Convergence or divergence: human resource practices and policies for competitive advantage worldwide

Abstract

The world is becoming far more competitive and volatile than ever before, causing firms to seek to gain competitive advantage whenever and wherever possible. As traditional sources and means such as capital, technology or location become less significant as a basis for competitive advantage, firms are turning to more innovative sources. One of these is the management of human resources. While traditionally regarded as a personnel department function, it is now being widely shared among managers and non-managers, personnel directors and line managers. As the management of human resources is seen increasingly in terms of competitive advantage, the question that arises is: What must we do to gain this advantage? Many of the most successful firms now have to operate globally, and this gives rise to a second question: Do firms in different parts of the globe practice human resource management (HRM) for competitive advantage differently? Because of their importance, these two questions form the primary focus of this investigation. Data from a worldwide respondent survey of chief executive officers and human resource managers from twelve countries are cluster analysed to identify country groupings across a range of human resource policies and practices that could be used for competitive advantage. Differences and similarities on fifteen dimensions of these policies and practices are statistically determined and the results interpreted in the light of relevant literature. This investigation concludes that there is indeed a convergence in the use of HRM for competitive advantage. However, in pursuing this convergence there are some clear divergences, nuances and specific themes in the areas of HRM that will take the fore and in the way in which specific aspects such as culture, work structuring, performance management and resourcing will be utilized. These patterns of HRM bear understanding and consideration in managing human resources in different parts of the world.