does one shoe fit everyone? a comparison of … · a comparison of human resource management in...

Does One Shoe Fit Everyone?

A Comparison of HumanResource Management inRussia, China, and Finland

CARL E. FEY ANTONINA PAVLOVSKAYA NINGYU TANG

P eople are an organization’s most valu-able resource as we enter the 21st

century. As the role of human resource man-agement (HRM) is to help organizationsmake the most effective use possible of theirhuman resources, HRM is thus an increas-ingly important area to understand. Withoutgood HRM systems, leadership and mostfunctions of an organization will struggle,as scholars such as Bartlett and Ghoshal havepointed out in their recent Sloan ManagementReview article ‘‘Building Competitive Advan-tage Through People.’’ A considerable bodyof research indicates that investments inhuman resources tend to have positiveeffects on firm performance. Companies withmore extensive and comprehensive humanresource (HR) systems and practices (e.g., forrecruitment and selection, performanceappraisal, training and development, com-pany-internal communication, performance-based rewards, and career management) arelikely to have employees that are more com-petent, better motivated and committed,more empowered and involved, and moreinnovative and flexible.

However, HRM practices may not beuniversally applicable. Both executives andinternational management scholars are wres-

tling with the question of the extent to whicha firm’s practices for people managementshould be modified across countries. Forinstance, should a company implement thesame HRM practices in Russia as in Finland?The localization stream in the literatureadvanced by scholars such as Rowley andBenson asserts that policies and practicesneed to be adapted to each local context.Other scholars, such as Pfeffer, argue thatone set of practices for people managementworks in most situations, and that stan-dardization is important to ensure that amultinational corporation (MNC) functionefficiently and preserve its identity. Further-more, global standardization of HRM is oneway in which a MNC may attempt to controlthe ways in which a foreign subsidiary oper-ates. The above discussion builds on thelong-standing debate on overall strategybetween the need for MNCs to pursue global‘‘integration’’ or ‘‘standardization’’ versuslocal ‘‘responsiveness’’ or ‘‘localization.’’This tradeoff is particularly well articulatedby Doz, Bartlett, and Prahalad.

Scholars such as Taylor, Beechler, andNapier, however, have argued that MNCssometimes may have an HRM strategy thatblends global standardization with local

Organizational Dynamics, Vol. 33, No. 1, pp. 79–97, 2004 ISSN 0090-2616/$ – see frontmatter� 2004 Elsevier Inc. All rights reserved. doi:10.1016/j.orgdyn.2003.11.006www.organizational-dynamics.com

Acknowledgments: The authors would like to thank the Swedish Research Council forproviding funding for this project, Marina Libo for research assistance, and Ingmar Bjorkman

for his comments on and help with this paper.

79

responsiveness. Taking this a step further, itmay even be beneficial for a firm to standar-dize different HRM practices to a differentdegree around the world. However, mostpast work has focused only on the overalllevel to which practices are standardized.Thus, there is arguably a need to describeand analyze in-depth each HRM practiceseparately, rather than using an aggregatemeasure of HRM practice standardization.

Most research on people managementhas focused on which HRM practices areused by a firm. Far less work has been doneon who does the HR work—line managers orHR staff. The role of line managers may beparticularly important in supplementing for-mal HRM practices with informal processes,thereby diffusing the company’s valuesand mission, establishing appropriate beha-vioral norms, and sharing information andencouraging responses to challenges facingemployees in their daily activities. Mostextant HRM research has focused on onecountry (often the USA). We assert that muchcan be learned from comparative studies.Thus, this article seeks to add value by pro-viding an in-depth comparison of Russian,Chinese, and Finnish subsidiaries of threeSwedish MNCs to augment our understand-ing of the ‘‘what’’ of HRM, but also to shednew light on the ‘‘how’’ of HRM. By ‘‘how’’we mean what part of human resources isdone by HR managers, and what part is doneby line managers. The role of formal andinformal practices is also an important partof ‘‘how.’’ As will be shown below, Russiaand China are good choices to include in thisstudy, since they are important marketsabout which we have limited understanding,and they are just now emerging as full part-ners in the international economy. Weinclude Finland as a comparative case.

BRIEF BACKGROUNDS ONTHE HOST COUNTRIES

Russia is an important country for theworld economy, since it is the largest in landarea, the sixth largest in population, and the

seventeenth largest in gross domestic pro-duct (GDP) in 2000. Further, Russia hasincreasingly attracted international businessattention as its economy has become morestable, and signs of continued improvementhave begin to emerge (e.g., the Russian stockmarket rose 43 percent between January andmid-May of 2002). However, Russia has his-torically proven to be challenging for foreigncompanies, in part due to cultural differ-ences.

Being the world’s most populous coun-try, with 1.3 billion inhabitants, China alsohas gained much attention since Deng Xiaop-ing began to open China’s doors to the worldin the mid-1980s. By 2000, China was theworld’s second most popular destinationfor foreign direct investment. This is notsurprising, since China is an inexpensivelocation to produce products, China hasaveraged 7.8 percent average annual growthfrom 1997 to 2001, and Boston Consultingestimates are that by 2008 China will be theworld’s largest market for any product onechooses. Like Russia, although China offersgreat potential, it is a market that has causedproblems for many foreign companies. Thus,a need clearly exists for more research focus-ing on China and Russia.

We include Finland in this study in orderto have a sample Western/European countrywith which to compare Russia and China.Finland’s proximity to Russia, yet differentculture, also helped motivate our choice toinclude it. Finland is a country of 5 millionpeople, known for a homogeneous popula-tion and an extensive social welfare system.

FORMAL AND INFORMAL HR

A fundamental problem facing managers inorganizations is how to exercise adequatecontrol and, at the same time, encourageand maintain flexibility, innovation, andcreativity. It has long been appreciated thatthe role of HRM is to help organizations toachieve their purpose by proper manage-ment of their resources. To help achieve thisgoal, HRM tools like performance appraisal

80 ORGANIZATIONAL DYNAMICS

systems have been developed. Such systemsmay contribute to improved employee andorganizational performance through impro-ved focus on the setting of objectives, analy-sis of training and development needs, andenhanced feedback on performance. Suchsystems are sometimes used more as formalcontrol mechanisms, e.g., focusing on themeasurement of progress against plans toguarantee the predictable achievement ofgoals. When used in this way, HRM practiceshold employees accountable for performancewithout stimulating motivation and initia-tive. This practice can cause sub-optimalperformance unless other complementarysystems are in place.

In his Harvard Business Review article‘‘Control in an Age of Empowerment,’’ R.Simons asserts that what he calls the ‘‘ingre-dients of success’’ should be taken intoaccount when developing a company’s man-agement system. These ingredients include‘‘belief systems’’ which encompass the com-pany’s values, mission, and other statementsof philosophy; ‘‘boundary systems’’ which setboundaries that establish the rules of thegame; and ‘‘interactive control systems’’which promote sharing information andencouraging interactive responses. An impor-tant argument of this paper is that a companyneeds to use all these different systems in abalanced way in order to be successful.

