Best HRM Practices or Context-Specific HRM Practices: Evidence from the Telecommunications Sector of Pakistan

Farwa Abbas1*, Muhammad Shahnawaz Adil1, and Asma Abdul Rehman2

1 Iqra University, Karachi, Pakistan

2 Institute of Business and Management, University of Engineering and Technology, Lahore, Pakistan

Original Article Open Access
DOI: https://doi.org/10.29145/jmr.111.01

Abstract

The current study attempted to explore the idea of convergence versus divergence of best Human Resource Management (HRM) practices in the context of Pakistan. In recent years, the businesses of multinational companies have grown immensely. This, in turn, has raised a debate of divergence vs. convergence of management practices in general and HRM practices, in particular, due to socio-cultural constructs that exist in a society. While, a major part of the international HRM literature has focused on the developed countries or the Western world. The current study, however, examined the convergence vs. divergence of the best HRM practices of a developing country, keeping in view the individual cultural values that people possess. The data was collected through a survey questionnaire technique from the telecommunications sector of Pakistan, which comprises Multinational Companies’ (MNCs) subsidiaries. The results showed that the best HRM practices should be carried out by incorporating the cultural values of the host country. However, there are certain practices that people prefer to follow in a standardized manner. Hence, the managers working in MNCs’ subsidiaries are suggested to incorporate and take into account the cultural variations while designing the HRM policies and practices. The current study also provided insights into the Pakistani culture for international research and the business community as well.

Keywords: best Human Resource Management practices, convergence, divergence, cultural dimensions, individual cultural values, standardization vs. localization
*Corresponding author: [email protected]

Published: 28-06-2024

1. INTRODUCTION

When an organization internationalizes itself, it faces the challenges and issues, e.g., response to institutional factors (Volkov & Cherre, 2023; Wang et al., 2022) that it doesn't have to bear when restrained to a single country (Armstrong, 2006). Some prominent challenges include understanding the human resource and their essential differences, such as institutional, cultural, and organizational, etc. (Raghuram et al., 2017). Thus, to achieve and sustain competitiveness, modern businesses are obligated to adopt efficient Human Resource Management (HRM) practices in geographically diversified operations (Ahlvik & Björkman, 2015; Evans et al., 2011). Matters pertaining to workforce management in multinational companies (MNCs) are termed as International Human Resource Management (IHRM). Armstrong (2006) states, “IHRM is the process of employing, developing, and rewarding people in international or global organizations.” (p. 99). However, global and international competitive forces compel MNCs to reassess their talent management practices (Raghuram et al., 2017).

For improved practices, the field of IHRM needs to be driven by theoretical advancements. Systematic and sustained efforts of researchers are required to enrich the body of IHRM knowledge to improve HRM (Gringer et al., 2002). Studying IHRM is not merely unfolding the relationships between the variables, rather it requires elaborating the contextual factors, such as laws, social norms, culture, and market development under which these variables are studied (Farndale et al., 2017).

Additionally, international business and its management are often seen through the lens of the culturist approach (Pudelko & Harzing, 2007). The Society for Human Resource Management (SHRM) in its HR Competency Model (2017) has included global cultural effectiveness as one of the important competencies in today's work environment. It says, ‘HR should value and respect diverse perceptions and backgrounds with an openness to varied cultures and perspectives. Although, culture was originally theorized at an aggregate and national level (Blodgett et al., 2008), however various layers of cultures exist. Therefore, the second key theme of the current study was to examine the individual cultural values.

Chevrier (2009) argues that with an increased globalization, countries' borders are getting blurred which makes the national culture relevancy less important. Besides, to benchmark as one company and save costs, mature MNCs strive to standardize their HR practices (Reilly & Williams, 2012). Several management practitioners and scholars argue that there are best HR practices that can assist organizations in achieving desired performance outcomes (Björkman et al., 2007; Geringer et al., 2002). In contrast, some argue that cultural and institutional factors diffuse into organizational practices in such a way that best HR practices cannot be shifted effortlessly to other parts of the world (Kaufman, 2016). There are examples when successful companies, that declare their HR practices as their competitive edge, had to face endangered prosperity while transferring the same HR practices abroad, for instance, Lincoln Electrics in the US and Marks & Spencer in the UK (Evans et al., 2002). Therefore, stress exists upon MNCs to respond to the local pressure or use the standardized best HRM practices in all the subsidiaries, irrespective of the location (Sablok et al., 2017), Pudelko (2023) states it one of the most crucial issues that MNCs deal with.

Hence, the current quantitative study attempted to analyze the extent to which convergence or divergence of HRM practices (recruitment and selection, training and development, and performance management system) occur due to individual cultural values.

