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RES-000-23-0305

Research Report Employment Practices of Multinational Companies in Organisational

Context: A large-scale survey in the UK

Paul Edwards, Tony Edwards, Anthony Ferner, Paul Marginson and Olga Tregaskis

Background The activities of multinational companies (MNCs) are at the heart of Britain’s internationally open economy. MNCs have long been well-established in manufacturing, but in recent years they have emerged as dominant players in the private service sector and have become increasingly involved in the provision of public services. The UK is second only to the USA in terms of stocks of both inward and outward investment. As a result MNCs are significant employers in Britain; 18% of the workforce in the manufacturing sector are employed by overseas-owned companies, with many more employed in the domestic operations of British-owned multinationals. Multinationals therefore have a crucial role in shaping employment practice in the UK, a role accentuated by the influence that they exert on their suppliers.

Yet despite a large number of studies, there has been no authoritative picture of the ways in which MNCs in Britain manage their employees. Previous survey research has been partial in important respects (see Edwards, Tregaskis et al., 2007 for details). Some surveys have been based on very small numbers. Others have covered only restricted groups of MNCs population, for example those of particular nationalities. A third group has drawn on broader surveys of firms not primarily designed to investigate the activities of MNCs. In addition, few studies of the first and second types have provided a satisfactory account of how the relevant population listing was constructed and of whether and how listings were verified. The experience of the present project, in which existing population listings were found to be seriously inaccurate, suggests that the failure to check listings is a major weakness of most earlier studies.

Although there is an extensive case-study literature on the structuring and organisation of MNCs, Collinson and Rugman (2005) demonstrate that these are largely based on studies of a relatively small group of large, highly internationalised firms, predominantly active in manufacturing and disproportionately American in origin. It is unclear how far the resulting findings might hold for the much larger population of smaller as well as large-sized multinationals, the growing number in services, or those based in Europe and east Asia.

The present project is the first study of employment practice in MNCs in the UK to be based on a representative sample of a comprehensive population of all foreign- and UK-owned MNCs that meet a minimum size threshold.

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To cite this output: Ferner, Anthony et al (2007). Employment Practices of Multinational Companies (MNCs) in Organisational Context: A Large-scale Survey: Full Research Report ESRC End of Award Report, RES-000-23-0305. Swindon: ESRC

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ObjectivesThe objectives of the project were:

1. To carry out a survey of MNCs operating in the UK, in order to provide an accurate picture of the organisational and employment practice of MNCs, and thereby to inform public debate.

2. To base the survey on a representative sample of UK-owned and overseas MNCs, drawn from a comprehensive and carefully validated listing of the population of MNCs operating in the UK.

3. To assess the policy of MNCs in relation to four core areas of employment practice:

� pay and employee performance management;

� training, development, and organisational learning;

� employee involvement and communication;

� employee collective representation and consultation;

and in relation to three distinct groupings of staff:

� managers

� the ‘largest occupational group’ (LOG)

� the ‘key group’ (KG), that is the group that the MNC defines as key to the competitive advantage of the UK subsidiary.

4. To analyse how employment practice varies according to key ‘structural factors’ such as MNCs’ country of origin, sector of operation, degree of international integration of operations, and international organisational structures including those of the HR function itself.

5. More generally, to contribute to theory; for example with regards to the relationship between forms of MNC organisation such as networks, ‘heterarchies’ and international ‘matrix’ structures, and employment practice; and in relation to the diffusion of ‘best practice’ across the organisation.

6. To provide a ‘template’ for possible comparable surveys in other countries in order to pave the way for a future exploration of employment practice in MNCs in comparative perspective, on the basis of a consolidated cross-national database.

These objectives have been met, fully or to a large degree. In summary:

� A comprehensive population listing was established and exhaustively checked. A screening survey, used to verify the population and to collect additional substantive information, received responses from 903 MNCs. The principal survey collected data on employment practice and organisational characteristics in 302 MNCs in the UK; this is substantially less than the achieved sample of 450 originally envisioned, for reasons explained below, but may be considered very satisfactory given the challenging circumstances.

