BHL6018InternationalHumanResourceManagement(IHRM)IntroductiontoModuleThecontextforinternationalHRM(II)-Nationalcontexts-NationalinstitutionsDrXiaoniRenxren@cardiffmet.ac.ukKeyobjective:tounderstandhownationalinstitutionsaffectHRMpracticesinMNCsNationalinstitutionsInstitutionalcontextanditsimpactonHRMpoliticalandlegalsystemsEconomicsystemsEducation,trainingandskillslevelsOutlineGlobaleffectRegionaleffectNationaleffectInternationalHRMstrategiesandpracticesOrganisationaleffectRecap:HowtounderstandIHRM?-FourlevelsofanalysisRecap:HowisHRMshapedandpracticedacrosstheworld?GlobalisationTheroleofmultinationalcompanies(MNCs)Nationaldifferences(e.g.institutionalandculturaldifferences)TechnologicalchangeandtheknowledgeeconomyDemographictrendsandlabourmarketchangeEUenlargementEmergingeconomies(e.g.China)(Lucasetal.,2010)Recap:AnalysisofNationalEffectsAnanalysisatthislevelemphasisestheimportanceofnationalcontextinunderstandinghowandwhyHRsystemsandpracticesdifferacrosscountries(EdwardsandRees,2011).Unlikegloballevelanalysis,thisanalysistakesa‘high-context’approachCountriesvarywidelywithregardtonationalcultureandinstitutionsTheyinfluencehowmanagersmakedecisionsregardingbusinessandHRstrategiesNationaleffectsusuallyleadtodivergentHRpracticesStudieslookingathowHRpracticesvaryacrossdifferentlocationswithinthesamemultinationalcompanyshowthatdifferencesininstitutionscanofferabetterexplanationofwhyHRsystems/policiesvaryfromcountrytocountrythanculturaldifferences.So,whatareinstitutions?Institutionsarethestructuresandactivitiesthatprovidestabilitytoasociety.Theyconsistofthefamily,education,economic,religious,socialandpoliticalsystems(ThomasandLazarova,2014)Nationalinstitutionsguide,constrainandenablemanagementpracticesanddecisions.TheyshapeanddetermineHRandIHRMpractices(Sparrow&Hiltrop1994)Whatareinstitutions?ExamplesofinstitutionalfactorsLocallawsEnforcementmechanisms/agenciesGovernmentandlocalgovernmentpoliciesTradeunionsFinancialestablishmentsLabourmarketinstitutionsEducationalsystems/institutionsNationaltrainingsystemsPensionarrangementsSocialsecuritysystemsTheseinstitutionalfactorsinfluencehowHRispracticedonadailybasis.Itreferstothesystemsofformallaws,regulations,andprocedures,andinformalconventions,customs,andnorms,thatbroaden,mold,andrestrainsocio-economicactivityandbehaviour.Itisthesourceoflegitimisation,rewardsorincentivesfor,aswellasconstraintsorsanctionson,organisationalactivities(Meyer&Rowan1977).TherelevanceofinstitutionaltheorytoHRMwasinitiallyderivedfromthisview(Rosenzweig&Nohria1994).InstitutionalcontextEffectoftheinstitutioncontextonorganisationsOrganisationsaredeeplyembeddedinthewiderinstitutionalcontext(Powell1988;DiMaggio&Powell1991).Inordertoachievetheirgoals,organisationsneedtointeractwithsocietalinstitutionsinthefollowingfiveaspects:Theymustinteractwithindustrialrelationssystem(e.g.tradeunion)toregulatewagesandworkingconditionsTheyneedtoensurethatemployeeshavethenecessaryskillsthroughtheirinteractionwiththevocationaltrainingandeducationsystemTheymustsecurethecooperationoftheworkforcebyinteractingwithemployeesTheymustinteractwithfinancialinstitutionstoraisecapitalTheymustinteractwithotherorganisationstosecureaccesstoinputsandtechnologySource:Thomas,D.C.andLazarova,M.B.(2014)EssentialsofInternationalHRM:Managingpeopleglobally.London:SAGE.HowinstitutionsinfluenceIHRM?Threemechanisms:Coercivemechanisms(constrainingforces)E.g.Legislationandgovernmentpolicies,tradeunions,andworkscouncilsMimeticmechanisms(cloningforces)E.g.benchmarkingagainstandimitatingothersimilarandsuccessfulorganisationsNormativemechanisms(learningforces)E.g.engagementwithprofessionalbodies,employers’associations(ThomasandLazarova,2014)WewilllookathowthefollowingkeynationalinstitutionsinfluenceMNCs’HRMpoliciesandpractices:Political-legalsystemsEconomicsystemsEducationandtrainingsystems,andskillslevelNext…Political-LegalSystemsAcountry’spolitical-legalsystemreferstoitsgovernment,laws,andregulations.Thelegislationdeterminesthefirm-employeerelationship(Brewsteretal.,2011).Themostsignificantlawstoemployersarenationallabourlawsinfluencingtheleveloforganisationalautonomy,healthandsafetyregulations,andregulationsinthefieldofsocialpolicy(e.g.minimumwages;annualandmaternityleaveentitlements).Acountry’slawsoftendictatetherequirementsforHRMpractices:pay,hiring,firing,training,andlayoffs.Acompanythatexpandsinternationallymustgainexpertiseinthehostcountry’slegalrequirementsandwaysofdealingwithitslegalsystem.Thecompanywillhireoneormorehost-countrynationalstohelpintheprocess.CountryHourlyrateFrance£7.66Australia£9.10US£4.31UK£6.70(21yearsoldorover)Mexico£0.37ChinaThereisnominimumwagesetfortheentirenation(roughly£0.71onaverage)NationalminimumwageCountryPaidannualleaveMaternityleaveandpayUK28days26weeksordinarymaternityLeave(90%ofone’saverageweeklyearnings(beforetax)forthefirst6weeks)Singapore15days16weekspaidmaternityleaveChina5-15days98dayspaidmaternityleaveAnnualandmaternityleaveentitlementsThemajordiff