IHRM in developing countries: does the functionalist vs. critical debate make sense South of the Equator?

ARTICLES

IHRM in developing countries: does the functionalist vs. critical debate make sense South of the Equator?

Miguel Pinto Caldas^I,*; Maria José Tonelli^II; Beatriz Maria Braga Lacombe^III

^IFundação Getúlio Vargas – EAESP/FGV. São Paulo, SP, Brazil. E-mail address: [e-mail]

^IIFundação Getúlio Vargas – EAESP/FGV. São Paulo, SP, Brazil. E-mail address: [e-mail]

^IIIFundação Getúlio Vargas – EAESP/FGV. São Paulo, SP, Brazil. E-mail address: [e-mail]

ABSTRACT

A recent debate has taken place in International Human Resource Management (IHRM) theory and practice between the so-called functionalists and the critical approaches. This paper reviews the literature on mainstream, functionalist IHRM and the critical approaches, and theoretically discusses their fit to emerging countries' realities and multilatinas experience. The essay's main objectives and contributions are: (a) to argue that this debate, overly typical of the American-European context, may not be fully applicable to ambiguous and contradictory contexts, such as most developing countries and, particularly, Latin America; (b) to argue that the disputes between both functionalist and critical IHRM theorists, in equally richer countries, is inadequate for other (non-rich-involving) contexts; and (c) to propose redirection possibilities for this debate, particularly, in Latin America.

Key words: IRHM; Brazil; critical management studies; functionalist approach.

Introduction

In the last few years, an intense debate has taken place in International Human Resource Management (IHRM) theory and practice between the so-called functionalists and the opposing critical approach. Within a functionalist research tradition, attention to HRM in and around MNCs tends to be central to IHRM theory and research internationally, and often revolves around issues concerning the transfer of HRM best practices across borders, the use of expatriates in foreign subsidiaries, the problems involved in such transferences and host country tensions, etc. (Schuler, Dowling, & De Cieri, 1993). To a functionalist theorist or practitioner, the transfer of HRM best practices to subsidiaries is possible and positive, and the orchestration of such transfers should be one of the key roles of corporate HRM functions.

Critical approaches point out that IHRM, just as domestic HRM, would be ultimately concerned with control and with perpetuating power relations in organizations (Legge, 1995; Peltonen, 2006; Townley, 1993). Contrary to the functional viewpoint, within a critical approach, the cross-border transfer of HRM practices would be perceived as an attempt to facilitate control of subsidiaries and host country realities by headquarters, placate potential headquarter-host country contradictions and conflicts, or solidify power relations that should rather be questioned or overcome. Furthermore, as such transfers tend to disregard issues of power and ideology and to inadequately impose headquarters' practices on subsidiaries' diverse realities, critical approaches tend to point out they would implicitly constitute disguised forms of neo-colonialism (Peltonen, 2006; Prasad, 2003; Said, 2007).

From a Latin American perspective, this article criticizes both extremes of this debate, and points out the inadequacy of both poles to depict the IHRM dynamics and challenges of developing countries, particularly in Latin America. Drawing both from previous work done in less-developed contexts such as Africa (e.g., Jackson, 2002a, 2002b), as well as from less renowned Latin American theorists, the article points out the dynamics of resistance and hybridization that happens in such countries as simultaneously: (a) HRM practices brought in by MNCs and Americanized academic and managerial discourse, (b) traditional and hierarchical HRM practices enduring amid several organizational terrains, and (c) endemic HRM practices (i.e., practices circumscribed to local-generated realities) continuing to arise in conjunction with new organizational forms and practices in these developing environments.

Ultimately, the main objective of the paper is to argue that the functional-critical debate, typical of the American-European context, is often out of place and ultimately devoid of sense amid ambiguous and contradictory conditions, such as those surrounding the IHRM context of developing countries, particularly those in Latin America. Theoretically reviewing both sides of the debate, the paper attempts to indicate how both extremes seem loosely connected with the complex realities existing in Latin America, and how the dichotomy brought in by such debate may undermine rather useful insights that both functional and critical perspectives can contribute to IHRM Latin American realities, insofar as they equally attempt to understand how their assumptions of both adequacy and inadequacy need to readjust south of the Equator.

As we intend to discuss the adequacy of both functional and critical perspectives of IHRM in developing countries, and as such purpose is to be carried out by a theoretical examination of the current literature, our proposed analysis should be seen as interpretive and reflective/reflexive. In other words: our analysis is conducted using a critical reflexive (Cunliffe, 2004) and reflective (Schön, 1983, 1987) approach on practice and theory building, departing mostly from a social constructionist perspective. The idea was to understand to what extent both sides of the debate could make sense in their own realities and contexts, and yet be devoid of full meaning when assumed elsewhere (e.g., Latin America), and in contexts (such as non-developed countries) constructed under very different assumptions, values and relational identities. In such types of analyses, theoretical and subjective in nature, the objective is to understand the appropriateness of theories not only by their inner strength, but rather to comprehend they were built as their authors' realities and identities were: in relational and highly contextual manners.

