Co-ordination and control of human resource management in multinational firms: the case of CASHCO

Much of the existing literature on the co-ordination and control of HRM in MNEs is written from the perspective of the 'view from above' that often ignores or plays down the politics and changing nature of the relationships between the centre and its subsidiaries. In this paper, we take a 'view from below' in exploring the politics of change in CASHCO, a well-known US MNE. The case study documents the motivation and ability of a UK subsidiary of CASHCO to respond positively to the centralized control of HRM through the near-constant transfer of US 'best practice' over a period of two decades. During this time, the UK subsidiary transformed itself from a loss-making, resource-dependent manufacturer to one that is a world leader in its particular field. In doing so, it had much less incentive to follow the lead of its less successful US headquarters and responded accordingly to ethnocentric control from the US through a range of political strategems. We conclude, first, that different strategies of HRM control used by corporate headquarters of MNEs will work effectively only when the assumptions underlying these strategies reflect the history, context and power base of particular subsidiaries. Second, we conclude that the effectiveness of control strategies will be influenced significantly by the incentive and ability of subsidiary managers to comply with centralized control. Finally, the case has some practical lessons for US managers who seek to transfer best practice to overseas subsidiaries, especially in the form of radical programmes of corporate culture change.