Multinational corporations, sub-national governance and human resources: a cross-national comparison

Lead Research Organisation: De Montfort University
Department Name: Human Resource Management

Abstract

This research aims to understand the relationships at a regional level between the local operations of foreign multinationals and 'governance actors', such as local, regional and national government, regional development agencies, training institutions, social partners, etc.



It looks at how these relationships affect the types of investment which regions compete for, and any wider impact on how the regional economy is coordinated.



The research has a specific focus on human resources, as the skills available on the local labour market are one of the main ways localities and regions can be distinctive. It explores how the availability of skills affects multinationals' decisions on work organisation; how such firms try to shape the skills available locally; and other ways in which multinationals try to influence the employment rules under which they operate locally.



Research will be carried out, with international partners, in two regions in each of four countries (the UK, Canada, Ireland and Spain). The research will involve interviews with individuals who have significant roles in local and regional development and governance, and with local managers in multinationals in each region. It will also map the structure of regional networks involved in the attraction and retention of foreign direct investment.

 
Description Through detailed cross-national comparative research into sub-national governance actors and foreign direct investors in regions in four countries (UK, Canada, Ireland, Spain): (a) to improve understanding of the role of development agencies and sub-national governance actors in the attraction and retention of foreign direct investment in developed economies (b) to contribute to the comparative capitalisms debate by highlighting and analysing the differential opportunities and constraints facing local governance actors in different political and economic systems (c) to highlight the different ways in which the subsidiaries of foreign multinationals interact with governance actors in sub-national geographies, and potentially become 'embedded' at local/regional levels (d) to highlight, through detailed cross-national comparative research, the ways in which national political systems and contingencies act as an important intervening variable in the regionalisation or deregionalisation of economic coordination, both of foreign direct investment and of employment and business systems more generally (e) in the English cases, to provide a detailed account of the processes of de-institutionalisation and re-institutionalisation following the abolition of Regional Development Agencies (RDAs), and the emergence of new institutions, and an assessment of the role of RDAs in coordinating with potential and current foreign direct investors Equally importantly, the project provides a framework by which the relations between multinationals and governance actors in local geographies can be analysed on a cross-national comparative basis, which can be adapted to regional and national geographies beyond those investigated here. Findings and outputs - sub-national embeddedness is shaped by multinationals' need to access geographically-specific combinations of skills/knowledge, value chains, and by local managers' capacity to engage in high-trust relations with local stakeholders. - regional development agencies and similar bodies play an important brokerage role in navigating between multinationals and complex institutional systems; in England, their role in skills coordination and interest aggregation was significant. - coordination between governance actors in England is difficult because of instability in local/regional institutions and skills systems; interviewees were generally unenthusiastic about the post-RDA system. - intra-national difference in coordination is strongly associated with the degree of sub-national political autonomy: more limited in England and Ireland than in Spain or Canada, where differences between regions/provinces pursuing social democratic vs neo-liberal approaches were notable. - Formal social network analysis showed relatively loose ties between governance and MNC actors on skills issues in England; network structure largely followed funding possibilities. Governance actors at regional level had a strong brokerage role. - MNCs fell into distinct groups: 'high engagers' which intensively interacted with local/regional actors, and sometimes formed reinvestment alliances with them, and 'isolates', who had little engagement and whose 'embeddedness' was much more passive. Engagement was often on a project basis, around pressing issues, rather than on an ongoing basis. - The English pattern of 'employer-led', state-funded coordination institutions has largely failed to provide strategic collaboration, and has problems of legitimacy. Outputs: Papers have so far been published in Human Relations, European Urban & Regional Studies. Other dissemination is detailed below. How these impacts were achieved In addition to the peer-reviewed publications above, impacts were achieved by over 20 conference/seminar presentations to academic audiences to date. These include: - A feedback report to participants, and an end of award workshop at DMU (19th December 2011), which participants and selected academics attended. - A comparative paper at the World Congress of the International Labour and Employment Relations Association conference 2012; this was given plenary status in a competitive process of refereeing - Special symposia, featuring papers from at least three of the four countries, at the Labor and Employment Relations Association (USA) Annual Meeting 2012, at the CRIMT international conference on Global Value Chains and Social Regulation (Montreal, 2011) and at the International Federation of Scholarly Associations of Management (Limerick, 2012); the last focussed specifically on social network analysis. - Participation in an international colloquium on MNCs and Social Regulation (Hong Kong Baptist University), to which the PI was invited and funded by the host. An edited collection featuring a chapter by the European team members is forthcoming. - Conference presentations at the Society for the Advancement of Socio-Economics (2010, 2011, 2012), CRIMT/Canadian Industrial Relations Association (2010) Irish Academy of Management (2010), and the Spanish Congress of Sociology (2010) - A presentation on the project by the project's Irish PhD student was awarded the "Most Original New Work" prize at the Academy of International Business (Liverpool, 2012) Seminar presentations have also been made at Manchester Business School and the University of Montreal. A Public lecture was given at Norwich Business School. The PI and members of the Canadian research team have also delivered findings to a forum of policy and employment relations actors at the CRIMT Conference, HEC Montreal, 2015, and have been involved in a number of dissemination activities, including notably roundtables with regional development professionals and others, organised through the University of Montreal. Who these findings impact Our findings and outputs have begun to have an impact on a number of distinct academic groups, as revealed by early citations, and interest as shown by invitations to present our work and by our success in organising symposia at international conferences. These include: scholars of international human resource management and of industrial relations; those interested in the varieties of capitalism debate and comparative political economy more generally; those researching foreign direct investment within regional studies; and those interested in applying social network analysis to investigations of institutions and organisations. More specifically, a project replicating our research in Germany has succeeded in attracting substantial funding (€295,000) from the German Research Foundation (DFG, principal investigator Anne Tempel, University of Dusseldorf). The project has also contributed to the development of early career researchers. This has been achieved by the direct involvement in the project of early career researchers in Ireland, Spain and Canada, and through the recruitment of PhD students undertaking research closely linked to the project - including one student who has been awarded a DMU bursary to undertake a replication study in France. Finally, the importance of, and challenges in, taking account of sub-national governance actors have been fed into doctoral training within the CRIMT network through PhD workshops etc. Similar initiatives are envisaged in the UK and elsewhere. Given the time horizons involved in