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DOI 10.1007/s10490-008-9103-6
PERSPECTIVES
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2005; UNCTAD, 2007). It is also predicted that most new members of the newly
affluent nations would come from Asia in the twenty-first century (see Tan, 2002).
Despite all this, most Asian emerging economies have a long way to go before they
acquire the status of developed nations (for example, in professionalism, formalism, and
rationalization of management systems). Nevertheless, it is important to examine the role
of HRM function in the region as it plays a significant role in the economic development
of nations (see Debrah, McGovern, & Budhwar, 2000; Tayeb, 1995). The existing
literature (see for example, Budhwar, 2004) highlights a scarcity of HRM research in
the Asian context (with an exception of the Chinese and Japanese contexts).
Considering the growing economic importance of the region, it has now become an
imperative to regularly conduct systematic research investigations which can highlight
the relevant HRM system(s) for the region. This will not only help decision makers to
develop appropriate policies but will also help in developing valid HRM theories.
Lately, Jackson and Schuler (1995) and Schuler, Budhwar, and Florkowski (2002)
have called for the examining of HRM systems in a given context. It will not only
help to highlight the context specific nature of HRM but also to reveal the influence
of various factors and variables on HRM. This will contribute to the development of
relevant policies and practices and theories of HRM (Budhwar & Debrah, 2004).
Research in contextual isolation is not only misleading, but it strongly hinders the
understanding of core aspects of the phenomenon in any significant way (Schuler
et al., 2002: 41). In a significant contribution to this debate, Meyer (2006) asserts
that in view of the challenges facing Asian businesses, Asian researchers should
focus on context-specific issues. In his view, such research should be capable of
making major contributions, for instance by explaining context-specific variables
and effects, and by drawing on traditional Asian thought in developing new theories.
In this article, we review the existing literature on HRM in Asia, highlight possible
avenues for future research, and also how research investigations on HRM in Asia
can be conducted in a meaningful manner. Table 1 highlights the main themes
along which research in the Asian context related to the field of HRM has been
conducted. It also helps us to identify the key gaps in the existing literature and
enables us to draw themes for future research. For example, what are the dominant
emerging HRM models of major Asian economies? What are the main factors
which dictate HRM in Asia? How best we can examine the influence of such
factors on Asian HRM? Is HRM converging or diverging within Asian countries?
199
Authors
Themes/studies
It is argued that Asian research agendas tend to be What is required is research that is able to make
dominated by theories developed for Anglomajor contributions, for instance by explaining
American contexts that are not sufficiently adapted
context-specific variables and effects, and by
to local circumstances
drawing on traditional Asian thought in
developing new theories
Provide a good understanding of HRM models in There is the need to examine the applicability of
specific countries but models cannot be extended/ such models to the region as a whole (all countries
in the region albeit with significant modifications)
applied to other countries in the region
Challenges identified
Table 1 Thematic areas of contemporary HRM studies in Asia and areas of future research.
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P. Budhwar, Y. Debrah
Authors
Challenges identified
Pervasive
influence of
Chinese
cultural
heritage
Convergencedivergence thesis in the Asian context
Rowley (1998), Rowley and Benson (2002),
Warner (1998, 2002), Amante (1998)
Themes/studies
Table 1 (continued)
Authors
Bold typeface indicates that the article was published in Asia Pacific Journal of Management.
Challenges identified
Quality of research
Tung (2005), Meyer (2006), White (2002),
Research limited to simplistic comparisons,
Lau (2002), Kao et al. (1999), Kidd et al. (2001) correlational analysis providing no insight into
underlying processes and skewed, idiosyncratic
sampling
Diversity management
Holland (2003), Debrah (2002)
Themes/studies
Table 1 (continued)
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P. Budhwar, Y. Debrah
203
Third, a significant number of scholars (see for example, Amante, 1998; Andrews
& Chompusri, 2005; Rowley, 1998; Rowley & Benson, 2002; Warner, 1998, 2002)
have examined the convergence-divergence thesis in the Asian context. Though,
over the last decade or so, research evidence has helped to supplant the convergence
view, recent investigations in the Asian region (see Warner, 2000, 2002) emphasize
the notion of soft convergence as an outcome of globalization. From the
multinational corporations (MNCs) perspective, the implementation of global
standardized HRM practices and policies (with local adjustments) is also an
indication of soft convergence. However, considering the heterogeneity (such as
population, geography, economies, economic development phase, labor markets,
socio-cultural, legal and political set-up, and HRM systems) of the region and
context specific nature of HRM, it will not be sensible to talk about significant or
hard convergence. More research is needed to confirm such a thesis.
