Managing cross-cultural differences: Testing human resource models in

Latin America

Jaime Bonache
a, b,
, Jordi Trullen
c, 1
, Juan I. Sanchez
d, 2
a
Universidad Carlos III de Madrid, Spain
b
ESADE Business School (Ramon Llull University), Department of People Management and Organisation, Mateo Inurria, 25-27, 28036 Madrid, Spain
c
ESADE Business School (Ramon Llull University), Department of People Management and Organisation, Av. Pedralbes, 60-62, 08034 Barcelona, Spain
d
Florida International University, Department of Management and International Business, 11200 SW 8 Street, RB 343 A, Miami, FL 33199, United States
a b s t r a c t a r t i c l e i n f o
Article history:
Received 1 September 2010
Received in revised form 1 April 2011
Accepted 1 August 2011
Available online 21 November 2011
Keywords:
Human Resource Management (HRM)
Latin America
Cross-cultural differences
Local adaptation
This study examines whether rms should adapt their Human Resource Management (HRM) practices to
cross-cultural differences. The authors introduce three different positions, namely, the culturalist, the univer-
salist, and an integrated position that reconciles the former two named the culturally-animated universalist
position. The study compares the effectiveness of these three positions in a sample of 138 rms located in
Latin-America. Results suggest that, contrary to common wisdom in the International HRM literature, rms
following a universalist approach outdo those using a culturalist one. However, the effect of universal HR
practices on HR performance is also contingent on the country's performance orientation. The authors advo-
cate the culturally-animated universalist position.
2011 Elsevier Inc. All rights reserved.
1. Introduction
Should rms adapt their human resource management practices to
cross-cultural differences? A review of the literature on International
Human Resource Management (IHRM) reveals two opposite and ap-
parently mutually exclusive answers to this question. The rst answer,
which the authors term hereafter as the culturalist position, argues for
HRMpractices that are adapted to the local environment. This position
assumes that employees prefer practices that conform to local usages
and that, as a result, such practices lead to higher performance. In sim-
pler words, When in Rome, do as the Romans do (Newman &Nollen,
1996).
In contrast, the second answer represents a viewthat is antagonistic
to the rst one, arguing that prevailing HRMpractices are not necessar-
ily the most effective ones. Indeed, this universalist position maintains
that rms should ensure that their HRM practices conform to a set of
principles known as High Performance Work (HPW) principles
whose effectiveness has been empirically supported by several studies
both in the US (e.g., Arthur, 1994; Delaney & Huselid, 1996; Huselid,
1995; Huselid, Jackson, & Schuler, 1997; Lawler, Anderson, Buckles,
Ferris, & Rosen, 1995) and elsewhere (Bae & Lawler, 2000; Guthrie,
2001; Hartog & Verburg, 2004; Katou & Budhwar, 2007). The underly-
ing assumption is that these principles have universal reach and should
help us manage people regardless of national environment.
A third answer, that can be named as the culturally-animated
universalist position, is more nuanced than the previous two. This
third position defends the existence of a set of globally applicable HRM
principles but, unlike the universalist position, the culturally-animated
universalist position maintains that culture interacts with HRMpractices
in ways that prevent the same practices from having identical results in
different countries. The culturally-animated position represents a way of
thinking that has already been inuential in sociology (Weber, 1904;
Fukujama, 1995) and in global leadership (Javidan, Dorfman, Sully de
Luque, & House, 2006).
The present study compares and contrasts these three theoretical
positions (i.e., culturalist, universalist, and culturally-animated uni-
versalist) through an empirical test conducted in a Latin American
context. Differently from other areas of the world such as North
America, Europe or Asia, HRM research in Latin America is scarce
and often theoretical (Montao, 1991; Sanchez, Gomez, & Wated,
2008), and has tended to focus on single countries and on compari-
sons to the US (Davila & Elvira, 2009; Elvira & Davila, 2005a, 2005b;
Gmez & Werner, 2004; Wated, Sanchez, & Gomez, 2008). Multi-
country empirical HRM research capable of providing broad guidance
regarding the effectiveness of various HRM practices across Latin
America is lacking. This paucity of empirical evidence is particularly
Journal of Business Research 65 (2012) 17731781
The authors thank Petra de Saa (Universidad de Las Palmas de Gran Canaria), Luigi
Stirpe (Universidad Carlos III de Madrid), Franois Collet (ESADE Business School) and
JBR reviewers for reading and comments of an early version of this article.
Corresponding author at: ESADE Business School (Ramon Llull University), Depart-
ment of People Management and Organisation, