Standardised leadership tools in MNEs ± critical
reflections on the conditions for successful
implementations
Keywords
Multinationals, Leadership,
Standards
Abstract
The article is inspired by a
paradox: why do MNEs like
standardised leadership tools
when everybody argues that the
world is becoming more complex?
Based on this paradox the article
raises the question: under what
conditions will standardisation of
a leadership tool be most useful to
an MNE? Previous literature
suggests that standardisation of a
leadership tool may have control
and learning benefits, and the
article explores these effects
looking at external and internal
contexts of MNE subsidiaries.
The paper is conceptual, but
draws also on examples from a
case study within a Norwegian
MNE. The article argues that
external complexity diminishes
the usefulness of standardisation
to an MNE. Internal fit of the tool
with other tools will increase
benefits of standardisation, the
article argues, whereas managerial
autonomy is associated with higher
subsidiary learning effects, but
lower synergy and control effects.
Journal of European Industrial
Training
26/6 [2002] 274±282
# MCB UP Limited
[ISSN 0309-0590]
[DOI 10.1108/03090590210431247]
[ 274 ]
Randi Lunnan
Norwegian School of Management ± BI, Sandvika, Norway
Rolv Petter Amdam
Norwegian School of Management ± BI, Sandvika, Norway
Bjùrn Hennestad
Norwegian School of Management ± BI, Sandvika, Norway
Jon Erland Lervik
Norwegian School of Management ± BI, Sandvika, Norway
Sùlvi Nilsen
Norwegian School of Management ± BI, Sandvika, Norway
Introduction
Globalisation is often characterised by
reduction of trade barriers, falling
telecommunication costs and speed of
technological changes (Astley and Brahm,
1989; Friedman, 2000; Harrison, 1994). One
feature of the globalisation process has been
the multinational enterprises (MNEs) that
have grown due to geographical expansion,
diversification and/or size expansion within
core areas (Chandler, 1986). Increases in
size, scope and distance in industries
characterised by blurring borders and
speedy technological change represent a
more complex external environment for
many MNEs. As the external environment
becomes more complex, we would expect
internal organisational solutions to follow
the same trend. The demands on modern
MNE managers to continuously learn and
change themselves and their organisation
should logically imply complex, firm-specific
leadership and development programs to aid
managers in developing the right skills.
There is, however, strong evidence of the
opposite. In the 1990s and beyond more MNEs
seem to prefer standard, pre-packed solutions
provided by consultants and academics than
previously. This is a paradox that raises the
following question: ``Under what conditions
will standardisation of a leadership tool be
most useful to an MNE?''
For MNEs operating in various industries
and countries, the need to stimulate change
and learning within each business unit is
often coupled with two additional desires.
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First, having operations in more than one
industry and more than one location
increases complexity and raises a control
need for the hub of the MNE. Additionally,
one rationale for MNEs is synergy between
business units, and it is therefore valuable
for the MNE if best practices and superior
knowledge in one part of the corporation are
shared and spread to other parts of the MNE
(Kostova, 1999).
How do MNEs organise to meet the
increased external and internal complexity?
The best answer seems to be ± with the
implementation of standardised tools.
Management consultants, business schools
with their MBA programs and the business
press have all increasingly contributed to the
dissemination of ``best practice'' world-wide.
The consultant firm McKinsey had for
example 3,559 active engagements in 1995
compared to 661 in 1975 (internal documents).
Management systems like total quality
management, balanced scorecard, and
reengineering have been widely applied
(Lindvall and Pahlberg, 1998) and the
overwhelming supply of the popular business
literature also illustrates this growth. This
development is criticised by Mitroff and
Mohrman (1987, p. 69) arguing that ``by
definition, simple formulas cannot cope with
complexity, and complexity is what today's
world is all about''. Our focus is to take
neither approach at face value, but to look
into conditions in which standardisation
may be more or less beneficial to a MNE, by
drawing on examples from a Norwegian
MNE implementing a standardised
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Randi Lunnan,
Rolv Petter Amdam,
Bjùrn Hennestad,
Jon Erland Lervik and
Sùlvi Nilsen
Standardised leadership tools
in MNEs ± critical reflections
on the conditions for
successful implementations
Journal of European Industrial
Training
26/6 [2002] 274±282
leadership tool. Our aim is to give new
insight into the bodies of literature
concerning diffusion of standardised
concepts as well as give knowledge on human
resource organisation of an MNE.