peer-reviewed publications in the field, we would expect this impact to grow over the medium-term. Summary of Economic impacts The immediate economic and societal impact of the UK research has been limited by recent politically-driven changes in the organisation of many of the institutions involved (see Section 4B). Nevertheless, through the feedback workshop event detailed below, through the report to fieldwork participants and through exchanges of perspectives and expertise in the fieldwork research process itself, we believe that we have allowed a space for critical reflection among professionals in the fields of regional development and skills policy, as well as among managers of the foreign multinationals involved. Naturally, these comments apply to the overseas fields of research as well as to the UK. Findings and outputs Many of the findings mentioned in Section 1B above were highlighted and discussed in the end of award workshop and in the report distributed to participants. In particular, findings relating to the instability of regional economic development policy, of skills policy, and difficulties involved in the coordination between the two, were considered in some detail by the individual governance actors represented at the end of award workshop. Specific difficulties faced by governance actors in the light of the abolition of Regional Development Agencies (RDAs), and resource and demarcation issues between Local Enterprise Partnerships (LEPs), UK Trade and Investment (UKTI) and other relevant actors in the sphere of attracting and retaining foreign direct investment, were discussed in some detail. The most relevant written output is the feedback report to participants. How these impacts were achieved The above impacts were principally achieved through an end of award workshop, held at De Montfort University on 19th December 2011, and through a feedback report to participants. The December 2011 workshop, to which all particpants and selected academics were invited, featured presentations from two participants, as well as broader structured discussions on issues relating to local and regional governance, skills development, multinationals' interactions with local actors and regional social networks around the development of human capital in which fieldwork particpants played an active role. The feedback report to participants is structured along similar lines. Selected participants were also invited to an earlier research workshop on employment practice, also at DMU, on 23rd March 2010. This workshop also featured a presentation by a then-senior inward investment professional at the East Midlands Development Agency. The Irish research was also presented to an audience of people management professionals at a symposium under the aegis of the Chartered Institute for Personnel and Development (CIPD) in 2010. Who these findings impact These impacts have predominantly been among those participating in the research, and attending the relevant events. Potential future impacts On the basis of positive feedback received to date, we are confident that the project will have impacts on discussions on the regional state and foreign direct investment, MNCs' embeddedness in local environments, labour market governance, and the mapping of human capital networks. We also hope that our findings feed into debates on regional and skills policy. A feedback event on the Spanish research is scheduled for September 2013 (University of Oviedo), and the project formed a substantial component of a major international conference organised by CRIMT (University of Montreal, May 2015), involving academics and policy-makers. As the related funded projects overseas come to an end, we will prioritise peer-reviewed publications on internationally comparative elements of the project. Early impacts among those interested in governance issues suggest a substantial potential academic audience for this component of the project, as a result of developing academic interest in issues of soft governance of employment and experimentation by institutional actors. These are debates with which our project has a natural fit. The DFG-funded project in Germany, and replication by a doctoral student for France, will in time allow us to expand the geographical remit of such findings. We are in preliminary discussions around further geographical expansion, and actively promote replication studies. The findings also informed a study of UK small-firm international expansion, funded by the RAKE-ESRC initiative (PI Edwards, Kings College London), which in turn supported a successful ESRC project bid on "Globalizing Managers" in UK multinationals, to start April 2016 (PI Edwards). One of our core findings - the importance of individual managerial engagement with external actors - was also the starting point for the research problem of a project entitled "Coordinating Actors" - a study of individual managers engagement with skills networks in the UK - funded by the British Academy (November 2015-2017) (PI Almond, co-investigator Tregaskis) Unexpected impacts The transfer of competencies in English sub-national economic development and inward investment support from regional (RDA) levels to national (UKTI) and local (LEP) levels meant that fieldwork for the UK component took place within a period of unexpected and dramatic institutional change. While this presented some challenges for the project, being in the field in this period also allowed us to witness first-hand a process of significant institutional changes, which, on reflection, exemplified wider instabilities in the English business and political system as it affects both regional development and skills policy. We believe that a theoretically informed but empirically-driven record of insiders' perspectives and actions during this period will be a valuable contribution, with the potential to inform future policy as well as academic discussions. For this reason, we prioritised the development of a paper on this process, which has been published by European Urban & Regional Studies. Limited scientific impacts Fieldwork was somewhat delayed due to difficulties in achieving private-sector access during the immediate post-crash crisis. We also made a methodological decision that owing to politically-driven institutional changes post-2010, it was necessary to interview emerging or 'reformed' governance actors towards the end of the period of funding. While fieldwork was completed by December 2011, and while we believe that this decision has been justified by the contribution made by the European Urban & Regional Studies paper, and the potential wider contribution detailed in Section 3A, these delays have had a knock-on effect on our publication timetable, meaning that impacts have been delayed. All international partner teams were successful in securing additional funding from their respective national funding agencies. In the Irish and Spanish cases successful research grant bids, adapted from the ESRC proposal, were made to national research councils/ministries (Almond is a named investigator on the Spanish project). In the Canadian case the research has been integrated into a large research programme funded by its national Research Council. This success has allowed us to maximise the scope of the overseas components of our research (for instance, the number of firms covered in the Spanish research, and the scope of the Irish research, is much larger than would have been possible without co-funding), different funding timetables mean that this has to some extent been at the cost of the early publication of comparative papers. Again, we believe that this trade-off is amply justified.. Limited economic impacts Economic and societal impact has been limited by the fact that the changes in the structure of governance mentioned above reduce the scope for knowledge transfer. Our research was predicated on a regional analysis of governance and foreign direct investment. Our findings do not support the broad thrust of relevant policy decisions made by national government, either from an economic or societal standpoint. Policy recommendations which would be sensible at a regional level cannot feasibly be executed by the combination of local and national actors in the current economic development system. Additionally, plans to involve participants in the research process to a greater extent, as envisaged during the planning stage of the research, were hamstrung by the economic and consequent political crisis. Both private sector and governance actors were dealing with crises around organisational survival, meaning that time to engage with academic research was understandably limited, notwithstanding the substantial goodwill shown to us by a number of participants.
First Year Of Impact 2011
Sector Other
Impact Types Societal,Economic
 