After this introduction the article was organized in the following manner: in the second section we summarize the classically researched themes in IHRM, clearly showing the essentially functionalist perspective of IHRM policies and practices. In the third section we summarize the critical approaches in IHRM, developed essentially by authors such as Legge, Townley and Keenoy, who underline the control theme, and the debate of authors such as Peltonen (2006), about the IHRM post-colonialist nature. The fourth section evaluates the applicability and adequacy of the mainstream IHRM functionalist research for the context of developing countries. In the fifth section this same discussion is carried out about the adequacy of the critical approach to IHRM. Lastly, in the sixth section, we close with final considerations.

The Funcionalist Approach: International Human Resource Management

Bjorkman and Stahl (2006) point out the difficulty of establishing the parameters of what has been called the young field of International Human Resource Management (IHRM). Today, many topics are being included within this field of study. One of the first models for IHRM was proposed by Schuler, in several studies (Schuler, 2000; Schuler et al., 1993). These authors tend to define IHRM as "human resource management issues, functions and the policies and practices that result from the strategic activities of multinational enterprises and that impact the international concerns and goals of those enterprises" (Schuler et al., 1993, p. 422). The models that followed (De Cieri & Dowling, 1999; Taylor, Beechler, & Napier, 1996) also mention IHRM for MNCs and emphasized the importance of both internal and organizational factors, such as structure, coordination mechanisms, operational systems, strategy, experience in managing international operations and organizational culture, as well as external factors, such as industry and sector characteristics, the features of the regions and countries in which they operate, and the inter-organizational networks they establish. De Cieri and Dowling (2006) comment that the models are still very broad and that the relationships that exist between the factors (internal and external), HR practices and the intended or obtained results, are still little understood.

Within such a young stream of research, a large number of studies on IHRM have been conducted, mainly in the last two decades, and mostly on themes such as the dual logic of IHRM, global staffing, expatriation, leadership and diversity (Bjorkman & Stahl, 2006). Recent IHRM studies (e.g., Albuquerque & Muritiba, 2009; Irigaray & Saraiva, 2009; Tanure, Barcellos, & Fleury, 2009) from Latin American countries have shown the potential for growth for this field in the sub-continent. A brief synthesis of this research is presented below.

Studies into what has been called the dual logic of IHRM are characterized by their attempt to understand how MNCs should operate, given the need to obtain simultaneously both global integration and local responsiveness/adaptation. Over the years, several authors have studied this subject and in the IHRM area it is worth highlighting the works of Bartlett and Ghoshal (1989), Rosenzweig (1994), Rosenzweig and Nohria (1994) and Dowling (1999). These authors investigated the dilemma of global integration and local adaptation for different activity sectors, organizational structures and functions, hierarchical levels and the countries of origin of the MNCs. More recently, according to Rosenzweig (2006), studies have revealed that practices related to Marketing, Sales and HR tend to follow local patterns.

In a review of this topic of dual logic, Edwards and Kuruvilla (2005) comment that research on the theme, in general, points to the problems, challenges and solutions found, but does not describe the national system (of the host country in question) or how it might exercise pressure towards adaptation to the local environment. The authors also state that studies tend not to examine the political aspect of the global/local issue: in other words, the disputes between players at the national and local level, on the one hand, and at the corporate level, on the other.

Another theme into which there is quite a lot of research in IHRM is staffing, since "global staffing is being increasingly seen as a primary human resource practice used by MNCs to control and coordinate their spatially dispersed global operations" (Collings & Scullion, 2006, p. 141). These authors mention the fact that global staffing is becoming gradually more important because: (a) it recognizes that the success of international business depends, increasingly, on hiring top quality senior executives; (b) the aspects involved with global staffing are more complex and different; (c) the performance of expatriates continues to be problematic; (d) there is a limited number of international executives, which makes it difficult to introduce global strategies; (e) the internationalization of SMEs is increasing the dimensions of the issue of global staffing; and (f) recent studies have shown the importance of staffing strategies like inpatriation, which reflect the need for MNCs to develop a multicultural labor force.

Within the global staffing themes, some themes have been gaining ground in recent academic research; two of which must be highlighted. First, the use of new forms of International Assignements such as short-term, commuter, rotational and frequent flyer assignments (Collings, Scullion, & Morley, 2007; Meyskens, Von Glinow, Werther, & Clarke, 2009). The alternative types of international assignments have become relevant due to the high costs and risks of failure involved in traditional expatriation, as well as the nature of the assignments to be carried out in the international context, which are short-lived and require no transfer on the executive's part. And second, the relationship between staff composition and the subsidiaries' performance according to variables such as competitive strategy, cultural dimensions (both of the head office and subsidiary) (Tarique, Schuler, & Gong, 2006), or other variables such as the subsidiary's role, psychological distance between host and head office countries, the subsidiary's business strategy and entry mode in the host country (Colagoku, Tarique, & Caligiuri, 2009), among others.

