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Miners, politics and institutional caryatids: Accounting for the transfer of HRM practices in the Brazilian multinational enterprise

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Abstract

This article contributes to the growing stream of research on power and micro-politics in the MNE. It is situated in the critical realist epistemology. It adopts Burawoy’s extended case study method together with a context-sensitive and an actor-centered mode of explanation. The case is intriguing: a MNE from Brazil expands into Canada, the United Kingdom, Switzerland and Norway and imposes a new pay and performance management system, contrasting with existing host norms. The article uses this to examine interrelated questions about the influence of an emerging-economy parent business system and how this interacts with the well-developed institutional regulation of the host countries. Hence we are forced into the interesting realm of multilevel analysis about MNEs, power relations and institutional change. We argue that the transfer of HRM practices within MNEs is best explained by a consideration of institutions, organizational structures, actors’ postures within and beyond the MNE, and their relational interplay. Specifically, it requires an analysis of the macro-political context (home and host institutional influences; subsidiaries’ size, mode of establishment, history, value chain location; and the host economies’ dependence on foreign investment) on which actors’ identities and interests are formed, and on which the ensuing micro-political relations are played out.

Abstract

Cet article contribue au flux croissant de recherches sur le pouvoir et la micro-politique au sein des entreprises multinationales (EMN). Il s’inscrit dans l'épistémologie réaliste critique. Il adopte la méthode d’étude de cas étendue de Burawoy associée à un mode d’explication sensible au contexte et axé sur l'acteur. Le cas est singulier : une EMN du Brésil se développe au Canada, au Royaume-Uni, en Suisse et en Norvège et impose un nouveau système de gestion des salaires et de la performance, contrastant avec les normes existantes des pays d'accueil. L'article utilise ce cas pour examiner des questions interdépendantes sur l'influence du système managérial d’un parent issu d’une économie émergente et sur comment cela interagit avec la régulation institutionnelle bien développée des pays d’accueil. Ainsi, nous sommes contraints d’utiliser le cadre intéressant de l'analyse multiniveaux des entreprises multinationales, des relations de pouvoir et du changement institutionnel. Nous argumentons que le transfert des pratiques de GRH au sein des entreprises multinationales s'explique mieux par un examen des institutions, des structures organisationnelles, des postures des acteurs au sein et au-delà de l'EMN et de leurs interactions relationnelles. Plus précisément, il nécessite une analyse du contexte macro-politique (influences institutionnelles du pays d’origine et du pays d’accueil ; taille des filiales, mode de création, histoire, localisation de la chaîne de valeur; et la dépendance du pays d'accueil aux investissements étrangers) sur lequel les identités et les intérêts des acteurs sont formés et sur lequel les relations micro-politiques qui en découlent se jouent.

Abstract

Este artículo contribuye a la creciente corriente de investigación en poder y micro-política en las empresas multinacionales. Está situado en el realismo crítico epistemológico. Adopta el método de caso estudio extendido de Burawoy junto con un modo de explicación sensible al contexto y centrada en actores. El caso es intrigante: Una multinacional de Brasil se expande a Canadá, Estados Unidos, Reino Unido, Suiza y Noruega e impone un sistema gerencial de pagos y rendimiento, lo cual contrasta con las normas existentes en los países anfitriones. Este artículo usa esto para examinar cuestiones interrelacionadas acerca de la influencia de un sistema empresarial de una casa matriz de una economía emergente y como esto interactúa con la regulación institucional bien desarrollada de los países anfitriones. Por lo tanto nos vemos forzados a un interesante campo de análisis de multinivel de las empresas multinacionales, las relaciones de poder y el cambio institucional. Argumentamos que transferir las prácticas de gestión de recursos humanos en las multinacionales se explica mejor por una consideración de instituciones, estructuras organizaciones, posturas de actores dentro y más allá de la multinacional, y su interacción relacional. Específicamente, se requiere un análisis del contexto macro-político (influencias institucionales país de origen y país anfitrión, tamaño de las subsidiarias, modo de establecimiento, historia, ubicación de la cadena de valor; y la dependencia del país anfitrión de inversión extranjera) en el cual las identidades de los actores y sus intereses son formados, y en el cual las relaciones micro-políticas resultantes se desarrollan.

