Do multinational subsidiaries demonstrate a convergence across their HRM practices in a less developed host-country?. Evidence from Ghana
| Published date | 06 November 2017 |
| DOI | https://doi.org/10.1108/ER-10-2016-0203 |
| Pages | 1066-1082 |
| Date | 06 November 2017 |
| Author | Desmond Tutu Ayentimi,John Burgess,Kantha Dayaram |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
Do multinational subsidiaries
demonstrate a convergence across
their HRM practices in a less
developed host-country?
Evidence from Ghana
Desmond Tutu Ayentimi, John Burgess and Kantha Dayaram
Department of Management, Curtin University, Perth, Australia
Abstract
Purpose –Using an institutionalist perspective, and through a case study analysis, the purpose of this paper
is to examine whether subsidiaries of MNEs demonstrate a convergence across their HRM practices ina less
developed host-country context.
Design/methodology/approach –This paper reports on an exploratory qualitative study involving five
MNEs subsidiaries that operate in Ghana and originate from the UK, France, Germany, and India.
The authors applied thematic and cross-case analysis techniques to explore similarities and differences in
their HRM practices by drawing data from in-depth face-to-face interviews and document analyses.
Findings –Findings suggest that MNE subsidiaries demonstrate more convergence across their HRM
practices as well as other HRM characteristics. Despite the similarities in their HRM practices, the evidence
suggests that MNE subsidiaries’HRM practices were similar to corporate headquarters HRM practices.
It appears thatthe host-country has lessinfluence in driving theirconvergence but rather the country-of-origin
effect; competitive isomorphic pressure and global integration benefits were driving their convergence across
their HRM practices.
Originality/value –This study makes a contribution to the convergence-divergence literature in the
international HRM (IHRM) domain with specific focus on addressing an under-researched context of less
developed host-countries. One of the puzzles in comparative and IHRM literature yet to be resolved is the
convergence-divergence thesis of firms’HRM practices.
Keywords Human resource management, International organizations, Emerging markets
Paper type Research paper
1. Introduction
This exploratory study makes a contribution to the convergence-divergence literature in the
international HRM (IHRM) domain with specific focus on addressing an under-researched
context of less developed host-countries. One of the puzzles in comparative and IHRM
literature yet to be resolved is the convergence-divergence thesis of firms’HRM practices.
The convergence-divergence debate is increasingly deepening in LDCs owing to the
prominence of institutional and national business systems’(NBS) instability and their
embeddedness with firms’operations (Ayentimi et al., 2016). The embeddedness of MNEs
within such host-country’s institutionshas implications on their HRM practice configurations.
This createsa real need for academicscholars and HRM practitionersto better understand the
behavior of MNEs within the convergence-divergence perspective through the lens of less
developed host-countries often characterized with disparate cultural and institutional
conditions to thatof MNEs from advanced economies (Ayentimiet al., 2016). The institutional
and economic drivers and limiters of advanced economies such as Australia, Canada, the
USA, the UK, Germany, andJapan among others explaining the convergence and divergence
of firms’HRM practice arrangementsare likely to be dissimilar fromLDCs due to cultural and
institutional dissimilarities (Kostova and Roth, 2002). Indeed, the institutional theory
perspective has long served the IHRM and comparative HRM fields as a major platform or
Employee Relations
Vol. 39 No. 7, 2017
pp. 1066-1082
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-10-2016-0203
Received 27 October 2016
Revised 6 April 2017
1June2017
Accepted 1 June 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
1066
ER
39,7
foundation for the development of conceptual and theoretical arguments toward the
understanding of MNEs’HRM arrangements, yet institutional and economic drivers of
advanced economies have dominated such conceptual and theoretical arguments.
HRM practices in Ghana, like many countries in Sub-Sahara Africa, have been shaped and
driven by cultural diversity, state-led development traje ctory, colonialization, and
decolonization (Debrah, 2013; Harvey, 2002). Indeed, the historical ties of Ghana with the UK
and other European countries through colonialization ensued the inheritance of many
institutional structures and administrative procedures in people’smanagem ent (Debrah, 2013).
However, the entrenchment of informal systems within formal institutional structures
underpinned by geopolitical dynamics and cultural diversity (kinship systems and cultural
beliefs) within the national business environment is expected to undermine HRM practice
convergence between Ghana and the UK as well as other liberal market economies (LMEs)
(USA, Ireland, Canada, etc.). Therefore, MNEs’HRM practices are more likely to be driven by
economic rationality and tailored toward the best practice HRM model (global HRM
standardization). Fundamentally, the implication of cultural diversity, state-led development
trajectory, colonialization, and decolonization in shaping HRM practices makes
Ghana contextually diverse from other less developed countries. This exploratory study,
thus, adds an important value to the convergence-divergence debate within a contextually
diverse perspective and contributes to the institutional and cultural distance literature between
developed and less developed countries (Ayentimi et al., 2016; Kostova, 1997; Kogut and
Singh, 1988). In addition, Ghana is a home to MNEs from Asia, Europe, and America; therefore,
these different continents have varying national competitive contexts and different
national institutional structures, resulting in their distinct ways of managing employees
(Collings et al., 2008). This diversity (dissimilar national business competitive context) amongst
the variousMNE subsidiaries foundin Ghana would add a uniqueand new perspective to the
understanding of the convergence-divergence literature.
This exploratory study examines whether subsidiaries of MNEs demonstrate a
convergence across their HRM practices and if so, which aspects of the HRM practices
demonstrate such convergence and what factors underpin or drive such convergence within
the context of a less developed host-country, using the lens of the institutional theory.
The study is centered on five key MNEs’HRM practices that include employee voice,
recruitment and selection, retention, training and development, and talent management.
Using the high-involvement work practices (HIWP) model and the high-performance work
systems (HPWS) model, our analysis indicates that the range of practices considered in our
paper are a result of important HRM drivers employed in the determination of MNEs
performance and are a source of MNEs competitive superiority (Becker and Huselid, 1998).
These HRM practices were examined in addition to their HRM structure, scope, orientation,
and strategies. The rest of the paper is divided into seven sections. Institutional theory
which underpins the theoretical basis of this study is outlined in Section 2. Section 3
addresses the convergence-divergence debate between home and host-countries which form
the basis of the analyses; additionally, this section provides a brief overview of the historical
antecedents of the convergence-divergence debate and current issues raised in the IHRM
and comparative HRM literature. Section 4 discusses the methods. The findings, discussion
and conclusion are subsequently presented. The study’s limitation and direction for future
research are outlined in the final section.
2. The theoretical framework
The nature oflocal isomorphism constitutesthe regulatory, cognitive,and normative profile of
a host-country (Kostova and Roth, 2002; Scott, 2001; DiMaggio and Powell, 1983).
The regulatory institutional setting acknowledges the rules and legislation governing
employment relationships, local content laws, and trade unions. The cognitive dimension
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Multinational
subsidiaries
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