Macro‐institutional conditions in Ghana and the challenges to HRM program development and implementation

• Published date: 01 March 2019
• Author: Kantha Dayaram,John Burgess,Desmond Tutu Ayentimi
• Date: 01 March 2019
• DOI: http://doi.org/10.1002/tie.21983

AREA PERSPECTIVES: AFRICA

Macro-institutional conditions in Ghana and the challenges

to HRM program development and implementation

Desmond Tutu Ayentimi

1

| John Burgess

2

| Kantha Dayaram

3

1

Tasmanian School of Business and

Economics, University of Tasmania, Sandy Bay,

TAS, Australia

2

School of Management, RMIT University,

elbourne, Vic, Australia

3

School of Management, Faculty of Business

and Law, Curtin University, Bentley, WA,

Australia

Correspondence

John Burgess, School of Management, RMIT

University, Level 9, Building 80, 445 Swanston

St, Melbourne, Vic 3000, Australia.

Email: john.burgess@rmit.edu.au

Multinational enterprises (MNEs) originating from advanced economies with operations in less

developed host countries need to have a good understanding of the macro-institutional condi-

tions of the host country. Given HRM practices are context-specific and embedded within the

institutional and cultural settings of the host country, an exploratory qualitative study approach

was employed to ascertain the host country’s institutional dimensions (drivers) likely to under-

mine HRM program implementation in large local companies and in MNEs. Data were drawn

from key stakeholder participants, including HR managers from MNE subsidiaries, domestic

firms, and officials from key stakeholder institutions. The evidence points to six (6) dimensions

of a less-developed host country’s macro institutions that undermine firms' HRM advancement.

These include the regulatory system, education and training arrangement, labor market condi-

tions, cultural barriers, political actors' intrusion, and economic uncertainty. The implications

thereof are discussed.

KEYWORDS

Ghana, human resource management, multinational enterprises

1|INTRODUCTION

The emergence of multinational enterprises (MNEs) from less-

developed and emerging economies and their increasing participation

in the global economy (Liou, Chao, & Ellstrand, 2017) necessitate a

shift in research focus toward nontraditional contexts in home and

host country (Kolk & Rivera-Santos, 2018). Nontraditional settings,

especially less-developed economies in Sub-Saharan Africa, provide

opportunities for management research to reevaluate both HRM the-

ories and policy design. The contribution of context-specific condi-

tions to management and international business (IB) research has

become an important subject of debate within the international man-

agement and international HRM domains (Kolk & Rivera-Santos,

2018). The relevance of nontraditional contexts may implicitly or

explicitly complement the understanding of current management the-

ories and also stimulate the emergence of new theories. Tsui (2007),

one of the advocates for the assimilation of context-specific condi-

tions into management and IB literature, suggests that empirical

insights and management theories needs to acknowledge specific idio-

syncrasies across contexts to remain relevant.

MNEs’HRM research in the “African context”has been underrep-

resented and less noticeable in the advancement of management the-

ories within the IB and international HRM domain (Oguji & Owusu,

2017). As Kolk and Rivera-Santos (2018, p.3) put it, “our limited

understanding of the extent to which African contexts can contribute

to the broader literature also has important implications for the extent

to which the broader literature can help understand the specificities

of business in Africa”. Cantwell et al. (2010) argued that the way in

which MNEs adjust their behavior, structures, and strategies to coun-

ter complexity and uncertainty in the development of their own activi-

ties and in their environment is crucial in understanding the

coevolution of MNEs and institutional transformation. By extension,

IB theories need to account for the dynamic configuration of the

activities of MNEs and the interplay between such activities and the

evolution of institutions external and internal to the firm (Cantwell

et al., 2010). Several studies suggest that cultural and institutional het-

erogeneity is most often associated with MNE operations emanating

from the home and host countries (Chao, Kim, Zhao, & Hsu, 2012;

Kostova, Roth, & Dacin, 2008). The rise in cultural and institutional

heterogeneity between MNEs' home and host countries trigger infor-

mation asymmetry, which affects MNE HRM policies and practices

DOI: 10.1002/tie.21983

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