Strategic HRM through the cultural looking glass: mapping the cognition of British and Indian managers - human resource management

Abstract

This study examines the issues of 'integration' of human resource management (HRM) into the corporate strategy, 'devolvement' of FIRM to line managers and the perceived influence of national culture on HRM in a cross-national comparative context. In order to achieve this, the cognition of personnel specialists from a matched sample of 48 Indian and British firms in the manufacturing sector using the 'Visual Cards Sorting' and 'CMAP2' methodologies are analyzed. The findings show that even where there is an apparent convergence of strategy -- e.g., the desire of both Indian and British personnel managers to increase integration between FIRM and business strategy, and to increase the level of devolvement to line managers, the two sets of specialists clearly follow a different logic of action, which is subject to a different set of cross-cultural influences. The implications of pursuing apparently similar HRM solutions in different cross-national contexts are considered. The analysis shows that HRM strategies, w hen considered in a cross-national context, vary a lot. Different logic leads to the adoption of similar HR strategies, and similar strategies in turn are perceived as producing different outcomes. This variance centres around the existence and perceived influence of several contextual variables such as industrial relations systems, operation of labour markets, and changes in business systems. Specific cross-cultural influences, along with different aspects of competitive business environment associated with the generic HR strategies of integration and devolvement in the two countries are highlighted. This research contributes to the fields of cross-cultural management research, international HRM and managerial and organizational cognition. It also has important messages for policy makers.

Descriptors: comparative HRM, managerial cognition, strategic integration and devolvement, national culture, India and Britain

Introduction

This section introduces the three focal points of this study. First, it highlights the need for more cross-national HRM studies. Second, it develops a case for conducting such investigations from a cognitive perspective. Third, it describes the impact of national culture on HRM.

The increased level of globalization and the internationalization of business, the growth of new markets and an increased level of competition amongst firms at both the national and international level has resulted in an increase of cross-national HRM studies. Managers are now eager to know how human resources (HRs) are managed in different regions of the world. The attention of Western academics and practitioners has been diverted from traditional international HRM issues to the area of comparative HRM. As such, in the present globalized era, the value of employees with cross-cultural skills and diverse demographic characteristics has increased. In order to maximize cross-national management capabilities, we need to understand how people in different national settings respond to similar concepts within their particular functions. This can be useful in clarifying the influence of a wide range of variables on cross-national HRM as well as developing practical induction and training tools for expatriate and int ernational managers (Budhwar and Sparrow 1998; Schneider 1993). It will also help to test the convergence-divergence thesis from a functional point of view (McGaughey and De Cerie 1999) and to highlight the 'context-specific' nature of HRM (Rousseau and Fried 2001; Schuler and Jackson 1999). Given the recency of the comparative HRM field, this is a particularly useful task.

Most of the comparative HRM research to date has been conducted in Western Europe and North America. However, it is clear that as firms enter into the more dynamic world of international business, and as the globalization of world markets continues apace (marked by the liberalization of economic policies by a large number of developing countries, the emergence of new international business blocs, and increased competition), comparative issues appear to be gaining momentum (Brewster et al. 1996; Budhwar and Debrah 2001a).

Moreover, over the past two decades, foreign direct investment (FDI) has swung to the developing parts of the world, bringing its share from 23 percent in the mid-1980s to 37.2 percent in 1997. As a consequence, of 53,000 multinational corporations (MNCs) with 450,000 affiliates operating around the world, a total of 230,696 affiliates are now based in developing countries (Budhwar and Debrah 2001b). Because of such developments, there is now a growing research interest in management in developing countries (see, e.g., Special Issue of the Academy of Management Journal, June 2000).

Further, the majority of the world's population live in developing countries. Apart from this, developing countries also act as significant buyers; important suppliers of different resources (both natural and human) to industrialized nations; competitors to developed countries with lower labour costs; strategic regional centres for the expansion of MNCs; production sites for MNCs; and capital users, i.e. from private creditors such as international banks, FDI, and foreign official governmental assistance (for details see Budhwar and Debrah 2001b).