Implementing English Language e-HRM Systems:
Effects on User Acceptance and System Use in
Foreign Subsidiaries
Jukka-Pekka Heikkilä and Adam Smale
University of Vaasa, Department of Management
65100 Vaasa, Finland
Abstract. It is suggested that the effective implementation of electronic human
resource management (e-HRM) technology will transform the management of
human resources in firms by allowing HR departments to transfer data man-
agement and process transaction responsibilities to employees, managers and
third-party service providers. In global setting, e-HRM systems are tasked with
facilitating this whilst accommodating cultural differences, one of which being
language. In the light of scant empirical research on language in international
HRM, this study analyzes and presents, shortly, the effects of using English
language e-HRM systems on acceptance and use in foreign subsidiaries. The
study’s findings are based on qualitative data collected via 18 in-depth inter-
views with HR managers from two European MNCs.
1 Introduction
MNCs adopt English as their corporate language in order to facilitate “in house”
communication, especially between headquarters and subsidiaries. The existence of a
formal English language policy, however, does not necessarily lead to its widespread
acceptance or usage. Indeed, according to [19] the communication event is far more
complex than the label lingua franca suggests. Describing MNC operations in the
European business context, [1] and [9] use the term “multilingual reality” in reference
to typical situations where practices in MNCs are linguistically diverse. Despite this
and the increasing significance of language barriers as MNCs pursue ever greater
levels of global co-ordination [6], the difficulties presented by ‘language standardiza-
tion’ and the implications for HR have not received much scholarly inquiry [12]. The
subject of language is non-existent in recent reviews of research on user acceptance of
information technology [27], Enterprise Resource Planning [15], human resource
information systems [16], HR outsourcing [2] and e-HRM [25].
In light of the above, this study aims to analyze the effects of using English lan-
guage e-HRM systems on acceptance and use in foreign subsidiaries. The specific
users in this study are subsidiary HR managers and user acceptance is analyzed by
applying the four main constructs of [27] Unified Theory of Acceptance and Use of
Technology – effort expectancy, performance expectancy, social influence and facili-
tating conditions – which are argued to predict actual system usage. Actual system
usage is analyzed by drawing on the power and micro-political view of HRM in
Heikkilä J. and Smale A. (2009).
Implementing English Language e-HRM Systems: Effects on User Acceptance and System Use in Foreign Subsidiaries.
In Proceedings of the 3rd International Workshop on Human Resource Information Systems, pages 18-27
DOI: 10.5220/0002172500180027
Copyright
c
SciTePress
MNCs [7] and examines the responses of subsidiary HR managers. The next section
defines e-HRM and provides a short overview of extant research. Corporate language
usage in MNCs is then briefly discussed, which leads us into the presentation of the
study’s analytical framework. Following a description of the study’s methods, the
paper finally presents its findings of the qualitative analysis.
2 Literature Review
2.1 Introduction to e-HRM
The business case for the adoption of e-HRM technology has been argued on three
main fronts [21]. Firstly, e-HRM can increase efficiencies by reducing HR transaction
costs and headcount. Secondly, e-HRM can substitute physical capability by leverag-
ing digital assets, i.e. HR information can be used flexibly on an infinite number of
occasions at little or no marginal cost. And thirdly, the effective use of integrated e-
HRM systems can transform the HR “business model” by freeing up the HR function
to provide strategic value to the business that it previously could not do. Perhaps due
to its relative infancy in academic terms and the heightened interest amongst HR
consultants, the e-HRM literature often draws on managerialist rhetoric or ‘pro-
innovation bias’ [25] about the expected ‘transformational’ impact of e-HRM adop-
tion. However, perceptions regarding whether e-HRM is an ‘innovation or irritation’
[22] will depend on where one stands. For example, HR headcount reduction can have
potentially damaging consequences for knowledge transfer, line managers expecting
personal HR service, and for those HR staff displaced by the reduction. There are
suggestions of dysfunctional consequences [26] of e-HRM adoption such as a de-
crease in social interaction and negative effects on the quality of information about
performance and compensation.
e-HRM research also suffers from a strong national focus on the US with limited
empirical findings from other countries [25]. This has prompted calls for more com-
parative research that investigates how the local idiosyncrasies of specific host-
country institutional and cultural environments affect the use and effectiveness of e-
HRM [17]. Evidence also encourages the local adaptation of e-HRM systems to fit the
local culture [23], but explains that this is necessary to improve employees’ percep-
tions and attitudes towards system implementation and use. Unfortunately, few stu-
dies are explicit about what aspects of a host country’s national culture are likely to
affect e-HRM system acceptance and use in the subsidiary, and how. The present
study seeks to address this gap in research by investigating the effect of language, a
subject to which we now turn.
2.2 Corporate Language usage in MNCs
Corporate language has been defined as “an administrative managerial tool” which is
derived from the need of an international board of directors and top management in an
MNC to run global operations [20]. A corporate language is also viewed as a compo-
nent of a shared identity that enables MNCs to transmit and share knowledge [29],
19
increasingly via IT. The decision to use a common corporate language in MNCs can
be justified, for instance, facilitating internal communication between units by using
one common language is intended to overcome mistakes between units, reduce costs,
avoid time-consuming translations and create a sense of belonging within the firm [9].
However, it seems that the issue of language is widely neglected in the field of in-
ternational business and international HRM in particular [19]. Instead, language has
been viewed as a medium of communication, aggregated under the umbrella concept
of culture and not subjected to theoretical investigation [29], [20]. Previous research
[11] suggests that one of the most serious obstacles to research on language in busi-
ness has been the lack of systematic analysis concerning the problems associated with
language differences and insufficient answers to the question of “what exactly is it
about language that creates the problem?” This study seeks to address the gap in
research on language in MNCs and international HRM, as well as the question of
language-related problems, by applying a user acceptance model to investigate the
effects of introducing English language e-HRM systems in foreign subsidiaries. How
it will be applied is presented next.
3 Analytical Framework
The analytical framework applied in examining the case study data consists of two
parts. The first part draws on user acceptance and discusses how the standardized use
of English in an e-HRM system could affect the reactions of users. The second part
draws on the power and micro-political view of HRM in MNCs.
3.1 Language Standardization and User Acceptance of e-HRM Systems
Several models have been developed that try to explain the acceptance of IT in firms.
In general, they share the same goal of identifying factors that will predict users’
intention to use IT and their relationship with actual IT system use [3]. User accep-
tance models have gone on to be applied in a handful of empirical studies on e-HRM
[23], [28] applies change management theory and a user acceptance model in arguing
that change management plans need to take account of cultural differences across
subsidiaries in order to increase e-HRM system acceptance and use. This study fol-
lows the approach of [23] by applying [27] Unified Theory of Acceptance and Use of
Technology and its four main constructs, or prerequisites of actual system usage:
effort expectancy (i.e. perceived ease of use), performance expectancy (i.e. perceived
usefulness), social influence (i.e. pressure exerted via subjective norms), and facilitat-
ing conditions (i.e. compatibility with existing organizational values and needs of
employees).
Taking each in turn, the impact of language standardization on effort expectancy
might manifest itself in user perceptions that the system is not simple to use and will
require a great deal of effort. While technical problems require somewhat less effort
to resolve, communication barriers resulting from language differences are far more
difficult to overcome. Language standardization’s effect on performance expectancy
is likely to be related to its effect on effort expectancy during the initial stages of e-
HRM system implementation, but perceived ease of use usually increases over time as
20
users become familiar with the system [3]. After the initial stages, however, subsidi-
ary HR managers’ belief that the e-HRM system will improve their work performance
might shift from concerns over their own language competence to the competence
levels of HR’s internal and external clients. This is likely to be the case for most e-
HRM technologies that are designed to mediate or even substitute the relationship
between HR and its clients.
Language standardization’s impact on social influence, on the other hand, may not
lead to such negative reactions. The dominant use of English in information commu-
nication technologies may instead lead subsidiary HR managers to accept the e-HRM
system as representing part of a broader social and business norm. More specifically,
[8] find that the diffusion of e-HRM technologies across firms is primarily fuelled by
interpersonal communication in the social system of potential adopters. From an insti-
tutional perspective, this implies that mimetic isomorphism might play an important
role in influencing the decision to adopt ‘best practice’ English language systems.
Lastly, the effect of language standardization on facilitating conditions will be depen-
dent on how diverse user needs and experiences are, the language used in ‘old’ sys-
tems, and the amount of resources the MNC dedicates to the provision of (local lan-
guage) support services.
