Skip to main content
SpringerLink
Log in

Human resource management and radical innovation: a fuzzy-set QCA of US multinationals in Germany, Switzerland, and the UK

  • Original Paper
  • Published:
Journal of Business Economics Aims and scope Submit manuscript

Abstract

This paper explores, based on the varieties-of-capitalism approach, configurations of key human resource management practices that explain radical innovation in subsidiaries. A fuzzy-set qualitative comparative analysis is conducted with data for 69 subsidiaries of US-based MNEs in Germany, Switzerland, and the UK. Contrary to the implications of the varieties-of-capitalism literature, combining numerical flexibility and employing a high share of academics does not necessarily achieve radical innovation. Various paths to radical innovation exist, and most of them involve functional flexibility. Overall, the findings emphasize the strategic discretion MNEs have, and accentuate that functional flexibility is a key HR practice to achieve radical innovation across differing varieties of capitalism countries.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

References

  • Akkermans D, Castaldi C, Los B (2009) Do “liberal market economies” really innovate more radically than “coordinated market economies”? Hall and Soskice reconsidered. Res Policy 38(1):181–191

    Article  Google Scholar 

  • Allen M (2004) The varieties of capitalism paradigm. Not enough variety? Socio-Econ Rev 2(1):87–108

    Article  Google Scholar 

  • Allen MMC (2013) Comparative capitalisms and the institutional embeddedness of innovative capabilities. Socio-Econ Rev 11(4):771–794

    Article  Google Scholar 

  • Allen MMC, Aldred ML (2011) Varieties of capitalism, governance, and high-tech export performance: a fuzzy-set analysis of the new EU member states. Empl Relat 33(4):334–355

    Article  Google Scholar 

  • Arundel A, Lorenz E, Lundvall B-A, Valeyre A (2007) How Europe’s economies learn. A comparison of work organization and innovation mode for the EU-15. Ind Corp Change 16(6):1175–1210

    Article  Google Scholar 

  • Arvanitis S (2005) Modes of labor flexibility at firm level: are there any implications for performance and innovation? Evidence for the Swiss economy. Ind Corp Change 14(6):993–1016

    Article  Google Scholar 

  • Atkinson J (1984) Manpower strategies for flexible organizations. Pers Manag 16(8):28–31

    Google Scholar 

  • Bamber G, Lansbury RD, Wailes N (eds) (2011) International and comparative employment relations. Globalisation and change. Sage, Los Angeles

    Google Scholar 

  • Bassanini A, Ernst E (2002) Labour market regulation, industrial relations and technological regimes. A tale of comparative advantage. Ind Corp Change 11(3):391–426

    Article  Google Scholar 

  • Bouncken RB, Lehmann C, Ratzmann M (2013) Shades of gray: effect of external work arrangements on firm performance under operational and strategic contingencies. J Bus Econ 83(8):863–900

    Article  Google Scholar 

  • Brewster C, Wood G, Brookes M (2006) Varieties of capitalism and varieties of firm. In: Wood G, James P (eds) Institutions, production, and working life. Oxford University Press, Oxford, pp 217–234

    Google Scholar 

  • Bureau van Dijk (ed) (2009) Amadeus. Bureau van Dijk, Amsterdam

    Google Scholar 

  • Cappelli P, Neumark D (2004) External churning and internal flexibility: evidence on the functional flexibility and core-periphery hypotheses. Ind Relat 43(1):148–182

    Article  Google Scholar 

  • Casper S (2007) Creating silicon valley in Europe. Public policy towards new technology industries. Oxford University Press, Oxford

    Book  Google Scholar 

  • Ciabuschi F, Forsgren M, Guy F (2011) Rationality vs ignorance: the role of MNE headquarters in subsidiaries’ innovation processes. J Int Bus Stud 42(7):958–970

    Article  Google Scholar 

  • Crilly D (2010) Predicting stakeholder orientation in the multinational enterprise: a mid-range theory. J Int Bus Stud 42(5):694–717

    Google Scholar 

  • Crouch C (2005) Models of capitalism. New Polit Econ 10(4):339–456

    Article  Google Scholar 

  • Doty DH, Glick WH, Huber GP (1993) Fit, equifinality, and organizational effectiveness: a test of two configurational theories. Acad Manag J 36(6):1196–1250

    Article  Google Scholar 

  • Estevez-Abe M, Iversen T, Soskice D (2001) Social protection and the formation of skills: a reinterpretation of the welfare state. In: Varieties of capitalism: the institutional foundations of comparative advantage. University Press, Oxford, pp 145–183

