Review 1

An integrative framework for understanding cross-national

human resource management practices

Pawan S. Budhwara,*, Paul R. Sparrowb,1

aCardiff Business School, Colum Drive, Cardiff CF1 3EU, UKbManchester Business School, Booth Street West, Manchester M15 6PB, UK

Abstract

Currently, debate in the area of cross-national human resource management (HRM) suggests that

both culture-bound and culture-free factors and variables are important determinants of HRM

policies and practices. HRM is presented as being context-specific and it is argued that with the growth

of new markets world-wide, and increased levels of competition and globalization of business, there is

a strong need for more cross-national HRM studies. However, the literature shows the absence of an

integrated framework, which can help to highlight the different role that context-specific facets of

HRM practices play. The nature of different determinants in different national and regional settings is

rarely analyzed. This paper develops an integrated framework. It delineates the main distinctive facets

associated with national factors, contingent variables, and organizational and human resource (HR)

strategies and policies, that may be used to evaluate cross-national comparative HRM policies and

practices. D 2002 Elsevier Science Inc. All rights reserved.

Keywords: IHRM; Comparative HRM; Integrative framework; Factors determining HRM

1. Introduction

Over a span of 20 years or so, the topic of human resource management (HRM) has

become one of the most documented in the management literature (Boxall, 1995; Legge,

1053-4822/02/$ see front matter D 2002 Elsevier Science Inc. All rights reserved.

PII: S1053 -4822 (02 )00066 -9

* Corresponding author. Tel.: +44-2920-875214; fax: +44-2920-874419.

E-mail addresses: [email protected] (P.S. Budhwar), [email protected] (P.R. Sparrow).1 Tel.: +44-161-275-6564; fax: +44-161-275-6598.

www.HRmanagementreview.com

Human Resource Management Review

12 (2002) 377403

1995; Schuler & Jackson, 1999). Moreover, the increased level of globalization and

internationalization of business, the growth of new markets (such as in Eastern Europe,

China, India, South East Asia, and Latin America), growth of new international business

blocs and an increased level of competition among firms at both national and international

level has resulted in an increase in comparative HRM studies (Brewster, Tregaskis,

Hegewsch, & Mayne, 1996; Clark, Gospel, & Montgomery, 1999). Managers and policy-

makers now need to know how human resources (HR) are managed in different regions of the

world and how their counterparts in different parts of the globe perceive or react to similar

concepts and pressures. It is also important to have an understanding about the main

determinants of HRM policies and practices in different regional and national settings.

Academics have responded positively to meet the challenges raised by the globalization

of business by investigating a number of issues and problems related to international

business (Hendry, 1996). They have attempted to examine management from a cross-

national view point. This comparison of HRM policies and practices at a national level helps

to test the convergencedivergence thesis. The typical questions pursued by comparative

researchers are (Pieper, 1990): (1) How is HRM structured in individual countries? (2) What

strategies are discussed? (3) What is put into practice? (4) What are the similarities and

differences? (5) What is the influence of national factors such as culture, government policy,

and education systems?

Scholars have also developed and proposed different models of HRM both between and

within nations (Boxall, 1995; Brewster, 1995; Guest, 1997; Legge, 1995; Truss & Gratton,

1994). Interestingly, most models of HRM have an AngloSaxon base. As such, from a

global perspective, principles of HRM have been developed from a restricted sample of

human experience. During the infancy stage of HRM literature, such an ethnocentric approach

was understandable and unavoidable. However, with the growth of a global business

village, firms operating in different countries need appropriate information and guidance

to develop their HRM policies and practices. Under such dynamic business conditions, the

relevance of lessons learned from the AngloSaxon experience is questionable. It is therefore

important to examine the extent to which AngloSaxon models of HRM are applicable in

other parts of the world. It has now become clear that the study of HRM needs a cross-national

comparative dimension and an international perspective (Brewster et al., 1996; Clark et al.,

1999; Kochan, Dyer, & Batt, 1992). However, the existing literature does not make it clear

how we should examine the applicability of HRM models in different settings. For further

developments in the field of HRM, it is important to have a framework, which can enable us to

conduct such an analysis.

Some researchers have emphasized a practical best practice framework for diagnosing

HRM practices. Hiltrop (1996) presents 11 dimensions of HRM, which can be used as a

checklist for evaluating the effectiveness of HR practices. These dimensions can also be used

to benchmark HR activities and the relative influence of the best practices on organizational

outcomes. However, in discussing the need to understand HRM in the European context,

Forster and Whipp (1995) reinforce the need for the adoption of a contingent approach,

which can highlight cultural, sectoral, and regional differences in European-wide companies.

They argue against the one best approach, suggesting that it is not practical for the

P.S. Budhwar, P.R. Sparrow / Human Resource Management Review 12 (2002) 377403378

development of global or European HRM strategies. One sensible way of highlighting the

suggested differences among firms in different countries is by identifying the main national

factors (such as culture, industrial sector, and institutions), which significantly influence their

HRM practices.

An important agenda before cross-national HRM researchers if they are to avoid

misinterpreting the situation is to detail clearly both the specific HR issues within a country

as well as the overall HRM recipes pursued by local managers. HRM policies and practices in

a cross-national context are influenced by both culture-bound variables such as national

and organizational culture, institutions, and industrial sector dynamics and culture-free

variables such as age, size, nature, and life cycle stages of organization (Brewster, 1995;

Hofstede, 1993; Jackson & Schuler, 1995; Sparrow, 1995). The degree and direction of

influence of these factors is, however, context-specific, and varies from region to region

(Jackson & Schuler, 1995; Locke & Thelen, 1995). For example, the response of unions to

common competitive pressures (such as the introduction of new production technologies,

large scale restructuring and re-engineering of organizations, and pressure to increase work

flexibility) varies across different countries. Union membership has declined in countries such

as the UK, France, or the US, whereas in Australia and Germany, it has remained stable.

Similarly, since 1989, union membership is on a continuous decline in South Korea due to

changes in the Korean politicaleconomic climate. Such a phenomenon shows that different

institutional configurations mediate in different ways the effects of common international

pressures (see Locke & Thelen, 1995).

However, in order to evaluate and highlight the context-specific nature of HRM in

different national or regional settings, we need to delineate the main factors and variables

that could determine HRM in such settings. The dilemma regarding what factors to include

under broad concepts such as national culture or institutions needs to be resolved. The

issue regarding the selection and choice for certain contingent variables and organizational

and HR strategies and policies (from the long available list) as possible determinants of

HRM also needs serious attention. A sensible way to tackle this mammoth task is to

understand the complex interactions between HRM practices and their determining variables

on the basis of empirical data. However, there is a scarcity of research in this area. This is

partly due to the fact that the number of methodological issues involved in cross-national

research are many and more complex in comparison to national research, and partly due to

the absence of a comprehensive framework for conducting such studies (see Cavusgil &

Das, 1997).

