A conceptual framework for international human resource management research in developing economies

Abstract

This paper highlights the evolution and contribution of the institutional theory perspective to the study of human resource management (HRM) transfers between advanced economies and less developed economies owing to institutional dissimilarities. The paper seeks to explore the institutional differences between advanced economies (home) and less developed economies (host) through the lens of institutional theory and how such institutional differences constrain or provide opportunities for the transfer of HRM practices. We develop a conceptual framework through the lens of institutional theory to provide useful and comprehensive insight of factors or conditions to consider when transferring HRM practices from advanced economies to less developed economies where there are institutional dissimilarities. The framework offers a broad perspective of the three dimensions of institutional theory to help multinational enterprises evaluate and explore how the differences in institutional settings between home and host countries may create opportunities or constraints in HRM practice transfers.Keywords: human resource management practices, institutional dissimilarities, institutional theory, international human resource management, multinational enterprises Key points 1 Our conceptual framework identifies those factors or conditions to consider when multinational enterprises transfer human resource management (HRM) practices from advanced economies to their subsidiaries in less developed economies. 2 The framework is based on institutional theory to evaluate and explore how the differences in institutional configurations between home and host countries may create opportunities or constraints in HRM practice transfers. 3 Institutional theory is significant for international HRM research in that it provides a strong foundation in hypothesizing at both home and host country levels with regards to institutional dissimilarities between developed and less developed countries. Newcastle) is a professor of HRM at the School of Management, Curtin University, Perth, Australia. His main research interests are HRM practices in multinational enterprises, work, technology and new employment arrangements, workplace partnerships and consultation and EEO and diversity management in the workplace.Kerry Brown (PhD, Griffith) was a professor of HRM at the School of Management, Curtin University, Perth; however, she is now at Edith Cowan University, Perth, Australia. 1 Her main fields of research are employment relations and public management.

An empirical analysis of research paradigms within international human resource management: The need for more diversity

“…Their authors ask the almost classic question of how the institutional environment and related pressures shape the HRM practices of local companies or foreign MNCs operating within or across country contexts (e.g. Ayentimi et al, 2018; Ma et al, 2016; Novitskaya and Brewster, 2016; Yahiaoui, 2015).…”

Macro‐institutional conditions in Ghana and the challenges to HRM program development and implementation

“…This will therefore create the platform to examine how a less‐developed host country's institutional configurations affect local and international firms' HRM implementation and advancement. Indeed, because of the complexities within the geopolitical dynamics and its embeddedness with formal and informal institutional systems within the Ghanaian business environment (Ayentimi et al, , ), we employed an exploratory qualitative research design. This offered us the opportunity to understand the lived experiences of key HRM stakeholder participants and to explore the host country's macro‐institutional conditions and the HRM challenges.…”

“…A less‐developed host country's macro‐institutional conditions are context‐specific and complex due to the geopolitical dynamics and their embeddedness within formal and informal institutional settings, particularly in Sub‐Saharan Africa (Osabutey & Okoro, ). Host countries’ institutional conditions may lack universal recognition because of the institutional and cultural dissimilarities between advanced economies and less‐developed economies (Ayentimi et al, , ).…”

“…The rise in cultural and institutional heterogeneity between MNEs' home and host countries trigger information asymmetry, which affects MNE HRM policies and practices transfer and knowledge‐sharing capabilities (Bonache & Pla‐Barber, ). MNEs operating in less‐developed and emerging markets have to manage numerous institutional and cultural constraints coupled with the lack of well‐developed institutional and regulatory systems within the general business environment (Adams, Debrah, Williams, & Mmieh, ; Ayentimi, Burgess, & Brown, , ). Fundamentally, firms’ behavior and structures are underpinned by the institutional environment in which they operate (Dunning & Lundan, ), and MNEs' understanding of less‐developed host countries’ macro‐institutional conditions remains relevant within HRM practice transfer literature.…”

“…Although detailed MNE HRM literature on Africa is limited, it has been noted that colonization and decolonization coupled with cultural diversity and a State‐led economic development trajectory have played a contributory role to the structure of the general business system, and especially to the HRM practice configuration (Debrah, ; Harvey, ; Kamoche, ; Ovadje & Ankomah, ). Within the context of IHRM and comparative HRM literature, it can be a challenge for strategic HRM advancement, particularly in a host country where the geopolitical dynamics are entrenched within formal and informal institutions that characterize the general business environment (Ayentimi et al, , ). Previous IHRM studies indicate that MNEs and their subsidiaries are likely to be challenged with a wide range of institutional and cultural conditions during the process of internationalization (Burbach & Royle, ; Chao et al, ; Osabutey & Okoro, ).…”