With regard to expatriation – the transfer of executives from the country of origin of the head office to subsidiary companies – a constant theme in academic research has been the expatriate's adaptation. This is because the starting point is the assumption that there is a strong relationship between the expatriate's adaptation and organizational performance. One of the main justifications for this particular research focus is the high cost of failure in expatriations.

These studies analyze the influence of individual, organizational and cultural characteristics concerning the expatriate's adaptation, showing controversial conclusions of great complexity for practical use. This is due to the fact that they indicate that adaptation is dependent on both home and host countries (culture, psychological distance, etc.), on the expatriate's function and position, and also on organizational aspects such as culture, clear role definition, co-workers' support and interaction, the expatriate's personal features, his family, etc. (Dellagnelo & Homem, 2006; Lee & Liu, 2006; Stahl & Caligiuri, 2005; Tanure et al., 2009).

The repatriation theme, the expatriate's return after the expatriation period is due, has also been gaining more academic research attention, and this may be due to repatriate's high turnover rate (according to Black and Gregersen (1999), between 10 and 25% of repatriates leave the company in the two years following their return). Research carried out with repatriates show their dissatisfaction with the lack of company support upon return, especially in regards to career planning, the lack of a definite position when back at the head office, the underuse of competences acquired abroad. There is also a lack of support concerning family issues, such as the re-adaptation of children and partner's relocation in the job market. On the other hand, little research has been carried out with companies, who actually recognize that there is insufficient support, but seem unable to see how to cope with the problem (Dellagnelo & Homem, 2006; Harvey, 1989).

With regard to global leadership, research has been directed mostly at investigating the competences that the global leader must have in order to be effective (Collings, Scullion, & Morley, 2007; Moran & Riesenberger, 1994; Spreitzer, McCall, & Mahoney, 1997; Srinivas, 1995), how managers can develop these characteristics more effectively (Caligiuri, 2006; Gregersen, Morrison, & Black, 1998; Pucik, 1992), the selection of global leaders, the dimensions of leadership and 360 degree evaluations (Osland, Bird, Mendenhall, & Osland, 2006).

In a review of the research on global leadership, Suutari (2002) draws attention to the fact that the very concept of global leadership is still not clearly defined, with studies dealing both with leaders, as well as with expatriate managers and other types of international managers. Furthermore, the competences that are required of global leaders, as found by empirical research, differ very little from the competences identified in studies on leadership in general, i.e. domestic leadership. The long lists of competences, Suutari says, are not sufficient for outlining what is required of a global leader. The author also adds that most of the research has been carried out with North American leaders and that more studies are necessary about leaders in other countries, such as in Europe and Asia.

More recently, some studies have attempted to single out the global leader on the basis of tasks he or she performs, such as, for instance "global leaders work with colleagues from other countries; manage a budget on a worldwide basis; manage foreign suppliers or customers; manage risk on a worldwide basis" (Caligiuri & Tarique, 2009, p. 341). In addition, it has become consensus that global leaders will be more effectively developed by means of international experience, such as expatriations, short-term assignments, multicultural teams, global meetings, structured (rotational) leadership, among others (Caligiuri & Tarique, 2009).

Although widely publicized, very little empirical work has been done on the theme of diversity (Dietz & Petersen, 2006) and what predominates is work that seeks to establish a relationship between the management of diversity and organizational results. Research into diversity assumes common interests and integration among employees and the possibility of identification with the organization, despite cultural differences. The management of diversity is considered to be a moderator of the relationship between the diversity in the labor force and results, in such a way that the relationship becomes more positive (or less negative) as diversity management increases.

More recently, Nishii and Ozbilgin (2007) draw attention to the fact that, unlike other areas, research on global diversity lags behind practice. Furthermore, according to these authors, some difficulty may be observed in defining the theme focus that generally seems to come down to studies focusing on gender and race for the functions of recruiting, selection, training, career development, etc. These authors observe that academic research, as a whole, still does not recognize that approaches to diversity management developed within one setting may not be applicable in other settings; thus research originating in places other than the US and Western Europe ends up being marginalized and deemed as inapplicable in other settings. Only US- and Western Europe-based research has, in studies on diversity, a presumed global applicability. What may occur in these cases is that an export of these concepts may not make any sense at all in countries such as Saudi Arabia, for example, where gender division is marked and where the diversity issue proposed should be another one (Nishii & Ozbilgin, 2007). Recent Latin American research (e.g., Alves & Galeão-Silva, 2004; Fleury, 2000; Irigaray & Saraiva, 2009) points out to similar difficulties and challenges around this theme.