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� The attempt to collect information on three specific employee groups was successful: in particular, the KG constituted a meaningful collectivity for most responding organisations.

� Subsequent analysis has provided an overview of the organisational characteristics and employment practices of a representative sample of both UK and foreign MNCs in the UK, and has been extensively fed back to respondents, practitioners, policy-makers and academics.

� Theoretical contributions are being made through a series of academic papers presented at conference and seminars. These papers are listed in the outputs.

� Work is well-advanced or completed in three other countries (Canada, Ireland, Spain), and underway in a fourth (Mexico), on parallel surveys modelled on the UK approach and using appropriately adapted versions of the original UK questionnaire. A consolidated dataset is currently under construction and will enable international comparative work of great theoretical and practical significance to be undertaken.

MethodsRealisation of the research required intensive collaboration between the five award holders, based at three institutions, and the research assistants employed at two of these. The researchers met on 18 occasions, for half a day or a day, over the award period. The professional survey firm GfK NOP was commissioned to undertake the field survey. From commissioning in February 2005 until delivery of the final dataset and technical report, in November 2006, there was weekly, and at times daily, liaison with the two GfK NOP executives responsible for the study.

There were three principal stages in the research design.

1. Population listing A population listing was meticulously constructed using a number of proprietary and publicly available databases, including FAME and AMADEUS.

The final listing contained two distinct sub-populations:

� all foreign-owned MNCs with at least 500 employees worldwide and 100 in their UK operations;

� all UK-owned MNCs with at least 500 employees worldwide and 100 in at least one other country.

Extensive problems were encountered with the publicly-available databases (for details, see Arrowsmith 2002). These included:

� striking disparities in the list of companies provided by different databases;

� disparities in information on the same company in different databases;

� limited availability of size data, particularly on UK firms’ overseas operations;

� ‘double-counting’ (the listing of multiple units or operating levels of the same company);

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� the prevalence of ‘flags of convenience’ listings (Bermuda, Virgin Islands, etc.), making it difficult to establish effective national ownership in terms of the location of the operational HQ.

The process of cross-checking the initial sources thus required supplementing them with a variety of other sources, including a range of databases, listings and company websites. The database was constructed in 2002 and updated using a variety of sources in 2004-5. The resulting population contained 3099 companies of which 2242 were overseas- owned, 681 were UK-owned and 176 were jointly UK- and overseas-owned.

2. Screening survey The resulting population was screened by GfK NOP, by means of a 10-minute telephone survey using CATI (computer-assisted telephone interviewing) to:

� check that each company met the above criteria;

� resolve incomplete information (e.g. clarifying nationality of ownership);

� establish a respondent for the main survey, namely an HR executive at the highest organisational level within the UK operations;

� collect additional data on such aspects as the sector of operation, the representation of HR on the main management board, and the reporting relationship between HR managers at national level and those at corporate HQ.

Some 950 firms screened out of the population as they did not meet the criteria, establishing a new upper limit for the population of 2148. In total, 903 usable responses were obtained, of which 737 were overseas and 166 were UK MNCs. Refusals and access failure occurred in over 1200 firms, meaning that the final magnitude of the population could not be established. Measuring the response rate as a proportion of the potentially eligible 2148 generates a figure of 43%; however, assuming the non-responses would have screened out at the same rate as those which responded, the ‘true’ response rate at the screening stage is estimated to be 54%.

3. Main survey The main survey sample was drawn from those companies which had indicated in the screener their willingness to participate in a more detailed survey. The fieldwork took place in the first half of 2006. The purpose was to investigate relationships between the structural and organisational characteristics of MNCs and their HR/ER policies and practices in a number of areas. Respondents were asked a series of questions about such issues as:

� international structure, e.g. the presence of international divisions, regions, international business functions or national subsidiaries;

� the organisation of the HR function internationally, e.g. the monitoring of HR in operating units, and the formation of international HR policies;

� the way in which the firms’ productive operations were integrated across borders;

� patterns of growth in the UK, e.g. through acquisitions, joint ventures, greenfield sites.

