The adoption of high performance work systems in foreign subsidiaries

This study examines the determinants and outcomes of the adoption of high performance work systems (HPWS) in foreign subsidiaries of multinational corporations (MNCs). Region-of-origin of MNCs, headquarters (HQ) influence, and strategic human resource management (SHRM) orientation are expected to determine subsidiaries’ use of HPWS, which affects firm performance via organizational climate. We found that HQ influence, SHRM orientation, and HPWS adoption varied among foreign subsidiaries originating in different regions. HQ influence and SHRM orientation were positively related to the adoption of HPWS. HPWS had a positive effect on subsidiaries’ performance, and this positive effect was partially mediated by organizational climate.