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The International Journal of Human Resource Management


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Rethinking comparative and cross-national human resource management research


Pawan S. Budhwar & Yaw Debrah Version of record first published: 09 Dec 2010.

To cite this article: Pawan S. Budhwar & Yaw Debrah (2001): Rethinking comparative and cross-national human resource management research, The International Journal of Human Resource Management, 12:3, 497-515 To link to this article: http://dx.doi.org/10.1080/713769629

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Int. J. of Human Resource Management 12:3 May 2001 497515

Rethinking comparative and crossnational human resource management research

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Pawan S. Budhwar and Yaw Debrah


Abstract This article rst brie y highlights the rapid development of the human resource management (HRM) discipline and the need for more cross-national HRM studies. The universal applicability of Anglo-Saxon models of HRM is then questioned. To examine the applicability of HRM models in different settings (national and international), ve main HRM models are critically analysed and their main research propositions are identi ed. This provides the basis for a framework for HRM evaluations in different contexts. Based on such a framework and developments in the literature, nally, a contextual model is proposed for conducting cross-national and comparative HRM studies. The paper also indicates some related directions for future research. Keywords Comparative HRM; models of HRM; contextual framework of HRM; crossnational HRM research; developments in HRM.

Introduction Developments in the eld of HRM are now well documented in the management literature (Boxall, 1995; Jackson and Schuler, 1995; Legge, 1995). The debate relating to the nature of HRM continues today, although the focus of the debate has changed over time. It started by attempting to delineate the differences between personnel management and HRM, and moved on to attempts to incorporate industrial relations into HRM, examining the relationship of HRM strategies, integration of HRM into the business strategies, devolvement of HRM to line managers and then the extent to which HRM can act as a key means to achieve a competitive advantage in organizations. Most of these developments have taken place over the last fteen years or so, and have precipitated changes in the nature of the human resource (HR) function from being reactive, prescriptive and administrative to being proactive, descriptive and executive (Boxall, 1994; Legge, 1995). At present then, the contribution of HRM in improving rms performance and to the overall success of any organization (alongside other factors) is being highlighted in the literature (Boxall, 1995; Guest, 1997; Sisson, 1996). However, it is clear that, as rms are entering into a more dynamic world of international business and as the globalization of world markets continues apace, comparative issues appear to be gaining momentum (Brewster et al., 1996; Dowling et al., 1994). Both practitioners and
Dr Pawan S. Budhwar, Lecturer in HRM, Cardiff Business School, Colum Drive, Cardiff CF1 3EU, Wales (tel: 1 44 (0)2920 875214; fax: 1 44 (0)2920 874419; e-mail: Budhwar@Cardiff. ac.uk); Dr Yaw Debrah, Senior Lecturer in HRM, Cardiff Business School, Colum Drive, Cardiff CF1 3EU, Wales (tel: 1 44 (0)2920 876803; fax: 1 44 (0)2920 874419; e-mail: Debrah@Cardiff.ac.uk).
The International Journal of Human Resource Management ISSN 0958-5192 print/ISSN 1466-4399 online 2001 Taylor & Francis Ltd http://www.tandf.co.uk/journals DOI: 10.1080/09585190010026266

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academicians in the eld of HRM are increasingly realizing the need to explore the thinking of people (managers) working in different parts of the world. This is crucial for developing relevant management practices. It can also become an important training tool for expatriate managers. The increased probability of having to manage in an international situation has made this an imperative. Academics have responded positively to meeting the challenges raised by the dynamic business environment. They have developed and proposed different models of HRM both between and within nations (Boxall, 1995; Brewster, 1995; Guest, 1997; Legge, 1995). Interestingly, most models of HRM have an Anglo-Saxon base. During the infancy stage of the HRM literature such an ethnocentric approach was understandable and unavoidable. However, the present dynamic international business environment demands appropriate information and guidance to develop relevant HRM policies and practices. Under such conditions, the relevance of lessons learned from the Anglo-Saxon experience is questionable (Hofstede, 1993). It is therefore important to examine the extent to which Anglo-Saxon models of HRM are applicable in other parts of the world. It has now also become clear that the study of HRM needs an international perspective (Brewster et al., 1996; Kochan et al., 1992). Recently, some researchers have made an attempt to examine the applicability of some of the theoretical models of HRM (see Benkhoff, 1997; Monks, 1993; Truss et al., 1997). It is noteworthy that most of these investigations have been conducted in the UK or Western developed nations. Moreover, though the present literature shows an emphasis on themes such as strategic HRM and cross-national, cross-cultural or comparative HRM studies, the majority of researchers are still examining only the traditional hard and soft models of HRM (Legge, 1995). For the growth and development of international HRM (IHRM), there is a strong need to examine the applicability of such models of HRM, which can help to assess the extent to which HRM has really become strategic in different parts of the world, and the main factors and variables which determine HRM in different settings. This will not only test the applicability of HRM approaches in different regions, but will also help to highlight the context-speci c nature of HRM practices (Guthrie and Olian, 1991; Jackson and Schuler, 1995; Locke and Thelen, 1995). However, the existing literature shows a scarcity of research in this area. This is mainly due to the fact that the methodological issues involved in cross-national research are more numerous and more complex than the single nation one, and also due to the absence of a comprehensive framework for conducting such studies (Brewster et al., 1996; Budhwar, 1997, 1999; Cavusgil and Das, 1997; Jackson and Schuler, 1995). Terms such as comparative and cross-national are used interchangeably in this paper. A starting point for such investigations can be to examine empirically the applicability of the main models of HRM in different settings. In the next section, ve models of HRM are analysed which are not only more documented in the literature but also cover a wide range of important issues of HRM. However, it must be said that these ve models in no way provide a complete picture of the eld of HRM. Based on the framework used in this paper, other prominent models of HRM should be analysed. The last three models analysed here have a number of points in common with regard to their contents. Along with the analysis, the main research propositions useful for evaluating the applicability of each model are identi ed. Later, a contextual framework is presented which can be used to examine these research propositions in different contexts.

