Paul N. Gooderham

Institutional and Rational Determinants of Organizational Practices: Human Resource Management in European Firms

This paper tests predictions from institutional and rational perspectives about the adoption of organizational practices through a comparative study of human resource management in firms located in six European countries. Distinguishing between calculative practices—aimed at efficient use of human resources—and collaborative practices—aimed at promoting the goals of both employees and employer—the paper predicts differences in adoption across countries. Results show that institutional determinants, as indicated by the national embeddedness of firms, have a strong effect on the application of both calculative and collaborative human resource management practices. Firm size, a rational determinant, has a considerable impact on calculative practices, whereas the effect of industrial embeddedness is quite modest for both practices.

Accountants as Sources of Business Advice for Small Firms

In many countries small business accountants play an important role as business advisers for small firms in addition to providing basic accounting services. However, while some small firms make extensive use of external accountants as business advisers, a substantial proportion uses them only to a minor degree. On the basis of small firms in Norway the aim of this article is to contribute to our understanding of the determinants of such variations. Our study reveals that the quality, rather than the longevity, of the relationship between firm and authorized accountant is an important antecedent of the degree to which small firms use accountants as business advisers. In addition, the study indicates that the competency orientation of firms also functions as an important determinant.

Human resource management in US subsidiaries in Europe and Australia: centralisation or autonomy?

We explore determinants of subsidiary autonomy in setting human resource management (HRM) practices within US-parented multinational enterprises (MNEs), in Europe and Australia. We examine both the effect of strategic context and the effect of the institutional location of the subsidiary. We find that US MNEs show greater centralisation of control over HRM where the subsidiary faces global markets, in coordinated market economies vs liberal market economies, and where union density is low.

Governance Mechanisms for the Promotion of Social Capital for Knowledge Transfer in Multinational Corporations

The aim of this paper is to extend social capital approaches to knowledge transfer by identifying governance mechanisms that managers can deploy to promote the development of social capital. In order to achieve this objective, insights from the micro-level, knowledge governance approach are combined with theory on the determinants of social capital. Three governance mechanisms are identified: market-based mechanisms, hierarchical mechanisms, and social mechanisms. The findings, based on data from two Danish MNCs, indicate that although the use of social governance mechanisms promotes positive assessment of social capital, hierarchical governance mechanisms constrain its development. The application of market-based governance mechanisms has no significant effect. In addition, the findings provide evidence that social capital has a positive impact on knowledge transfer.

The impact of bundles of strategic human resource management practices on the performance of European firms

The relationship between HRM practices and perceived firm performance was analysed in 3,281 firms located in European Union countries using data derived from the Cranet data set. A factor analysis of 80 different HRM practices resulted in 15 bundles of HRM practices which were then further categorized as being either ‘calculative’, ‘collaborative’ or ‘intermediary’. While controlling for contingency factors, firm strategy, firm size, market conditions and degree of unionization, as well as controlling for industry and country, the resulting analysis indicates that while five of the six calculative practices and two of the three intermediary practices have a significant impact on performance none of the six collaborative practices has. Significantly it was further noted that the overall effect of HRM on performance was relatively modest.

National embeddedness and calculative human resource management in US subsidiaries in Europe and Australia

This article presents a study of the degree to which national institutional settings impact on the application of management practices in foreign subsidiaries of multinational companies. Applying the national business systems approach our study centres on the use of calculative human resource management (HRM) practices by subsidiaries of US multinational companies in the UK, Ireland, Germany, Denmark/Norway and Australia, respectively, in comparison with these countries’ indigenous firms.The analysis indicates that while US subsidiaries adapt to the local setting in terms of applying calculative HRM practices, they also diverge from indigenous firm practices.

When in Rome, do they do as the Romans? HRM Practices of US Subsidiaries in Europe

In this study we investigate whether and to what degree subsidiaries of US companies in Europe adapt their calculative human resource management practices to varying national institutional contexts. We compare their practices with those of indigenous firms in Ireland, the United Kingdom and Denmark/Norway. The analysis indicates that subsidiaries of US companies while showing some adaptation are partly immune to the specific national contexts in which they operate.

Enhancing knowledge transfer in multinational corporations: a dynamic capabilities driven model

While the possession of knowledge-based assets endows a firm with the potential to benefit following internationalization, a distinct ability to transfer knowledge efficiently is also required. The application of social capital theory has contributed important insights into the processes underlying knowledge transfer within the MNC. However, from a practitioner stand point this perspective needs to be supplemented in two ways. First, there is a need to take into account the influence of the external environment and second a need to incorporate the role dynamic capabilities, in the form of management-initiated practices, can play in enhancing levels of social capital. The latter include transmission channels, socialization mechanisms and motivational mechanisms. It is these mechanisms that represent the key modifiable elements in facilitating knowledge flows. The paper concludes with a conceptual model for the study of intra-MNC knowledge transfers that embraces the various facets of social capital, the influence of the external environment and modifiable practices.

Flexibility in Norwegian and British Firms: Competitive Pressure and Institutional Embeddedness

Discusses critically the concept of numerical flexibility arguing that strategies for numerical flexibility may in part be viewed as “emergent” strategies. Argues further that “emergent” strategies evolve as responses to the national institutional context. This context comprises laws and regulations which constrain firms from introducing numerical flexibility and trade unions which, acting on behalf of their members, will attempt to limit the scope of numerical flexibility. Demonstrates that since the 1980s the institutional contexts in which Norwegian and UK firms operate have diverged significantly, leading to expected differing rates of increased use of numerical flexibility. This is tested through a multivariate analysis of variations in numerical flexibility at the firm level on the basis of data from the 1995 Euronet‐Cranfield Survey.

Diffusion of HRM to Europe and the Role of US MNCs: Introduction to the Special Issue

There has been considerable debate both among scholars and policy makers concerning the extent to which national systems of industrial relations (IR) and human resource management (HRM) systems are converging. In Europe this debate has concerned both convergence within Europe and convergence between European systems and those of non-European states, most notably the USA. The convergence thesis rests essentially on the notion of competitive isomorphism: that is as firms are increasingly faced with similar competitive environments globally, they will adopt similar (optimally efficient) management practices. For example, a significant part of the European convergence debate concerns whether, in Europe, collective employee relations, mediated by representative institutions are being replaced by HRM management systems designed to establish a direct and individualised relationship between organization and employee. Some commentators have attributed this trend to the influence of a model of HRM derived from practices in the USA and increasingly adopted in Europe. Multinational companies (MNCs) have become of particular importance to this thesis. First, they are often seen as an important channel for the transmission of management practices from one country to another, in particular from the USA to Europe. Second, the transferability of management practices from one national context to another is a matter of considerable practical importance for managers in MNCs. Third, the economic importance of large MNCs and their border spanning nature means that their activities have particular salience to legislators and regulators. This special issue addresses these concerns in three ways. First reviews of the development of HRM in the USA and in Germany and evidence on convergence of HRM practices in Europe help us consider both what may be being transmitted from the USA and the evidence for its transmission. Second three papers, provide different kinds of evidence on the convergence or barriers to convergence of HRM practices between Europe and the USA and the role of MNCs in that transmission. Finally, the special issue concludes with three reviews of in all six books each of which are relevant to the concerns of this special issue.