Convergence-divergence of HRM in the Asia-Pacific: Context-specific analysis and future research agenda

Highlights

• Determinants, nature and patterns of HRM systems in Asia-Pacific

• Convergence-divergence of HRM in Asia-Pacific

• Challenges for HRM in Asia-Pacific

• Framework for analyzing context-specific nature of HRM

• Future research agenda for the field of HRM in Asia-Pacific

Abstract

In this article, we highlight the significance and need for conducting context-specific human resource management (HRM) research, by focusing on four critical themes. First, we discuss the need to analyze the convergence-divergence debate on HRM in Asia-Pacific. Next, we present an integrated framework, which would be very useful for conducting cross-national HRM research designed to focus on the key determinants of the dominant national HRM systems in the region. Following this, we discuss the critical challenges facing the HRM function in Asia-Pacific. Finally, we present an agenda for future research by presenting a series of research themes.

Introduction

For the last couple of decades or so, a combination of economic and geo-political factors have caused the world's attention to be focused on a number of emerging and developed economies in south and south-east Asia-Pacific, including Japan, South Korea, China, Hong Kong, Taiwan, Singapore, Malaysia, Thailand, Vietnam and India. Indeed, these economies have successfully attracted global trade, as well as exerted economic dominance. Several key factors have led to the growing clout of these economies on the world economic scene. These include, (i) their ever increasing contributions towards the global economic growth (e.g., ADB - Asia-Pacific Development Bank, 2015), (ii) the growing number of significant emerging markets from the region (The Economist, 2011), (iii) the region becoming the most important destination for global foreign direct investment (UNCTAD, 2012), (iv) the rapid growth of multinational corporations from emerging markets in the region (e.g. Chattopadhyay, Batra, & Ozsomer, 2012), (v) a strong resilience of the region against the last global economic crisis, (vi) the rapidly growing centers of excellence in business and management education and research in the region (e.g. Hong Kong, Singapore and rapidly emerging management institutions in India and China), and (vii) the continuous strengthening and recognition of the regional economic and trading blocs (such as ASEAN, APEC, SAARC). In addition, it is critical to note that this region is home to around 60% of the world population (for further discussion, see Horwitz & Budhwar, 2015).

The above-mentioned developments have led to a renewed interest among management scholars in conducting research on issues directly relevant to the region. Relatedly, there has been a rapid increase in the number of publications dedicated to addressing issues directly affecting south and southeast Asia-Pacific (e.g. Benson and Zhu, 2011, Budhwar and Varma, 2014; the ‘Working in Asia-Pacific Series’ by Routledge; Zhang, 2012). Furthermore, several leading journals have published special issues dedicated to the region (e.g. Ahlstrom and Bruton, 2004, De Cieri et al., 2005, Jain et al., 2012, Warner, 2002), and a number of new journals (e.g. Asia-Pacific Pacific Business Review, Asia-Pacific Journal of Management, Management and Organization Review, Asia-Pacific Business and Management and Asia-Pacific Pacific Journal of Human Resources) and learning societies (e.g. the Asian Academy of Management and Indian Academy of Management) have emerged, confirming the tremendous interest in studying issues related to the region. Indeed, a review of the relevant literature shows a clear link between the economic development of specific countries in the region and the increasing number of research publications related to the same.

Clearly, the above developments also apply to the field of HRM in the region. However, given that HRM is still in its infancy in the region, there is a scarcity of robust literature that can shed critical light on, and provide a comprehensive overview, of the core aspects of HRM in the region. This is rather ironic as, with the continued growth and evolution of the HRM function in the region, a number of fundamental questions need to be addressed. First, it is critical that we better understand the nature of the HRM function in the region. In other words, we need to understand if the HRM being practiced in the region has been developed locally, or at least adapted to the local context, versus simply borrowed from the West and implemented locally. The next critical question relates to the degree to which the current version(s) of HRM are able to help organizations improve their operational and financial performance and achieve competitive advantage (e.g. Varma, Beatty, Schneier, & Ulrich, 1999), since it is this role of HRM that helps it to be viewed as a strategic partner, as opposed to a purely administrative function (Ulrich, 2013).

The next set of questions relate to the factors that determine HRM policies and practices in the region, and the degree to which these factors are similar/different across nations in the region. Finally, another important issue to investigate would be the challenges faced by HRM, and the degree to which these challenges are similar/different between countries in the region as well as other parts of the world - in particular, the west, since most HRM systems are based on, or derived from, systems developed in the west.

The present paper was thus designed to address the above issues, with two primary foci – first, we address the convergence-divergence thesis by emphasizing the context-specific analysis of HRM in the region, which is done by examining the main determinants of HRM in the region via an integrative framework for cross-national HRM. Next, we highlight the main challenges faced by the HRM function in the region and identify themes for future research, which should help with the development of future theory and practice in the region. The proposed framework should also prove useful in identifying the key determinants of HRM that are leading to the convergence and/or divergence of HRM in the region (this point is further elaborated below).

