LAUSR

Abstract The paper investigates the relationship between cultural fit, state of institutional development, the headquarters–subsidiary relationship and choice of MNCs' strategy for transferring human resource management (HRM) practices through the sample of 21 Russian subsidiaries. The results propose that exportation strategy better suits MNCs that originate from culturally close countries that enter markets with a relatively developed institutional and business environment. Adaptation strategy is suitable for home countries that are culturally distant, while integration strategy appears to be universal and allows capturing the benefits and mitigating the drawbacks of other strategies. The paper also discusses the connection between the establishment mode, which serves as a formal operationalization of the headquarters (HQ)–subsidiary relationship, and knowledge flows. The result can be important for Central and Eastern Europe (CEE) countries and to support the decision-making process for MNCs considering entering this region.