The Impact of Host Country Effects on Transferring HRM Practices from Western Headquarters to Ukrainian Subsidiaries
The emerging markets of post-USSR countries have
attracted Western multinational companies; however, weak
institutions and unstable host country environments have hindered the
implementation of successful management practices. The Ukrainian
market, in light of recent events, is particularly interesting to study
for its compatibility with Western businesses. This paper focuses on
factors that can facilitate or inhibit the transfer of human resource
management practices from Western headquarters to Ukrainian
subsidiaries. To explain the national context’s effects better, a
business systems approach has been applied to a qualitative study of
16 wholly owned Western subsidiaries, dissecting the reasons for a
weak integration of Western practices in Ukraine. Results show that
underdeveloped institutions have forced companies to develop
additional practices that compensate for national weaknesses, as well
as to adjust to a constantly changing environment. Flexibility and
local responsiveness were observed as vital for success in Ukraine.
[1] Almond, P., Edwards, T., Colling, T., Ferner, A., Gunnigle, P., Muller-
Camen, M., … Wachter H. (2005). Unraveling home and host country
effects: An investigation of the HR policies of an American
multinational in four European countries. Industrial Relations, 44(2),
276–306.
[2] Amable, B. (2003). The diversity of modern capitalism. New York:
Oxford University Press.
[3] Bjorkman, I. &Ehrnrooth, M. (2000). HRM in western subsidiaries in
Russia and Poland. Journal of East-West Business, 5(3), 63–79.
[4] Bjorkman, I., &Lervik, J. (2007). Transferring HR practices within
multinational corporations. Human Resource Management Journal,
17(4), 320–335.
[5] Boguts’ka, D. (2010). Таємницікорпоративноїкультури (Secrets of
corporate culture). Online journal Innovations.com.ua, Retrieved from
http://innovations.com.ua/uk/articles/4/22/1625 (in Ukrainian).
[6] Briscoe, D., Schuler, R., &Tarique, I. (2012). International human
resource management. policies and practices for multinational
enterprises (4 ed.). Oxford: Routledge.
[7] Croucher, R. (2000). Trade union education and union strategy:
Renewing agricultural unions in Moldova, the Ukraine and Russia.
South-East Europe Review S., 157–170.
[8] Degtyareva, S. V. (2005). К
вопросуобинституционныхосновахрусскойэкономики (Regarding
the question about institutional framework of Russian economy).
Naykoviprazi Don NTU. Seria Ekonomichna, 89–91. (in Russian).
[9] DiMaggio, P., & Powell, W. (1991). The new institutionalism in
organizational analysis. Chicago: University of Chicago Press.
[10] Edwards, T., &Ferner, A. (2002). The renewed American challenge: A
review of employment practice in US multinationals. Industrial
Relations Journal, 33(2), 94–111.
[11] Ferner, A. (1997). Country of origin effects and HRM in multinational
companies. Human Resource Management Journal, 7(1), 19–37.
[12] Ferner, A., & Edwards, T. (1995). Power and the diffusion of
organizational change within multinational enterprises. European
Journal of Industrial Relations, 1(2), 229–257.
[13] Festing, M., &Sahakiants, I. (2010). Compensation practices in Central
and Eastern European EU member states – an analytical framework
based on institutional prospective, path dependencies, and efficiency
considerations. Thunderbird International Business Review, 52(3), 203–
216.
[14] Gaidai, T. V. (2006). Теоретико-
методологическиеосновыисследованияэкономическийментальности
: институциональныйаспект (Theoretic-methodological approach to
study the economic mentality: institutional aspect”. Rossia: variant
instituzional’nogorazvitiya. Paper presented at the Internet conference,
Moscow. Retrieved from
http://www.mirrossii.ru/db/msg/295702/print.html (in Russian).
[15] Gvozdiov, S. (2010). Яквиграти "прем’єр-лігу":
факториуспіхуукраїнськихкомпаній-лідерів (How to win “prime
league”: Success factors of Ukrainian leading companies). Retrieved
from http://innovations.com.ua/ua/articles/14182/temp (in Ukrainian).
[16] Hall, P. A., & Soskice, D. (2001). An introduction to varieties of
capitalism. In P. A. Hall & D. Soskice (eds.), Varieties of capitalism:
The institutional foundations of comparative advantage (pp. 1–70).
