- 2 The DiVusion of Preferred HRM Strategies Abroad
To take a closer look at the issues and dynamics that unfold in managing human
resources abroad, we can turn to a growing and largely case study literature about
the diVusion of preferred HR strategies to foreign locations. At the center of
decisions regarding diVusion, the home oYces of MNCs can expect to encounter
local isomorphic pressures from foreign locations to maintain long-embedded
localized workplace policies and practices (Ferner and Quintanilla 1998 ). As argued
by Kostova ( 1999 ), the successful diVusion of new HRM policies and practices will
be more diYcult or costly to achieve, the greater the diVerences in workplace
cultures, norms, customary practices, laws, and institutional arrangements between
the country-of-origin and host country locations. The degree of local resistance,
therefore, will be a factor of how radical or extensive any change the parent seeks to
achieve at the subsidiary level.
It appears from numerous case studies and a few cross-sectional surveys of such
eVorts that the extent of diVusion varies widely along a continuum. At the one
extreme of the continuum, Bird et al. ( 1998 ) report that some Japanese MNCs have
been insistent on and successful in replicating home-based HRM systems across
their foreign subsidiaries. Believing that their HRM systems oVer substantial
competitive advantage, these MNCs have engaged in intensive eVorts to mold
foreign workplaces to their satisfaction via extensive recruitment and selection
activities coupled with substantial reorientation and training for both managers
and employees. By way of further example, McDonald’s has been largely successful
in diVusing its HR strategy throughout its chain of European fast-food restaurants.
According to Royle and Towers ( 2003 ), however, to minimize local resistance to the
diVusion of its uniform worldwide policies, McDonald’s has apparently circum-
vented long-standing, institutionalized forms of employee representation. In par-
ticular, Royle and Towers conclude that it has aggressively deterred employee
interest in union representation, has avoided compliance with collective bargaining
agreements, and has either evaded creating or maneuvered to dominate local and
national works councils.
At the other extreme of the continuum, some MNCs have apparently found that
the anticipated beneWts do not outweigh the costs of overcoming local resistance to
the diVusion of HRM practices from abroad and, thus, have decided against or
abandoned eVorts to transfer preferred HRM practices. For example, in their study
of Japanese television assembly transplants in the USA, Kenney and Tanaka ( 2003 )
found that MNCs abandoned their eVorts to diVuse their preferred Japanese-style
‘learning bureaucracies,’ characterized as work environments placing primary
focus on creating learning environments in which all employees actively contribute
to continuously improving performance. According to the authors, American
traditions and cultures manifested in Fordist workplace systems (governed by
hierarchical job protection and seniority rights and distinct divisions between
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