The impact of cultural value orientations on individual HRM preferences in developing countries: lessons from Kenyan organizations

The intention of the study is to examine the impact that individual national culture value orientations have on the preference for the design of HR policies and practices. The value orientation structure and preferences for thirty-four HR design choices are studied in a sample of 274 Kenyan employees from eight multinational, state and private domestic firms operating in the manufacturing and processing sector. The study shows that the HR design choices of Kenyan employees reflect the following picture across four factors: high HR involvement/participation: high predictability of rewards; performance rather than loyalty-based policies; and moderate levels of HR empowerment. Kenyan employee value orientations reflect: activity thinking over activity doing; individual over collective relationships; relationship to nature mastery over relationship to nature harmony; low subjugation to nature; and human nature evil (manipulative). More importantly, three out of the four HR preference factors are valuesrelated, i.e. the individual's value orientation is highly predictive of their preference for the design of HR policies and practices. From 9 per cent to 19 per cent of the variance in preferences for involvement, empowerment and predictability of rewards is accounted for by national culture value orientations. HR involvement preferences are related to activity thinking values. Predictability of rewards is related to high activity doing. Empowerment HR is related to low relationships hierarchical values. Preferences for performance versus loyalty-based HRM are intriguingly values-free judgements, although ethnic factors play a role here.     

Cultural barriers in the transferability of Japanese and American human resources practices to developing countries: the Turkish case

Multinational enterprises can be expected to increase their chances of success by understanding the socio-cultural systems of the regions in which they operate. This paper examines the applicability of Japanese and American human resources management practices in Turkey within a socio-cultural perspective. Emphasizing the contextual differences between developing and industrialized countries and comparing work-related values of the three countries, the paper argues that Japanese human resources practices are more compatible with Turkish societal characteristics than are their American or Western counterparts.     

Editorial introduction: Is the World Bank lending effective in developing countries?

This special issue of Economic Systems includes five papers about the World Bank lending in developing countries. The motivation for the special issue stems from the relatively extensive literature on the sister institution, namely, the International Monetary Fund (IMF), but not on the World Bank itself. The papers’ focus is the influence of the World Bank lending on economic growth, education and health, poverty reduction, and regulation in the recipient countries. The papers’ findings contribute to our understanding of the effects of the World Bank lending in developing countries, which reflects both successes and shortcomings.     

Enterprise clusters in developing countries: mechanisms of transition and stagnation

This paper analyses the dynamics of clustered enterprise development in developing countries. It is focused on the different types of clusters that can be identified in these contexts. After a brief introduction, the cluster concept is explained and the need to understand clusters as an expression of social connectivity rather than mere spatial agglomerations is established. Next, a typology of clusters is presented. This typology is discussed on the basis of recent research on small and medium-sized enterprise clusters in different countries and continents. The types of linkages prevailing in different types of clusters are analysed, as well as their implications for technological change. It is argued that the mechanisms of enterprise growth and innovative activity are different in each type of cluster and hence the opportunity structures that entrepreneurs face are variable across cluster types. Therefore, the mechanisms of transition from one type to another are different, and these are discussed next, as well as mechanisms of stagnation and continuity. In conclusion, the implications for development research and policy are outlined and it is emphasized that support must be tailored to the actual state of existing clusters and cannot be deduced from general theory.     

Constructive Pressures And Incentives To Reform: Globalization and its impact on public sector performance and governance in developing countries

Contrary to widespread pessimism regarding the effects of globalization on nation states and the quality of governance in developing countries, this contribution stresses that several of its features can be made instrumental, and be beneficial, in terms of public policy making and state capability. Four ‘constructive pressures’ stemming from globalization could be seized constructively by citizens and governments in the developing world: First, better informed and better connected citizens, and an emerging global civil society, demand improvements in service delivery, transparency, and participation. Second, subnational governments, often backed by local NGOs and businesses, and keen to attract foreign investment, increasingly exert pressure vis-à-vis central governments. Third, global investment strategies by private businesses increase the demand for appropriate institutional arrangements within developing countries as well as credible government policies. Although with mixed results, forth, International Organizations, in particular IFIs, have been addressing public sector modernization in developing countries, also sponsoring global public policy networks in critical areas. Moreover, policy coordination and cooperation among states increases significantly, constraining arbitrary action by governments. Globalization, thus, advances the discussion about, and the demand for, new institutional arrangements, clearly with new opportunities for improvements in state capability and governance.     

Foreign direct investment and small firm employment in northern Mexico: 1987-1996

This study analyses the impact of foreign direct investment on small business employment along the border in Mexico between 1987 and 1996. During this period, unprecedented levels of foreign direct investment flowed to Mexico, most notably to the northern border region. At the same time, it appears that internal migration of workers from the interior to the border occurred in response to employment generated by this investment. Utilizing 1987 and 1996 data from the Encuesta Nacional de Empleo Urbano, bivariate probit models of employment and small/ large firm employment for the border and interior regions are estimated. The results suggest that the increased employment share captured by large firms in the border may have hindered growth in the small business sector. A better understanding of the impact of FDI flows on small businesses may help policymakers in developing countries as they strive to create broad-based economic growth.     