Research Questions

To address the aforementioned issues, this study aimed to answer the following research questions:

RQ1: What individual cultural values people in Pakistan possess?

RQ2: What is the impact of power distance, uncertainty avoidance, masculinity, collectivism,
and Confucian dynamism on three HRM practices in the telecommunications sector of Pakistan.

Literature Review and Hypothesis Development

Pakistan: A Country with Dynamic Cultural Values

Yazdani and Siddiqi (2013) articulated that Pakistan is an ideological country and isbased on Islamic values. However, may be due to a lack of genuine following of Islamic ideology, the people of Pakistan correlate their identity and association with diversified sources.

Pakistani culture continues to evolve and this evolution is taking multiple directions. Some of the practices are influenced by modernization and Westernization, while some institutions revive Islamic practices (Qadeer, 2006). Globalization has been a constant source of influence and changes in the societal values of many countries and Pakistan is no different. Global mass media, modern education, and awareness have brought certain changes in the mindsets of the Pakistani people. For instance, the increasing trend of women employment, extinction of joint family systems into single-unit families, and modern ways of living. Additionally, Pakistani societal values and practices are evolving due to certain Islamic institutions that endeavor to practice Islamic values. In a nutshell, Pakistani culture is a rich culture according to many aspects and one should be aware of these diverse cultural orientations to effectively manage the professional activities.

IHRM research has focused on Western, Educated, Industrialized, Rich, and Democratic (WEIRD) countries (Shen et al., 2015), leaving the developing and underdeveloped countries behind. Even if the idea of emerging countries is taken into account, only ‘BRICS' (Brazil, Russia, India, China, and South Africa) countries have been reflected (Cooke et al., 2018; Farndale et al., 2017), leaving other emerging countries (such as Pakistan) unattended.

Universalism vs. Relativism of Best HRM Practices

In the 1950s and 1960s, there was a dominant belief in Europe and the US that management practices were somewhat a universal thing, and there existed rules and guidelines that were considered to be valid, irrespective of the specific environments (Hofstede, 1983). In this connection, universalists suggest that there is a general set of rules and principles that can be applied across cultures, on the contrary, relativists argue that there is no set of absolute values and principles that can be applied across cultures (Buck, 1991). This belief is termed as universalism vs. relativism or convergence vs. divergence hypothesis.

Pfeffer (1994) says that irrespective of the context, organizations and industries can achieve success in making profits if a particular set of HR practices is institutionalized. The effect is profound if carried out along with all the complementary consistent HR practices. Effective and consistent practices that are applicable universally regardless of contextual and institutional variations are termed as best practices (Pudelko & Harzing, 2007). The best HR practices are characterized by two ideas:

  • Having confirmed capacity to enhance the organizational effectiveness and efficiency.
  • These practices can be generalized.

Institutionalism Theory and HRM

The cross-cultural management is usually seen through the lens of institutionalism theory. This theory states that organizations are subject to social influence and understanding to adopt organizational practices (Björkman et al., 2007; DiMaggio & Powell, 1983). Hence, it is crucial for the success and survival that an organization should respond to such institutional coerce. The implication of institutional theory started in 1990s. Though, Paauwe and Boselie (2003) were the pioneers who systematically used the new institutional theory in the field of HRM research and developed a framework. Similarly, Björkman et al. (2007) proposed that organizations seek social fitness which means that they have to be consistent with the institutional/contextual environment. This process of identicalness is explained well with the phrase Isomorphism (Paauwe & Boselie, 2003).

Individual Cultural Values

To effectively predict the behaviors of the managers in a specific business setting, the key factor is to understand the cultural value system of that particular environment (Budhwar et al., 2008). However, the word culture is a complex expression to define. It was Swedish psychologist Geert Hofstede, who empirically defined culture along with its dimensions. Hofstede's work has numerous prominent features which gives it a distinct identity and substance that shifted the paradigm of cross-cultural research. However, Hofstede's work defines culture at national level and the variables that are included in his work cannot explain the cultural variations at the individual level (Minkov & Hofstede, 2011). Therefore, when the unit of analysis is individual, Hofstede's framework does not provide valid findings (Blodgett et al., 2008; Hofstede, 1994).

It is also essential to identify the cultural variations at the individual level from a business perspective. This conception becomes significant in situations where the population of a country is greatly heterogeneous and where intra-culture variations exist (Culpepper & Watts, 1999; Yoo et al., 2011). This approach helps to link various individual-level organizational objectives (for instance, job satisfaction and organizational citizenship behavior) directly with cultural orientation at the individual level (Culpepper & Watts, 1999).

