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The first approach regards MNCs as broadly positive and progressive. In this view, MNCs are agents of economic progress, principal factors in the expansion of the international division of labour, and the diffusers of modern technology and production techniques, which generalise the benefits of globalisation. The second view is that MNCs reflect both the increasing concentration of capital and the growing integration of production on an international scale.

MNCs exercise this power by locating plants in countries with what they consider less restrictive regulatory environments, by lobbying governments and international institutions, by comparing performance across the MNC, and by squeezing costs in subsidiaries through coercive comparisons and threats to relocate production. This distinction is mirrored in the debate in IHRM between the so-called functionalists and the opposing critical approach Caldas et al. Whereas the functionalist tradition focuses attention on economic considerations and the transfer of HRM best practices across borders, critical approaches tend to highlight sociopolitical issues and point out that IHRM, just as domestic HRM, would be ultimately concerned with maintaining managerial control and power relations in organisations.

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Comparing mainstream analyses from IHRM with sociologically orientated perspectives on work and employment reveals significant differences. Voss points to three noteworthy, underlying premises that differ between these perspectives cited in Collings, — Accordingly, sociologically based research has the potential to provide insights into aspects of labour management in MNCs — such as trade union recognition, collective bargaining and employee participation — that are often neglected in the mainstream IHRM literature, which views the firm as an atomistic entity operating without political challenges.

Furthermore, as corporations have adopted networked forms of organisation and outsourced a growing number of operations, the firm as the unit of analysis has become problematic Grabher, This makes it perilous to attribute firm profitability to the HRM strategy of a principal firm when it depends on the management of a complex supply chain and tiers of subcontractors in different contexts over which HRM has little or no control Delbridge et al. There are also broader, more significant and compelling issues than maximising MNC performance that have come to the fore since the advent of globalisation and neoliberalisation.

These have encouraged sweeping changes to the structures and institutions of the traditional employment relationship, and are characterised by the rise of new forms of organisation, flexible work, polyvalent skills, the emergence of new multinational actors and so on see Thornley et al. In a review of the literature, Clark et al. Work and employment studies tend to adopt contrasting positions on all these characteristics.

The collective determination of terms and conditions employment, in particular, is an area of study where work and employment relations scholars have a significant advantage over IHRM researchers. Indeed, IHRM research has been widely criticised for its lack of consideration of the significance of power in management.

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As Edwards and Kuruvilla note, since institutional factors do not have determining effects, there is scope for organisational politics and power to shape the ways in which MNCs manage their international workforces. Arguably, a sociologically orientated perspective, with pluralist underpinnings, would assist researchers in addressing these and other related deficiencies and in advancing theory in the field.

Rather, they are a means of redressing the power imbalance between labour and management. Given the lack of a theory of power in IHRM, the consideration of power is one of the key means through which industrial relations research can contribute to a better understanding of management in MNCs. Hence, there can be no fully determinate ex ante model of labour management. The implementation of managerial strategies is shaped by a host of contextual factors and invariably generates unforeseen and unintended consequences.

Durkheim introduced the idea of institutions as systems of shared beliefs, norms and collective sentiments that mould social behaviour. Weber pioneered the interpretive study of social institutions through his comparative analysis of cultural beliefs, economy and polity. Parsons later developed a structural-functionalist framework that conceived of institutions as organised systems of shared cultural beliefs, norms and values.

As Nee points out, economists interested in studying social institutions have found that the more they come to understand the workings of institutions as endogenous to social processes in society, the more their work must address questions that require them to integrate sociological variables. Generally, neo-institutionalism in economics and sociology is unified around the belief that neoclassical economics is severely limited by among others its unrealistic behavioural assumption of individual utility maximisation and its improbable supposition of zero-transaction costs, which imply that extant institutions, social relations and cultural beliefs are extraneous to explanations of economic and organisational life.

The common starting point of these approaches is the claim that institutions matter and that understanding institutions and institutional change is a principal task of the social sciences. Sociological neo-institutionalists — such as John Meyer, Richard Scott, Paul DiMaggio and Walter Powell — have reshaped the study of organisations by analysing how institutional context and cultural beliefs shape their behaviour. DiMaggio and Powell introduce into neo-institutional theory the ideas of Weber, which is evident in their account of how organisational fields emerge and then constrain the actions of agents under conditions of uncertainty.

Neo-institutional economic sociology, according to Nee , includes ideas and insights from this organisational research programme, and integrates these into a framework of sociological research that examines context-bound rationality shaped by custom, networks, norms, cultural beliefs and institutional arrangements. Economic sociology is heterogeneous and diverse, with no single, dominant theoretical perspective.

The influence of Weber and Parsons is pervasive. The latter idea is often employed in a loose sense as largely synonymous with the view that the economy is part of a larger institutional structure.

Granovetter , however, uses the notion of embeddedness in a more precise way, to mean that economic action takes place within the networks of social relations that constitute the social structure. This entails an explanation of organisational diversity that cannot be reduced to the mere search for efficiency by atomistic individuals or firms. The choices made by actors are influenced by their social relations and by their cognitive and normative attitudes see Arts, ; Beckert, ; Trigilia, In this regard, Zukin and DiMaggio have attempted to distinguish between different kinds of embeddedness, such as cognitive, cultural, structural and political.