Belief systems contain the core valuesand mission of the organization and thusreduce the uncertainly about purpose. Thisbecomes particularly important in situationsof ongoing change or transformation (such asin China or Russia), where insecurity is animportant issue and employees need con-stant reinforcement. In the absence of clearlyarticulated core values, employees are forcedto make assumptions about what constitutesacceptable behavior in the many differentand unpredictable circumstances theyencounter. As performance-oriented organi-zations grow and become more decentra-lized, managers need to ensure that theboundaries are communicated and under-stood. Boundaries can help with the empow-erment process (and empowerment is a key

issue in countries like Russia and China,where there is not a tradition of empower-ment) and decrease uncertainty by clearlydelineating the area of an employee’s respon-sibility. Finally, the interactive control sys-tems play an important role in allowingfor the sharing of strategic information andobtaining employees’ input—two itemswhich are critical to employees’ feeling thatthey are meaningfully contributing to theorganization.

In summary, relying only on formalHRM tools without having other informalprocesses in place can cause problems. Thetype, way, extent, and proportion that var-ious formal and especially informal practicesare used are dependent on the local contextwhere the organization is operating.

HRM PRACTICES IN THETHREE COMPANIES

This article is based on in-depth case studiesof three Swedish multinational firms operat-ing in China, Russia, and Finland. The firmsare Ericsson (fixed line and mobile tele-communications equipment), The ElectroluxGroup (home appliances—white goods), andTetra Pak (solutions for packaging liquidsand ice cream). Approximately five people(normally including the general manager, thehuman resource manager, and a managerand employee from two different functionalareas) were interviewed at each subsidiary in2002. At least one representative from head-quarters was also interviewed.

Recruitment and Select ion

Managers in the Russian and Chinese sub-sidiaries felt that hiring was one of the mostimportant HR practices on which to focus.Given Russia’s and China’s transformationsfrom communism to capitalism, some peoplein those countries are making the necessarymental-state transitions, while others are not.Russia and China have more heterogeneouspopulations in terms of level and quality ofeducation, expectations, values, etc. than is

81

the case in a fairly small homogenous coun-try like Finland. Thus, the downside of mak-ing an incorrect choice is normally larger inRussia or China than in Finland, makinghiring particularly important in Russia andChina. However, there seems to be a largerpool of applicants with Western training andexperience in China than in Russia; in fact, asizeable and growing number of Chinesehave MBAs or other education from abroad.

Initially, when the case study companiesopened their Russian and Chinese subsidi-aries, they tended to rely heavily on the useof expatriate managers for their subsidiaries.However, by 2002, only a few expatriate man-agers worked in key management positions inthe Russian and Chinese subsidiaries. Bothlocal and expatriate interviewees asserted thatwhenever possible (i.e., if suitable compe-tence could be found), it was best to havemostly local managers. It was felt that localmanagers were beneficial because they under-stood the local environment better than theexpatriates, decreased language problems,were much less expensive, and might be will-ing to work at the company long-term. Thedecreasing role of expatriates was supportedby the managing director of Electrolux, Fin-land, who was also in charge of the subsidiaryin Russia. He said:

The next stage in development of oursubsidiary in Russia, which we arenow starting, is moving the businessto the locals. Local managers arestarting to take broader responsibil-ities. The best possible way todevelop the business in Russia is toselect and hire young and profes-sional people with higher educationbackground. Hiring is the mostimportant HR practice in Russia forthe time being.

The increasing ability and importance oflocals were supported by the Chinese inter-views also. For example, the HR manager ofEricsson China Region Central said, ‘‘In 1995,we had about 30 expatriates in our region.Now the general manager, who is from

Sweden, is the only expatriate.’’ Filling anincreasing number of key positions with localpeople, however, has increased the impor-tance of finding and developing the rightlocal people. One important task whichexpatriate managers fulfill in subsidiaries isto help transfer the corporation’s organiza-tional culture and values (Simon’s belief sys-tems). Such values are especially critical indynamic environments, where people areoften working in jobs they are not usedto—both of these conditions can be foundin Russia and China. Values can providedirection and an important sense of stability.It is a challenge to ensure that values andorganizational culture from the parent firmremain/develop at the same level with fewerexpatriates in the subsidiaries. One Ericssonmanager commented:

Many people came to work for Erics-son because they wanted to work at aforeign firm. We used to worry if wewere adapted enough to the Chineseenvironment. This is no longer anissue, but with fewer expatriates,Ericsson China is becoming some-what more Chinese and someemployees complain about this.

Several interviewees mentioned that itwas good that the subsidiaries we inter-viewed were adapting more to the localenvironment. However, it should not be for-gotten that MNCs have the culture andvalues they do for good reason. Several inter-viewees suggested that hiring top managersfrom within the Chinese subsidiaries (asopposed to someone from outside) helpedmaintain the subsidiary’s/MNC’s cultureand mitigate the problem of diluting thefirm’s organizational culture.

One important question concerning hir-ing was whether it was better to hire some-one with experience, but potentiallyexperience doing the same job in a companywith a very different philosophy (perhapsfrom Communist times), or whether it wasbetter to hire a young person who lacked theexperience, but presumably could be more


easily molded. In most cases, the companieschose the latter approach, as they had con-cluded that changing attitudes and workingstyles was far more difficult than trainingpeople in a skill. As the HR manager inEricsson Russia put it:

This focus in recruitment was madebecause it was too difficult to changethe mindset of old people . . .. Thecompany wanted young, talentedpeople who were not spoiled bythe old Soviet system. . . . It ischeaper and easier to develop tech-nical skills rather than trying tochange the mentality.

Over the last ten years, the focus for mostforeign subsidiaries in Russia was on hiringbright, young Russian people twenty tothirty-five years old—even if they did nothave the exact skills that were needed for aspecific job. For example, the average age ofemployees at Electrolux Russia was 30. It wasfelt it was easier to teach skills than changementality.

Electrolux, Ericsson, and Tetra Pak allused interviews and some sort of psycholo-gical tests to select employees in Russia. TetraPak also asked candidates to solve differentcase studies as part of their evaluation pro-cess. The focus in hiring was on identifyingmanagerial potential. Managers at Ericsson(Russia) stressed that experience had shownthem the ability to successfully evaluateone’s strengths and weaknesses was a goodindicator of managerial potential, and wasthus looked for in interviews. All firms men-tioned their wish to hire people good inteamwork, but there was also a uniformfeeling that this was difficult to identify inadvance.

Hiring in China was somewhat differentfrom that in Russia and Finland. First, com-panies preferred applicants who had func-tional experience, even if it was from astate-owned firm, over people who had noexperience, but the correct character, andcould be more easily molded. An HR managerat Ericsson China supported this view and

indicated that Ericsson considers many fac-tors when hiring, but proven skills from pastexperience is the most important one. The HRmanager of Tetra Pack Hoyer China sup-ported the importance of potential employeespossessing needed skills. He stated, ‘‘The keyfactors we look at in making a hiring decisionare the applicants’ previous working experi-ence, their motivation to apply for the com-pany, and salary expectations.’’