3.2 Language Standardization and Actual Use of e-HRM Systems
One critique of the extant literature on HRM in MNCs is the over-emphasis on struc-
tural explanations of HRM practices in foreign subsidiaries and insufficient acknowl-
edgement of the role of organizational micro-politics [4]. Case-study research sug-
gests that our understanding of how HRM integration takes place, or not, will remain
incomplete if the contested nature of parent-subsidiary relations is not taken into ac-
count [7]. This view highlights the significance of subsidiary attitudes and the strateg-
ic responses that are open to subsidiary managers in the face of dual institutional
pressures to implement legitimate HRM practices, or in this case technologies. This
lack of attention is cited [18] to organizational self-interest as one weakness of institu-
tional theory explanations of subsidiary behavior and suggests that they need to be
complemented with a resource dependence perspective that better acknowledges the
strategies and tactics subsidiaries might use to resist institutional pressures such as
language standardization.
In terms of actual e-HRM system usage and based on a potentially mixed range of
reactions to the standardized use of English, we might expect subsidiary HR managers
to respond in various strategic and tactical ways in an interplay of interests between
themselves, other system end-users and MNC headquarters. In turn, this is likely to
lead to various patterns of e-HRM system adoption.
4 Method
4.1 Data Collection and Analysis
The study uses a multiple case-study design comprising the foreign subsidiaries of
two MNCs – one well-known western European MNC (POWERCOM) and one Fin-
21
nish MNC (TECHNOCOM). A qualitative case study method was selected based on
the need to contextualize the research and draw on individuals’ personal experiences
[10]. The purpose was not to generalize findings to a wider population, but to allow
analytical generalization by using previously developed theory as a template with
which to investigate cause-effect relationships [30]; in this case an IT user acceptance
model to assess the impact of language standardization. Whilst there can be several
users in e-HRM systems, the users in this study are limited to subsidiary HR manag-
ers. In TECHNOCOM, 13 interviews were conducted with subsidiary HR managers
in 11 different units: Brazil, Canada, Finland, Germany, Guatemala, Italy, Indonesia,
Norway, Pakistan, Sweden and the UK. In POWERCOM, 5 interviews were con-
ducted with 3 different HR managers from the Finnish unit only. Interviewees were
asked to comment on their experiences of the e-HRM integration process in general,
their feelings about the use of English, and how they have tried to resolve any chal-
lenges faced.
4.2 e-Recruitment at TECHNOCOM
TECHNOCOM is a Finnish mechanical engineering group with 20,000 employees
and a presence in around 70 countries. After having grown via acquisitions into a
large, diversified MNC, TECHNOCOM began to pursue a more globally integrated
strategy and structure, which prompted a systematic streamlining of its core business
processes. In 2000, as part of this overall streamlining process and in recognition of
the geographical reach of its operations, all written and oral communication between
units was required to be in English. Integrated corporate-wide IT systems soon fol-
lowed suit and started to be rolled out globally.
The implementation of TECHNOCOM’s web-based e-recruitment system (The
Recruiter) commenced in 2005 in Finland and was rolled out globally throughout
2007. The main reasons for the introduction of The Recruiter were (i) ineffective
internal handling of both internal and external applications, (ii) insufficient informa-
tion provided to potential applicants regarding how and where to apply, (iii) to in-
crease the global mobility of managers, and (iv) to support the high-tech image of the
company. During global implementation all foreign subsidiary HR managers received
implementation guidelines and took part in a relatively short web-based training ses-
sion. The training was viewed as helpful, but didn’t cover the more complex uses of
the system.
4.3 Integrated e-HRM Suite at POWERCOM
POWERCOM operates in over 100 countries employing more than 100,000 people.
In the late 1990’s POWERCOM initiated a significant organizational restructuring
which saw the launch of its ‘Global Organization’ vision – a desire to reduce the
complexity of its previous conglomerate, multi-domestic approach and to adopt a
matrix-type structure with fewer lines of business and standardized core processes.
The implications of the ‘Global Organization’ for POWERCOM’s global HR strategy
were translated into three key objectives: greater HR functionality in how it serves the
newly defined lines of business, greater standardization of HR processes, and the
creation of a single global HR system.
22
In 2000 POWERCOM made the decision to purchase and implement a corporate-
wide, integrated HRM software suite (in this case SAP HR) – a system that provides
access to large databases through a variety of modules that automate diverse HR sub-
functions [8]. In addition to supporting the three main global HR strategy objectives,
the rationale behind adopting the HRM software suite were: (i) HR process simplifi-
cation, standardization and benchmarking as a necessary step prior to setting-up HR
shared service centers, (ii) to increase employee and manager self-service roles and
thus accountability, allowing HR professionals to focus more on servicing their allo-
cated line of business, (iii) to improve HR strategic decision-making via more sophis-
ticated management reporting tools, and (iv) to reduce compliance costs by assuming
greater control over HR processes. e-HRM suite went live during 2007.