Concept foundations
MNEs have different ways of organising
their international activities. Some
theoretical approaches having discussed
these differences focus on the amount of
co-ordination between international
activities and geographical concentration
(Porter, 1986), or type of control (Goold and
Campbell, 1987). These insights suggest that
the MNE may favour strong initiatives and
control from headquarters or allow
subsidiaries to organise their activities
according to local needs (Rosenzweig and
Singh, 1991). Human resource management
(HRM) has been identified as the glue that
holds MNEs together (Gupta and
Govindarajan, 1991) and the vehicle to
enhance organisational learning (Bartlett
and Ghoshal, 1992; Prahalad and Hamel,
1990).
Standardisation is one of the key concepts
of co-ordination in organisations (Scott,
1981; Thompson, 1967). Standardisation is
defined as the establishment of rules and
procedures, and when ``. . . these are
incorporated in a program, the need for
communication is correspondingly
reduced'' (March and Simon, 1958, p. 162). In
this way standardisation may replace the
need for mutual adjustment or direct
supervision (Mintzberg, 1979) and is the
fundamental requirement for sequential
production (Thompson, 1967). Mintzberg
points to standardisation of work processes,
outputs or skills. In this article we are
interested in the first type of
standardisation, where the content of the
work process is programmed. If we apply
the standardisation insight to MNEs, the
idea is that headquarters of an MNE
develop a standardised ``best practice'' tool,
based on input from consultants, academics
or subsidiaries. In this definition,
standardisation is a ``top-down'' process.
This article focuses on the
standardisation of what we term a
leadership tool, defined as a method for
organising the whole or parts of an
organisation (Rùrvik, 1997). Leadership
tools differ from organisational practices
(March and Simon, 1958), or habitualised
actions, routines and standard operating
procedures, evolving over time and being
institutionalised in the organisation. We
are interested in the introduction of broad,
comprehensive tools, introduced by
headquarters, consisting not only of a
general idea but also including detailed
procedures, routines and specifications
regarding leadership processes.
Based on the discussion so far, we argue
that standardisation of a leadership tool
within an MNE may have at least two
purposes, and there may even be a
contradiction between the two purposes:
1 Control mechanism. By standardisation
headquarters would like to be assured
that certain processes take place within
its diverse subsidiaries. Additionally,
results from these processes can be
collected and sent to headquarters for an
overview over key HR competencies and
supplies.
2 Learning and change. Headquarters want
to stimulate internal development within
and synergies between subsidiaries. By
learning we refer to improvements of
practice at the individual or the
organisation levels within the
subsidiaries. Synergies imply that the
standardised tool may have these effects
across subsidiaries. Professionals at
headquarters may get ideas of ``best
practices'' and want to spread these to all
subsidiaries to encourage learning and
change in all parts of the MNE.
Based on the presentation of how we
understand the role of standardised
leadership tools in MNEs, we will in the
next part discuss the empirical case which
we draw on to illustrate the discussion in the
following part.
The case
The empirical reflections we draw on are
based on two years of observation of the
implementation effort of a standardised
leadership tool throughout the entire MNE.
We performed around 30 interviews in the
second pilot stage of the process at the point
in time when the tool had been first tried
out in the major parts of the corporation.
These interviews followed a semi-
structured interview guide, lasted about
two hours and were recorded. The
interviews were held mainly at two
subsidiaries and at headquarters. We also
performed a survey, measuring the
satisfaction and use of the tool in the
organisation over two years. Both years we
received well over 900 responses, giving a
response rate of 66 per cent. In addition, we
have observed a number of meetings,
reviewed internal brochures, memos, notes
[ 275 ]
Randi Lunnan,
Rolv Petter Amdam,
Bjùrn Hennestad,
Jon Erland Lervik and
Sùlvi Nilsen
Standardised leadership tools
in MNEs ± critical reflections
on the conditions for
successful implementations
Journal of European Industrial
Training
26/6 [2002] 274±282
[ 276 ]
and electronic communication. As the aim
of this paper is to conceptualise rather than
generalise, we are interested in
understanding the conditions under which
standardisation may be useful to an MNE.
We will thus not use our observations to
test, but rather to illustrate, explore and
understand.