In this connection, Dorfman and Howell (1988) were the earliest who extended this line of investigation by developing the scale to measure four original cultural dimensions as proposed by Hofstede but at the individual level (Culpepper & Watts, 1999). Afterwards, Robertson and Hoffman (2000) developed a scale to investigate the fifth dimension of the Hofstede framework at the individual level. Furthermore, the best HRM practices have been inferred from the definition of Armstrong (2006).

Taking the three theoretical orientations together, following conceptual framework has been developed to study the impact of the institutional environment on the adoption of best HRM practices.

Figure 1

Hypothesized Model


Convergence vs. Divergence of HRM Practices

HRM practices assist in achieving sustainable competitive success, specifically for organizations that work in excessively challenging and dynamic international environments, (Cascio & Bailey, 1995; Florowski & Schuler, 1994). Cross-cultural management is one of the ways to study international HRM (Dowling & Welch, 2006). Diversified cultural values and intra-national heterogeneity (Budhwar et al., 2016) are a few challenges that occur in cross-cultural business management. A moderately escalating global economic growth in major regions and enhanced returns on investments inspire the MNCs to invest more (United Nations [UN], 2017). This increasing growth of foreign direct investment has given rise to a debate on managing HR in recipient countries.

Researchers have identified a crucial issue in the field of IHRM, that is, convergence vs. divergence of HRM practices (Dowling & Welch, 2006; Khilji, 2002; 2003;). The IHRM practices are under pressure to respond to major socio-cultural (national culture, Government laws and regulations, etc.) and organizational (size, structure, corporate culture, etc.) factors (Geringer et al., 2002). Similarly, DiMaggio and Powell (1983), regarding the institutional theory, articulate that organizations are influenced by the social context in choosing practices, such as HRM. Guo (2024) discusses that MNCs need to conform the home and host countries institutional factors in deciding HRM practices. On the contrary, Chevrier (2009) argued that with the increasing globalization, countries' borders are getting blurred which makes the national culture relevancy less important.

The idea of universal (standardized) management practices even existed in the era of 1950s and 1960s, however, had to die out in the 1970s when it was recognized by MNCs that national culture is impossible to avoid (Hofstede, 1983). Similarly, Blodgett et al. (2008) stated that the economic globalization has resulted in immense heterogeneity of markets and consumers and that is largely due to the differences in national cultures across the countries. Fischer et al. (2005) stated that cross-cultural research uncovered the association of national culture with both organizational practices and individual behavior at work. Hofstede (1983) indicated that people have their own identities that are hardly reconciled with the idea of convergence. Similarly, Budhwar et al. (2016) suggested that diversified cultural values urge organizations not to converge the HRM practices.

For that reason, many research scholars have studied the relationship of national culture with HRM practices. Khilji (2003) studied the role of national culture in HRM practices in Pakistan. The study was conducted on eleven banks, local and multinational. It was identified that there is a resemblance between the HRM practices that local and multinational companies employ. The point to ponder over here is that MNCs did not converge the practices of their parent company, rather MNCs are intimidated by the host country's national culture to diverge their practices.

A study conducted by Beechler and Yang (1994) demonstrates that cultural and contextual attributes play a major role in transferring the HRM practices from the parent company or adapting as per the local cultural demands. To test the same concern in Bangladesh, Miah and Wali (2012) investigated the HRM practices of Chinese origin subsidiaries and local firms in Bangladesh. The data was collected through interviews and structured questionnaires and results revealed that local firms use the recruitment and selection process more systematically. Whereas, Chinese subsidiaries transfer the parent company's HRM practices and rely more on interviewing the candidates rather than making efforts in the initial stages of recruitment. The study further revealed that Chinese subsidiaries prefer referral-based hiring which is a particular Chinese cultural norm of Guanxi. These foreign-based firms opt to appoint Chinese employees for the top managerial positions.

According to the study, Chinese subsidiaries provide trainings regularly which is again the transference of parent company's HRM practices, whereas local firms offer trainings on needs base. Likewise, three of the Chinese firms conduct the appraisal once a year and do not share the feedback with the employees. While, two companies conduct the assessment twice a year and month, respectively and share the feedback with the employees. The appraisal is conducted on KPIs generally by Head of the Department (HOD) and HR head which is the endorsement of the Confucian value to regard the hierarchy and authority. Conversely, local companies assess the employees' performance at the year-end which has certain shortcomings, such as no immediate feedback on the lacking and KPIs achievement. It can be concluded from the study that globalization has let the Chinese MNCs converge on the parent company's HRM practices in the host country, however, a slight adaptation to the local culture is needed. Moreover, local firms should learn from Chinese HRM practices to be more competitive and effective.