Even so, the concept of embeddedness remains in need of greater theoretical specification and empirical exploration. The neo-institutional model essentially holds that organisational survival is determined by the extent of alignment with the institutional environment. While allowing for a nominal amount of agency, neo-institutionalists largely suggest that the incorporation of institutionally mandated elements allows organisational actors to portray the organisation as legitimate, thereby enhancing its likelihood of survival Kostova et al.

In general, most IHRM scholars draw extensively from neo-institutionalism and utilise the concepts of organisational field, legitimacy, isomorphism, and mechanisms of institutional pressures. Kostova et al. Institutions are therefore symbolic, economic, political and legally sanctioned orders that are reproduced and dynamically transformed by embedded social actors, who are, in turn, moulded by these institutions Heidenreich, An extended embeddedness concept, which assimilates the roles of agency, multi-dimensional institutions and the co-evolution of individual and corporate actors and structures, may facilitate a wider perception of the social construction of MNCs.

The task of assessing the role of sociology in IHRM is complicated by several factors, chief among which is the fact that neither discipline is homogenous. On the one hand, both areas of study draw on a number of distinct disciplines. On the other hand, the different fields of sociology have had a differential influence on the various sub-fields of HRM. The sociology of work and organisations as well as economic sociology have had a significant impact on studies in IHRM that explore issues such as embeddedness, institutions, human resource development, knowledge flows, social capital, network relations, corporate social responsibility, research and design, and the role of culture and discourse.

By contrast, sociological theories and concepts are less evident in what are arguably the mainstream concerns of IHRM. In many ways, the emphasis in industrial sociology on conflict, contradiction, struggle and reflexivity is inimical to the stress on consensus, integration, harmony and best practice by the mainstream HRM literature. A key challenge posed by interdisciplinarity is sustaining disciplinary rigour without sacrificing social relevance.

Public sociology is therefore a commendable attempt to bolster the discipline. However, as Burawoy also shows, professional work needs to be protected, at some level, since sociology can have no public, critical or policy face without tried and tested methods as well as accumulated bodies of knowledge. In this regard, disciplinary work is vital because it exposes the pitfalls of focusing on one aspect of the social: on structure at the expense of agency, on global at the cost of local, on policies at the expense of practices, on institutions at the cost of culture, on stability at the expense of change, and so on.

This is apparent, for instance, in the failure by many IHRM scholars to disentangle the relative influence of MNC internal and external regulative, normative and cultural processes as well as explore the sub-national embeddedness of MNCs. Distinct strategies of competitiveness are forged in the context of conflicting organised interests, with particular organisational and institutional resources, which struggle to assert discrete paths of restructuring in a context of specific strategic selectivities Jessop, Despite these and other challenges, there are some encouraging signs of elements within HRM shifting away from the rather bland and prescriptive approach of earlier accounts towards a stress on the negotiability, uncertainties and contested nature of the managerial process.

Yet, this shift is largely confined to the critical margins of the discipline.

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Sociology has much to offer IHRM in this regard. For instance, it would call much more attention to the ambiguities, contradictions, silences and tensions that always plague strategic action. Taxonomies of managerial practice — a key concern and focus of HRM — must reflect endogenous as well as exogenous opportunities and constraints as mediated through prevailing normative and institutional frameworks, discursive apparatuses, organisational structures and regulatory mechanisms.

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Variation in managerial behaviour is rooted in different configurations of regulatory mechanisms, diverse dynamics and trajectories, and specific institutional arrangements. A significant part of the variety within and between firms is a product of managerial efforts to draw on local institutional and normative resources in ways that offer distinct compromises between conflicting interests in the workplace.


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Research on hybridisation has frequently deployed it in an undifferentiated, mechanical fashion that impedes multi-scalar analysis and conceptual bricolage Gamble, The constitution and institutional bases of hybridisation are empirical questions that require detailed historical evidence of the processes of institutional diffusion, borrowing, clashes and complementarity. Broad generalised categories are inadequate to explore the complex dynamics and diverse patterns of hybridisation.

This suggests that the binary opposition between best-practice and best-fit HRM is poor reflection of the variety in managerial practices. Although dominant national regulatory models tend to place limits on the patterns of work and employment relations, there are no a priori rules dictating how diverse regulatory mechanisms will be coordinated in a specific empirical context. This is partly a product of the differential interaction across time and space between the institutional processes associated with production, reproduction and social regulation Peck, Given the variety of levels at which the employment relationship may be coordinated and the non-zero-sum articulation of markets and institutions, it is misleading to classify managerial practices in terms of a simple contrast between the relative influence of markets and institutions.

The forms that regulation assumes and the dynamics that it displays are determined in large measure by the structures and propensities of the object that is to be regulated. The employment relationship is dependent on numerous mechanisms of reproduction, regularisation and governance capable of generating the social rules and conventions necessary for its cohesion and durability. This approach allows us to proceed beyond mere taxonomies of managerial practices to explore their conditions of possibility, emergent properties, contradictions, reproduction and propensity for transformation.

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Why is management research irrelevant?

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