The Transfer of ‘International Best Practice’ in a Brazilian MNC: A Consideration of the Convergence and Contingency Perspectives

Abstract

This study examines the transfer of a Brazilian MNC's HR model to its subsidiaries in the UK, Canada, Switzerland and Norway. It enquires where the model was sourced from, to what extent it bore a distinct Brazilian complexion, and whether it was adapted to meet the strictures of host institutional constraints and traditions. The paper uses these questions to address an important theoretical debate in the international business literature; that is, whether the pattern of diffusion of management practices within MNCs will lead to a convergence of practices across companies and countries à la the convergence perspective, or whether this is unlikely given the variety of social and political constraints limiting such a process as suggested by the contingency perspective. We find that the MNC imposed a unitary (US-sourced) model of HR ‘best practice’ on all of its subsidiaries. Thus our empirical findings support the convergence thesis. However, we argue that these outcomes are largely explained by relations of power and economic dependence; specifically, the co-existence of dominant-country (US) practices and a dominant sectoral firm operating in economically dependent regions. Where similar circumstances are replicated one might foresee convergence within sectors across countries, but otherwise pluralism and eclecticism between sectors and across countries might be the predominant pattern along the lines envisaged in the conceptualization of “converging divergences”.