Future research direction 4: Examine the convergence-divergence or crossvergence thesis for HRM systems in the Asian
context.
Fourth, the unique characteristics of different business groups (such as chaebols,
keiretsus) operating in different countries in the region which have contributed a
great deal in their economic success have attracted a lot of research interest (see
Isobe et al., 2006; Rowley & Warner, 2005). These business groups have deep roots
in the core institutions (such as family structure, Confucianism), and socio-cultural
background of their respective societies and accordingly have their own HRM
systems (see Begin, 1997; Rowley, 1998; Yang, 2006). The economic crisis of late
1990s and the present competitive environment have raised questions regarding the
validity of such ideal-typical family business management models in the present
context (see Tsui-Auch & Lee, 2003; Tu, Kim, & Sullivan, 2002; Wang, Huang, &
Bansal, 2005). Before the economic crisis, such groups, although professionalized
their management systems, retained family control and corporate rule. However, the
pressure created by the economic crisis is forcing the groups to relinquish some
family control and corporate rule by absorbing more professional managers into their
top management (Peng & Delios, 2006). A similar pattern is emerging in the Indian
private business houses where top positions are being offered to best available
professionals and a more formal and rationalized approach to HRM is being adopted
(see Budhwar, 2003). However, this phenomenon is still evolving across many Asian
countries and there is a scarcity of reliable literature in this regard (White, 2002). To
confirm it more research is needed and should be the focus of future research.
Future research direction 5: Highlight the main factors contributing to the
changing nature and management systems of
dominant business groups (for example, chaebols,
keiretsus) in the Asian region.
Fifth, some scholars highlight the effects of globalization on the employment
relations system of Asian countries (Frenkel & Peetz, 1998; Verma, Kochan, &
Lansbury, 1995). Most countries of the region (like many others around the globe)
experienced decline in the union membership (Kuruvilla, Das, Kwon, & Kwon,
2002). Changes in industrial relations in the Asian context due to globalization is
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P. Budhwar, Y. Debrah
also contributing to adjustment from previously salient constraint (labor peace and
industrial stability) to the new imperative of enhancing firm-level competitiveness
through both numerical and functional flexibility (Kuruvilla & Erickson, 2002). It is
clear that globalization and the Asian economic crisis of late 1990s have certainly
affected the employment relations of Asian countries in one way or the other, such as
employment security (see Debrah, 2002; Hadiz, 2002). What are the new pattern(s)
or perhaps more valid scenario of employment relations is then worth examining?
Future research direction 6a: Highlight the emerging patterns of employment
relations in Asian countries.
From the above discussion it becomes evident that the existing HRM research in
the Asian context is both limited and possibly not conducted in a systematic manner
with a clear framework which can highlight the main determinants of HRM, and also
highlight the context specific nature of the personnel function, and enable scholars to
draw a comprehensive picture of the scene. This is consistent with Meyers (2006)
view that in Asia research agendas tend to be dominated by theories developed for
Anglo-American contexts that are insufficiently adapted to local circumstances.
Research investigations along the lines of Asian context-specific issues can
significantly help to cover such gaps. An analysis of the existing literature, also
highlight a number of challenges faced by the HR function in the region. The next
section presents some of the main challenges and further research areas as a possible
way forward to overcome the challenges.
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207
Across the Southeast Asia region, governments are trying to develop biotechnology
industry. Many of the ambitious projects are in India, Singapore, South Korea, Taiwan
and China. Many cities in these countries already have thriving high-tech industries
and want to ride the next big wave by creating life-sciences centers/hubs. Singapore,
for instance, is pouring money into Biopolis, a science park for biomedical and other
knowledge-based industries. In India, Hyderabad is witnessing a gathering of the
elements needed to create a life science hotspot to match its IT industry (Merchant,
2003). Southeast Asian countries, particularly China, Korea and Taiwan are building
biotech clusters to attract back to their native (East Asian) countries expatriate
scientist trained overseas (mainly the United States).
