Anthony Ferner

Dynamics of Central Control and Subsidiary Autonomy in the Management of Human Resources: Case-Study Evidence from US MNCs in the UK

This article revisits a central question in the debates on the management of multinationals: the balance between centralized policy-making and subsidiary autonomy. It does so through data from a series of case studies on the management of human resources in American multinationals in the UK. Two strands of debate are confronted. The first is the literature on differences between multinationals of different national origins which has shown that US companies tend to be more centralized, standardized, and formalized in their management of human resources. It is argued that the literature has provided unconvincing explanations of this pattern, failing to link it to distinctive features of the American business system in which US multinationals are embedded. The second strand is the wider debate on the balance between centralization and decentralization in multinationals. It is argued that the literature neglects important features of this balance: the contingent oscillation between centralized and decentralized modes of operation and (relatedly) the way in which the balance is negotiated by organizational actors through micro-political processes whereby the external structural constraints on the company are defined and interpreted. In such negotiation, actors’ leverage often derives from exploiting differences between the national business systems in which the multinational operates.

The Underpinnings of 'Bureaucratic' Control Systems: HRM in European Multinationals

This paper explores the relationship between the operation of management control systems and the mobilization of power resources in multinational companies. It argues that formal ‘bureaucratic’ controls depend for their effective operation on informal systems and the power relations they embody. In particular, bureaucratic control systems rely inherently on the deployment of ‘social’ control mechanisms relating to the creation of common value systems, understandings, and expectations about the ‘rules of the game’ among corporate actors. The argument is illustrated by material from case studies of HRM in British and German multinationals.

Power, institutions and the cross-national transfer of employment practices in multinationals:

This article argues for the systematic incorporation of power and interests into analysis of the cross-border transfer of practices within multinational companies (MNCs). Using a broadly Lukesian perspective on power it is argued that the transfer of practices involves different kinds of power capabilities through which MNC actors influence their institutional environment both at the ‘macro-level’ of host institutions and the ‘micro-level’ of the MNC itself. The incorporation of an explicit account of the way power interacts with institutions at different levels, it is suggested, underpins a more convincing account of transfer than is provided by the dominant neoinstitutionalist perspective in international business, and leads to a heuristic model capable of generating proposed patterns of transfer outcomes that may be tested empirically in future research.

The renewed “American challenge”: A review of employment practice in US multinationals.

Despite the extensive literature concerned with IR practice in American multinational companies (MNCs), there are serious gaps in our understanding of how this group of firms manages their international workforces. In this paper, we set out a framework of ‘four key influences’ on the way MNCs approach the management of labour and go on to use this framework to assess existing literature concerned with US MNCs. While this review reveals a number of general tendencies—for example, American MNCs tend to be highly centralised in the decision making on IR matters—it also reveals a number of gaps and weaknesses. In particular, we argue that previous research has failed to develop a convincing understanding of how the ‘embeddedness’ of US MNCs in their country of origin informs the behaviour of these firms as employers outside the USA. The paper ends by outlining a programme of research into US MNCs.

Multinationals, reverse diffusion and national business systems

The paper addresses the issue of ‘reverse diffusion’ in the field of HRM, defined as the transfer of practices from foreign subsidiaries to the domestic operations. Pulling together the limited relevant findings from previous research, and drawing on our own case study evidence, it provides a set of structured arguments about the logic, determinants and mechanisms of reverse diffusion.

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

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.

HRM structures and subsidiary discretion in foreign multinationals in the UK.

This article uses a large-scale representative survey to examine a key aspect of control in multinational companies (MNCs): the extent of central influence over human resource (HR) policy formation in subsidiaries. This is a crucial aspect of behaviour, relevant for example for the cross-border diffusion of policies and practices and for the institutional distinctiveness of practice within a given host environment. The article assesses how far policy is determined by corporate headquarters or some other higher-level organizational structure. Its novelty lies primarily in its exploration of the influence of the structure of the HR management (HRM) function on subsidiary discretion. It finds, first, that the degree of central control is influenced for different HR issues by nationality of ownership and by international product/service standardization. Second, there is some variability in the antecedents associated with discretion on different HR issues. Finally, aspects of the structure of the HRM function significantly affect discretion, notably the networking of HR managers across borders and the direct reporting relationships within the function between the UK and higher organizational levels.

Multinational companies in cross-national context : integration, differentiation and the interactions between MNCs and nation states

In the introductory article to a special issue on multinational corporations (MNCs) and employment practices, the authors highlight the key features of an international survey research project. Research teams carried out parallel surveys in four countries: Canada, Ireland, Spain, and the United Kingdom. These surveys are the most comprehensive investigations of the employment practices in MNCs in their respective countries. In framing the comparative analysis of these data, the teams had four objectives: (1) to explore the processes of integration and differentiation in MNCs, including the interactions among MNCs and nation states and their impact on employment practices; (2) to chart the influence of foreign direct investment (FDI) and systems of industrial relations; (3) to outline the key elements of the research design and chart the process of collecting data; and (4) to provide a summary of the patterns of integration and differentiation found among MNCs.

The conditions for international human resource management: two case studies

A move towards the transnational or global corporation is widely canvassed. Rather less attention has been devoted to how the multinational company actually organizes its HR activities or to the conditions which permit a transnational form of organization to emerge and survive. The paper explores these two issues, using case study evidence from two British-owned companies. The model of the transnational suggests that authority is devolved and control is dispersed. The paper shows, however, that central control was greater than is often thought. As for the conditions for transnationality, key immediate influences were the length of time for which the firms had been multinationals and the routes taken to attain this state; these influences were underpinned by differences in market structure. Even where a transnational approach had been developed, future competitive trends suggested that it might be under threat. The implication is that the‘transnational solution’may be attainable only in certain types of fi...

Employee Representation and Consultative Voice in Multinational Companies Operating in Britain

Multinational companies (MNCs) from different countries of origin are widely held to have distinct preferences regarding the presence of employee representative structures and the form that employee ‘voice’ over management decisions takes. Such preferences are said to derive from the national models that prevail in the different countries of origin in which MNCs are based. Findings from a large-scale survey of the UK operations of MNCs indicate that country-of-origin influences on patterns of employee representation and emphasis on direct or indirect channels of employee ‘voice’ are attenuated by other factors, notably sector and method of growth. They also reveal significant recent innovation in representation and voice arrangements by this key group of employers.