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Why do Human Resource Management practices differ across countries?
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For decades, scholars have tried to explain the reasons behind the huge dispersion in productivity between businesses and countries. Only recently, the importance on Management and especially Human Resource practices followed by businesses, became apparent. This paper attempts to explain the reasons why management practices differ between countries by the prism of Human Resource Management (HRM) and the Model of Cultural Fit.A range of different parameters like the legal and political environment, trade unions, the level of prosperity and the degree of openness along with the cultural context, appear to have an important impact on HRM practices.For instance, organizations that operate in a politically stable country that invests in education and interact with the global economy, tend to adopt more innovative HRM practices. The extent to which HRM affects business development is the second research question of this book.We found that Management has a strong positive and significant effect on business performance. Overall, innovative and flexible HRM practices like the imposition of explicit targets, financial and non-financial incentives appear to be central to business development.
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