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The International Journal of Human


Resource Management
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The emergence of international human resource
management
Peter J. Kidger a
a
Lecturer in Human Resource Management, University of Salford, UK

Online Publication Date: 01 September 1991


To cite this Article: Kidger, Peter J. (1991) 'The emergence of international human
resource management', The International Journal of Human Resource Management,
3:2, 149 - 163
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The emergence of international human
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resource management

Peter J . Kidger

Introduction

Management is becoming increasingly world-wide in outlook. As inter-


national competition intensifies it is no longer sufficient to understand the
local context. The vision must be wider. This is particularly the case in
Europe as a consequence of the approach of the single market in 1992.
The internationalization of management also involves the developnient
and exchange of ideas and practices across national boundaries. In the.
global village that communications technology has created, ideas and
techniques are traded as managers learn from international competitors.
Will the result be the development of an international consensus of good
management? To what extent is such a development constrained by the
diversity of national culture, history and political structures?
British managers have frequently bccn urged to learn from the
management practices of other countries thought to be performing better
than the UK. At different times the USA, Sweden, West Germany and,
more recently, Japan have been the comparators. However, any manager
considering whether to introduce what is apparently a successful idea from
another country has to consider whether account should be taken of
national culture differences. Are management practices culture-bound or
culture-free?
Similar questions face the manager in a multinational corporation with
subsidiary ventures around the world. Can management policy developed
within the culture of the multinational's home country be transferred
elsewhere? Can policy and practice be universally applied or must they be
adapted to fit the local culture? Are national culture and corporate culture
potentially opposing forces in the multinational organization? And what
are the implications of this on the question of whether and how to develop
a cadre of internationally orientated managers?
These are some of the practical issues faced by managers which relate to
the development of international human resource management. 'Human
Peter Kidger

resource management', or HRM, is fast replacing 'personnel management'


as the general English-language term for the policies and practices involved
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in managing people in organizations. Although the phrase is not


completely new, it has been said to have recently taken on a special
significance which implies a greater recognition by managers that people
really are critical to success (Storey, 1989). HRM can however represent
different things to different people, and there are several models on offer
(Keenoy, 1990). While the term is used here in its generic sense, its
connotations of seeking excellence in employee management and of
representing leading-edge practice also make human resource management
the appropriate term in relation to the questions raised above.
HRM has been called an American concept which 'also overlaps in some
respects with the stereotypical view of Japanese management' (Guest,
1989). T o that extent it may ;~lreadybe considered international. However,
in international business, the personnel-relations function is an area of
activity which has been thought to be most affected by cultural differences
(Globerman. 1986). In considering the emergence of international human
resource management, it seems useful firstly to review the culture context
of HRM before considering the extent to which practices may begin to
converge on the world scene. I t is argued that, despite cultural differences,
there are grounds for suggesting that a body of ideas on good practice is
emerging on a world-wide basis. The field of international human resource
management should embrace both international diffcrcnccs and inter-
national commonalities.

The culture context

The practice of human resource management in an organization is


contextual and should not be seen in universalistic terms (Sisson, 1989).
The contexts can conveniently be divided into the external, societal
environment (the cultural, legal, political. social and economic contexts)
and the internal, organizational environment (size, technology, objectives,
resources, etc.) (Negandhi, 1983). Organizations in the same environment
will not necessarily act in the same way because of differences in corporate
cultures and in managers' perccptions of the meaning of external events.
There is now wide acceptance of the concept that an organization may
have its own distinct culture. This may have developed over a period of
time. but can be created on the basis of what is appropriate to the
organization's needs and environment and can be managed through the
processes of recruitment, induction, appraisal and reward (Sathe, 1983;
Hunt, 1984). Like any society, an organization may have various sub-
cultures, but in the strong culture company there is an overriding and
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hurnarz resource munugement

unifying corporate culture (Deal and Kennedy, 1982). This is normally the
predominant management culture, determined by the CEO or top
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management team. The founder has often had an important role in shaping
corporate culture (Schein, 1984), and this can be seen in businesses like
Marks & Spencer (Sieff, 1984). The dominant value system (normally that
of executive management) may be considered as a mediator between
national and corporate culture. Corporate culture will be affected by the
social culture, but other contingencies mean that there are differences
between the cultures of organizations in the same country.
Despite, or perhaps because of, a multitude of attempts there is not a
universally agreed definition of culture. Schein (1985) describes a culture
model in three layers: behaviour and artefacts; beliefs and values;
underlying assumptions. He sees, culture as the 'assumptions which lie
behind the values and which determine the behaviour patterns'.
In contrast Adler, Dokter and Redding (1986) distinguish between

(a) the shared ideas which shape and influence social action and
(b) the action itself as played out in the social system.