This paper presents an integrated framework which is suitable for evaluating and

comparing HRM policies and practices and examining their main determinants in a cross-

national context. Following the established notion that national factors (for example,

national culture and institutions) determine management practices (see Brewster, 1995;

Hofstede, 1993), structure dictates HRM practices (Chandler, 1962; Galbraith & Nathan-

son, 1978), organizational strategies and policies decide management practices (see Miles

& Snow, 1978, 1984; Porter, 1980, 1985), and contingent variables (such as size, age,

nature of firm) determine organizational practices (see Hickson, Hinings, McMillan, &

Schwitter, 1974; Tayeb, 1987), we consider HRM practices as a dependent variable. The

P.S. Budhwar, P.R. Sparrow / Human Resource Management Review 12 (2002) 377403 379

framework should act as an intellectual filing box by highlighting three types of factors

and variables (national, contingent and organizational) for such a purpose.2 It can also be

used to assimilate comparative studies into the body of commonly accepted knowledge of

HRM. The framework developed in this paper contributes to the literature by serving

three purposes:

1. to highlight the main determinants of HRM policies and practices in a cross-national

context. By doing so, it will also:

2. help examine the cross-national applicability of the main models of HRM; and

3. provide a mechanism to test the convergencedivergence thesis in the field of HRM.

Cross-national comparisons can be conducted at various levels (Kochan et al., 1992;

Locke, Kochan, & Piore, 1995). This can range from nation state (which is the focus of

political literature), level of the firm (the focus of labor economics and HRM literature) to

individual level (the focus of social psychology literature). We propose our framework for

investigations and comparisons conducted at both the national and firm levels. One should be

aware of the measurement difficulties in conducting studies including more than one level of

analysis. Most importantly, the type of factors to be used will vary in the two levels of

analysis. Moreover, in comparison to a firm level of analysis, in a cross-national analysis, a

whole range of issues need to be resolved such as ensuring equivalence (e.g., functional,

concept, category, and variable), uniformity in data collection methods, clear time frame of

study, and sampling issues (e.g., Adler, 1983). Further, depending on the level of research

analysis, research designs should specify which of the variables are included and which are

excluded in a particular study. This is only possible if researchers have an understanding

about the total range of variables which are known to have a significant impact on the

examined practices and policies in a particular context. Research should also show how those

excluded variables are being controlled in order to avoid the cross-variable contamination

problem. It is important to note that, depending on the focus of research and theoretical

inheritance, assumptions are set which are then destined to determine particular types of

results (Smith & Meiksins, 1995).

The remaining article is structured as follows. To develop the framework, we first critically

review the existing comparative, contingent, and process constructs that are used to compare

management and HRM practices in a cross-national context. We then detail our proposed

framework for cross-national HRM comparisons. Finally, we discuss the workability of our

framework. The existing literature shows that two main stances dominate the area:

comparative theories and contingency-based theories.

2 The term contingent variable is used in the most basic sense, i.e., to provide a demographic description of the

organization. This categorization has been adopted from an established school of thought on context of

organization structureThe Aston Programme (e.g., Hickson et al., 1974; Tayeb, 1987). However, we agree that

researchers with different backgrounds could use different term(s) such as indogenous, internal environmental,

or internal contextual variables instead of contingent variables.


2. Four comparative management frameworks

What can be gleaned from the comparative management literature? It is primarily

interested in studying the similarities and differences among nations and management

systems of different countries (Adler, Doktor, & Redding, 1986; Brewster et al., 1996;

Redding, 1994). The major thrust of the comparative management literature can be broadly

classified into four categories. These are the following.

1. Economic development approach: developed by Harbison and Meyers (1959) and based

on the premise that managerial input plays a significant role in achieving rapid industrial and

economic development. This is basically a macroeconomic approach, concentrating on an

examination of managerial trends and developments. Its basic assumption is that there is an

inherent logic that propels nations towards industrialization.

2. Environmental approach: proposed by Farmer and Richman (1965) and based on the

assumption that managerial effectiveness is a function of external environmental factors

(such as sociocultural, legalpolitical, economic and educational). Compared to the

economic development approach, which primarily focuses on the economic factors in the

environment, this approach assumes that there is a much more sophisticated set of

determinants and conceptualizes the environment in a much broader framework. A number

of researchers (such as Murray, Jain, & Adams, 1976; Negandhi, 1975, 1983) adopted this

approach in part or in full to develop frameworks for cross-cultural comparative management

research. The approach is however criticized for letting the environment crowd out the

comparative analysis.

3. The behavioral approach: developed from the work of scholars working in the field of

organizational behavior (such as Barrett & Bass, 1970; Davis, 1971; Haire, Ghiselli, & Porter,

1966). It is based on the assumption that management practices, as well as managerial

effectiveness, depend on cultural variables such as attitudes, beliefs, values systems,

behavioral patterns, management philosophies, and so forth. Variables in this approach are

operationalized in terms of attitude and values scales (Nath, 1988). This approach attempts to

explain behavioral patterns of individuals and groups in organizational settings and the

impact of cultural variables on management practices and effectiveness.

4. Open systems approach: used to conceptualize organizations and their interaction with

the environment. Negandhi (1975, 1983) describes three kinds of environments in this regard:

organizational (which deals with variables such as size, technology), task (which includes

distributors, suppliers, employees, government, stockholders, and community), and societal

(the macro environment explained in the environmental approach). Negandhis categorization

seems ambiguous and not logical. For example, community as a whole makes more sense if

put under the societal factors. Nevertheless, this approach assumes that the relationship

between HRM and the various factors that make up the national context is complex but can

be understood by comparing the operations of surrounding systems.

All four approaches to comparative management present a broad list of variables and

factors which form the core basis for cross-national management comparisons. The choice for

their selection depends on the nature and aims of the research. However, since they represent

some of the most fundamental principles of analyzing management, it is sensible to consider


the impact of these variables and factors on HRM policies and practices in a cross-national

context. Several frameworks have been developed to evaluate HRM at separate levels of

analysis (such as international, MNCs, comparative). Most of these frameworks adopt a

contingency approach and are of US origin.