The actual MNE (company X) is a large
Norwegian multinational corporation,
engaged in three major business areas. With
its diversified portfolio and its culturally
dispersed activities, the company had long
felt a need to centrally get a better grip on its
human resources. Many leadership tools had
been developed locally, but the output from
these development and appraisal tools could
not be used for the corporate management to
get a good overview of the human resources
in the corporation. This overview was seen
as important for corporate recruitment
purposes, to identify and retain people with
high potential, and to influence the
recruitment and development of managers
throughout the corporation. To meet these
needs, the corporate human resource unit
got a mandate from corporate management
to develop a tool that could be used on
individual managers for appraisal and
development purposes throughout the entire
corporation. The tool was developed together
with a large consultant agency with
benchmarking from other large European
industrial companies. The main function of
the tool was to replace the traditional
appraisal dialogues. In addition, results from
the dyadic employer-employee dialogues
were to be aggregated through a hierarchical
pattern of review meetings, all the way to the
top of the corporation. In this way, corporate
management could be aware of people with
high potential at low levels and take proper
steps to retain and develop these individuals.
Results from the review meetings would be
given back to the employees for further
discussion and career development
planning.
Implementation conditions and
outcomes
Based on existing literature and our research
experiences from the Norwegian MNE we
will in this section be concerned with the
development of propositions to discuss some
approaches to our research problem: how can
standardisation attempts from headquarters
fulfil MNE control and learning objectives,
and what conditions facilitate or constrain
these objectives? The discussion will
concentrate on two major topics: differences
in external and internal conditions of the
subsidiary. Figure 1 illustrates the
propositions.
Subsidiary external conditions
Differences in legal and regulatory pressures
within local environments may cause the
subsidiary to conform to local environments
and have fewer benefits of standardised tools
being developed under other legal and
regulatory conditions (Doz et al., 1981). The
more regulation of work practices differs
between the host country of two subsidiaries,
the more difficult it should be to standardise
work processes. One small illustration of this
can be found in MNE X. The tool was
originally developed in Norway after a
benchmarking process with large European
MNEs. When the tool was tried out in the
USA, one problem was the request for private
information, such as date of birth, in the
forms. The age of the employee was seen
as important for internal recruitment
purposes. This request was contradictory to
US law, and therefore had to be removed
(Teagarden and Von Glinow, 1997).
Teagarden and Von Glinow (1997) argue
further that there is a large variation
between country-specific practices
depending on the home country of the MNE.
Consequently, standardisation of assessment
practices based on Norwegian HR practices
may not be applicable to countries like the
UK and the USA (Rùrvik, 1997). This issue
could be illustrated by examples from the
MNE.
The leadership tool we studied had a rating
process that was aimed to give signals to the
appraisee of actual performance compared to
expected performance. It was stated
specifically in the early processes of the
implementation that the rating was not
comparable across individuals and only had
subjective meaning. This was far better
understood in Norway than in the UK, where
employees gaining a high rating expected
more benefits than colleagues who received a
lower rating. It seems likely that it is difficult
to develop a standardised leadership tool that
meaningfully incorporates legal and cultural
aspects of different environments in a way
that allows for subsidiary synergies and
learning. Consequently, we may argue that:
P1. The larger the host country differences
between subsidiaries the fewer synergies
and less learning can be expected from
standardisation.
Several researchers seem to argue that there
are problems with the implementation of a
standardised leadership in very different
industry contexts (Rosenzweig and Singh,
Randi Lunnan,
Rolv Petter Amdam,
Bjùrn Hennestad,
Jon Erland Lervik and
Sùlvi Nilsen
Standardised leadership tools
in MNEs ± critical reflections
on the conditions for
successful implementations
Journal of European Industrial
Training
26/6 [2002] 274±282
Figure 1
Overview over propositions
1991; Teagarden and Glinow, 1997). We
observed in our Norwegian MNE that heavy
manufacturing units had needs for other
HRM practices than competency intensive oil
exploration units had. Whereas the first
units applied sequential production logic
with highly specialised functional units, oil
exploration depends on cross-functional
co-operating teams with overlapping
competence and high interactivity (Stabell
and Fjeldstad, 1998).
Another industry difference relates to the
distinction between multidomestic and
global MNEs (Rosenzweig and Singh, 1991).