They note that 'culture' is generally defined as the former, but suggest that
progress in understanding the relationship between culture and manage-
ment practice will be more likely if culture is accepted as being:

an observable aspect of human behaviour, manifest in social interaction


and tangible objects like organizations, but resting on symbolic
frameworks, mental programmes and conceptual distinctions in people's
minds.

While corporate culture has sometimes been expressed simply as 'the way
we do things around here', it is important to recognize what is in the mind
as well as what can be observed. Cultural differences become more
significant as they are manifest in different behaviour patterns. while
behaviour cannot be fully understood without reference to beliefs, values
and underlying assumptions.

Culture and HRM

Descriptions of HRM generally emphasize the importance of the manage-


ment of culture (Legge, 1989) and both national and corporate culture
have significance for international human resource management.
Studies of cultural differences between managers from different parts of
the world have generally surveyed attitudes, and a summary of comparative
Peter Kidger

studies is given by Ronen (1986). In one of the best-known pieces of


research on cultural differences between national groups, Hofstede (1980)
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measured values and beliefs and found statistically significant differences


between national groups of managers. These were described in terms of
four discrete dimensions labelled Power Distance. Uncertainty Avoidance,
Masculinity-Femininity and Individualism-Collectivism. The con-
sequences in the form of nianagement practices were inferred from the
culture differences. Managers in the same society were not uniform but
tended to be more similar in thcir cultural bclicfs to one another than to
managers in other socicties.
Differences between sonie countries are slight while those between
others are marked. Countries can be clustered in regions, reflecting the fact
that the usual equating of nation and culture is convenient but inexact
(Ronen, 1986).
It would be reasonable to concludc from such research that cultural
diffcrcnccs will mcan that cvcn successful pritctice may not readily
transplant from one country to another, or may do so only with
modification. I t -should be noted. however, that Hofstcde's rcscarch also
shows that differing national cultural attitudes can coexist within an
organization with a strong corporate culture. His study originated in a
survey of national differences within IBM. a multinational corporation
which is often quoted ;is a n examplc of a n organization with a distinct
corporate culture (Peters and Waterman. 1982). Despitc this Hofstcde
found significant differences in the attitudes of eniployccs around the
world. which he attributed to national culturc. Elscwhcrc hc has noted the
fact that 'There is something American about IBM the world over' and that
in well-integrated multinationals with a strong organization culture,
employees are both similar and diffcrcnt (Hofstede. 1985).
Laurent (1986). in looking particularly at the international management
of human resources within multinational organizatic~ns,questions the
depth of organizational as against societal bchaviour norms. Hc suggests
that personnel in subsidiaries may adjust thcir behaviour to head office
requirements at a superficial level while deeper rootcd societal values
affect the meaning they give to thcir actions and may Icad to different
outcomes to those anticipated. International human resource managemcnt
therefore has to solvc 'a multi-dimensional puzzle located at thc crossroad
of national and organizational cultures'.
In this regard the multinational may be a special case but it is not unique.
Any organization that develops a distinct corporate culture may carefully
screen applicants and socialize employees into thc culture, but the extent
to which the latter is 'mcrcly cornplied with or truly incorporated' (Sathe,
1983) will vary and is always problematic. People are both conformist and
adaptive and will modify their hehaviour to what is required, including
Intertratiotral human resource managenlent