In the 1980s and 1990s foreign firms’representative offices had no right to hireemployees directly in China—they were hiredthough the assistance of a state organization.As a result, many foreign firms initially didnot have well-developed HR departments inChina. This situation has now changed, how-ever. Electrolux and Ericsson both had grownwell-developed HRM departments by thetime of our interviews, even if some employ-ees also remembered much earlier timeswhen HR was not so strong.

Deciding on the roles of HR and linemanagers was an important issue in Chinaas elsewhere. One manager at Ericssonexplained the roles of HR and line managersin hiring:

First, I provide the requirements ofthe position to the HR department,and HR will help to post the vacancyusing both internal and externalmedia. After that, HR will do the firstround of selection after processing allapplications. Then line managers areresponsible for second-round selec-tion and conducting interviews.

Electrolux China had a similar process forhiring, and line managers usually made thefinal decision about the candidates. The gen-eral manager and the HR department playeda larger role in hiring in Tetra Pak HoyerChina, probably because the firm is earlier inits life cycle.

The methods used for hiring in thesethree companies in China were similar tothose used in Russia. Interviews were themost commonly used method. However,psychological tests and assessment centers

83

were also used by all companies at timesdepending on the requirements of vacancies.Another important characteristic of hiring inChina was that the firms spent much efforttrying to hire from within the firm whenpossible. This process was closely tied topersonnel development. About 80 percentof middle managers in all three companiesin China were promoted from within thecompany.

In contrast to Russia and China, some-what less attention was placed on hiring inFinnish subsidiaries. This may be a result ofthe fact that Finnish people’s mindsets andtraining were more homogeneous than inRussia. In addition, the greater availabilityof well-developed recruiting agencies, jobfairs at universities, and databases of poten-tial employees resulted in greater ease infinding suitable employees in Finland thanin Russia. Although tests were used forscreening candidates in Finland, extensiveinterviews were the key determinant of hir-ing decisions. Further, compared with Russiaand China, there was a greater involvementof line managers in the selection process.For example, a manager in Ericsson Finlandstated:

HR is not very much involved in theprocess, given that it is mostly theresponsibility of the line managers toselect people. The only role of HR inthe process is to make an initialscreening of potential candidates.

Appraisal

Parent company influence was very notice-able when observing appraisal systems inRussia, China, and Finland. There weremany tools developed to conduct appraisal,though the difference among the three coun-tries was much more in the way these toolswere applied than in which tools were used.Another key difference was the expectationsthat employees had concerning appraisal.

In the Russian subsidiaries of Tetra Pakand Ericsson, appraisal was performed underclose supervision of the HR department. In

Electrolux Russia, appraisal was a less forma-lized discussion. In China, all three companieshad a formal performance appraisal system.In Ericsson and Electrolux, the systems werelinked to compensation, while in Tetra Pak theresults were largely linked to employee devel-opment. Different forms and levels of apprai-sal were used. For example, in Ericsson China,employees identified as ‘‘high potentials’’received extensive appraisal and career man-agement assistance, including identifyingdevelopment needs and planning develop-mental activities.

Standard employees in Ericsson Chinawere each evaluated once a year by super-visors on various characteristics such as lea-dership ability and teamwork capacity. Inaddition, each employee was assessed onhow well he or she did at meeting mutuallyset short-term goals, which are individual,group, and corporate goals. Based on thisassessment, the company pays a bonusequivalent to about 10–20 percent of yearlysalary. Tetra Pak Hoyer China, being some-what newer, had a basic system in place andwas planning to develop a more extensivesystem similar to those mentioned above.

The quality of the performance apprai-sal, however, depended much on the man-ager making the appraisal. As one employeeof Ericsson said,

Every manager has different prefer-ences and looks more on differentthings. Some managers like you toshow your performance, yet somemanagers see how you perform evenif you don’t tell them how well youhave done. Sometimes I feel a littlebit frustrated because what I do isnot identified, much less rewarded.

Such statements revealed that while employ-ees have high expectations for performanceappraisal, managers need to understand thesystem of performance appraisal more, andcompanies should give clearer directionsabout performance appraisal.

In Finland similar tools were usedfor assessment. These included personal


planning and development (PPD) and man-agement planning and development (MPD)in Tetra Pak Finland, personnel development(PD) talks in Ericsson, and individual plan-ning sessions in Electrolux Finland. The man-agers interviewed knew all the tools verywell. In China, Ericsson and Electrolux alsoused quite similar tools; however, in Chinathey were often linked more to objectives andquotas than to facilitating employee growth.One problem in China was that managers andemployees were just becoming familiar withthese appraisal tools. Lack of familiaritysometimes caused some challenges, espe-cially since they were important determinantsof compensation—something everyone caresabout.

Differences did exist regarding appraisalin Russia, China, and Finland. An importantdifference among the three countries was inthe expectations employees had concerningappraisal. In Russia, probably because theprocess was driven by the company ratherthan employee demand, employees viewedappraisal as a formal process in which theywere required to complete evaluation formswhich perhaps did not contribute to the bestresults. Further, given that in most casesRussian managers were used to givingorders rather than feedback, several expatri-ate managers indicated that they thoughtRussian managers needed to improve theirappraisal skills (probably mostly naturallythrough practice). Coaching skills amongRussian managers were mentioned as beingparticularly weak.

In Finland, on the other hand, managersnormally provided their subordinates withfeedback, and such feedback was expected.Compared with Russia, however, this feed-back was often provided in an informal wayand not in such a structured formal system.The business controller stressed:

It is quite self-evident that perfor-mance is up to the individual. Theindividual has to see his work ismeaningful, and this is about gettingfeedback. Feedback increases moti-vation and spirit in the department.

Also, people can see their contribu-tion to the whole company and theirdevelopment.

In general, as mentioned above, Finnishmanagers were more accustomed to givefeedback and more willing to do so. How-ever, sometimes time pressures left theirsubordinates without needed feedback forquite a while. A manager in ElectroluxFinland described her first days at work inthe company:

When I started work here, I won-dered how would I know what Iam allowed to do and what not, whatthe standards are? I would havetalked with my boss, but my bosswas very busy—we don’t have reg-ular meetings. It is part of the cultureand also history that you have to findout how things work yourself. I’d liketo have had the opportunity to talkwith my boss to find out whether theactivities I planned were what he feltwere needed. I want to go in the samedirection with the company; it isimportant for me to know such thingsas vision, strategy, targets and whereI am in the company.