Abstract

Este artigo contribui para a crescente área de pesquisa sobre poder e micro-política nas MNE. Ele está situado na epistemologia realista crítica. Ele adota o método de estudo de caso extendido de Burawoy juntamente com uma forma de explanação sensível ao contexto e centrada nos atores. O caso é intrigante: uma MNE do Brasil expande para o Canadá, Reino Unido, Suíça e Noruega e impõe um novo sistema de gestão de remuneração e desempenho contrastando com as normas existentes. O artigo usa isso para examinar questões inter-relacionadas a respeito da influência de um sistema de uma empresa controladora originária de uma economia emergente e como este interage com a bem desenvolvida regulação institucional dos países de destino. Por isso, somos levados para o interessante reino da análise multinível sobre MNE, relações de poder e mudança institucional. Argumentamos que a transferência de práticas de HRM nas MNEs é melhor explicada pela consideração de instituições, estruturas organizacionais, posturas de atores dentro e fora das MNE, e sua interação relacional. Especificamente, é requerida uma análise do contexto macro-político (influências institucionais da origem e do destino; tamanho da subsidiária, forma de estabelecimento, história, localização da cadeia de valor, e dependência do investimento externo por parte das economias de origem) em que as identidades e interesses dos atores são formados, e em que as consequentes relações micro-políticas são desenvolvidas.

Abstract

本文对跨国企业权力和微观政治研究潮流做出了贡献。它基于批判现实主义的认识论。它采用了布洛维的扩展案例研究法与情境敏感和以参与者为中心的解释模式的结合。此案例耐人寻味 : 一家巴西的跨国企业扩展到加拿大、英国、瑞士和挪威, 并实行了新的薪酬和绩效管理系统, 与东道国现有的规范形成鲜明对比。本文使用它来研究新兴经济母业务系统的影响以及它如何与东道国发达的制度规定互动的相互关联的问题。因此, 我们被迫进入了跨国企业权力关系和制度变迁多层次分析的有趣领域。我们认为, 跨国企业内的人力资源管理实践的转移可以用制度、组织结构, 跨国企业内外部参与者的姿态, 以及它们之间关系的相互作用来做出最好的解读。具体来说, 它需要有一个宏观政治情境的分析 (母国和东道国制度的影响; 子公司的规模, 创建模式, 历史, 价值链位置;东道国经济体对外资的依赖) , 其中参与者的身份和利益得以形成, 持久的微观政治关系得以发挥出来。

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Notes

  1. One such “abductive moment” arose when we realized (following our research in Canada) that qualitatively different forms of resistance could not be reasonably explained by whether or not subsidiaries were embedded in robust or liberal institutional environments, and that account needed to be taken of other factors such as shifting patters of dependence and dominance.

  2. MiningCo and NickelCo are pseudonymous.

  3. There were no expatriates working in the Norwegian and the UK subsidiaries at this time.

  4. Market modes of coordination refer to relations between firms and other actors that are coordinated via competitive markets, and are characterized by arm’s length dealings and formal contracts. The determination of pay, for example, is primarily a matter of contract between management and individual employees. In contrast, strategic forms of coordination depend on institutional supports that enable actors to make credible commitments to one another. Labor markets are less flexible, employers typically negotiate wages with trade unions, and managerial scope for independent action is circumscribed by employee representatives’ rights to share in organizational decision-making.

  5. The fourth subsidiary negotiated a separate agreement in 2008.

  6. See Mir and Sharpe’s (2009) critical consideration of how MNEs sustain their power through connections with nation states, state elites and international institutions like the IMF and the WTO.

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Acknowledgements

The authors thank the journal’s area editor, Ulf Andersson, and the three anonymous reviewers for their detailed and helpful comments on successive drafts of our article. The financial support provided by the UCD Ad Astra Fellowship is gratefully acknowledged.

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Authors and Affiliations

  1. College of Business, University College Dublin, Dublin, Ireland

    John Geary

  2. Durham Business School, Durham, UK

    Roberta Aguzzoli

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  1. John Geary
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Correspondence to John Geary.

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Accepted by Ulf Andersson, Area Editor, 24 March 2016. This article has been with the authors for four revisions.

APPENDIX

APPENDIX

The interview guide was first prepared in Portuguese and was used to interview management at the company’s Brazilian HQ and a former senior manager living in Rio de Janeiro. It focused on the structure of the organization, forms of control and levels of subsidiary autonomy, the presence and influence of a national style of management and the design and transfer of the MNE’s policies and practices. Similar questions were adapted to suit the interviews conducted at subsidiary level. The questions posed were often general in nature. They were designed to steer the questioning into particular areas of interest and to permit some flexibility to explore topics of curiosity as they arose. The interview guide is here provided below.

Interview Guide for HQ Interviewees

Company structure, operations and management

Could you explain the structure of the company and, in particular its operations in Canada, UK, Norway and Switzerland?

