Introduction
Human resource management (HRM) is the main body managing employees across the globe. HRM deals with the processes of hiring, recruiting, managing, and the deployment of employees in organizations (Chai & Sutner, 2020). In most organizations, the HRM department tends to coordinate with the other sectors in a firm to ensure that there is better management of the workforce, hence boosting productivity. Whether HRM practices in businesses are growing more comparable or distinct over time and across nations is significant for both practice and theory. Even though this argument has been going on for years, it remains an open question. Every firm must recruit, employ, inspire, pay, and prepare its personnel for the exit. Human resource management practices differ in enterprises throughout the globe.
Companies must be aware of these disparities to manage their human resources. They must also have a thorough grasp of the decisive variables contributing to converging or divergent trends in HRM. HRM and leadership development are the most influential aspect of every organization, and it is the foundation for achieving optimal levels of innovation, reliability, timeliness, and customer focus in global competitiveness (Adams et. al., 2017, p. 27). Employee competency and motivation are among the two most essential success components in an international company. As a result, human resource operations are becoming increasingly important in boosting an organization’s competitiveness. The paper analyzes the extent to which HRM patterns worldwide are becoming more similar. HR patterns will be associated with specific countries because of the nation’s distinctive historical, societal, economic, and political context.
The Concept of Human Resource Management
To investigate whether HRM converges or diverges amongst nations, it is necessary first to have a thorough knowledge of HRM. As a result, we must examine the issue more closely, as well as the goals of HRM and the degree to which it may be implemented. To investigate how diverse cultural and institutional environments influence HRM practices in firms, it is also crucial to evaluate which aspects comprise HRM (Delery and Roumpi, 2017, p. 131). Traditional HRM is focused on making choices about hiring and selection, learning and growth, performance appraisal, and reward.
Nonetheless, these fundamental components can be supplemented with other topics like workplace flexibility, equal chances, or participative management. Because there is no widely accepted consensus on a single definition or particular aspects of HRM, the issue is hotly debated. Greater uniformity in particular HR practices is most likely to occur in the United States, where the notion of high-performing work systems is popular. The United States Department of Labor defines High-Performance Work Systems (HPWS) as a collection of specific HRM practices to increase organizational effectiveness.
These activities can serve as a starting point for assessing excellent HRM. Nonetheless, it is not viable to generalize HPWS as an international reference to many national situations worldwide. There is a lot of debate in the scholarly papers on the emphasis of HRM (Edwards and Kuruvilla, 2005, p. 23). The majority of scholars in the United States study HRM to better comprehend how to manage human capital in businesses, with the eventual objective of improving organizational effectiveness.
Based on previous research in this field, organizational success should be measured by its influence on the organization’s proclaimed strategic planning and particular consumers and shareholders. Compared to the United States, European HRM affects a few more partners. As a result, European scholars are more careful in defining the topic of HRM.
Furthermore, academics must be explicit about the degree of study while examining HRM. The question determines the degree to which HRM may be implemented. Although Europeans believe that HRM may be used at several levels, most research conducted in the United States focuses on the corporate or the sub-organizational stage, such as the business unit (Evans, Pucik, and Bjorkman, 2011, p. 45). Several scholars in research journals made the mistake of drawing data from one stage of HRM but conducting their study as if the conclusions applied to other levels.
Furthermore, there are several techniques for researching the topic of HRM. Published research from comparative HRM, global HRM, and strategic change is relevant for addressing the convergence and divergence argument. There is a difference between international and comparative HRM. HRM is concerned with comprehending and describing how HRM differs inside nations and across several regions in the world (Ferraro and Briody, 2017, p. 87). International HRM, on the other hand, is concerned with how international institutions manage their personnel across multiple national settings.
Strategic HR is the structure of scheduled human resource installations and activities designed to help a company accomplish its objectives. The difference between the techniques mentioned above appears to be minor. The three theoretical views on HRM are necessary for analyzing the scientific papers in the HRM convergence and divergence debate and comprehending the individual authors’ intentions for their appraisal of empirical data.
The Debate on Convergence and Divergence in HRM
Globalization has heightened attention to the divergence or convergence of organizations’ HRM strategies in various national and cultural contexts. According to some research, because of a common logic of industrialization, similarities in organizational context are increasing all over the world. As a result, the latter leads to the convergence of HRM practices around certain associated with the United States Multinational Corporations (MNCs) (Evans, Pucik, and Bjorkman, 2011, p. 45). As such corporations are frequently viewed as technological leaders despite differences in international cultures, world affairs, and ideologies. According to another study, institutional and cultural disparities exist between nations and regions, leading to lasting variances in managerial methods and systems.