As these biotech clusters take hold in Asia, the need for knowledge workers will
increase. The companies that are able to attract expatriate scientists must be capable
of harnessing the knowledge of the scientists. In this respect, HR managers need to
contribute effectively to knowledge management by exhibiting expertise in the area.
In a changing psychological contract environment, HR managers need to be able to
promote values and norms, which emphasize the importance of sharing knowledge,
commitment and trust. In relation to that, HR managers must be capable of
developing compensation and career development structures that can not only
motivate but also retain knowledge workers. In addition, HR managers must be able
to develop performance management processes and organizational and individual
learning programs for knowledge workers in organizations (Armstrong, 2001).
Future research direction 8b: Highlight the factors which can contribute to the
efficient management of knowledge workers.
Another essential challenge in HRM in the Asia-Pacific region is the effects of the
transition from collectivism to individualism in HRM practices in countries such as
Japan, India, China and Vietnam. Here, along with the managerial responses to
employees perceived violation of the psychological contract is the need for
managers to develop a new culture where promotion, pay and other organizational
benefits will be based on individual contributions rather than group characteristics.
In this regard, it appears that globalization and competitive pressures are pushing
organizations in East Asia to move towards the western system of determination of
employee benefits. How to achieve an effective and successful change to individual
based HRM practices within the broad East Asian culture of groupism is then a
critical challenge for all managers in Asia.
Future research direction 9: How to achieve a balance between the traditional
management customs which are strongly dictated by
socio-cultural aspects of a given society and changing
individualistic emphasis of HRM functions?
Yet, another challenge for HRM managers in the region is the issue of diversity
management. In recent years, diversity management has been a burning issue in the
management of HRs in the Asian region. The issues relating to gender, age, ethnicity
among others, have assumed increasing importance. However, against a background
of labor shortage problems in many Asian countries, the governments are
encouraging more women to enter the labor market (see Special Issue of Asia
Pacific Business Review, 2005). In view of the declining birth rate in many East
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Asian countries, it is anticipated that the female labor force participation rate will
continue to grow. If this trend continues as predicted then HR managers face the
challenge of developing a safe and secure working environment for women. It must
be realized that in order for organizations to be able to recruit, motivate and retain
female employees, HR managers need to confront the issues relating to the
discrimination of women in the labor market.
Future research direction 10: Conduct research regarding the dynamics of diversity
management in the Asian context, especially to
highlight the different mechanisms adopted by firms
to manage diversity and also to indicate the
challenges and barriers faced by firms and decision
makers in this regard.
Perhaps the most daunting scenario regarding diversity management in Asian
countries is the looming demographic time bomb. As Holland (2003) asserts, on
average Asians are getting older. This is a slow, silent and unstoppable revolution
which is reshaping Asian societies. It is claimed that in the mid-1950s, old people
(65 years and above) were a rarity in most East Asian societies. However, with better
health care, higher standard of living, better education, and increase in life
expectancy in recent years, there has been a considerable increase in the number
of old people. At the same time, most East Asian countries are experiencing
decreasing birth rates, ageing workforce and hence labor shortages. It is estimated
that by 2050 nearly a quarter of East Asias population will be aged 65 or over
(Holland, 2003).
Japan is particularly affected by the problems of ageing population. Currently, one
in six Japanese is older than the mandatory retirement age of 65. But with a fertility
rate of just 1.3 children per womanway below the birth rate of 2.1 needed to
maintain a stable populationand a life expectancy of more than 80 years and
rising, it is estimated that by 2050 more than 36 percent of the Japanese population
will be above retirement age (Holland, 2003).
While some countries such as Singapore and Japan have made efforts in the
legislative arena to tackle the problem others have paid little attention to it. However,
an ageing population poses serious challenges to HRM in the Asian region (Debrah,
1996, 2002; Snape & Redman, 2003). How each country responds to the issues
relating to an ageing workforce depends on the severity of the problem but it is
likely that some countries would have to import labor or rely on immigration in
order to sustain economic growth. For instance, it is anticipated that Japan will need
6 million immigrants in the next 25 years but immigration is bitterly opposed by
those who equate it with crime (Pilling, 2003). Even if East Asian countries manage
to delay or resist limited or large scale immigration from both within and outside the
region, the countries would most likely need migrant workers.
Currently, there are legal migrant workers from labor-surplus countries such as
Indonesia and Philippines to labor-recipient areas, such as Hong Kong and
Singapore. There are also low-paid legal migrant workers from countries such as
India and Bangladesh in Singapore and Malaysia. In the construction industry in
Singapore, for instance, it is possible to find migrant workers from different
countries working together in a team. The management of such multicultural work
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211
Along the same lines, Meyer (2006) argues that there is the need for Asian
scholars to undertake comparative research but such research should not simply
document differences or correlations among variables. Rather, it has to explore causal
relationships and processes to explain how and why contextual variables
influence management practice. Meyer adds that the predominance of AngloAmerican trained researchers in Asia has the effect to producing a homogenous
perspective which affects the selection and methodology of issues investigated. In his
view, Asian management research is strongly influenced by traditions developed in
North America that may not always be useful in advancing management knowledge in
an Asian context. Perhaps, increased support from local organizations for research
would help focus researchers attention to the investigation of local issues.
In response to this suggestion, Lau (2002) recommends the adoption of Asian
developed constructs to study local and global issues and calls for development and
validation of new constructs so as to get into the depth of Asian-based issues.
Similar suggestions have been made by many others. For example, focusing on
cultural values, scholars (see for example, Kao et al., 1999) highlight the need to
indigenize management practices in Asian organizations. Due to the strong influence
of the socio-cultural context, the applicability of Western management and
organization theories in the Asian context is now questionable. To a great extent
this is a core issue for Western firms operating in the Asian context (see Kidd et al.,
2001) and sends a clear message to researchers in the field. Meyer (2006) suggests
that Asian researchers need to focus their research on local phenomena and issues of
importance to local managers. In a sense, theories should be adapted to explain
locally interesting phenomena; or new theories should be developed to overcome the
low explanatory power of adapted theories.
Future research direction 16: To continuously develop, test and re-test constructs
suitable for conducting research in the Asian
context.
Another challenge facing researchers in the Asian context is how to conceptualize
and enhance our understanding of the heterogeneous nature of HRM systems of
Asian nations; it is not sensible to propose a single set of solutions for whole of the
region. Due to its unique socio, economic, political and legal set-up, each nation
presents its own unique sets of challenges for the HRM function (see Debrah &
Budhwar, 2004). Therefore, it is important to emphasize the significance of each
context regarding the development of appropriate HRM processes. The crucial
question is how do we conduct research which can satisfy such challenges? A
possible way forward is to conduct a systematic analysis starting from a basic level
and leading to an advanced level. The next section presents a framework for
conducting cross-national comparative HRM research, which helps to highlight the
main factors determining HRM policies and practices in a given national context.
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Perhaps, very large projects, spanning over a long period of time can effectively
examine the influence of all the three sets of factors and variables on HRM systems
of a particular nation at a given period of time. However, considering the infancy
stage of HRM in many Asian countries and the argument that HRM in a crossnational context can be best analyzed by examining the influence of national factors
(Brewster et al., 1996; Budhwar & Sparrow, 1998), we propose to initially examine
the impact of the main national factors on HRM in different Asian countries. This
will help to draw useful cross-national comparisons regarding the scenario of HRM
in different Asian countries. The national factors such as culture and institutions
form the macro environment of organizations in a national context. This approach
has been recently successfully adopted by Budhwar and Debrah (2004), Budhwar
(2004), Budhwar and Mellahi (2006) and Kamoche, Debrah, Horwitz, and Muuka
(2003) to examine the HRM systems and to highlight the context-specific nature of
HRM in a large number of countries in Asia-Pacific, the Middle East and Africa.
