International Human Resource Management

Policy and Practice

Mila Lazarova, Michael Morley, Shaun Tyson

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781317984658
• Edition: 1
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

The extent to which organisational performance is related to the Human Resource policies and practices adopted has been a question debated by both academics and practitioners for the past two decades. This book takes the debate into the international field by drawing upon the well respected Cranet data set, which provides longitudinal and comparative data drawn from 40 countries across the world. International Human Resource Management highlights the dominant institutional factors embedded in the societal contexts of different cultures which impact on corporate HR policies and practices, and illustrates how these variables influence Human Resource Management and performance. It examines how the HR function can impact upon HR policies and influence organisational performance. It also discusses the role of the HR department; specifically, how the distribution of responsibilities between HR managers and line managers moderates the relationship between HR strategic integration and organizational performance. Finally, it investigates the impact of societal factors on the strategic integration of female HR directors. These contributions show the complexity of the relationship between HRM and organisational performance, and modify the current prevailing models of this relationship, where scant attention has been paid to institutional forces and the cultural, economic and social contexts in which organisations are located.

This book was originally published as a special issue of The International Journal of Human Resource Management.

INTRODUCTION

International comparative studies in HRM and performance – the Cranet data

Mila Lazarova^a, Michael Morley^b and Shaun Tyson^c

^aSimon Fraser University, Burnaby, Canada; ^bKemmy Business School, University of Limerick, Limerick, Ireland; ^cCranfield School of Management, Cranfield University, Cranfield, UK

Research in the field of international and comparative HRM is becoming ever more available. The International Journal of Human Resource Management now usually publishes 12 issues per year, and the enormous range of the field is apparent from the scope of the topics covered. The papers published in this special issue are all drawn from the Cranet project. Cranet is a network of scholars from universities across the world, representing over 40 countries. Cranet conducts a survey of HRM in member countries approximately every four years, enquiring into policies and practices in people management through a set of common questions. In this introduction, we locate Cranet within this research field, and say how Cranet seeks to contribute to this growing body of knowledge.

Different research trajectories

In the context of an ever-increasing evolution towards global activity in business venturing, the notion of international comparative human resource management has concomitantly grown in stature in recent years. Nonetheless, despite emerging evidence on its value to the international firm, and its increased visibility within academic communities, defining and delimiting the nature of this field and all its constituent parts poses something of a challenge. This is perhaps hardly surprising. Determining the anatomy and impact of human resource management and its associated activities in a domestic context have proven elusive. In an international context, these problems are even greater. Along with being performed differently, HRM is also conceptualized differently in different countries. Although some convergence has been observed, different developmental trends, institutional determinants, cultural specificities, stakeholder preferences and relationships, rather than atrophying, have shown intractable resilience. The result is a variety of perspectives on what constitutes the field.

Morley (2007) describes three distinct, but overlapping, research trajectories along which one can understand the field, namely an International, a Comparative and a Cross-cultural trajectory. The concept of ‘trajectory’ is used here in order to denote the existence of a distinctive line of enquiry. This distinctiveness may be observed both in terms of differing points of departure in the original research effort and consequently unique developmental paths for the major themes investigated.

Thus, it is suggested that International HRM can be conceptualized as a field of enquiry dedicated to charting the anatomy of HRM in the MNC and the unearthing of the HRM strategies, systems and practices pursued in the context of internationalization. In this trajectory, it is recognized that the ever-increasing complexity and uncertainty in which MNCs operate creates a unique set of organizational, coordination and managerial issues for the managers of these MNCs. Central among these is the management of employees on a global scale. In this international trajectory, HRM is concerned with identifying and understanding how MNCs manage their geographically dispersed workforces in order to leverage their HR resources for both local and global competitive advantage (Schuler, Budhwar and Florkowski 2002).

The body of work arising from this trajectory has several unique features. Most of the theoretical and empirical effort in this trajectory has focused on expatriation and the international assignment cycle where much evidence has now been accumulated. There is evidence also, in this trajectory of a focus on the dominant coalition of the firm as the human capital base deserving of our research attention. Furthermore, given the MNC as a unit of analysis, much of the work has sought to examine headquarter – subsidiary relations and the diffusion of managerial practices and systems throughout firm subsidiaries.

The overlapping Comparative HRM trajectory shows a preference for exploring the context, systems and content, and national patterns of HRM as a result of the distinctive developmental paths of different countries and their subsequently idiosyncratic institutional and economic regimes. This may be regarded as a trajectory that, in part at least, mirrors a much earlier trajectory in industrial relations systems research. A long-established tradition, it is based on the premise that many relevant insights into organization processes and systems in a global era will come from studying them in a comparative context (Poole 1993; Strauss 1998; Evans, Pucik and Barsoux 2002). Budhwar and Sparrow (2002) suggest that the increased level of globalization and internationalization of business, the growth of new markets (such as in Central and Eastern Europe, China, India, South East Asia and Latin America), the growth of new international business blocks and the increased level of competition among firms at both national and international level have resulted in a significant growth in comparative studies. Similarly, Morley and Collings (2004) point to an increasing interest in comparative studies in a broadening range of countries. This, they suggest, can be explained in part by the changing contours of foreign direct investment (FDI) location decisions in the global economy. While traditionally FDI flows have been concentrated in developed countries, recent years have heralded a shift in investment locations towards new destinations, on many of which there is a dearth of knowledge. Such new locations are now proving fertile ground for generating insights in this comparative tradition.