3. Developments in cross-national HRM: contingency themes

Different scholars in the field of HRM have put forth a number of frameworks for

conducting international HRM research. However, most of these are either normative in

nature, or they present a very complex set of variables that cannot be tested empirically. This

forms the basis of their general criticism. Three contingency frameworks are now briefly

analyzed to highlight the different aspects covered. Largely on theoretical and grounded

theory arguments, the contributions made by these models are that they have built up a

sophisticated awareness of important factors to consider in international HRM comparisons.

3.1. Framework for cross-cultural comparative analysis of personnel policies

Murray et al. (1976) provide a framework for cross-cultural analysis of personnel policies

at the level of analysis of comparative management. It is based on three considerations.

1. There should be a well-specified breakdown of components of the personnel manage-

ment process. They break personnel management into generic functional processes of

manpower planning, recruitment and selection, training, and development, motivational

systems (employee welfare policies), and collective bargaining. These functions are assumed

to be present in all organization level HRM systems, regardless of national factors.

Researchers such as Easterby-Smith et al. (1995), Hendry (1996), and Welch (1994) have

recently emphasized this consideration for cross-national comparative HRM studies.

2. A detailed specification of the relevant characteristics of the culture. Murray et al. (1976)

adopted and modified Farmer and Richmans (1965) approach in this regard. They conceive

four major segments of what can be called external constraints on management. These

segments highlight the characteristics of culture and assume that it operates in four domains,

which are namely, educational, sociological, political, and legal and economic characteristics

(1976, p. 48). Each segment is further characterized by a number of sub-aspects.

3. The influence of cultural factors varies in regard to validity, priority, feasibility, and

organization in different national setting. Comparative management makes an implicit

assumption that an environmental constraint will have its effect on management in only one

way, i.e., by rendering a given management practice or policy, which is effective in one

setting, invalid in another. That is, something that works in one country will not

necessarily work in another. It can also affect the priority ranking or relative importance of

the various objectives and programs which make up the personnel function, the feasibility of

implementing a given policy or practice, and the organization of any given personnel policy

and practice (Murray et al., 1976, p. 50). In some settings, the personnel function is

undertaken by specialists and in others by line managers.


3.2. Framework for determining IHRM management approaches and activities

The work of Welch (1994) is typical of cross-national analysis at the level of multinational

organizations. She has developed a contingency model based on four in-depth comparative

case studies in Australian companies. She suggests a framework for determining international

HRM approaches and activities relevant for expatriate management. Welch specifies three

sets of variables, which determine the generic functions of selection, training and devel-

opment, compensation and repatriation of overseas employees:

1. contextual variables (such as the host countrys legal system and the cultural distance

between host country and employees country);

2. firm-specific variables (such as the stage of internationalization, type of industry, link

between strategy and structure and organization culture); and

3. situational variables (such as staff availability, location of assignment, need of control, time

factor, locus of decision).

3.3. An integrative framework of IHRM

Schuler, Dowling, and DeCeri (1993) similarly suggest an integrated contingency frame-

work for evaluating strategic international HRM of multinational enterprises (MNEs). They

identify two sets of factors determining strategic international HRM in MNEs. These are:

1. exogenous factors (industry characteristics and country/region characteristics) and

2. endogenous factors (structure of international operations, headquarters international

operations, competitive strategy, and experience in managing international operations).

It is important to note that these factors are broadly competitive in nature, and barring

country/region characteristics, operate at the organizational level. Schuler et al.s theoretical

framework is more complicated than the framework of Murray et al. (1976) and Welch (1994)

as they link these factors to both strategic MNE components (such as inter-unit linkages, i.e.,

how MNEs manage their various operations and internal linkages) and the different strategic

international HRM issues faced (i.e., how MNEs effectively operate within the confines of

local laws, politics, culture and economy). They differentiate three strategic international

HRM functions (orientation, resources and location), four strategic international HRM

policies and practices (staffing, appraising, compensation, and developing) and five MNE

concerns and goals (competitiveness, efficiency, local responsiveness, flexibility, and learning

and transfer). Based on these complicated connections, Schuler et al. (1993) present a number

of theoretical propositions which need to be tested to support the proposed contingencies.

Their framework, then, still needs empirical testing but is felt to be suitable for determining

strategic HRM in MNEs, but still does not truly capture cross-national HRM comparisons.

Having outlined three contingency frameworks, we argue that the contribution of Murray

et al. (1976) still provides a good starting point for developing a conceptual framework for

cross-national HRM comparisons. First, they suggest what should be considered under the


broad construct of national culture. More importantly, their framework also focuses attention

on how it influences HRM. Similar processes of influence could be identified for other

national factors of institutions, a dynamic business environment and industrial sector

determinants. Their framework also does not consider the impact of contingent variables

and competitive strategies on HRM policies and practices at the organizational level, as

highlighted by Schuler et al. (1993) and Welch (1994).

4. Comparative process theories

Negandhi (1975, 1983) suggests that one way of incorporating the wide range of

contingent factors and highlighting the interdisciplinary nature of the international manage-

ment discipline is to ensure that cross-cultural management studies become part of

organization theory. He asserts that a number of developments in organization theory are

relevant for cross-cultural management research. Still reflecting the contingency theory

perspective, he argues that frameworks should include those contextual variables, envir-

onmental factors, and sociocultural variables that both impact and provide a comprehensive

cross-cultural understanding of the factors affecting the structuring and functioning of

organizations, and accordingly the management policies and practices. We need to include

all three sets of variables in one model. Negandhi conceptualizes these three sets of variables

by visualizing three successive environments or boundaries. These are the organizational

environment, the task environment and the societal environment. Different facets of these

environments were explained under the open systems approach. While contingency theories

have demonstrated the range of variables that shape HRM policy and the different type of

influence they may have on the HRM process, comparative theories have helped to classify

these variables into different system effects.

Building on this environmental approach to comparative management, and the analysis

provided by Farmer and Richman (1965) and Gronhaug and Nordhaug (1992) propose such a

perspective for international HRM. They argue that two sets of factors can be used to discuss

the nature of international or cross-national management of HR. The first set of factors is

called microenvironmental. In addition to a range of primary factors (such as a subsidiarys

relationship to other parts of MNC), which relate to Schuler et al.s emphasis on inter-unit

linkages, they highlight a series of secondary factors concerning the role of external actors

(including customers, clients, competitors, suppliers of resources, and local public institutions

and interest of organizations). There are also a series of macro-environmental factors, which

are the relevant conditions that are embedded in the surrounding region and country of

operation. These include the socio-economic, institutional (political/legal) and cultural factors

already discussed. Comparative process theories build on traditional contingent approaches,

then, by emphasizing the role of multiple actors, and the influence of broader social factors.

