systems place more emphasis on short-run financial performance, and adopt
investment strategies which are driven by purely financial criteria. Also, under
insider systems employees are likely to be regarded as enduring assets who
form a potential source of competitive advantage, encouraging an emphasis by
management on training and skill acquisition, whereas under outsider systems
employees are likely to be regarded as disposable liabilities and to be the focus
of short-run cost minimization by management (Marginson and Sisson, 1994).
Whitley (1996: 39) concludes that European enterprises continue to dis-
play considerable variation according to the national business systems in
which they are located, and that there is little evidence amongst large enter-
prises of convergence on a single type, such as the diversified multi-divisional
form. The implication is that European MNCs remain a collection of differing
national types: the national business system remains the essential reference
point for international companies. Mayer and Whittington question this con-
clusion: ‘national economies in Europe seem both to be more internally diverse
and to have more in common than most societal-contingency accounts can
explain’ (1996: 88). They propose instead a ‘societal choice’ approach, which
recognizes that business organization within Europe is simultaneously over-
lapping and fragmented. They argue that institutional environments contain
actors – the state, entrepreneurs, families – that may prefer and have the
resources to support forms of enterprise organization which do not conform to
the dominant model. Such an approach remains sensitive to dominant pat-
terns of business organization, but is also alert to forms that cross-cut national
boundaries. Those forms which cut across European countries include family-
owned enterprises, state-owned or public enterprises, the traditional holding
company structure and the multi-divisional structure (see Box 18.2).
In underlining the scope of intra-societal variation in enterprise forms as
well as the potential points of overlap across borders between them, the soci-
etal choice approach offers some analytical underpinning in conceptualizing
the Eurocompany. Much, however, remains to be specified before this line of
argument can be taken further.
Box 18.2 European enterprise-forms which cross-cut
national boundaries.- Family ownership is a persistent feature of a number of European
economies, including France, Germany, Italy and the Walloon region of
Belgium. Moreover the challenge posed by internationalization does not
appear to be insuperable for such companies; some have extended their
reach across European markets by acquiring firms in other countries,
French-based LVMH for example. - The state-owned enterprise has, until recent privatization initiatives, been
a prominent feature of several economies, notably Austria, France, Italy
464 International Human Resource Management