Human resource management – a national business system perspective

Abstract

Although a sizeable body of academic literature has attempted to explain the role of national business systems in the context of human resource management (HRM), there is still little research on the extent to which institutional features explain patterns of HRM in the emerging economy of Dubai. Different institutional settings tend to generate their own organisational arrangements to manage their employees, and it is important to understand how this interplay works. From an economic perspective, Dubai is important, mainly due to its promising diversification of its economy and its political stability. From a national business system perspective, the institutional environment represents a peculiar case, because it differs from many other emerging markets with respect to the strong co-ordinating role of the state, the strong segmentation and specialisation of tasks, roles, skills and authority, especially between nationals and expatriates, and a unique employment system. Thirty-two in-depth interviews with HR managers, and extensive document reviews, reveal that these elements of the institutional environment are related strongly to specific patterns of HRM practices, including distinctive policies for national employees and expatriates. The insights generated in this study explain the particularities of HRM in Dubai from a national business system perspective.     

Devolution or (de)centralization of HRM function in European organizations

This article deals with the condition and changes of the HRM function in various European states. These changes have shown a shift of HRM tasks from HRM departments to managers themselves, and are according to the literature, this shift is known as devolution or decentralization. Our attention is focused on important factors in this process (from organizational ones, such as HRM strategies and policies, to more environmental ones, such as the sector or the state). Analysis shows that the country (as an institutional environment) sets the limits or encourages development towards devolution. HRM policy within the individual institutional context is of only secondary importance. Results show that country is a factor that fosters divergent tendencies and HRM policy accelerates convergence in HRM practice.     

Cross-national learning from best practice and the convergence-divergence debate in HRM

The chief objective of this paper is to develop suggestions as to how to learn from best practices in HRM across national borders. The analysis is based on survey data gathered from 232 HRM managers from American, Japanese and German top 500 companies. The managers provide information on how the HRM model of their respective country is characterized and from which of the other two country models they seek inspiration. The concrete attributes of the models considered worth adopting are described in detail and future developments with regards to convergence of the HRM models explored. The empirical data suggest that HR managers from all three countries expect a partial convergence towards a hybrid model. Curiously, the model that comes closest to this hybrid – the German one – is also the one that rates lowest as a source of inspiration. An argument is made that in order to better understand learning from best practice and resulting convergence tendencies, research should seek more insights regarding the knowledge of managers about foreign management models, their perceptions of these models, and how these perceptions are generated.     

A study of HRM and recruitment and selection policies and practices in Taiwan

In this paper, the authors present and discuss the findings of a survey of human resource management (HRM) and recruitment and selection policies and practices in a sample of manufacturing industry in Taiwan. The results indicate that there is a general desire among HR professionals in participant companies that HRM policies are integrated with corporate strategy and that HRM should be involved in decision making at board level. Evidence was also obtained that some HRM decisions are shared between line management and HR specialists and that line managers had a particularly influential role in decisions regarding recruitment and selection, training and development, and workforce expansion/reduction. There was also some evidence supporting an assertion that certain recruitment and selection practices were culturally sensitive and this was supported by evidence of association between recruitment and selection practices and country of ownership.     

Constructing an index for comparing human resources management sustainability in Europe

Assuming that a company's institutional context influences its sustainability approach and its human resources management (HRM), this article compares firms' sustainable HRM systems across countries. Despite the presence of a supranational government, different social models exist in Europe according to the level of social protection in each country. The article compares the engagement of companies with sustainable HRM across Europe and develops an index with which to compare HRM sustainability in countries that present significant institutional differences: Germany, Spain, Sweden, and the United Kingdom. The index is constructed based on a formative measurement model, which reflects the implementation levels of sustainable HRM in 106 western European firms. The index reveals significant differences between companies from the four countries and between liberal and coordinated market economies, indicating the need to address the impact of the national institutional context on firms' HRM sustainability.     