Criticism of the (classical) research into IHRM

In a review of the literature on IHRM, Clark, Gospel and Montgomery (1999) indicate some of the characteristics of research into this theme: (a) it has a greater focus on the area's functions, such as hiring, compensation, training, etc., and therefore, does not integrate the results obtained with other issues like the organization of work or industrial relations; (b) it is predominantly quantitative, using questionnaires which may not be appropriate for the study of complex themes like cultural differences, or the issues of adjusting practices and adapting people; (c) there are few longitudinal studies; (d) it focuses more on countries such as the United States, England, Japan, France and Germany, with a second much less researched group, including countries such as China, Australia, Sweden, Canada, the Netherlands, Spain and Singapore; (e) it tends to be ethnocentric, since it uses theories and instruments largely developed in Anglo-Saxon countries; (f) generally speaking, it indicates, but does not explain the differences or similarities between countries, and when they are explained, the cultural and institutional factors(frequently supported by the work of Hofstede) are the most mentioned, without, however, going into either the nature of these factors or how they exercise an influence on the research topic in any depth; and (g) it is more directed towards the study of managers than operational workers.

Some of these limitations have generated studies elsewhere that deal with the gaps that classical IHRM has not been able to fill. For example, the studies on MNCs people management in Latin America and East Asia have revealed hybrid management systems, that suffer strong influence from the so-called best practices brought by the head offices but also had to adapt to the local conditions (Elvira & Davilla, 2005; Zhu, Warner, & Rowley, 2007). Zhu, Warner and Rowley (2007) point out influence from the opposite direction, in which Japanese practices, for instance, which emphasize both the collective and harmony may also be found in US management systems; conversely, Europe's pluralism and legalist setting have also influenced practices in other countries. However, the authors state that the more dependent on foreign capital, the greater the likelihood of adopting high performance work systems (HPWS).

Critical IHRM

The field of critical research in Management is recent, almost as recent as IHRM itself. In the 1970s, critical texts like the one from Burrel and Morgan (1979) and in the 1980s, texts from Smircich and Calás (1999) and Alvesson and Willmott (1992) and Callas and Smircich (1999) were already attracting attention, but the field gained visibility in the 1990s with the creation of the Critical Management Studies movement, especially in the Anglo-Saxon context (Davel & Alcadipani, 2003; Fournier & Grey, 2000). Alvesson and Deetz (1999) show that, among others, issues like ideological criticism, the denaturalization of socially constructed processes, the explanation of the globalization of managerial interests and the primacy of instrumental rationality over social and human needs permeate the analysis of organizational phenomena within critical approaches.

According to Prasad (2005), besides the critical traditions that include the classic propositions of historical materialism, the approaches supported by the discussion of Habermas on communicative action, the feminist criticisms and the archaeology of power in Foucault (Prasad, 2005), post traditions today include resistance to the post- and the neo-colonialist processes. The neo-colonialist criticism accentuates the construction of ways of life and subjectivities that are supported in the Euro-centered view of the world, which are displayed as ignorant of and disregarding of the cultural issues of these countries. It is in this context that the concepts of tropicalism and hybridism arise, often in an innocent and romanticized way (Caldas, 1997; Caldas & Alcadipani, 2006; Caldas & Wood, 1998; Prasad, 2005).

From its more comprehensive view and influence in Organization Studies, Critical Theory has also evolved into HRM and its context. The critical approach in HR includes at least three arguments: (a) the Human Resources area is predominantly functionalist and/or positivist; (b) the Human Resources area represents the essence of the power and control exercised by organizations; and (c) the International Human Resources' approach explains, in practice, the neo-colonialist movements of the multinationals. Notwithstanding the importance of critical analysis of HRM, literature is restricted to few international authors, as shown below.

HRM as a functionalist and/or positive science

Most critical authors in the field classify HRM as functionalist, and several (such as Townley, 1993) as both functionalist and positivist. The article by Townley (1993) shows that the positivist approach to the HR area is in perfect harmony with the classic view of Administration, in which the main objective of organizations would be to seek a stable efficiency that is adapted to its system. In this context, the HR function is one of the means by which organizations can achieve their stabilizing objectives. Hence, guided by a modernist tradition, human resource processes such as selection, appraisal and training, etc, would be naturalized, departing from the belief that the advance of knowledge in these areas will lead to better organizations. As pointed out by Keenoy back in 1991, the naturalization of HRM practices would hide its history, its origin and its contradictions. In fact, throughout the 20th century, most developments in Human Resource practices have been supported by functionalist research and, in this sense, are strongly associated with the idea of control, including the so-called psycho-techniques, according to Rabinbach (1992).

Thus, we believe that it is possible to discuss the first two arguments mentioned above together, i.e., the positivist approach of HRM and its action as control. That is what we shall now do, as follows.

HRM as control

According to the critical perspective of HRM, the view of HR as control can be understood from two aspects. The first, according to Townley (1993), is the issue of control and power in the Foucaultian view. The second, on the other hand, is the fact that this control may be exercised using both hard and soft approaches to human resources policies and practices which according to Legge (1995) and Keenoy (1990, 1991, 1999), allow a useful ambiguity regarding the conduct of organizational policies. Furthermore, according to these authors, the promises of the HR area are in harmony with the view of the American dream (Guest, 1990), including the desire for promotion and professional recognition, which are promises to be fulfilled largely with the benefits and actions of the HR function. We shall now discuss these three aspects.

