Multinational enterprises, global value chains and local human resource management decision-making discretion

This paper seeks to discuss two primary research questions. First, what is Australia’s place in the global value chain? In answering this question, we will be able to determine whether Australia is moving towards a knowledge or service based economy, or whether it remains a destination for investments in natural resources and basic manufacturing activities? Our second research question asks, what impact does the Australian operations’ position in the global value chain have on local subsidiary decision-making autonomy over key human resources (HR) and employment relations (ER) policies and practices? In this paper we set out to establish whether the global value chain concept is useful in explaining subsidiary management autonomy. In doing this we propose a number of hypotheses. Focusing on human resource management (HRM) and the discretion afforded to subsidiary management in multinational enterprises (MNEs) is also significant due to the increasing consensus in the literature on the importance of HR in deriving sustainable competitive advantage (Amit & Belcourt 1999; Hatch & Dyer 2004). Being able to discern the extent to which management in MNEs in Australia have authority over HR policies and practices or whether they merely execute corporate decisions and policies that are decided elsewhere is a useful contribution. Specifically, we will further existing research on the extent to which MNEs are pursuing common, global agendas or whether there are a number of factors impinging on this, and most notably here, the subsidiary position in the corporate value chain.