We would like to point out that our analyses in the present paper are based on secondary information. The literature on the core themes for the analysis was searched from a variety of datasets such as Proquest, ESBCO, and books and from the webpages of relevant journals. The themes searched, included (i) the economic development of the region, (ii) the history and current status of HRM in the region, (iii) context-specific HRM, (iv) convergence-divergence debate/thesis, (v) the challenges faced by HRM in key economies in South and South-east Asia-Pacific, (vi) the future of HRM in Asia-Pacific, and (vii) frameworks for conducting cross-national HRM research.

Beginning in the 1950s, and continuing through the 1960s, several scholars made a strong case for the convergence thesis based on similarity of organization, technology, operations and planning across nations and cultures (e.g. Galbraith, 1967, Harbison and Meyers, 1959, Kerr, 1983). This was followed by a number of cross-cultural theorists and others arguing that the strong differences in cultural norms and values made convergence at all levels highly unlikely (e.g. Hofstede, 1991, Hofstede, 1993, House et al., 2002, Ralston et al., 1997).

The convergence-divergence debate was extended to the field of HRM by several leading scholars (e.g. Brewster, 2004, Brewster and Mayrhofer, 2012, Brewster et al., 2015, Budhwar et al., 2009; Dowling et al., 2013, Sparrow and Budhwar, 1997, Tregaskis and Brewster, 2006). These and other scholars of comparative international HRM initiated work on the convergence-divergence theses to help us better understand the dynamics of IHRM (see, also, Katz and Darbishire, 2000, Liu et al., 2004, Mcgaughey and De Cieri, 1999, Paik et al., 2011, Pudelko et al., 2006, Rowley and Benson, 2004, von Glinow et al., 2002, Witt, 2008).

In order to study these complex issues, we need to have a clear understanding of what we mean by the terms convergence, divergence and crossvergence, and how these topics can be best examined, especially for an under-researched and extremely diverse regional context. To this end, Guo (2015) recently offered a detailed explanation of the theses of cultural convergence, divergence and crossvergence. According to the author, the convergence thesis focuses on the creation of similarity in the thinking, values, attitudes and behaviors of individuals due to the emergence of a common belief system/logic. On the other hand, the divergence thesis suggests that due to a variety of factors, individuals from a nation/society will retain their specific preferences, thinking, mindsets, values, attitudes, and behaviors over time (see also Brewster et al., 2015, Katz and Darbishire, 2000, Thomas et al., 2014). Finally, the crossvergence thesis proposes that due to the dynamic and increasing interface of global socio-cultural influences and business philosophies and ideologies, a unique value system continues to emerge in the global society (also see Ralston, 2008). In Table 1, we present a summary of the main forces contributing towards convergence-divergence.

Linking the convergence-divergence debate to the field of HRM, Brewster et al. (2015) recently offered a clear explanation of the similarities (based on single time analysis) versus convergence (which means coming together over a period of time), directional convergence (where units of analysis share the same trends) and final convergence (implying a decrease in differences between units of analysis). For purposes of this paper, we revisit these phenomena to highlight the converging and diverging trends in HRM in the Asia-Pacific region. Addressing the convergence-divergence debate in the Asia-Pacific context will help us understand if the HRM systems and practices in these countries are becoming similar as they experience economic growth and development and with the continued evolution of the HRM function. Further, this analysis can also help clarify if HRM in these economies is becoming more like HRM in the developed countries, and whether this is resulting in the emergence of ‘best practices’. If indeed the HRM systems of the countries in this region are beginning to resemble those of the developed economies in the west, it would behoove scholars to investigate the factors leading to this convergence. In the case of multinational companies (MNCs) operating in the region, there is documented evidence of the existence of the ‘best practice’ model (e.g. Bjorkman and Lervik, 2007, Budhwar, 2012). However, given the heterogeneity of the economies in this region, there is a strong possibility that the HRM models practiced in the various nations are quite different, with each country identifying and using what works ‘best’ for them. In this case as well, it is critical to understand the factors contributing to the development of such distinct approach(es) to HRM in the Asia-Pacific economies.

Given the global dominance of Western management thought, the vast majority of the research publications initially emerging from Asia-Pacific were based on Western management constructs and theories (e.g. Hofstede, 1993, Meyer, 2006). However, given the unique socio-cultural, institutional, political-legal and business context(s) of economies in the Asia-Pacific region, research based on Western approaches is increasingly proving to be less suitable in understanding and explaining the key characteristics of the dominant management approaches in general, and HRM systems in particular (e.g. Leung, 2012, Shiu et al., 2015). Clearly, there is a great need to conduct context-specific research, which can help both scholars and practitioners better understand the unique characteristics and philosophies that guide practices in the Asia-Pacific-Pacific region.