The general manager of Ericsson regioncentral highlighted another differencebetween China (with Russia being fairlysimilar) and Finland for us. China is verypeople-oriented, while Scandinavia tries tobe process-oriented. In Scandinavia, peopletry to build a process that will work regard-less of who is in a given job. In contrast, inChina, the job is often built around the per-son in the job—the person is the central focus.This difference is becoming a larger chal-lenge now as firms like Ericsson try to imple-ment SAP throughout their organization.SAP demands conformity and a process-based organization. It is too early to tellexactly how this will work out in China,but it is clear that it will create a greaterpressure for conformity throughout theEricsson worldwide organization and result

85

in greater pressure for a larger process-orien-tation, even in China.

Most expatriate managers whom weinterviewed in Russia and China high-lighted that, compared with Swedes, mostRussian and Chinese employees were extre-mely driven and willing to work longerhours to help the firm and to further theircareers. As one employee in Ericsson China,who had been in Ericsson headquarters inSweden, commented:

Sweden is a country with high ben-efits, and people place high impor-tance on a good quality of life. Thesocial insurance system is quite goodin Sweden. Employees in EricssonChina actually work harder thanthose in Sweden. Besides the careerorientation, the new situation in theChinese market is an important fac-tor. Customers request more—quickresponse and short delivery time areessential.

Training and Development

Training and development received muchattention and were more formalized in theRussian and Chinese subsidiaries than in theFinnish subsidiaries. The logic behind thisdifference was that the Russian and Chineseemployees, while very intelligent and cap-able, had more diverse backgrounds andwere often working in areas in which theywere not originally trained, and thus weremore likely to benefit from formalized train-ing than their Finnish counterparts. Further,the content of training differed between thecountries. Training in Russia and Chinaappeared to be fairly similar and differ fromFinland. According to the top Electroluxexecutive responsible for Finland and Russia:

In Russia, because we have veryyoung people, all with very goodeducation, training is about givingour employees practical tools. Train-ing in Finland differs. In Finland wehave employees with an average age

of 40 years, and they need other kindsof training, e.g., different courses togradually develop their managementskills. Young potentials in Russiahave very high expectations for theircareers. They perceive training as asign that the company developingthem sees them as potential bosses.

In the Russian subsidiaries of both Erics-son and Tetra Pak, training and developmentactivities received significant coordinationfrom headquarters. For example, special pro-grams for high-potential employees weretransferred from Ericsson and Tetra Pakheadquarters to their Russian subsidiaries.Developmental tools based on the use ofcompetencies were also applied in thesecompanies. International training in thesesubsidiaries was very structured (for certainpositions/departments or for high potential).In addition to training, once new employeeswere on the job, orientation also played animportant role.

The most formalized training and devel-opment process was in the Russian subsidiaryof Tetra Pak, where all training and develop-ment activities were supervised and co-coor-dinated by the HR department. There was asystem of developing high potentials, and thissystem was ‘‘very strong’’ (HR director ofTetra Pak), meaning very formalized andreceiving much attention. Every managerialemployee had a development plan that waskept in the HR department, and progress wasstrictly monitored by HR staff. The initiativefor training could come from the individual,his/her superior or the HR department, butthe HR department normally played animportant role.

Deciding on the training an employeewould attend was done in consultation withthe employee. Sometimes, however, therewas implicit or explicit pressure for anemployee to attend a particular training.An explanation for this could be that becauseof a need to formally satisfy training quotarequirements of the parent company, man-agers did not pay much attention to identi-fication of subordinates’ training needs. The


existence of formal criteria, however, hashelped in making sure that people wereselected and the program moved forward.

In China, though training was more simi-lar to Russia than to Finland, training wasapproached differently. For example, Erics-son China provided employees with exten-sive training of various types from 1996 to2000, when the Chinese economy was devel-oping very well, especially for telecommuni-cations firms. At that time there were no strictlimitations on training. As one employeesaid, ‘‘I participated in a lot of techniquetrainings in the late 1990s.’’ However, withthe recent decline of the telecommunicationsindustry, Ericsson has had to control costssignificantly and restrict training programs.Ericsson does, however, recognize theimportance of training and maintains muchmore training than many companies, evennow. In recent times Ericsson has decided tofocus its training more on technical trainingthan on managerial training. Recently Erics-son has placed more effort on training inChina as opposed to abroad, and the generalmanager or deputy general manager mustapprove all foreign training. ElectroluxChina provides some training for manage-ment-level employees and anticipates pro-viding more training for all employees inthe future.

As to the standardization of training,both Ericsson and Electrolux China got sup-port and coordination from headquarters ontraining. Tetra Pak Hoyer China had muchmore focus on developing locally-specifictraining. Ericsson and Electrolux had a mixof programs, with some training programsbeing standardized and used worldwide.Standardized training usually related tocompany strategy and to core techniquesand skills. Subsidiary employees also tooktraining courses provided by headquarters tomake full use of the resources within thecompany.

All three of these companies use on-the-job training, although procedures for thistraining were not very explicit and formal.Coaching was a new concept in China. Noneof the three companies had an extensive

formal coaching program, although man-agers from all companies indicated thiswas an interesting concept which they wouldconsider exploring more fully in the future.Ericsson had a coaching system to someextent for identified high potentials. How-ever, the deputy general manager mentionedthat it was probably the people who have notyet made it to the high-potential list whomost needed the coaching. Electrolux plansto start a coaching program next year, using amodel that has been applied in other area ofthe corporation. Tetra Pak Hoyer does not yethave any formal coaching program, but isinterested in the idea.

Training needs were identified by linemanagers and HRM personnel together in allthree companies in China. However, in Erics-son China, line managers played moreimportant roles than in the other two com-panies. In Ericsson, training needs wereusually identified through an annual activitycalled Personal Development Talks. As onemanager said, ‘‘Employees can put forwardtheir perceived training needs, and super-visors judge whether the employee shouldtake part in the training program accordingto the needs of employee and department.’’

Compared with Russia and China, thesubsidiaries in Finland had a very informalapproach to organizing training. This infor-mal approach resulted in some critical com-ments by the managers interviewed. Forexample, a manager in Electrolux Finlandhighlighted some weaknesses:

Two years ago we did not have HR[department] and there was almostnothing in terms of HR. At that pointI did not have any appropriate train-ing. There was only language andcomputer skills training and I knewabout that before. Only this year Iattended some classes I was longhoping for. Historically, trainingwas not organized; nobody had timeto organize it. My supervisor wouldnot reject my initiative but at thattime I was young and did not haveenough strength or knowledge to

87

demand training or know whattraining I needed. Now I learned thatI have to take care of myself.

The managers interviewed in all of the Fin-nish subsidiaries uniformly indicated thattraining was not very formalized. However,for both Russia and Finland, more concernswere raised in the area of internal commu-nication.

