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Multinationals and the evolving contours of their human management practices in Central and Eastern Europe and the former Soviet Union

József Poór (Faculty of Economics, J. Selye University, Komarno, Slovakia)
Allen D. Engle (Eastern Kentucky University, Richmond, Virginia, USA)
Ildikó Éva Kovács (Faculty of Economics and Social Sciences, Szent István University, Gödöllő, Hungary)
Michael J. Morley (Kemmy Business School, University of Limerick, Limerick, Ireland)
Kinga Kerekes (Babes-Bolyai University, Cluj-Napoca, Romania)
Agnes Slavic (Faculty of Economics, University of Novi Sad, Subotica, Serbia)
Nemanja Berber (Faculty of Economics, University of Novi Sad, Subotica, Serbia)
Timea Juhász (Budapest Business School (BBS), Budapest, Hungary)
Monica Zaharie (Babes-Bolyai University, Cluj-Napoca, Romania)
Katerina Legnerova (Faculty of Economics, University of Economics, Prague, Czech Republic)
Zuzana Dvorakova (Masaryk Institute of Advanced Studies (MIAS), Czech Technical University, Prague, Czech Republic)
Marzena Stor (Wroclaw University of Economics, Worcław, Poland)
Adam Suchodolski (Wroclaw University of Economics, Worcław, Poland)
Zoltán Buzády (Corvinus University of Budapest, Budapest, Hungary)
Ainur Abdrazakova (School of International Economics and Trade,Lanzhou University of Finance and Economics, Lanzhou, China)

Employee Relations

ISSN: 0142-5455

Article publication date: 9 March 2020

Issue publication date: 26 March 2020

Abstract

Purpose

We explore the effects of three organizational variables (country of origin of the multinational company (MNC), the timing of entry into the European Union and the mode of establishment of the MNC subsidiary unit) on the human resource management (HRM) practices being pursued by subsidiaries of large MNCs operating in selected countries in Central and Eastern Europe (CEE) and the Former Soviet Union. Furthermore, we examine whether the degree of autonomy afforded to the subsidiary over its preferred HR recipes is related to overall local unit performance.

Design/methodology/approach

We profile the HRM practices of 379 foreign owned subsidiaries located in Bulgaria, Croatia, The Czech Republic, Kazakhstan, Poland, Hungary, Russia, Romania, Serbia and Slovakia. Using descriptive statistics, we present the general characteristics of the sample and we then use bivariate statistical analysis to test our hypotheses relating to the impact of different organizational factors on the HR practice mix implemented in the MNC subsidiaries covered in our survey.

Findings

We find a significant correlation between the annual training budget, the importance of knowledge flow from headquarters (HQs) to the subsidiary and the perceived criticality of training and development and whether the subsidiary is a greenfield site or an acquisition. A correlation was also found between the national timing of EU membership (older members, newer and then candidate countries and non-EU members) and three HR practice variables: the use of expatriates, external service providers and employee relations practices.

Research limitations/implications

Our research calls attention to the issue of balancing the efficiencies of standardization with the local preferences and traditions of customization which results in more successful MNC control and ultimately higher levels of performance. It also calls attention to the challenges in pursuing research of this nature over time in the CEE region, especially given the dynamic nature of the MNC mix in each of the countries.

Practical implications

Our findings serve to reduce the information gap on foreign-owned companies in CEE and the Former Soviet Union.

Originality/value

Despite some 30 years of transition, there remains a paucity of empirical research on the HR practices of MNCs across a number of countries in the CEE region. For a decade and a half, the CEEIRT group[1] has been systematically gathering empirical evidence. The combination of the breadth (10 countries) and depth (numerous items related to MNC subsidiary relationships with corporate HQs and patterns of HR practices and roles) characterizing the ongoing research effort of the CEEIRT collaboration serves as a mechanism for augmenting the empirical base on HRM in the region.

Keywords

Citation

Poór, J., Engle, A.D., Kovács, I.É., Morley, M.J., Kerekes, K., Slavic, A., Berber, N., Juhász, T., Zaharie, M., Legnerova, K., Dvorakova, Z., Stor, M., Suchodolski, A., Buzády, Z. and Abdrazakova, A. (2020), "Multinationals and the evolving contours of their human management practices in Central and Eastern Europe and the former Soviet Union", Employee Relations, Vol. 42 No. 3, pp. 582-608. https://doi.org/10.1108/ER-01-2019-0082

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited