The second assessment is an individual 2000 word essay entitled �Critique of Quantitative Methods
Journal Paper� and represents 60% of the total assessment for this course. This assignment builds
on your weekly seminar papers for discussion and is concerned with critically evaluating and
interpreting a business and management journal article that adopts quantitative methodology.
You are asked to interpret and evaluate the following journal paper attached with this assignment:
Edwards, Tony, Sanchez-Mangas, Rocio, Belanger, Jacques and McDonnell, Anthony, (2015), Why
are Some Subsidiaries of Multinationals the Source of Novel Practices while Others Are Not?
National, Corporate and Functional Influences, British Journal of Management, Vol. 26, pp. 146-162.
Areas for discussion within the essay are:
? Introduction: Key research gaps that the paper is trying to fill
? Brief description of current theory and empirical research illustrating incoherencies, inconsistencies
and uncertainties
? The nature of sample used in the study and an appraisal of its fit for the research question as well
as its shortcomings
? The major part of your paper (at least 1000 words) is to describe the most significant statistics in the
paper and what they mean
? Conclusions: Discuss how the researchers could have done the study differently. Here I�m looking
for your creative thinking especially linked to seminar discussions of other papers during this course.
CRITIQUE OF QUANTITATIVE METHODS JOURNAL PAPER 2
Critique of Quantitative Methods Journal Paper
Introduction
Edwards, T., Sanchez-Mangas, R., Belanger, J & McDonnell, A. (2015). Why are Some
Subsidiaries of Multinationals the Source of Novel Practices while Others Are Not?
National, Corporate and Functional Influences, British Journal of Management, 26: 146-
162.
Transitional corporations are usually thought to be shifting toward network forms
where their subsidiaries assume major roles and share practices with the rest of the firm.
Continual national diversity in the context where companies operate offers the chance for
multinational corporations to make the most of local patterns of unique practices and spread
them globally (Cantwell & Zhang, 2010). A multinational corporation is understood as a
company that has a workforce of at least 500 workers globally with a minimum of 100 within
the host nation (Holtbrugge & Mohr, 2011).
In the article, Edwards et al. (2015) point out that the existing literature has 2 major
gaps. In theory, the existing literature generates only the most fundamental comprehension of
the way that national contexts shape the position of multinational corporation subsidiaries to
instigate diffusion. Empirically, the authors point out that there are somewhat few researches
which differentiate between the different directions that diffusions could take, and among the
studies that actually do, there is hardly any quantitative evidence with regard to the factors
that retard or foster reverse diffusion or employ data from several nations. This journal article
by Edwards et al. (2015) help in filling these gaps in existing literature by exploring the way
the national context of the subsidiary produces disparity in the potential for the subsidiaries to
instigate diffusion in multinational corporations by analyzing representative, unique, cross-
country data.
Reverse diffusion basically refers to the diffusion of human resources practices from
the overseas operations of multinational corporations to the rest of the company. It is called
reverse diffusion since the direction of diffusion is actually inverted from the one that is the
primary focus on research in relation to multinational corporations (Edwards, 2011). In the
article, Edwards et al. (2015) consider the national context’s role together with other
explanations for disparity in the occurrence of reverse diffusion and maintain that the
functional, corporate and national contexts all matter, illustrating the advantages in taking on
a multiple, instead of a single factor explanation. In particular, actors at the subsidiary level
who instigate diffusion are placed differentially by the authors in accordance with their
national context, their position in corporate structures, as well as the degree to which the
human resources function is globally networked. The authors studied 4 countries including
Britain, Spain, Ireland and Canada, which all have significant characteristics which make
them interesting contexts for investigating reverse diffusion.
An approach commonly utilized to analyze transfer within multinational corporations
is focused on the concept of institutional distance, which measures the extent of dissimilarity
CRITIQUE OF QUANTITATIVE METHODS JOURNAL PAPER 3
between the cognitive, normative and regulative aspects of institutions across borders and has
been utilized in explaining the reasons as to why transfer does or does not take place between
2 nations (Hill, Hwang & Kim, 2010). The aim of Edwards et al. (2015) in the article is to
compare the degree to which 4 different nations contain donor units, and therefore rather than
focusing on the institutional distance approach, they assume an eclectic approach employing
3 bodies of theory. The first body of theory pertains to the position of each of the 4 nations
within the main flows of cross-border economic activity, especially foreign direct investment.
The second body of theory is focused on how multinational corporations are fragmenting
their activities across different nations bringing about production which is globally integrated.
The third body of theory is concerned with how the human resources function is typified by
effective networks which can transfer various practices across the company. Edwards et al.
(2015) take each of these bodies of theory one after another and build hypothesis from each.
The authors develop a number of hypotheses including H1a, H1b, H1c, H2a, H2b, H2c and
H3.
Sample used
This article is derived from an innovative project employing parallel, comparative
national surveys of multinational corporations that operate in 4 nations where the research
instrument was developed cooperatively. Each of the surveys was based upon the most far-
reaching list of multinational corporation developed so far in each country (Edwards et al.,
2015). The sample comprised a total of 883 foreign-owned multinational corporations: 247 in
Spain, 214 in Ireland, 165 in Canada and 258 in the United Kingdom. The senior-most human
resources official in each of the subsidiaries took part in the survey. On the whole, the sample
size of the over 880 multinational companies is satisfactory as it allowed the researchers to
collect comprehensive data that could be generalized. The high number of participants also
ensures that the surveys actually have an extremely high level of representativeness.
Furthermore, this sample size allows the researchers to collate sufficient empirical evidence
with regard to the degree to which subsidiaries of multinational companies input or introduce
new practices into the rest of the firm. The sample size allows the researchers to effectively
explore this within the field of human resources (HR) by analysing a distinctive international
data set in 4 different host nations. As such, the sample size effectively fits the research
question.
Most significant statistics in the paper
In the study, Edwards et al. (2015) constructed dependent variables from questions
which asked the study participants whether or not the subsidiary of the multinational
corporation has introduced some novel practices in areas which have been adopted elsewhere
in the multinational firm: Code 0 = No, Code 1 = Yes. The authors asked this question
regarding employee consultation and Training and Development (T&D), and these 2
comprise the study’s dependent variables (DVs). These 2 DVs offer an important contrast in
2 ways. Firstly, the significance of Training and Development in developing capabilities,
especially the capability of producing and absorbing implicit knowledge, could make this
issue more strategic compared to consultation given that higher management levels could be
involved in creating policy (Edwards et al., 2015). Secondly, the limits of the host nation
institutional setting are more distinct and clear with regard to consultation practices, which
show that they could come across more significant institutional hindrances to diffusion. As a
result, these 2 facets of Human Resource Management practice present a crucial test of
whether or not these factors explain disparity in the diffusion of various human resources
practices (Edwards, 2011). The explanatory variables in the study comprised the following:
CRITIQUE OF QUANTITATIVE METHODS JOURNAL PAPER 4
integrated production, country dummies, skills, human resources network intensity, and
controls (Edwards et al., 2015).
The findings of the study are provided as descriptive statistics. The pattern for the
DVs indicates that Training and Development practices are more frequently diffused from the
subsidiaries in comparison to consultation practices. The researchers also found that for both
consultation practices and Training and Development practices, the United Kingdom
subsidiaries are most commonly the source of novel practices adopted in other places
followed by subsidiaries in Canada, Ireland and Spain (Edwards et al., 2015). With regard to
the explanatory variables, there are some resemblances throughout the 4 host nations; that is,
trading links between the subsidiaries of the multinational corporation and the rest of the
company comprise nearly 50 percent of all subsidiaries in each host nation. The other
similarity across the 4 host nations is that the low skill group is in fact the most common in
each of the countries. Nonetheless, the extent to which the subsidiary is entrenched in human
resource networks is different, with subsidiaries in Canada more frequently having linkages
to parts of the human resources function in other host nations and the subsidiaries in Spain
least frequently.
The researchers carried out binary logistic regression on the 2 DVs, the reverse
diffusion of Training and Development and consultation practices. Using list-wise deletion,
the N drops to 741 and 738 from 883 in the 2 models. The average partial effects,
significance levels, standard errors and coefficients of all the variables as well as the fit
statistics of the models are clearly illustrated in tabular form by the authors of the article.
Subsidiaries in the United Kingdom are very much more probable to be source of reverse
diffusion for both consultation and Training and Development than Irish and Spanish
subsidiaries, whereas there are no big differences between Britain and Canada, a finding that
actually supports hypotheses 1c, 1b and 1a (Edwards et al., 2015). On average, the likelihood
that the subsidiaries in Spain and Ireland introduce novel practices in Training and
Development is 17% and 15% respectively lower than the subsidiaries in the United
Kingdom, while the figures are 9% and 7% points lower for consultation practices.
In addition, the impact of trading connections is significant and consistent in both
models, with subsidiaries that act as recipients and suppliers of services and components
more probable to be the sources of reverse diffusion (Birkinshaw & Hood, 2013). On
average, the likelihood that intermediate skill and high skill subsidiaries offer Training and
Development practices is 14% and 9% respectively higher than in low skill subsidiaries. With
regard to the impact of human resource network intensity, Edwards et al. (2015) learned that
having various types of networking has a significant and positive effect on the 2 models,
which in fact supports Hypothesis 3. Furthermore, making use of one more facet of human
resource networking is related to an average increase of five percent in the likelihood that the
subsidiaries offer novel Training and Development practices. The corresponding figure for
consultation is three percent (Edwards et al., 2015; Minbaeva, 2010). As a result, in the two
models, the higher the intensity of the human resource networks, the greater the likelihood of
reverse diffusion.
It is notable that the distinctive nature of the cross-national research design, in
particular the representative and all-inclusive aspects of the surveys in addition to the
strongly coordinated process where they were created and executed, has served to position
the authors of the article to go past what other researchers investigating the reverse diffusion
of Human Resource Management practices have managed to do (Quintanilla et al., 2010).
The results demonstrate that some multinational corporation subsidiaries actually assist the
CRITIQUE OF QUANTITATIVE METHODS JOURNAL PAPER 5
parent company to employ a varied locational portfolio of abilities in human resources. In
assuming an approach with the use of several factors, the authors followed a deep-rooted
tradition in this extensive field. It is worth mentioning that eclectic approaches have been
employed in the international business field in explaining why business organizations expand
internationally and their choice of mode of entry (Doz, Santos & Williamson, 2011; Thory,
2011).
By utilizing a strong data set that covers a broad variety of nations, Edwards et al.
(2015) have extended the understanding of the different influences which are believed to
affect the reverse diffusion of human resource practices which have originated from earlier,
more exploratory research studies. Regarding the country effect, earlier research studies have
given emphasis to the significance of the national context of the nation of origin in shaping
the hurdles to reverse diffusion (Gunniglr & McGuire, 2011; Yang, Mudambi & Meyer,
2012). Moreover, other researchers have demonstrated that the perceptions of executives in
high ranks within the company of the host institutional context condition the capacity of
subsidiaries to produce interest in their practices (Whitley, 2010; Michailova & Mustaffa,
2012). The authors of the article have extended this understanding of the role played by
country context by focusing on the host nation’s position in the international economy. The
capacity of subsidiaries to wield influence over human resource practices diffused throughout
multinational corporations is shaped by the position of their economy in the international
environment (Hill, Hwang & Kim, 2010; Yang, Mudambi & Meyer, 2012).
Conclusion
On the whole, this article contributes greatly to the understanding of the reverse
diffusion of human resource practices. The researchers applied eclectic approach and utilized
various bodies of theory in developing expectations with regard to the influence of somewhat
dissimilar factors. The authors have clearly demonstrated that multiple factor explanations are
needed in order to gain a proper understanding of the factors which retard or promote the
diffusion of HR practices in transnational firms. Functional, corporate and national contexts
are crucial and they all matter. In particular, the subsidiary actors who try to instigate
diffusion are differentially positioned in accordance with their place in corporate structure,
their national context, as well as the degree to which HR function is globally networked
(Pudelko & Harzing, 2012).
In spite of everything, the researchers could have carried out the research study
differently so as to avoid the limitations inherent in the present study. Even though the
researchers took appropriate measures to reduce Common Method Variance and
measurement error from employing a single participant, they could have pursued the
matching of participants between the subsidiaries and company headquarters in the same
company. In the study, there is a possibility that there is some disparity within the
subsidiaries in terms of the source of the diffused practices. It might be that some sorts of
operating unit, or some parts of countries, are more commonly the origin of practices that are
diffused. To explore this, Edwards et al. (2015) could have employed a design which would
have allowed for comparisons to be made between the sites of multi-site subsidiaries.
CRITIQUE OF QUANTITATIVE METHODS JOURNAL PAPER 6
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