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Budhwar and Debrah: Comparative and cross-national HRM research Theoretical developments in HRM

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The literature contains many theoretical models of HRM. However, due to limitation of space and breadth of issues covered, only ve main models of HRM are analysed here. These are: the Matching Model, the Harvard Model, the Contextual Model, the 5-P Model and the European Model of HRM (Boxall, 1992; Brewster, 1995; Budhwar, 1996; Guest, 1997; Legge, 1995; Poole, 1990). The reason for analysing these models is two-fold: rst, to highlight their main contribution to the development of HRM as a distinct discipline and, second, to identify the main research propositions suitable for examining these models. The analysis begins with one of the traditional models of HRM. The strategic t or the hard variant of HRM The main contributors to the Matching Model of HRM come from the Michigan and New York schools. Fombrun et al.s (1984) model highlights the resource aspect of HRM and emphasizes the ef cient utilization of human resources to meet organizational objectives. This means that, like other resources of organization, human resources have to be obtained cheaply, used sparingly and developed and exploited as fully as possible (Sparrow and Hiltrop, 1994). The matching model is based mainly on Chandlers (1962) argument that an organizations structure is an outcome of its strategy. Galbraith and Nathanson (1978) expanded on Chandlers analysis and linked different personnel functions (such as the analysis of career paths, rewards and leadership styles) to an organizations strategy and structure. They highlight the signi cance of the HR function in the achievement of an organizations mission. Fombrun et al. (1984) expanded these premises and developed the matching model of strategic HRM, which emphasizes a tight t between organizational strategy, organizational structure and HRM system. The organizational strategy is pre-eminent, i.e. both structure and HRM are dependent on the organizational strategy. The main aim of the matching model is therefore to develop an appropriate human resource system which will characterize those HRM strategies that contribute to the most ef cient implementation of business strategies. Further developments to the matching model and its core theme of strategic t were made by the Schuler group in the late 1980s. Relating HRM practices to organizational strategies, Schuler and Jackson (1987) presume that the successful implementation of different organizational strategies requires different role behaviours on the part of employees, who must therefore exhibit different characteristics. Based on survey research, they concluded that the same HRM practices (such as those related to recruitment, training and retirement) are used differently by organizations that differ in their organizational strategies (for example defenders or reactors). Moreover, greater differences in HRM practices are found within organizations than across organizations, regardless of strategy. Therefore, organizations are likely to use rather different HRM practices with employees at different levels. Schuler and Jackson (1987) note that, as organizations change strategies, they are likely to change HRM practices. They identi ed the most important HRM practices about which strategic decisions had to be made and for each practice noted the dichotomous (but logical) alternatives that could be applied. For Schuler and Jackson (1987), HRM could then be seen as a menu of strategic choices to be made by human resource executives in order to promote the most effective role behaviours consistent with the organization strategy and ensure that they are aligned with each other (Sparrow and Hiltrop, 1994).