Multidomestic subsidiaries are more
dependent on local resources, whereas global
subsidiaries depend on other units in the
MNE for know-how, key personnel,
technology and capital. Thus, MNEs
operating in global industries apply
organisational structures and practices that
to a greater extent resemble those found in
other areas of the MNE. As with differences
in host countries, the more different
industries the subsidiaries are operating in,
the more difficult it seems to be to develop a
tool that leads to learning within and across
subsidiaries.
P2. The more different the industries of the
subsidiaries in an MNE the fewer
synergies and less learning can be
expected from standardisation.
Kostova (1999, p. 311) defines success of
transfer of a tool as the degree of
institutionalisation of practice at the
recipient or subsidiary: ``Institutionalization
is the process by which a practice receives a
taken-for-granted status of `how things are
done around here'''. Institutionalisation is
conceptualised at two levels:
1 formal implementation describing
whether the recipient follows the formal
rules of the practice; and
2 internalisation implying that the tool is
accepted by employees and has become
part of organisational identity.
If employees within an organisation are to
learn from a standardised tool presented to
them by headquarters, we may argue that the
tool is probably internalised and thereby
accepted as useful by the employees. If we
accept that internalisation of a standardised
tool becomes more difficult when external
conditions of subsidiaries are very different,
the question becomes whether all units
within an MNE must internalise a
standardised tool if the standardisation
attempt can be characterised as successful.
Through our observations in the
Norwegian MNE, we were able to see various
practices resulting from the introduction of
the tool. We were able to observe that the
practices resulting from the use of the tool
differed greatly, and that in some places the
tool was just a ``formal exercise without any
real implications'' (interview with manager,
40 years). Also from these subsidiaries
central HR managers within the MNE had
more systematised knowledge to act upon
when making decisions about HR policies
and actions. They claimed to have a better
overview over high potentials and the total
leadership pool within the company, and felt
better about all leaders being given a ``quality
controlled appraisal process'' (interview with
central HR manager).
In our example, the leadership tool was
also perceived as filling a need, and the tools
that had existed before had not filled this
need any better, in many people's eyes rather
worse. In Norway, as in many other
countries, all firms are expected to perform
appraisal dialogues. If these dialogues are
held once a year, and they have no
implications, we cannot say that a new
system resulted in any learning. We can say,
however, that this formal process is filling a
formal requirement firms have, and that one
formal tool may be as good as any other to the
subsidiary.
We may therefore argue that even if
variability in external conditions implies
that learning did not take place in all parts of
the MNE, the process all over allowed for
summaries of outputs that increased the
formal control over human resources within
the MNE.
P3. Standardisation of a leadership tool
within an MNE may improve
headquarters control independent of
high external differences between MNE
subsidiaries.
As we have observed the MNE over time, we
would like to add that this control effect may
[ 277 ]
Randi Lunnan,
Rolv Petter Amdam,
Bjùrn Hennestad,
Jon Erland Lervik and
Sùlvi Nilsen
Standardised leadership tools
in MNEs ± critical reflections
on the conditions for
successful implementations
Journal of European Industrial
Training
26/6 [2002] 274±282
[ 278 ]
not be stable. Based on the comments on the
tool the second year, we see that more people
say that the tool is less useful for the unit and
start suggesting that the standardised tool
should be exchanged with something else. We
may therefore suggest that standardised
leadership tools that are not internalised
over time in a manner that demonstrates
some learning benefits to the employees, is
unstable and may be sabotaged. The
contradicting factor to this development is
headquarters pressures. Headquarters may
strongly insist that subsidiaries use the
process to ensure control purposes centrally.
It seems likely, however, that in a situation
where subsidiaries spend time and resources
on a process they have little use of, will exert
pressure back to have the tool removed.
P4. Headquarter control effects of
standardised tools are unstable over time
when external conditions in subsidiaries
are very different.
Subsidiary internal conditions
In P1-P4 we argue that standardised ``best
practice'' leadership tools are useful for
control purposes, but will be less useful to
promote learning when host country and
industry differences at the subsidiary are
very large. That is, the more different the
subsidiaries are from each other, and the
more different legal and cultural
environments they face, the less likely we
think it is that a ``best practice'' standardised
leadership tool will lead to learning within
the single subsidiaries of a MNE.
This idea is similar to Milliman et al. (1991)
arguing that when environmental
uncertainty is high, MNEs will emphasise
HRM flexibility over fit, that is they will
allow HRM practices to vary across
subsidiaries and pay less attention to
standardised practices across subsidiaries.
