IDEAS home Printed from https://ideas.repec.org/a/eee/iburev/v34y2025i1s0969593124000702.html
   My bibliography  Save this article

Control of subsidiary HRM Policies by Multi-national Corporate Headquarters: The Role of Institutional Differences and Labor Unions

Author

Listed:
  • Fenton-O′Creevy, Mark
  • Gooderham, Paul

Abstract

There is a lack of clarity about the institutional sources of variation in the control of multi-national enterprise (MNE) subsidiaries by corporate headquarters (CHQ). Applying comparative institutional theory, we focus on the control of HRM policies by CHQ. First, we argue that when there are substantial home-host institutional differences in national employment protection regulation the dissimilarity in CHQ-subsidiary mindsets increases the likelihood of CHQ control. Second, we argue that union influence within the subsidiary amplifies that effect. We analyze a sample of 708 MNE subsidiaries in 32 countries with CHQs distributed across 39 countries. Unlike some prior work on subsidiary autonomy, we account for the multi-level nature of country and firm-level data. The evidence for the first of our arguments is mixed. However, in that we find a significant three-way interaction effect of CHQ control on home country and host country employment protection regulation and union influence, the second argument finds support.

Suggested Citation

  • Fenton-O′Creevy, Mark & Gooderham, Paul, 2025. "Control of subsidiary HRM Policies by Multi-national Corporate Headquarters: The Role of Institutional Differences and Labor Unions," International Business Review, Elsevier, vol. 34(1).
  • Handle: RePEc:eee:iburev:v:34:y:2025:i:1:s0969593124000702
    DOI: 10.1016/j.ibusrev.2024.102323
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969593124000702
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.ibusrev.2024.102323?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Vahlne, Jan-Erik & Johanson, Jan, 2021. "Coping with complexity by making trust an important dimension in governance and coordination," International Business Review, Elsevier, vol. 30(2).
    2. Mark F Peterson & Jean-Luc Arregle & Xavier Martin, 2012. "Multilevel models in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(5), pages 451-457, June.
    3. Kostova, Tatiana & Marano, Valentina & Tallman, Stephen, 2016. "Headquarters–subsidiary relationships in MNCs: Fifty years of evolving research," Journal of World Business, Elsevier, vol. 51(1), pages 176-184.
    4. Jean-Luc Arrègle & Brice Dattee & Michael Hitt & Donald Bergh, 2023. "Organizational Autonomy : A Review and Agenda for Future Research," Post-Print hal-04325643, HAL.
    5. Bernd Fitzenberger & Karsten Kohn & Qingwei Wang, 2011. "The erosion of union membership in Germany: determinants, densities, decompositions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(1), pages 141-165, January.
    6. Anne-Wil Harzing, 2000. "An Empirical Analysis and Extension of the Bartlett and Ghoshal Typology of Multinational Companies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(1), pages 101-120, March.
    7. Jon I Martinez & J Carlos Jarillo, 1991. "Coordination Demands of International Strategies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(3), pages 429-444, September.
    8. van Schuur, Wijbrandt H., 2003. "Mokken Scale Analysis: Between the Guttman Scale and Parametric Item Response Theory," Political Analysis, Cambridge University Press, vol. 11(2), pages 139-163, April.
    9. Tomassen, Sverre & Benito, Gabriel R.G., 2009. "The costs of governance in international companies," International Business Review, Elsevier, vol. 18(3), pages 292-304, June.
    10. Foss, Nicolai J. & Pedersen, Torben, 2002. "Transferring knowledge in MNCs: The role of sources of subsidiary knowledge and organizational context," Journal of International Management, Elsevier, vol. 8(1), pages 49-67.
    11. John Geary & Roberta Aguzzoli, 2016. "Miners, politics and institutional caryatids: Accounting for the transfer of HRM practices in the Brazilian multinational enterprise," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(8), pages 968-996, October.
    12. Mark Fenton-O'Creevy & Paul Gooderham & Odd Nordhaug, 2008. "Human resource management in US subsidiaries in Europe and Australia: centralisation or autonomy?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(1), pages 151-166, January.
    13. Reichstein-Scholz, Harriet & Giroud, Axèle & Yamin, Mo & Andersson, Ulf, 2021. "Sales to centre stage! Determinants of the division in strategic sales decisions within the MNE," International Business Review, Elsevier, vol. 30(6).
    14. Gregory Jackson & Richard Deeg, 2008. "Comparing capitalisms: understanding institutional diversity and its implications for international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 540-561, June.
    15. Klaus E. Meyer & Ram Mudambi & Rajneesh Narula, 2011. "Multinational Enterprises and Local Contexts: The Opportunities and Challenges of Multiple Embeddedness," Journal of Management Studies, Wiley Blackwell, vol. 48(2), pages 235-252, March.
    16. Bruno Palier & Kathleen Thelen, 2010. "Institutionalizing Dualism: Complementarities and Change in France and Germany," Politics & Society, , vol. 38(1), pages 119-148, March.
    17. Hall, Peter A. & Gingerich, Daniel W., 2009. "Varieties of Capitalism and Institutional Complementarities in the Political Economy: An Empirical Analysis," British Journal of Political Science, Cambridge University Press, vol. 39(3), pages 449-482, July.