Impact of World Bank lending in an adjustment-led growth model

Within a financial- and growth-programming framework, this paper develops a policy-driven growth model and addresses the effects of World Bank lending on economic growth in a sample of 30 countries, after having controlled for the effects of key macroeconomic variables. Both static and dynamic panel estimates suggest a positive significant effect of the rate of growth in World Bank lending on economic growth, conditional on other variables, namely changes in exchange rate, domestic credit growth, and inflation. Empirical evidence also reveals the positive effect of a macroeconomic policy index in this sample of developing countries.     

The making and remaking of HRM: the practice of managing people in the Eastern Cape Province,South Africa

This paper explores the nature of human resource management (HRM) practice in the Border region of the Eastern Cape Province, South Africa, located within contemporary local and international debates regarding the content and nature thereof. Four distinct patterns of practice were identified. The first represented a simple changing in nomenclature of the relevant personnel sections, with, in several cases, staff being seen not as managers, but rather as a distinct, and somewhat junior, category of employee. In the second category, the traditional personnel function was broadened to encompass clearly delineated areas such as training and development. In the third category, while HRM practitioners did play an important strategic role, this was more in terms of facilitating the adoption of progressive industrial relations policies, than in developing a vision for managing human resources across the organization. In all cases, what human resource practitioners did seemed somewhat removed from the 'conventional wisdom' definition of HRM. In part this was a result of the persistence of effective and militant trade unions, necessitating the adoption of hybrid HR-industrial relations practices. However, it also represented a product of particular managerial traditions, and the fact that HRM represents a complex package of concepts and practices, which, inevitably, are subject to adjustment in the light of prevailing realities. This study sheds further light on the diverse and multi-faceted area of HRM practice, and underscores the need for flexibility and pragmatism in both transitional, and, indeed, mature economic contexts.     

Promoting the informal sector as a source of gainful employment in developing countries: insights from Ghana

Although the informal sector continues to be the main source of employment in developing countries, little empirical research has been conducted into the human resource management (HRM) issues surrounding this sector in sub-Saharan Africa. Against this background, this study seeks to highlight the HRM issues, such as training and employment strategy, which are assuming increasing importance in the informal sector in developing countries. After reviewing the marginalist and structuralist debates on the informal sector, the paper looks at the Ghanaian government's attempt to transform the sector into a source of national economic development, entrepreneurship and self-employment. As part of this examination, the paper explores the question of whether the government's strategies can provide jobs for all who need them.

Based on the evidence of the empirical research, the paper argues that although the current Ghanaian government's informal employment strategy is a product of political expediency and, therefore, prone to pitfalls, it nevertheless constitutes a worthwhile attempt to combat unemployment in the long term. The paper also contends that in environments of perpetual economic crisis, which undermine the ability of sub-Saharan African (SSA) governments to generate adequate growth, it makes good socio-economic sense to promote the informal sector as a significant source of employment. The government's strategy should, therefore, be seen as an attempt to help the informal sector generate a level of employment above the marginal and survival. In this respect, the Ghanaian experience provides useful lessons for other SSA countries grappling with similar unemployment problems.     

Expatriate compensation and its link to the subsidiary strategic role: a theoretical analysis

This paper focuses on the strategic design of expatriates' salaries. Unlike standard expatriation literature that assumes a lack of connection between strategy and international managers' compensation, we use the theoretical concepts from the international strategic management research to discuss how different international strategies affect the way expatriates are compensated. In this respect, the paper proposes a series of hypotheses on how expatriate compensation systems take shape according to the role that the expatriates may play in the internationalization process. The hypotheses refer to the type of incentives offered to encourage acceptance of the assignment, the type of criteria used to evaluate their performance and the reference unit used to establish variable compensation.     

The effect of corruption on entrepreneurship in the presence of weak regulatory quality: Evidence from developing countries

Efforts to improve currently low entrepreneurship in developing countries could be necessary but likely hampered by the high corruption. With poor regulatory quality in most developing countries, the effect of corruption on entrepreneurship could be unique. By using the Generalized Method of Moments (GMM) estimator, utilizing 48 developing countries as the sample for the period from 2008 to 2016, this study finds that there is a conditional effect of corruption on entrepreneurship, implying that poor regulatory quality has forced and opened up the door for individuals to offer bribes in order to start a new business. Nonetheless, as corruption could add to the high cost of business start-ups, to enhance entrepreneurship, policymakers need to give priority to improving regulatory quality and, subsequently, force corruption to fade away.     