For Townley (1993, p. 529) the Foucaultian perspective allowed for

an alternative analysis of exchange relationships in the workplace. Given the version of Foucault for self-evident categories, the focus does not fall on institutions (the market, themanagement), or on individuals (agents,). Also according to Foucault, the analysis is not conducted considering what (the market, themanagement) or why (efficiency, negligence, problems of trust, etc), but how.

In this context, Towley believes that HRM serves as the discourse that precisely organizes the how, that is, the relationship between what is promised and what actually happens in the management of the knowledge-power relationship. The Human Resources area would then discipline relationships, tasks, behavior, time, space and movement, and would focus not only on physical dimensions, but also on the subjective dimensions of work. The history of the area throughout the 20th century, moving from the Personnel Department (pure discipline) to the strategic management of people may hence be understood from the Foucault conception of disciplinary power.

The description of how can be seen from the interpretation of Legge (1995) of the soft and hard approaches in HRM. According to Legge, in the context of the restructuring of production in the 1990s, the creation of entrepreneurial individualism allowed HRM to utilize the hard approach, which reconciles the company's business strategy with the human resource strategy, according to the company's demands. This view would reinforce the use of rationality and quantification as factors for regulating relationships with the employees. The alternative would be the soft approach, which proposes a view of human resources as a valuable asset. In this version the focus is not economic, but guided by the search for best practices in human resources that allow quality of life and the development of people here seen as valuable.

The two approaches are not incompatible, on the contrary, they allow for a useful ambiguity in the use of discourse (Keenoy, 1999). In the view of Keenoy (1999), the notions of organization and employee begin to fade away. Apparently, the employee begins to control his/her career in a free market (Legge, 1995; Keenoy, 1999), in a rhetoric that is in absolute accord with the rhetoric of the free market. According to Guest (1990), this soft human resources approach is also compatible with the values of the American dream that preaches individual development and recognition of success. HRM is the place in which good actions relating to the development of people are thought about and articulated, even though they are not resolved. According to Legge (1995) this rhetoric preserves the idea that markets are free and that choices are possible, provided that the rules of entrepreneurial individualism are accepted. Keenoy (1999) also observes that HRM works like a holograph, with images and movements that allow for paradox and control at the same time.

International HRM: a neo-colonialist criticism

When studying IHRM from a critical perspective, Peltonen (2006) argues that this area is still in its infancy. In fact, it is only in the last twenty years that IHRM has been systematic in studying the effects of human resource practices in an intercultural context, dealing mostly with the question of power, control and ideology in IHRM. According to Peltonen, there is a consensus that HRM techniques are not neutral and are always related to the discourse on management rationality in the name of an ideologically established social construction.

Peltonen (2006) argues that human resource models are taken from head offices to subsidiary companies without being adjusted to the local cultural and social context, with the only exception being the provision that labor legislation in these countries needs to be considered. The transposition of models has indeed been going on for decades, and as Peltonen (2006) indicates, multinational companies prefer centralization to differentiation. The author proposes that the power question in multinationals needs to be analyzed, not only as a question of structure, but from the asymmetry that is present in the head office-subsidiary company relationship and the acceptance of the transfer of these techniques. The arguments of the neo-colonialist criticism, presented by Prasad (2005), reinforce the idea of Peltonen (2006): in other words, it is perceived to be necessary to discuss what elements make these practices possible, and what motives lead to the transposition and acceptance of these models.

The applicability/adjustment of the research in functionalist IHRM in poor and developing countries

In this section, we discuss the applicability of IHRM research that uses a functionalist approach to developing sub-equatorial countries.

It is a fact, for example, that research in IHRM suffers from the same limitations as the new internationalizing traditions in comparative organizational research, such as international management and international marketing. All of them seem to share an excessively functionalist basis, and the incorrect supposition of the feasibility of non-critically transposing concepts. In all these disciplines, the focus has been strongly centered on the unquestioned spreading of the content and practices of the head offices of multinational companies to their subsidiaries, on the unquestioned transfer of processes and standards from more developed nations to poor nations, and frequently on the beyond-frontier reproduction of the contradictions, iniquities and inequalities of the country of origin into the host country.

However, research in IHRM itself reveals many of these same deficiencies wherever it has been applied, whether it is between developed countries, or from more developed countries to developing ones. An undeniable aspect of the applicability of the criticism of IHRM to developing contexts is the ignorance within the field about these contexts. For example, in exploring domestic concepts in one or two nations in a comparative way, many authors in IHRM believe they have found support (or a lack of it) for their models, even though such comparisons insist on being carried out in a very limited group of countries, which throws into doubt the universality of what has been discovered. As Clark et al. (1999) pointed out, research in IHRM is done more in countries like the United States, England, Japan, France and Germany, with a second, very much less researched group, made up by countries like China, Australia, Sweden, Canada, the Netherlands, Spain and Singapore.