What role do the subsidiaries perform? Do they undertake separate and distinct functions? Can you transfer production from one facility to another and between facilities?

What is the relationship between the headquarters and subsidiaries?

Are their particular guidelines/specifications/performance targets which the subsidiaries are meant to operate by or meet?

Can you tell me about your employment and HR policies? Where are they sourced? Do you use external consultancies? Why? To what extent might they be considered “Brazilian”? Were they developed here in Brazil and then transferred overseas? Why was that? How important was that?

How did management and employees respond to the transfer of practices? How would you explain their responses? What did you do if and when you encountered any resistance?

How much autonomy does local management have in determining the HR/IR policies they adopt?

Is there anything specifically “Brazilian” in your style of management?

What are the principal differences in HR practices and styles of management between the MNE’s and the subsidiaries?

What levels of autonomy are permitted local management? Can you tell us about the ways in which you tried to – assuming you did – control or cast oversight over the subsidiaries’ performance and implementation of corporate policies?

Have you adapted any of your practices to local practices/norms? Can you provide any examples? Why is that the case?

International management networks/meetings

Do HR managers from different national subsidiaries meet?

How often? Where and what is discussed? Do they meet to discuss particular best practices?

Recruitment and selection

How do you recruit for managerial and non-managerial positions in foreign locations?

What kind of policies does MiningCo have in place to attract and retain its employees?

Rewards systems

What kind of reward system does MiningCo have in place in its foreign operations?

Do you have PRP? What do your subsidiaries’ employees think of it?

Training and development

What kind of training do employees get in MiningCo, in Brazil, Europe and Canada? How do staff career and development programmes work here? Are policies transferred to the subsidiaries?

Industrial relations

What type of relationship does MiningCo have with employer representative associations in Brazil and in the subsidiaries?

What type of relationship does MiningCo have with unions in Brazil and in the subsidiaries?

Is there collective bargaining? How does that work? How much influence does it have over management decision-making in the subsidiaries?

What are the differences observed among trade unions in Europe/Canada?

General questions

In summary, then, can I ask you to reflect again on whether there are any distinctive “Brazilian” features to the way in which MiningCo conducts its business overseas?

Are there any distinctive “Brazilian” features to the way in which MiningCo manages its human resources overseas? If yes, how were such distinctive features transferred across subsidiaries?

Are they adopted in particular ways such that they are customized to the local context but still exhibit distinctive Brazilian features?

How do HR practices vary across subsidiaries? How might such variation be explained?

What are the biggest challenges/ opportunities facing you and local management in the subsidiaries?

At the Canadian, British, Swiss and Norwegian subsidiaries the following questions as appropriate were asked of the site manager, operations manager and finance manager.

Structure and reporting relations

What is the structure of MiningCo in Europe/Canada?

What is the role/functions of the Swiss/Norwegian/Canadian/British subsidiary? What is expected from the Swiss/Norwegian/Canadian/British subsidiary?

What is the place/role of this subsidiary in the company’s value chain?

Why is MiningCo located in Switzerland/Norway/Canada/the United Kingdom?

What is the relationship between the Swiss/Norwegian/Canadian/British subsidiary and the other European/Canadian subsidiaries? And between the Swiss/Norwegian/Canadian/British subsidiaries and the Brazilian headquarters?

What is your role and what are the principal by which your performance is reviewed?

What corporate guidelines is this subsidiary obliged to follow?

Would you say that the company’s worldwide structure is organized mainly around national subsidiary companies, around divisions with an international focus, or centered in the headquarters?

How are MiningCo’s managerial policies and practices designed? How are they different from country to country? Any examples?

How is this subsidiary managed? Is it based targets, mandates, budgets? What happens if you do not achieve the objectives/target set?

Is there any particularly Brazilian about the way MiningCo conducts its business here and in how it manages its subsidiaries?

In terms of managerial practices, would you say the company uses Brazilian or Swiss/Norwegian/Canadian/British policies? Does it adapt to local practices/norms? If it does, can you give us any examples? If they do adapt, is there still any residue of a distinctive Brazilian influence?

Do you think policies and practices from Switzerland/Norway/Canada/the United Kingdom are transferred to Brazilian headquarters or other subsidiaries?

Are policies benchmarked against any particular standard?

General questions

What differences/similarities do you perceive in management styles and policies between the headquarters and this subsidiary?

Can you transfer production from one facility to another? Do they have the skilled workforce for that?

To what extent is the workforce dependent on the company remaining in this location?

What are the biggest challenges/ opportunities for management in the subsidiary?

