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The effects of market economy type and foreign MNE subsidiaries on the convergence and divergence of HRM

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Abstract

This study explores patterns of human resource management (HRM) practices across market economies, and between indigenous firms and foreign MNE subsidiary operations, offering a novel perspective on convergence and divergence. Applying institutional theorizing to improve our understanding of convergence/divergence as a process and an outcome, data collected from nine countries at three points in time over a decade confirm that convergence and divergence occur to different extents in a nonlinear fashion, and vary depending on the area of HRM practice observed. Patterns of adoption and convergence/divergence are explained through the effect of institutional constraints, which vary between liberal and coordinated market economies, and between indigenous firms and foreign MNE subsidiaries. Specifically, we expected, and largely found supporting evidence confirming that compensation and wage-bargaining level practices show more evidence of being institutionally constrained, and hence were less likely to converge, than contingent employment, training, and direct information provision practices. The study contributes a more graded conceptualization of convergence/divergence (from constant no difference, through robust convergence, non-robust convergence, non-robust divergence, and robust divergence to constant difference), allowing us to tease out the subtle manifestations of the process that can incorporate the complex dynamic reality of international business.

概要

本研究探讨人力资源管理(HRM)实践在市场经济国家,以及在本土公司和外国MNE(跨国公司)子公司业务之间的模式,提供了关于汇聚和发散的一个新颖视角。运用制度理论提高我们对聚/散作为过程和结果的理解,来自九个国家十多年来三个时间点收集的数据确认,汇聚和发散以一种不同程度的非线性方式发生,具体取决于观察到的HRM实践领域的变化。接纳和聚/散模式由制度约束效应来解释,这在自由的和协调的市场经济体之间,以及在本土公司和外国MNE子公司之间变化。具体而言,我们预期,并在很大程度上已找到证据确认,报酬与工资谈判水准实践显示了更多在制度上受限的证据,因此与偶然就业,培训,以及直接信息提供的做法相比更少可能汇聚。这项研究贡献了一个更渐变的聚/散概念(从一直无差异,经稳健汇聚,非稳健汇聚,非稳健发散,稳健发散,到一直有差异),让我们梳理出能包容国际商务复杂而动态的现实过程的微妙表现。

Résumé

Cette étude examine les caractéristiques des pratiques de gestion des ressources humaines (GRH) dans les économies de marché, et entre les opérations des firmes locales et des filiales de multinationales étrangères, offrant une nouvelle perspective sur les points de convergence et de divergence. En appliquant la théorie institutionnelle pour améliorer notre compréhension des points de convergence/divergence comme des processus et des résultats, les données collectées dans neuf pays à trois moments différents d’une décennie confirment que les points de convergence et de divergence ont lieu de manière non-linéaire à des niveaux différents, et varient selon le domaine de la pratique de GRH observée. Les caractéristiques d’adoption et les points de convergence/divergence sont expliqués par l’effet des contraintes institutionnelles, qui varient entre les économies de marché libérales et coordonnées, et entre les firmes locales et les filiales de multinationales étrangères. Plus spécifiquement, nous attendions, et nous avons largement trouvé, des preuves confirmant que les pratiques en matière de compensation et de négociation des salaires ont une tendance plus marquée d’être contraintes institutionnellement, et sont ainsi moins susceptibles de converger que l’emploi contingent, la formation et les pratiques de mise à disposition directe d’informations. L’étude contribue à une conceptualisation plus graduée des points de convergence/divergence (pas de différence constante, convergence robuste, convergence non-robuste, divergence non-robuste, divergence robuste et différence constante), nous permettant de cerner les manifestations subtiles du processus qui peut intégrer la réalité dynamique complexe de l’international business.