apparent acceptance of beliefs or ideas. A process of adjustment occurs


when people join organizations, which maintains the coherent corporate
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culture but does not necessarily mean a complete unification of beliefs and
assumptions. An alternative to the unitarist view of organizational culture
is the suggestion that the challenge for HRM specialists is to develop
policies which are accommodative of multiple value systems, cultural
diversity and differing interests (Horwitz. 1990).
In the multinational. management philosophies or principles may appear
in mission statements and be quoted world-wide as part of the cullure
'glue' which maintains corporate unity. This is despite the problem that all
value statements are potentially culture affected, and may as a result be
differently interpreted in different subsidiaries. The underlying values of
equal opportunity. reward based on performance. individual participation.
selection on merit and so on are all culturally biased. Indeed the whole idea
of an organizational culture which can be created and imposed may itself
be culture bound (Adler and Jelinek. 1986).
Schneider (1988) illustrates how underlying beliefs about man's relation-
ships with others and with nature may affect the acceptability and potential
successfulness of key human resource management practices. She contrasts
particularly Western and Eastern beliefs and discusses them in relation to
planning and staffing, appraisal and compensation. selection and social-
ization. Schneider poses the question: 'To what extent can corporate
culture override national culture differences to create a global company?'
Reviewing some of the evidence she concludes that what may be created is
a cultural mosaic rather than a melting pot. and that national culture may
provide a counter to the creation of international organization man.

The case for convergence


All societies in which people are employed by others will have developed
ways of dealing with the employment relationship which reflect the
predominant assumptions of societal cultures. The convergence thesis is
that differences that might arise from the differing beliefs and value
orientations of national culture are superseded by the logic of technology
(Negandhi, 1979). Technology shapes and constrains the way work is
organized. The adoption of the technology of the developed world may
require the adoption of certain management techniques. These may go
against the grain of societal culture, but if they are necessary to the
management of people within the marketing, production and financial
processes they are likely to be adopted. This is an evolutionary process, so
that, while culture may be regarded as a contextual contingency (Child,
1981), over time cultural differences are of diminishing importance (Child
Peter Kidger

and Tayeb, 1983). Since countries face similar problems in an increasingly


unified market-place. it has been argued that despite cultural and historic
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differences, there will be a best management style for the future (Prentice,
1990).
Levitt (1983) descrihed technology as 'a powerful force [that] drives
the world towards a converging commonality'. He was referring to the
global market-place and the converging demands of consumers, but one
could similarly refer to a converging comnionality of management.
Greater international competition and the recognition of world-wide
environmental problems have begun to build a common context. Inter-
national best sellers. international conferences and the influence of
international organizations all contribute to the establishment of an
international management culture. Hanaoka (1986) suggests:

There is an internationill drive towards convergency for 'good


management' or 'excellent niani~gement'.In the excellently managed
company personnel nianagerncnt is intlucnced only slightly by national
culture.

Hanaoka contends that comparative research studies in Japan and the


USA show convergence of the rnanagcmcnt characteristics of large firms in
the two count~.ics.He feels that national cultural diffcrenccs have resulted
in overstatement of the peculiarity of Japanese management. He hypothes-
izes that there is an inverse relationship between degree of cultural
influence and management level of sophistication and excellence. The
internationally orientated organizations arc those whose practices will tend
to converge.
The perceived success of Japanese cornpanics in international niarkets
has led to a great deal of interest in Japanese management practice. Since
there are clear cultural differences between Japan and EuropeIUS, it may
be that these have created an expectation of a culturelpractice link. I f the
features of the large Japanese companies irre identitied as lifetime
employment, teamworking. concern with quality. absence of overt status
differences. it can certainly be argued that similar priorities are found in
the 'excellent' American and 'winning' British companies (Peters and
Waterman. 1982; Goldsmith and Clutterbuck. 1984). In some instances
Japanese methods originatcd i n the West but were developed in Japan and
re-exported. Cultural diffcrenccs have not prevented this cross-fertilization
of practice.
The synthesis of itleas is also illustrated by the pragmatic approach
adopted by Japanese companies which have begun to operate in Britain.
Pang and Oliver (1988) studied personnel strategy in eleven Japanese
manufacturing companies in the U K . They set out to discover how widely
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humar~resource management