Tetra Pak Russia’s extensive efforts indeveloping its personnel through varioussystems including formal training and othermethods had met with much success andalso resulted in one important challengefor the firm. With the help of the varioussystems that Tetra Pak Russia had in place,Tetra Pak Russia’s employees increased theircompetence significantly over time, to thepoint where many employees actually pos-sessed the competence to be promoted tohigher positions. Not enough higher vacan-cies were available, however, for all qualifiedemployees to be promoted. At the same time,other firms (especially local Russian firms)were actively trying to attract these well-trained/developed employees to join theirfirms. This problem was exacerbated bythe fact that most Tetra Pak employeeswanted an interesting and challengingcareer—simply paying qualified peoplemore money was not a sufficient answer.How to persuade the qualified employeeswho could not be immediately promotedto stay at Tetra Pak was a key challenge withwhich Tetra Pak Russia was struggling.

Internal Communication

There was strong agreement in Russia, China,and Finland that good internal communica-tion was critical for a company to work effec-tively. This is in keeping with Simons’assertion (described earlier) that interactivecontrol, communication both up and down inthe organization, is the third system neededfor an organization to be effective. It was alsoclear that communication happened muchmore naturally in Finland than in Russiaand China. For example, the general director

of Electrolux Russia, who was a Fin, assertedthat internal communication is a key chal-lenge in Russia, much more of a challengethan it is in Finland:

Lack of this communication betweenpeople is a problem I am workingon in Electrolux Russia. Here if Iwant to deliver some message, I haveenough experience to understandthat if I tell it to one person I am100 percent sure that that personshould tell it to you, it may not hap-pen. I have to especially agree withthe first person that he would com-municate also with you and then, if itis important, I still have to check thatit actually happened. In Finland,such communication happens natu-rally; it is not something you have toworry about much. In Russia, it isconsidered if you tell too much youare losing the power. Russians like totalk to each other and they speak alot about a car crash or general itemsfrom the newspaper, but they don’tspeak about the core things for thecompany.

A production manager at Tetra Pak Rus-sia, like other employees, indicated thatwhile communication between some depart-ments at Tetra Pak Russia worked very well,communication between other departmentsdid not work as well as it could. This is notsurprising, since historically Russian orga-nizations have been good at vertical flowof information (at least downwards), butvery poor with horizontal flow of informa-tion. As one employee at Tetra Pak Russiacommented:

Firms in Russia have a long traditionof having poor information flow, andeven in Tetra Pak it takes time tocreate a firm where informationflows as well as would be desirable.People just can’t change their styleovernight. Tetra Pak is improving,but information does not flow as well


as it should between some depart-ments.

Managers in Chinese subsidiaries had asimilar feeling. Some managers interviewedsaid there were some problems in commu-nication between departments. Several inter-viewees indicated they thought there wereseveral explanations for this problem, includ-ing cultural traditions and employees think-ing more about their department’s interestthan the interest of the company as a whole.Employees in all firms, however, uniformlyindicated that internal communicationworked much better in their firm than intraditional firms in their country. In fact, anumber of people, especially in China, indi-cated that relatively better communicationflow was one of the reasons they chose theirfirm.

The GM of Tetra Pak Hoyer China pro-vided an insightful explanation for why hethought internal communication was diffi-cult in China. He said:

One problem is that Chinese reallyare concerned about losing face. Youhave heard it before, but it is reallytrue. Thus, if a Chinese manager doesnot understand something that I sayto him, he is unlikely to ask for clar-ification because he is concerned hemight say something that sounds stu-pid. This is quite different than mostplaces I have worked previously.

In both Russia and China, companiesused formalized mechanisms to increaseinternal communication flow, since informa-tion flow was not a tradition. Formalizedsystems included instruments like intranets,newsletters, regular department/companymeetings, suggestion boxes/systems, etc.Having such formal mechanisms seemed tobe more important in Russia and China thanin Finland, since in Finland employees indi-cated that by the time the information wasavailable via formal channels, they oftenalready knew much of the information frominformal channels. In Russia and China, since

information was often perceived as power,less information was shared via informalchannels (especially across department lines)and thus the formal channels served animportant purpose. In Finland, employeeswere much more likely to share useful infor-mation with another employee than was thecase in Russia.

Compensation Systems

In fact, what stands out most about compen-sation was that the structure of compensation(the types of compensation systems used)was very similar in Russia, China, and Fin-land. All of the subsidiaries involved in theresearch in Russia, Finland, and China hadcompensation systems which had some sortof a performance-based component and wereco-coordinated from headquarters. Head-quarters had the main role in determiningsalary structure/levels with input from thesubsidiaries.

In general, Chinese subsidiaries hadsomewhat more independence than theirRussian and Finnish counterparts, perhapsdue to their larger size and geographic andcultural distance from Sweden. Both Ericssonand Electrolux participated in a compensa-tion survey in China and annually adjustedcompensation levels according to the surveyresults. A unique aspect of the compensationsystems in China was that firms contributed(as was required by law) to a housing fundfor each employee. This was a fund centrallymanaged by the government, where eachemployee had his or her own account andcould use the money to purchase a house orapartment. In the Chinese subsidiaries, weinterviewed, employees each contributed 7percent of salary and the company contrib-uted matching funds. This could vary some-what from firm to firm.

There were slight differences betweenRussian subsidiaries, Chinese subsidiaries,and Finnish subsidiaries in terms of systemsof bonuses. Different subsidiaries used dif-ferent types of performance-based compen-sation ranging from subsidiary performance,to subjective assessments of individual per-

89

formance, to reaching quantifiable indivi-dual targets, to reaching subjective indivi-dual performance or development targets.However, performance-based compensationof some type was an important salary com-ponent in each case, and especially in Russiaand China, this was cited as appreciated bymost employees and an important motivat-ing factor.

Though compensation was importantfor all employees interviewed, there werenot many comments about the way the prac-tice was administered. This was probablybecause the interviewed firms usually hadabove market-level compensation; employ-ees appeared generally satisfied with salarylevel. Further, for the type of people workingat case study companies in Russia andChina, monetary compensation was seenas only part of their overall compensationpackage; development of one’s career wasalso very important. As an employee atEricsson Russia said, ‘‘What is the mostimportant for me is my possibility to learnand develop, but of course good compensa-tion also plays a role.’’ An employee at Elec-trolux China echoed these comments,‘‘Career opportunities and personal devel-opment are most important for me in my joband are something I consider as part of mycompensation.’’ Compared with Chineseand Russian subsidiaries, Finnish employ-ees seemed less inclined to consider devel-opment a part of compensation.

THE ROLE OF THE HRFUNCTION: FORMAL VS.INFORMAL APPROACH

While some differences could be detectedbetween the three corporations, considerablymore striking was the similarity in the rolesplayed by the HR departments in a givencountry, and, conversely, how different therole of HR was among Russia, China, andFinland. The role of the HR function wasclosely associated with the degree of forma-lization of HRM practices. In brief, the HRdepartment played a more central role, and

HRM issues were handled in a much moreformalized manner in Russia than in Finland,with China being someplace in-between—but much closer to Russia. In Russian sub-sidiaries, the role of the HR function was verysignificant in providing support to busi-nesses in managing their operations. Thesubsidiaries had well-developed HR func-tions. The Russian subsidiary of Ericssonfollowed an interesting approach to facilitatecloser relations between HR and the otherdepartments. HR officers were allocated todifferent departments to help with HRM-related issues, e.g., assessment and develop-ment planning. In Tetra Pak, the role of theHR department was even stronger—everyHRM activity in the company was super-vised by the HR department. The Russianinterviewees often referred to the HR depart-ment when they were asked about theirdevelopment plans or appraisal systems dur-ing the fieldwork.