Adams et al. (2017) examined the HRM practices of South African MNCs in Ghana through a qualitative approach. The results exposed that HRM practices are standardized in the Ghanaian subsidiaries with very minimal contextual adaptation, to maintain control over the subsidiaries. Mangi et al. (2012) explored the influence of power distance and collectivism on the exercise of merit-based HRM practices in the private sector organizations of Pakistan. In this qualitative study, interviews were conducted with HR managers of various levels to investigate the phenomenon of power distance. The study concluded the presence of bureaucratic and hierarchical structure in Pakistani organizations. Furthermore, it was also mentioned that the leadership is not very welcoming to hear a NO from their subordinates. Consequently, employees with a fear of future consequences abide by their bosses.

Similarly, Geary et al. (2017) investigated the phenomenon of convergence vs. divergence of best HRM practices within a Brazilian-based MNC and its subsidiaries located in the UK, Norway, Canada, and Switzerland. Brazilian MNCs use a US-based HR model developed by renowned consultancy companies (for instance, Accenture, Boston Consultancy Group (BCG), and McKinsey) who work closely with the Brazilian MNCs in many domains. However, Accenture and BCG are mainly involved in developing HR practices and policies. They claim that these HRM practices are US based and Brazilian companies exercise them globally irrespective of the host country's institutional context. This empirical investigation supports the idea of convergence of the HRM practices in the subsidiaries of the MNCs located in different countries and are termed as global HR practices.

Furthermore, Zhu and Warner (2019) investigated the phenomenon of convergence, divergence or contextualization of HRM in China. The country has a long and rich dynamic history from feudalism to modern industrialization. The influence of Western and Eastern philosophies and a transition to a market-driven economy makes China quite an interesting case to be investigated in detail. An extensive literature review suggested that in China, the idea of convergence, divergence or contextualization varies. It was mentioned that the contextualization of practices differs due to size, sector of the firm, and region within the national context. The private sector is influenced by Western practices and the impact of national culture, feudalism, and Confucianism is remarkable on HRM practices. Confucianism has penetrated deep into Chinese society and all the managerial and organizational practices are influenced by these values. For instance, managers sharing information and keeping morality intact for the sake of harmony and equality. On the contrary, feudalism is all about elite rule and the importance of holding higher positions.

Best HRM Practices in MNCs

Pfeffer (1994) termed the practices that lead to superior performance as best HRM practices. These practices have also been named as high-performance work systems or practices (Appelbaum & Batt, 1994), high-investment practices (Lawler, 1986), high commitment practices (Wood, 1996) and, lastly, higher productivity and product quality practices (Ichniowski et al., 1997). It has been identified statistically that employees' management practices and their level of job satisfaction and job attitudes are the predictors of organizational performance (Pfeffer, 2007). Best HRM practices can improve organizational performance for all organizations (Marchington & Wilkinson, 2002).

Sablok et al. (2017) studied the phenomenon of universal HR development best practices and contextual best fit and termed it as a tension between global integration and local adaptation.

The best management practices/high-performance work practices and good internal fit lead to positive outcomes for every organization (Delery & Doty, 1996; Huselid, 1995; Pfeffer, 1994). Based on these statements, Purcell (1999) articulated that there is one formula for successful HR activity and that could be used universally. However, he concluded that this ultimately leads people to ignore the changing work environment and society; it is worthy to find out high performance practices, yet the environments should not be neglected.

Similarly, Pudelko and Harzing (2007) stated that best practices are developed in a specific social and institutional setting and it is tough to transfer such practices to a different socio-cultural context. The process of transference is also affected by the openness and receptiveness of the host country.

In Pakistan, observance of HRM practices is not old (Iraqi et al., 2015). The majority of organizations have a bureaucratic style of management (Khilji, 2002), and HRM departments also are somewhat acting with no real exercise of HRM practices (Iraqi et al., 2015). In Pakistani organizations, the recommendation of people in power (sifarish) or favoritism/nepotism is preferred over merit while making decisions pertaining to recruitment or promotion (Ali, 2013). Reward decisions are made on a seniority basis whereas training activities take place without any proper planning which brings no benefit to the organization and becomes a financial expense instead. Performance management is merely a paperwork activity and brings no evident change in the performance of employees, nor it is tied to reward management (Khilji, 2002).

However, to encourage private investments and promote business activities in the country, it is need of the day to create such a business climate that is attractive to foreign investors. Hence, the organizations are slowly and gradually shifting from the old school of thought to the new school of thought pertaining to HRM practices. Besides the increasing trend of modern education, globalization, competition, and technological innovations, Pakistani organizations are forced to reform their HR departments. Consequently, organizations now hire relevant educated personnel and tend to mimic famous practices and have also proved to be successful in other organizations. One such example is that of PTCL, which, after being acquired by the Etisalat group in 2006 underwent a structural change. It shifted its focus from administrative to strategic at the organization-wide level and established three formal HR departments and adopted high-performance work practices (Nadeem & Aziz, 2018).