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The matching model of HRM has been criticized for a number of reasons. It is argued to be too prescriptive by nature, mainly due to the fact that its assumptions are strongly unitarist (Boxall, 1992). As the model emphasizes a tight t between organizational strategy and HR strategies, it completely ignores the interest of employees, and hence considers HRM as a totally passive, reactive and implementationist function. Many argue that we actually see the opposite trend (Storey, 1992). It is also asserted that it fails to perceive the potential for a reciprocal relationship between HR strategy and organizational strategy (Boxall, 1992; Lengnick-Hall and Lengnick-Hall, 1988). Indeed, for some, the very idea of tight t makes the organization in exible, incapable of adapting to required changes and hence un tted to todays dynamic business environment. The matching model also misses the human aspect of human resources and has therefore been called a hard model of HRM (Guest, 1997; Legge, 1995; Storey, 1992). The idea of considering and using human resources like any other resource of organization seems unpragmatic in the present world. The model is also criticized for taking only selection, appraisal, rewards and development as the generic HRM functions. By doing so, it overlooks two fundamental policy domains, which others argue should be included among the list of the generic functions: leadership styles and recognition of labour relations, industrial relations, trade unions and their bargaining power. Nevertheless, despite the many criticisms, the matching model deserves credit for providing a framework for subsequent theory development in the eld of HRM. Researchers need to adopt a comprehensive methodology in order to study the dynamic concept of human resource strategy. Do elements of the matching model exist in different settings? This can be done by examining the presence of some of the core issues of the model. The main research propositions emerging from the matching models are: Research Proposition 1: Do organizations show a tight t between their HRM and organization strategy where the former is dependent on the latter? Do personnel managers believe they should develop HRM systems only for the effective implementation of their organization strategies? Do organizations consider their HRs as a cost and use them sparingly? Or do they devote resources to the training of their HRs to make the best use of them? Do HRM strategies vary across different levels of employees?

Research Proposition 2:

Research Proposition 3: The soft variant of HRM

The Harvard Model of HRM is another analytical framework, which is premised on the view that, if general managers develop a viewpoint on how they wish to see employees involved in and developed by the enterprise, then some of the criticisms of historical personnel management can be overcome. The model was rst articulated by Beer et al. (1984). Compared to the matching model, this model is termed the soft variant (Legge, 1995; Storey, 1992; Truss et al., 1997). It stresses the human aspect of HRM and is more concerned with the employeremployee relationship. The model highlights the interests of different stakeholders in the organization (such as shareholders, management, employee groups, government, community and unions) and how

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their interests are related to the objectives of management. This aspect of the model provides some awareness of the European context and other business systems which emphasize co-determination (Boxall, 1992). It also recognizes the in uence of situational factors (such as the market) on HRM policy choices. The actual content of HRM, according to this model is described in relation to four policy areas, i.e. human resource ows, reward systems, employee in uence and works systems. Each of the four policy areas is characterized by a series of tasks to which managers must attend. The outcomes that these four HR policies need to achieve are commitment, competence, congruence and cost effectiveness. The aim of these outcomes is therefore to develop and sustain mutual trust and improve individual/group performance at the minimum cost so as to achieve individual well-being, organizational effectiveness and societal well-being. The model allows for analysis of these outcomes at both the organizational and societal level. As this model acknowledges the role of societal outcomes, it can provide a useful basis for comparative analysis of HRM (Poole, 1990). However, this model has been criticized for not explaining the complex relationship between strategic management and HRM (Guest, 1991). Both the matching model and the Harvard analytical framework represent two very different emphases: the former is closer to the strategic management literature, the latter to the human relations tradition. Based on the above analysis, the main research propositions emerging from this model, which can be used for examining its applicability in different contexts, are: Research Proposition 4: What is the in uence of different stakeholders and situational and contingent variables on HRM policies? To what extent is communication with employees used as a source to maximize commitment? What level of emphasis is given to employee development through involvement, empowerment and devolution?

Research Proposition 5:

Research Proposition 6: The contextual emphasis

Based on the human resource policy framework provided by the Harvard Model, researchers at the Centre for Corporate Strategy and Change at the Warwick Business School developed an understanding of strategy making in complex organizations and related this to the ability to transform HRM practices. They investigated empirically based data (collected through in-depth case studies on over twenty leading British organizations) to examine the link between strategic change and transformations, and the way in which people are managed (Hendry and Pettigrew, 1992; Hendry et al., 1988). Hendry and associates argue that HRM should not be labelled as a single form of activity. Organizations may follow a number of different pathways in order to achieve the same results. This is mainly due to the existence of a number of linkages between the outer environmental context (socio-economic, technological, political-legal and competitive) and inner organizational context (culture, structure, leadership, task technology and business output). These linkages contribute directly to forming the content of an organizations HRM. To analyse this, past information related to the organizations development and management of change is essential (Sparrow and Hiltrop, 1994). The main research propositions emerging from this model are:

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Research Proposition 7:

Research Proposition 8:

