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Convergence, crossvergence, divergence : the Influence of institutional pressures on the transfer of HR practices : the case of Coulisse Inc. Miami

Alink, J. (2013) Convergence, crossvergence, divergence : the Influence of institutional pressures on the transfer of HR practices : the case of Coulisse Inc. Miami.

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Abstract:Aim of the study: Transferring HR practices to subsidiaries in foreign countries is becoming popular for researchers and with the increasing importance of MNCs in the whole world economy, literature on this phenomenon has also increased. This research contributes to the existing debate on converge vs. divergence, and then more specifically to the standardization vs. localization debate in international business. The research involves a single case study carried out in the company Coulisse B.V., and indentifies how the parent company and their subsidiary in Florida are interpreting and dealing with four HR practices (recruitment and selection procedures; performance management; reward and compensation; termination and retirement). Based on existing literature, this investigating contributes to the debate on transferring HR practices to overseas subsidiaries and the influence of institutional pillars, which are defined by Scott (2001) as regulatory, normative, and cultural-cognitive pressures. In order to accomplish the purpose of the study, the following research question is developed: "What are the institutional pressures that shape HR practices transfer from a Dutch multinational headquarter, to a U.S. subsidiary?". It should provide an understanding, in how HR decision making of the headquarter in the Netherlands (Europe), will influence HR practices in Florida (United States), and next if these practices therefore can be converged (standardized) or should be diverged (localized) with the foreign country, or if a mix of both is the most obvious choice (crossvergence). Methodology: The study can be classified as a descriptive research, and is elaborating on the transferability of HR practices in which two different situations will be compared. Data is collected by conducting e-mail interviews with employees of both the headquarter and the subsidiary in Florida, followed by some personal interviews with employees at the headquarter. They are asked to interpret how the mentioned HR practices are developed and used in their establishment. It aims to gain insights in how the institutional pressures of Scott (2001) are affecting the transfer of HR practices globally. The focus is primarily on comparing both 'situations' in the Netherlands and Florida and investigate if there are conflicting pressures which have an influence on possible transfer. Findings: Regulations concerning hiring an employee in Florida are much less-restricted than in the Netherlands. Also the whole process of selecting the right candidate differs, since in the Netherlands people expect to be treat much more neatly than in Florida. In case of poor performance and dismissal, in the Netherlands, the company should comply with regulations while in Florida, hiring and also dismissing employees is much more easy because of so known "At-Will" contracts. The Hispanic culture has a major influence in Florida. People are tending to react sensitive while conceiving criticism, so during performance appraisal, the attitude of the employer should adapt to local standards. The differences in wages between the Netherlands and Florida are varying strongly. Standardizing would mean that the company will overcompensate employees in one of the countries or under compensate in the other. Besides, the structure of wages is differing in both locations, since in the U.S.A. (including Florida) for sales employees, the part of the compensation that is variable (not fixed) is much more higher than in European countries. Dutch employees are accustomed to secondary benefits such as business trips etc.. However, in Florida, they are not as much attracted by these types of benefits while employees over there are much more expecting to get rewarded for their performance in money. The strong culture of social security by law is much higher in the Netherlands, since the majority of employees build their supplementary pension via the employer. This in contrast with Florida where employees decide by their own whether they want to safe for their retirement.
Item Type:Essay (Master)
Coulisse Inc., Miami, United States
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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