In China, neither Ericsson nor Electroluxhad a very strong HR function at the begin-ning of their expansion into China. However,after several years, both had set up HRdepartments, which were quite well devel-oped by the time of our interviews in 2002.As in Russia, HR in China was quite forma-lized and consisted mainly of many differentprograms, tools, and systems. At first, HRhad done more administrative tasks, but astime passed, HR was beginning to become apartner in strategy implementation (and to alesser degree formulation). As an HR man-ager in Ericsson China said:

HRM plays an important transac-tional (administrative) role in thecompany. A study by a consultingfirm indicated that we spend over 1

2of our time on transaction activities.Yet our company desires to lift upthe image of the role of HR. HRM isreceiving quite much attention cur-rently. HRM is becoming more stra-tegic in recent years; however, thereality of the pace of this changedoesn’t always match the spokenphilosophy.


The HR departments in Tetra Pak Hoyerand Electrolux China were somewhat lessinvolved with strategy. Because TP Hoyerwas a young joint venture. There were manyHR-related administrative issues. However,the company has initiated several organiza-tional development programs such as man-agement training and staff evaluation.

In the Finnish subsidiaries, the role of theHR function in co-coordinating of HRMactivities was less pronounced. As anemployee at Ericsson Finland indicated,‘‘The role of the HR department is not sovisible to the employees.’’ Until two yearsbefore our interviews, Electrolux Finlandhadn’t even had a formal position of HRmanager. This raises the question of whatthe role of HR is. As an HR manager atEricsson’s corporate group in Stockholmcommented:

An important role of HR is to teachemployees the Ericsson way of doingthings. In Finland, since many peo-ple have been with our organizationfor many years and most peoplehave a similar mindset this happensnaturally—almost by itself. In Russiaand China, more attention is neededto using more formal practices tomake sure this acculturation occurs.

In Russian subsidiaries, the prime role ofthe HR function was to help with the imple-mentation (and to some degree adaptation)of the major HRM tools used by the parentcompanies. The multinationals brought theirstandardized practices, and the local HRfunction was to implement these in the sub-sidiaries. The HR director in Tetra Pak Russiaexplained:

In the area of HR, key approachesand practices are determined by theheadquarters: Tetra Pak core valuesare declared and applied worldwide;they are told to every new hire,repeated and referred to during thecompany events. These core valuesare global . . .. Our contacts with the

headquarters are very close ones:whatever we do here has to be inline with their requirements . . .. We[HR Russia] are here to provide sup-port and disseminate practices aswell as to take the best that exist inthe market companies. Adaptation isabout how implementation is done.

The interviewees in the Russian subsidi-aries of Ericsson also highlighted close linkswith the parent company. This was some-what less pronounced in the subsidiary ofElectrolux. In every Russian subsidiary therewere a variety of printed materials, e.g., dif-ferent manuals, describing the major HRMprocedures and processes.

In China, the subsidiaries also adoptedmany standardized processes and tools fromheadquarters in Sweden, but they had muchflexibility in precisely how these tools wereimplemented to best suit the environment.As the HR director of Electrolux said:

Our headquarters in Sweden pro-vides us with a clear platform, whichis helpful to our operation. Yet westill adjust it to the Chinese situation.For example, when we design ourcompensation and benefits, we needto think about what the Chinese gov-ernment requires us to do for socialsecurity and medical insurance andwhat will motivate Chinese employ-ees best. Thus, some differences existbetween the system in China andthat found in Sweden.

The GM of Ericsson China Region Cen-tral had a similar view and said, ‘‘We usemany processes from Sweden, but we have alot of freedom because managers at head-quarters realized that China is a very differ-ent place from Sweden, and thus things needto be done differently.’’

The above actions are consistent with theobservation that flexibility is quite importantfor doing business in China. As the GM ofEricsson indicated, ‘‘A key skill you need tobe successful in China is to be flexible. For

91

example, meetings will be changed at the lastminute. It does not mean they do not want tomeet with you. It is just how China is.’’

In China, all three companies shared theresponsibility between the HR managers andthe line managers. As the HR director ofElectrolux China commented, ‘‘Line man-agers must also act like HR managers. TheHR department acts as a facilitator andshould provide good service and consulta-tion to our customers. Line managers makemany decisions regarding people manage-ment.’’ And the GM of Ericsson said, ‘‘WhileHR is an important part of our organization,increasingly we are pushing more and moreof our HR out into the organization. Hiringand personal development decisions, forexample, are largely made by functionalmanagers with some support from HR.’’However, all companies we interviewed feltthat line managers would benefit fromimproving their HR skills and from payingmore attention to HRM.

As mentioned above, less attention wasgiven to the HR department in the Finnishsubsidiaries than in their Russian and Chi-nese counterparts. Even more noticeable, inFinland, HRM practices were communicatedto employees in a more informal way andline managers did a large part of HR. Inter-viewees in all three companies in Finlandmentioned that there was a strong companyculture which helped things work correctly.The fact that many employees had worked atthe company for many years also helpedthings work smoothly (showing the impor-tance of Simons’ belief systems). As a result,when a new employee came to the company,he/she naturally saw the way things weredone and adjusted to fit with the culture. Thisassimilation was likely made easier, sinceFinnish people tend to be conformists, arefairly homogenous, and have a similar men-tality compared with the heterogeneousRussian and Chinese workforces. Further,due to the age of the subsidiaries, in Finlandthere was more of a focus on modifyingexisting systems than creating new ones.

The above section provides support thatformal structures were transferred from

headquarters and applied in the Russiansubsidiaries of the multinationals involvedin the research. Given that in Russia the HRMpractices (tools) transferred were new to thelocal employees, the focus was on the intro-duction of formal structures and systems. Asimilar transfer occurred to the Chinese sub-sidiaries, with many formal systems/toolsbeing implemented. However, a greaterdegree of modification to these practicesoccurred prior to implementation in China.In contrast, in Finnish subsidiaries the HRMpractices were used in a more informal way,given the smaller influence of the parentcompanies on the implementation of thepractices.

Implementing HRM practices in theFinnish subsidiaries also required less effort,since the practices (tools) used in the Finnishsubsidiaries were not very different fromthose used in other local Finnish companies.As discussed in the following section,however, it appears important to focus onemploying both formal structures and infor-mal processes to ensure successful imple-mentation of HRM practices. The existenceof formal structures does not guarantee theyare used in a way they were meant to be.

BALANCING THE USE OFFORMAL HRM TOOLS ANDINFORMAL PROCESSES: AWAY TO EMPOWERMENT?