In this situation, we have argued that a
standardised tool may give some temporary
formal control for issues like subsidiary
status on personnel matters within the
different subsidiaries, but that there will be
little learning within and between
subsidiaries as a result of the
implementation of the standardised tool.
We may also ask ± even if environments
and subsidiaries are similar ± is it plausible
to believe that ``best practice'' leadership
standards defined by headquarters lead to
learning within the subsidiaries of a MNE?
Marchington and Grugulis (2000, p. 1121)
attack Pfeffer's (1998) universalistic approach
to global human resource practices, arguing
that ``when unpacked, the practices are much
less `best' than might be hoped, there are
times when they present contradictory
messages, they are not universally
applicable, and they tend to ignore any active
input from employees ± other than to help
achieve employer goals ± into organizations
for which they work''. Their point is that
simple standardised ``truths'' within one
context may not hold true in another, or
depend on so many other factors that a
standardised process could in some instances
lead to an unfavourable outcome. If we follow
this line of logic, standardised ``best practice''
leadership tools initiated from headquarters
could allow standardised control across
subsidiaries of an MNE, but could lead to
dysfunctional, antagonistic and slow-down
outcomes at subsidiaries as well as the
learning that was desirable. The question is
then ± how and when standardised
leadership tools lead to the desired learning
processes within subsidiaries?
MacDuffie (1995) states that employees
must be motivated to apply a standardised
tool. Through our observations of company
X, we also want to add two other issues:
autonomy and fit. Our two arguments here
suggest that internalisation or learning
effects of a standardised tool can be
facilitated by two situations.
First, we want to discuss the level of fit
between the present tool and the other
systems already in place at the subsidiary.
Another part of this issue is subsidiary
culture, or present experiences and attitudes
towards standardisation in general within
the subsidiary. If employees at the subsidiary
are used with similar systems, the fit should
be higher.
A standardised leadership tool is often
comprehensive and requires resources to
implement and use. There are also other
processes within the subsidiary running in
parallel ± strategy processes, recruitment,
training and development, budgeting and
accounting processes are some examples.
The standardised tool that is implemented
must fit with these processes ± not only in
annual cycles, but also in content and
structure. Hence, the subsidiary has few
resources to spend on a standardised
leadership process during budgeting
sessions. And if training and individual and
organisational development initiatives are
not co-ordinated with the leadership tool,
next year's talk will end up in a void since
very few of the actions from last year are
acted upon.
To make sense of the tool and be able to see
the benefits of it, the subsidiary employees
must see that it fits with the rest of the things
they do, and improve and feed into the other
processes of the unit. Similarly, subsidiary
cultures vary according to previous
Randi Lunnan,
Rolv Petter Amdam,
Bjùrn Hennestad,
Jon Erland Lervik and
Sùlvi Nilsen
Standardised leadership tools
in MNEs ± critical reflections
on the conditions for
successful implementations
Journal of European Industrial
Training
26/6 [2002] 274±282
experiences with tools. In our survey we
asked about previous use of standardised
appraisal tools and their belief in these kinds
of tools in general. The answers varied
between countries and industries, signalling
that different subsidiaries have different
collective attitudes towards standardisation.
P5. The level of fit between the standardised
leadership tool with other standardised
tools and internal culture in the
subsidiary increases subsidiary learning
effects.
We may also add that control effects improve
the better the fit is, as it will be more easy for
headquarters to get standardised output from
the process when it fits right into the
subsidiary and its other standardised
processes.
P6. The level of fit between the standardised
leadership tool with other standardised
tools increases headquarters control
effects.
Second, we want to add the managerial
autonomy and skill to make the tool fit with
other routines and systems within the
subsidiary, either by adapting the tool or by
changing the previous systems. P5 implies
the more easy implementation and
internalisation of the tool, whereas our
second argument presented here may imply a
more resource demanding process. It is
likely, however, that the amount of learning
is higher if the subsidiary has to put some
effort into adapting the tool, rather than
more simply ``putting it in place''.
Through our interviews and observations
we were able to see institutionalisation
practices in two different subsidiaries. We
observed these practices at a time when the
leadership tool was in its second pilot stage.