Within this comparative trajectory, there is a focus on national systems elements as a basis for legitimate comparison and, as indicated above, the focus until relatively recently has largely been on economically successful and developed economies, with a growing emphasis in recent years on emerging economies. Thus, this trajectory may be characterized as one that gives attention to country specific institutional provision as the wellspring for organizational-level HR practice and one that is now characterized by an increasing heterogeneity in the number and variety of countries being studied. Studies derived from this trajectory, either as single country socio-systems accounts or as ab initio constructed comparative investigations now abound (Lazarova 2006).

The third trajectory, here labelled as Cross-cultural HRM, may be conceived as a research tradition dedicated to explicating tenets of national culture as the dominant paradigm for conditioning what is acceptable organizational practice in that socio-cultural context. In this genre, significant explanatory power is accorded to tenets of societal culture in accounting for similarities and differences in the conceptualization of, and in the practice of, HRM. Much of the empirical effort in this trajectory has been focused on the issue of dimensionalizing these cultural tenets and replicating enquiry in an array of contexts. And, as with the other trajectories outlined above, the range of contexts is continuously expanding.

Against the backdrop of these distinct trajectories, there are several cross-cutting theoretical and empirical themes that have been actively pursued by Cranet researchers in their efforts to add to the body of work on aspects of international, comparative and cross-cultural HRM, originally in the European context, but recently much further beyond. Worthy of particular mention in this regard are three particular cross-cutting themes, first we consider, the promulgation of a discourse on the appropriate paradigm for understanding HRM in the international arena. At the fundamental level, the question of the adoption of an appropriate paradigm for understanding HRM in an international, comparative and cross-cultural way has proven theoretically significant for Cranet researchers, as set down in the Network’s 2000 volume New Challenges for European Human Resource Management. Here, Mayrhofer, Brewster and Morley (2000), among others, argue that there are essentially two paradigms for researching HRM, namely a universalist paradigm and a contextual paradigm. They highlight that it is to some degree the difference between these paradigms that has led to the conceptual confusion of what is the appropriate scope of the subject matter of HRM often obvious in the literature. The universalist paradigm, Mayrhofer et al. argue, which is dominant in the United States of America, but is widely used in many other countries, is essentially a nomothetic social science approach: using evidence to test generalizations of an abstract and law-like character. The strength of this approach, they argue, is that good research based upon it tends to have a clear potential for theoretical development, it can lead to carefully drawn research questions, the research tends to be easily replicable and research methodologies sophisticated, and there is a coherence of criteria for judging the research. The contextual paradigm, by contrast, according to Mayrhofer et al., is idiographic, searching for an overall understanding of what is contextually unique and why. In the HRM field it often involves a focus on understanding what is different between and within HRM in various contexts and what the antecedents of those differences are. As a contributor to explanation, this paradigm emphasizes external factors as well as the actions of management within an organization and context.

Second, we can see the efforts at establishing a European perspective on HRM, as something that characterized much of the early research endeavour of the Cranet Network. Europe, and the advancing of a more contextual understanding of HRM in Europe and the exploring of the appropriateness of US notions of HRM for adoption and institutionalization into European practice has also been a very significant leitmotif for Cranet researchers (see, for example, Brewster and Tyson 1991; Brewster, Hegewisch, Holden and Lockhart 1992). The debate on what should be the preferred labour market approach has been particularly significant in this respect. For example, it is sometimes argued that the European Union’s preferred ‘social market’ approach, characterized by comparatively high levels of labour regulation and strong trade unions, has served to impede competitiveness and employment creation (Gooderham, Morley, Brewster and Mayrhofer 2004). In contrast, the US ‘free market’ approach which – apparently – affords employers greater autonomy, is often portrayed as a more ‘effective’ alternative in this respect, most particularly in terms of its capacity for employment creation. In this context, there are what Gooderham et al. (2004, p. 20) refer to as ‘powerful, non-market institutional factors’ at play in Europe, many of which make the central features of US HRM inappropriate to, or unworkable in, European organizations. Significant among the constraining forces here are national culture and legislation, state intervention and organizational-level trade union involvement and participation and the requirement for consultation, dialogue and communication between the social partners, all of which have a long-established pedigree in European workforce management (Morley, Mayrhofer and Brewster 2000; Gooderham and Nordhaug 2003).

