HRMG

HRMG

HRMG

Introduction

The literature on international human resource management (IHRM) - that is, the way in which multinational companies (MNCs) manage their workforces across national borders - has been dominated by a number of powerful biases. One is the implicit but pervasive assumption that the behaviour of American MNCs provides a kind of template against which MNCs of other provenance may be measured. As the representatives of the dominant economic power of the postwar period, US MNCs are seen as the future to which economic organisation and behaviour are naturally tending. The US model of IHRM is in some senses regarded as a universal model matching the requirements of increasingly internationalised operation in a world economy dominated by the tenets of free-market liberal capitalism.

A second bias - often in practice present alongside the first - is that differences in the behaviour of MNCs from different countries of origin can be explained by reference to simplistic indices of cultural difference. Many studies thus link aspects of international management - say, the degree of centralisation of management of subsidiaries - to variations in Hofstede's key cultural differentiators such as 'power distance' or 'uncertainty avoidance' (Hofstede 1980). However much subsequent studies have replicated Hofstede's findings, the fundamental problem with this approach remains that it explains very little about underlying differences in the way different business systems operate.

The popularity of the culturalist approach has meant that the IHRM literature has made much less sustained use of another, highly important, strand of literature on national differences: the institutionalist literature represented by Whitley (1992), Lane (1989; 1995), and many others. This sees persistent differences in capitalist organisation deriving from the national development paths pursued by different countries, and by the institutions that have been generated out of the interaction of social groups and classes. (Cultural explanations can be integrated into such approaches (e.g. Whitley 1992), but cultural phenomena are seen as emerging out of and interacting with evolving societal institutions rather than as free-floating, ahistorical givens.) Even with the pressures of globalisation, the 'path-dependent' distinctiveness of national forms of capitalist organisation remains (e.g. Berger and Dore 1996; Crouch and Streeck 1997; Doremus et al. 1998; Hollingsworth and Boyer 1997a). This is not to say, however, that each national business system is entirely distinctive: as Chandler (1990), for example, argues national development paths may be contrasted in such general terms as 'competitive' vs. 'cooperative' or 'personal' vs. 'managerial' capitalism.

This paper tackles the question of IHRM from a comparative 'institutionalist' perspective: that is, one rooted in the understanding of a national business system organised around distinctive institutions that remain - even in an age of globalised capitalism - the basis of the national system's engagement with the international economy. More specifically, it examines the way American MNCs are embedded in a business system that is distinctive. The following section briefly outlines the elements of an institutionalist approach. The third part of the paper provides a stylised account of the main features of the American business system that are relevant ...