They also introduce a more dynamic perspective into the field. For example, Begin (1992)

proposes a systems perspective for comparative HRM. This perspective draws variations in,

and identifies broad patterns of comparative HRM systems. His framework is also useful for

addressing the convergence debate. To operationalize his framework, he proposes a set of


independent variables in the form of different institutions (economic, political, cultural, and

societal), the impact of which dictate different types of HRM system configurations over time

in different national and regional settings. Gronhaug and Nordhaug (1992) use their analysis

of such macro and micro environmental factors to show how they influence different HRM

elements such as acquisition, development, compensation, work system and labor relations.

Emphasizing the need to understand HRM in context, Jackson and Schuler (1995)

propose an integrative framework. To achieve this, they suggest one should consider the

effect of both internal (i.e., technology, structure, size, life cycle stage, and business strategy)

and external (i.e., legal, social, and political environments, unionization, labor market

conditions, industry characteristics, and national cultures) contextual factors on HRM (for

details, see Jackson & Schuler, 1995, p. 254). Like earlier frameworks, this framework also

has limitations. First, the list of factors put under the two contexts is not comprehensive. To

get a complete picture of the scene, especially in a cross-national context, it is important that

researchers should be aware of possible factors, which might influence HRM in a specific

context. Second, the subcomponents of many factors are not presented, as a result, it is not

clear how this framework can be operationalized (e.g., national culture, politics). Third, some

of the factors are used in the traditional sense which also need to be examined with a more

contemporary approach (e.g., industry factor is considered as private versus public, man-

ufacturing versus service, regulated versus unregulated). In the present context, it is also

important to regard industrial sectors as a part of the national business system. Similarly, we

now need to buildon and move ahead of the traditional organizational strategies mentioned in

Jackson and Schulers framework to more generic HR strategies. Such issues are considered

in our framework.

Comparative process theories of management are appropriate for understanding the

development over time of organizational patterns and the effectiveness (or not) of HRM.

Nevertheless, since the time when Negandhi (1975, 1983) proposed his model, much

academic development has taken place in the field of international and comparative

management. Notably, competitive business sector and organizational strategies have been

shown to have an important impact on management practices, as reflected in the more recent

contingency models such as Schuler et al. (1993).

Comparative theories tend to emphasis only a few factors, with aggregated lists of things

that influence national culture. The role of organizational and HR strategy is underplayed, as

is change over time. For example, the impact of trade unions on Indian and British HRM

policies and practices has been significant at different points of time, but their nature and role

in the two countries is different. In India, unions still play a noncooperative role and have an

antagonistic nature. On the other hand, unions in the UK are playing a cooperative and

supporting role (see Budhwar & Sparrow, 1998). Similarly, different sets of contingent

variables and organizational policies and strategies determine HRM practices in different

countries. Empirical studies of HRM in comparative settings tend to reveal the context-

specific nature of HRM. This is seen in the case of India, where the present thrust towards

human resource development (HRD) as opposed to HRM created by recent economic reforms

has significantly influenced the HR functions (see Sparrow & Budhwar, 1997). Similarly, the

recent Asian economic crisis has contributed significantly in speeding-up the transition from


the traditionally established HRM practices (more applicable to the Tiger and Dragon

economies), such as life-time employment and seniority-based pay and promotions to

contract-based employment and performance-related pay and promotions (e.g., Khatri,

1999; Rowley, 1998).

An investigation into the influence of different factors (such as national culture and

different national institutions), variables (such as age, size, life cycle stage, or type of

organization) and organizational/HR policies and strategies (such as defender, analyzer, cost

reduction, talent acquisition, or talent improvement) on HRM policies and practices can help

to reveal national similarities and differences and the possible reasons for them. We now

present our conceptual framework.

5. Moving beyond contingency and comparative process models

An argument that runs counter to the HR practices perspective, with its requirement to

concentrate on simple culturally equivalent HR functions is put forward by Begin (1992)

and Boxall (1995). While developing a conceptual framework of cross-national HRM that

draws upon both the international and comparative HRM traditions, Boxall notes it is

important to define HRM in the broadest sense. Why? Because, several distinctive HRM

models exist within firms in a particular country, each of which depends (along with a number

of other factors, such as different institutions and national culture) on a number of distinct

internal labor markets (Boxall, 1995; Hendry, 1996; Osterman, 1994). Within each labor

market, HRM incorporates a range of subfunctions and practices which include systems for

work force governance, work organization, staffing and development, and reward systems

(Begin, 1992). HRM is therefore concerned with the management of all employment

relationships in the firm, incorporating the management of managers as well as nonmanage-

ment labor. Potentially, therefore, it covers a diverse array of styles even within national

cultures (Boxall, 1995, p. 6). Moreover, the aim of comparative HRM should be to involve

comparisons of nations, and the activity of comparison should be associated with explanation

rather than simply description (Poole, 1990). Observed similarities and differences should

therefore be related to theoretical causative factors emerging from broad socio-economic

outcomes (Boxall, 1995).

One of the main criticisms of both the contingency and comparative frameworks is that

they do not present a comprehensive list of factors and variables which determine HRM in a

cross-national context. Moreover, most of the contingency models are proposed for expatriate

management or management in MNEs, not general cross-national HRM comparisons. An

attempt has been made to overcome such limitations in our framework.

5.1. Metalogic factors

The framework in Fig. 1 is developed by considering the contribution of the above

discussed frameworks, and current trends in the HRM, international HRM, cross-national

HRM, and comparative management literature. It also draws upon empirical testing for most


of its factors and variables (for details, see Budhwar, 1998, 2000; Budhwar & Sparrow, 1997,

1998). The main components of the national factors and variables presented in Fig. 1 are

detailed later. To avoid congestion in Fig. 1, a separate table is formed highlighting the

detailed list of the subcomponents of the factors and variables of our framework (see Table 1

in Appendix A). We place the majority of contingency variables and national factors at the

broader, macro, or outer level. These variables parallel Negandhis organizational and societal

environments, respectively. The contingent variables highlighted by researchers such as

Schuler et al. (1993), Welch (1994), and the Aston Programme (e.g., Hickson et al., 1974)

are incorporated into Negandhis task environment. This allocation is based on the premise

that the impact of different stakeholders, as well as the traditional contingent variables, varies

from firm to firm. Finally, organizational strategies (highlighted in the model by different HR

functions and internal labor markets) are placed at the micro level or inner level. We now

detail and explain the reasoning behind the inclusion of the various factors within each

boundary and delineate the important variables involved. In order to improve the feasibility of

our proposed framework, we identify seven propositions.