  • Farndale E, Brewster C, Poutsma E (2008) Coordinated vs. liberal market HRM: the impact of institutionalization on multinational firms. Int J Hum Resour Manag 19(11):2004–2023

    Article  Google Scholar 

  • Fenton-O’Creevy M, Gooderham P, Nordhaug O (2007) Human resource management in US subsidiaries in Europe and Australia: centralisation or autonomy? J Int Bus Stud 39(1):151–166

    Article  Google Scholar 

  • Fiss PC (2007) A set-theoretic approach to organizational configurations. Acad Manag Rev 32(4):1190–1198

    Article  Google Scholar 

  • Fiss PC (2011) Building better causal theories: a fuzzy set approach to typologies in organization research. Acad Manag J 54(2):393–420

    Article  Google Scholar 

  • Flickinger M, Gruber-Mücke T, Fiedler M (2013) The linkage between human resource practices and organizational ambidexterity: an analysis of internal labor market dynamics in a port-of-entry context. J Bus Econ 83(8):923–946

    Article  Google Scholar 

  • García-Castro R, Aguilera RV, Ariño MA (2013) Bundles of firm corporate governance practices: a fuzzy set analysis. Corp Gov Int Rev 21(4):390–407

    Article  Google Scholar 

  • Geletkanycz MA (1997) The salience of ‘culture’s consequences’: the effects of cultural values on top executive commitment to the status quo. Strateg Manag J 18(8):615–634

    Article  Google Scholar 

  • Giannetti C, Madia M (2013) Work arrangements and firm innovation: is there any relationship? Camb J Econ 37(2):273–297

    Article  Google Scholar 

  • Greckhamer T, Misangyi VF, Elms H, Lacey R (2008) Using qualitative comparative analysis in strategic management research. An examination of combinations of industry, corporate, and business-unit effects. Organ Res Methods 11(4):695–726

    Article  Google Scholar 

  • Gresov C, Drazin R (1997) Equifinality: functional equivalence in organization design. Acad Manag Rev 22(2):403–428

    Google Scholar 

  • Hall PA, Soskice D (2001) An Introduction to Varieties of Capitalism. In: Hall PA, Soskice D (eds) Varieties of capitalism. The institutional foundations of comparative advantage. Oxford University Press, Oxford, pp 1–68

    Chapter  Google Scholar 

  • Heidenreich M (2012) The social embeddedness of multinational companies: a literature review. Socio-Econ Rev 10(3):549–579

    Article  Google Scholar 

  • Henisz WJ (2000) The institutional environment for multinational investment. J Law Econ Organ 16(2):334–364

    Article  Google Scholar 

  • Henisz W, Swaminathan A (2008) Institutions and international business. J Int Bus Stud 39(4):537–539

    Article  Google Scholar 

  • Herrmann AM, Peine A (2011) When ‘national innovation system’ meet ‘varieties of capitalism’ arguments on labour qualifications: on the skill types and scientific knowledge needed for radical and incremental product innovations. Res Policy 40(5):687–701

    Article  Google Scholar 

  • Iseke A, Schneider M (2012) Transfer of employment practices, varieties of capitalism, and national employment systems, a review. Ind Bezieh Z Arbeit Organ Manag 19(2):236–252

    Google Scholar 

  • Jackson G (2005) Employee representation in the board compared. A fuzzy sets analysis of corporate governance, unionism and political institutions. Ind Bezieh 12(3):252–279

    Google Scholar 

  • Jackson G, Deeg R (2008) Comparing capitalisms: understanding institutional diversity and its implications for international business. J Int Bus Stud 39(4):540–561

    Article  Google Scholar 

  • Jackson G, Miyajima H (2007) Varieties of capitalism, varieties of markets. Mergers and acquisitions in Japan, Germany, France, the UK and USA. doi:10.2139/ssrn.1012210. Available at SSRN: http://ssrn.com/abstract=1012210

  • Jensen MB, Johnson B, Lorenz E, Lundvall BA (2007) Forms of knowledge and modes of innovation. Res Policy 36(5):680–693

    Article  Google Scholar 

  • Kalleberg AL (2001) Organizing flexibility: the flexible firm in a new century. Br J Ind Relat 39(4):479–504