In third place, criticism of the functionalist positivism of IHRM seems to also apply in the context of developing countries. For instance, it seems reasonable that ideas such as naturalization and an exclusive focus on efficiency and control, which are typical of the criticism of HR management in general, would also apply to IHRM. The typical positivism of HR research seems, indeed, to have crossed frontiers and, in the same way as its domestic equivalent, has concentrated on scientific approaches that favor the transposition of an objectivist and naturalizing epistemology of social phenomena in the cross-frontier context, which may magnify its limitations and deficiencies as a scientific field. If, in a domestic environment, the generalization of concepts and the extrapolation of tendencies were already debatable, any attempt to reproduce this across frontiers gives rise to even more suspicion, and its rigor to even greater doubt.

In methodological terms the criticism that is made of IHRM, i.e., that it is predominantly quantitative and excessively based on questionnaires, that it may not be appropriate for studying complex themes such as cultural differences or questions relating to the adjustment of practices and the adaptation of people (e.g., Clark, Gospel, & Montgomery, 1999), all seem to be well-founded and also befitting the context of developing countries. Perhaps it is even more so in these contexts, where these quantitative measurements are not available, where they ignore the enormous regional and international differences, or are even based on categories and variables that find no local echo and are, per se, samples of an ethnocentricity exaggerated in its formulation. Indeed, as Clark et al. (1999) discuss, research in IHRM tends to be ethnocentric, carried out using theories and instruments developed for the most part in Anglo-Saxon countries and reproduced as if they were universal and adequate to be applied in other countries.

A fourth element is that the functionalism pointed out by the critics of HR management, in fact, seems to preponderate also in IHRM, where research that focuses on maximizing control, regulation and efficiency is, indeed, predominant. Several examples of this type of functionalist predominance may be given. Focus on research into the dual role of HR within an international context, for example, indicates that the need for localizing practices, when feasible, should not be done out of respect for what is singular and precious in the 'local' context, but as a functional requirement of adaptation: in other words, it is assumed that the reproduction of the standards of the head office in the subsidiary companies of MNCs is ideal and should only be avoided when it is functionally inefficient. Hence, its discussion has more to do with an instrumental, rather than a substantive logic. Local practices are adopted only if there is no way of implementing international ones, which are assumed to be superior and logical. Contempt for what is local or for the possibility of perceiving, knowing, appreciating and learning from what is new and local, goes unnoticed in the logic between the colonizing voice and the host, who is left with the mandate to assimilate the incoming culture.

Another illustration of exacerbated functionalism is the discussion about global staffing: the main concern of research seems to be to discover the optimum points of equilibrium between the disadvantages of the excessive presence of staff from the head office (because of the cost involved, less than because of any social-cognitive violence that this may represent), on the one hand, and the disadvantages of the absence of representatives from the head office (which tends to equate to the chance of conduct deviations and non-compliance with corporate standards). In other words, the staffing discussion in IHRM fundamentally focuses on fine tuning what is understood to be a right and an imperative to keep guard over local hosts, in the sense of protecting the greater and, in theory, more legitimate, interests of the head office.

The functionalist focus can also be noticed in the research on international assignments, especially into expatriates: this particular vein of IHRM focuses much more on the effect of the local place and its foreignness upon the expatriate, rather than in investigating the potential effects the virulence of the expatriate may have on the local reality; and much less on using neo-colonialists approaches for understanding the ethos of the visitor and his/her interaction with the place. In general, in most research on IHRM the expatriate is the solution, or the bearer of good things, and the 'local' ethos is the problem. It is the place that has to be illuminated, saved and civilized.

Finally, a fifth element has to do with the typical ethnocentricity of the approaches of IHRM. Just as in its analogous fields (international marketing or international management, for example), IHRM also usually assumes conceptually and in an unquestioning fashion the universality of its fundamental concepts and arguments. In the same way that consumer and purchase in the marketing area, or leader, motivation or decision-making in the management area, are not universal and invariable concepts all over the world, because they are affected by a countless number of contextual and cultural factors, so conceptual pillars in HRM are also not universal and must be placed within their relative international contexts. The criticism of IHRM that points out these deficiencies seems in good part to be well-founded.

The applicability/adaptation of the critical approach to IHRM in poor and developing countries

As mentioned before, despite the fact that a large portion of the critical approach to IHRM seems to be reasonable and logical for developing countries, a further significant part of the critical current seems to be, itself, geocentric. The critical authors tend to assume that their arguments can be reproduced in any context but that may be of questionable value in poor or emerging countries. We shall discuss these improprieties by raising some of the myths of the criticism of IHRM and by discussing the challenges when it comes to applying it in poor and emerging countries.