There are a series of factors which operate at the national level, which set the overall

climate for international HRM activities by providing a metalogic that guides HRM

choices. Four broad national factors of national culture, institutions, industrial sector, and

dynamic business environment have been identified as significant determinants of this

metalogic, and the resultant HRM policies and practices, in a cross-national context.

Fig. 1. Factors determining cross-national HRM practices.


Proposition 1: Nation states contain unique configurations of industrial/business

sectors, which over a period of time (based on the functional requirements of the sector

and the regional/national characteristics such as culture and dominant institutions of

the geographical area(s) in which a particular is sector based), develop and practice

sector-specific HRM policies and practices.

The inclusion of national culture, institutional arrangements, and changing business

dynamics as a metalogic is based on the work of the many comparative process theories.

Few would question such a positioning. Perhaps of more note is the positioning of the

industrial sector. Out of these four national factors, the industrial sector is the only one, which

can be taken as a contingent variable because it represents the interests of a number of

stakeholders. However, from the study of national business systems (e.g., Rasanen & Whipp,

1992; Whitley, 1992), evidence suggests that the industrial sector is best considered as a

country level or national unit of analysis and is worth considering for national comparisons.

This inference is based on the premise that certain sectors (for example, the forest sector in

Finland, which is an industrial complex of various businesses that has emerged over the last

130 years) are well-connected to similar sectors in other competing countries and to markets

all over the world. Examples of such potent sectors include the Finnish forest sector, the

Danish milk products sector, or the Japanese car sector. All can clearly be distinguished by

the very nature of their social networks, ownership control relationships, and vertical

logistical links. However, all also clearly retain a national character. It is important to bear

in mind that a sector is an accomplishment of many actors, who work in different time periods

and with diverse logics of action. There are always alternative interpretations and applications

of the sectoral business recipe, based on simultaneous factions that emerge in the sectoral

networks. It is then logical to state that nation states contain unique configurations of sectors,

each trying to develop their own business recipe within the national business system

(Rasanen & Whipp, 1992, pp. 4849). Recent research (e.g., Eriksson, Fowler, Whipp, &

Rasanen, 1996) has therefore shown how HRM policies and practices are governed by a

specific sector. Causative influences related to this aspect of sector include (Hiltrop, 1993;

Rasanen & Whipp, 1992):

1. common strategies, business logic, and goals;

2. regulations and standards;

3. specific requirements or needs associated with supply chain management;

4. the need for sector-specific knowledge;

5. informal or formal bench marking against sector competitors;

6. cross-sector cooperative arrangements;

7. common developments in business operations; and

8. sector-specific labor markets or skill requirements.

In terms of operationalizing the framework and testing the first proposition, these are

the phenomena that the independent variable of sector configuration must be designed

to capture.


One major limitation of most of the earlier frameworks in the field, which suggest the

impact of national culture on national patterns of HRM, is that they do not highlight the main

aspects of national culture which can help to assess such an impact.

Proposition 2: National culture influences HR policies through a series of identifiable

mechanisms.

National culture is also seen to operate as a meta logic factor. A number of researchers

(such as Easterby-Smith, Mailna, & Yuan, 1995; Hofstede, 1993; Laurent, 1993; Schneider,

1993; Schuler & Rogovsky, 1998; Sparrow, 1995; Tayeb, 1995) have highlighted and

explained the influence of national culture on HRM policies and practices. The definition

and scope of the concept of culture is, of course, 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. Studies must first hypothesize how national culture is deemed to

influence the operation of HR policies. The most important processes or influence

mechanisms attributed to national culture that have been identified are:

1. The socialization process through which managers are made and through which the

managerial role is defined (Hofstede, 1983, 1993; Schein, 1985; Terpstra & David, 1985;

VanMaanen & Schein, 1979). This influences the competencies that firms feel are necessary

to resource and for subsequent shaping the selection and development systems.

2. The basic assumptions which shape managers behavior (Hofstede, 1983, 1993; Van

Maanen & Schein, 1979). These influence the perceived relevance of HRM practices.

3. Their common value orientations, norms of behavior and customs (Hofstede, 1983, 1993;

Keesing, 1974; Tayeb, 1995). This influences the preferences individuals have for specific

HR policies and the extent to which these policies will actually function effectively.

4. The influence of social elite or pressure groups unique to a country (Keesing, 1974), which

can make the pursuit of specific HR policies politically and socially inappropriate.

5. The unique ways of doing things and management logics in a particular country, which are

reflective of the broader national business system (Sparrow & Hiltrop, 1997; Whitley,

1992).

The impact of the above mentioned aspects of national culture on HRM varies from region

to region. Budhwar & Sparrow (1998) show how these aspects of national culture can be

operationalized and comparative impact of the same on HRM in India and Britain.

Proposition 3: National institutions shape the context of HRM through the level of

organizational autonomy they afford and the legitimacy of HRM practices.

Moving onto the third metalogic factor, researchers in the field of cross-national HRM

have considered in detail the impact of different national institutions on HRM policies and

practices (e.g., Brewster, 1995; Budhwar & Sparrow, 1998; Sparrow & Hiltrop, 1997). Given

the regional focus in much international HRM research, researchers 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 a number of

institutional systems whose influence on HRM in a cross-national context must be

interpreted. These include:

1. National labor laws (Brewster, 1995; Sparrow, 1995). These influence HRM practices

through the level of organizational autonomy that they imply, the breadth of policies

affected by regulation and the time span through which codification has taken place.

2. The structure, density, and role of trade unions (Brewster, 1995; Tayeb, 1994). These

influence HRM practices in terms of the range of issues on which employees speak, levels

of flexibility that may be pursued and the consequences to the organization of

miscalculating employee attitudes.

3. The educational and vocational set-up (Hiltrop, Despres, & Sparrow, 1995; Sparrow,

1995), which influences the quality of HR and the competencies that must be developed in

the labor market.

4. International business institutions (Morishima, 1995; Zucker, 1987), which can create a

pan-national structure for HRM decision making.

5. Labor market dynamics and overall preferences for internal or external markets (Benson,

1995; Cappelli, 1995; Osterman, 1994), which influences the weight given to different

aspects of HRM such as selection, development or performance management.

6. The role of professional bodies (Torrington, 1993; Zucker, 1987).

7. Employers federations and representative bodies (Powell & DiMaggio, 1991; Scott, 1995;

Zucker, 1987).

