Country-of-origin effects, host-country effects, and the management of HR in multinationals: German companies in Britain and Spain

A key current academic debate is the interaction between multinationals companies and national business systems, both the parent-country system in which they are embedded, and the host systems in which they operate. This article presents evidence from recent case-study research on German multinationals operating in Britain and Spain. It argues, first, that there are pressures on these companies to adopt many standard 'Anglo-Saxon' business practices in human resources and industrial relations (HR/IR), such as standardized international policies on appraisal, performance, management development, and an explicit, formalized corporate 'culture'. Second, however, significant manifestations of the influence of the German business system persist, including a long-termist orientation, and a management approach based on co-operation. 'Anglo-Saxon' practices are absorbed into this prevailing German managerial culture, and as a result operate in a distinctively 'German' way. Third, the country-of-origin effect is mediated by the institutional constraints of different national host environments. But even in highly regulated contexts, such as Spain, companies were able to create sufficient flexibility to preserve elements of a German style.