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Fenton-O′Creevy, Mark and Gooderham, Paul
(2024).
DOI: https://doi.org/10.1016/j.ibusrev.2024.102323
Abstract
There is a lack of clarity about the institutional sources of variation in the control of multi-national enterprise (MNE) subsidiaries by corporate headquarters (CHQ). Applying comparative institutional theory, we focus on the control of HRM policies by CHQ. First, we argue that when there are substantial home-host institutional differences in national employment protection regulation the dissimilarity in CHQ-subsidiary mindsets increases the likelihood of CHQ control. Second, we argue that union influence within the subsidiary amplifies that effect. We analyze a sample of 708 MNE subsidiaries in 32 countries with CHQs distributed across 39 countries. Unlike some prior work on subsidiary autonomy, we account for the multi-level nature of country and firm-level data. The evidence for the first of our arguments is mixed. However, in that we find a significant three-way interaction effect of CHQ control on home country and host country employment protection regulation and union influence, the second argument finds support
Plain Language Summary
In our recently published study we examine what effects the tendency of multinational firm headquarters to directly control subsidiary HR management policies versus allowing local discretion. Criticising much prior research for failing to account properly for the national versus firm level effects on subsidiary autonomy, we use appropriate multi level statistical methods to analyse a large cross-national dataset.
We find less effect of institutional differences between home and host countries, except where labour union influence is high. For subsidiaries in liberal market economies with HQ in a liberal market economy (e.g. USA, UK) we find control over subsidiaries HRM tends to decrease with increasing labour union influence. Where either subsidiary, or HQ, or both are in a coordinated market economy setting control over subsidiaries HRM tends to increase with increasing labour union influence.
CORE (COnnecting REpositories)
CORE (COnnecting REpositories)
