Toivonen Paper in the U.S.

: Human Resource Implications of Foreign Corporate

Ownership

Opening
Globalisation has significantly influenced how companies manage operations across
borders, particularly in terms of human resource management (HRM). As U.S.
companies expand abroad and foreign companies acquire American subsidiaries, cultural
integration becomes pivotal. This case study focuses on the Finnish firm Toivonen
Paper’s acquisition of Treelin, a U.S.-based paper plant. The analysis highlights the
strategic role of HRM in international business, the challenges of cross-cultural training,
and the cultural differences as outlined in Hofstede’s model. It evaluates the success of
Toivonen’s adaptation.

Agenda
This paper analyses four key aspects: the role of HRM in international business, issues in
training a multinational workforce, cultural differences between Finnish and American
workplaces using Hofstede’s framework, and evaluates Toivonen Paper’s success in
integrating with the U.S. workforce.

Body

Role of HRM in International Business

Human Resource Management serves as a critical enabler in aligning local and global
strategic goals. It helps organisations bridge cultural differences and implement practices
that are both globally efficient and locally responsive. In the case of Toivonen Paper,
HRM is not just administrative—it is pivotal in harmonising Finnish employment
philosophies with American expectations. Williams, the HR Manager, recognised that
imposing home-country policies can conflict with local norms, stressing the importance
of adaptation. Effective HRM in international business encompasses recruitment
strategies tailored to local talent pools, performance systems that reflect cultural values,
and conflict resolution mechanisms that foster cross-cultural understanding. The strategic
role of HR is underscored in global mergers and acquisitions (M&As), where employee
morale, retention, and organisational integration depend heavily on successful HR
alignment.

Human Resource Management serves as a critical enabler in aligning local and global
strategic goals. In the case of Toivonen Paper, HRM is not just administrative—it is
pivotal in harmonising Finnish employment philosophies with American expectations.
Williams, the HR Manager, played a crucial role in recognising that imposing home-
country policies can conflict with local norms, stressing the importance of adaptation
(David & Maamoun, 2008, p. 2).

Training Challenges in Multinational Contexts

Training a culturally diverse workforce presents unique challenges, particularly when
values and expectations diverge. Treelin's current HR practices emphasised individual
performance and autonomy, contrasting with Toivonen’s group-oriented, team-based
approach. Cultural misalignment may arise when employees feel forced to adopt foreign
norms without clear communication or localised training. Moreover, training methods
must be designed to bridge not just skill gaps but also cultural gaps. For instance, while
U.S. employees may value direct feedback and merit-based promotions, Finnish
employees may prioritise team cohesion and consensus. A successful training strategy for
Toivonen would involve cross-cultural sensitisation workshops, joint team-building
activities, and leadership training that reflects a hybrid of both organisational cultures.

Training a culturally diverse workforce presents challenges, mainly when values and
expectations differ. Treelin's current HR practices emphasised individual performance
and autonomy, contrasting with Toivonen’s group-oriented, team-based approach.
Cultural misalignment may arise when employees feel forced to adopt foreign norms
without clear communication or localised training. The Finnish preference for group
cohesion, EAP support, and flextime contrasts with Treelin’s performance-based
appraisals and flatter hierarchy (David & Maamoun, 2008, p. 5).

Cultural Differences using Hofstede’s Model

According to Hofstede’s dimensions, several key differences emerge between Finnish
and American workplaces. Finnish culture scores higher in Uncertainty Avoidance,
reflecting a preference for structured environments and a tendency to minimise risk. They
are more collectivist, favouring group harmony and long-term employment relationships,
whereas Americans are more individualistic, focusing on personal achievement and
upward mobility. The Finnish model also downplays power distance, promoting
egalitarianism and flatter hierarchies, whereas American workplaces often respect
managerial authority and emphasise clear reporting lines. Additionally, Finnish culture
emphasises femininity, valuing quality of life, cooperation, and care, while American
culture leans toward masculinity, valuing competition and success. These differences
suggest potential clashes in performance appraisals, autonomy, and communication
styles, particularly when transferring HR policies from one context to another (Hofstede,
2001). For example, Toivonen’s lack of formal performance appraisals may conflict with
Treelin’s existing merit-based system. Similarly, unlimited sick leave, although
progressive, may be viewed with scepticism in performance-driven American systems.

According to Hofstede’s dimensions, several key differences emerge between Finnish

and American workplaces. Finnish culture scores higher in Uncertainty Avoidance,
reflecting a preference for structured environments. They are more collectivist, favouring
group harmony and long-term employment, while Americans are more individualistic,
focusing on personal achievement. The Finnish model also downplays power distance,
promoting flatter hierarchies, whereas American workplaces often respect managerial
authority more (Hofstede, 2001). These differences suggest potential clashes in
performance appraisals, autonomy, and communication styles.

Was Toivonen Successful in the U.S.?

Toivonen demonstrated cautious optimism and a willingness to adapt, primarily through
Kempainen’s communication with Williams. Their approach to blend rather than abruptly
overhaul HR practices reflects a sensitivity to local culture. However, success depends on
how well they maintain Treelin’s performance while integrating Finnish philosophies.
Allowing space for gradual adaptation and respecting existing operational strengths were
critical. If implemented collaboratively, Toivonen could benefit from both cultural
models, resulting in higher employee satisfaction and operational efficiency. The
potential benefits of successful cultural integration are substantial, including enhanced
employee satisfaction and increased operational efficiency. Success should be evaluated
not only by financial outcomes but also by employee engagement, retention rates, and
cultural integration. Early signs—such as open communication and an awareness of
cultural friction—indicate Toivonen's potential to succeed. However, it hinges on
inclusive leadership, ongoing feedback mechanisms, and respecting organisational
autonomy at Treelin.

Toivonen demonstrated cautious optimism and a willingness to adapt, primarily through

Kempainen’s communication with Williams. Their approach to blend rather than abruptly
overhaul HR practices reflects a sensitivity to local culture. However, success depends on
how well they maintain Treelin’s performance while integrating Finnish philosophies.
Allowing space for gradual adaptation and respecting existing operational strengths were
critical. If implemented collaboratively, Toivonen could benefit from both cultural
models, resulting in higher employee satisfaction and operational efficiency.

Conclusion
The Toivonen Paper case demonstrates that HRM is crucial for navigating international
expansions. Cultural differences must be respected and strategically managed through
localised policies and inclusive practices. While Toivonen’s Finnish values emphasise
teamwork and social welfare, integrating them thoughtfully with American pragmatism
and individualism may unlock synergies. Success lies in mutual respect, flexibility, and
continuous dialogue.

References
1. David, J., & Maamoun, A. (2008).
Toivonen Paper in the U.S.: Human Resource Implications of Foreign Corporate
Ownership.
Ivey Publishing.
In-text citation: (David & Maamoun, 2008, p. X)
Access: Ivey Publishing - Case #908C19 (You will need access through Ivey
Publishing or an institutional login)

2. Hofstede, G. (2001).
Culture's Consequences: Comparing Values, Behaviors, Institutions, and
Organizations Across Nations (2nd ed.).
SAGE Publications.
In-text citation: (Hofstede, 2001)
Access: SAGE Publishing - Culture’s Consequences