Human resource management Few scholars in organizational studies or practicing managers would argue with the statement that people are the most important factor in the success of an organization. Therefore, human resource (HR) management is considered a vital part of an organization’s strategy. However, there are a variety of factors that influence the HR management strategies and practices a firm will use. There appears to be substantial evidence to support the proposition different HR practices are used in different cultural environments. For example, Bjorkman, Fey, and Park (2007) found multinationals used different HR practices in their different subsidiaries in the United States, Russia, and Finland. Likewise, a number of studies have shown HR practices in Asia remain distinctly different from practices found in the United States and other locations despite the influence of “globalization” (e.g., Beer and Katz 2003; Chen and Wilson 2003; Chew and Goh 1997; McGrath-Champ and Carter 2001). Wei and Lau (2008) found the use of “Strategic Human Resource Management” practices did not always have a positive effect in the developing market of China, and this was partially attributed to differing ownership structure and the amount of autonomy of managers. In many racially heterogeneous societies, such as the United States, Britain, and Australia, HR management is greatly concerned with the concept of equal opportunity for members of all racial segments of societies. Also, the concept of equality of the sexes has a huge impact on the practices of HR management in Western societies (Ng and Wiesner 2007). These cultural values are reflected in the legal systems of most Western countries, and are especially important in the United States. Therefore, in US organizations, HR managers spend considerable amounts of time dealing with a variety of issues to ensure legal compliance with anti-discrimination legislation (Dessler 2003, 25-58). The complexity of the legal system in the United States in regards to equal opportunity makes it important for US corporations to ensure HR personnel work with line and staff managers closely to ensure compliance and firms having individuals holding positions such as equal employment opportunity coordinator or affirmative action officer are not uncommon (Dalton 2007). The concept of equal opportunity based on
race or ethnic background plays a much less influential factor in HR management practices in more racially homogeneous societies, such as those found in the Theravada Buddhist countries of Southeast Asia. There is significant evidence that HR management practices used in developing countries are far from identical to what is found in more developed economies. Cowell (2007) reported that in Jamaica, firms used much less systematic and formal HR systems than is normally found in Western societies. While Ghebregiorgis and Karstan (2007) found both employee job satisfaction and productivity were correlated with the use of formal HR practices in Eritrea, the authors did not find employee training to be a key feature in firms in the country. Therefore, it could be speculated that the lack of formalized HR programs in many firms in developing countries may be due to both cultural factors as well as other factors, which may include the lack of resources, knowledge of modern HR management systems, or the need to comply with equal opportunity legislation. As seen in the case studies presented in earlier chapters, and from personal experience, it does not appear that most firms in the Theravada Buddhist countries in Southeast Asia use sophisticated and formal HR systems or practices. The relatively smaller size of firms in the region, the prevalence of ownermanaged firms and the lack of a need to comply with equal opportunity regulations would all appear to be factors limiting the use of formal HR practices. Furthermore, it is likely cultural aspects of these societies also influence HR practices. Collectivist societies often use less formal HR practices than do societies with individualist cultures, and the Theravada Buddhist values of acknowledging the impermanence of all things and the emphasis on the middle path likely have significant influences on decisions made by firms in regards to recruitment and selection, training, performance management, and compensation.