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On substantive HR issues, the questionnaire contained a series of questions on each of the four issues referred to above: pay and performance management; training, development and organisational learning; employee involvement and communication; employee representation and consultation.

The survey made a threefold distinction between different occupational groups: managers, the largest occupational group (LOG), and – an innovation in our survey – the key group (KG). This classification reflects growing evidence that different groups are managed differently in MNCs, and to correct the bias of much international business literature towards the management of managers. The introduction of the category of ‘key group’ was an attempt to explore whether a firm identifies a distinct group crucial to the firm’s core competences and if so how it is managed.

The detailed main survey questionnaire, which involved different variants for overseas and UK MNCs, was administered in face-to-face interviews with senior HR respondents by a team of GfK NOP interviewers. All interviewers underwent detailed briefing, including regionally-organised face-to-face sessions with members of the survey team. The questionnaire was rigorously tested during two main pilot stages. Interviewers used computer-assisted programmed interviewing (CAPI) which, like CATI, has the advantages of allowing real-time checks for consistency in responses, automatic routing of interviewers through complex filters, and immediate storage of data. On average questionnaires took 70 minutes to administer.

The telephone screening had established a valid population substantially lower than the original database population. In the light of this, the original target of 450 main stage responses proved unrealistic, and the survey company was requested to devote additional resources to achieving an acceptable level of response. This involved additional attempts to locate firms untraceable at the screener stage, and in particular to chase up companies in which only lower-level respondents had been available at the time of the screening. In view of the one-third reduction in the size of the population, the final achieved sample of 302 firms, comprising 258 overseas and 44 UK MNCs, may be regarded as highly acceptable, and represents a respectable 33% response rate in relation to the screener.1

Characteristics of the firms taking part in the two stages were compared, and there were slight discrepancies in sectoral profile. These were corrected for by using appropriate sectoral weights in the final dataset.

Ethical issues Particular ethical issues arose in connection with the use of an external survey organisation to conduct the survey. The company’s code of conduct prevented it from sharing data that would identify responses with particular companies. This could conceivably complicate future developments such as the use of ‘panel studies’ of a sub-group of firms across successive surveys. However, the survey company has provided assurances that the data will be retained in its archives in order to facilitate any such future work.

1 This shortfall in achieved responses compared with the initial proposal largely accounts for the budget underspend in relation to the survey element of the project, somewhat mitigated by the extra resources devoted to ‘working’ the smaller population harder.

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ResultsThe main survey provides the first detailed, representative portrait of HR/ER in MNCs operating in the UK. A panoramic descriptive analysis has been undertaken as part of the process of providing feedback to responding companies and, subsequently, to policy-makers and academics. The report of this analysis (Edwards, P. et al., 2007) is one of the nominated outputs. It shows that:

� MNCs in Britain are a heterogeneous group, divided roughly equally between manufacturing and services. They originate from North America, Europe and to a lesser extent Asia – though US firms predominate, comprising 40% of the sample. And they vary greatly in their worldwide and UK employment size.

� Relatively few MNCs have a straightforward hierarchical relationship between HQ and operating units. Most have complex, multi-layered corporate structures internationally.

� In relation to strategy, the diversified conglomerate MNC with few linkages between sites seems to be quite rare (only 5% of the total). More usually there is a high degree of commonality in MNCs’ products and services across sites and there are substantial trading relationships between units.

� In a significant proportion of firms the UK operations appear to play a ‘strategic’ role in that they have international responsibility for products or services (in over half of foreign-owned firms) or generate significant expertise in R&D.

� Around 80% of firms were able to identify a key group as a meaningful category, and there is evidence that it is treated distinctively in relation to e.g. pay and performance and training and development programmes

� The international HR function is often highly structured, with many mechanisms for the dissemination and monitoring of policy and practice. For example, around half of firms use international electronic Human Resource Information Systems; around half have an international HR policy committee; nearly two-thirds bring together HR managers across countries on a systematic basis; nearly one-third use international ‘shared service centres’ in HR; and three-fifths of firms have a worldwide philosophy on managing employees.