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Debates in the early 1990s suggested the need to explore the relationship between strategic management and HRM more extensively (Boxall, 1992; Guest, 1991). Starting roughly from 19867, the literature shows an increasing concern about this issue (Hendry and Pettigrew, 1992; Lengnick-Hall and Lengnick-Hall, 1988; Schuler and Jackson, 1987). The next model analysed is strongly based on this premise. The issue of strategic integration The literature reveals a trend in which HRM is becoming an integral part of business strategy (Brewster and Larsen, 1992; Budhwar and Sparrow, 1997; Lengnick-Hall and Lengnick-Hall, 1988; Schuler, 1992; Schuler and Jackson, 1987; Storey, 1992). The emergence of the term strategic human resource management (SHRM) is an outcome of such efforts. It is largely concerned with integration and adaptation. Its purpose is to ensure that (Schuler, 1992: 18): 1 HRM is fully integrated with the strategy and strategic needs of the rm; 2 HR policies are coherent both across policy areas and across hierarchies; and 3 HR practices are adjusted, accepted and used by line managers and employees as part of their everyday work. SHRM therefore has many different components, including HR policies, culture, values and practices. Schuler (1992) developed a 5-P model of SHRM which melds ve HR activities (philosophies, policies, programmes, practices and processes) with strategic needs. Strategic needs re ect managements overall plan for survival, growth, adaptability and pro tability. The strategic HR activities form the main components of HR strategy. This model to a great extent explains the signi cance of these ve SHRM activities in achieving the organizations strategic needs, and shows the interrelatedness of activities that are often treated separately in the literature. This is helpful in understanding the complex interaction between organizational strategy and SHRM activities. The model further shows the in uence of internal characteristics (which mainly consist of factors such as organizational culture and the nature of the business) and external characteristics (which consist of the nature and state of economy within which the organization exists and critical success factors, i.e. the opportunities and threats provided by the industry) on the strategic business needs of an organization. This model attracts criticism for being over-prescriptive and too hypothetical in nature. Though it seems very attractive, practitioners might nd it dif cult (if not impossible) to implement. It needs a lot of time to gain an understanding of the way strategic business needs are actually de ned. The melding of business needs with HR activities is also very challenging, mainly because linkages between human resource activities and

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business needs tend to be the exception, even during non-turbulent times (Schuler, 1992: 20). Nevertheless, the model raises two important research propositions (also suggested by many other authors in the eld) important for HRM comparisons. These are: Research Proposition 9: Research Proposition 10: What is the level of integration of HRM into the business strategy? What is the level of responsibility for HRM devolved to line managers?

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Brewster and associates (see Brewster et al., 1997) successfully compared crossnational HRM across European nations based on the last two research propositions. These research propositions presently form one of the central themes of debate in the HRM literature (Storey, 1995). European model of HRM Moving ahead with the cross-national comparative mode, the fth model of HRM is now analysed. Based on the growing importance of HRM and its contribution towards economic success and the drive towards Europeanization, Brewster (1993, 1995) proposes a European model of HRM. His model is based on the premise that European organizations operate with restricted autonomy. They are constrained at both the international (European Union) and national level by national culture and legislation, at the organization level by patterns of ownership and at the HRM level by trade union involvement and consultative arrangements (Brewster, 1995: 3). Brewster suggests the need to accommodate such constraints while forming a model of HRM. He also talks about outer and internal constraints on HRM. The outside constraints on HRM are in the form of the legalistic framework, vocational training programmes, social security provisions and the ownership patterns (public and private). The internal constraints on HRM include union in uence (in the form of representation) and employee involvement in decision making through various bodies such as workers councils. Based on such constraints, Brewsters model highlights the in uence of factors such as national culture, ownership structures, role of the State and trade unions on HRM in different national settings. He emphasizes the need for a more comprehensive view of the role of different actors (such as government, unions, management and customer) in developing the concept of HRM and testing its international applicability. The European model shows an interaction between HR strategies, business strategy and HR practice and their interaction with an external environment constituting national culture, power systems, legislation, education, employee representation and the previously mentioned constraint factors. It places HR strategies in close interaction with the relevant organizational strategy and external environment. One important aim of this model is to show factors external to the organization as a part of the HRM model, rather than as a set of external in uences upon it. This helps to place organizational approaches rmly within the national context, which contributes to a better understanding of the unique situations of and differences between nations in their HRM practices, as well as how MNCs try to adopt local practices (Brewster, 1995: 13). Such an approach helps to build a better model of European HRM and saves it from becoming too normative. It also moves beyond the traditional discussion about whether the term HRM should be accepted or rejected and towards a more positive debate about

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different forms and styles of HRM. More importantly, it helps to analyse HRM at a national level. From the above analyses it can be seen that there is an element of both the Contextual and 5-P Models of HRM present in Brewsters European model. Apart from the emphasis on strategic HRM mode, one main research proposition important for crossnational HRM comparisons emerges from Brewsters (1995) model. This is: Research Proposition 11: What is the in uence of international institutions, national factors (such as culture, legal set-up, economic environment and ownership patterns), national institutions (such as the educational and vocational set-up, labour markets and trade unions) on HRM strategies and HRM practices?