'Japanese' management methods are used by Japanese companies in the


UK and how well they are working. The picture that emerged is of
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Japanese methods being adapted not imported wholesale. In fact the main
policy seemed to be to introduce personnel practices which will best fit the
main business strategy.
Support for a view that the differences between the internationally
orientated and other companies is as important as differences between
countries can be drawn from the comparisons made by Purcell et ul. (1987)
between the industrial relations practices of UK and foreign-owned plants
in Britain. The foreign-owned plants were more likely to employ personnel
specialists, have written policy statements, use job evaluation, operate
briefing groups, organize quality circles and generally devote more
resource to personnel management. In other words, they followed what
textbooks would generally regard as good practice in HRM.
While it would be restrictive to see international human resource
management solely as something that exists in the multinational organiza-
tions, it is reasonable to acknowledge that MNOs are key players in the
international transfer of ideas. At the present time, American, Japanese,
and European organizations are emerging that share some characteristics
that might be deemed international HRM. Good practice models can be
built from what is happening in the global firms (Evans er ul., 1989).
The extent of convergence should not be exaggerated nor should
'superficial resemblances [be] pressed into support for minimising cultural
differences' (Brooke, 1987). What is required is to become clearer ahout
what aspects of organizational life vary because of cultural difference and
what aspects are, despite culture, converging. Adler er (11. (1986) suggest
that it is structures that will become similar while people's behaviour will
show culturally based dissimilarities so that 'we should probably expect to
observe the most profound differences at the informal rather than the
formal organizational level'.
The distinction between structures and behaviour may be over-
simplified, but a reminder of the importance of the informal level in
organizations is useful in this context. The world-wide convergence of
human resource management concepts may result in similar sounding
espoused policies while operational policies are more reflective of cultural
and other differences.

A study of convergence

The recent growth of influence of Japanese management on the West


follows the perhaps longer period during which Western practices have
, been the model for the East. Differences between occidental and oriental
Perer Kidger

culture have not prevented Western management ideas predominating in


the Chinese states of Taiwan, Singapore and Hong Kong. The results of a
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small study of Hong Kong and UK companies may illustrate this.


Hong Kong has been exposed to the influence of BritishIAmerican
values through the presence of expatriate managers and teachers in higher
education. A good number of their better qualified young people have
studied in the West. There are therefore clear reasons why Hong Kong
organizations are likely to follow Western management practices.
On the other hand. Hong Kong is a Chinese culture which has been
shown to be different from the UK (Hofstede, 1980; Adler er al.. 1986).
This might be expected to provide a pressure for divergence.
The study examined the HRM policies and practices of three pairs of
organizations. These were matched on the basis o f industry and ownership,
and as far as possible on size. The three industry types were also chosen to
represent a traditional industry. a modern hi-tech industry and a service
industry. They were:
Textile companies with similar manufacturing processes. both locally
owned private sector companies;
electronic companies, both manufacturing subsidiaries of the same US
owned multi-national;
passenger transport organizations. both in the public sector.
The Hong Kong organizations were selected through consultation with a
senior member of the Hong Kong IPM. 7'hey were companies considered
to have good personnel practices. The UK comp:~riieswere chosen later, to
match the Hong Kong sample. All the conipanies had a personnel/HRM
department and information was gathered via semi-structured interviews
with the senior HRM executives of those departments. The first part of the
interview concerned policy. strategy and priorities. and the factors that
were determining them. Participants were then asked about the policies
and procedures that were being followed in relation to employee
resourcing, development, relations and rewards. The general aim was to
assess whether any similarities in human resource management related
more to national culture or to industry/ownership.
The results were consistent with the view that organizational contingencies
are more important factors i n determining HRM than societal culture. In
looking at similarities and differences, in general each company seemed
closer to its match in the other country than to its compatriot companies in
different industries. I t is also noteworthy that the HR specialists spoke the
same personnel language arid had much the same perception of what
constituted good practice.
The textiles companies were family businesses which had grown and
international human resource management

faced a very competitive market-place. The role of the personnel function


was similar between the two. Although there was a head-office-based
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senior personnel executive, most activities were carried out in the


manufacturing units which had their own personnel officers. Similarities
included:
- an absence of human resource planning, although forecasts were made
as part of annual budgeting;
- pay systems which included incentives and relied on such traditional
methods as overtime and shifts to meet fluctuations in demand;
- safety concerns related to the use of dangerous machinery;
- use of immigrant labour;
- shortage of similar skills which had led both companies to promote
special training schemes for key technicians;
- staff assessed for salary purposes but no proper appraisal schemes.