Third, a discourse on patterns of convergence or ongoing and enduring divergence evident from international, comparative and cross-cultural lines of enquiry has also proven to be a significant cross-cutting theme within the Network’s research, and an empirically testable proposition arising from the longitudinal nature of the Cranet Network (see Brewster, Mayrhofer and Morley 2004). This well-established debate argues that the effects of increasing internationalization, in general, will eventually give rise to an increasing similarity within human resource management practices. At organization level this manifests itself in a common set of management requirements that are resulting in a convergence of managerial techniques, regardless of cultural or national differences (McGaughey and DeCieri 1999). The logic of this argument is that the impact of national origin on management practices will progressively decline as globalization leads to the adoption of more generic, standardized practices. Divergence theorists, however, refuse to subscribe to the notion of convergence. They argue, on the contrary, that national, and in some cases regional, institutional contexts are slow to change, partly because they derive from deep-seated beliefs and value systems and partly because significant re-distributions of power are involved (Brewster 2004; Gooderham et al. 2004).

The Cranet survey

Cranet has its origins in a conference organized under the auspices of the ILO, held at Cranfield in 1988, many of the papers from which were subsequently published (Brewster and Tyson 1991). It is pleasing to note that Nancy Papalexandris, who has contributed to this special edition, was one of the contributors to that original conference and to the book of articles. It was Chris Brewster who took the idea of an international study forward and who founded Cranet, and who has also co-authored a paper in this special edition.

Although the first surveys concentrated upon European countries (there were five members in the first survey in 1989), there were 13 countries, including Turkey, by the 1991/92 survey, and by 2003 as well as the ‘accession countries’ to the EU, there were many non-European countries including Australia, New Zealand, Canada and the USA, which expanded the focus beyond Europe. This reflected a changing emphasis in the themes with which Cranet was concerned. In the first surveys the European Union and the potential convergence in business practices across Europe produced a desire at the outset to explore hypotheses on ‘harmonization’. This was also a time when there was much debate about whether the then new term ‘human resource management’ was replacing ‘personnel management’ just as a form of words, or whether this represented a shift in the emphasis of the role to be more involved with business strategy, perhaps at the expense of the old focus on industrial relations (Brewster, Hegewisch, Mayne and Tregaskis 1994). More recently, greater attention has been given to questions about HRM and performance in the Cranet surveys.

The survey methodology has centred upon the prerequisite of a common questionnaire, created by Cranet members who have had to establish a common interpretation of the terms so often used unquestioningly by HR academics and practitioners alike; words which may have different meanings in different cultures and languages and which do not translate exactly into English (for example the word and concept of ‘cadre’ in French). The creation of the questionnaire and its revision has required many meetings of members, and the use of practitioner panels to help to provide a reality check on the outcomes. Preparations for a survey round usually take up to 18 months of such meetings and discussions, when the questionnaire is re-examined, amendments made, new questions added and old questions discarded. Bearing in mind the need both for longitudinal data, and to obtain a good response rate for the survey, a parsimonious approach has been taken to adding new questions, and to the removal of existing questions. In order to minimize mistranslations, the questionnaire is developed in English, translated into each language by the partners and then retranslated back into the English language for verification purposes, so any queries can be dealt with prior to the survey itself.

Over the years, full details of the Cranet methodology have been published, perhaps the fullest accounts being in Brewster, Hegewisch and Lockhart (1991) and Brewster et al. (1994). Nevertheless we should mention here, briefly, that questionnaires have typically been administered by post (online in the USA in 2003), to samples drawn from representative databases in each country to companies that have 200 plus employees, so that industry sectors and organization sizes are representative as far as possible with the organizational populations in each country.

The questionnaire is divided into six sections: HRM Organization and Activity (covering HR’s strategic role and range of policies), Staff Practices (such as workforce numbers, flexibility policies, diversity and recruitment practices); Employee Development (appraisal, training, development and careers); Compensation and Benefits; Employee Relations and Communication (TU membership, recognition, employer associations, communication channels) and finally Organization Details (including workforce demographics, sector and organization performance details).

There has been no fundamental change to the methodology over the years, and the reliance on a single respondent (the organization’s most senior HR Executive) could be criticized. Some of this criticism applies to all cross-sectional studies and to large scale surveys, where, as Gerhart (1999) points out, causality is difficult to ascribe from the results and there may be problems of reverse causality. For example, organizational performance measured in profitability could be the cause of different levels of investment in training rather than the consequence of investment in training. Gerhart, Wright and McMahon (2000) also noted the limitations of single respondent survey data. Paauwe (2004) has taken up these points in his analysis of HR theories, since so much reliance has been placed on linking HR activities to performance based on the responses of a single respondent, with all the potential problems of measurement error.

The question remains as to whether these cri...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Notes on Contributors
• 1. Introduction: international comparative studies in HRM and performance – the Cranet data
• 2. Coordinated vs. liberal market HRM: the impact of institutionalization on multinational firms
• 3. North American MNCs and their HR policies in liberal and coordinated market economies
• 4. The impact of bundles of strategic human resource management practices on the performance of European firms
• 5. Training and firm performance in Europe: the impact of national and organizational characteristics
• 6. Effects of work-family human resource practices: a longitudinal perspective
• 7. New insights into the link between HRM integration and organizational performance: the moderating role of influence distribution between HRM specialists and line managers
• 8. The influence of social policy practices and gender egalitarianism on strategic integration of female HR directors
• Index