Transcript A framework for HRM analysis

OHT 15.1
Defining the terms
Comparative HRM: examines how and why
HR policy and practice differ across
countries. Main analytical focus: institutional
influences on organisational decision-making.
• Typical questions:
– To what extent are HR policies developed in one
country appropriate in other countries?
– Are policies in different countries becoming more
similar (convergence) or remaining different
(divergence)?
Human Resource Management, 4th Edition
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OHT 15.2
Defining the terms
International HRM: understanding how MNCs
manage their international workforces in order to
gain competitive advantage. Main focus:
organisational strategy and structure, relationship
with market competition.
• Typical questions:
– What is the best way of organising the international HR
function?
– What role can expatriate managers play in achieving
strategic integration and control within MNCs?
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OHT 15.3
Cross-national
differences: Theories
• National Business Systems (NBS) (Whitley) – Economic, political
and social characteristics of individual market economies shaped by a
social system, leading to distinctive NBS
• Industrial Orders (Lane) – orientations of NBS’s affected by the
extent of non-market institutions within the national economy.
Systems with more non-market institutions tend to be more
production, rather than finance, dominated, and more long-termist
• Coordinated Market Economies (CMEs) vs Liberal Market
Economies (LMEs) (Hall and Soskice) –
– CMEs (e.g. Japan, Germany) – more non-market institutions, tendency
towards incremental innovation
– LMEs (e.g. USA, UK) – based on ‘free market’, tendency towards rapid
change, radical innovation.
– Both types of economy can be competitive, but react in different ways to
similar events (airlines example)
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OHT 15.4
Empirical differences
between NBSs
USA
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Coordination by market mechanisms
Organisational capabilities developed by professional management
Short-term focus on shareholder value
Liberal market economy
UK
• Market relations dominant
• Finance-dominated system
• Low level of institutional regulation often prevents effective
implementation of corporate strategies
• Liberal market economy
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OHT 15.5
Empirical differences
between NBSs
Germany
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Active institutional regulation by state constrains short-termism
Productivist system
Collectivist system
Incremental innovation, competitive advantage in manufacturing
Coordinated market economy
Japan
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High level of inter-firm cooperation and other non-market mechanisms
Active state role in finance provision
Collective system, firm-based industrial relations
Long-term orientation
Coordinated market economy
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OHT 15.6
Comparative HRM
Reasons for cross-national difference:
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financial system
labour market system and regulation
industrial relations system
education and training system
welfare state
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OHT 15.7
National HR Systems
USA
• market based regulation, lack of institutional ‘constraints’ on HR policy
• low level of collective bargaining, many firms ideologically opposed to
trade unions
• centralised, formalised management systems
• history of Taylorism
• reactions to global competition: employee involvement,
renegotiation/imposition of new forms of work organisation
• short-termist nature of financial system makes moves towards ‘best
practice’ HRM difficult
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OHT 15.8
National HR Systems
Germany
• co-determination (works councils)
• sectoral collective bargaining reduces firm-level autonomy, creates
uniformity in some practices across firms
• vocational training system with inputs from employers, state and trade
unions
• constraints on moves towards ‘American’ forms of HRM
• ‘pluralist HRM’: argument that constraints on firms encourage moves
towards best practice
• system under some pressure as a result of globalisation and
reunification
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OHT 15.9
National HR Systems
United Kingdom
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voluntarism
history of low-trust industrial relations
deregulation and individualisation of the employment relationship
lack of coordination of system inhibits moves to ‘best practice’ HRM
reliance on numerical forms of flexibility
Japan
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seniority-based wages
‘lifetime’ employment
financial system aimed at long-term growth
long-term, commitment-based approach to HRM for core workers in
large firms
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OHT 15.10
International HRM
Definition
• The set of distinct activities, functions and processes that
are directed at attracting, developing and maintaining an
MNC’s human resources. It is thus the aggregate of the
various HRM systems used to manage people in the
MNC, both at home and overseas.
Taylor et al., 1996
Human Resource Management, 4th Edition
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OHT 15.11
Models of
International HRM
• Schuler, Dowling and De Cieri (1993) – Integrative
framework of international HRM
– identifies 3 groups of variables that impact on the nature of
strategic IHRM: strategic MNE components, exogenous factors,
endogenous factors
– strengths: comprehensive
– weaknesses: descriptive, emphasis on management employees
• Taylor, Beechler and Napier (1996) typology
– identifies 3 types of strategic IHRM forms: exportive, integrative
and adaptive
– draws heavily on resource-based theory of the firm
– strengths: recognises variable role of employees in providing
critical resources
– weaknesses: unclear what practices are diffused and how
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OHT 15.12
Models of
International HRM
• Perlmutter (1969) – Mindsets
– identifies 4 mindsets: ethnocentric, polycentric, geocentric and
regiocentric
– strengths: recognises the role of individual cognition in shaping
organisational practice
– weaknesses: fails to specify, or predict, how and why
organisational actors may shift their mindsets
• Adler and Ghadar (1990) – organisational change model
– identifies how changes in product life cycles impacts on the
demands of international and local managers
– strengths: emphasis on the cultural context and its implications for
international training
– weaknesses: overemphasis on expatriate manager
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OHT 15.13
Expatriates
• Reasons organisations use expatriates:
– to fill positions
– provide management development opportunities
– to enable organisational change
• The transfer cycle
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selection and recruitment
relocation
adjustment
repatriation
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OHT 15.14
HRM in MNCs
• Need to draw together the institutional and
strategic perspective on IHRM together
• Four Forces Model - Edwards and Ferner (2000)
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home country effects
dominance effects
pressures for international integration
host country effects
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OHT 15.15
Convergence–Divergence
Debate
• Convergence
– globalisation is creating similar pressures and diffusing similar
technology encouraging convergence
– as American HRM is argued to be the dominant and most
advanced/efficient then it follows MNCs will converge on this
• Divergence
– varieties of capitalism argument suggest different national
business systems more appropriate than others demanding
diversity in HRM practice
• Conclusion
– on-going debate
– need to refine the terms convergence and divergence more
precisely
– likely we are seeing strong and weak convergence and
divergence across different HRM practices
Human Resource Management, 4th Edition
© Pearson Education Limited 2004