As far as culture is concerned, Pakistani culture is a blend of many cultures. Moreover, it is also apparent that external influence has brought about many changes in the societal cultural values as well as management practices. Based on the above literature review, the following hypothesis were developed.

: Individual cultural values are compatible with the best recruitment and selection practices.

: Individual cultural values are compatible with the best training and development practices.

: Individual cultural values are compatible with the best performance management practices.

Figure 2

Hypotheses Development


The current study employed a quantitative approach by collecting the data through a survey questionnaire. For sampling, a-priori statistical power analysis, in G*Power 3, was used to estimate the minimum sample size. A priori is a systematic way to estimate the minimum sample size by controlling statistical power (Faul et al., 2007).

To analyze the data, various descriptive and inferential statistical techniques were applied. Data screening (that is, identification of missing values and outliers) is the first step that is applied before heading towards the main analysis. The data screening is conducted by using SPSS 23. Similarly, descriptive statistics was carried out by using SPSS software version 23, which helps to comprehend and profiles the responses as well. It also helps to summarize and categorize the respondents according to the given demographics.

Furthermore, hypotheses testing was performed by using inferential analysis to predict the collected data and for this purpose, SEM technique was employed for the following reasons,

  • It considers all the relationships between variables simultaneously.
  • It provides robust results as compared to other statistical techniques.
  • It is in accordance with the latest trend, since many highly indexed journals require it and Hair et al. (2010) also supported the idea of its usage due to its high precision rate. Therefore, by using smart PLS 3, firstly outer model was measured followed by the inner model and lastly, hypothesis testing was carried out.

Table 1 further provides information about the research design adopted for the current study.

Table 1

Research Design

Research Approach

Quantitative Approach

Research Purpose

Descriptive

Type of Investigation

Correlational research design

Study Setting

Non-Contrived

Data Source

Primary data

Unit of analysis

Individual

Data Collection Instrument

Survey Questionnaire (Likert scale)

Time Horizon

Cross-Sectional

Sampling Technique

Non-probability convenient sampling technique

Target Population

Direct employees of 4 telecom companies (Having officer grade)

Sample Size

275 respondents

Statistical technique

Partial Least Square Technique

The Telecom sector of Pakistan is comprised of five companies, namely Zong, Telenor, Jazz, PTCL, and Ufone. These companies are either 100% owned by multinational companies or have joint ownership, while Ufone is a subsidiary of PTCL. The details of the organizations that constitute the telecom industry in Pakistan are given in Table 2.

Table 2

Description of the Telecommunications Companies

Name

Ownership/Parent Company

Size( in terms of employees)

Year of Inception

Products

Zong (China Mobile Pakistan)

100% owned by China Mobile CommunicationsCorporation

More than 2000 (Approx.)

2007

Mobile Services, Data Services

Telenor

100% owned by Telenor Group ( a Norwegian originated Company)

2,038 (Q4 2017)

2005

Mobil service, Data services, Mobile financial services

Jazz (Mobilink)

85% Global Telecom Holding (VEON Group) and 15% Dhabi Group

2300 (approx.)

1990

Mobil service, Data services, Mobile financial services

PTCL

62% owned by Govt. of Pakistan and 26% by Etisalat Group with full management control

18000 (approx.)

Privatized in 2006

Land line and wireless telephone and internet services

Ufone

100% owned by PTCL

2100 (approx.)

2001

Mobil service, Data services, Mobile financial services

Note. Source: Wikipedia, Zong.com.pk; Telenor.com.pk; Jazz.com; Ptcl.com.pk

Measurement Scale

Measures included in the current study are individual cultural values that are comprised of five sub measures, for instance, power distance (PD), uncertainty avoidance (UA), masculinity (MAS), collectivism (COL), and confucian dynamism (CD). These measures have been adapted from Culpepper and Watts (1999) and Dorfman and Howell (1988). On the other hand, best HRM practices further have three subscales. These subscales include recruitment and selection (R&S), training and development (T&D), and performance management system (PMS) adapted from Demo et al. (2012). The instrument also includes a few demographical questions (such as gender, qualification, and years of experience). The operational definitions of all variables are mentioned in Appendix A.

Data Analysis

Before starting the main analysis, the data screening was carried out by using SPSS 23 which included missing values and outliers' identification. Furthermore, hypothesis testing was conducted by using SEM technique in smart PLS 3. Table 3 briefly elaborates the demographics of the respondents who participated in the current study.

