What Makes MNC-Policy Collaborations Work in Practice?
The interplay between multinationals (MNCs) and institutions in shaping how human resources (HR) in host environments are managed and developed is under researched. Much of the research on skills and multinationals focuses on current skills, talent and HR processes internal to the multinational. An area often overlooked in this field is the external relationships multinationals cultivate with local labour market skills actors. This raises questions with respect to why a global firm would choose to engage with local skills actors and how such relationships are enacted in practice. This paper examines how networks involving MNCs and skills governance actors (hereafter referred to as M-SGA networks) are structured and sustained within two subnational regions of England. Governance actors refer to government departments, and those involved, directly or indirectly, in delivering government policy. In the context of this research we focus on governance actors involved in the retention and attraction of multinational firms to the UK where labour market skills are central to the agenda. Through analysis of the structural, relational and functional basis of M-SGA collaborations, this paper considers how and why MNCs engage with policy actors. The work aims to make a contribution to understanding the dynamics of M-SGA networks that enable learning and adaptation in ambiguous policy contexts.
Method
The paper uses a combination of interview data and social network data collected within 2 regions in England:
In total 51 semi-structured interviews were conducted with 53 respondents, these included: 25 interviews in the Midlands, 18 in the North West, and eight extra-regional for example with representatives from institutions with a national remit; 35 of the interviews were with governance actors and 16 with MNCs. The interviews covered the following issues, with some deviation reflecting the differing roles of multinational and governance actors: the structure of the organisation, the FDI networks the organisation was involved with, members, function and outcomes of network activity, nature of relationships with other network members. To illustrate how the networks operated in practice respondents were asked to draw on specific examples of collaborative projects. All interviews were conducted by two researchers and recorded.
The data used for the social network analysis were also collected at the time of interview. Membership of the FDI governance network was identified through a combination of preliminary interviews with representatives of the RDA and analysis of secondary data sources including website materials and policy reports. On the basis of this a list of potential policy network actors was drawn up (Wasserman and Faust, 1994). The method used to interrogate the data was Social Network Analysis (SNA) adopting the software package UCINET.
Findings
The institutional heritage at the regional level was important for shaping the funding structures, funding resources and co-ordination of actors in a locality over time. The way in which these resources are mobilized can be critical to determining innovation and learning (Djelic and Quack, 2003; Lawrence et al., 2002). The analysis here identified key mechanisms underpinning the MNC-policy collaborations. First, a critical factor to building mutual gains (Mørk et al., 2012) was developing a shared identity. This research revealed that shared identity was fostered in many ways and ranged from a general community based shared identity to project-based shared priorities. For institutional actors, identity was built through developing understanding of what the MNCs need or can utilise; building a track record of successful collaborations; and building expertise on what the institutional system can offer or adapt. The importance of career histories was notable and arguably a key factor in providing longevity to the relational context in the absence of stable institutional structures. Individuals moved jobs and organisations, but remained within the same career community allowing a social identity with the policy community which provides stability whilst the political boundaries are in flux due to changes in policy and/or government - as in the case of the UK.
Second, the variation in the capacity of the MNC to access the institutional system was apparent. This was in part a structural issue with regard to firms having dedicated personnel or functions who could negotiate with institutional actors. Larger firms were able to develop a multi-layered response to a multi-layered system. The national-HQ level of interaction was most likely long established, particularly for those large firms making significant investment at the country level. However, the local subsidiary level is perhaps an area that has received less attention and particularly where subsidiary interests are smaller or operate in more niche sectors. The regional analysis offered here demonstrated that MNC subsidiaries are an important actor in how they shape and engage with a country’s institutional structures sub-nationally. The different structures of networks in the two regions represented how the network actors had adapted structures to fit the nature of the collaborative action in their region (Wenger, 2000). Congruence, enabled through boundary spanning, within the network appears important to understanding how collaborations are sustained (Fennel and Alexander, 1987). It also suggests that during times of destabilisation, perhaps through political change or MNC-led institutional negotiation, that boundary spanning capability within the network (Mørk et al 2012), provides an adaptive mechanism through which boundaries can be challenged and reorganised.
References
Djelic ML and Quack S (2003) Globalization and institutions: redefining the rules of the economic game. Cheltenham: Edward Elgar.
Fennel ML and Alexander JA (1987) Organizational boundary spanning in institutionalised environments. Academy of Management Journal 30(3): 456-476.
Lawrence TB, Hardy C and Phillips N (2002) Institutional Effects of interorganizational collaboration: the emergence of proto-institutions. Academy of Management Journal 45(1): 281-290.
Mørk BE, Hoholm T, Maaninen-Olsson E and Aanestad M (2012). Changing practice through boundary organizing: A case from medical R&D. Human Relations 65(2): 263-88.
Wasserman S and Faust K (1994) Social Network Analysis. Cambridge: CUP.
Wenger E (2000) Communities of practiced and social learning systems. Organization 7(2): 225-46.