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American Multinationals in Europe: Managing Employment Relations Across National Borders Phil Almond and Anthony Ferner (eds)

Published in print: 2006 Published Online: Publisher: Oxford University Press September 2007 DOI: 10.1093/ ISBN: 9780199274635 eISBN: 9780191706530 acprof:oso/9780199274635.001.0001 Item type: book

This book addresses some of the major contemporary issues in comparative business and employment relations. At its core are the findings of a four-year international exploration of the management of employment relations in American multinational companies in the UK, Germany, Ireland, and Spain. Data from detailed case studies are used to illuminate the tensions between the forces of globalization and the continuing distinctiveness of national business systems. It looks at what is distinctively American about US multinationals, asking how the US business system’s particular features influence their management of human resources across national borders. It shows that the transfer of ‘Americanness’ is not a technical, top-down, managerial process, but a highly political and ‘negotiated’ one in which groups and individuals at different levels within the company try to influence the terms of transfer. The book uses a wealth of empirical material to explore the ways in which US multinationals manage international employment relations in different host countries. Four areas of policy and practice are considered in detail: pay and performance; collective employee representation; the management of workforce ‘diversity’; and managerial careers. It shows how global HR policies are made; how they are diffused internationally; and how they are adopted, adapted, or resisted by overseas subsidiaries. It also explores some of the structures and processes that characterize US multinationals: the changing balance between centralization and subsidiary autonomy; the management of international learning; and the structure and role of the international human resource function.

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Centralization

Anthony Ferner, Paddy Gunnigle, Javier Quintanilla, Hartmut Wächter, and Tony Edwards in American Multinationals in Europe: Managing Employment Relations Across National Borders Published in print: 2006 Published Online: Publisher: Oxford University Press September 2007 DOI: 10.1093/ ISBN: 9780199274635 eISBN: 9780191706530 acprof:oso/9780199274635.003.0010 Item type: chapter

This chapter considers the balance between central control and subsidiary autonomy in HR policy and practice. US multinationals have been shown to centralize control of international HR policy compared with multinationals of other nationalities. This chapter examines the organizational processes whereby particular patterns of centralization or autonomy are maintained, and how such patterns evolve over time. In explaining the mechanisms that drive changes in the centralizationautonomy balance, the chapter highlights the ability of actors at different levels of the multinational to influence policy choices through the deployment of a variety of power resources; the latter includes the leverage that local managers derive from their expert knowledge of the distinctive constraints and possibilities of their host business system. The factors that explain differences in the balance of centralization and autonomy between different multinationals are also explored.

Innovation and the Transfer of Organizational Learning

Tony Edwards, David G. Collings, Javier Quintanilla, and Anne Tempel in American Multinationals in Europe: Managing Employment Relations Across National Borders Published in print: 2006 Published Online: Publisher: Oxford University Press September 2007 DOI: 10.1093/ ISBN: 9780199274635 eISBN: 9780191706530 acprof:oso/9780199274635.003.0011 Item type: chapter

It is commonly argued that a key factor shaping the competitive position of multinationals is their capability to identify innovations made within the firm, and subsequently transfer these across their operations. This chapter examines the process of innovation and the transfer of innovations in US multinationals. It focuses on the ways in which innovative employment practices are identified in one part of a firm’s operations, and then transferred to sites in different countries. In doing so, it examines the contribution of different perspectives on organizational learning, contrasting the information-processing, Page 2 of 6

contingency, national business system, and micro-political approaches. The evidence concerning the transfer of practices from the domestic operations of American multinationals to their foreign subsidiaries is reviewed, drawing on the findings of earlier chapters. The extent to which the case study firms transfer across borders practices that originated in their overseas operations is considered.

Introduction: American Multinationals and the Cross-National Management of Employment Relations Anthony Ferner and Phil Almond

in American Multinationals in Europe: Managing Employment Relations Across National Borders Published in print: 2006 Published Online: Publisher: Oxford University Press September 2007 DOI: 10.1093/ ISBN: 9780199274635 eISBN: 9780191706530 acprof:oso/9780199274635.003.0001 Item type: chapter

This chapter explains the background and rationale behind the study of the management of international HR and employment relations in US multinationals in four European host countries: the UK, Germany, Ireland, and Spain.

Multinationals and National Business Systems: A ‘Power and Institutions’ Perspective Anthony Ferner and Anne Tempel

in American Multinationals in Europe: Managing Employment Relations Across National Borders Published in print: 2006 Published Online: Publisher: Oxford University Press September 2007 DOI: 10.1093/ ISBN: 9780199274635 eISBN: 9780191706530 acprof:oso/9780199274635.003.0002 Item type: chapter

This chapter presents a conceptual framework for understanding the cross-national transfer of human resource management and employment relations policies in US multinationals. The framework draws on institutionalist theory, arguing that multinationals’ embeddedness within the institutions of their parent-country business system influences how these firms operate abroad. However, weaknesses in current strands of institutionalism need to be addressed. In particular, existing theory has tended to neglect questions of power. The chapter considers how institutional and power perspectives may be integrated. It focuses on the interaction between power and institutions at multiple levels, notably at the organizational level of ‘micropolitics’ within multinationals, and at the Page 3 of 6

macro-level of nation states. The cross-national transfer of HR policies and practices within multinationals is seen as the movement of practices across institutional domains by actors with divergent interests in the transfer, and with differential power resources with which to effect or inhibit it.