One of the key challenges mentioned by thecase study managers in Russia and China,but not Finland, was empowerment. Thisproblem has historical roots. Historically,organizations have been hierarchical inChina and Russia and there has been littleempowerment. This tradition continuestoday. Swedish firms are now keen to createorganizations with more empowerment,since empowerment is a Swedish traditionand has proven to be effective, but managersare discovering that empowerment is a pro-cess, not an event. As one Swedish managerwe interviewed said, ‘‘We learned the hardway that you cannot just say, ‘Now you are


empowered.’ Employees have to acceptbeing empowered. It takes both a subordi-nate and a boss to follow empowerment for itto work.’’ Several managers commented onthe importance of a gradual evolution toempowerment. Further, just having formalprocedures in place without supportingthese by other informal systems discussedearlier in the paper can lead to chaos andemployees discomfort. One manager weinterviewed at Elecrolux Russia commentedon the importance of setting clear boundarieson what subordinates should and should notdecide on. With clear boundaries providingguidance, employees felt more comfortableand more progress was made on empower-ment. This advice follows Simons’ concept ofboundary systems—the second of threeingredients to organizational success thatSimons recommends.

Historically, Russians and Chinese havebeen harshly punished for mistakes—onefactor that has contributed to Russian andChinese employees generally taking littleinitiative. The general manager of ElectroluxRussia realized this tradition caused pro-blems for him successfully implementingthe degree of empowerment that he wanted.To counteract this he said, ‘‘I have told theemployees thousands of times—don’t beafraid of punishment for making mistakes.Mistakes happen when we do things, and themost important thing is that we constantlytry new things. If we don’t try new things wewill not succeed.’’

Further, in Russia information hasalways been power. As a result, managerswere reluctant to share information withcoworkers, even if it could help them withtheir job (especially if it was across depart-ment lines). Thus, both from above andbelow there were pressures for low empow-erment. One of Ericsson Russia’s expatriatemanagers explained the problem:

Russians are used to somebodydeciding above them. The managerswe have are quite inexperienced.They are not that good in managingpeople yet. That they have to learn

by experience—eventually our man-agers will be very good because theyare very capable people. They are notused to guiding and helping others. . .. It’s the Swedish way of mana-ging—giving guidance supervisionand delegating and getting consen-sus. You have to convince people.Russians are more inclined just todecide, but then people furtherdown in the organization don’t workso hard for the success of the ideabecause they don’t feel it is theiridea. Further, you just don’t havetime to decide everything yourselfas a manager.

Despite these obvious difficulties, themanagers interviewed claimed that theycould achieve some results in empoweringtheir local staff. The general manager of Elec-trolux Russia explained:

I want to delegate lots of responsi-bility and not control things cen-trally—like the Kremlin does.Central control is a Russian tradition,but it is not effective for a firm. Wehave come pretty far . . .. In Russiantraditions if you take whatever pic-ture from the newspaper there isalways this wonderful strong mansitting behind the desk and makingall of the decisions. I don’t want to dothat, and we work hard so that eachday we are further away from thispicture.

Many local managers interviewedvalued this open approach—although somemanagers, reminiscent of the old days whentheir boss had been dictator and they hadbeen forced to obey, wished they could nowexperience that absolute power in their rolesas managers. All firms were trying to weedout or change such managers. All of thefirms, however, had discovered that changeis a process, not an event. Most managersinterviewed in our three case study firmsmade positive comments about the extent

93

their firms, compared with other Russianfirms, were open to employee opinion andempowerment, even if further progress wasneeded.

In our interviews with Chinese subsidi-aries of these three companies, we identifiedthe same issue of empowerment as critical.As the GM of Ericsson China Region Centralcommented, ‘‘Empowerment is a particularchallenge in China. The key secret in Chinaregarding empowerment is to be very expli-cit about what people are empowered to do.’’This idea was also supported by GM of TetraPak Hoyer China, who said:

Our employees are quite good aboutdoing a task that they are clearlyassigned to do and coming back withthe requested output. What mostChinese employees, including man-agers in our firm, are not very goodat doing is dealing with unstruc-tured tasks.

One reason for Chinese difficulties withempowerment might be that in China, simi-lar to Russia, there is a strong obedienceculture. Usually employees will just followwhat their managers tell them to do withoutany questioning. The other reason, quitesimilar to the Russian situation, is that Chi-nese companies and society have not histori-cally encouraged people to try differentthings and potentially make mistakes. Sincemistakes were punished, and conforming tothe norms rather than trying to stand out andexcel was considered desirable behavior,people did not like to take risks.

All companies we interviewed in China,however, were trying to make stridestowards more empowerment. As the generalmanager of Tetra Pak Hoyer said:

Working on empowerment is a keychallenge in China. Our employeesare not used to working in anempowered environment, and ittakes a long time and much effortto explain what empowerment is allabout. We are working on this and

have made some progress, but wehave a way to go.

Our research also uncovered that more isnot always better when it comes to formal HRpractices. In those subsidiaries where man-agers were used to being supported by astrong HR function there were some signsof lack of incentives among managers todevelop their own leadership skills. It wasthe turf of the HR function to give directionand develop people. For example, given thestrong role of the HR function in coordina-tion of all HR-related activities, some Russianemployees in Tetra Pak and Ericsson took apassive role in conducting these practices.They had an appraisal meeting, but theydid not really put their whole hearts intoit. Further, some employees expected theHR function to help them with people-related issues so they could concentrate onother tasks. People in a way felt helplesswithout help from the HR department. Thesame was true to a lesser degree at Ericssonand Electrolux in China. It is impressive thatthese firms had managed to develop suchsophisticated HR departments which couldprovide much support to the firms. How-ever, the above demonstrates that there is arisk if the HR department becomes too strongand has too many systems—perhaps thiscalls for more of a focus on informal HR. Italso seems to call for an equally large focuson HR, but dividing the HR task morebetween the HR department and line man-agers. This is something that in fact many ofthe case-study firms were starting to do—especially Electrolux.

Clearly the above problem is not simpleto avoid. It appears that the case study com-panies made a good effort to explain WHATthey were doing in Russia and China toemployees. However, often there was notenough explanation of WHY they were doingthings. Both Russians and Chinese, havingmuch experience of hearing many slogansand goals from communism without a clearexplanation of why these goals were impor-tant, are now eager to understand why thesegoals are important. Of course with great


time pressures, such communication is noteasy.

CONCLUSION

In an effort to help illuminate the particularfeatures of HRM in different countries, thispaper has compared HRM practices used bythree Swedish MNCs in their Russian, Chi-nese, and Finnish subsidiaries. The articlehas shown that significant differences inthe practices used in Russia, Finland, andChina exist for good reason. Further, in con-trast to the way much previous literature hasdealt with standardization of HR practices,our study reveals that in fact MNCs standar-dize different practices to varying degreesacross countries. For example, compensationsystems—which were easy to control fromheadquarters—were fairly standardized,while hiring practices and internal commu-nication practices varied quite a bit fromcountry to country. A central point of thisarticle is that it is important to move beyond acoarse look at the ‘‘what’’ of HR, which iswhat most extant literature has focused on,and look at the ‘‘what’’ of HR in fine detail.

