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Economic Interests, Company Values and Local Institutions: Shaping Soft Work Practices in a Multinational’s Subsidiaries in Western and Central Eastern Europe

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  • Marta Kahancova

Abstract

How can we understand similarities and differences between work practices in multinational companies’ (MNCs) subsidiaries in different host country conditions? The paper addresses this question by studying selected soft work practices, namely work systems and fringe benefits, in a Dutch MNC and its subsidiaries in Western and in Central Eastern Europe. Acknowledging institutional variation across the studied host countries, the paper explores how the MNC’s economic interest and company values interact with host-country institutions in shaping subsidiary work practices. It is argued that the MNC’s rational behaviour is contextualized in local socio-institutional conditions, as well as it is informed by company values. Interaction between the profit interest, values and institutions yields subsidiary work practices that are neither fully standardized across the subsidiaries, nor extensively adapted to local work standards. Instead, soft work practices are embedded in, but only selectively adapted to, host-country standards.

Suggested Citation

  • Marta Kahancova, 2010. "Economic Interests, Company Values and Local Institutions: Shaping Soft Work Practices in a Multinational’s Subsidiaries in Western and Central Eastern Europe," Industrielle Beziehungen - Zeitschrift fuer Arbeit, Organisation und Management - The German Journal of Industrial Relations, Rainer Hampp Verlag, vol. 17(2), pages 170-191.
  • Handle: RePEc:rai:indbez:doi_10.1688/1862-0035_indb_2010_02_kahancova
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    Keywords

    multinationals; soft work practices; work systems; company values; Central and Eastern Europe;

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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