An important issue confronting multinational corporations (MNCs) in the human resource management (HRM) sphere is the extent to which the HR policies and practices implemented in their foreign subsidiar­ ies conform to those pertaining in their "home" country, or alterna­ tively, the extent to which they are adapted to fit "host" country norms and traditions. In the European Union (EU), this debate is most pointed when one considers the HR practices of subsidiaries of US­ owned MNCs. At a general level, we have seen in the past decade or more that significant changes in organisation structure and HR prac­ tice combined with the sluggish performance of a number of the EU's major economies, particularly Germany, has sparked increasing de­ bate on optimal approaches or "systems" of HRM and industrial rela­ tions. For example, it is sometimes argued that the EU's preferred "social market" approach, characterised by comparatively high lev­ els of labour regulation and strong trade unions, has served to im­ pede competitiveness and employment creation (Grubb and Wells, 1993; Sadowski et al., 1995; Sparrow and Hiltrop, 1994). In contrast, the US "free market" approach, which - apparently - affords em­ ployers greater autonomy, is often portrayed as a more "effective"