Multinationals and National Business Systems: A ‘Power and Institutions’ Perspective

Abstract

Abstract This chapter presents a conceptual framework for understanding the cross-national transfer of human resource management and employment relations policies in US multinationals. The framework draws on institutionalist theory, arguing that multinationals’ embeddedness within the institutions of their parent-country business system influences how these firms operate abroad. However, weaknesses in current strands of institutionalism need to be addressed. In particular, existing theory has tended to neglect questions of power. The chapter considers how institutional and power perspectives may be integrated. It focuses on the interaction between power and institutions at multiple levels, notably at the organizational level of ‘micropolitics’ within multinationals, and at the macro-level of nation states. The cross-national transfer of HR policies and practices within multinationals is seen as the movement of practices across institutional domains by actors with divergent interests in the transfer, and with differential power resources with which to effect or inhibit it.

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