Table 3

Respondents' Profile (n=275)

Demographic

Indicator

Frequency

%

Gender

Male

246

89.45

Female

29

10.54

Age

Less than 30

72

26.18%

30-39

157

57.09%

40-49

41

14.90%

50-59

5

1.81%

Mode of Employment

Permanent

221

80.36%

Contractual

54

19.63%

Years of Experience

1 to 3 years

138

50.18%

3 to 4 years

43

15.63%

4 to 6 years

24

8.72%

6 or more years

70

25.45%

Name of Organization

Jazz

64

23.27%

PTCL

72

26.18%

Telenor

73

26.54%

Zong

66

24%

Descriptive Statistics

Table 4 shows the mean and standard deviation of all the variables. It helps to understand the attributes of a datasetby giving short summaries of the data spread. The mean value measures the central tendency of the data whereas, the standard deviation shows the variability of data from its mean. It can be seen from Table 4 that PD has the lowest mean value of 2.0897 with a variability of 0.788. Whereas, UA has a greater mean value among all the variables (that is, 4.3338) with a standard deviation of 0.60302. Mean responses on COL, CD, and UA show agreement as their mean values are more than 4. On the contrary, PD and MAS show a mean response towards disagreement.

Table 4

Overall Mean Values of Variables

S.no.

Variables

Mean

Std. Deviation

1

PD

2.0897

.78822

2

UA

4.3338

.60302

3

MAS

2.4145

1.06932

4

COL

4.0418

.77899

5

CD

4.2291

.70857

6

RS

4.0606

.80623

7

TD

3.9788

.76579

8

PMS

3.9716

.83705

Outer Model and Inner Model Analysis

Construct validity is identified by using PLS 3. Table 5 depicts the reliability and validity of the model which is termed as convergent validity. As per Hair et al. (2012), the composite reliability of a construct should not be less than 0.7, and all the constructs have internal reliability greater than 0.7. Similarly, the Average Variance Extracted (AVE) is suggested to be greater than 0.5 (Hair et al., 2012) and in the current study, all the values of AVE are greater than 0.5.

Table 5

Construct Reliability and Validity of the Model

Construct Name

Factor Loading

Composite Reliability (CR)

Average Variance Extracted (AVE)

Power Distance

0.793

0.563

PD1

0.823

PD5

0.661

   

PD6

0.758

   

Uncertainty Avoidance

 

0.881

0.599

UA1

0.668

   

UA2

0.755

   

UA3

0.818

   

UA4

0.833

   

UA5

0.784

   

Collectivism

 

0.812

0.683

COL2

0.837

   

COL3

0.816

   

Masculinity

 

0.92

0.697

MAS1

0.798

   

MAS2

0.827

   

MAS3

0.841

   

MAS4

0.86

   

MAS5

0.846

   

Confucian Dynamism

 

0.854

0.745

CD1

0.841

   

CD4

0.885

   

Recruitment & Selection

0.917

0.787

RS4

0.866

   

RS5

0.918

   

RS6

0.876

   

Training & Development

0.916

0.646

TD1

0.786

   

TD2

0.881

   

TD3

0.76

   

TD4

0.677

   

TD5

0.868

   

TD6

0.832

   

Performance Management System

0.904

0.653

PMS1

0.846

   

PMS2

0.813

   

PMS3

0.822

   

PMS4

0.791

   

PMS5

0.765

   

Hair et al. (2012) suggested considering the Fornell-Larcker Criterion and Heterotrait-Monotrait Ratio (HTMT) to detect the discriminant validity. Table 6 shows the Fornell-Larcker Criterion and it was recommended that every construct must have the highest value in its own column and row (Fornell & Larcker 1981 as cited in Hair et al., 2012). All the bold values in Table 6 show that the current model has attained this criterion of discriminant validity.

Table 6

Fornell-Larcker Criterion

Construct Name

CD

COL

MAS

PD

PMS

RS

TD

UA

CD

0.863

             

COL

0.366

0.827

           

MAS

-0.063

0.040

0.835

         

PD

-0.186

-0.108

0.405

0.750

       

PMS

0.290

0.313

-0.159

-0.202

0.808

     

RS

0.327

0.315

-0.137

-0.206

0.639

0.887

   

TD

0.366

0.343

-0.088

-0.173

0.712

0.753

0.804

 

UA

0.489

0.388

-0.027

-0.121

0.280

0.321

0.383

0.774

Similarly, Table 7 shows that HTMT is achieving the criteria as well, that is, no value should be greater than 0.85 (Henseler et al., 2015).