� With regards to pay and performance, a picture emerges of firms paying their managers and key group above the median, and making widespread use of formal performance appraisal and variable pay schemes. Between a fifth and a third of firms use share-ownership, stock option or profit-sharing schemes, though a substantial minority have no such schemes at all.

� Firms spend around 4% of their annual pay bill on training and development. Most have formal succession planning systems and programmes for ‘high potentials’; in the vast majority of cases, schemes are global in scope. Nearly 40% of firms have schemes specifically for the key group.

� Multiple mechanisms of employee communication and participation are near-universal. There is extensive learning about involvement practices from

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elsewhere in the MNC and also from outside it. The use of ‘bundles’ of high-performance involvement practices is also common.

� In relation to employee representation and consultation, almost half of firms recognise unions for the LOG in at least some sites. Non-union representation is found in around one-third and is becoming more common. A large majority of firms have representative-based consultation arrangements at the level of the UK operations and/or at site level, with a substantial recent growth in response to the UK’s Information and Consultation of Employees legislation.

� Finally, the data depict a pattern of international organisational learning in MNCs based on informal networks of managers, international project groups or task forces, and expatriate assignments; formal committees at international level are also important. There is extensive learning on HR issues from the UK subsidiary by units elsewhere in the worldwide company. Learning relates particularly to training and development, but is also present to some degree in the other substantive HR areas. The presence of international HR structures is strongly associated with learning and knowledge diffusion, suggesting that the HR function plays an important role in building the social capital of the MNC.

Bivariate analysis indicates that a number of factors are significantly associated with these HR characteristics in MNCs:

� There are clear differences between firms according to nationality of ownership. Nationality is important in all four substantive HR/ER areas. But it is also related to process and structure. For example, US firms are distinctive for the low discretion that they grant to subsidiaries, their disinclination to recognise trade unions, and their extensive use of international HR structures. US MNCs tend to be less distinctive in relation to concrete HR practice. Conversely, Japanese firms have less control over HR policy, fewer international HR structures, and are less likely to have policies on individualised pay and performance, formal management development or organisational learning. Overall the survey suggests that, while MNCs of different nationality may be converging in the use of specific HR/ER practices, there is much less convergence in the mechanisms whereby policy and practice are generated, disseminated and monitored.

� Sectoral differences between manufacturing and services are marked in the area of employee representation: for example, manufacturing operations are more likely to recognise unions, have greater union influence on management decision-making, and have a higher prevalence of European Works Councils (EWCs). They make more use of teams, problem-solving groups and cross-unit project teams or task forces, and they provide more information about the company to their workforce. Service sector firms are more likely to emphasise the individual assessment of employees (e.g. through variable pay) and to have performance appraisal.

� Worldwide and UK employment size exerts much less influence than might be expected. This suggests that there may be generic approaches to HR that do not depend on attaining a certain size, at least above the size thresholds specified in the study. However, there are some significant relationships. Thus worldwide size is related to the existence of international HR structures, to a

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more ‘ethnocentric’ HR philosophy, and to EWCs. A larger UK workforce is linked to the use of share schemes, the ‘reverse diffusion’ of practices, and a higher level of engagement with unions. Both worldwide and UK size are associated with the monitoring of HR, the presence of expatriates in the UK, and the use of organisational learning mechanisms.

� There is very little evidence of a ‘vintage’ effect, whereby the length of time that a subsidiary has been part of the MNC affects HR policy. One explanation may be that vintage works in opposing ways depending on the mode of entry. Greenfield sites are likely to experience considerable parental influence in their early years; conversely, in UK operations dominated by acquired ‘brownfield’ sites, with their own local management heritage, parent companies may take some time to establish formal systems of control and influence.

� International business structure has a considerable impact. The presence of intermediate international structures, such as region, international business division and global business function, particularly in matrix combinations, is significantly related to a variety of employment practices, notably in organisational learning and development and employee involvement. MNCs with matrix structures are more likely to have formalised international HR structures. Most notably, UK operations that are part of MNCs with international matrix structures have lower discretion over HR policy in most areas.

