Critical Evaluation of International Essay
A review of literature on international HRM reveals three different approaches (Dowling et al. , 1999, p. 2): Comparative, Cross-cultural and multi-national. Firstly, according to Adler (1997), the early approaches to researching international HRM focused on cross-cultural differences and examination of human behaviour from an international perspective. Certainly, research on cross-cultural organizational behaviour has become a conduit for the understanding of the dynamics of multicultural domestic and international workplaces within the advent of globalisation.
There are different levels of analysis within cross-national HRM, national factors, contingent factors and organisational level. Cross-national HRM researchers claim that it is at the levels of national factors and contigent variables that they can make useful contributions through the examination of the impacts of such determinants of HRM policies and practices (Boxall, 1995; Brewster et al, 1996).
However, other researchers (Budhwar and Sparrow, 1997; Jackson and Schuler, 1995) argue that national factors and contingent variables are not enough in themselves to provide an understanding of the context-specific nature of HRM practices. It is important therefore, to consider analysis of the impact of organisational-level strategies (Budhwar and Sparrow, 1997). Secondly, the comparative approach focuses on similarities and differences in HRM practices within an international context.
Undeniably, Budhwar & Sparrow (2002) note that the increase in globalisation of business transactions, the emergence of new markets such as the BRIC countries (Brazil, Russia, India and China) as well as hyper competition among organisations at equally the domestic and international level have been associated with an increased significance and need for comparative human resource management (HRM) studies. As a result, there has been a growing number of studies addressing the configuration of HRM in different national contexts (Budhwar & Sparrow, 2002).
According to Rechie, Lee and Quintanilla (2009) one of the most significant role of comparative HRM research is to provide managers, principally those working in multinational firms, with specific guidelines concerning how to design and implement an effective HRM system taking into consideration cultural differences especially when their business operation enters into different cultural contexts for example western multinationals seeking to do business in China.
This notion of being responsive to the context and standardisation of HRM policies and practices has generated controversial but nonetheless critical topics of discussion in comparative HRM, such as the debate on localization versus standardization, and the process of transferring HRM policies and practices across nations (Rechie et al, 2009). The thirdly, multinational approach, tends to focus on HRM practices in multinational organisations. The HRM extant literature reveals that there are two distinct schools of thought as regards approaches to managing people within MNCs: (i) convergence and (ii) divergence.
According to Brewster et al. , (2007), the convergence approach is said to be one of the most dominant strands in international management research. On the one hand, the convergence approach has three main assumptions: firstly, the ultimate aim in all organisations is to improve performance through high-performance work systems (Brewster, 2001). Secondly, the universal aim of performance improvement can be achieved by using sound and effective management philosophies that hold true despite of differences among national environments (Girgin, 2005).
Thirdly, proponents of the convergence approach argue that if local practices are different from these principles, they are expected to be replaced with ‘the one best way’, converging mainly on the American model as the leading industrial economy (Dowling et al. , 1999). According to Girgin (2005) the concept of convergence towards the one best way practice has been encouraged and/or supported by the forces of globalisation, which has led to the opening of world markets, deregulation, regional integration and improvements in communication technologies.
Although HRM as a field of practice was developed in America, the principles and practices designed for America may not hold for other parts of the world. Barlett and Ghoshal (1989), say that, the main suggestion of the globalisation argument is that nationality factors in the operation of national systems and of companies are no longer influential or important as international companies become ‘trans-national’ which converge to a new ‘best model’.
Yes, the IHRM literature shows that because multinational corporations are embedded in their home institutional environments, they may attempt to transfer ‘home’ practices to their foreign operations in different cultural environments (Edwards et al. , 1999). However, the study of HRM practices in Europe (see Brewster et al 2007) suggest that national differences are significant in the determination of HRM practices. On the other hand, the divergence approach or contextual paradigm searches for contextually unique practices and approaches to management, it does not search for evidence of similarities (Brewster, 2001).
Within the IHRM literature, the focal point of the divergence standpoint is the dissimilarity of policies and applications across different national and regional contexts and tries to understand the particularities of the context with a view to interpret why and how such differences have emerged in these settings (Brewster, 2005). Within the divergence school of thought, there are two distinct approaches to managing human resources in multinational organisations: (i) the culturalist and (ii) the institutionalist perspectives.
Based mainly on Hofstede’s (1980) value-based behavioural dimensions and concepts of national culture which have made an attempt to explain the influence of culture upon Multinationals’ behaviour, the culturalist approach has found widespread acceptance in the IHRM literature. Hofstede (1980) came to a conclusion that culture was the main determinant of the variations in work-related values, attitudes and behaviours among employees and managers within the same organisation, and of the same profession, age, or gender.
Hofstede found that there were four dimensions that explained the differences in work-related values and behaviours: (i) Individualism and collectivism, (ii) Uncertainty avoidance, (iii) Power distance and (iv) Masculinity and femininity According to Girgin (2005), the culturalist approach endeavours to build an understanding of differences in work organisations, managerial behaviour and human resource practices based on attributes of national cultural distinctiveness in terms of values, ideas and beliefs shared by people in a given society.
Under the divergence school of thought, the institutionalist perspective is the second. The main argument of the institutionalist perspective is that national institutional contexts (for example, government systems, training and development systems) play a major role in determining structures and strategies of organisations (Girgin, 2005). According to Girgin (2005), those who support the Institutionalist perspective stress the pressures on companies to acquire and maintain legitimacy in relation to the environment and the way that interlocking practices can bring benefits in particular systemic contexts.
This perspective presents itself as a more comprehensive framework for the comparative study of different national systems (Girgin, 2005). For example, despite the knowledge of the influence of culture on organisational behaviour, HR practitioners cannot simply measure cultural values across their operations and predict behaviour, due cognisance must be given to various institutional contexts.
As noted by Dewettinck and Remue (2011) certain practices are shared across or within particular contexts; some are distinctive of certain countries; some are unique to certain sectors or sections of an organization or even individuals. Without doubt, while each of the above approaches sharpens the focus on some aspects of HRM, it is possible that solely focusing on one aspect may unavoidably, hinder capturing the positive aspects from other perspectives(Mayrhofer and Brewster, 2005). Indeed what appears to be more significant in researching international HRM is the context.
According to Dewettinck and Remue (2011) the notion of context and/or focus on contextual factors has been reflected in the cross-cultural embedment of many international HRM studies (Brewster, Mayrhoferand Morley, 2004), in addition, the Globe project which was focused on leadership also reveals that context is important (House and Javidan, 2004). For example, a recent study by Hartmann et al. (2010) of western multinationals operating in China shows that these organisations implement relatively unchanged HRM practices from their home country in their Chinese subsidiaries.
The study of Hartmann et al. , reveals that consideration of contextual factors is important in the understanding of HRM practices and the management of people in an international context. As a matter of fact, results of Hartmann et al. ’s study indicate that, although the Chinese subsidiaries of Western multinationals were able to implement unchanged HRM practices such as talent management from their headquarters, the practices were not successfully internalised.
This demonstrates the significance of national cultures and being responsive to local needs in implementing HRM practices. The example above actually shows that context is an important aspect in researching international HRM regardless of the approach taken. In conclusion, there is indeed something to be learnt from each of the perspectives. Each of the perspectives do make considerable contribution to the understanding of international HRM.
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