The international transmission channels of US supply and demand shocks: Evidence from a non-stationary dynamic factor model for the G7 countries

We employ a multi-country non-stationary dynamic factor model to assess spillover effects and transmission channels of US supply and demand shocks on a variety of macroeconomic variables in individual non-US G7 countries. We find that trade, financial and confidence channels all play a significant role in the international transmission of US shocks. However, the results point to substantial heterogeneities of shock transmission across the individual G7 economies. In particular, we find negative transmission effects for Italy and Japan as the only two G7 countries not well integrated into global value chains. Moreover, the exchange rate responses of Germany, France and Italy turn out to be far less pronounced in comparison to the other G7 economies which we relate to their membership of the euro area and their coordinated monetary policies prior to the establishment of the euro. Whereas we document a close comovement of stock market dynamics across the G7 countries, we find credit and real estate markets to be less synchronized. We do not find the effects and transmission channels to be fundamentally affected by the post-2008 economic environment.     

A French model of craft training: its strategic relevance and recruitment issues for a UK firm

This paper is a study of the recruitment to the first version of the International Journeyman Programme (IJP), a project to recruit and train young workers from the north-east of England for a craft and technician training programme in engineering organized by a French trade guild, Les Compagnons du Devoir (CdD). The initial version of the project was unsuccessful and the paper highlights the role played by UK state agencies and institutions in the recruitment process in the project's lack of success. The paper examines the strategic relevance of a model of French craft training to a UK firm, describes that system of training and development, and analyses the recruitment difficulties faced by the IJP organizers when they attempted to launch the programme. The study finds that key elements of the UK VET system have severe problems in delivering high-skills training, and that there are in-built structural barriers that limit the extent to which such training can be easily imported.     

The impact of Universal Service Obligations and International Cross-subsidies on the dispersion of telephone services in developing countries

This paper re-evaluates the telecommunication policies often applied to create regional dispersion of services in developing countries. We observe that failure to consider the complexities of the regional telecommunication systems in creating policies and investment strategies has increased the telecom gap between urban and rural regions worldwide. In particular, the teledensities of rural telecommunications in developing countries have remained very low in spite of support through universal service obligation fees and cross-subsidization from international services. As traditional methods for economic analysis and modeling have failed to identify mechanisms that improve telephone dispersion in these countries, we use a system dynamics modeling approach to deal with complexities of the situation in order to evaluate how Universal Service Obligations (USOs) and International Cross-Subsidy (ICS) policies affect telephone densities. We demonstrate that these policies may be counterproductive due to the structure of the telecom system itself. We also show that, when market-clearing pricing is combined with USOs once the urban telephone density reaches a minimum threshold, the dispersion of rural telecommunications can be considerably improved.     

Human resource management in developing economies: a comparison of India and Thailand

This paper reports the results of surveys of firms that were conducted both in India and Thailand. The surveys centred on a wide range of human resource management practices (staffing, training, compensation and evaluation). The sample consisted of both the subsidiaries of multinational corporations and locally owned companies. Statistical analysis suggests pronounced differences in employment practices between India and Thailand in some areas, while considerable similarities in other areas. The study controls for a variety of organizational factors (e.g., firm size, ownership (foreign versus domestic), union status).     

Towards a strategic understanding of global teams and their HR implications: an expert dialogue

Abstract

Drawing on initial insights emerging from a panel at the EIBA 2016 Conference in Vienna, here discussants and expert panelists engage in a follow-on conversation on the HRM implications of global teams for international organizations. First we set out how HRM can enable global teams and their constituent members to overcome the new and considerable challenges of global teams. These challenges span levels of analysis, time and space. Next we debate global teams as a strategic response to the dual pressures of global integration and local adaptation. We consider what HRM is needed for global teams to successfully resolve this dilemma, challenging practitioners to move beyond the ‘best practices’ and ‘alignment’ dichotomy. Lastly we look to the future to consider implications for research. We propose a rich research agenda focused on the complexities of the global team context.     

Towards an integrative framework of strategic international human resource control: the case of Taiwanese subsidiaries in the People's Republic of China

This study integrates the resource-based view of the firm, the resource dependence model, institutionalism theory and the cybernetic system model into a framework to investigate the determinants of international human resource (IHR) control at the subsidiary level. The effects of competitive strategies and the mediating effects of inter-organizational interdependencies on three different dimensions of IHR control (input, behaviour and output) were studied by using a sample of 101 Taiwanese subsidiaries operating in the People's Republic of China (PRC). Four notable associations were found: (1) a robust direct relationship between the adoption of a low-cost strategy and two dimensions of IHR control (behaviour and output) was testified; (2) an indirect effect of a low-cost strategy on IHR input control through dependence on the parent's resources was found; (3) the direct relationship between local differentiation strategy and IHR input control could not be testified because a positive mediating effect of dependence on local resources counteracted the negative mediating effect of dependence on parents resources; (4) the direct effects of dependence on local resources on the IHR input control and dependence on parent's resources on IHR input control and behavioural control were testified.     

Union membership among young graduate workers in Australia: using the experience good model to explain the role of student employment

Using panel data from a survey of 319 university graduates, this article shows that positive experiences of union membership during the student employment phase increase the likelihood of university graduates becoming union members. These results are consistent with the ‘experience good’ model of union membership.