Table 7

Heterotrait-Monotrait Ratio (HTMT)

 

CD

COL

MAS

PD

PMS

RS

TD

UA

CD

               

COL

0.624

             

MAS

0.090

0.103

           

PD

0.267

0.179

0.543

         

PMS

0.372

0.451

0.175

0.271

       

RS

0.428

0.460

0.153

0.239

0.743

     

TD

0.458

0.491

0.101

0.203

0.808

0.843

   

UA

0.662

0.586

0.164

0.251

0.327

0.372

0.431

 

Note. All values are less than HTMT0.85 criterion

Once the measurement model is found satisfactory, the hypotheses are tested next by using a bootstrapping technique. Table 8 shows the values of inner model and the decision about the acceptance or rejection of the hypotheses that have been developed earlier, based on the literature reviewed. For the first exogenous construct PD, it was determined that there is a negative, however, insignificant impact on the endogenous variables R&S (β=-0.101, p-value>0.05), T&D (β=-0.074, p-value>0.05), and PMS (β=-0.092, p-value>0.05).

Table 8

Hypothesis Testing by using VB-SEM Analysis

Construct Name

Hypothesis

Relation

Path Coefficient Value

Effect Size/F-Square

t Stats

p Values

Decision

Power Distance

H1a

PD -> RS

-0.101

0.022

1.461

0.144

NS

H2a

PD -> TD

-0.074

0.028

1.232

0.218

NS

H3a

PD -> PMS

-0.092

0.014

1.405

0.160

NS

Collectivism

H1b

COL -> RS

0.190

0.010

2.904

0.004

S

H2b

COL -> TD

0.189

0.006

3.262

0.001

S

H3b

COL -> PMS

0.214

0.008

3.159

0.002

S

Masculinity

H1c

MAS -> RS

-0.089

0.008

1.325

0.185

NS

H2c

MAS -> TD

-0.048

0.002

0.787

0.431

NS

H3c

MAS -> PMS

-0.119

0.014

1.908

0.056

S

Confucian Dynamism

H1d

CD -> RS

0.157

0.021

2.370

0.018

S

H2d

CD -> TD

0.176

0.042

2.611

0.009

S

H3d

CD -> PMS

0.128

0.012

1.862

0.063^

S

Uncertainty Avoidance

H1e

UA -> RS

0.156

0.036

2.297

0.022

S

H2e

UA -> TD

0.214

0.044

3.057

0.002

S

H3e

UA -> PMS

0.120

0.037

1.709

0.088

S

Note. PD= Power distance; CD= Confucian dynamism; UA= Uncertainty avoidance; MAS= Masculinity; COL= Collectivism; RS= Recruitment and selection; TD= Training and development; PMS= Performance management system. S= Supported; NS= Not supported.

Whereas, the second cultural dimension, that is, COL has a positive and significant impact on the R&S (β=0.190, p-value<0.01), T&D (β=0.189, p-value<0.01), and PMS (β=0.214, p-value<0.01). However, the third independent variable, that is, MAS has an insignificant impact on all the dependent variables R&S (β=-0.089, p-value>0.05), T&D (β=-0.048, p-value>0.05), and PMS (β=-0.119, p-value<0.10). Therefore, this hypothesis is not supported. Whereas, CD has a positive and significant impact on R&S (β=0.157, p-value<0.05); on T&D (β=0.176, p-value<0.01), and has a positive and significant impact on the third dependent variable PMS (β=0.128, p-value<0.10). Lastly, UA has a positive and significant impact on R&S (β=0.156, p-value<0.05) and T&D (β=0.214, p-value<0.01) similarly has a positive and insignificant impact on PMS (β=0.120, p-value>0.10).

Table 9

Inner Model Results

 

R Square

Adj R Square

Q Square

RS

0.194

0.179

0.136

TD

0.228

0.214

0.126

PMS

0.175

0.160

0.096

Moving further, Table 9 depicts the values of R Square, adjusted R2 and Q2. For R&S, the explained variance is 19.4% which is acceptable and is also considered as a good estimate in the domain of management and social sciences. According to Hair et al. (2010), there is no prescribed value of R2 and it purely depends upon the context of the study. Similarly, for the other two endogenous variables, explained variance is 22.8% and 17.5%, respectively. Q2 values being greater than zero of all the constructs, ensure that exogenous variables have predictive relevance for under consideration endogenous variables (Chin, 1998 as cited in Hair et al., 2012).

Discussion

The findings based on the data collected from the telecommunications sector of Pakistan provided mixed results. The majority of individuals were not in favor of PD and disagreed with all the actions that highlight it. Consequently, it was determined that PD has no significant compatibility with all three dependent variables in the Pakistani context. These results are consistent with the studies conducted earlier stating that organizations' practices could be standardized and accept no impact from the socio-cultural context of the host country. It has been discussed previously that Pakistan has undergone various cultural changes due to many factors including modern education. Moreover, as far as the current era is concerned, people are more educated and believe in fairness and equivalence of the organizational HRM practices. Whether it is about the selection of candidates for job, application of training on the job or performance management system, best proven HRM practices could be converged in the context of Pakistan and they do not need to be contextualized as far as power distance is concerned.