Oxford: Oxford University Press. [17] Hayonz, N., &Lushnycky, A. (2005). Ukraine at a crossroads. Bern:
Peter Lang AG.
[18] Knell, M., &Srholec, M. (2007). Diverging path ways in Central and
Eastern Europe. In D. Lane & M. Myant, Varieties of capitalism in postcommunist
countries. London: Palgrave Macmillan.
[19] Kostova, T. (1999). Transnational transfer of strategic organizational
practices: A contextual perspective. Academy of Management Review,
24(2), 308–324.
[20] Lane, D., &Myant, M. (2007). Varieties of capitalism in post-communist
countries. London: Palgrave Macmillan.
[21] Lesyk, O. I. (2005). How to succeed in knowledge transfer: Case study
of Scandinavian alliance in Ukraine (Unpublished academic
dissertation). University of Helsinki, Helsinki.
[22] Meyer, W., & Rowan, B. (1977). Institutionalized organizations: Formal
structure as myth and ceremony. American Journal of Sociology, 83(2),
340–363.
[23] Mitry, D. J., & Bradley, T. (1997). Managerial leadership and cultural
differences of Eastern European economies. San Diego, CA: National
University School of Business and Technology.
[24] Mollering, G., &Stahe, F. (2007). German-Ukrainian business
relationship. Trust development in the face of institutional uncertainty
and cultural differences. Discussion paper 07/11, MPIfG, Cologne.
[25] Mykhnenko, V. (2005). What type of capitalism in post-communist
Europe? Les Actes du GERPISA, 39, 83–112.
[26] Mykhnenko, V. (2007). Poland and Ukraine: Institutional structures and
economic performance. In D. Lane & M. Myant (eds.), Varieties of
capitalism in post-communist countries. London: Palgrave Macmillan.
[27] Myloni, B., Harzing, A., &Mirza, H. (2004). Host country specific
factors and the transfer of human resource management practices in
multinational companies. International Journal of Manpower, 25(6),
518–534.
[28] Nureev, R. M. (2000). Transformaziyaeconomicheskihinstitutov v
postsovetskoy Rossii. Moskovskyobshestvenniynaychniy fond. Vipysk
14. (in Russian).
[29] Riabchuk, M. (2009). Agony of a ‘blackmail state’: Rise and (possible)
fall of post-Soviet semi-authoritarian regimes. In A. Lushnycky& M.
Riabchuk (eds.), Ukraine on its meandering path between east and west.
Bern: Peter Lang.
[30] Schwartz, G., & McCann, L. (2007). Overlapping effects: Path
dependence and path generation in management and organization in
Russia, Human Relations. 60(10), 1525–1550.
[31] Shmidt, A. (2009). Number of HR employees in Ukrainian companies.
Journal ‘Prazya I Zakon’. Retrieved from
http://www.hrc.com.ua/content/articles/index.php?article=1297 (in
Russian).
[32] Standing, G., &Zsoldos, L. (2000). Worker insecurities in the Ukrainian
industry: The 1999 ULFS. Geneva: International Labor Organization,
International Labor Office.
[33] State Statistics Service of Ukraine. Direct foreign investment (equity
capital) from countries of the world to Ukraine economy. Retrieved
from: http://www.ukrstat.gov.ua
[34] Tempel, A., Wachter, H., &Walgenbach, P. (2006). The comparative
institutional approach to human resource management in multinational
companies. In M. Geppert& M. Mayer (eds.), Global, national and local
practices in multinational companies. London: Palgrave Macmillan.
[35] Wachter, H., Peters, R., Tempel, A., & Muller-Camen, M. (2003). The
‘country of origin effects’ in the cross-national management of human
resources. Mering, Germany: Reiner HamppVerlag.
[36] Whitley, R. (1999). Divergent capitalisms. The social structuring and
change of business systems. Oxford: Oxford University Press.
[37] Zaikovskaya, I. (2009). Ukraine: The continuing deficit of talented topmanagers.
Search & Development. Retrieved from
http://www.hrc.com.ua/content/articles/index.php?article=1891 (in
Russian).