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Pursuing more or less a similar pattern, another group of researchers (Hiltrop et al., 1995; Sparrow, 1995; Sparrow and Hiltrop, 1997) propose a model of factors that determine the distinctiveness of a countrys HRM problems. They suggest a series of factors related to cultural, institutional factors, business systems and structure and HR role and competence as the determining in uences on European HRM. The above discussion presented a brief regarding the theoretical developments in HRM. It also identi ed and highlighted the main research propositions which can be used to examine the ve models of HRM. The question that arises then is how to carry out such an investigation. What factors and variables should be considered in examining the identi ed research propositions in different national or comparative settings? Is there a comprehensive framework for conducting this type of evaluation? An attempt has been made to answer these and related questions in the next section. A contextual perspective for cross-national evaluations of HRM HRM evaluations can be conducted at various levels (Kochan et al., 1992; Locke et al., 1995). This can range from nation state (which is the focus of political literature) to the level of the rm (where the labour economics and HRM literature is the focus). A framework is now proposed for investigations and comparisons at the rm level. The framework should be used to assimilate comparative studies into the body of commonly accepted knowledge of HRM. What can be gleaned from the comparative management literature? The major thrust of the comparative management literature can be broadly classi ed into four categories. These are: the economic development approach; the environmental approach; the behavioural approach; and the open systems approach (Nath, 1988). The main methodological issues involved in cross-national or cross-cultural HRM research are related to: c c c c c differences between the terms cross-cultural and cross-national; different types of functional equivalence; control of variables or matching of rms on possible variables; de nition and scope of culture; and dif culties in data collection, analysis and interpretation. Researchers have prescribed possible remedies to these issues so as to facilitate more meaningful cross-national comparisons (Adler, 1983; Cavusgil and Das, 1997). In coping with perceived methodological weaknesses, different scholars in the eld of HRM have also put forth a number of frameworks for conducting international HRM

Budhwar and Debrah: Comparative and cross-national HRM research


Outer Context National Culture Socialization process: common values, norms of behaviour & customs; influence of pressure groups; assumptions that shape managers perceptions; match to the organization culture Inner Context

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Contingent Variables Age; size; nature; life-cycle stage; level of technology; presence of unions and HR strategies; business sector; different stakeholders interest

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Institutions National labour laws; trade unions; educational & vocational training set-up; labour market; professional bodies international institutions; industry by itself; employers federation; consulting organizations Dynamic Business Environment Competition; business alliances; changing composition of workforce; restructuring; focus on total customer satisfaction; facility of information; technology change; globalization of business Industrial Sector Common strategies; business logic and goals; regulations & standards; sector-specific knowledge; informal & formal benchmarking; cross-sector co-operation; common developments in business operations; labour or skill requirements

National HRM Policies & Practices Recruitment & selection; training & development; career development; performance appraisals; pay & benefits; transfers; communication; retirement separation

Organizational Strategies & Policies Primary HR functions; internal labour markets; level of integration & devolvement; nature of work flexibilty; prospector, analyser, defender or reactor

Figure 1 Contextual model of factors determining HRM policies and practices

research (see Begin, 1992; Gronhaug and Nordhaug, 1992; Hiltrop, 1996; Jackson and Schuler, 1995; Miles and Snow, 1984; Murray et al., 1976; Negandhi, 1975; 1983; Schuler et al., 1993; Tayeb, 1995; Welch, 1994). Discussion on these is beyond the scope of this article. However, these frameworks are found to be normative in nature and many of them present a complex set of variables that cannot be tested empirically (Redding, 1994). The relevant contributions useful for cross-national HRM evaluations from these frameworks have been collated and more factors and variables have been added by the authors to develop the framework. Based on the above analysis and after synthesizing the fragmented contributions from the elds of comparative management, HRM and IHRM, it is possible to examine the

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eleven research propositions identi ed above by studying the in uences of three levels of factors and variables. These are: national factors, contingent variables and organizational strategies and policies on HRM policies and practices. Considering the context speci c nature of HRM (Locke and Thelen, 1995; Jackson and Schuler, 1995), the authors have tried to provide a comprehensive list of factors and variables in the framework (see Figure 1), which is by no means exhaustive. Nevertheless, it should facilitate the investigation into the identi ed research propositions of the HRM models in a different context. A detailed explanation of the framework is beyond the focus of this paper. However, theoretical support will be provided for each of the selected national factors, and their respective aspects and the contingent variables and organizational strategies and policies will be discussed. Later there will be a brief overview of the operationalization of the framework. National determinants of HRM Brewster (1995) emphasizes the need to look into the in uence of different national factors (such as national culture and institutions) on HRM practices (Research Proposition 11). A similar desire is put forward by the Warwick researchers (Research Proposition 7). Apart from these, there are a series of other factors that operate at the national level which set the overall climate for international HRM that guides HRM choices. Four broad national factors of national culture, institutions, industry sector and dynamic business environment have been identi ed as signi cant determinants of HRM policies and practices in cross-national settings. Few would question the inclusion of national culture, institutional arrangements and changing business dynamics under the outer context. Perhaps of more note is the positioning of the industry sector. The industry sector can be taken as a contingent variable because it represents the interests of a number of stakeholders. However, the study of national business systems evidence (Rasanen and Whipp, 1992; Whitley, 1992) suggests that industry or business sector is best considered as a country-level or national unit of analysis and is worth considering for national comparisons. Recent research (Eriksson et al., 1996) has shown how HRM policies and practices are governed by a speci c sector. The main causative in uences related to this aspect of sector include: 1 2 3 4 5 6 7 8 common strategies, business logic and goals; regulations and standards; speci c requirements or needs associated with supply chain management; the need for sector-speci c knowledge; informal or formal benchmarking against sector competitors; cross-sector co-operative arrangements; common developments in business operations; and sector-speci c labour markets or skill requirements (Hiltrop, 1993; Rasanen and Whipp, 1992).