Overview of the Host Business Systems

Tony Edwards, Paddy Gunnigle, Javier Quintanilla, and Hartmut Wächter in American Multinationals in Europe: Managing Employment Relations Across National Borders Published in print: 2006 Published Online: Publisher: Oxford University Press September 2007 DOI: 10.1093/ ISBN: 9780199274635 eISBN: 9780191706530 acprof:oso/9780199274635.003.0004 Item type: chapter

This chapter establishes the distinctive characteristics of the four host business systems: the UK, Germany, Ireland, and Spain. After providing an overview of the role of foreign, particularly US, multinationals within each of the four economies, it establishes the key aspects of the industrial relations systems in each case, particularly those that contrast with the American system. Building on this, the chapter provides an analysis of the extent to which each of the countries are likely to be ‘receptive’ to the introduction of American-style employment practices.

Workforce Diversity Policies

Anthony Ferner, Michael Morley, Michael Muller-Camen, and Lourdes Susaeta in American Multinationals in Europe: Managing Employment Relations Across National Borders Published in print: 2006 Published Online: Publisher: Oxford University Press September 2007 DOI: 10.1093/ ISBN: 9780199274635 eISBN: 9780191706530 acprof:oso/9780199274635.003.0008 Item type: chapter

Workforce diversity is a defining issue of international HR policy transfer in US multinationals. Demographic characteristics, sociopolitical developments, and the evolution of the legal framework have created a distinctive constellation of diversity agendas in the US. This chapter explores the way in which these agendas were transferred by US companies to their subsidiaries, in host business systems with varying demographic patterns and legal traditions that were not necessarily consonant with American diversity practice. The case studies reveal that there was a frequent lack of fit between the diversity agendas of US multinationals and host-country institutional frameworks, Page 4 of 6

provoking considerable resistance from subsidiaries. However, there was considerable variation in subsidiary responses to diversity, partly explained by structural factors, such as the degree of international integration of operations, and partly by the more contingent strategic and political choices of actors at different levels of the multinational.

Conclusions

Phil Almond, Trevor Colling, Tony Edwards, and Anthony Ferner in American Multinationals in Europe: Managing Employment Relations Across National Borders Published in print: 2006 Published Online: Publisher: Oxford University Press September 2007 DOI: 10.1093/ ISBN: 9780199274635 eISBN: 9780191706530 acprof:oso/9780199274635.003.0013 Item type: chapter

This concluding chapter reviews the evidence gathered in the case studies, and contemplates their contribution to the understanding of country of origin, host country, sectoral, and global dominance effects in the management of human resources within US multinationals. It also suggests directions for future research in the area.

The Role of the International Personnel Function

Hartmut Wächter, René Peters, Anthony Ferner, Paddy Gunnigle, and Javier Quintanilla in American Multinationals in Europe: Managing Employment Relations Across National Borders Published in print: 2006 Published Online: Publisher: Oxford University Press September 2007 DOI: 10.1093/ ISBN: 9780199274635 eISBN: 9780191706530 acprof:oso/9780199274635.003.0012 Item type: chapter

There is a dearth of existing literature on cross-national variations in the organization, role, and boundaries of the personnel function. This chapter explores the evolving role and structure of the personnel function within the different national subsidiaries of US multinationals, and how these fit with the multinational company’s conception of the function’s role at an international level. It is argued that personnel departments in US multinationals face mounting pressures to reduce costs, leading to structural innovations such as shared service centres. Subsidiary personnel departments have pursued a more strategic role as ‘business partner’, and as contributor to the design of international HR policies. The management of tensions between the US approach and different host-country traditions of personnel management are examined, as well Page 5 of 6

as the way in which subsidiary personnel managers ‘negotiate’ with higher levels of the international HR function, drawing on the institutional resources of their local environment.

Overview of the US Business System Ian Clark and Phil Almond

in American Multinationals in Europe: Managing Employment Relations Across National Borders Published in print: 2006 Published Online: Publisher: Oxford University Press September 2007 DOI: 10.1093/ ISBN: 9780199274635 eISBN: 9780191706530 acprof:oso/9780199274635.003.0003 Item type: chapter

This chapter examines the distinctive and evolving nature of the American model of capitalism, emphasizing the links between embedded features of the US national business system through a review of its historical development. It argues that American industrial capitalism developed against a background quite different to those of European countries, with ongoing effects on the nature of product, financial and labour markets, and on prevalent patterns of production and work organization. The effects of the US business system on patterns of industrial relations, particularly the divide between welfare capitalist and New Deal firms, is also introduced. Recent challenges faced by US firms in the areas of work organization and human resource management are briefly considered. The issue of the transferability of elements of US multinatinals’ domestic management systems to foreign subsidiaries is raised.

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