[1] Almond, P., Edwards, T., Colling, T., Ferner, A., Gunnigle, P., Muller-
Camen, M., … Wachter H. (2005). Unraveling home and host country
effects: An investigation of the HR policies of an American
multinational in four European countries. Industrial Relations, 44(2),
276–306.
[2] Amable, B. (2003). The diversity of modern capitalism. New York:
Oxford University Press.
[3] Bjorkman, I. &Ehrnrooth, M. (2000). HRM in western subsidiaries in
Russia and Poland. Journal of East-West Business, 5(3), 63–79.
[4] Bjorkman, I., &Lervik, J. (2007). Transferring HR practices within
multinational corporations. Human Resource Management Journal,
17(4), 320–335.
[5] Boguts’ka, D. (2010). Таємницікорпоративноїкультури (Secrets of
corporate culture). Online journal Innovations.com.ua, Retrieved from
http://innovations.com.ua/uk/articles/4/22/1625 (in Ukrainian).
[6] Briscoe, D., Schuler, R., &Tarique, I. (2012). International human
resource management. policies and practices for multinational
enterprises (4 ed.). Oxford: Routledge.
[7] Croucher, R. (2000). Trade union education and union strategy:
Renewing agricultural unions in Moldova, the Ukraine and Russia.
South-East Europe Review S., 157–170.
[8] Degtyareva, S. V. (2005). К
вопросуобинституционныхосновахрусскойэкономики (Regarding
the question about institutional framework of Russian economy).
Naykoviprazi Don NTU. Seria Ekonomichna, 89–91. (in Russian).
[9] DiMaggio, P., & Powell, W. (1991). The new institutionalism in
organizational analysis. Chicago: University of Chicago Press.
[10] Edwards, T., &Ferner, A. (2002). The renewed American challenge: A
review of employment practice in US multinationals. Industrial
Relations Journal, 33(2), 94–111.
[11] Ferner, A. (1997). Country of origin effects and HRM in multinational
companies. Human Resource Management Journal, 7(1), 19–37.
[12] Ferner, A., & Edwards, T. (1995). Power and the diffusion of
organizational change within multinational enterprises. European
Journal of Industrial Relations, 1(2), 229–257.
[13] Festing, M., &Sahakiants, I. (2010). Compensation practices in Central
and Eastern European EU member states – an analytical framework
based on institutional prospective, path dependencies, and efficiency
considerations. Thunderbird International Business Review, 52(3), 203–
216.
[14] Gaidai, T. V. (2006). Теоретико-
методологическиеосновыисследованияэкономическийментальности
: институциональныйаспект (Theoretic-methodological approach to
study the economic mentality: institutional aspect”. Rossia: variant
instituzional’nogorazvitiya. Paper presented at the Internet conference,
Moscow. Retrieved from
http://www.mirrossii.ru/db/msg/295702/print.html (in Russian).
[15] Gvozdiov, S. (2010). Яквиграти "прем’єр-лігу":
факториуспіхуукраїнськихкомпаній-лідерів (How to win “prime
league”: Success factors of Ukrainian leading companies). Retrieved
from http://innovations.com.ua/ua/articles/14182/temp (in Ukrainian).
[16] Hall, P. A., & Soskice, D. (2001). An introduction to varieties of
capitalism. In P. A. Hall & D. Soskice (eds.), Varieties of capitalism:
The institutional foundations of comparative advantage (pp. 1–70).
Oxford: Oxford University Press. [17] Hayonz, N., &Lushnycky, A. (2005). Ukraine at a crossroads. Bern:
Peter Lang AG.
[18] Knell, M., &Srholec, M. (2007). Diverging path ways in Central and
Eastern Europe. In D. Lane & M. Myant, Varieties of capitalism in postcommunist
countries. London: Palgrave Macmillan.
[19] Kostova, T. (1999). Transnational transfer of strategic organizational
practices: A contextual perspective. Academy of Management Review,
24(2), 308–324.
[20] Lane, D., &Myant, M. (2007). Varieties of capitalism in post-communist
countries. London: Palgrave Macmillan.
[21] Lesyk, O. I. (2005). How to succeed in knowledge transfer: Case study
of Scandinavian alliance in Ukraine (Unpublished academic
dissertation). University of Helsinki, Helsinki.
[22] Meyer, W., & Rowan, B. (1977). Institutionalized organizations: Formal
structure as myth and ceremony. American Journal of Sociology, 83(2),
340–363.
