Randi Lunnan

Global transfer of management practices across nations and MNC subcultures.

Executive Overview Our case shows how a Norwegian Multinational Firm (Norwegian Multi) introduced a new performance management practice. The initial starting point was a “best practice” developed by a U.S. consultancy based on the benchmarking of large global firms. Norwegian Multi chose to remove from this best practice the elements that were seen as most provocative to dominant cultural values. Over time more and more subsidiaries reintroduced elements of the original practice. The management practice we examine—performance management (PM)—can be regarded as an extension of the traditional performance appraisal, linking individual performance to corporate strategy.1 Researchers separate calculative PM (focus on individual contributions and rewards) and collaborative PM (focus on creating a partnership culture between employer and employee, for example through competency development).2 In the United States, PM practices contain both calculative and collaborative elements, whereas in Scandinavia the calcu...

Distant Encounters of the Third Kind: Multinational Companies Locating Divisional Headquarters Abroad

We examine the location and relocation abroad of divisional headquarters of companies originating in a small country on the periphery of Europe. While the internationalization of business activities has been extensively studied for more than four decades, there is limited research on the strategic decision to locate divisional headquarters outside the home country. Our study shows a massive movement of headquarters functions between 2000 and 2006. Building on agency, resource based, and institutional perspectives, we propose that such moves are driven by efficiency/effectiveness as well as legitimacy factors. We find that state ownership and ownership concentration discourage MNCs from moving headquarters activities abroad, but national ownership does not. We also find that while MNCs may move their divisional headquarters to gain efficiency by co-locating with foreign subsidiaries, they keep them at home when the company becomes large, highly diversified and complex to manage.

Implementing human resource development best practices: Replication or re-creation?

Abstract Firms increasingly introduce HRD ‘best practices’ developed somewhere else, but results often fall short of expectations. Much of existing theory fails to guide the implementation of HRD best practices because it does not recognize how introduced practices interact with existing practices in the firm. In this paper, we contrast the dominant perspective ‘Implementation as Replication’ with a perspective of ‘Implementation as Re-creation’. Through four stages of the implementation process, we identify and discuss how these contrasting perspectives yield different implications for how firms go about introducing HRD best practices. First, when firms take up a practice, is this a process of adoption or translation? Second, is it assumed that new knowledge can be implanted directly and lead to new behaviour, or is active experimentation a necessary precondition to gain new knowledge? Third, are deviations from the intended plan considered errors to be corrected or sources for learning? Fourth, are introduced best practices treated in isolation or as integral parts of the firms management system? We argue that implementation efforts guided by the re-creation perspective increase the prospects of HRD best practices succeeding as a useful tool in the receiving firm.

Is the standardization of human resource practices perceived as fair across national cultures

Purpose – The purpose of this paper is to investigate perceptions of fairness of a standardized performance appraisal in a multinational enterprise. The paper looks at the first step in understanding fairness perceptions by examining whether national culture influences the view on standardization itself and by comparing China, Lithuania, and Norway.Design/methodology/approach – An experiment using a scenario that outlined a performance appraisal tool in a multinational company is conducted. National culture and individual cultural values are the independent variables and the perception of fairness of the practice is the dependent variable. A sample of 80 management respondents from Lithuania, China, and Norway is taken.Findings – The findings suggest that national culture influences perceptions of fairness of a standardized performance appraisal tool. Employees from countries undergoing profound economic and political change, that score low on the cultural dimension of self‐expression, tend to see the sta...

Exploring Subsidiaries’ Perceptions of Corporate Headquarters: Subsidiary Initiatives and Organizing Costs

Abstract The chapter examines how distance, integration mechanisms, and atmosphere influence the level of organizing costs and subsidiary initiatives in headquarter–subsidiary relationships. Survey data were collected at the subsidiary level in one major Norwegian multinational company. Empirical analyses were based on regression and partial correlation analyses. Organizing costs are driven by distance to headquarters as well as the integration mechanisms and the atmosphere that exists in subsidiary–headquarter relationships. Another important insight gained by this study is that integration mechanisms influence subsidiary initiatives.

The Virtue of in-between Pragmatism – A Balancing Act between Responsiveness and Integration in a Multinational Company

Abstract In this paper, we offer insights that combine a network perspective of the multinational company (MNC) with an analysis of different types of interdependencies. We develop and illustrate our arguments with a company case (LIMO) and argue that types of interdependencies have consequences for the orchestration of MNC activities. The experience from LIMO suggests that extreme organizational designs, where orchestration is either purely local or mostly global, fail to capture the nuances necessary to ensure efficiency and profitability. The main theoretical contribution in this paper is to show that the search for orchestration through an organizational design must involve the combination of several perspectives of activity combinations and their interdependencies. Simply optimizing through a tight network or looking at the firm as a loose federation is too simple to understand the complex trade-off facing modern MNCs.

Trust and control in fixed duration alliances

What happens to the development of trust in an alliance with a known end date? This study found that, even in such alliances, detailed and well known contracts, industry norms for appropriate behaviour and positive initial encounters can facilitate the development of trust. This trust can take two forms. One is the traditional personal trust resulting in learning and high performance. This trust replaces other forms of governance and therefore entails risks of opportunism. The other form of trust is inter-organisational, founded on the contract and industrial norms and initiated from favourable initial encounters. This form of trust allows smoother and faster processes throughout the cooperation exposing the firms to relatively low risks. We call it contractual trust. As the contract proceeds towards termination, the benefits of opportunism may be too tempting, resulting in mistrust.

Alliance formation: the impact of teams and individuals in initial negotiations

In this paper, we investigate whether individuals or teams should be sent to an initial alliance meeting and the impact of shared team aspiration levels on negotiation processes and outcomes. We use an experimental role-play to simulate an initial alliance meeting. 128 subjects participated in our study and our findings reveal that in team to team negotiations, higher economic outcomes were achieved and a higher degree of competitive behaviour was reported than in individual to individual dyads, and that team aspiration alignment was associated with increased reciprocity between teams. These findings suggest that in initial negotiations in an alliance, sending teams may be better for the subsequent developments in the alliance. When these teams are aligned, they are more attuned to the behaviour of their alliance partner.