� Integration into the worldwide company was measured on four dimensions: these include the extent to which the UK operation either supplies to or receives inputs from other parts of the international firm, and the existence of a strategic role for the UK operations, for example through managing a product or service on behalf of the worldwide company. All four dimensions were found to have some impact on employment practices in the UK operations. For example, operations with a strategic role are more likely to use international project groups, and to have expatriates.

� Finally, international HR structures have a strong and consistent link with many aspects of employment practice especially pay and performance and organisational learning, though their influence on employee representation is much less noticeable. They are, moreover, associated with the diffusion of policies to other parts of the MNC, and with lower levels of local discretion. Some elements of HR structures are more influential than others. Particularly important are the existence of international HR committees, and the bringing together of HR managers from different countries.

In summary, structural characteristics are important in understanding variations in HR/ER, but the findings also reveal extensive diversity of practice; few HR/ER characteristics are strongly determined by structural features, so that there is considerable openness of choice for firms and managers. For instance, US firms as a group may be different from other firms, but they still show considerable internal variation. Relatedly, there is no single ‘model’ of the MNC. For example, succession planning is one of the most central practices in debates on international management, yet one-third of firms do not use it. The ability to identify such patterns reflects the comprehensive and representative nature of the survey.

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The insights from this overview have been used to develop a series of multivariate analyses, presented in conference papers (see below) over the past 18 months. Overall, these studies confirm the influence of the variables outlined above, but also make clear that different factors vary in importance according to the HR issue concerned. The following issues have been addressed.

Organisational learning. The factors influencing the capability of the multinational firm to engage in cross-national organisational learning have been explored in a paper by Tregaskis et al. (2007), which is one of the nominated outputs. Structural equation modelling is used to show how the effect of nationality on transnational learning capability is ‘mediated’ through the presence of factors such as international HR networks, global organisational learning policy and R&D capabilities. The mediation effects are distinct for MNCs of different national origin, as expected from comparative institutional theory.

Employee voice. There has been no systematic study of preferences of MNCs of a range of national origins concerning employee representation and ‘voice’ within the UK context. The survey data were analysed (Marginson et al., 2007) in order to explore associations between voice preferences – whether or not unions are recognised, the balance between direct and indirect forms of consultation – and structural features of MNCs. The investigation reveals a more complex picture than is often assumed. Whilst some country-of-origin influences are apparent, they are not as sharp as might be anticipated, though still enough to confirm the UK as a ‘permissive’ environment in relation to industrial relations practices. An innovative aspect of the analysis is that it differentiates MNCs headquartered in different parts of Europe, showing distinct behaviour, for example, of Nordic and German MNCs in relation to employee representation.

Discretion of UK operations on HR policy. A key issue in the relationship between subsidiaries and HQ within MNCs is the degree of discretion that local operations enjoy. Are they able to determine their own policies on different HR issues, or are they constrained by decisions made at higher organisational levels? A conference paper (Ferner et al. 2007) and subsequent multivariate analysis confirm the importance of the variables described above, particularly nationality and international HR structure. US ownership is significantly associated with lower discretion. Structural influences vary, however, across different aspects of HR.

Diffusion of HR practices from UK operations. A paper in progress explores the characteristics of MNCs in which HR practices are diffused from subsidiary operations to other parts of the worldwide firm. The key finding is that variation is explained by broad structural features to only a limited extent and that it is the structures of the international HR function and the size of the UK HR function that are major determinants of diffusion.

Finally, analysis of data from the screener survey also produced results that have been presented in two conference papers as well as in a feedback report to companies. In particular, Edwards, Marginson et al. (2006) explore the incidence of codes on corporate social responsibility among firms that responded to the telephone screener. Over 70% of MNCs have such a code. In the majority of cases, codes are international in scope and mandatory, at least in part. US firms are more likely to have such codes (but less likely to negotiate them with employee representatives), as are large firms and MNCs in manufacturing.

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ActivitiesPapers presented at academic conferences etc.