Human resources managers

Many of the questions put to the site manager were also put to the other managers, although more emphasis was placed on their areas of expertise and responsibility

The design of IR/HR policies

Are there any guidelines issued by MiningCo that subsidiaries have to follow?

Please take us through the main HR policies used here in terms of where they were formulated; to what extent they represent “Brazilian” or local practice?

If Brazilian practices have been transferred, how was that done?

What kind of local policies and practices has MiningCo had to adopt in Switzerland/Norway/Canada/the United Kingdom? Why was that? Was it because it was required by local laws, customs?

Do the HR policies and practices adopted by MiningCo in Switzerland/Norway/Canada/the United Kingdom resemble those adopted by other local companies?

Are they adopted in a particular way such as they are customized to the local context, but still exhibit a distinctive Brazilian feature?

Can we explore levels of local autonomy at subsidiary level vs central control (identify where “central control” is located). How much autonomy does local management have in determining the HR/IR policies?

Are there any expatriate personnel employed at Swiss/Norwegian/Canadian/British subsidiary? What are their roles?

How do HR practices vary across the European/Canadian subsidiaries? How might such variation be explained?

Are policies benchmarked against any particular standard?

International management networks/meetings

Do HR managers from different national subsidiaries meet/network in particular ways?

Are they formal or informal meetings? How often? Where and what is discussed?

Recruitment and selection

How does MiningCo recruit its employees in Switzerland/Norway/Canada/the United Kingdom?

What kind of policies does MiningCo have in place to attract and retain its employees?

Training and development

What kind of training do employees get in MiningCo here in Switzerland/Norway/Canada/the United Kingdom?

How do career and development programme works here? How did you implement them?

Rewards systems

What kind of reward system does MiningCo have in place in its Swiss/Norwegian/Canadian/British operation?

What do people think about the pay for performance? How was it implemented?

How does the pension plan work? How was it implemented?

Are there any local influences shaping the rewards system?

Industrial relations

Is there a trade union representative at this site? What is his/her role?

What type of relationship does MiningCo have with unions? Who decided on whether to deal with a union – Swiss/Norwegian/Canadian/British management or Brazilian management?

What influence does the trade union exercise over management decision-making?

What influence do employees across the various grades/occupations exercise over management decision-making?

Is MiningCo Switzerland/Norway/Canada/the United Kingdom a member of any employers’ representative grouping or body? Why are you a member and what role does this body perform? Who decided to join – Swiss/Norwegian/Canadian/British management or Brazilian management?

How do you typically resolve conflictual issues? Can you take us through any particular conflicts?

General questions

What are the biggest challenges facing and opportunities for management and HR management in the subsidiary?

In Canada we added the following questions to the interview guide for both corporate and HRM managers:

How was the subsidiary managed before the takeover? (also asked in the United Kingdom)

How different is the management style and levels of local autonomy now? (also asked in the United Kingdom)

Why are Canadian employees on strike?

How does management in Brazil and Canada perceive such a long strike?

What are the consequences of having workers on strike?

What courses of action did you pursue to bring the strike to an end?

In the United Kingdom we added the following questions to the interview guide for corporate and HRM managers and employees:

What role did the UK site play during the Canadian strike?

How did you perceive such a long strike?

What were the consequences of having Canadian workers on strike for this site?

Trade union officers

What is the structure of the trade union in this subsidiary?

How do you see the role of the trade union?

What are the rights and duties of this trade union?

Do trade union representatives have influence over managerial decision-making?

If you are not a member of the trade union, are you represented by the union?

Talk to me about the relationship that exists between workers and the trade union, and the union and the company.

How does collective bargaining work?

What relationship exists between the unions and local/regional politicians/policy makers?

What challenges do you see the trade union facing in this subsidiary? And opportunities?

We added the following questions to the interview guide in Canada:

Why are workers on strike?

How do you perceive corporate and local management’s role and influence?

What are the main differences between the present and former owners?

How do you perceive the Brazilian style of management?

How do you perceive the way MiningCo is conducting negotiations with the trade union?

How are employees maintaining themselves?

Are the workers considering going back to work? When might they and under what circumstances?

Why do workers not cross the picket line?

How does trade union perceive MiningCo’s decision to use replacement workers?

What does the USW intend to do next? What can it do?

On what terms do you think the strike will be won or lost?

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Geary, J., Aguzzoli, R. Miners, politics and institutional caryatids: Accounting for the transfer of HRM practices in the Brazilian multinational enterprise. J Int Bus Stud 47, 968–996 (2016). https://doi.org/10.1057/jibs.2016.24

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