8. The legitimate role of consulting organizations (Lowndes, 1996; Scott, 1995; Zucker,

1987), which play a role in the transfer of best practice across organizations.

9. Politics (Jackson & Schuler, 1995) significantly influences most HRM functions through

different actors (such as managers, trade unions, policymakers).

A number of the existing frameworks in the field do indicate the impact of a competitive

business environment on HRM. However, like the factor of national culture, none of the

frameworks provide the main aspects of the competitive environment which can help to

assess the impact of cross-national HRM.

Proposition 4: The dynamic business environment (i.e., the external competitive

business conditions which change at a rapid pace) influences HRM by creating the

competitive stimulation for the adoption of new practices or by making existing HRM

systems more receptive to changed ideas.

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 (e.g., Budhwar & Sparrow, 1998; Hendry & 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 identified as major determinants of


IHRM activity. The aspects of a dynamic business environment that have been identified as

influencing 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 coordination systems (Hiltrop, 1993);

4. change in the composition and demographics of the work force (Torrington, 1993);

5. downsizing of organizations and the transfer of work across a new international division of

labor (Cappelli, 1995; Soeters & Schwan, 1990); and

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 & Hiltrop, 1994).

5.2. Contingent variables or dependencies

Proposition 5: The influence of national factors and metalogics is dependent on a range

of simple contingent variables. These contingent variables are not independent of each

other and are shaped by the national factors detailed in the first four propositions.

We now delineate the contingent variables in our framework. As mentioned in the

introductory review, a prominent stream of research being conducted by cross-national HRM

researchers has examined the influence of a number of contingent variables on HRM

policies and practices. These are the main mediating factors3 on which the influence of the

previous national factors or metalogics have been seen to depend. These tend to be

expressed as categorical variables, which provide a demographic description of the

organization in terms of its size, structure, technology and age. They are the artifacts

through which the four metalogics outlined above may easily be measured and operation-

alized. The influence of these contingencies is itself mediated by the four metalogics.

3 The mediatormoderator factors are generally used to measure specific statistical influence, affect, or

variations (between a predictor or independent and a criterion or dependent variable). In this paper, we use the

term mediating factors in a general sense, i.e., A affects B through C (see Baron & Kenny, 1986). For example,

national factors (A) affect HRM policies and practices (B) through different contingent variables (C). It is

important to note that in certain circumstances, the interaction between the different levels of factors and variables

presented in Fig. 1 could create a moderator effect as well (i.e., the effect of A on B changes as values of C

change). For example, influence of national factors (A) on HRM policies and practices (B) will vary with a

variation in the nature of contingent variables (C). For example, Budhwar and Khatri (2001) report that the

influence of trade unions (A) on HRM (B) varies between large (size) Indian public sector (ownership) firms (is

very high) in comparison to small private sector firms (C).


Specifically, the various contingent variables shown to determine HRM policies and

practices are the:

1. size of the organization (based on the number of employees) (Cohen & Pfeffer, 1986;

Dimick & Murray, 1978; Jackson & Schuler, 1995; Yuen & Kee, 1993);

2. type of ownership (Dimick & Murray, 1978; Tayeb, 1988);

3. level of technology adopted (Jackson & Schuler, 1995; Perrow, 1967);

4. age of organization (Dimick & Murray, 1978; Tayeb, 1988);

5. presence of a formal HRM department (Fisher & Shaw, 1992);

6. life cycle stage of the organization (Baird & Meshoulam, 1988; Jackson & Schuler, 1995;

Hendry & Pettigrew, 1992);

7. existence of training units in the HR department (Fisher & Shaw, 1992);

8. type of HR strategy (Jackson & Schuler, 1995; Schuler, 1992);

9. union status (Cohen & Pfeffer, 1986; Fisher & Shaw, 1992; Yuen & Kee, 1993);

10. interests of influential stakeholders (Beer, Spector, Lawrence, Quinn Mills, & Walton,

1984); and

11. structure of organization (Jackson & Schuler, 1995; Schuler et al., 1993).

The difference in our framework from contingency approach theorists is that they assume

that these factors are acultural, i.e., although their presence may vary across countries, they

have the same effect onHRMonce present. If there is convergence between nations across these

contingencies, it is assumed that convergence in the associated HR policies and practices will

follow. These factors are therefore frequently classified as culture-free (Sparrow & Hiltrop,

1994; Tayeb, 1994). We argue this is a naive assumption, and in our framework we posit a two-

way interaction between these two levels. For example, the proportion of firms at any one

particular life cycle stage reflects survival rates, which is itself highly dependent on the

institutional metalogic that operates within a country or region. Some regions within the EU

such as the Rhone-Alps corridor or Italy are noted for their ability to sustain start-up businesses.

5.3. Inner-contextual variables: organizational and HR strategies and policies

Cross-national HRM researchers claim that it is at the first two levels of analysis

discussednational factors and contingent variablesthat they can make useful contribu-

tions, by examining the impacts of such determinants on HRM policies and practices (Boxall,

1995; Brewster et al., 1996). These two levels of analysis alone are not sufficient. In order to

get a better understanding of the context-specific nature of HRM practices, an analysis of the

impact of organizational level strategies on them is also important (e.g., Budhwar & Sparrow,

1997; Jackson & Schuler, 1995; Jackson, Schuler, & Rivero, 1989; Miles & Snow, 1984;

Peck, 1994; Schuler & Jackson, 1987). We use the term inner contextual variables in Fig. 1 in

the narrowest sense, i.e., only to represent organizational strategies and policies.

Proposition 6: The impact of contingent variables such as structure, size, and tech-

nology is mediated by actions at the organizational level.


A review of the literature shows that organizational strategies determine a range of

primary HR functions and policies such as staffing (Guthrie & Olian, 1991), compensation

and rewards (Veliyath, Ferris, & Ramaswamy, 1994), the employment relationship (Peck,

1994) and its associated psychological contracts (Rousseau & Wade-Benzoni, 1994), levels

of work flexibility (Mayne, Tregaskis, & Brewster, 1996), integration of HRM into the

corporate strategy and levels of devolvement of HRM to line managers (Budhwar &

Sparrow, 1997), career management practices (Slocum, Cron, Hansen, & Rawlings, 1985),

the range of internal labor markets or structured employment systems (Osterman, 1994;

Soeters & Schwan, 1990), the requisite type of training and development (Peck, 1994), and

levels of performance (e.g., Guest, 1997; Lahteenmaki, Storey, & Vanhala, 1998; MacDuf-

fie, 1995). These studies confirm the significant 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 both national factors and contingent variables such as

size, structure, and technology. For example, organizations run on the basis of Islamic

principles (institutional factor), develop a unique set of internal labor markets (for details,

see Budhwar and Fadzil, 2000), which help them to out perform their competitors. On a

different aspect, research by Mayne et al. (1996) shows how the level of work flexibility

across Europe is determined by different configurations of organizational policies related to

recruitment, training and communication, along with organizational strategies and organ-

izational demographics. These researchers suggest that the changes taking place within

Europe (such as unification of HRM through pan-European institutions, deregulation of

employment protection and the introduction of more flexible working to create additional

employment) are forcing firms to adopt such practices. Examining the cross-national

patterning of levels of work flexibility, integration, and devolvement, the construction of

internal labor markets and structured employment systems then presents a significant

research agenda.