Description British Academy/Leverhulme Small Grants
Amount £9,970 (GBP)
Organisation British Academy 
Sector Public
Country United Kingdom of Great Britain & Northern Ireland (UK)
Start 11/2015 
End 10/2017
 
Description ESRC Research Grants
Amount £650,000 (GBP)
Organisation Economic and Social Research Council (ESRC) 
Sector Public
Country United Kingdom of Great Britain & Northern Ireland (UK)
Start 04/2016 
End 03/2019
 
Description Higher Education Innovation Fellowship
Amount £8,700 (GBP)
Organisation Higher Education Funding Council for England (HEFCE) 
Sector Public
Country United Kingdom of Great Britain & Northern Ireland (UK)
Start 09/2014 
End 08/2015
 
Description RAKE/ISBE/ESRC
Amount £8,000 (GBP)
Organisation The Institute for Small Business and Entrepreneurship (ISBE) 
Sector Multiple
Country Unknown
Start 09/2012 
End 12/2014
 
Description Research Grant
Amount € 22,000 (EUR)
Organisation Spanish Ministry of Science and Innovation 
Sector Public
Country Spain, Kingdom of
Start 10/2010 
End 12/2013
 
Description CRIMT 
Organisation University of Montreal
Country Canada 
Sector Academic/University 
PI Contribution Extensive participation in initiatives run by CRIMT research group, by Almond, Tregaskis and Ferner. Conference co-organising (Almond) Participation in research bid to Canadian research council, and in successful subsequent bid to ESRC (PI Tony Edwards)
Collaborator Contribution Fieldwork organisation and participation Use of office facilities over extended periods Broader networking
Impact All publications etc featuring Murray as author CRIMT conference 2015 http://www.crimt.org/CRIMT2015CONFERENCE.html
Start Year 2009
 
Description MNCs, sub-national governance and human resources 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Public/other audiences
Results and Impact Early findings, presented at one-day workshop on Multinationals and employment practice, Leicester Business School, De Montfort University



Tuesday 23rd March 2010

Talk sparked questions and discussion afterwards

links between this and other projects reinforced
Year(s) Of Engagement Activity 2010
 
Description Multinational corporations, sub-national governance and human resources 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Supporters
Results and Impact Presentation made at International Colloquium "The Strategies of Multinational Corporations and Social Regulation : European and Asian Perspectives" Hong Kong, 14-15 June 2011 (invited and funded by host)

Future research collaboration with organising group.
Year(s) Of Engagement Activity 2008,2012
URL http://www.cefc.com.hk/fr/event/the-strategies-of-multinational-corporations-and-social-regulation-e...