US Multinationals and Human Resource Management in Ireland: Towards a Qualitative Research Agenda1

By Gunnigle, Patrick; Collings, David G. et al. | Irish Journal of Management, January 1, 2003 | Go to article overview

US Multinationals and Human Resource Management in Ireland: Towards a Qualitative Research Agenda1


Gunnigle, Patrick, Collings, David G., Morley, Michael J., McAvinue, Catherine, et al., Irish Journal of Management


INTRODUCTION

US-owned multinational corporations (MNCs) are dominant actors in the world economy and are particularly significant in the Irish context. This paper profiles US foreign direct investment (FDI) in Ireland, focusing specifically on human resource management (HRM) and industrial relations (IR) in US- owned subsidiaries. Drawing on an ongoing qualitative study, we identify and explain the main HRM and IR themes pertinent to researching the dynamic between centralised control and subsidiary autonomy in the management of US MNC subsidiaries in Ireland.

THE SIGNIFICANCE OF THE MULTINATIONAL CORPORATION

The main means by which organisations can significantly internationalise their operations are through acquisitions, mergers and joint ventures, and by establishing greenfield site facilities. Of course there are other means by which firms may engage in international business, such as licensing/franchising and service arrangements. However, the term "multinational" is generally applied to those engaged in FDI whereby the MNC has a controlling interest in foreign companies. FDI has been described by Daniels and Radebaugh (1995: 17) as the "highest commitment a domestic company can make in international business because it usually involves not only the infusion of capital but also the transfer of personnel and technology".

Multinational corporations are not a homogenous group of companies who operate on a worldwide basis. What we would consider to be a MNC can range in size from vast corporations such as General Electric comprising different divisions and businesses with numerous subsidiaries around the globe to smaller privately owned firms operating in one core business area with a small number of international subsidiaries. In total though, MNCs exert a huge economic and political influence. Their immense economic power is reflected in Anderson and Cavanaghs' (1999) finding that the 100 largest multinational corporations now control about 20 per cent of global foreign assets. The UNCTAD (2001) estimates that total FDI in 2000 amounted to a record US$1.3 trillion, driven by some 60,000 MNCs and their 800,000 affiliates abroad. FDI is, however, unevenly distributed geographically, with the world's top 30 host countries accounting for 95 per cent of total FDI inflows and the worlds top 30 home countries generating approximately 99 per cent of outward FDI stocks (Gorringe, 1999). Looking specifically at US MNCs, it is estimated that they employ over 7 million people world-wide and approximately 2.5 million of them in Europe (UNCTAD, 1996; Ferner and Quintanilla, 1998). As a consequence, we find that MNCs have acted as key drivers in the increased internationalisation of business. Indeed, Ferner and Hyman (1998: xiii) have labelled MNCs "...the dominant actors in the internationalisation [sic.] process".

In this process of internationalisation, HRM/IR considerations emerge as a key concern, not least because at the micro-level HRM/IR can act as a key source of competitive advantage, while at the macro level it influences the regulation and operation of labour markets. A specific and long-standing debate in this context concerns the extent to which HRM and IR approaches in MNCs are embedded in their home country business system and thus form the core of HRM/IR practices in foreign subsidiaries (Beaumont, 1985; Chandler, 1990; Gunnigle, 1995; Ferner and Quintanilla, 1998; Edwards, 2000; Tregaskis et al., 2001). Indeed strong institutional 'embeddedness' is seen as particularly characteristic of US MNCs (Ferner et al., 2001 a). For example, Schlie and Warner (2000: 34) posit that:

American management values may be derived from deep-rooted societal norms endemic in their specific national culture, comprising a national business system ... Built on a free and capitalist system emphasizing property rights, the key features of American management contain a strong commitment to individualism and universalism.

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