Resumo

Este estudo explora os padrões de práticas de gestão de recursos humanos (HRM) em economias de mercado e entre operações de empresas domésticas e subsidiárias de multinacionais estrangeiras, oferecendo uma perspectiva inovadora sobre convergência e divergência. Aplicando teorias institucionais para melhorar a nossa compreensão sobre convergência/divergência como um processo e um resultado, dados coletados de nove países em três pontos ao longo de uma década confirmam que convergência e divergência ocorrem de diferentes maneiras de forma não linear e variam de acordo com a área de prática de HRM observada. Os padrões de adoção e convergência/divergência são explicados pelo efeito de restrições institucionais, que variam entre economias de mercado liberais e coordenadas, e entre empresas domésticas e subsidiárias de multinacionais estrangeiras. Especificamente, esperávamos e, encontramos amplas evidências que confirmam que práticas de remuneração e de negociação salarial mostram mais evidências de serem restringidas institucionalmente e, portanto, menos propensas a convergir do que o emprego contingencial, treinamento e práticas de provisão de informações diretas. O estudo contribui para uma conceituação mais categorizada de convergência/divergência (de constante nenhuma diferença, passando por convergência robusta, convergência não robusta, divergência não robusta e divergência robusta até constante diferença), permitindo-nos provocar as sutis manifestações do processo que podem incorporar a complexa realidade dinâmica dos negócios internacionais.

Resumen

Este estudio explora los patrones de las prácticas de la gestión de recursos humanos entre las economías de mercado, y entre las empresas locales y las operaciones de las subsidiarias de las empresas multinacionales extranjeras, ofreciendo una perspectiva novedosa donde la convergencia y la divergencia. Aplicando la teorización institucional para mejorar nuestro entendimiento de la convergencia/divergencia como proceso y como resultado, los datos recolectados en nueve países en tres puntos de tiempo durante una década confirman que la convergencia y la divergencia ocurren en diferentes grados de forma no lineal y varían dependiendo del área de la gestión de recursos humanos observada. Los patrones de adopción y convergencia/divergencia son explicados mediante el efecto de limitaciones institucionales, las cuales varían entre las economías de mercado liberadas y coordinadas, y entre empresas locales y subsidiarias de empresas multinacionales extranjeras. Específicamente, esperábamos, y encontramos grandes evidencias que confirman que el nivel de las prácticas de remuneración y negociación salarial muestran más evidencias de ser institucionalmente limitadas, y por ende tienen menos probabilidades de convergencia, que el empleo contingente, la capacitación, y las prácticas de provisión de información directa. El estudio contribuye a una conceptualización más graduada de la convergencia/divergencia (desde constante a ninguna diferencia, mediante convergencia robusta, convergencia no robusta, divergencia no robusta y divergencia robusta a diferencia constante), permitiéndonos descubrir las manifestaciones sutiles del proceso que puede incorporar la realidad dinámica compleja de los negocios internacionales.

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Acknowledgements

We would like to thank the editor and reviewers for very insightful feedback and direction throughout the review process. We would also like to acknowledge the contributions of members of the Cranet Network for their assistance in this article.

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Authors and Affiliations

  1. School of Labor & Employment Relations, 501c Keller, Pennsylvania State University, University Park, PA, 16802, USA

    Elaine Farndale

  2. Department of Human Resource Studies, Tilburg University, Tilburg, The Netherlands

    Elaine Farndale

  3. Institute for Management Research, Radboud University, Nijmegen, The Netherlands

    Chris Brewster, Paul Ligthart & Erik Poutsma

  4. Henley Business School, University of Reading, Reading, UK

    Chris Brewster

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  1. Elaine Farndale
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Correspondence to Elaine Farndale.

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Accepted by Paula Caligiuri, Area Editor, 25 June 2017. This article has been with the authors for four revisions.

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Farndale, E., Brewster, C., Ligthart, P. et al. The effects of market economy type and foreign MNE subsidiaries on the convergence and divergence of HRM. J Int Bus Stud 48, 1065–1086 (2017). https://doi.org/10.1057/s41267-017-0094-8

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  • DOI: https://doi.org/10.1057/s41267-017-0094-8

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