Indeed, it is well established that research in contextual isolation is not only misleading, but can also severely hinder the understanding of core aspects of the research phenomenon in any significant way (Schuler, Budhwar, & Florkowski, 2002: 41). As a result, several scholars have called for context-specific HRM research with context-relevant constructs (e.g. Budhwar and Sparrow, 2002, Deadrick and Stone, 2009, Klien and Delery, 2012, Morley, 2004, Schuler et al., 2002). In response to these calls, several scholars have initiated a move to highlight indigenous management constructs and models that are seemingly more valid and appropriate for specific geographical contexts (see Cappelli et al., 2010, Klien and Delery, 2012, Pines and Zaidman, 2014, Stone-Romero, 2008, Tung and Aycan, 2008).

While these scholars need to be applauded for their efforts, it should be noted that such work in the Asia-Pacific context is still in its infancy (e.g. Zhu, Rowley, & Warner, 2007Special Issue of MOR – Khatri et al., 2012, Leung, 2012). Furthermore, there is a continued scarcity of research focusing on the nature of dominant HRM system(s), the forces determining these systems, the challenges faced by the HRM function, and the future of HRM in the Asia-Pacific region (see Budhwar & Varma, 2014).

This is indeed ironic, since it is well established that research along such themes is very useful in highlighting the context-specific nature of the HRM function, and also contributes to the development of relevant policies and practices and theories of HRM (Budhwar and Debrah, 2009, Rowley and Benson, 2004, Rowley and Poon, 2010, Warner, 2000). In this connection, Meyer (2006) has asserted that, in view of the challenges facing businesses, Asia-Pacific researchers should focus on context-specific issues. He further adds that such research should be capable of making major contributions – for instance, by explaining the context-specific variables and effects, and by drawing on traditional Asia-Pacific thoughts in developing new theories. To this end, some well-known scholars have provided useful overviews of employment relationships, industrial relations and key developments in the field of HRM in several countries in the Asia-Pacific region (see Table 2 for examples of such works).

These overviews provide critical evidence along several key HRM themes, including (i) the dynamics of Asia-Pacific labor markets, (ii) the multi-dimensional constructs of industrial and labor relations, (iii) several country-specific HRM studies, (iv) research into the dominance of Anglo-Saxon models, (v) the convergence-divergence debate, (vi) factors affecting employment relations, (vii) HRM in key specific sectors, such as business process outsourcing - BPO, (viii) knowledge based economies), (ix) the HRM-performance intersection, and (x) diversity management, with emphasis on the role of women in management.

Undoubtedly, this is a fairly comprehensive coverage of the key issues facing HRM in the Asia-Pacific region. However, given both the rapid economic developments in the region and the changing nature and developments in the field of HRM, there exists considerable scope for crucial HRM research with more robust methodologies (e.g. involving multi-level analyses, multi-source data, multi-method designs, and context-relevant constructs and advanced levels of analyses), all of which can help interpret and explain the intricacies of indigenous and context specific HRM systems. This is all the more crucial, given the heterogeneous nature of the nations in the region, which possess vastly different economic, socio-cultural, political and institutional practices (see, e.g., Benson and Zhu, 2011, Rowley and Harry, 2011, Rowley and Warner, 2011, Varma and Budhwar, 2014a, Varma and Budhwar, 2014b). Furthermore, there is also clear scope and need for comparative analyses within the region. We believe that something along the lines of Cranet survey would be timely and appropriate. For those not familiar, the Cranet survey helped to provide a good overview of HRM policies and practices in a number of European nations (see Parry, Stavrou-Costea, & Morley, 2011 for details about the Cranet project). Indeed, the Cranet survey results have helped to address the convergence-divergence debate in the European context (see Brewster and Mayrhofer, 2012, Morley, 2004). Based on our analysis, we are convinced that a similar research instrument could be employed in the Asia-Pacific region to help scholars and practitioners better understand the underlying dynamics of HRM systems in the region.

Indeed, research conducted to identify the main factors influencing national patterns of HRM should prove immensely useful to both researchers and policy makers, as such investigations will help shed light on context-specific determinants (e.g. the role of national unions and labor legislation. Furthermore, such research could also help clarify whether HRM systems of one country can be effective in another country, or whether the conditions are so different as to make HRM systems of one country irrelevant in another. In other words, there is a somewhat urgent need to conduct context-specific HRM research within the Asia-Pacific region. Of course, this raises the key question – how should researchers go about conducting such research, and what kinds of framework(s) could be adopted for this purpose. We address these questions in the following section.