The influence of national business systems and company characteristics on the cross-national transfer of employee participation practices : foreign acquisitions of UK and Swedish multinational corporations

Abstract

The importance of multinational corporations (MNCs) on a global scale has continued to increase over the past decades. This is evidenced in rapidly rising levels of foreign direct investment (FDI) coupled with high amount of mergers and acquisitions (M&A) activity. MNCs are likely to have a significant impact on their surroundings, including national governments, suppliers, customers, trade unions and employees. This research focuses on the impact on the latter by investigating post-acquisition transfers of employee participation practices in MNCs. This thesis examines Swedish and UK MNCs and their foreign acquired subsidiaries. Following a review of comparative industrial relations, institutionalism, international business, national business systems (NBS), and M&A literature, the influence of NBS and nine specific company characteristics on MNCs' ability and willingness to transfer employment practices are discussed. The contribution to knowledge is fivefold. Firstly, it extends the understanding of employment practices transfers following cross-border acquisitions. Secondly, it contributes to the global-local debate of how MNCs try to implement global standard employment practices on the one hand and on the other to adapt and conform to local conditions. Thirdly, it provides an insight into MNCs from small and large economies engaging in transfers. Fourthly, it compares acquisition integration approaches from Anglo-Saxon and Scandinavian MNCs. Fifthly, it informs about the forces at national and company levels influencing MNCs in their choice of employment practices abroad. Empirically, the research is based on detailed case studies. Case data has been collected from five MNCs - two UK and three Swedish - and their foreign acquired subsidiaries. Interviews have been carried out at corporate and subsidiary levels in the UK and Sweden in the native languages. The research draws some significant conclusions. Firstly, the influence of the NBS on the transfer of employment practices varies according to the type of practice in question. Secondly, it adds another dimension to Bartlett and Ghoshal's (1998) MNC typologies, the brand structured MNC. In this type of MNC, practices are transferred according to brands rather than national patterns. Thirdly, the pattern of transfer supports the argument of a flow of transfers from 'dominant' systems to 'follower' systems both in terms of forward and reverse transfers. Finally, the results reveal that transfers are not only influenced by the NBS but also company characteristics are significant. This is most clearly demonstrated by the post-acquisition integration approach and the 'significance' of the subsidiary.EThOS - Electronic Theses Online ServiceCollinson Grant (Firm)Economic and Social Research Council (Great Britain) (ESRC)GBUnited Kingdo