    18. Gregory Jackson & Richard Deeg, 2019. "Comparing capitalisms and taking institutional context seriously," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(1), pages 4-19, February.
    19. Alex Bryson & John Forth & Simon Kirby, 2005. "High‐Involvement Management Practices, Trade Union Representation And Workplace Performance In Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(3), pages 451-491, July.
    20. Patrick Regnér & Jesper Edman, 2014. "MNE institutional advantage: How subunits shape, transpose and evade host country institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(3), pages 275-302, April.
    21. Barbara Brenner & Björn Ambos, 2013. "A Question of Legitimacy? A Dynamic Perspective on Multinational Firm Control," Organization Science, INFORMS, vol. 24(3), pages 773-795, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Klaus E. Meyer & Chengguang Li & Andreas P. J. Schotter, 0. "Managing the MNE subsidiary: Advancing a multi-level and dynamic research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-39.
    2. Andrews, Daniel S. & Fainshmidt, Stav & Newburry, William & Parente, Ronaldo & Haensel, Kira, 2023. "What determines subunit integration in the multinational firm? A meta-analysis," Journal of International Management, Elsevier, vol. 29(6).
    3. Klaus E. Meyer & Chengguang Li & Andreas P. J. Schotter, 2020. "Managing the MNE subsidiary: Advancing a multi-level and dynamic research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 538-576, June.
    4. Gabriela Gutierrez-Huerter O & Jeremy Moon & Stefan Gold & Wendy Chapple, 2020. "Micro-processes of translation in the transfer of practices from MNE headquarters to foreign subsidiaries: The role of subsidiary translators," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(3), pages 389-413, April.
    5. Sjoerd Beugelsdijk, 2022. "Capitalizing on the uniqueness of international business: Towards a theory of place, space, and organization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(9), pages 2050-2067, December.
    6. Rong (Ratchel) Zeng & Birgitte Grøgaard & Ingmar Björkman, 2023. "Navigating MNE control and coordination: A critical review and directions for future research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(9), pages 1599-1622, December.
    7. Jong Min Lee, 2022. "MNCs as dispersed structures of power: Performance and management implications of power distribution in the subsidiary portfolio," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(1), pages 126-155, February.
    8. Mbalyohere, Charles & Lawton, Thomas C., 2022. "Engaging informal institutions through corporate political activity: Capabilities for subnational embeddedness in emerging economies," International Business Review, Elsevier, vol. 31(2).
    9. Johann Fortwengel, 2017. "Understanding When MNCs can Overcome Institutional Distance: A Research Agenda," Management International Review, Springer, vol. 57(6), pages 793-814, December.
    10. Fortwengel, Johann & Gutierrez Huerter O, Gabriela & Kostova, Tatiana, 2023. "Three decades of research on practice transfer in multinational firms: Past contributions and future opportunities," Journal of World Business, Elsevier, vol. 58(3).
    11. Liu, Xiaming & Yang, Na & Li, Linjie & Liu, Yuanyuan, 2021. "Co-evolution of emerging economy MNEs and institutions: A literature review," International Business Review, Elsevier, vol. 30(4).
    12. Shaker A. Zahra & Olga Petricevic & Yadong Luo, 2022. "Toward an action-based view of dynamic capabilities for international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(4), pages 583-600, June.
    13. Liu, Yu & Maula, Markku, 2021. "Contextual status effects: The performance effects of host-country network status and regulatory institutions in cross-border venture capital," Research Policy, Elsevier, vol. 50(5).
    14. Ruth V. Aguilera & Valentina Marano & Ilir Haxhi, 2019. "International corporate governance: A review and opportunities for future research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 457-498, June.
    15. Nishani Bourmault & Jordan Siegel, 2022. "Why Local Adaptation Sometimes Fails to be Effective for MNEs: Exploring the Dynamics of Collective Bonuses, Egalitarianism, and Informal Norms," Journal of Management Studies, Wiley Blackwell, vol. 59(4), pages 886-924, June.
    16. Ilgaz Arikan & Oded Shenkar, 2022. "Neglected elements: What we should cover more of in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(7), pages 1484-1507, September.
    17. Helene Loe Colman & Birgitte Grøgaard & Inger G. Stensaker, 2022. "Organizational identity work in MNE subsidiaries: Managing dual embeddedness," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(9), pages 1997-2022, December.
    18. Rana, Mohammad B. & Morgan, Glenn, 2019. "Twenty-five years of business systems research and lessons for international business studies," International Business Review, Elsevier, vol. 28(3), pages 513-532.
    19. Jean-Luc Arregle & Toyah L Miller & Michael A Hitt & Paul W Beamish, 2016. "How does regional institutional complexity affect MNE internationalization?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(6), pages 697-722, August.
    20. Nikolas Rathert, 2016. "Strategies of legitimation: MNEs and the adoption of CSR in response to host-country institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(7), pages 858-879, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:34:y:2025:i:1:s0969593124000702. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.