Most important, unlike much past HRresearch, it is crucial to consider the ‘‘how’’of HR.

This article also showed that while afocus on HR systems is clearly beneficial,both formal and informal systems shouldbe used to make HR practices work success-fully in different environments. The reper-toire of systems used and their balance issignificantly influenced by the context. Prob-ably due to the diverse backgrounds of Rus-sian and Chinese employees, compared withtheir rather homogenous Finnish counter-parts, formal HR practices have a larger roleto play in Russia and China than in Finland.This article also showed the importance ofengaging both the HR department and linemanagers in HR issues to achieve maximumbenefit for the organization. In conclusion, itis critical for MNCs to adapt their HR prac-tices for the environmental context wherethey are operating, but the true secret tosuccess is not just the ‘‘what,’’ but also the‘‘how’’ issues of HR.

95

SELECTED BIBLIOGRAPHY

For a good explanation of the importance ofpeople and good HRM systems for a firm’ssuccess please see, C. Bartlett and S. Ghoshal,‘‘Building Competitive Advantage throughPeople,’’ Sloan Management Review (Winter2002), 34–41.

A good summary of extant research onthe link between use of HRM and firm per-formance is provided by B. Becker and B.Gerhart, ‘‘The Impact of Human ResourceManagement on Organizational Perfor-mance: Process and Prospects,’’ Academy ofManagement Journal, 1996, 39(4), 779–801.

For more about the debate on the extentthat MNCs should modify practices whenoperating in different countries see: Y. Doz,C. A. Bartlett, and C. K. Prahalad, ‘‘GlobalCompetitive Pressures and Host CountryDemands,’’ California Management Review,1981, 23(3), 63–74; and C. K. Prahalad andY. Doz, The Multinational Mission: BalancingGlobal Demands and Global Vision (New York:Free Press, 1987). For more about the extentto which HRM practices are standardized inmultinational corporations, see P. Rosenz-weig and N. Nohria, ‘‘Influences on HumanResource Management Practices in Multina-tional Corporations,’’ Journal of InternationalBusiness Studies, 1994, 25, 229–251.

To learn more about the localizationstream of HRM research see C. Rowleyand J. Benson, ‘‘Convergence and Diver-gence in Asian Human Resource Manage-ment,’’ California Management Review, 2002,144(2), 90–109; and S. C. Schneider and J.-L.Barsoux, Managing Across Cultures (London:Prentice Hall, 1997). For more informationabout the universal best practice stream ofresearch see J. Peffer, ‘‘Producing SustainableCompetitive Advantage through the Effec-tive Management of People,’’ Academy ofManagement Executive, 1995, 9, 55–69. For

more information about combining globalstandardization and local adaptation inHRM strategies see, S. Taylor, S. Beechler,and N. Napier, ‘‘Toward an IntegrativeModel of Strategic International HumanResource Management,’’ Academy of Manage-ment Review, 1996, 21, 959–985.

To read more about HRM in Russia, seeC. F. Fey and I. Bjorkman, ‘‘The Effect ofHuman Resource Management Practices onMNC Subsidiary Performance in Russia,’’Journal of International Business Studies, 2001,32(1), 59–76; C. Fey, P. Engstrom, and I.Bjorkman, ‘‘Effective Human Resource Man-agement Practices in Russia,’’ OrganizationalDynamics, 1991, 4, 1–12; R. C. May, C. B.Yong, and D. Ledgerwood, ‘‘Lessons fromRussian Human Resource ManagementExperience,’’ European Management Journal,1998, 16(4), 447–459; S. Shekshnia, ‘‘WesternMultinationals’ HRM in Russia,’’ EuropeanManagement Journal, 1998, 16(4), 460–465;and S. Puffer, Business and Management inRussia (New York: Edward Elgar, 1996).

To read more about HRM in China see,R. Verburg, ‘‘Developing HRM in Foreign-Chinese Joint Ventures,’’ European Manage-ment Journal, 1996, 14(5), 518–525; I. Bjorkmanand Y. Lu, ‘‘The Management of HumanResources in Chinese-Western Joint Ven-tures,’’ Journal of World Business, 1999,34(3), 306–323; and Y. Lu and I. Bjorkman,‘‘MNC Standardization Versus Localization:MNC Practices in China-Western Joint Ven-tures,’’ International Journal of Human ResourceManagement, 1997, 8, 614–628.

To read more about HRM in Finlandplease see, S. Vanhala, ‘‘Human ResourceManagement in Finland,’’ Employee Relations,1995, 17(7), 31–26.

To read more about Simons ingredientsof success (belief systems, boundary systems,


and interactive control systems) please see,R. Simons, ‘‘Control in an Age of Empower-

ment,’’ Harvard Business Review (March–April 1995), 80–88.

Carl E. Fey is an assistant professor at the Institute of InternationalBusiness at Stockholm School of Economics and associate dean ofresearch at Stockholm School of Economics in St. Petersburg. Amongother things, he has been helping Stockholm School of Economicsdevelop a branch campus for executive development work and researchin St. Petersburg, Russia. During the fall semester of 2002, Fey was avisiting assistant professor at China Europe International Business Schoolin Shanghai, China. His research and consulting focus on how firms canoperate effectively in large transforming economies like China andRussia. In particular, Fey’s work has focused on organizational culture,human resource management, knowledge transfer, and strategic alli-ances. Fey, who has published previously in Organizational Dynamics, isthe author of many journal articles. His most recent publication is C. F.Fey and D. Denison, ‘‘Organizational Culture and Effectiveness: CanAmerican Theory be Applied in Russia?’’ Forthcoming in OrganizationScience. ([email protected])

Antonina Pavlovskaya is a management development specialist at JapanTabaco International in St. Petersburg, Russia. Previously she worked asa research associate at Stockholm School of Economics in SaintPetersburg. Pavlovskaya is in the final stages of completing her Ph.D.thesis at Warwick Business School in the United Kingdom. Her researchfocuses on human resource management, with a special interest inmanagement development. Pavlovskaya has published previously inboth Russian and Western journals, including The International Journal ofHuman Resource Management.

Ningyu Tang is an associate professor at the School of Management atShanghai Jiaotong University. Her research focuses on culture’s influenceon HRM, HRM in Chinese SMEs, and virtual team learning. She haspublished papers in both the organizational behavior and HRM areasand she is also the author of several books, including Human ResourceManagement and Personnel Evaluation (in Chinese). She has taught coursesin human resource management, organizational behavior, and researchmethods to both M.B.A. students and undergraduates. Tang has wonseveral awards for her teaching. She has also served as a consultant formany firms in China.

97

http://[email protected]

does one shoe fit everyone? a comparison of … · a comparison of human resource management in...

Documents