Typologies for characterizing the organizational business strategies used by firms are

abound. 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, analyzers, 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 longer-term

development (for more details, see Jackson & Schuler, 1995; MacDuffie, 1995; Peck,

1994; Slocum et al., 1985). Similarly, Porters (1985) competitive strategies distinguish

firms that compete on the basis of cost leadership, product differentiation, and market

focus. Based on this typology, Schuler and Jackson (1987) used a role behavior

perspective to describe the possible HRM implications of cost-reduction, innovation, and

quality enhancement 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.

Identifying the need to highlight the prevalence of generic HR strategies in organizations

in different national contexts, Budhwar (1998) proposes four HR strategies worth pursuing

for cross-national comparisons. These are:

1. talent acquisition HR strategy (emphasizes to attract the best human talent from external

sources);

2. effective resource allocation HR strategy (its goal is to maximize the use of existing HR by

always having the right person in the right place at the right time);

3. talent improvement HR strategy (aimed to maximize the talents of existing employees by

continuously training them and guiding them in their jobs and career); and

4. cost reduction HR strategy (aimed to reduce the personnel costs to the lowest possible

level).

Recently, Budhwar and Khatri (2001) operationalized and examined the impact of these

HR strategies on recruitment, compensation, training and development, and employee

communication practices in matched Indian and British firms. The impact of these four

HR strategies varied significantly in the two samples, confirming the context-specific nature

of HRM. On the same pattern, there is a need to identify and examine the impact of other HR

strategies such as high commitment, paternalism, etc.

Do cross-national differences in HRM occur because the various metalogics and contin-

gent factors predispose organizations within one country to one type of domestic HR

strategy? Is each type of strategy evidenced by the same patterns of HR policies and

practices or are there culturally equivalent variations?

Proposition 7: HR strategies are reflected in organizational policies towards primary

HR functions. These organizational policies shape the importance given to specific

bundles of HR practices.

Apart from the above mentioned four HR strategies, recent research shows that organiza-

tional policies related to recruitment (such as an emphasis on the recruitment of fresh

graduates), training and development (for example, to monitor training through formal

evaluation after training), and communication (such as to communicate with employees

through immediate superiors) both determine HR practices and policies in a cross-national

setting and can be used to distinguish national groupings of organizations (e.g., Bournois,

Chauchat, & Roussillon, 1994; Brewster & Hegewisch, 1994; Budhwar & Sparrow, 1997;

Dany & Torchy, 1994; Mahoney & Deckop, 1986). For example, research by Budhwar and

Sparrow (1997) reveals how internal organizational policies and strategies related to

recruitment, training and development and employees communication act as significant

determinants of the levels of integration of HRM into the corporate strategy and devolvement

of HRM to line managers practised in Indian firms. These organizational policy variables

represent the internal logic within the HR strategy. Importantly, they were more predictive of


the presence of specific HR practices than traditional contingency variables such as age, size,

and nature of the firm. Organizations also have different HR strategies for different levels and

groupings of employees, and this varies across countries. The same study showed that in

comparison to British organizations, Indian organizations shared less financial 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 in India and were both less willing

and saw less added-value in sharing such information with this level of employees (Budhwar

& Sparrow, 1997).

It is important to note that a particular inner context such as this is an outcome of an

interplay of many complex factors and variables, as explained above under the discussion

of national factors and contingent variables, and revealing the causeeffect linkages

across these levels of analysis becomes a cross-cultural task. As far as cross-national

HRM research goes, there is then a paucity of empirically grounded studies which detail

the differential reflection of generic HR strategies such as empowerment, up-skilling or

resourcing in the actual set of specific HR practices. The same strategic ends can be

achieved through very different means (HR practices) across countries. The majority of

the studies which have examined the impact of organizational and HR strategies and

policies on HRM policies and practices have been conducted in the AngloSaxon

nations (an exception being research by Budhwar and associates in India). For the field

of IHRM to develop, it is important to examine the impact of different organizational

and HR strategies and policies on HRM policies and practices in different national

settings. This will not only provide a useful tool for comparisons but will also help to

reveal the logic behind the existence and practice of certain HRM functions in specific

nations. This will also help to further develop the ideas about best practice and the

impact of bundles or configurations (see Guest, 1997; MacDuffie, 1995) of

organizational policies on HRM in different settings. Based on this premise, it can be

argued that organizational and HR strategies and policies in different national settings

will determine unique bundles or configurations of HRM policies and practices. The

need for such investigations is crucial considering the present trend towards increased

globalization and internationalization of business.

6. Conclusions

We have argued for the need of a framework that integrates our understanding from

both international HRM and comparative management disciplines. The approaches,

models and theories which we identified in order to develop our framework each deal

with pieces of a larger phenomenon, but one which lacks a comprehensive framework to

tie them together. We have presented the range of main national factors that create a

metalogic for HRM and their various components. We have also delineated the important

contingent variables and outlined the organizational and HR policies and strategies, which

determine HRM policies and practices in a cross-national context. In so doing, it is

important to note that the influence of all the different facets of the four main national


factors (i.e., national culture, national institutions, dynamic business environment and

industrial sector), contingent variables (such as size, age, nature, life cycle stage of

organization, presence of unions, and HR strategies) and the HR strategy with its

different organizational strategies and policies of HRM is context-specific. Different

configurations of cultural, institutional, industry sector, or business dynamic metalogics

alter the specific impact that the individual contingency factors have. Understanding the

complex interactions and causes-and-effect relationships between these different sets of

metalogic factors, contingent variables and organizational strategies and policies now

plays a crucial role in highlighting the cross-national but context-specific nature of HRM

in different settings.

