A r t i c l e 3 .

Opening the black box of the relationship between HRM

practices and firm performance comparison of MNE subsidiaries in the
USA, Finland, and Russia

This paper investigates the extent to which different human resource

management (HRM) practices work better in different countries. Authors tried to
open the black box between HRM and multinational enterprise (MNE) subsidiary
performance by considering mechanisms through which HRM practices affect MNE
subsidiary performance. The study utilizes a unique data set consisting of
subsidiaries of 241 MNEs operating in Russia, USA, and Finland. In the partial
least-square analysis used to examine our hypotheses, we demonstrate that different
HRM practices are preferable in different countries, and that motivation and ability
are important mediating variables in the HRM– MNE subsidiary performance
relationship.

The purpose of this study was to analyze the effect of HRM practices on
MNE subsidiary performance, and to uncover whether and, if so, how these
relationships differed in different countries. The table presents the path coefficients
for the model, and a summary of which hypotheses were sup-ported and the
significance level at which they received support. The empirical results provide
evidence to support the majority (all but three) of the research hypotheses. Thus it is
proved that differences in employee ability development, employee motivation, and
performance between MNE subsidiaries can be partly explained by the types of
HRM practice implemented.