[23] Mitry, D. J., & Bradley, T. (1997). Managerial leadership and cultural
differences of Eastern European economies. San Diego, CA: National
University School of Business and Technology.
[24] Mollering, G., &Stahe, F. (2007). German-Ukrainian business
relationship. Trust development in the face of institutional uncertainty
and cultural differences. Discussion paper 07/11, MPIfG, Cologne.
[25] Mykhnenko, V. (2005). What type of capitalism in post-communist
Europe? Les Actes du GERPISA, 39, 83–112.
[26] Mykhnenko, V. (2007). Poland and Ukraine: Institutional structures and
economic performance. In D. Lane & M. Myant (eds.), Varieties of
capitalism in post-communist countries. London: Palgrave Macmillan.
[27] Myloni, B., Harzing, A., &Mirza, H. (2004). Host country specific
factors and the transfer of human resource management practices in
multinational companies. International Journal of Manpower, 25(6),
518–534.
[28] Nureev, R. M. (2000). Transformaziyaeconomicheskihinstitutov v
postsovetskoy Rossii. Moskovskyobshestvenniynaychniy fond. Vipysk
14. (in Russian).
[29] Riabchuk, M. (2009). Agony of a ‘blackmail state’: Rise and (possible)
fall of post-Soviet semi-authoritarian regimes. In A. Lushnycky& M.
Riabchuk (eds.), Ukraine on its meandering path between east and west.
Bern: Peter Lang.
[30] Schwartz, G., & McCann, L. (2007). Overlapping effects: Path
dependence and path generation in management and organization in
Russia, Human Relations. 60(10), 1525–1550.
[31] Shmidt, A. (2009). Number of HR employees in Ukrainian companies.
Journal ‘Prazya I Zakon’. Retrieved from
http://www.hrc.com.ua/content/articles/index.php?article=1297 (in
Russian).
[32] Standing, G., &Zsoldos, L. (2000). Worker insecurities in the Ukrainian
industry: The 1999 ULFS. Geneva: International Labor Organization,
International Labor Office.
[33] State Statistics Service of Ukraine. Direct foreign investment (equity
capital) from countries of the world to Ukraine economy. Retrieved
from: http://www.ukrstat.gov.ua
[34] Tempel, A., Wachter, H., &Walgenbach, P. (2006). The comparative
institutional approach to human resource management in multinational
companies. In M. Geppert& M. Mayer (eds.), Global, national and local
practices in multinational companies. London: Palgrave Macmillan.
[35] Wachter, H., Peters, R., Tempel, A., & Muller-Camen, M. (2003). The
‘country of origin effects’ in the cross-national management of human
resources. Mering, Germany: Reiner HamppVerlag.
[36] Whitley, R. (1999). Divergent capitalisms. The social structuring and
change of business systems. Oxford: Oxford University Press.
[37] Zaikovskaya, I. (2009). Ukraine: The continuing deficit of talented topmanagers.
Search & Development. Retrieved from
http://www.hrc.com.ua/content/articles/index.php?article=1891 (in
Russian).
@article{"International Journal of Business, Human and Social Sciences:69856", author = "O. A. Novitskaya", title = "The Impact of Host Country Effects on Transferring HRM Practices from Western Headquarters to Ukrainian Subsidiaries", abstract = "The emerging markets of post-USSR countries have
attracted Western multinational companies; however, weak
institutions and unstable host country environments have hindered the
implementation of successful management practices. The Ukrainian
market, in light of recent events, is particularly interesting to study
for its compatibility with Western businesses. This paper focuses on
factors that can facilitate or inhibit the transfer of human resource
management practices from Western headquarters to Ukrainian
subsidiaries. To explain the national context’s effects better, a
business systems approach has been applied to a qualitative study of
16 wholly owned Western subsidiaries, dissecting the reasons for a
weak integration of Western practices in Ukraine. Results show that
underdeveloped institutions have forced companies to develop
additional practices that compensate for national weaknesses, as well
as to adjust to a constantly changing environment. Flexibility and
local responsiveness were observed as vital for success in Ukraine.", keywords = "Business system, HR practices, human resource
management, multinational companies, Ukraine.", volume = "9", number = "5", pages = "1514-9", }