Coming to the practical utility of our framework, the proposed framework is suitable for

highlighting the main determinants of HRM in different contexts and settings. We have

provided a detailed list of the factors supported by mainstream research which influence

HRM practices across different levels of analysis, i.e., national factors, contingent

variables, and organizational strategies and policies. All of these factors could and should

be used to determine HRM policies and practices in cross-national settings. The use of

tightly matched samples and the adoption of mixed methodologies should help to identify

the significant predictors of HRM policies and practices in different national settings. This

can be beneficial in many ways. For example, from our examination of the influence of

national factors, contingent variables and organizational policies in Indian and British

firms, we are now in a position to clearly highlight the main influences of HRM in the

two countries. It has also enabled us to understand why the impact of certain factors and

variables on HRM in India and Britain is similar or different (for details, see Budhwar,

1998, 2000; Budhwar & Khatri, 2001; Budhwar & Sparrow, 1998). Such an evaluation is

useful for policymakers to form appropriate HRM policies and practices. For academics,

this can act as a reference point for future similar evaluations. Comparisons based on such

evaluations also help to clarify the convergencedivergence debate (Boxall, 1995;

Brewster et al., 1996). Our empirical analysis confirms the operationalization of our

framework in a cross-national context, more importantly outside the AngloSaxon group

of nations, i.e., in a developing countryIndia. As we have picked-up the core national

factors and variables, which influence HRM, therefore, we believe that this framework is

suitable for examining HRM in different regions of the world (not only in the Anglo

Saxon nations).

The adoption of the proposed framework can help to test the applicability and

relevance of the AngloSaxon models of HRM to different nations. We have outlined

seven specific propositions that need to be tested to identify which causal relationships are

able to be generalized across firms in different countries. These propositions help to

highlight the interplay between actual HRM policies and practices, and the web of

surrounding national factors, contingent variables and organizational and HR strategies

and policies. Such analysis can be used to test the main assumptions of particular HRM

models. For example, the issue of tight-fit (one of the main propositions of the

matching model of HRM) can be evaluated by looking at the impact of accepted

measures, such as involvement of HRM in the corporate strategy at the formulation stage


and representation of HRM at the board level (Brewster & Larsen, 1992; Budhwar &

Sparrow, 1997; Mayne et al., 1996; Storey, 1992; Truss, Gratton, Hailey, McGovern, &

Stiles, 1997) on the actual HR practices evident in organizations. The proposed

framework would help to evaluate what are the main reasons for the continued reliance

on specific HR practices (i.e., cultural, institutional, or company philosophy). Similarly,

the main propositions of the Harvard model, such as the influence of stakeholders and

situational variables on HRM and the emphasis given to employee development through

involvement, empowerment and devolution (see Legge, 1995; Storey, 1992; Truss et al.,

1997) could be examined more accurately by adopting the proposed framework in

different national settings. The framework also makes it easier to operationalize such

measures. We have broken the influence of metalogic factors, contingent variables, and

organizational and HR strategies and policies down into a series of constituent influence

mechanisms on cross-national HRM which can be examined through more appropriate

statistical techniques, such as regressions or discriminant analysis, as suggested by Dimick

and Murray (1978) and Guest (1997). All the mentioned analysis has been successfully

conducted in a cross-national comparative HRM context in India and Britain (for details,

see Budhwar, 1998).

Further research is needed to test which HR and organizational strategies and policies

become significant predictors of HRM in different regional settings. More facets of each

national factor will undoubtedly be identified as our research understanding broadens

and deepens. The issue of policy versus practice needs serious consideration. For

example, in many developing countries such as Brazil, Peru and India, there are explicit

policies regarding sexual harassment, discrimination, child labor, minimum wages, etc.

Though a number of factors and variables mentioned in our framework (such as labor

legislation and pressure groups) result in the development of these policies, in practice

these policies are rarely enforced. Similarly, a number of HRM practices are determined

by different factors and variables. For example, the word of mouth method of

recruitment (which is not a policy) has become a prominent practice in unionized

Indian firms (Budhwar & Khatri, 2001). This is due to the pressure created by unions to

recruit relatives of existing employees or of their own choice. Why do HRM policies

not reflect an organizations current practices or the other way? Such issues should form

the agenda of future research. Nevertheless, the proposed framework provides a good

starting point for positioning and mapping much of the existing and proposed cross-

national HRM research.

Acknowledgements

We thank Randall Schuler, Paul Blyton, Monir Tayeb, Kieth Whitfield, Peter Turnbull,

anonymous reviewers of HRM Review, David Balkin, and the three anonymous reviewers

of the 99 AOM conference for their useful comments on earlier versions of this article. An

earlier version of this article was presented at the 1999 Academy of Management

Conference, Chicago.


National National factors Contingent Organizational HR strategies

culture

Institutions

Industrial

sector

Dynamic business

environment

variables strategies and

policies

and policies

Socialization

process;

common values,

norms of

behavior, and

customs;

influence of

pressure groups;

assumptions

that shape

managers

perceptions,

insights, and

mindsets;

management

style; meaning

of work and

values; personal

dispositions,

attitudes and

manners;

approaches to

cultural

diversity;

match to the

organization

culture.

National labor

laws; trade

unions; politics;

educational and

vocational

training set up;

labor market;

professional

bodies;

international

institutions;

industry

by itself;

employers

federation;

consulting

organizations;

placement

organizations;

trade bodies;

government

institutions;

local authorities;

voluntary bodies.

Common

strategies,

business logic

and goals;

regulations

and standards;

sector-specific

knowledge;

informal and

formal

benchmarking;

cross-sector

cooperation;

common

developments

in business

operations;

labor or skill

requirements;

merger activity;

workforce

mobility;

capital mobility.

Competition;

business

alliances;

changing

composition

of workforce;

restructuring;

focus on total

customer

satisfaction;

facility of

information

technological

change;

globalization

of business.

Age of

organization;

size of

organization;

nature of

organization;

status and

ownership

of organization;

product; control;

life cycle stage

of organization;

level of

technology used;

structure;

presence of

unions;

presence

of HRM

department;

presence of HR

strategy;

industry

characteristics;

different

stakeholders

interest.

Prospector;

analyzer;

defender;

reactor; cost

leadership;

innovation;

quality

enhancement;

group work;

product

differentiation;

market focus;

internal labor

markets;

levels of

integration and

devolvement;

nature of work

flexibility.

Talent

acquisition;

talent

improvement;

resource

allocation;

cost reduction;

high

commitment;

high control;

paternalism;

primary HR

functions.

Appendix A

Table 1. Details of subcomponents of factors and variables determining cross-national HRM P.S.Budhwar,P.R.Sparro

w/HumanReso

urce

Managem

entReview

12(2002)377403

398

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