Hrm in Foreign Affiliates: A Multiple Case Study Among Estonian Affiliates of Finnish Companies

Zusammenfassung

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The key question concerning the HRM in MNCs is the extent of global standardization versus localization operating in Estonia apply a clear strategical approach to their IHRM and if so, what kind of approach (standardization versus localization) they have adopted across key HRM-functions. The study followed that case companies did not have one clear approach to HRM in foreign affiliates in Estonia, i.e. those had not systematically standardized or localized all the HRM-functions.

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Auszug

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Hrm in Foreign Affiliates: A Multiple Case Study Among Estonian Affiliates of Finnish Companies

1. Introduction

The increasing globalization of business is causing new pressures for HRM within MNCs. The effective management of human resources internationally is increasingly acknowledged as a key competitive advantage in international business (Edwards et al. 1996), and as a major determinant of success or failure in international business (Stroh/Caligiuri 1998). Of all the management domains, HR management is generally considered to be the most sensitive to local context (Gooderham et al. 1999). At the same time, there are strong pressures to adapt global strategies in many fields of industries. The realization of such strategies in turn typically require higher level of global integration of key HRM-processes. Thus, many MNCs have aimed at a higher level of integration of HRM practices, but such aims have faced the resistance due to the local culture, legislation and traditions (Lindholm et al. 1999).

There are different approaches to human resource management within MNCs - which in turn are closely related to international strategies of the firm (see e.g. Dowling et al. 1999; Scullion 1999). Companies with an ethnocentric approach allow little autonomy to foreign affiliates and the major decisions are made in the headquarters. The key positions are fulfilled with the PNC nationals, i.e. expatriates. This naturally increases the use of home country approaches and practices in the foreign affiliates. Companies with polycentric approaches use totally different approaches: major decisions are made at foreign affiliates and key positions are typically filled with host country representatives. This leads to more localized solutions in the HRM. In addition, so-called regiocentric (areal strategy, structure, management and HRM) and geocentric approaches have been traditionally named.

According to Dowling et al. (1999) it is still fairly difficult to classify companies by a single approach since complexity of international operations creates pressures to make changes in basic approaches. The key question concerning the HRM in MNCs is still the extent of global integration (standardization) versus local responsiveness (e.g. Evans et al. 2002; Schuler et al. 1993; Lindholm et al. 1999). Typically, MNCs are seen as important disseminators of HRM practices and innovations in work organizations (Walch 2001). Empirically, the HRM practices that are found in MNC subsidiaries have been analysed in a number of studies (see e.g. Beechler/Yang 1994; Björkman/Ehrnrooth 1999; Ferencikova 2000; Rosenzweig/Nohria 1994; Scullion 1999; Walsh 2001). The most common studies in a CEE context are case studies of enterprises with FDI (Ferencikova 2000). They usually describe the ch...

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