A number of researchers (Brewster, 1995; Hofstede, 1993; Laurent, 1993; Schneider, 1993; Sparrow, 1995; Tayeb, 1995) have highlighted and explained the in uence of national culture on HRM policies and practices. However, it is important to note that the de nition and scope of the concept of culture is debatable (Tayeb, 1994). It is therefore sensible to examine the impact of those aspects of national culture on HRM which have a sound theoretical base. The most important processes or aspects of national culture that have been identi ed for comparative evaluations are:

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1 the socialization process through which managers are made (Hofstede, 1983; 1993; Schein, 1985; Terpstra and David, 1985; Van Maanen and Schein, 1979); 2 the basic assumptions which shape managers behaviour (Hofstede, 1983, 1993; Van Maanen and Schein, 1979); 3 their common values, norms of behaviour and customs (Hofstede, 1983, 1993; Keesing, 1974; Tayeb, 1995); 4 the in uence of social elites or pressure groups unique to a country (Keesing, 1974); and 5 the unique ways of doing things and management logic in a particular country, which are re ective of the broader national business system (Sparrow and Hiltrop, 1997; Whitley, 1992). With development of different trading blocs the world over (such as NAFTA, EFTA, ASEAN), researchers in the eld of cross-national HRM have seriously started considering the impact of different institutions on HRM policies and practices (Brewster, 1995; Sparrow and Hiltrop, 1997). Given the regional focus in much international HRM research, they have provided lists of institutions most relevant to broad regional contexts (such as the European Union, the Social Chapter, patterns of unions and the recognition of the legal set-up). There are then a number of institutional systems whose in uence on HRM in a cross-national context must be interpreted. These include: 1 2 3 4 5 6 national labour laws (Brewster, 1995; Sparrow, 1995); the structure, density and role of trade unions (Brewster, 1995; Tayeb, 1994); the educational and vocational set-up (Sparrow, 1995); the role of professional bodies (Torrington, 1993; Zucker, 1987); international business institutions (Morishima, 1995; Zucker, 1987); labour-market dynamics, and overall preferences for internal or external markets (Benson, 1995; Cappelli, 1995; Osterman, 1994); 7 employers federations and representative bodies (Powell and DiMaggio, 1991; Scott, 1995; Zucker, 1987); and 8 the legitimate role of consulting organizations (Lowndes, 1996; Scott, 1995; Zucker, 1987). Along with the above three national factors, HRM research has also demonstrated the impact of dynamic business environments, characterized mainly by distinctive sets of competitive pressures on HRM policies and practices at the national level (Hendry and Pettigrew, 1992; Hiltrop, 1993; Sparrow, 1995). Although many of these dynamics are unique to each nation, a series of developments are pan-national and have been identi ed as major determinants of IHRM activity. The aspects of a dynamic business environment that have been identi ed as in uencing HRM policies and practices in a cross-national context are: 1 increased competition and pressures on productivity, quality or social costs of employment at both national and international level; 2 the resulting growth of new business alliances or forms of corporate governance (Cappelli, 1995; Sparrow, 1995); 3 automation of information systems and their impact on international business structures and co-ordination systems (Hiltrop, 1993); 4 change in the composition and demographics of the workforce (Torrington, 1993); 5 downsizing of organizations and the transfer of work across a new international division of labour (Cappelli, 1995; Soeters and Schwan, 1990); and

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6 transfer of convergent best practice, for example through the Japanization of production systems, emphasis on customer service or creation of like-minded international cadres of managers (Sparrow and Hiltrop, 1997). Contingent determinants of HRM Research propositions 4, 8 and parts of 7 strongly emphasize the impact of different contingent variables on HRM policies and practices. The contingent variables in the framework are now highlighted. The various contingent variables shown to determine HRM are the:

