Anastasia Kynighou PhD

273 Pages·2011·1.62 MB·English

Analysing the interplay of factors affecting the implementation
of HRM within service sector MNCs: the case of Cypriot sub-
units.

A thesis submitted to The University of Manchester for the degree of
Doctor of Philosophy
in the Faculty of Humanities.

2010

Anastasia Kynighou

Manchester Business School
Table of Contents
Table of Contents................................................................................................................................2
List of Figures, Diagrams and Tables.................................................................................................8
Abstract.............................................................................................................................................10
Declaration........................................................................................................................................11
Copyright Statement.........................................................................................................................11
Acknowledgements...........................................................................................................................12
CHAPTER I: Introduction................................................................................................................13
1.1 Introduction - Rationale..........................................................................................................13
1.2 The MNC setting.....................................................................................................................14
1.3 Multinationals and HRM........................................................................................................17
1.4 Thesis’ Aims and Structure.....................................................................................................21
1.4.1 Main Aims.......................................................................................................................21
1.4.2 Structure Outline..............................................................................................................22
CHAPTER II: Theoretical approaches to the home/host country effects debate.............................25
2.1 Introduction.............................................................................................................................25
2.2 Theoretical Approaches which explain HRM drives..............................................................26
2.2.1 Institutionalist approach...................................................................................................26
2.2.2 Culturalist approach.........................................................................................................32
2.2.3 Universalistic approach....................................................................................................35
2.2.4 Contingency approach......................................................................................................38
2.2.5 Summary of theoretical perspectives...............................................................................43
2.3 Interplay of factors shaping practices.....................................................................................44
2.3.1 Dilemma...........................................................................................................................44
2.3.2 ‘Transfer’ of HR practices revisited.................................................................................50
2.4 An alternative approach: Bottom-up.......................................................................................58
CHAPTER III: Methodology...........................................................................................................61
2
3.1 Introduction.............................................................................................................................61
3.2 Epistemological and ontological assumptions........................................................................64
3.3 Methods of Data Collection and Data Analysis......................................................................68
3.3.1 Generating Data: Case Study Research Design...............................................................68
3.3.2 Data Sources: Qualitative, Semi-structured Interviews...................................................73
3.3.3 Data Collection Process...................................................................................................74
3.4 Limitations of Chosen Methods..............................................................................................81
3.5 Summary.................................................................................................................................84
CHAPTER IV: The specific context of Cyprus and the service sector............................................85
4.1 Introduction.............................................................................................................................85
4.2 Background Information on Cyprus.......................................................................................86
4.2.1 History..............................................................................................................................86
4.2.2 Culture and Institutions....................................................................................................87
4.2.3 Economy and FDI............................................................................................................92
4.3 Labour Market, Industrial Relations and Human Resource Management..............................96
4.3.1 Labour Market.................................................................................................................96
4.3.2 Industrial Relations........................................................................................................101
4.3.3 Human Resource Management......................................................................................104
4.4 Product Market......................................................................................................................107
4.5 Summary...............................................................................................................................108
CHAPTER V: Empirical Chapter I – Networks and Fully Owned Subsidiaries...........................110
5.1 ProfServA.............................................................................................................................111
5.1.1 Background....................................................................................................................111
5.1.2 History............................................................................................................................111
5.1.3 Size and Market Position...............................................................................................112
5.1.4 HR Department and HR Philosophy..............................................................................113
5.1.5 HRM practices...............................................................................................................114
3
5.1.6 Conclusion.....................................................................................................................118
5.2 ProfServB..............................................................................................................................119
5.2.1 Background....................................................................................................................119
5.2.2 History............................................................................................................................121
5.2.3 Size and Market Position...............................................................................................122
5.2.4 HR Department and HR Philosophy..............................................................................123
5.2.5 HRM practices...............................................................................................................124
5.2.6 Conclusion.....................................................................................................................126
5.3 FinancServCo........................................................................................................................128
5.3.1 Background....................................................................................................................128
5.3.2 History............................................................................................................................128
5.3.3 Size and Market Position...............................................................................................129
5.3.4 HR Department and HR Philosophy..............................................................................130
5.3.5 HRM practices...............................................................................................................131
