Host country specific factors and the transfer of human resource management practices in multinational companies

This paper concerns the transfer of human resource management (HRM) practices by multinational companies (MNCs) to their overseas subsidiaries. It investigates how factors originating from the cultural and institutional framework of the host country impact on this transfer. Using data collected from MNC subsidiaries located in Greece and local Greek firms, we examine the degree to which several HRM practices in MNC subsidiaries resemble local practices. Our empirical findings indicate that subsidiaries have adapted their HRM practices to a considerable extent, although some practices are more localised than others. Specifically, practices that do not fit well with Greek culture or are in contrast to employee regulations show a low level of transfer. On the other hand, our interviews revealed that significant cultural changes are underway and that the institutional environment is gradually getting more relaxed, leaving more room to manoeuvre for MNCs.