5 Findings
5.1 Impact of English Language Usage on e-HRM System Acceptance
At POWERCOM, HR managers at the Finnish subsidiary were not particularly
daunted by the prospect of using English, generally regarding the system’s ease of use
in this respect as unproblematic due to their regular exposure to English. Instead, their
major fears concerned how those with poor English skills would cope and the impli-
cations this would have for HR’s intended reduction in administrative duties. In order
for the e-HRM suite to function in one language and to facilitate a smooth transfer of
HR services to an English language shared service centre, subsidiary HR managers
needed to establish whether they were adopting the global HR policy or a locally
adapted variation, and translate it into Finnish or English accordingly.
Before the e-HRM system went live, HR managers noticed that whilst there were
opportunities for the system to reduce their administrative workload, the language
issue was seen as a potentially big barrier to its usefulness and was going to consume
a lot of their time. In addition, some of the HR managers confessed to being shocked
not only at the system’s lack of flexibility concerning what you could and couldn’t
enter into the various fields, but also the response from the consultants who argued
that they were simply following instructions from headquarters. In terms of social
pressure, headquarters were seen to adopt a tough stance that language variation was
only acceptable if otherwise illegal, and the consultants were seen to use technical
explanations and a touch of ignorance in arguing that linguistic adaptations were
impossible, very costly or not important. Being one of the latter units to implement
the e-HRM system, subsidiary HR managers took both reassurance and a sense of
powerlessness from the fact that other units had been tackling the language issue and
had survived. The subsidiary HR managers’ reactions to the system with regards to
facilitating conditions were that it was contradictory and that it lacked support. The
system was contradictory because as POWERCOM promoted its core value of diver-
sity and inclusiveness, the forced use of English was having precisely the opposite
effect. The lack of support, on the other hand, referred to no extra resources being
directed to HR departments for assistance in translation work and a lack of Finnish
speaking personnel at the shared service centre.
23
At TECHNOCOM, English language usage in the e-recruitment system resulted in
perceptions regarding effort and performance expectancy that were closely related. In
general, this was based on the belief that if potential applicants do not find the system
easy to use because they cannot understand English language advertisements, compa-
ny websites or application forms, then foreign TECHNOCOM subsidiaries are not
likely to able to attract enough or the right people. In terms of usefulness, subsidiary
HR managers attached conditions when explaining whether the ‘old’ versus ‘new’
system is more effective. Several HR managers did this by dividing positions into
‘local’ jobs (e.g. technicians, electricians, machine operators) where English language
competence tends to be low and ‘global’ jobs for professionals and managers whose
language competence is much higher. Negative reactions about the new e-recruitment
system’s usefulness therefore tended to focus on its lack suitability in recruiting ‘lo-
cal’ people into ‘local’ jobs.
The use of English was not only seen as a threat to attracting enough candidates,
but was also viewed as potentially resulting in lots of unwanted CV’s that were sub-
mitted without applicants fully understanding the details of the job, sent in the local
language via email. This was described to make searching, finding and selecting good
candidates more difficult. The effect of using English on perceptions of social influ-
ence was quite different when compared to POWERCOM. In TECHNOCOM, subsid-
iary HR managers believed there to be much greater scope for using more than one
system and only using The Recruiter in situations where language mattered less. HR
managers justified this belief by referring to similar practices elsewhere at
TECHNOCOM and there being a lack of agreement in the company regarding wheth-
er certain positions didn’t require employees to use English. In terms of compatibility
with TECHNOCOM’s global hi-tech image, HR managers generally agreed that The
Recruiter would achieve this, but expressed concerns that since TECHNOCOM is not
well known, it would also need to introduce itself to potential applicants in their na-
tive language. What was similar to POWERCOM, however, was the same perceived
contradiction of an English language e-HRM system operating in a firm that embraces
cultural differences.
5.2 Impact of English Language Usage on e-HRM System Use
At POWERCOM, subsidiary HR managers were unable to negotiate much flexibility
in the system’s standardized use of English or in the use of the system itself. This
meant that past norms and practices in local HR had to be modified around the new e-
HRM system. For example, English language skills had never explicitly been in-
cluded in recruitment profiles or job criteria for lower level employees, so this was
one thing that the HR managers felt needed to be changed.