Papers listed here and under ‘outputs’ are available at: http://www2.warwick.ac.uk/fac/soc/wbs/projects/mncemployment/

T Edwards, P Marginson, P Edwards, A Ferner and O Tregaskis ‘Corporate social responsibility in multinational companies: management initiatives or negotiated agreements?’ SASE 2006 Annual Meeting, Trier, June 2006; IREC 2006 Conference,Ljubljana, August 2006.

O Tregaskis, P Edwards, T Edwards, A Ferner and P Marginson ‘Multinational companies: multi-level control and the role of the corporate HR function’ 22nd EGOS Colloquium, Bergen, July 2006.

T Edwards, O Tregaskis, P Edwards, A Ferner and P Marginson with Jane Arrowsmith, Duncan Adam, Michael Meyer and Ali Budjanovcanin ‘Charting the contours of multinational Britain’ Conference of the Association of International Business: UK Chapter, London, April 2007.

O Tregaskis, T Edwards, P Edwards, A Ferner and P Marginson ‘Local employees, networks and the diffusion of employment practices’ SASE 2007 Annual Meeting,Copenhagen, June 2007. Revised version to be presented at LERA 2008 Annual Meeting, New Orleans, January 2008.

A Ferner, P Edwards, T Edwards, P Marginson and O Tregaskis ‘The determinants of central control and subsidiary discretion in HRM and employment relations policies’ IIRA 8th European Congress, Manchester, September 2007.

P Marginson, P Edwards, T Edwards, A Ferner and O Tregaskis ‘Channels and coverage of employee voice in multinational companies operating in Britain’ IIRA 8th

European Congress, Manchester, September 2007.

P Edwards, ‘A successful ESRC grant application’: a case study of the project, presented to British Academy of Management workshops on applying for research grants; presentations made on 3 occasions, most recently Lancaster, October 2007.

O Tregaskis presented a seminar entitled ‘Sampling frames and theory in quantitative research: experiences from multinational organisational research’ at the ESRC seminar series: Advancing research in the business and management field Seminar no. 3 Programme, ‘Advancing theory in management research’, University of Sheffield Management School, 20th July 2007.

An overview of HR aspects of the findings was presented by T Edwards, A Ferner and O Tregaskis at a Leicester Business School seminar, De Montfort University, 17th

October 2007.

To facilitate the dissemination of the findings of the study, a project website was established and managed by the research assistant based at Warwick [http://www2.warwick.ac.uk/fac/soc/wbs/projects/mncemployment/].

Engagement with users of the research is addressed under Impacts below.

International network activity with research teams undertaking parallel surveys in four other countries is addressed under Future Research Priorities below.

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OutputsPublications, current and forthcoming, are:

Tony Edwards, Olga Tregaskis, Paul Edwards, Anthony Ferner, Paul Marginson with Jane Arrowsmith, Duncan Adam, Michael Meyer and Ali Budjanovcanin (2007) ‘Charting the contours of multinationals in Britain: methodological challenges arising in survey-based research’ jointly published in Leicester Business School Occasional Paper Series, no. 83, and Warwick Papers in Industrial Relations, no. 86.

PE, TE, AF, PM and OT with DA and MM (2006) Employment practices of multinational companies in organisational context: report of the screener survey June.

PE, TE, AF, PM and OT with DA and MM (2007) Employment practices of multinational companies in organisational context: report of the main survey January.

TE, PM, PE, AF, OT (2007) ‘Corporate social responsibility in multinational companies’ IILS Discussion Paper series (forthcoming).

Further papers presented at academic conferences, listed in Section 5, are currently being revised before submission to academic journals.

ImpactsNon-academic users of research have been engaged in the different phases of the research, including the design of the survey questionnaires, securing the high-level access within companies which administration of the survey required, dissemination and discussion of findings through different media, and supplementary analysis of the findings.

To assist with all of these issues, an Advisory Panel was established, comprising a senior CIPD official, two senior international HR managers (one current and one retired), and three leading academics with experience of surveying organisations. Advice and comments were sought from the Panel at different stages of the study.