An exploration of the HRM values of Chinese managers working in Western multinational enterprises in China: implications for HR practice

This paper qualitatively explores the nature of human resource management (HRM) values of local Chinese managers working in Western-based multinational enterprises in China and also considers how these values are associated with preferences for HR practices. The study involves the use of repertory grid interviews with 36 local Chinese managers. The study shows that interviewees reflected a high level of assimilation and internalization of many Western HRM values. Interviewees also retained many traditional Chinese values, thus highlighting the role of institutional and cultural forces on HRM. However, among these local managers, there was clear decline in some traditional Chinese values, such as ‘harmony’ and ‘virtue’. A further interesting finding was the co-existence of paradoxical values of collectivism and individualism among the managers. Analyses of repertory grid data and interview comments also highlight that preferences for HR practices is associated with these underlying HRM values.     

Lost in translation: exploring the link between HRM and performance in healthcare

Using data collected in 2004 from 132 Victorian (Australia) public healthcare providers, comprising metropolitan and regional hospital networks, rural hospitals and community health centres, we investigated the perceptions of HRM from the experiences of chief executive officers, HR directors and other senior managers. We found some evidence that managers in healthcare organisations reported different perceptions of strategic HRM and a limited focus on collection and linking of HR performance data with organisational performance management processes. Using multiple moderator regression and multivariate analysis of variance, significant differences were found in perceptions of strategic HRM and HR priorities between chief executive officers, HR directors and other senior managers in the large organisations. This suggested that the strategic human management paradigm is ‘lost in translation’, particularly in large organisations, and consequently opportunities to understand and develop the link between people management practices and improved organisational outcomes may be missed. There is some support for the relationship between strategic HRM and improved organisational outcomes. Implications of these findings are drawn for managerial practice.     

Exploring the reality of educated middle managers' capability and involvement in human resource management in China

Since the recent global financial crisis, human resource management (HRM) policies may be seen more than ever as one of the cornerstones for building an appropriate organizational culture to better promote effort and cooperation between human resource (HR) managers and other middle line-managers. This article is designed to explore the reality of educated middle managers' capability and involvement in HRM in China, given that the concepts of HR roles in general and middle managers in particular are relatively new there. By analysing the results from more than 300 middle managers who had been educated at MBA programmes in different parts of China, our findings, we argue, have important implications for both the HRM literature and management practice in emerging economies.     

Self-renewal of the Japanese firm and the human resource strategy

Traditional “Japanese personnel management” that has long been considered as the key for Japan's competitive success now needs fundamental restructuring in order to meet the challenges of a stagnant economy, matured domestic market, and the rise of NICs (Newly Industrialized Countries) in international markets. The self-renewal of Japanese firms can be achieved by a paradigm shift at the corporate strategy level: from a production orientation to a product orientation. In accordance with this paradigm shift, leading Japanese firms have started reforming their Human Resource Management (HRM) function from a productivity-centered to a creativity-centered one— creative HRM. Creative HRM has three pillars: (1) the creation of the strategic vision through commitment of the employees, (2) an entrepreneurial middle management as a key strategic node, and (3) multi-dimensional personnel management. Creation and realization of the strategic vision through the active commitment of an entrepreneurial middle management is necessary for the self-renewal of the firm. “Japanese Personnel Management” that might have been overadapted to the traditional strategic paradigm is now transforming itself from a “group-centered” personnel administration to an “individual-centered” one. While Western companies have been adopting Japanese “groupism” to reconstruct their production systems, Japanese companies have started introducing Western “individualism” to encourage creative self-transformation. But no system or technique is truly effective without human commitment, and this requires a fundamental paradigm shift for Japanese firms.     