That is, the tool was formally at its latest test
stage and not finally accepted. The
subsidiaries were encouraged to follow
procedures strictly, and not deviate too much
from the instructions. One subsidiary at a
Norwegian aluminium plant followed these
instructions directly. They arranged for the
meetings, filled out the forms, and submitted
the requested documents ``by the book''.
The process was viewed as ``something that
we do'', but had very few effects on daily life
in the plant. No one had thought of rotation,
new development, recruitment etc. as a direct
result of the process, even if the tool
processes yielded this kind of information.
Another unit in the MNE, a Swedish
chemical plant, adapted, translated and used
the leadership tool within a few months. The
tool was applied to the entire subsidiary,
far more than headquarters requested, and
more review meetings were held at local
initiatives. Top management reported more
use of teams, and one unit was totally
reorganised as a result of the process. These
results are similar to Beyer and Ashmos
(1997), finding that an organic
implementation process allowing the
organisation to take charge over the
implementation, resulted in long-term
learning. This example illustrates that
introduction of the same standardised tool
may lead to different practices within the
MNE.
In the implementation phases of the
leadership tool we were able to observe the
outcomes of several appraisal dialogues.
These dialogues result in a set of
development needs that were supposed to be
implemented in the months following the
process. We received several comments
regarding the quality of the dialogues
depending on the skills of the appraiser.
Occasionally appraiser and appraisee had
different opinions about the issues that were
discussed in the talks, and the skills of the
appraiser on how to handle these difficult
issues varied greatly. Appraisees also
commented on issues like the setting of the
dialogue ± did the appraiser allocate enough
time and was the atmosphere open at the
same time as confidentiality and respect
was ensured. Some comments were made
about obvious problems, like phone calls
interrupting the talk, and the appraiser
not welcoming appraisee opinions.
Consequently, we may argue that the level of
skills in the organisation may greatly affect
the implementation of the tool. If my
appraiser messes it up ± why should I pay
any attention to it?
Often, the introductory phase of a
standardised tool is given far more attention
than the following phases. It is easy to forget,
however, that organisations change, and that
every year new people are expected to use
the tool. When the tool is introduced it is
often followed by courses, training sessions
and intensive marketing by headquarters
staff. These initiatives tend to decrease
rapidly in the maintenance phases of the
process. Is it reasonable to expect new users
to find their way on their own without the
support the first users were given?
Additional problems arise if new situations
occur, as for example total reorganisations of
a subsidiary or the acquisition of a new firm.
If the tool is developed for stable
organisations ± who will give guidance on
how to use the tool during integration
phases? Who facilitates and changes the tool
to fit new conditions? From our observations
it seems as if the use of a standardised
leadership tool over time requires a
[ 279 ]
Randi Lunnan,
Rolv Petter Amdam,
Bjùrn Hennestad,
Jon Erland Lervik and
Sùlvi Nilsen
Standardised leadership tools
in MNEs ± critical reflections
on the conditions for
successful implementations
Journal of European Industrial
Training
26/6 [2002] 274±282
[ 280 ]
managerial and HR function that knows the
tool and related processes within the
subsidiary and the rest of the MNE. This
function must see that changes in one part of
the unit are compatible with other parts.
And in the final stages ± terminate the use of
the tool if the standardisation no longer fits
with the goals and requirements of the
subsidiary.
We will thus argue that learning effects
from the implementation of a standardised
tool are related to the managerial autonomy
within each subsidiary. In this situation we
see managerial autonomy as the freedom and
skills to change and adapt the standardised
tool to fit internal needs. Without managerial
autonomy, learning effects may take place if
they are obvious and fit nicely within
existing culture and structures. If long-term
learning is going to take place in the
subsidiary we argue that managerial
autonomy in the form of support and change
functions is required to fit the standardised
tool to new realities until it is no longer
useful. We argue that without this
managerial autonomy, the standardised tool
will not be flexible enough to be of use to the
subsidiaries in the long run.
If managerial autonomy is high, it may
however be more difficult to see synergies in
the form of learning across subsidiaries, as
the MNE may end up in a situation where all
subsidiaries develop the standardised tool in
different directions.
P7. The more managerial autonomy within
the subsidiary the more learning within
a subsidiary, but the less learning across
subsidiaries from standardised ``best
practice'' leadership tools.
An implication of managerial autonomy
within the subsidiary may be that the
standardised process changes content and
shape to fit with other process and changes
within the unit. To reap learning effects of
the standardised tool, the tool may have to
change to fit with subsidiary processes and
culture, but this process may lead to the tool
becoming ``less standardised'' across units.
