A study on management practices and manufacturing performance in India and Malaysia
| Date | 07 August 2017 |
| DOI | https://doi.org/10.1108/JABS-07-2015-0115 |
| Pages | 278-295 |
| Published date | 07 August 2017 |
| Author | Takashi Sakikawa,Kaushik Chaudhuri,Nurhaizal Azam Arif |
| Subject Matter | Strategy,International business |
A study on management practices and
manufacturing performance in India
and Malaysia
Takashi Sakikawa, Kaushik Chaudhuri and Nurhaizal Azam Arif
Takashi Sakikawa is
based at Graduate
School for Management
of Technology, Niigata
University, Niigata,
Japan.
Kaushik Chaudhuri is
based at School of
Management and
Entrepreneurship, Shiv
Nadar University, Gautam
Buddha Nagar, India.
Nurhaizal Azam Arif is
based at Universiti of
Utara, Kuala Lumpur,
Malaysia.
Abstract
Purpose –The purpose of this study is to explore the relationship between management practices and
manufacturing performance, based on evidence from India and Malaysia – two countries from the
cultural area of Southern Asia.
Design/methodology/approach –The authors theorized by drawing not only on the strategic human
resource management (SHRM) literature but also on cross-cultural research. A total of 233 leaders
constituted this study’s sample: 96 production leaders from 16 Indian companies and 137 production
leaders from 16 Malaysian companies participated in the survey.
Findings –Some of the high-performance work practices (HPWPs) were effective across India and
Malaysia. The use of HPWPs in Indian culture led to better manufacturing performance than the use of
HPWPs in Malaysian culture.
Research limitations/implications –This study did not measure national culture itself but instead
used a dummy-coded variable of country as its proxy. Not only can national culture explain varieties in
management practices including HPWPs, but it can also interact with these practices to affect
performance.
Practical implications –Indian and Malaysian managers can learn about their management practices
from this, and they can learn about benefits they might bring to their workplaces if they manage through
the use of HPWPs.
Originality/value –The authors’ research provides insight into the capability of national culture to
moderate the relationship between HPWPs and manufacturing performance, even among two countries
situated in the same region of Southern Asia.
Keywords Institutions, Malaysia, India, National culture, Business system
Strategic human resource management
Paper type Research paper
Introduction
An increasing volume of strategic human resource management (SHRM) research has
examined the impact of human resource management (HRM) policies or practices on
performance in Confucian (East Asian) and Anglo (Western) countries over the past
decade or more (Chow et al., 2008;Takeuchi, 2009). Comparatively less SHRM research
has been conducted in other parts of Asia – that is to say, the region the Global Leadership
and Organizational Behavior Effectiveness (GLOBE) study called the cultural area of
Southern Asia (House et al., 2004) – even though that region is expected to have
high-growth economies in the years to come (OECD, 2013).
To bridge this gap in the literature, the purpose of this paper is two-fold. First, we examine
whether certain management practices, i.e. high performance work practices (HPWPs) as
proposed by the SHRM literature (Huselid, 1995;Pfeffer, 1998), can be effective in India
and Malaysia – two countries situated in Southern Asia, and whether the practices will
Received 31 July 2015
Revised 24 March 2016
9 June 2016
26 July 2016
5 August 2016
Accepted 15 August 2016
This research was supported
by Japan Society for the
Promotion of Science (JSPS)
KAKENHI Grant Number
24530457.
PAGE 278 JOURNAL OF ASIA BUSINESS STUDIES VOL. 11 NO. 3, 2017, pp. 278-295, © Emerald Publishing Limited, ISSN 1558-7894 DOI 10.1108/JABS-07-2015-0115
converge among those countries. Indian and Malaysian companies do not have a set of
consistent management practices and there does not exist an Indian or Malaysian style of
management (Budhwar, 2003;Kawabe, 1991). We will explore those countries’
management practices in terms of the use of HPWPs. As suggested earlier, the amount of
SHRM research in Southern Asia is smaller than that in the Anglo and East Asian cultural
clusters. Among SHRM research in South Asian countries, the amount of SHRM research
in Malaysia (Othman, 2009) is much lower than that in India (Azmi, 2011;Khandekar and
Sharma, 2005;Nagaraj and Kamalanabhan, 2005). Our research will enhance the
understanding of management practices in India and Malaysia and of the relationship of
these management practices to performance.
Second, we explore whether different national characteristics can affect the implementation
and success of those practices and the resultant performance even within the region and
whether management practices diverge between India and Malaysia. This is because
studies of national business systems have highlighted the role played by different
institutional characteristics in various countries in explaining variation in the way
organizations are managed (Whitley, 1999). We will focus our attention on national culture
among other institutions for a specific reason: national culture is an important part of the
informal or normative/cognitive institutions in the environment, and it underpins formal or
regulative institutions (such as laws and regulations), as discussed by Peng et al. (2008).
This study mainly uses the term “management practices” rather than “HRM practices”
because it looks at management practices centering not just on HRM functions in particular
(such as training and reward systems) but also on other functions of people management,
such as teamwork practices and improvement activities. We chose the two countries’
manufacturing sectors as our research setting because the manufacturing sector is a key
industry in India and Malaysia in terms of the sector’s output to gross domestic product
(GDP) and its employment compared to that of other industrial sectors (OECD, 2013).
This study will make a contribution to SHRM research by focusing on two countries within
Southern Asia and by examining those two countries’ management practices and their
relationship to manufacturing performance. The study will also contribute to national
business system research by providing insight into the ability of national culture to
moderate that relationship despite the fact that the national cultures we look at are both
situated in Southern Asia.
Thus, responding to a call from the journal’s special issue, we explore in this paper,
management practices – part of the business systems – in India and Malaysia, and their
relationship to manufacturing performance. Our approach focuses on national culture
among other institutions that could affect management practices. We draw on studies of
SHRM and cross-culture (Baron and Kreps, 1999;Hofstede, 2001).
Literature review and hypotheses
The universalistic and contingent effects of management practices
To explore the relationship between management practices and performance, theoretical
perspectives have been developed in the SHRM literature. The universalistic perspective is
arguably the most popular. This perspective assumes that particular management
practices can generate a high performance across organizations (Delery and Doty, 1996);
these practices are called “high performance work practices (HPWPs)” or “best practices”
(Huselid, 1995;Pfeffer, 1998). According to the universalistic perspective, HPWPs would
be as effective in India and Malaysia as they have been elsewhere. Prior research has
found HPWPs to be effective in several countries, such as the USA, European countries,
China and Japan (Chow et al., 2008;Guest et al., 2003;Huselid, 1995;Takeuchi, 2009).
Scholars have designated certain management practices (for instance, job security or
symbolic egalitarianism) as HPWPs or best practices (Baron and Kreps, 1999;Pfeffer,
VOL. 11 NO. 3 2017 JOURNAL OF ASIA BUSINESS STUDIES PAGE 279
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