Ready for the mantle? Australian human resource managers as stewards of ethics

In recent years in Australia, interest in business ethics has increased among managers, management educators and the public who observe the behaviour of organizations. This has been reflected in the literature of management education by an increased attention to the ethical implications of management practice. In parallel, human resources management in Australia has continued to evolve as a field, and to press its claims as a profession. This is reflected by ongoing debate in the literature about the HRM role. Advocates of an expanded role for HRM claim that HRM initiatives and practices have a strategic impact on organizations, and should accordingly be recognized at senior management levels. However, these claims for an expanded role for HRM have not been accompanied by an increased discussion of the ethical implications of the HRM role. The need for such discussion is highlighted by a survey of HR managers in Australia, which found a high level of disagreement among HR managers on a wide range of ethical issues. Even where questions related to perceptions of fact rather than the expression of attitudes, a high level of disagreement was revealed. If this is the case, it should not be taken for granted that there is a ready consensus among HR managers when it comes to translating ethical principles into organizational practice. The importance of this conclusion is indicated by another finding of the study: where organizations have undertaken initiatives on ethics, there is a high degree of involvement by HR staff.     

Foreign subsidiary perspectives on the mechanisms of global HRM integration

Often in connection with the integration‐responsiveness dilemma, research on HRM in multinational corporations (MNCs) speaks more to explaining the appearance of HRM practices in foreign subsidiaries than to the mechanisms through which such practices are globally integrated. Accordingly, and adopting a subsidiary perspective, the present study has two main aims. The first is to identify the key mechanisms of global HRM integration, how they are used and by whom, and the second is to investigate the factors that explain their usage. The study uses qualitative data from 40 personal interviews conducted with general managers and the most senior HR personnel across 20 Finnish‐owned subsidiaries in China. Based on the contingency view of organisations, explanations for mechanism usage are attributed to certain internal characteristics of the subsidiaries and to the Chinese institutional environment.     

How far do cultural differences explain the differences between nations? Implications for HRM

This conceptual paper argues that national differences in human resource management (HRM) matter and can be explained by cultural and institutional theories. We explore briefly the nature of each set of theories and some of the critiques that have been made of them. We argue that in general much of the differences in HRM between countries are determined by institutional factors, and that management has more influence over the effect of national cultural differences than it has over institutional differences and therefore in most cases the appropriate tests will be tests against institutional differences. Where institutions are less constraining, cultural differences may be the appropriate template.     

The organizational choice of human resource management practices: a study of Chinese enterprises in three cities in the PRC

This study examined the effects of an organization's contextual variables on the choice of human resource management (HRM) practices to secure, nurture, reward and retain managerial employees. The contextual variables included organizational characteristics (ownership, age and size), on the one hand, and its competitive strategies (innovation, quality and cost) and the strategic role of the human resource function, on the other. Data were collected through a questionnaire survey of general managers and human resource directors from 326 joint ventures and state-owned enterprises located in Shanghai, Nanjing and Guangzhou, three major cities in China. Using structural equation analysis, we examined both the direct and indirect effects of the contextual variables on HRM practices. The indirect effects were measured through the strategic role of the human resource function. Results indicated that ownership and the strategic role of the human resource function were key variables in explaining an organization's choice of HRM practices. Age and size of the organization had limited effects. Compared with cost and quality strategies, the innovation strategy affected HRM practices, both directly and indirectly, indicating the increasing dynamism of the Chinese economy in its move towards a market orientation.     

Effectiveness of a corporate HR department in an Australian public-sector entity during commercialization and corporatization

This study examines the effectiveness of the strategic human resource management (HRM) function performed by the corporate human resource department of an Australian public-sector entity, before and after its corporatization. Multiple methods (including a survey of senior managers and semi-structured interviews) were used to collect the data. Despite an improvement in the overall level of strategic integration between HRM and strategic management, the rating of strategic HRM role effectiveness remained low. The results indicate that the strategic HRM function, as a corporate headquarters function, was more effective in its administrative role than in a value-adding function. The difficulty in balancing the dual roles of a corporate headquarter unit, together with the challenges of becoming a strategic business partner to line managers, provided the major impediments to effective strategic HRM.     