5.3.6 Conclusion.....................................................................................................................133
5.4 MarkResCo...........................................................................................................................134
5.4.1 Background....................................................................................................................134
5.4.2 History............................................................................................................................136
5.4.3 Size and Market Position...............................................................................................136
5.4.4 HR Department and HR Philosophy..............................................................................137
5.4.5 HRM practices...............................................................................................................138
5.4.6 Conclusion.....................................................................................................................142
5.5 InsuranceCo..........................................................................................................................143
5.5.1 Background....................................................................................................................143
5.5.2 History............................................................................................................................144
5.5.3 Size and Market Position...............................................................................................145
5.5.4 HR Department and HR Philosophy..............................................................................145
4
5.5.5 HRM practices...............................................................................................................148
5.5.6 Conclusion.....................................................................................................................150
CHAPTER VI: Empirical Chapter II –Affiliated Members and Franchises Firms.......................152
6.1 AdvertCo...............................................................................................................................152
6.1.1 Background....................................................................................................................152
6.1.2 History............................................................................................................................153
6.1.3 Size and Market Position...............................................................................................154
6.1.4 HR Department and HR Philosophy..............................................................................155
6.1.5 HRM practices...............................................................................................................156
6.1.6 Conclusion.....................................................................................................................159
6.2 FastFoodCo...........................................................................................................................160
6.2.1 Background....................................................................................................................160
6.2.2 History............................................................................................................................160
6.2.3 Size and Market Position...............................................................................................161
6.2.4 HR Department and HR Philosophy..............................................................................162
6.2.5 HRM practices...............................................................................................................163
6.2.6 Conclusion.....................................................................................................................165
6.3 RestaurantA...........................................................................................................................166
6.3.1 Background....................................................................................................................166
6.3.2 History............................................................................................................................166
6.3.3 Size and Market Position...............................................................................................167
6.3.4 HR Department and HR Philosophy..............................................................................168
6.3.5 HRM practices...............................................................................................................169
6.3.6 Conclusion.....................................................................................................................172
6.4 RestaurantB...........................................................................................................................173
6.4.1 Background....................................................................................................................173
6.4.2 History............................................................................................................................173
5
6.4.3 Size and Market Position...............................................................................................174
6.4.4 HR Department and HR Philosophy..............................................................................175
6.4.5 HRM practices...............................................................................................................176
6.4.6 Conclusion.....................................................................................................................178
6.5 HotelCo.................................................................................................................................178
6.5.1 Background....................................................................................................................178
6.5.2 History............................................................................................................................179
6.5.3 Size and Market Position...............................................................................................179
6.5.4 HR Department and HR Philosophy..............................................................................180
6.5.5 HRM practices...............................................................................................................182
6.5.6 Conclusion.....................................................................................................................185
6.6 Summary of Empirical Chapters...........................................................................................185
Chapter VII: Discussion..................................................................................................................187
7.1 Introduction...........................................................................................................................187
7.2 An alternative multi-dimensional approach to the study of HRM within MNCs.................188
7.2.1 Influence by Cultural factors..........................................................................................197
7.2.2 Influence by Institutional factors...................................................................................204
7.2.3 Influence by Intra-Organisational factors......................................................................210
7.2.4 Influence by Global factors............................................................................................231
7.3 Conclusions...........................................................................................................................233
Chapter VIII: Conclusions, Limitations and Contributions............................................................235
8.1 Key outcomes – Conclusions................................................................................................235
8.2 Limitations and Areas for Future Research..........................................................................242
8.3 Contribution to Knowledge...................................................................................................246
References.......................................................................................................................................250
Appendix I: Case studies’ characteristics.......................................................................................267
Appendix II: Access Letter.............................................................................................................268
6
Appendix III: List of Respondents in each case study....................................................................269
Appendix IV: Interview Scheme.....................................................................................................271
Appendix V: World Investment Report 2008 – Country fact sheet Cyprus..................................273