The myth of the 'noble savage'

Emerging countries are not only colonized: they also expand internationally. What the criticism of IHRM fails to perceive is the critical analysis potential that exists in understanding those IHRM practices that are in the outbound flow – instead of being typically inbound-focused – of internationalization that surrounds developing countries. This is the case, for example, of international HR practices on the part of multinationals that come from emerging countries (Goldstein, 2007, 2009; Guillén, & García-Canal, 2009), and particularly of the so-called multilatinas (e.g., Borini, Fleury, Fleury, & Oliveira, 2009; Casanova, 2009; Cuervo-Cazurra, 2008; Dantas & Bell , 2009).

The growth of these developing multinationals has been the subject of intense debate over the last 20 years and their evolution has been the target of careful monitoring (see Table 1 and Figure 1).

In critical discourse, poor and developing countries have been the victims – both in the past and present – of neo-colonization processes, where IHRM practices are the instruments of vigilance, submission and control. Such critics conclude that if these countries had the power to speak up they would probably choose to favor the 'local' and deny the truculent interference of the head office and its emissaries.

However, the growing emergence and influence of MNCs coming from emerging countries is well known. Chinese, Korean, Russian, Indian and Mexican, and other MNCs (e.g., Martinez, Esperanca, & Torre, 2005; Mathews, 2006; Sachwald, 2001), have stopped being the exception and have started having a strong international presence.

Research into IHRM in emerging countries seems, in this sense, to present a strong potential for empirical investigation, in spite of the opposition from critical theorists. Moreover, there is potential for research on MNCs from developing countries from a critical perspective: e.g., one could focus on understanding if MNCs from developing countries, when they are in dominant positions as head offices, resort to IHRM practices that are less ethnocentric, truculent and standardizing than those to which they allege they have been submitted in their own countries by head offices coming from more developed countries. In this sense, research into IHRM that focuses on MNCs from emerging countries may generate multiple and vastly rich research agendas, including research that has a critical approach.

For example, we can think of research focused both on discussions about dual logic and standardization decisions vs. the adaptation of MNCs coming from emerging countries relative to their subsidiaries in less or similarly developed countries, rather than the usual focus on relationships between head offices from developed countries, on the expanding or internationalizing side, and subsidiaries in developing nations, on the receiving side (e.g., Bjorkman, Fey, & Park, 2007; Brewster, Wood, & Brookesw, 2008; Fenton-O'Creevy, Gooderham, & Nordhaug, 2008; Li, Qian, Liao, & Chu, 2008; Parry, Dickmann, & Morley, 2008). Moreover, one could design an investigation into the standards and mechanisms of vigilance and control on the part of MNCs coming from developing countries, and compare them with the criticized practices of MNCs coming from developed countries: to what extent does the logic change when roles are inverted and they are on the other (i.e., more dominant) side of the fence? Another possibility is to discuss the staffing strategies of MNCs coming from emerging countries: is the logic of staffing different in MNCs that have this origin than was seen in the axis developed country vs developing country? Also along the same lines, are expatriation processes as truculent and difficult in MNCs that come from emerging countries? To what extent would differences be noted if the destination were another country with a similar degree of (under) development, or if the destination were a more developed country? and so on. The possibilities seem to be countless and ignoring them could be a serious mistake for the IHRM field.

The myth of 'all standardization should be punished'

For the critic of IHRM coming from developed countries, any standardization by head offices vis-à-vis subsidiary companies should be viewed as an inappropriate imposition. However, when the difference between the country of origin and the host country is abysmal, this may not be true and the generalized criticism of IHRM may be as ethnocentric – in the sense of projecting the same conditions and context of the country of origin on developing host countries – as the IHRM theorists that criticize it.

Indeed, the majority of critics of IHRM argue (see summary, for example, in Clark et al., 1999) that at the hub of the problem of the logic of this field lies an ethos of control and territorial extension with a dynamic that is essentially neo-colonial.

From the point of view of critical sociology, first and foremost, the attack on such standardization-at-all-costs practices is deserved, to the extent that they restrict the autonomy, the development, and ultimately the emancipation; whether of the individual from the conditions that surround and oppress him, or of the local or the subsidiary, in terms of its dependence on the head office and the capital that controls it.

In this sense the standardization of processes and practices under the control of HR, using IHRM mechanisms, can indeed be perceived as instruments of control and neo-colonial domination. No one doubts this can occur and that this can possibly carry severe negative effects on individuals and subsidiaries in many cases and contexts of internationalization. This is the case, for example, of the inappropriate pressure for standardization of corporate processes applied by North American organizations in Japan, where processes and local dynamics are artificially and truculently despised in favor of Western standards that may not be superior and, in terms of the local context, are certainly not localized. Standardization in this type of circumstance is not only unfair and incorrect, but is an evidence of head office control, and is potentially inefficient from the functional point of view.