HRM researchers have examined various elements in this convergence-divergence issue, most prominently country-of-origin impacts and host- and home-nation effects. It emphasized the impact of host-country elements on HRM practices, like local isomorphism, consistency, institutional pressures, informal checks, social network forums, headquarters authority, and the host-country environment in general (Farndale et. al., 2017, p. 192). In contrast, no indication of total convergence has been found (Farndale et. al., 2017, p. 191). MNCs may not arrange their subsidiaries’ human resource functions based on their country of origin or host-country setting. Rather, they can harmonize their HRM policies and procedures following the nation that sets the criteria for what is regarded to be the best global procedures.
The United States is the technical leader and managerial true inspiration because of globalization and the United States’ dominance in the global economy. HPWS, as a set of quality standards for human resource management, originates in American culture and history, indicating that it may not be appropriate in other nations (Farndale et. al., 2017, p. 193). Nonetheless, the American-style HPWS has a widespread effect on HPWS, and MNCs, especially, have emerged as the dominant worldwide human resource system.
Both HRM practices are diverse across nations, but various approaches exist to conceiving the issue and the research tools used to investigate it. When investigating the prevalence of convergence or divergence trends in HRM practices in firms at the European or global scale. Researchers can choose between two approaches that are contextual because both are model frames. The concept of paradigm refers to established models and theories with the connotation that other scientists may be utilizing rival models or theories. The Universal paradigm is a non-empirical social science strategy for developing universal principles.
More specifically, this paradigm aims to uncover best business practices that are an international reference to many circumstances and enhance the way human capital is handled in companies, with the eventual goal of raising the organization’s performance. As a result, the Universalist perspective is linked to the Convergence hypothesis. The Convergence thesis underlines many reasons why HRM practices have become more similar worldwide. It is crucial to recognize variations in the convergence notion. According to the Market-forces model, variances in management solutions caused by the geographical remoteness of firms and varied value systems of both corporate and national cultures are being supplanted by technological logic.
Firms must implement the most effective HRM practices to remain competitive because of technological diffusion. Competitive forces combine HRM methods in firms worldwide. Furthermore, there is an organizational viewpoint on convergence. In Europe, variances in legal, labor union, and employment market factors might lead to variations in HRM. Nevertheless, macro-level power structures with identical regulations may decrease the variations in how HRM is done in various member countries.
In opposition to the Humanitarian paradigm, supporters of the Situational paradigm are concerned with identifying what distinguishes HRM in different situations and causes such variations. Theorists in this perspective examine elements such as labor force, trade union company, and organizational ownership structures to determine what is contextually distinctive and why. In contrast to the Universalist worldview, the Situational paradigm places less emphasis on the idea of best practices and the influence of HRM management on firm performance.
Contextual studies have a much broader reach than individual organizations, intending to reveal the actual legal and political circumstances in which enterprises are positioned in reality. The Contextual worldview is connected to the Divergence hypothesis since it strongly focuses on macro-level phenomena. Divergence school experts argued with the assumption that globally applicable standard procedures in HRM can be discovered regardless of institutional or country context. Following the divergence hypothesis, HRM practices in various nations are growing increasingly divergent over time. As a result, changes in applying specific HRM practices are moving in diverse directions. Divergence theorists highlight the significance of varied cultural distance and institutional frameworks, arguing that each nation will adopt a distinct method for managing human resources in businesses.
Directional Convergence
When comparing trends across nations, one may talk of vertical convergence or directional resemblance if changes in the use of the investigated HRM practices evolve in the same direction. Every nation may begin with a distinct proportion of enterprises utilizing specific human resource practices, and the disparity in the use of these procedures may grow with time (Haak-Saheem and Festing, 2016, p. 23). Nonetheless, there is a sense of directional convergence since a growing number of firms are now implementing the relevant HRM strategies. Likewise, the inverse could occur, with a shift in the opposite direction.
While firms in the United States may employ the same HR system across many states, the situation in Europe is more complicated due to considerable cultural and institutional variations (Haak-Saheem and Festing, 2016, p. 24). Nonetheless, HRM in its present form is significantly inspired by thinking in the United States, where the discipline of human management was created and defined (Guest, 2017, p. 25). The topic of whether United States-derived HRM approaches are generally applicable in various situations throughout the world is critical for both managerial theory and actual management practice. To determine if European HRM practices are concurrent with the United States HRM practices throughout time, it is mandatory to examine the contextual situation in both hemispheres.
Institutional Theory and Convergence-Divergence
Institutional theory is a significant theoretical method for analyzing convergence-divergence, implying that enterprises within the same institutional space become comparable. Firms adhere to contextual expectations to obtain legitimacy and continue to exist. As a result, a homogenization process causes one unit in a community to match others. Those who suggest that human resource policies tend to diverge stress the importance of different country-specific entities on enterprises’ HRM principles and practices. As a result, in nations with distinct cultural and institutional settings, the United States’ best practice paradigm of HRM cannot be defined as the best.