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1 size of the organization (based on the number of employees) (Cohen and Pfeffer, 1986; Dimick and Murray, 1978; Jackson and Schuler, 1995; Yuen and Kee, 1993); 2 level of technology adopted (Dimick and Murray, 1978; Jackson and Schuler, 1995); 3 age of organization (Dimick and Murray, 1978; Tayeb, 1988); 4 presence of a formal HRM department (Fisher and Shaw, 1992); 5 type of HR strategy (Jackson and Schuler, 1995; Schuler, 1992); 6 representation of personnel on the board (Brewster, 1995); 7 type of ownership (Dimick and Murray, 1978; Tayeb, 1988); 8 existence of training units in the HR department (Fisher and Shaw, 1992); 9 union status (Cohen and Pfeffer, 1986; Fisher and Shaw, 1992; Yuen and Kee, 1993); 10 interests of in uential stakeholders (Beer et al., 1984); 11 structure of organization (Jackson and Schuler, 1995; Schuler et al., 1993); and 12 life-cycle stage of the organization (Baird and Meshoulam, 1988; Jackson and Schuler, 1995; Hendry and Pettigrew, 1992). Organizational strategies and policies determining HRM Cross-national HRM researchers claim that it is at the levels of national factors and contingent variables that useful contributions can be made by examining the impacts of such determinants on HRM policies and practices (Boxall, 1995; Brewster et al., 1996). However, in order to get a better understanding of the context-speci c nature of HRM practices, an evaluation of the impact of organizational strategies on them (along with the above-mentioned contingent variables) is important (Budhwar and Sparrow, 1997; Jackson and Schuler, 1995; Jackson et al., 1989; Miles and Snow, 1984; Peck 1994; Schuler and Jackson, 1987). Understandably then, research propositions 1, 2, 3, 5, 6, 9 and 10 suggest a similar emphasis. There are many typologies for characterizing the organizational business strategies used by rms. However, the two most frequently cited in the discussions of HRM and therefore worth considering for cross-national analysis are the ones proposed by Miles and Snow (1978, 1984) and Porter (1980, 1985). Miles and Snow classify organizations as prospectors, analysers, defenders and reactors. These generic strategies dictate organizations HRM policies and practices. For example, defenders are less concerned about recruiting new employees externally and are more concerned about developing current employees. In contrast, prospectors are growing, so they are concerned about recruiting and using performance appraisal results for evaluation rather than for longerterm development (Jackson and Schuler, 1995; MacDuf e, 1995; Peck, 1994; Slocum et al., 1985). Similarly, Porters (1985) competitive strategies distinguish rms that

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compete on the basis of cost leadership, product differentiation and market focus. Based on this typology, Schuler and Jackson (1987) used a role behaviour perspective to describe the possible HRM implications of cost-reduction, innovation and qualityenhancement strategies. They predict that organizations which pursue a cost-reduction strategy (comparable in many ways to a defender strategy) will emphasize short-run relationships, minimize training and development and highlight external pay comparability (Peck, 1994). Legge (1989) makes a similar argument in her critical analysis of HRM. Based on such a premise, different organizational strategies have shown to determine a range of HR practices and policies, such as staf ng (Guthrie and Olian, 1991), compensation and rewards (Veliyath et al., 1994), the employment relationship (Peck, 1994) and its associated psychological contracts (Rousseau and Wade-Benzoni, 1994), work exibility (Mayne et al., 1996), integration of HRM into the corporate strategy and levels of devolvement of HRM to line managers (Budhwar and Sparrow, 1997), career management (Slocum et al., 1985), the range of internal labour markets or structured employment systems (Osterman, 1994; Soeters and Schwan, 1990), type of training and development (Peck, 1994) and levels of performance (Guest, 1997; MacDuf e, 1995). These studies con rm the signi cant impact of organizational strategies on different HRM practices and the fundamentally important way in which the inner context of organizations still mediates the role of national factors. Recent research also shows that organizational policies related to recruitment (such as to emphasize the recruitment of fresh graduates), training and development (for example, to monitor training through formal evaluation after training) and communication (for example, to communicate with employees through immediate superiors) also determine HR practices and policies in a cross-national setting (Bournois et al., 1994; Brewster and Hegewisch, 1994; Budhwar and Sparrow, 1997; Dany and Torchy, 1994; Mahoney and Deckop, 1986). Research by Budhwar and Sparrow (1997) reveals how internal organizational policies related to recruitment, training and development and employees communication act as signi cant determinants of the levels of integration of HRM into the corporate strategy and devolvement of HRM to line managers practised in Indian rms. Importantly such variables, which represent the internal logic within the HR strategy, were more predictive than traditional contingency variables such as the age, size and nature of the rm. Similarly, research by Mayne et al. (1996) shows how the level of work exibility across Europe is determined by different con gurations of organizational policies related to recruitment, training and communication, along with organizational strategies and organizational demographics. These researchers suggest that the changes taking place within Europe are forcing rms to adopt such practices. On the same lines, MacDuf e (1995) and Guest (1997) also suggest the in uence of bundles or con gurations of organizational policies and strategies on the performance level of rms. Such explanation shows the context-speci c impact of organizational strategies and policies on HRM policies and practices. However, it is important to note that a particular context is an outcome of an interplay of many complex factors and variables, as explained above under the discussion of national factors and contingent variables. Conclusions and implications The rapid growth in the eld of HRM and the need for more cross-national HRM studies has been highlighted. Models of HRM have contributed to the theoretical

