Reflecting on Institutional Theories and HRM Policies

This report reflects on the importance and application of institutional theories in understanding the variation of HRM policies across different countries. It examines how cultural theories play a role in shaping these differences. The analysis incorporates real and up-to-date HRM data from reliable international datasets (e.g., CRANET, UNCTAD, OECD, ILO) and academic journals to present a comprehensive overview of global HRM practices. The report explores the implications of institutional theories for IHRM, discusses HRM differences through an institutional lens, and provides recommendations for managers in charge of HRM across borders, offering practical action points for selecting, appraising, and managing employees in diverse cultural contexts. The discussion is supported by academic literature, including works by Halls and Soskice, Whitley, and Paik et al., with a special focus on Table 1. The report emphasizes the influence of institutional aspects like power distance and formal systems on HRM policies, using examples such as Germany and the UK to highlight specific differences in approach, especially concerning vocational training and employee skill development.

Part2
Reflecting on the importance and Application of Institutional
Theories (approx 1000 words)
Reflect on HRM policies variation across
Countries and how Cultural Theories might
play a role
Follow up the lecture topic by reading the recommended texts and articles -as specified
in your hello.doc - and THEN reflect on why HRM practice varies worldwide. The focus
here is on differences than can be attributed to institutional differences- see
below.:
a)-present REAL and up-to-date HRM data on HR policies and practices
used across the world,(you can look at any countries/regions and at any
HRM functions, be it recruitment and selection; employee development,
employee relations etc...) proceeding from reliable international
DATASETS (e.g. CRANET; UNCTAD; OECD; ILO) and international ACADEMIC
journals.
Writing (answer) The institutions are the different structures that help in providing a
kind of stability to the society. The influences that these institutions have on the HRM
policies will definitely depend upon the different ways in which the industries interact
with the society or the different social and institutional contexts. In order to accomplish
the goals and objectives the organizations need to interact with the social organizations
in five spheres. In order to regulate the wage system they must interact with the
present industrial system (Allen et al 2017). They also need to interact with the existing
educational training and the vocational training system in order to see the skills and the
knowhow of the employees. It is as per this educational and vocational knowledge of
the employees that the HRM policies have to set. In other words the questions in the
recruitment round, the selection criteria, the method of selection and the several other
policies. They must also interact with the workforce in order to gain their cooperation
and interacting with the institutions is also essential for the raising of the capital and to
use the inputs and technology. HRM policies vary in different European countries as
well. The communication with the employees is much more in case of USA, due to the
lack of proper legislation in the employee involvement process. However it is different
in case of Japan, where the communication among the employees is indirect and

unclear.
REFLECT And DISCUSS: What are the
implications of institutional theories for IHRM
practice?
Can you explain/discuss the HRM differences presented earlier by using
institutional theories? (You can also refer to differences mentioned in log 1).
Try to back up your discussion with academic literature (e.g. Halls and
Soskice; Whitley; Paik et al's paper, special focus on Table 1).
Please note: A brief introduction to your chosen institutional theory would help
but no 'description' please; awareness and knowledge will be demonstrated
by competent application and integration with the HRM analysis.
Writing(answer)There are many institutional aspects that influence the formulation of the
HRM policies as well. Power distance is one of the important institutional aspects. Many
countries like that of India, Nigeria, China, and Bangladesh follow the high power distance or
the autocratic leadership. Whereas on the other hand, the developed countries like that of
New Zealand, Sweden, United Kingdom has a low power distance (Budhwar et al 2016). On
the low power system, the employees are usually having more freedom in interacting with
the managers and they have a greater scope of knowledge sharing. This is however present
mostly within the low power system countries. Another influence in this context is that of
formal institutional aspect, which usually refers to the kind of codified rules and standards
that characterize the in interaction among the social members. There are also three different
kinds of systems through which the intuitionalism is formulated (Alfes et al 2013). The HRM
policies of different countries are formed as per the constitutions and the rules and
regulations formulated in the same. This is because of the fact that the performance of the
employees will naturally depend upon the rules governing the country. These factors include
the industrial or the employment laws, formal public policies. Another important aspect is
that of the enforcement system. The country’s judiciary system, property rights, the taxation
policies and all the other enforcement mechanisms play a major rule in enabling the
companies to set the HRM policies. A good example is the difference between the HRM
policy of Germany and UK. As far as the HRM policies of the German company are
concerned, they invest a lot for the vocational training of the employees. On the other hand

the companies in U.K are however reluctant in investing for the apprenticeship skills. They
are much more concerned about focusing on the general skills of the employees (Xing et al
2016).
Any recommendations?
In the light of In the light of your newly acquired institutional awareness, can you
make some recommendations - in the form of action points- to any manager
in charge of HRM across borders?
Be HRM specific; e.g. "when selecting/appraising/disciplining/dismissing etc... employees
in country X, please be aware of.../avoid.../implement..."
Recommendations should proceed from the above discussion and not be completely
unrelated.
Writing (answer)
The companies of different countries must keep this in mind that they are to formulate the HRM
policies as per the cultural and the institutional aspects. This is because of the fact that the
performance of the employees will definitely depend upon the different rules and regulations
that are prevalent in their countries (Ahlvik and Björkman 2015). The companies should also
keep in mind that the HRM policies must be designed in such a way so that it encourages the
active participation of the employees in all the business decisions. The other aspects of the HRM
policies must also ser the employee recruitment criteria, the process of selection, the method of
selection of the employees must depend upon the institutional aspects like that of the
educational and the vocational training system existing in that country (Tzabbar et al 2017). The
HRM Policies must also include the employee awarding schemes. In other words, the HRM
Policies of any and every country depends largely upon the social, economic, educational,
cultural and social contexts. The HRM policies must

References
Ahlvik, C. and Björkman, I., 2015. Towards explaining subsidiary implementation,
integration, and internalization of MNC headquarters HRM practices. International
Business Review, 24(3), pp.497-505.
Alfes, K., Truss, C., Soane, E.C., Rees, C. and Gatenby, M., 2013. The relationship
between line manager behavior, perceived HRM practices, and individual
performance: Examining the mediating role of engagement. Human resource
management, 52(6), pp.839-859.
Budhwar, P.S., Varma, A. and Patel, C., 2016. Convergence-divergence of HRM in the
Asia-Pacific: Context-specific analysis and future research agenda. Human Resource
Management Review, 26(4), pp.311-326.
Cooke, F.L., 2014. Chinese multinational firms in Asia and Africa: Relationships with
institutional actors and patterns of HRM practices. Human Resource
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Geary, J. and Aguzzoli, R., 2016. Miners, politics and institutional caryatids:
Accounting for the transfer of HRM practices in the Brazilian multinational
enterprise. Journal of International Business Studies, 47(8), pp.968-996.
Ren, S. and Chadee, D., 2017. Influence of work pressure on proactive skill
development in China: The role of career networking behavior and Guanxi
HRM. Journal of Vocational Behavior, 98, pp.152-162.

Tzabbar, D., Tzafrir, S. and Baruch, Y., 2017. A bridge over troubled water:
Replication, integration and extension of the relationship between HRM practices and
organizational performance using moderating meta-analysis. Human Resource
Management Review, 27(1), pp.134-148.
Xing, Y., Liu, Y., Tarba, S.Y. and Cooper, C.L., 2016. Intercultural influences on
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