Even though Asian firms have increased their search for sophisticated Western HRM approaches, Asian customs, beliefs, history, and institutions differ considerably from the West, rendering Asian leadership and HRM highly distinct. Therefore, it is critical to investigate the particular contextual elements to understand human resource practices in MNC affiliates and local enterprises. Regardless of an economy’s organizational practices, enterprises have some leeway for HRM and some latitude to select the level of adaptation. However, businesses frequently cannot afford to deviate much from their rivals’ HRM methods.
Diversity and HRM
The pressures exerted by the forces that impact the divergence of HRM practices vary, according to the lens of institutionalism. Laws and regulations enacted by these authorities will compel a business to follow a specific set of human resource practices (Cooke, 2018, p. 51). In the United States, for example, similar pressure may be seen in legislation like the positive discrimination statute, which supports positive discrimination against minorities and other marginalized people. Likewise, in Europe, mandates are in place to guarantee that women are represented proportionately on corporate boards.
Therefore, the issue is how much a change in law aimed at increasing female participation in the workforce or company governance in one nation might cause the same changes in the law in another. Despite the lack of empirical data on which to build an argument, any inter-country effect likely happens on a continental rather than a world stage. So inter-country convergence as a consequence of strong pressure is fairly restricted.
Another problem with managing diversity is that it requires widespread cross-cultural acceptance of the notion as a desirable strategic human resource strategy. It is well acknowledged that diverse teams produce more imaginative and efficient ideas and solutions. The reasoning behind this is straightforward. Innovative thinking necessitates individuals stepping outside of their regular operating paradigms in order to achieve fresh and innovative conclusions. A group of people with comparable talents is significantly less likely to discover or produce fresh ideas that result in creativity (Brewster and Hakk-Saheem, 2020, p. 17). The method was effectively implemented after a thorough process of translation that included strategic reinterpretation and local anchoring. It was greeted with initial skepticism and opposition. The example shows that what appears to some to be a globally accepted human resource practice based on fairness and equal chance is regarded otherwise in other societies.
Whereas the Danish enterprises in the previous example were finally successful in transferring this approach, it may not be the case in other scenarios and geographic locations. Indeed, managing diversity is far from becoming a commonly accepted global human resource approach. As defined in the US model, the notion of managing diversity would not be appropriate in the Middle East area (Brewster and Hakk-Saheem, 2020, p. 19). Regardless of the midst of organizational actors persuaded of the effectiveness of these practices, the path to implementing new formal structures in some circumstances would need to be carefully planned to avoid being regarded as a sort of foreign imposition.
The Future of Global Integrated Human Resource Management
The first way depicts the notion of people as important resources. Human resources management has embraced this viewpoint, claiming that employees may be distinctive assets in developing a long-term competitive edge (Brewster and Hakk-Saheem, 2020, p. 19). It is concerned with the administration of human resource tasks that will be done by personnel structured by the human, financial market, the current HR department functioning in collaboration, and outsourcing (Christiansen et. al., 2017, p. 56). HRM strategies might benefit from adopting concepts from theoretical approaches, which are classified as evolutionary, economical, sociological, and analytical.
These theories support notions ranging from comprehensive organization-wide methods to specialist approaches like people-driven, international group, response-driven, friendship, hierarchy-driven, intellectual, social psychology, and imagination. Although each idea has value, its application will be limited by the current scenario. Various businesses might or might not be the ideal prospects for a given methodology at various times. The idea of HRM quality standards is situational, and there cannot be a collection of best standards that applies to all scenarios. Comparative HRM is important because organizations manage their staff differently in each nation. Moreover, despite shared tendencies and common rhetoric, there is little indication that things will change.
Conclusion
The HRM role in traditional and e-commerce enterprises is changing dramatically due to convergence. Traditional human resource processes, such as hiring, choosing, and training personnel, are being conducted differently and more effectively than in many organizations, with technology taking the lead. Globalization brings fresh and unique issues like those faced by diverse teams. Multinational corporations have become increasingly major actors in the world economy, and their human resource practices are affected by numerous cultures as they compete globally.
Congruent management practices with cultural identity have improved business financial success. Human resource managers must be more familiar with the culture and emotionally aware to establish a culture that supports the organization’s primary goal. On the other hand, globalization creates a large talent pool that is simply unavailable to traditional businesses. It provides a chance to gain a competitive edge. Lastly, to effectively capitalize on convergence, businesses must build and use their intrinsic human resource holdings.
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