From the Norwegian MNE we observed that
some subsidiaries tied this process with
salary adjustments, others used it solely for
development purposes. Some used it for all
types of employees, others only for leaders.
These variations in use resulted in
difficulties with ``standardisation across'' and
thereby with the tool fulfilling headquarters
control needs.
P8. The more managerial autonomy within
the subsidiary the less headquarters
control from standardised ``best practice''
leadership tools.
Discussion
In this paper we started with a paradox:
why do so many global MNEs use
standardised leadership tools when their
environments are becoming more complex?
Based on previous studies we may argue
that standardisation of a leadership tool
could meet at least two purposes: control
and learning within and across
subsidiaries. The focus of this paper was to
discuss the conditions under which
standardisation could be most useful to
a MNE.
If host country and industry conditions
differ greatly, the firm has little control over
detailed leadership processes, but may
through a standardised leadership tool
receive standardised forms, and general
statistics that allow the MNE some control.
This control allows the MNE to be assured
that:
. certain leadership processes take place
within the MNE (although their content
may differ);
. outcome statistics may be compiled and
summarised.
Hence, the MNE may know the totality of
development and training needs, internal
rotation practices, get access to high
potentials and employee demographics.
If learning within and across subsidiaries
is the main objective, we argue that country
and industry differences may cause
problems for standardisation. If the
subsidiaries need to meet very different
external claims, their HRM practices must
also be different, and standardisation
becomes expensive and a suboptimal use of
focus and resources. Furthermore, we
argue that for learning to take place, the
users of the tool must have a certain level of
interpersonal skills, the tool must fit with
other tools and processes in the subsidiary,
and the implementation and maintenance
of the tool must have a support structure.
Subsidiary managerial autonomy in the
form of skills and support functions to
change and adopt the tool may however
give a flip side to standardization as
subsidiaries may learn and develop the
tool in different directions, thereby
decreasing synergy effects between
subsidiaries, and control opportunities by
headquarters.
In response to our initial dilemma, we
suggest that standardised leadership tools
can be useful in global MNEs even if the
subsidiaries are different and the speed of
change is fast. The standardised leadership
process we have been discussing in this
Randi Lunnan,
Rolv Petter Amdam,
Bjùrn Hennestad,
Jon Erland Lervik and
Sùlvi Nilsen
Standardised leadership tools
in MNEs ± critical reflections
on the conditions for
successful implementations
Journal of European Industrial
Training
26/6 [2002] 274±282
article aims at discovering and compiling
information rather than implementing
specific predetermined types of knowledge.
Consequently, this type of standardised tool
can handle all types of employee information
with the aim of making it visible in the
organisation rather than standardising a
specific ``way of doing things''. The
leadership tool thus defines a process and a
type of outcome rather than a specific
outcome. In our observations from the
Norwegian MNE, we have seen that a
standardised leadership tool may be a very
useful way to get an overview over talent and
competence in a timely manner that also
allows headquarters information they can
use for overview and control purposes. For
this type of tool, thus, we propose that
standardisation can save time and increase
efficiency in different subsidiaries in a MNE.
Learning from the tool, seen as direct
changes in organisation, structure and work
practices, varies across subsidiaries. We
suggest that the subsidiaries that will have
less learning are those that are most different
from mainstream subsidiaries, and those
that have less fit with external systems and
less managerial autonomy.
Regarding speed of change and the
implications for usefulness of a standardised
leadership tool, the question is about
shortening the cycles of a standardised process
or replacing it with another speedier process of
development. Alternatively, the subsidiary can
use no specific process, but allocate time to the
issues that occur in an incremental manner.
On one hand high speed of change could
disfavour standardisation, as subsidiaries do
not have the time to follow present procedures
to compile development needs. On the other
hand, no procedures could result in
inefficiencies as the wheel has to be discovered
every time there is a change. This could
suggest that high change subsidiaries could
benefit from simplified standardised tools, but
to deal with these issues more properly, we
suggest that this topic be treated more
thoroughly in another setting.
To conclude, we tend to agree with
Marchington and Grugulis(2000) that
regarding the question of benefits of a
standardisation tool to an MNE, it depends
on many issues. Our contribution to this
topic has been to highlight some of these
issues.
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