Subsidiary responses to institutional duality: Collective representation practices of US multinationals in Britain and Germany

Abstract

New institutionalist studies of human resource management in multinational companies argue that subsidiaries are faced with institutional duality-pressures to conform to parent company practices and to the local institutional environment in which they are based. To date, they have concentrated on how subsidiaries respond to parent company pressures. This article considers how subsidiary management responds to both parent company demands and host country pressures in trying to reconcile the challenges of institutional duality. It focuses on how such responses are shaped by the interdependence of subsidiary management with the parent company and the local environment. It does so by comparing case study evidence of collective representation practices in US-owned subsidiaries in Britain and Germany.

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“…Most obviously, they originate in a particular country-of-origin or national business system (NBS) from whence they developed their original structures and strategies and from where they are managed and controlled (Hall & Soskice, 2001;Lane, 2000). They are also nested in the institutional domains of their host countries in which they further grow and are shaped, but from which they may take flight if certain inimical circumstances come to prevail (Hayden & Edwards, 2001;Pauly & Reich, 1997;Tempel, Edwards, Ferner, Muller-Camen & Wächter, 2006). Further they are nested in international or transnational domains wherein they encounter trade agreements, international regulations, competitive pressures and managerial 'best practices' (Morgan, 2011;Tempel & Wagenbach, 2007).…”

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