Why Are Some Subsidiaries of Multinationals the Source of Novel Practices while Others Are Not? National, Corporate and Functional Influences

Abstract

It has frequently been argued that multinational companies are moving towards network forms whereby subsidiaries share different practices with the rest of the company. This paper presents largescale empirical evidence concerning the extent to which subsidiaries input novel practices into the rest of the multinational. We investigate this in the field of human resources through analysis of a unique international dataset in four host countries -Canada, Ireland, Spain and the UK -and address the question of how we can explain variation between subsidiaries in terms of whether they initiate the diffusion of practices to other subsidiaries. The data supports the argument that multiple, rather than single, factor explanations are required to more effectively understand the factors promoting or retarding the diffusion of HR practices within multinational companies. It emerges that national, corporate and functional contexts all matter. More specifically, actors at subsidiary level who seek to initiate diffusion appear to be differentially placed according to their national context, their place within corporate structures and the extent to which the HR function is internationally networked.

Crossing the streams: HRM in multinational enterprises and comparative HRM

“…Furthering our understanding about the diffusion of HRM practices from the perspective of emerging country MNEs "without assuming the prevailing Western ethnocentric orthodoxy" is viewed as being especially important in this regard (Thite, Wilkinson, & Shah, 2012: 251). From the subsidiary perspective, the contextual antecedents of reverse HRM transfer have also attracted growing attention, looking at conditions under which foreign subsidiaries, albeit quite often from institutionally strong host-country settings, are capable of transferring HRM practices to headquarters Edwards & Tempel, 2010;Thory, 2008), as well as laterally to other MNE subsidiaries (Edwards, Sanchez-Mangas, Bélanger, & McDonnell, 2015).…”

“…Gamble, based on his analysis of processes leading to HRM practice hybridisation (Gamble, 2003: 705), concludes that "approaches based upon culturalist, national business systems, industry sector, international division of labour, and agency perspectives are shown to be inadequate, individually, to account for the complex patterns of transfer, local adoption, and adaptation" and calls instead for "conceptual bricolage" and multilevel analysis. Similarly, Edwards et al (2015) stress the need for multilevel analyses since their study revealed that national, corporate and functional HRM contexts all matter.…”

Beyond Simple Configurations: The Dual Involvement of Divisional and Corporate Headquarters in Subsidiary Innovation Activities in Multibusiness Firms

“…We describe innovation activities in large multibusiness firms that are also internationally dispersed and focus on these activities as they provide an appropriate empirical setting for dual headquarters involvement (Edwards et al 2015;Regnér and Zander 2014). While we have advanced our knowledge on selective corporate headquarters involvement (Poppo 2003), we think that a theory of selective dual headquarters involvement would complement extant research and provide valuable insights into multibusiness firms' organizations.…”

“…For headquarters, it is a critical task to govern inter-unit relationships within multibusiness firms and manage the development of innovations that may be critical for the competitive advantage of the organization (Edwards et al 2015;Hong Chung et al 2006). By focusing on the nature and role of multiple headquarters in complex organizations, we address a phenomenon that has remained largely unexplored in the literature, both from a theoretical and an empirical perspective.…”

Institutional and Resource‐based Explanations for Subsidiary Performance

“…Future research would benefit from a focus on both parent and subsidiary as co-developers of competitive advantage and subsidiary performance (see also Edwards et al, 2015). The diffusion of knowledge, routines and practices to set in place an initial set of capabilities for the subsidiary is important but needs to be matched with strategic initiatives supporting human capital strength at the subsidiary level.…”