Human resource management in multinational and domestic enterprises: A comparative institutional analysis in Southeast Asia

• Author: Abdul Fattaah Mohamed,Geoffrey Wood,Tamer K. Darwish,Jocelyne Fleming,Satwinder Singh
• Published date: 01 March 2019
• Date: 01 March 2019
• DOI: http://doi.org/10.1002/tie.21997

AREA PERSPECTIVES: ASIA AND SOUTH-EAST ASIA

Human resource management in multinational

and domestic enterprises: A comparative institutional

analysis in Southeast Asia

Satwinder Singh

1

| Geoffrey Wood

2

| Tamer K. Darwish

3

| Jocelyne Fleming

4

|

Abdul Fattaah Mohamed

5

1

Dubai Business School, University of Dubai,

Dubai, United Arab Emirates

2

University of Essex, Colchester, UK

3

School of Business and Management,

University of Gloucestershire,

Gloucestershire, UK

4

The Business School, The Park, University of

Gloucestershire, Gloucestershire, UK

5

Baiduri Bank, Bandar Seri Begawan, Brunei

Correspondence

Dr. Satwinder Singh, Professor of International

Business, Dubai Business School, University of

Dubai, Academic City, Emirates Rd., Dubai,

United Arab Emirates.

Email: ssingh@ud.ac.ae

This article looks at the relative impact of context on the role of senior managers. It compares

HR directors of domestic enterprises (DEs) with those of multinational enterprises (MNEs),

within an emerging market setting, based on a survey of HR directors in Brunei. We found that,

with the exception of some aspects of selection and recruitment, HR directors of MNEs

accorded a higher priority to strategic tasks but were more reluctant to delegate. This study

confirms the importance of MNEs in pioneering more modern and integrated approaches to

people management but also demonstrates the limitations to the extent where they might act

as evangelists of new practices that are adopted by their local peers. In contrast, local firms were

more likely to concentrate their attention on administrative, rather than strategic, issues. We

draw out the implications of our findings for theory and practice.

KEYWORDS

emerging markets, HR directors, institutional theory, international HRM

1|INTRODUCTION

Does context—and how deeply a firm is embedded in it—override for-

mal organizational structures and roles to determine the extent to

which a firm manages its people strategically? A broad body of litera-

ture suggests that multinational enterprises (MNEs) are particularly

likely to serve as “norm entrepreneurs,”pioneering and promoting

new practices that challenge existing ways of doing things (see Bjork-

man & Lervik, 2007; Dore, 2008). This may encompass more strategic

and innovative approaches to human resource management (HRM)

(Brewster, Wood, & Brookes, 2008). It has also been argued that the

presence of an HR director is some indication of how seriously firms

take HRM and of the willingness of firms to accord HR professionals a

voice in strategic decision-making (Sheehan, 2005). Through their

presence at board level, HR directors have a greater chance of ensur-

ing that people management strategies are better aligned with the

other aspects of firm strategy (Ulrich & Dulebohn, 2015). This is

achieved through championing the importance of the HR function,

through negotiating with colleagues' adjustments to the strategic

direction within other functional areas, and through using their insider

knowledge of the board to ensure that the people management prac-

tices adopted are those that best fit the overall strategic direction of

the organization (Holden, 2001). A better alignment can ensure the

optimal usage of human capital and the development of combined

organizational cognitive capabilities (Aoki, 2010). Yet, in some firms,

HR directors have been much more successful in securing such a role

than others.

Hence, this article investigates whether representation of the HR

function at board level generally makes for a more strategic and inno-

vative approach to HR or whether such an approach is more likely to

be associated with MNEs. The latter are less closely bound to local

rules and conventions, and hence, there may be more space to inno-

vate, especially in countries of domicile where institutions are evolv-

ing (Wood, Dibben, & Ogden, 2014). In seeking to answer this

question, we evaluate the relatively strategic role accorded to HR

directors in MNEs versus that of their local counterparts; variations

according to firm characteristics; and their willingness to delegate

strategic functions, drawing out the implications for theory and prac-

tice. This study is based on evidence from Brunei, a microstate with a

strong presence of international firms. In 2013 alone, foreign direct

DOI: 10.1002/tie.21997

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