Stepping into the role of translator, HR managers described the translation work as
acting as a kind of filter and since nobody was checking the accuracy of translations,
they could integrate some of their own ‘local’ interpretations. Due to the legal ap-
proach to local language provision adopted by POWERCOM headquarters, subsidiary
HR found themselves in the unusual situation of having to consult their Head of Legal
Affairs in order to establish in which language (or languages) POWERCOM was
obliged to provide employment documentation. The Nordic units’ request to head-
quarters for language support was met with a suggestion of sending employees on
24
basic language training, and was not well received. At TECHNOCOM, subsidiary HR
managers were more successful in negotiating more autonomy in the use of The Re-
cruiter, even if that sometimes meant updating The Recruiter with the data headquar-
ters needed and then using other ‘old’ recruitment systems. Some subsidiary HR man-
agers were quite open about not using The Recruiter.
Indeed, it was common for TECHNOCOM subsidiaries to run dual systems – the
‘old’ system for recruiting people to ‘local’ jobs, and The Recruiter for jobs that are
more suitable for foreign applicants. A recurring theme that subsidiary HR managers
brought up in negotiations with headquarters was the need to create local language
websites. Whilst English language skills were already included in most job criteria at
TECHNOCOM, the subsidiary HR managers did suggest that they were narrowing
the focus of their recruitment activities on younger applicants since the introduction
of The Recruiter. However, the general view remained that they were not going to
give up the way they used to do things without a fight.
6 Discussion and Conclusion
The present study sought to combine and contribute to two streams of literature.
Firstly, the study contributes to the field of international HRM by investigating the
effects of ‘language standardization’ on e-HRM system adoption. Secondly, the study
contributes to the e-HRM literature by placing two different e-HRM systems in the
context of MNC operations and investigating the impact of English language usage on
user acceptance and use. In their discussion on the impact of technology on global
HRM, [24] highlight the challenges that come with firms having to re-engineer (or
‘optimize’) their HR processes before they can e-enable them. POWERCOM, for
instance, considered the pan-national ‘optimization’ of its HR processes as an essen-
tial step in the design of its integrated e-HRM suite and in moving towards shared
service centers. In such situations, [24] suggest that the key challenges for MNCs will
rest in how they ensure appropriate decisions are made about which variations are
simplified or deleted, and how they ensure specialist HR advice is available to those
performing HR transactions across institutional and cultural settings.
Study also illustrated that the decisions to standardize (not ‘optimize’) the lan-
guage of e-HRM systems were perceived by subsidiary HR managers as inappro-
priate, not due to their own language competence, but the competence levels of pre-
dominantly older, blue-collar internal and external end-users. This, together with the
subsequent language support and translation work, ultimately had negative effects on
their acceptance of the e-HRM systems, leading to some of the dysfunctional conse-
quences discussed in literature [26]. Indeed, the potential threat to intended cost re-
ductions and process optimization that multiple languages would have presented out-
weighed local concerns about the e-HRM systems’ ease of use.
Although in general the HR managers accepted the benefits of e-HRM systems in
terms of improved functionality and the reduction of more routine administrative HR
tasks, these tasks were soon replaced not by more ‘strategic partnership’ roles, but by
language support services in their attempts to limit the resistance of other end-users.
In both MNCs there were gaps in perceptions about whether English skills were
needed for all job types and therefore whether all employees needed to have a good
25
understanding of English. In TECHNOCOM subsidiaries, language and e-HRM sys-
tem usage were dependent on the level of the job in question. The introduction of an
English language e-HRM system, seemingly unintentionally, forced subsidiary HR
managers to step into the role of an informal ‘language node’ in which they acted as
default communication channels between managers, employees, job applicants and
the ‘system’. Previous research [13] suggest as drawbacks to the use of ‘language
nodes’, this role was a barrier to the execution of their formal duties and was ex-
ploited as an opportunity to exert their influence over how processes were carried out.
6.1 Limitations and Future Research
The findings of this study must be interpreted in light of its limitations, which them-
selves offer fruitful directions for future research. Firstly, the study investigates sys-
tem acceptance and usage less than one year after its implementation. Since reactions
to a new system, especially ease of use, are generally more negative during the early
phases [3], [23] we might expect to see higher acceptance levels and system usage
over time, therefore longitudinal research would be useful here. Secondly, typical to
many qualitative case studies, the present study is not conducive to broader generali-
zations. Survey-based studies involving a larger number of MNC subsidiaries would
be needed to validate the explanations presented here. Thirdly, single informants were
used in this study in the form of subsidiary HR managers. Future research would
benefit from drawing on the experiences of other HR stakeholders, especially local
managers, employees and potential employees from countries where English is not
widely spoken.
Tables and citations of data are available on request from jpheik@gmail.com
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