1. ¹Department of Management and Organisation, Swedish School of Economics, Helsinki, Finland
2. ²INSEAD Euro-Asia and Comparative Research Centre, Fontainebleau, Texas, USA
3. ³Stockholm School of Economics, Stockholm, Sweden
4. ⁴Stockholm School of Economics, St Petersburg, Russia
5. ⁵Department of Managerial Sciences, J. Mack Robinson College of Business, Georgia State University, Atlanta, GA, USA

Correspondence: Ingmar Björkman, Department of Management and Organisation, Swedish School of Economics (Hanken), Post Box 479, 00101 Helsinki, Finland. Tel: +358 9 9 431 33273; Fax: +358 9 9 431 33275; E-mail: Ingmar.bjorkman@hanken.fi

Received 8 July 2003; Revised 3 January 2006; Accepted 31 August 2006; Published online 5 April 2007.

Abstract

This study sets out to explore human resource management (HRM) practices in multinational corporation (MNC) subsidiaries within an institutional theory framework. Based on a sample of 158 subsidiaries of MNCs operating in the United States, Russia and Finland, the paper examines factors hypothesised to influence the HRM practices adapted in US, Japanese and European MNC subsidiaries located in Russia, Finland and the US. The results indicate significant differences in HRM practices used across host countries. Both the status of the subsidiary human resource department and the degree to which the subsidiary was involved in knowledge transfer with other parts of the MNC had a significant impact on the selection of HRM practices.