The thesis aims to understand what shapes the development of HR and employment practices in MNCs from mature Western economies in their subsidiaries located in transition economies. It looks at the Polish subsidiaries of an Irish and German MNC in the retail banking sector in a comparative case study research design. The research takes into account the insights from three different theoretical perspectives. They are: the institutional perspective looks at how MNCs’ practices are shaped by the institutions in their home and host countries; the strategic perspective considers competitive pressures within the industry; and finally the political perspective focuses on the interests and power of organisational actors. The thesis argues that the shape of employment and HR practices of MNCs in transition economies must be understood within the complex of host country ambiguity and flux, sectoral development, company establishment, time of entry and power relations and dynamics.