the added value of EWCs in multinational subsidiaries in the pharmaceutical industry in Greece. The data gathering was carried out through in-depth semi-structured interviews with management, HR executives, trade union representatives and EWC representatives using a semi-structured questionnaire based on the state-of-the-art literature review. Organizations participating in the study are subsidiaries of multinational companies with an active European Works Council in the pharmaceutical industry in Greece. Findings suggest that there are potential benefits of employee participation practices for the employees and added value for the pharmaceutical companies and provide a useful perspective for managers and researchers in the field of labor relations and human resource management.

Gender diversity management in foreign subsidiaries: A comparative study in Germany and Japan

Gender (in)equality varies strongly across countries. However, research has not sufficiently addressed how subsidiaries of multinational companies respond to differences in gender equality between home and host countries. Based on interviews with 34 managers, our study explores how subsidiaries experience gender-related challenges in their home and host countries, what kinds of practices they implement to increase gender equality, and which role the headquarters play in the implementation of these practices. We do so by examining the cases of German subsidiaries in Japan and Japanese subsidiaries in Germany, two countries that differ greatly in gender equality. Building on our analysis, we systematically compare how subsidiaries respond to the institutional pressures from their home and host countries and develop a theoretical model that illustrates how gender diversity management in a subsidiary is contingent on the interaction of (1) global integration pressure from the headquarters and (2) the level of gender equality in the home country relative to the host country, linked via different types of collaboration and practice transfer from the headquarters. Theoretical and practical implications of our findings are discussed.

Board Diversity and General Manager Turnover in MNC Subsidiaries

This study examines the impact of board diversity in multinational companies (MNCs) on the likelihood of general manager (GM) turnover in foreign subsidiaries. Using a longitudinal dataset with 2,177 observations, which includes 649 GM turnover events across 1,040 foreign subsidiaries of Japanese MNCs between 2004 and 2013, we find that board diversity in tenure, education, and gender reduces the likelihood of GM turnover. These findings support the value-in-diversity perspective and are consistent with the view that diversity not only expands the pool of knowledge in the boardroom but also allows the knowledge to be considered more deeply and extensively. As a result, MNCs with diverse boards make well-reasoned decisions and are less reliant on GM turnover as a managerial intervention tool to address foreign subsidiary issues. Our study contributes to the literature in two important ways. First, by focusing on the general manager, we add much needed insights to the role of boards in influencing turnover beyond the CEO position. Second, we advance research on board performance in multinational contexts, which remain understudied.

Correction: Triantafillidou and Koutroukis (2022). Employee Involvement and Participation as a Function of Labor Relations and Human Resource Management: Evidence from Greek Subsidiaries of Multinational Companies in the Pharmaceutical Industry. Administrative Sciences 12: 41

The authors would like to make corrections to the published paper (Triantafillidou and Koutroukis 2022) [...]

From the CEO perspective: Critical competencies for effective performance

The principal aim of this research has been to identify the critical competencies required for effective performance in the position of CEO in subsidiaries of multinational companies from the perspective of the players themselves. Eleven critical skills have been identified; the most significant of them are communication and interpersonal relationships, using a qualitative approach consisting of interviews with thirty CEOs.

Employee Involvement and Participation as a Function of Labor Relations and Human Resource Management: Evidence from Greek Subsidiaries of Multinational Companies in the Pharmaceutical Industry

Employee involvement and participation is part of Labor Relations and Human Resource Management. This study is to identify how and to what extent employee involvement and employee participation mechanisms are used in the Greek subsidiaries of multinational companies in the pharmaceutical industry. The issues examined in this study are the design of employee involvement and participation practices, the similarities and differences of employee participation practices in the group of companies internationally, corporate employee communication and consultation mechanisms, corporate policy towards trade unions and the EWC nature and agreements. The research method is qualitative with semi-structured interviews conducted with management executives, human resource management executives and the selected organizations participating in the study are active in the pharmaceutical industry and fall within the scope of Directive 2009/38/EC/16.5.2009 on the right of employees to information and consultation at Community-scale companies and groups of companies. The findings indicate that most of the participant companies when designing employee involvement and participation practices, consider a formal model of best practices that has been codified for all multinational companies. Regarding the global company’s policy on consultation and employee involvement most of the participant companies state that they provide a little more than the institutional framework requires. Nevertheless, management receives information about the activity and meetings of the EWC systematically at the time of EWC meetings. Increasing employee participation requires both management attention and initiatives on the part of employees.

The Impact of Occupational Stress on Employees’ Performance and Customer Value Creation: Case of an American Multinational Company Subsidiary in Morocco

This paper intends to determine the extent to which occupational stress impacts individual performance, and whether it affects the customer value creation. The objective is to shine new light on the occupational stress challenges through examining an American multinational company based in Morocco. Therefore, the key question of this study asks the way the occupational stress affects individual performance, and consequently, customer value. A qualitative methodology is adopted and a specific interview guide was developed. The main finding shows a high level of customer value creation is only possible through ensuring a non-stressful working environment, a prerequisite for employees’ performance.

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.

Strategic Issue Selling by International Subsidiaries: The moderating role of the cultural distance

This study was to examine the moderation effect of cultural distance in the packaging and process of a strategic issue selling by a subsidiary of multinational company affects the attention dedicated by the headquarters. Data was collected via an online survey sent to the country managers of subsidiaries of multinational companies and responded by managers from 29 different countries and 46 different headquarter location, with that was possible to assess the cultural distance. The method used was structural equation modeling using Smart PLS 3.0. The results of this research show that as the effect of the issue selling strategy changes due to the cultural distance in the headquarter-subsidiary relationship, the greater the cultural distance, the less the effect of presenting organizational benefits on headquarter attention and, contrary to priori theory, the greater the cultural distance the lesser the effect of the consistency of values on the attention of the multinational company's headquarters. This research brings two contributions to the strategic issue analysis and the headquarters-subsidiaries relationship literatures. First, to provide additional empirical evidence regarding impact of issue framing on headquarters’ attention in MNC around the world; second, to expand the unresearched impact of the cultural distance like a moderation effect in headquarter-subsidiary relationship.

DETERMINANTS OF STANDARDIZATION AND LOCALIZATION OF HUMAN RESOURCE MANAGEMENT (HRM) PRACTICES IN MULTINATIONAL COMPANIES’ SUBSIDIARIES: A REVIEW AND IMPLICATIONS

Standardization and localization are two debatable concepts in human resource management of Multinational Companies (MNCs) subsidiaries. Standardization involves conducting subsidiaries HRM practices in similar ways as conducted at headquarters of Multinational Companies while localization is adaptation of subsidiaries HRM practices to ways used by local firms in the host countries of subsidiaries. The objective of this paper was to explore determinants associated with standardization and localization of HRM practices in Multinational Companies’ subsidiaries. Method used was a review of literature retrieved from Google, Google Scholar and Jstor as electronic data bases. Interpretation of findings from the literature showed that there were various determinants associated with standardization and localization of HRM practices in Multinational Companies’ subsidiaries and mostly included: cultural and institutional factors, country-of-origin dominance and HRM approaches adopted by Multinational Companies for overseas subsidiaries. It was concluded that the national contexts of the parent and host countries as reflected in the individual determinants had a huge role to play in standardization and localization of HRM practices such as staffing, training and development, compensation, communication, job design, promotion, recognition, job security, industrial relations, and performance management among MNCs’ subsidiaries. The paper also provided implications to international human resource management practitioners. KEY WORDS: HRM practices, Localization, Standardization, Subsidiaries