In spite of all the truth in these critical theorists' arguments, the fact seems to be that in other contexts of internationalization, standardization does not necessarily abolish legitimate and emancipatory practices. Depending on the pre-existing gap between the country of origin and the host country MNCs, some standardization coming from the head offices may, in fact, bring significant possibilities for improving the local context. For instance, by bringing in standardization of IHRM processes and practices, MNCs may make it feasible for countries with very poor and universally unfair conditions to formalize or to improve processes in labor relations that may have been chronically subordinated to situations of endemic regression for generations.

An example of this is informal labor. Informal labor, which seems to be a chronic problem in many developing countries (see Figure 2), is almost impossible to maintain within the complex formal systems of major MNCs. By forcing the introduction of systems or processes that come from their head offices or from other subsidiary companies, informal workers are either officially incorporated or simply cannot be paid. This has led to the formalization of labor in many sectors, which provides these workers with minimum working conditions (social benefits, such as health care and pensions, paid vacations and the guarantee of minimum standards of remuneration), which in the absence of standardization, simply could not have been overcome.

This type of context is not unusual in Latin America. In Brazil, the data from National Survey by Household Sampling for 2008 shows that informal labor accounted for 73,1% of the domestic sector, 17,4% in the agricultural, 15,1% in industry and 42,3% in the service sector (Instituto Brasileiro de Geografia e Estatística [IBGE], 2008).

Something similar may happen with child labor or semi-slave labor, and illegal immigration in these countries: standardization may force the formalization of work contracts, which, under the veil of informality, might be perpetuated, as it still is in local and less supervised companies. Again, the data from National Survey by Household Sampling shows that in Brazil 3,3% of the children ages from 5-13 worked in 2008; 6,1% from 10-13; and 25%, ages 14-17 (IBGE, 2008).

Another example is the mass training and development of workers. The standardization of processes and systems by MNCs often ends up demanding knowledge and skills of a higher level than those practiced locally. The illiterate have difficulty in operating machinery or integrated computer systems, or in using self-help terminals or even in operating bank accounts and magnetic strip cards (ATM cards) that new processes force them to use. While, in principle, standardizations that force local labor to use such devices may exclude individuals who were previously integrated (albeit in a marginalized fashion), in establishing exogenous training standards, by either direct or indirect measures such standardization efforts may end up improving the qualifications of the local labor force. This is either because these new standards become institutionalized and force the older people to adapt because of the competitiveness of the local labor market, or because the lack of suitable labor may force MNCs to introduce massive training programs, delivering progress where previous social conditions or government–supported programs failed.

All these examples illustrate a single thing: that the criticism of IHRM, or the actions of MNCs among developed countries have characteristics that may be very different in either developed or less developed countries. In the latter, standardization may bring changes and progress that inertia would certainly hamper and in the former such standardization may not be substituting standards that have a similar potential.

It is clear and obvious that not everything that comes from the head office is good, nor do we want to say that everything that exists in the subsidiary in developing countries is backward. But it seems to be undeniable that in general terms the greater the development gap, the greater seems to be the chance that the standardization processes of global practices may bring development, instead of just discomfort and the truculent substitution of appropriate local standards.

Final Considerations

From a review of the research into IHRM in its functionalist and critical approaches, this article has tried to explore the issues that are raised when dealing with internationalization processes that involve poor and developing countries.

In short, what we are advocating here is that a good part of the critical approach to IHRM that is done in developed countries is fair and fitting, but that many of these authors extend their arguments globally, as if internationalization conditions were the same as in the rich-rich country axis. Internationalization is different in poor-poor and rich-poor axes than between rich countries. Therefore, this opens up multiple possibilities, even those that have a critical bias, for the interested IHRM researcher.

Our ultimate argument is that the mere criticism that echoes in internal (rich-rich) disputes between both functionalist IHRM scholars and their colleagues, as well as critical IHRM theorists and their own critics, in equally richer countries, tends to provoke a distortion and to veil opportunities. The distortion is created by two factors: (a) their claims for the universal validity of either their theories (be it functionalist or critical) or critiques; and (b) by the voluntary, mimetic, or dependent adoption and diffusion of these so-called universal theories or critiques, by non-reflexive scholars in developing countries. Functionalist claims and fervent critical critiques are thus echoed in developing countries as if they made the same sense as they may in the countries that originated them. This article proposes that while many of such claims and critiques seem to make sense in developing countries, particularly in Latin America, many other fail to address local problems, to understand poorer countries' conditions, or simply to underestimate the complexities and opportunities of understanding poor-poor relationships that we should also be focusing on, at least south of the Equator.

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Received 22 October 2009; received in revised form 09 November 2010

*

Corresponding author: Miguel Pinto Caldas

Rua Itapeva, 474, 11º andar, São Paulo, SP, 01332-000, Brazil.

Publication Dates

• Publication in this collection
  25 Oct 2011
• Date of issue
  Dec 2011

History

• Reviewed
  09 Nov 2010
• Received
  22 Oct 2009