Human resource management and industrial relations in multinational corporations in and from China: Challenges and new insights

The purpose of this article is to provide an overview on the state of research in the field in human resource management (HRM) issues in multinational corporations (MNCs) in and from China. We integrate previous studies from multiple disciplines to articulate the contextual importance of research on this topic, and suggest overarching themes to expand the field of research. HRM research in the intercultural, interinstitutional context of MNCs in and from China has the potential to provide contextualized insights for longstanding debates in the field such as HRM standardization versus localization and convergence versus divergence and contextual factors behind these patterns. To this end, we call for future research to center on the changing cultural, institutional, technological, and globalization context in understanding HRM and industrial relations issues in these MNCs. Practically, knowledge in this area can help global managers and top management teams in multinational organizations navigate various context complexity, foster more productive coordination and cooperation across borders, and gain legitimacy and MNCs in and from China additional competitive edge in the global marketplace.     

Introducing the impact of technology: a ‘neo-contingency’ HRM Anglo-French comparison

The paper analyses the impact of technological and national-culture factors on certain HRM policies and practices in Britain and France. This perspective supports the neo-contingency approach, which does not claim primacy for either the technological or the national-cultural factors shaping HRM policies and practices. HR managers in each country in high-, mid- and low-tech firms were surveyed. The relevance in the diffusion of certain patterns of HRM policies and practices advocates that employees working in intensive technology firms need a creative and adaptive HR management approach. The differences found in the application of the HRM practices studied between the two countries are illustrated through the educational system, which is different in France and Britain.     

Overcoming liabilities of origin: Human resource management localization of Chinese multinational corporations in developed markets

Despite the rapid growth of Chinese outward foreign direct investment in developed markets, many Chinese multinational corporations (MNCs) suffer from liabilities of origin (LOR)—capability‐ and legitimacy‐based disadvantages associated with the country of origin. This study identifies localization as a strategic mechanism through which Chinese MNCs overcome their LOR. With a specific focus on human resource management (HRM), we examine how factors associated with firms' perceived LOR, including springboard intent, local competition, and host country regulatory pressures, affect Chinese MNCs' adoption of local HRM practices in developed markets. We differentiate HRM practices that managers intend to adopt from those that are actually implemented and explore how state ownership affects the intention–implementation gap. Based on a sample of Chinese MNCs in the United States, we find that springboard intent, local competition, and host country regulatory pressures are positively associated with intended, but not implemented, HRM localization. Further examination demonstrates that springboard intent and local competition have significant effects on implemented HRM localization among private businesses but not in state‐owned enterprises (SOEs). The managerial constraints and resource endowment of Chinese SOEs may hinder their overseas subsidiaries from implementing local HRM practices to address LOR.     

Human resource management on the line?

The prospects for devolving HR activities to the line are examined in this article. Evidence drawn from a wider study of HRM in practice suggests that, while line manager involvement is possible, their practices tend to be inconsistent in implementation and uneven in quality. A number of constraints on line management practice were identified. First, there is limited reinforcement of practice through institutional forces. Secondly, the short-term nature of managerial activity means that a greater priority is placed on the achievement of the numbers rather than the achievement of numbers through people. Finally, downsizing and delayering place tremendous pressures on the time which line managers could allow for people matters generally. These findings challenge much of the rhetoric associated with the idea of giving HRM back to the line by arguing that the quality of line management practice may distort the overall impact of HR policies.     

Foreign involvement in the Hungarian economy: its impact on human resource management

This paper explores the role human resource management (HRM) has taken in Hungarian firms since the country moved towards a market economy. Three sources of data (a questionnaire of 165 international joint ventures, interviews with six senior foreign representatives and observations of forty client firms) provide an in-depth view of the transitional economy. Multinational corporations' (MNC) participation in Hungary is evolving through deeper managerial involvement and greater capital commitment. This evolution affects their headquarters' role in setting their local HRM policy. The greater the foreign participation of the MNC, the more the MNC influences the HRM policy of the local organization. The status of the five major HRM activities (planning, staffing, compensation, training and employee relations) is described against the backdrop of the transition from socialism to capitalism using the transition's three basic elements: price and market reform, restructuring and privatization and redefinition of the State's role.