Drafting of the survey questionnaires. Comments were elicited from the Panel on the draft questionnaires for the survey. The main survey questionnaire was also informally piloted by members of the research team with two senior HR contacts in multinationals in the UK. Only then were revised versions submitted to GfK NOP.

Facilitating access. CIPD provided a letter of support for the study for use by GfK NOP in negotiating access to senior HR executives for the face-to-face interviews undertaken in the main survey. Feedback indicated that this proved valuable in securing agreement to participate.

Dissemination and discussion of findings. A summary report of the main findings from the 10-minute telephone screening survey was distributed electronically to the management respondents at the 903 companies which participated. An extensive overview of the main findings, together with an executive summary, was compiled and distributed (as a CD-ROM with the executive summary also in hard copy) to the

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management respondents at the 302 companies which participated in the main survey six months in advance of its public release.

A one-day workshop was organised in June 2007 to present and discuss major themes from the report of the main survey. The 75 participants included senior HR managers, employers’ association officials, trade union officials, public policymakers, academics and representatives from the research teams undertaking parallel surveys in Canada, Ireland and Spain. The main discussants were Bob Scott, former European HR director of AT&T; Roger Jeary, Research Officer Unite-Amicus section; Prof. John Purcell and Prof. Heinz-Josef Tüselmann.

Following the feedback event, the main report was publicised in a joint press release by the three institutions and taken up in a report in the Daily Telegraph as well as in local and professional media.

Internationally, a revised version of the paper ‘Corporate social responsibility in multinational companies’ was presented by Tony Edwards at an International Institute for Labour Studies (IILS) workshop on ‘Cross-border Social Dialogue and Agreements: An Emerging Global Industrial Relations Framework?’ at the ILO in Geneva in December 2006. The paper will be published in the IILS’s discussion paper series.

In September 2006, four team members gave presentations drawing on early findings from the main survey at an ‘International Conference on Human Resource Management in Multinational Companies’ jointly organised at HEC Montréal by CRIMT, which houses the Canadian research team, and Canada’s Conference Board. The purpose of the conference was to launch the findings from the Canadian survey.

In June 2008, team members will present at a major dissemination event for the findings from the Irish survey being organised in Dublin in conjunction with the Labour Relations Commission.

Supplementary analysis. CIPD commissioned a supplementary analysis of the main survey findings, led by Tony Edwards, according to whether companies had been involved in recent mergers and/or acquisitions. The interim findings of this analysis were presented at CIPD’s International Forum on January 24th 2007 and published by the CIPD in April 2007 (see http://www.cipd.co.uk/NR/rdonlyres/B29DD027-C12E-4712-923D-5B3C44645D73/0/hrintmergacqu.pdf). The analysis of the survey data has been supplemented with case study research also undertaken by the team and an integrated, final report is being prepared for publication in early 2008.

Future Research Priorities In the initial application for financial support from the ESRC we raised the prospect of the survey in the UK serving as the basis for the formation of a network of research teams from different countries, each of which might replicate our study in their national contexts. As we put it in the proposal, the survey would form ‘a template promoting comparative exploration and the development of cross-national generalisation in the future’.

This goal has been realised. Research teams in Canada and Ireland have completed parallel surveys, while a Spanish survey is nearing completion and a Mexican team has secured funding to undertake the survey in the near future. An Australian team is

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also committed in principle and is searching for financial support. Three international meetings of these teams have taken place: in London in January 2005, Montréal in September 2006 and London in June 2007. Further meetings are planned for Dublin in June 2008 and Madrid in April 2009. The three meetings to date, which have involved five working days of intensive face-to-face discussions, have been supplemented by bilateral meetings between members of the different teams, for example at international conferences and in the course of overseas visits, and ongoing electronic liaison and exchange. The meetings and ongoing contact have served to align as far as practicable the design of the national surveys, research instruments and structure of the data sets. They have also provided opportunity for the presentation and discussion of findings, identification of promising lines of comparative analysis and, most recently, addressed the mechanics of integrating the datasets from the different national surveys. Future funding requirements, funding opportunities and the approach to dissemination of findings have also been the focus of recent deliberation. Thus this international collaboration has produced a unique dataset, the integration and analysis of which will – funding permitting – be carried out over the next two to three years.

