Patterns of Integration in American Multinational Subsidiaries in Europe

Key elements of multinational behaviour have been attributed to by observers adopting an institutionalist approach to the interplay of parent and host national business system pressures (Whitley, 1999). On the one hand, the behaviour of multinationals (MNCs) is influenced by ‘country-of-origin’ effects relating to the embeddedness of companies in a parent national business system with distinctive characteristics. On the other, different national host environments impose institutional constraints on MNCs: national legislative frame-works, labour market regulation and business environments shape to what degree and in what form employment practices are transferred across countries. In the terms of the ‘institutionalist’ approach, the normative or coercive ‘isomorphic pressures’ exerted by host country legislation or collective bargaining condition the extent to which such practices are transferred (Brewster and Tregaskis, 2003). Host institutional constraints on the transfer of HR and IR practices seem to exist most notably in countries with strong institutional labour systems. In such cases, there are stronger pressures for adaptation of transferred Anglo-Saxon HR/IR practices (Muller, 1998). Host-country isomorphic pressures have also been postulated in the case where MNCs from highly regulated parent company systems establish subsidiaries in weak institutional settings (Tüselmann et al., 2003).