another. One element of this is the transfer of employment practices across
borders. This capacity can be seen as a potential source of higher efficiency in
MNCs compared with firms based solely at the national level. However, many
of those who work for MNCs, including some managers, may see the transfer
of practices as a challenge since the process can cause a shift away from prac-
tices that have become accepted at the national level. Employee representa-
tives, in particular, may see their interests as being threatened and may be able
to block the introduction of practices that originated elsewhere. Thus the
process of transfer can be contested, even blocked in some cases, and can also
create fraught relations between different organisational groups.
The troublesome nature of such transfer arises in part from the way in which
employment practices are ‘embedded’ in distinctive national contexts.
Employment practices, like any other social custom, are strongly influenced by
the context in which they operate. The political system and the dominant polit-
ical traditions within it shape several key aspects of the employment relationship,
notably the strength of organised labour and the nature of employment regula-
tions. The legal system, itself partly the product of the political system, not only
constrains the range of courses open to management in devising procedures in
areas such as employee representation, but also plays a part in conditioning the
expectations of organisational actors in this area. Concomitantly, the nature of
key institutions in the labour market also limits the options available to man-
agement in employment relations and further contributes towards the creation
of a set of norms and values. The existence of a set of values concerning work and
organisations – often referred to as culture – is the most commonly cited source of
national distinctiveness in employment relations (e.g. Tayeb, 1996, see also
Chapter 6). The political, legal and institutional context gives rise to the emer-
gence of dominant values in societies, and these are central to the character of
the employment relationship (see Chapter 5 for a more extensive discussion).
Given that the context and the values differ markedly from country to country,
transferring practices across diverse social systems is bound to be a tense process
In this chapter we tackle several of the key aspects of the transfer of
employment practices within MNCs. One initial question is that, given that
such practices are embedded in particular national contexts, why do many
MNCs seek to transfer practices to quite different national contexts? In address-
ing this, three broad explanations that are evident in the academic literature
are reviewed and the strengths and weaknesses of each of these are assessed.
Identifying the weaknesses points to the need for a fourth, integrated approach
which can explain a number of aspects of the transfer of employment practices,
such as in which countries MNCs’ practices that are transferred are likely to
originate, how we can explain variations between MNCs in terms of the extent
of transfer, and the likely nature of the relations between different groups
within MNCs in the transfer process. To this end, the fourth approach elabo-
rated here consists of a framework of four key influences. The chapter ends
by examining the consequences of the transfer of practices for national systems
390 International Human Resource Management