WORD COUNT: 87 293

7
List of Figures, Diagrams and Tables

Figure 1: Institutional influences on MNCs......................................................................................31
Figure 2: Global Integration of HRM...............................................................................................54
Figure 3: Overview of theoretical perspectives influencing HR practice adoption and adaption.....56
Figure 4: Characteristics of the case study design............................................................................68
Figure 5: Research cycle...................................................................................................................71
Figure 6: Index of earning by sector in real terms, 1980-2007.........................................................91
Figure 7: Matrix of inward FDI performance and potential.............................................................94
Figure 8: Structure of employment in broad sectors, 1997 and 2007...............................................95
Figure 9: Foreign workers in Cyprus by economic activity, 2007....................................................97

Diagram 1: Structure of HR Department - ProfServA....................................................................114
Diagram 2: Influences on HRM - ProfServA.................................................................................119
Diagram 3: Global Structure ProfServB.........................................................................................121
Diagram 4: HR Department Structure - ProfServB........................................................................123
Diagram 5: Influences on HRM - ProfServB..................................................................................127
Diagram 6: Structure of HR Department – FinancServCo.............................................................130
Diagram 7: Influences on HRM- FinancServCo.............................................................................134
Diagram 8: Structure of HR Department - MarkResCo..................................................................138
Diagram 9: Influences on HRM - MarkResCo...............................................................................143
Diagram 10: Structure of HR Department - InsuranceCo...............................................................147
Diagram 11: Influences on HRM - InsuranceCo............................................................................151
Diagram 12: Influences on HRM - AdvertCo.................................................................................159
Diagram 13: Influences on HRM - FastFoodCo.............................................................................166
Diagram 14: Influences on HRM - RestaurantA.............................................................................173
Diagram 15: Influences on HRM - RestaurantB.............................................................................178
8
Diagram 16: Influences on HRM – HotelCo..................................................................................185
Diagram 17: HQ influence variation in different LCM phases.......................................................216
Diagram 18: Integrated model of factors which shape HRM in sub-units......................................242

Table 1: Size of MNC and sub-unit................................................................................................212
Table 2: Age of MNC and sub-unit................................................................................................214
Table 3: Type of service sector, type of sub-unit and type of ownership.......................................221

9
Abstract

University of Manchester
Anastasia Kynighou
Doctor of Philosophy
Analysing the interplay of factors affecting the implementation of HRM within service
sector MNCs: the case of Cypriot sub-units.
27th August 2010

This thesis examines the implementation of HR practices within Cypriot sub-units of
service sector MNCs. It attempts to shed light on the decision-making process which takes
place at the local unit and highlight the forces which shape this. Existing literature, albeit
influential, seems to be constrained by the underlying notion that HQ seek to transfer HR
practice to the local unit. Hence, researches have attempted thus far to explore the factors
which facilitate or hinder the transfer.
However, this thesis uses a bottom-up approach and shifts the emphasis from the top to the
bottom level without assuming proactive, vertical transfer of practices. However, influence
from the top level is by no means ignored. On the contrary, intra-organisational aspects and
pressures have been incorporated in the integrated model used for this analysis. The
integrated model, as such, incorporates influences from four different theoretical
approaches in order to study HRM within sub-units. Indeed, findings from this thesis
illustrate how external and internal forces interplay to shape HR policies and practices
locally. The multi-dimensional approach suggested in this thesis contributes to the
literature by highlighting the interplay of factors which shape HRM within MNCs. This
allows for a deeper understanding of how HRM occurs at local level. Findings from this
thesis can also be extended beyond to a range of other countries and sectors.

10