Referring to the next hypothesis, that is, the compatibility between collectivism and best HRM practices in the Pakistani context, these hypotheses have been supported.  It means that R&S, T&D, and performance management practices should be diverged, as Pakistani individuals have moderate collectivist orientation and think about the in-group harmony and acceptance by the group members. Therefore, it could be inferred that organizations should consider this cultural orientation in Pakistan instead of adopting the best HRM practices.

As far as masculinity is concerned, it is evident that individuals do not believe in the superiority of men which is quite contradicting to the results of the previous studies which rate Pakistani society as a masculine-oriented country. Therefore, best HRM practices can be adopted without any likely impact of this particular dimension. As mentioned earlier, cultural values have changed greatly due to the invasion of Western culture, modern education, and economic situations. Moreover, women are considered equally competent and capable to be a part of the workforce by fulfilling their responsibilities, whether organizational or familial.

The UA positively and significantly affects all the three dependent variables. Consistent with earlier cultural studies, individuals were found to be pro to standardization and must avoid uncertainty and ambiguity. Therefore, organizations may converge the best HRM practices, since these practices are pre-planned and distinctly explains every step and procedure. This, in turn, lets every employee of the organization know about the processes and procedures which minimizes the confusion and chaos among the employees.

Finally, CD explores ethical values that people carry with them in the course of businesses and it is visible that all the individuals in Pakistan prioritize traditions, conscience, and consistency. Analysis shows that this dimension has a positive and significant impact on R&S, T&D, and performance management practices. Therefore, these practices should be implemented by keeping the ethical values into account before implementing them in Pakistani society.

Conclusion

Reliable management practices are emphasized at all organizational levels and the subject becomes more critical when organizations expand their operations in culturally and geographically diversified environments. Organizations need to strike a balance between convergence and divergence of best HRM practices. In this connection, the current study made it empirically evident that convergence and divergence of best HRM practices cannot be segregated. MNCs may carry proven best practices from the home country to the host country; however, they cannot avoid the host country's influence on personnel management. Therefore, organizations and managers should be aware of the fact that employees may not accept the traditional approaches of management. Hence, organizations must put a rigorous effort into identifying what employees prefer and what their cultural orientation is before transferring the universal best practices.  

Limitations

The current study inherited some of the limitations which, in turn, may be considered as an opportunity for future research. The collection of data from large sample size across the countries was a major limitation of this study. Hence, no data was taken from the headquarters of the subsidiaries and it solely relied on the host country residents. Secondly, this study was conducted in one country, therefore, the generalization of findings may not be appropriate for other countries. Although, few directions may offer help to the researchers who are willing to study the same issue.

  • The current study included the cultural dimension only due to time constraints, however, future researchers may include other institutional factors, such as political and organizational factors, to study the phenomenon of convergence vs. divergence of best HRM practices.
  • Future researchers may include more than one country in their research work.
  • Future researchers may also include the Headquarters of MNCs along with the subsidiaries in the host country and the third country.
  • Subsidiaries of MNCs and locally originated companies may be included to compare and contrast the findings.

Conflict of Interest

The author of the manuscript has no financial or non-financial conflict of interest in the subject matter or materials discussed in this manuscript.

Data Availability Statement

The data associated with this study will be provided by the corresponding author upon request.

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  68. Appendix A

    Measurement Scale

    Operational Definition

    Recruitment and Selection

    To search and induce eligible applicants to apply for the vacant posts in the organization and select the most competent candidate after screening through appropriate selection testing methods.

    Training and Development

    The process of teaching new or existing employees the basic skills, attitudes and behaviors they need to perform their current and future jobs.

    Performance Management System

    The ongoing process of identifying, assessing, and developing the performance of employees and aligning it with the organization's goals.

    Power Distance

    How much status in organizations is valuable for any individual and how do they react to the people who are in superior positions or hold power.

    Uncertainty Avoidance

    How much any person tries to keep things standardized and rejects the ambiguity and deviations in the working environment. Change is not welcomed, and differences are not much tolerated. This attitude restricts the individuals from accepting changes in norms, rules and instructions given to them in the organization.

    Collectivism

    To what extent individual believe in group welfare and gain rather than for own self. This dimension dictates the individual behavior to give the group interest precedence over the individual interest. Respect is given to the relations and harmony is appreciated.

    Masculinity

    To what extent any individual is compassionate, aggressive, less empathetic, considers different roles for women and men.

    Confucian Dynamism

    It expresses the time orientation and Confucian work values.This value is associated with persistence, respect for rank, thrift, and having a sense of shame.