Two themes stand out for collaborative research. First, while the British dataset allows comparison of MNCs of different nationalities in the same host country, a cross-national study permits investigation of the employment practices of MNCs from the same country of origin in different host environments. Do MNCs from one country exhibit similar employment practices across countries? If practices vary, does this reflect differences in the respective roles of their subsidiaries within a cross-country division of labour or is it primarily a reflection of a decentralised mode of operation under which local influences predominate?

The second theme is the dissemination of employment practices across borders by MNCs. One aspect of this concerns the ‘receptiveness’ of host systems to the introduction of innovative practices from other countries. It is widely thought that MNCs will have more leeway to introduce innovative practices in the more deregulated employment relations systems and be more constrained in those that are characterised by tight regulations in the labour market. Alternatively, countries with strong institutions may, by promoting adaptable and highly skilled workforces, be more receptive to innovative practices that are contingent on such workforce attributes. To what extent do various host systems facilitate or constrain the dissemination of practices by MNCs? What kinds of practice tend to be disseminated, and what explains differences between host countries? A further aspect of innovation across borders concerns the phenomenon of ‘reverse diffusion’, whereby MNCs identify practices operating in their foreign operations and subsequently transfer these to operations in other countries (including the home country). Previous findings suggest that differences in national institutions mean that actors in the subsidiaries are differentially placed to engage in this process and that the nationality of the parent firm also shapes the incidence of reverse diffusion. Is there variation in the extent to which subsidiaries across countries are the source of reverse diffusion? And are there patterns according to parent company nationality?

Alongside this comparative inquiry, the team will continue to analyse the UK data. This work will include addressing the theoretical issues identified in Objective 5 and explored to date in a preliminary way. The research suggests, for example, that networked and matrix forms of organisation are common. One unexplored question

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concerns the implications of such forms for the HR function and for the management of employees. Do they, for example, encourage organisational learning?

Finally, this is the first survey of its kind. It should establish a clear benchmark for future studies of how employment management in MNCs evolves over time.

References

Arrowsmith J. (2002) ‘MNCs Databases – Report on Data Gathering’ Available at: http://www2.warwick.ac.uk/fac/soc/wbs/projects/mncemployment/conference_papers/Collinson, S. and Rugman, A. (2005) ‘Case Selection Biases in Management Research: The Implications for International Business Studies’, Unpublished Paper.

Edwards, P., Edwards, T., Ferner, A. Marginson, P. and Tregaskis, O. (2007) Employment Practices of MNCs in Organisational Context: A Large-Scale Survey. Report of Main Survey. King’s College London/Leicester Business School/Warwick Business School.

Edwards, T., Marginson, P., Edwards, P., Ferner, A. and Tregaskis, O. (2006) ‘Corporate social responsibility in multinational companies: management initiatives or negotiated agreements?’ SASE 2006 Annual Meeting, Trier, June; IREC 2006 Conference, Ljubljana, August.

Edwards, T. Tregaskis, O., Edwards, P., Ferner, A. and Marginson, P. (2007) ‘Charting the Contours of Multinationals in Britain: Methodological challenges arising in survey-based research’. Warwick Papers in Industrial Relations/Leicester Business School Occasional Paper Series.

Ferner, A. Edwards, P., Edwards, T., Marginson, P. and Tregaskis, O. (2007) ‘The determinants of central control and subsidiary discretion in HRM and employment relations policies’ IIRA 8th European Congress, Manchester, September.

Marginson, P., Edwards, T. Edwards, T. Ferner, A. and Tregaskis, O. (2007) ‘Channels and coverage of employee voice in multinational companies operating in Britain’ IIRA 8th European Congress, Manchester, September.

Tregaskis, O, Edwards, T., Edwards, P., Ferner, A. and Marginson P. (2007) ‘Local employees, networks and the diffusion of employment practices’ SASE 2007 Annual Meeting, Copenhagen, June. Revised November 2007.

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