A review of literature on international HRM reveals three different approaches (Dowling et al., 1999, p.2): Comparative, Cross-cultural and multi-national. Firstly, according to Adler (1997), the early approaches to researching international HRM focused on cross-cultural differences and examination of human behaviour from an international perspective. Certainly, research on cross-cultural organizational behaviour has become a conduit for the understanding of the dynamics of multicultural domestic and international workplaces within the advent of globalisation.
There are different levels of analysis within cross-national HRM, national factors, contingent factors and organisational level. Cross-national HRM researchers claim that it is at the levels of national factors and contigent variables that they can make useful contributions through the examination of the impacts of such determinants of HRM policies and practices (Boxall, 1995; Brewster et al, 1996). However, other researchers (Budhwar and Sparrow, 1997; Jackson and Schuler, 1995) argue that national factors and contingent variables are not enough in themselves to provide an understanding of the context-specific nature of HRM practices. It is important therefore, to consider analysis of the impact of organisational-level strategies (Budhwar and Sparrow, 1997).
Secondly, the comparative approach focuses on similarities and differences in HRM practices within an international context. Undeniably, Budhwar & Sparrow (2002) note that the increase in globalisation of business transactions, the emergence of new markets such as the BRIC countries (Brazil, Russia, India and China) as well as hyper competition among organisations at equally the domestic and international level have been associated with an increased significance and need for comparative human resource management (HRM) studies. As a result, there has been a growing number of studies addressing the configuration of HRM in different national contexts (Budhwar & Sparrow, 2002).
According to Rechie, Lee and Quintanilla (2009) one of the most significant role of comparative HRM research is to provide managers, principally those working in multinational firms, with specific guidelines concerning how to design and implement an effective HRM system taking into consideration cultural differences especially when their business operation enters into different cultural contexts for example western multinationals seeking to do business in China. This notion of being responsive to the context and standardisation of HRM policies and practices has generated controversial but nonetheless critical topics of discussion in comparative HRM, such as the debate on localization versus standardization, and the process of transferring HRM policies and practices across nations (Rechie et al, 2009).
The thirdly, multinational approach, tends to focus on HRM practices in multinational organisations. The HRM extant literature reveals that there are two distinct schools of thought as regards approaches to managing people within MNCs: (i) convergence and (ii) divergence. According to Brewster et al., (2007), the convergence approach is said to be one of the most dominant strands in international management research. On the one hand, the convergence approach has three main assumptions: firstly, the ultimate aim in all organisations is to improve performance through high-performance work systems (Brewster, 2001). Secondly, the universal aim of performance improvement can be achieved by using sound and effective management philosophies that hold true despite of differences among national environments (Girgin, 2005). Thirdly, proponents of the convergence approach argue that if local practices are different from these principles, they are expected to be replaced with ‘the one best way’, converging mainly on the American model as the...