213
Nevertheless, to fully examine the above raised propositions, it is important to also test
the influence of both contingent variables and organizational strategies in different
national context. For a detailed explanation regarding the rationale for the selection of
various factors and variables included in the framework and practical applicability of
the framework see Budhwar and Sparrow (2002) and Budhwar and Khatri (2001).
The core aspects of each of the four national factors which are known to influence
HRM systems in different cross-national context are summarized in Table 2.
Investigation based on such a framework then helps to highlight the contextspecific nature of HRM. For example, the economic environment significantly
influences HRM in most Asian countries, but its impact varies from country to
country. For instance, in Japan the recessionary conditions of the past decade is
undermining traditional employment practices and precipitating changes in the
system. India has witnessed a boom in foreign direct investment since it liberalized
its economy. However, the arrival of foreign firms in the Indian labor market is
forcing local firms, in pursuit of efficiency, to rationalize their human resource
management practices.
In the same way, the political and legal set-up of the respective countries
influences HRM policies and practices in their own unique way. For example, China
allows the existence of only one national union which functions strictly according to
Table 2 Details of aspects of national factors determining cross-national HRM.
National culture
Institutions
Industrial sector
Dynamic business
environment
Socialization process
National labor
laws
Competition
Trade unions
Common strategies,
business logic
and goals
Regulations and
standards
Sector specific
knowledge
Informal and formal
benchmarking crosssector co-operation
Common developments
in business operations
Labor or skill
requirements
Merger activity
Politics
Educational &
vocational
training set up
Labor market;
professional bodies
International
institutions
Industry by itself
Capital mobility
Business alliances
Changing composition
of workforce
Restructuring
Focus on total
customer satisfaction
Facility of information
Technological change;
globalization of
business
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P. Budhwar, Y. Debrah
the wishes of the communist party. But, in India there are many local, regional and
national unions which generally function in an adversarial way. Similarly, research
has revealed the unique influence of socio-culture context (for example, Islamic
work principles in many Malaysian firms; Confucian principles in China and
Taiwan) on HRM systems (Budhwar & Fadzil, 2000).
Apart from the national factors, as indicated above, an investigation based on both
the contingent variables (mentioned above) and organizational strategies (such as the
ones based on Miles and Snows (1984) typologyprospectors, analyzers,
defenders and reactors, can further help to get a more detailed picture of the
scene and effectively examine the raised propositions (for more details see Budhwar
& Khatri, 2001; Budhwar & Sparrow, 2002).
Conclusion
Emerging markets based in Asia have made a significant contribution to the world
economy. With the growing business interest in the region, both academics and
practitioners are interested in finding out about the kind of HRM systems appropriate
for the region. The challenges facing HRM in the Southeast Asia are clearly complex
and daunting. Majority of these challenges have emerged due to the changes in the
economic environment. In particular, globalization and international competitiveness
have brought to the fore the need for organizations to adopt appropriate HRM
practices in their quest for competitive advantage. In this globalized era, competitive
pressures have laid bare the limitations of the traditional models of management in
some Asian countries. Clearly, there is some indication that HRM is undergoing
transformation in the region but it is unclear what the outcome of this transformation
would be. Early indications are that there is a move towards individual basis in
employment systems. However, it is too early to see a clear model or approach
emerging. Possibly, a hybrid system (based on a mixture of both traditional Asian
characteristics and Western rationalized system) would emerge. However, it is
important that any HRM system that emerges in the region should be as proposed by
Meyer (2006), context based. It is hoped that the suggested future research areas
identified would guide researchers to investigate issues that can significantly
contribute in this regard.
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Pawan Budhwar (PhD, Manchester Business School, UK) is a Professor of International HRM and Head
of Work and Organisational Psychology Group at Aston Business School, Birmingham, UK. He is also the
Senior Associate Editor of British Journal of Management, Associate Editor of International Journal of
Cross Cultural Management and Director of Aston Centre for Human Resources and Aston India
Foundation for Applied Business Research at Aston University, Birmingham, UK.
Yaw A. Debrah (BA, MA Simon Fraser, Canada; PhD Warwick Business School, UK) is Professor of
Human Resource and International Management and Director of the MBA Programme at Swansea
University (University of Wales, Swansea, UK). He has worked at Nanyang Business School, Nanyang
Technological University, Singapore.