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development of the eld. However, in the present dynamic business environment the universal applicability of such models has become questionable. For the development of better HRM and IHRM theories and practices it has now become necessary to examine the main models of HRM in different settings. Unfortunately, the literature shows the absence of an established framework for such evaluations. The authors have identi ed the main research propositions of ve HRM models which could be examined in different settings. To pursue such investigations, the authors proposed a contextual framework consisting of four national factors and a set of contingent variables and organizational strategies and policies which are known to determine HRM policies and practices. Considering the context-speci c nature of HRM, the authors made an attempt to provide a comprehensive list of these factors and variables (which is by no means complete but is supported by mainstream research). Based on the context-speci c premise, the authors believe that different con gurations of cultural, institutional, sector or business dynamic alter the speci c impact that the individual contingency factors have. Understanding the complex interactions and causes-and-effect relationships between these different sets of national factors, contingent variables and organizational strategies and policies now plays a crucial role in highlighting the cross-national, but context-speci c nature of HRM in different settings (Locke and Thelen, 1995; Jackson and Schuler, 1995). The use of tightly matched samples and the adoption of mixed methodologies should help to identify the signi cant predictors of HRM policies and practices in different national settings (Boxall, 1995; Brewster et al., 1996; Mayne et al., 1996). With the help of such analysis, the research propositions of different HRM models can be tested. For example, the issue of tight- t (Research Proposition 1) can be evaluated by looking at some of the accepted measures, such as involvement of HRM in the corporate strategy at the implementation stage (Storey, 1992; Truss et al., 1997). The proposed framework would help to determine the main reasons for such a practice (cultural, institutional or company philosophy). In a recent evaluation, Budhwar and Sparrow (1997) found that, in comparison to British rms, Indian rms involve their HRM less from the outset while forming their corporate strategy. In the same way, the main reasons which contribute to an emphasis on training and development in a national or regional setting (Research Proposition 2) could be examined. For example, the present thrust on human resource development (HRD) in India is created by the recent economic reforms. These have signi cantly in uenced the Indian HRM function (Sparrow and Budhwar, 1997). Similarly, whether organizations have different HR strategies for different levels of employees (Research Proposition 3) can be examined. In comparison to British organizations, Indian organizations shared less nancial and strategic information with lower-level employees. This was based on the rationale that management had less faith in the capability of lower-level employees and were less willing to share such information with them (Budhwar and Sparrow, 1997). Similarly, the research propositions of the Harvard Model, i.e. the in uence of stakeholders and situational variables on HRM and the emphasis given to employee development through involvement, empowerment and devolution (Research Propositions 4 and 6) could be examined by adopting the proposed framework in different national settings. For example, recently, Truss et al. (1997) examined the prevalence of the soft and hard models of HRM in eight large rms in the UK. They found an emphasis on the development and empowerment of employees. However, the same study revealed very little in uence of different stakeholders on their HRM. The in uence of national factors on HRM in different settings (Research Propositions 7 and 11) could be examined by collecting information on rating scales or allocation of

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points to each of the aspects of national factors. Such an approach has been successfully adopted by Budhwar and Sparrow (1998) to examine and compare the main national factors (presented in Figure 1) affecting British and Indian HRM policies and practices. Similarly, the in uence of contingent variables and organizational strategies and policies on HRM (Research Propositions 2, 3, 4, 5, 6, 8, 9 and 10) could be examined with the help of appropriate statistical techniques such as regressions or discriminant analysis (for empirical explanations, see Budhwar and Sparrow, 1997; Dimick and Murray, 1978; Guest, 1997). This article contributes to the theory of HRM. The proposed framework is not only helpful in identifying the main determinants of HRM but also facilitates cross-national comparisons (as shown by recent studies, such as by Brewster et al. (1997) and Budhwar and Sparrow (1997, 1998)). Theoretical support for the mentioned national factors, contingent variables and organizational strategies and policies is available. However, more research is required to examine them further empirically. The proposed framework can be adopted for future research, such as to examine the applicability of more models of HRM, as, for example, proposed by Morgan (1986) and Dowling et al. (1994) in different contexts. Moreover, efforts should be made to identify more aspects of the given national factors (for example, national culture) and organizational policies which can in uence HRM. Acknowledgements We thank Paul Sparrow, Monir Tayeb, Harish Jain, Emanuel Ogbonna and Peter Turnbull for their useful comments on earlier drafts of this article. References
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