The Hong Kong textile company was more paternalistic in a way consistent
both with its being a family firm and with Hong Kong culture. Personnel
priorities were to maintain organizational stability. The British firm had its
welfare provision and valued long service but its personnel priorities were
more directed at change. ii reflection of a less stable environment. As is
common in its industry in the U K , the British company recognized unions,
and this obviously affected aspects of practice and priorities.
By contrast. the HR executives of the two electronic subsidiaries were
more concerned with issues of culture, employee involvement and their
contribution to business strategy. Both saw the organization's culture as
not entirely compatible with the values of the local society from which their
labour force is drawn, so that one of the H R M tasks was to promote
assimilation and build commitment to the company. Recognition of
individuals was part of the corporate culture which was reflected in similar
forms of individual consultation, and in this they were different from the
other organizations. Other similarities that could be ascribed to the
common industry/technology included remuneration policy and work
patterns. Both saw themselves as 'upper quartile' companies in terms of
pay and benefits. The American parent had an international mission
statement of employment policy, and this formed one of the constraints
within which their own policies were formed. The parent also shaped the
broad role of the HR function, which had to understand the business and
commercial constraints but was also expected to be the 'corporate
conscience' in personnel matters.
Corporate policy however was not so detailed as to produce complete
uniformity. Differences between the electronic companies emerged in the
kind of welfare provision felt appropriate, and in the tendency for the
Hong Kong executive to refer to their conformity to corporate policy while
the British executive quoted several instances of where they had resisted or
changed proposals from corporate HQ. The latter difference should not be
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exaggerated but is consistent with Britain's lower ranking on Hofstede's


Power Distance index.
The passenger transport organizations ran services which had started in
the last ten years. Both reported that as public sector organizations they
were expected to be seen as 'good employers'. The work technology, which
defined the kind of work-force needed, together with the nature of being a
public service provider, were the main causes of HRM priorities. In each
case this was to recruit and maintain a work-force to deliver the service at
acceptable cost and quality. T o both HR departments industrial relations
was the key area, although the different histories of employee representation
in the two countries meant that this did not translate into identical
activities. Manpower planning. recruitment sources. pay levels policy,
safety, work patterns and discipline procedures showed similar practices.
Training needs were similar, although the British company has a more
developed training plan concept. The Hong Kong company formally
appraised all personnel; the British only staff. Hong Kong used job
evaluation, the British company did not. Both organizations had formal
consultation mechanisms.
The Hong Kong HR executive noted that appraisals were difficult for the
Chinese who hide their feelings and are concerned not to lose 'face'. He
characterized employee motivation as primarily concerned with the best
available wages. By contrast the British executive felt that operatives
wanted job satisfaction iis well as good money, citing as evidence that their
most boring jobs had the highest sickness and absence rates. The Hong
Kong company made more o f providing welfare facilities. In all these
areas, culture may be an influence.
A final point is to note that the personnel1HR functions in the
organizations studied can be neatly arranged using the typography of
Tyson and Fell (1986). 'l'he textile companies may he said to have 'clerks of
work' and the transport companies. with their industrial relations
concerns, 'contract managers'. The electronic companies' HR executives
came nearest to the 'architect' model.
I t is not intended to claim too much for such a small study, merely to use
the results to illustrate the argument. Industrial organizations in Hong
Kong can be divided in the way Hanoaka suggests between the local
predominantly family-ownetl businesses and thc larger companies with
professional managers. The companies in the study were of the latter group
and were in general following the prescriptions of the Western personnel
management textbooks. The influence of national culture was discernible,
and equally the different culture and industrial history of Britain affected
the U K companies' practice and priorities. Generally however differences
lnterr~atiottalhuman resource management

seemed to relate more clearly to the organizational contingencies, and to


support the convergence thesis, at least among companies with an
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identifiable HR function.