    Article  Google Scholar 

  • Kluike M, Pull K (2013) Similar, but still different: how US multinational companies in Germany and Switzerland use host-country training and skill practices. Ind Relat J 44(5–6):495–513

    Google Scholar 

  • Kristensen PH, Morgan G (2012) Theoretical contexts and conceptual frames for the study of twenty-first century capitalisms. In: Morgan G, Whitley R (eds) Capitalisms and capitalism in the twenty-first century. OUP, Oxford, pp 11–45

    Chapter  Google Scholar 

  • Lange K (2009) Institutional embeddedness and the strategic leeway of actors: the case of the German therapeutical biotech industry. Socio-Econ Rev 7(2):181–207

    Article  Google Scholar 

  • Latzer M (2009) Information and communication technology innovations: radical and disruptive? New Media Soc 11(4):599–619

    Article  Google Scholar 

  • Lazonick W (2010) The Chandlerian corporation and the theory of innovative enterprise. Ind Corp Change 19(2):317–349

    Article  Google Scholar 

  • Lorenz E (2011) Do labour markets and educational and training systems matter for innovation outcomes? A multi-level analysis for the EU-27. Sci Public Policy 38(9):691–702

    Article  Google Scholar 

  • Lorenz E, Valeyre A (2005) Organisational innovation, human resource management and labour market structure: a comparison of the EU-15. J Ind Relat 47(4):424–442

    Article  Google Scholar 

  • Marsden D (2000) A theory of job regulation, the employment relationship, and the organisation of labour institutions. Ind Bezieh 7(4):320–347

    Google Scholar 

  • Marx A (2010) Crisp-set qualitative comparative analysis (csQCA) and model specification: benchmarks for future csQCA applications. Int J Multiple Res Approaches 4(2):138–158

    Article  Google Scholar 

  • Meuer J, Rupietta C, Backes-Gellner U (2015) Layers of co-existing innovation systems. Res Policy 44(4):888–910

    Article  Google Scholar 

  • Meyer AD, Tsui AS, Hinings CR (1993) Configurational approaches to organizational analysis. Acad Manag J 36(6):1175–1195

    Article  Google Scholar 

  • Minbaeva D, Pedersen T, Björkman I, Fey CF, Park HJ (2003) MNC knowledge transfer, subsidiary absorptive capacity, and HRM. J Int Bus Stud 34(6):586–599

    Article  Google Scholar 

  • Pajunen K (2008) Institutions and inflows of foreign direct investment. A fuzzy-set analysis. J Int Bus Stud 39(4):652–669

    Article  Google Scholar 

  • Parry E, Dickmann M, Morley M (2008) North American MNCs and their HR policies in liberal and coordinated market economies. Int J Hum Resour Manag 19(11):2024–2040

    Article  Google Scholar 

  • Peck J, Theodore N (2007) Variegated capitalism. Prog Hum Geogr 31(6):731–772

    Article  Google Scholar 

  • Porter ME (1990) The competitive advantage of nations. The Free Press, New York

    Book  Google Scholar 

  • Pudelko M, Harzing A (2007) Country-of-origin, localization, or dominance effect? An empirical investigation of HRM practices in foreign subsidiaries. Hum Resour Manag 46(4):535–559

    Article  Google Scholar 

  • Pull K (2003) Managerial flexibility and the comparative attractiveness of the UK as a business location. Eur Bus J 15(2):49–60

    Google Scholar 

  • Pull K (2008) Flexibility in HRM and foreign direct investment: do international investors self-select? Int J Hum Resour Manag 19(2):314–329

    Article  Google Scholar 

  • Ragin CC (1987) The comparative method. Moving beyond qualitative and quantitative strategies. University of California Press, Berkeley

    Google Scholar 

  • Ragin CC (2000) Fuzzy-set social sciences. University of Chicago Press, Chicago

    Google Scholar 

  • Ragin CC (2006) Set relations in social research. Evaluating their consistency and coverage. Polit Anal 14(3):291–310

    Article  Google Scholar 

  • Ragin CC (2008) Redesigning social inquiry. Fuzzy sets and beyond. University of Chicago Press, Chicago

    Book  Google Scholar 

  • Ragin C, Davey S (2009) fs/QCA, Version 2.5. University of Arizony, Tucson

  • Ragin CC, Fiss PC (2008) Net effects analysis versus configurational analysis: an empirical demonstration. In: Ragin CC (ed) Redesigning social inquiry: Fuzzy sets and beyond. University of Chicago Press, Chicago, pp 190–212

    Chapter  Google Scholar 

  • Ragin CC, Strand SI (2008) Using qualitative comparative analysis to study causal order. Comment on Caren and Panofsky (2005). Sociol Methods Res 36(4):431–441

    Article  Google Scholar 

  • Rihoux B, Ragin C (2009) Configurational comparative methods. Qualitative comparative analysis (QCA) and related techniques. Sage, Thousand Oaks

    Book  Google Scholar 

  • Schmitt M, Sadowski D (2003) A cost-minimization approach to the international transfer of HRM/IR practices. Anglo-Saxon multinationals in the Federal Republic of Germany. Int J Hum Resour Manag 14(3):409–430

    Article  Google Scholar 

  • Schneider MR, Paunescu M (2012) Changing varieties of capitalism and revealed comparative advantages from 1990 to 2005: a test of the Hall and Soskice claims. Socio-Econ Rev 10(4):731–753

    Article  Google Scholar 

  • Schneider CQ, Wagemann C (2012) Set-theoretic methods for the social sciences: a guide to qualitative comparative analysis. Cambridge University Press, Cambridge

    Book  Google Scholar 

  • Schneider MR, Schulze-Bentrop C, Paunescu M (2010) ‘Mapping the institutional capital of high-tech firms. A fuzzy-set analysis of capitalist variety and export performance. J Int Bus Stud 41:246–266

    Article  Google Scholar 

  • Schulze-Bentrop C (2013) Qualitative comparative analysis (QCA) and configurational thinking in management studies. PL Academic Research, Frankfurt

    Book  Google Scholar 

  • Taylor MZ (2004) Empirical evidence against varieties of capitalism’s theory of technological innovation. Int Organ 58(Summer):601–631

    Google Scholar 

  • Teuber S (2012) The effect of vocational education and labor market institutions on personnel and organizational strategies—an international comparison. e-Diss, Zürich

  • Valverde M, Tregaskis O, Brewster C (2000) Labor flexibility and firm performance. Int Adv Econ Res 6(4):649–661

    Article  Google Scholar 

  • Wilkens U, Ruiner C, Küpper M (2013) Flexible arrangements with the highly qualified workforce: antecedents and effects of different contract policies in knowledge-intensive firms. J Bus Econ 83(8):837–861

    Article  Google Scholar 

  • Witcher BJ, Chau VS (2012) Varieties of capitalism and strategic management: managing performance in multinationals after the global financial crisis. Br J Manag 23:S58

    Article  Google Scholar 

  • Witt MA, Lewin AY (2007) Outword foreign direct investment as escape response to home country institutional constraints. J Int Bus Stud 38(4):579–594

    Article  Google Scholar 

  • Zhou H, Dekker R, Kleinknecht A (2011) Flexible labor and innovation performance: evidence from longitudinal firm-level data. Ind Corp Change 20(3):941–968

    Article  Google Scholar 

Download references

Acknowledgments

This study was funded by research grants from the German National Science Foundation and the Swiss National Science Foundation; Silvia Teuber also received a mobility grant of the Swiss National Science Foundation for a research stay at Harvard University and was partly funded by the Swiss Leading House on Economics of Education, Firm Behavior and Training Policies.

Author information

Authors and Affiliations

  1. Department of Business Administration, University of Zurich, Plattenstrasse 14, 8032, Zurich, Switzerland

    Uschi Backes-Gellner & Silvia Teuber

  2. Department of Human Resource Management and Organization, University of Tuebingen, Nauklerstr. 47, 72074, Tübingen, Germany

    Marlies Kluike & Kerstin Pull

  3. Department of Business Administration and Economics, University of Paderborn, Warburger Str. 100, 33098, Paderborn, Germany

    Martin R. Schneider

Authors
  1. Uschi Backes-Gellner
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Marlies Kluike
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Kerstin Pull
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Martin R. Schneider
    View author publications

    You can also search for this author in PubMed Google Scholar

  5. Silvia Teuber
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Uschi Backes-Gellner.

Appendix

Appendix

See Tables 4, 5 and 6.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Backes-Gellner, U., Kluike, M., Pull, K. et al. Human resource management and radical innovation: a fuzzy-set QCA of US multinationals in Germany, Switzerland, and the UK. J Bus Econ 86, 751–772 (2016). https://doi.org/10.1007/s11573-015-0803-3

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11573-015-0803-3

Keywords

JEL Classification

Search

Navigation