The scope of international HRM

Within the UK. current thinking on managing people at work is drawing


upon ideas from the USA and Japan as well as from Europe. Thurley and
Wirdenius (1989) have advocated the development of a distinct European
managerial approach to fit the new European society and as a counter to
AmericanIJapanese hegemony. A truly international view would perhaps
also require distinctive contributions from other culture regions such as the
Muslim world and Africa.
In the UK the personnellhuman resource management debate has
resulted in a number of attempts to define HRM and establish what it is
about (Armstrong, 1988; Fowler, 1987; Guest, 1987; Hendry and
Pettigrew, 1990; Sisson, 1990; Storey, 1989). The issues that constitute the
agenda for current HRM thinking include:
- the integration of HRM with business strategy;
- the development of a distinctive corporate culture;
- the creation of a skilled, flexible and committed work-force, which is
adaptive to changing circumstances;
- the implications of the concepts of culture and commitment for the
recognition of trade unions.
Integrated market-related strategies, a unifying corporate culture and a
committed work-force can all be argued as necessary responses to forces of
competition, technology and social change which are or will be common
throughout the world. They could therefore be seen as internationally
relevant.
However, while technologically advanced production processes niay
require a skilled, flexible and committed work-force, the techniques for
achieving this will be affected by cultural, educational, legal and political
differences. Even where a technique achieves universal interest, imple-
mentation in another culture may not be straightforward, as is illustrated
by the history of quality circles in Britain (Collard and Dale, 1989).
The creation of a unified corporate culture and personnel policy linked
to corporate strategy may be open to question in a diversified company
where different business units are pursuing different strategies (Purcell,
1989). An international company may similarly pursue different strategies
in different countries and may either decide that HRM policy should follow
local strategy or seek to determine some overall HRM principles that niay
Peter Kidger

create some commonality of iniernal culture. A related issue is the extent


to which the company seeks to build a truly international management
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team.
One of the key issues in defining HRM in the U K has been the role of
trade unions (Fowler, 1987; Guest, 1989). HRM has been seen as
embodying unitarist and individualist values which may not see any reason
why employees would want the protection of union membership. This
aspect of HRM may be considered a reflection of its American and
Japanese origins. The power and effectiveness of unions, and their legal
standing, varies greatly between countries. The union context will in many
situations be important while in others it will be non-existent. A rhodel of
H R M that completely ignores the potential for conflict and differing
employer-employee objectives would seem unrealistic. Of course manage-
ments may establish non-union consultation and procedures to deal with
conflict. but pragmatically international HRM should allow for the union
dimension.
Looking to the future in the European context, Thurley (1990) has
identified four principles as likely building blocks for a European personnel
management model. These arc: the need for dialogue between the social
partners of the organization; the need to build organizations on a multi-
cultural basis; the need to provide opportunities for participation in
decision making; the need to provide for continuous learning by staff and
objective evaluation of results. Although Thurley has carefully related
these principles to the EEC context and specifically to the Social Charter,
they could easily form part of the agenda of international HRM.
The building of multi-cultural organizations in particular will be a major
challenge for human resource management. Despite the claimed ad-
vantage of a strong company culture, i t may be better for organizations
wanting to be adaptive for the future to aim for Schneider's mosaic rather
than the melting pot. The cultural context is important when translating
principle into practice, and successful international managers may be those
who see cultural differences as an opportunity rather than a threat.

Conclusion

Forces of convergence are a t work within and across national boundaries.


Managers under pressure to change and improve will look for and adopt
ideas that are currently considered as contributors to excellence. In the
area of human resource management, patterns of normal practice exist and
are followed by 'progressive' organizations. An international cross-
synthesis is emerging in those countries which are at a similar stage of
industrialization, share common technology and are part of an international
International humun resource management

competitive economy. World-wide communication through books, articles,


conferences and multinational organizations promotes the flow and
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adoption of ideas.
Forces of divergence are also at work. Within the current body of
practices there are differences between organizations arising out of their
differing sizes, technologies, histories, organizational cultures and com-
petitive positions. These differences exist within and across national
boundaries. National culture is an important part of the external context.
and its influence should be neither ignored nor exaggerated.
A full picture of international HRM must include both the common and
the different. lnternational HRM will not consist of identical practices
since HRM is not identical within a single industry in one country, let alone
on a world-wide stage. Rather it will be about choices which managers
must make to meet objectives within given contexts.
One aim of future research should be to discover not just whether an
international body of practices is emerging but whether practices have the
same significance in different countries. Where there are differences the
aim should be to see if they relate to specified cultural, educational or
political differences in such a way that a knowledge of the societal culture
will enable one to predict if and when the introduction of practices from
other countries will be successful.
lnternational human resource management is emerging both as a body
of practices and as a field of study into those practices and the theory and
principles that underpin them. If it is recognized on a world-wide basis that
'success goes to those organizations which arc able to recruit and develop
the right people and not just at the top' (Tirnpcrlcy and Sisson, 1989), t h e n
international HRM will continue to grow in significance.
Lecturer in Hirmun Resolrrce Murtagemet~t
University of Solford, 1lK

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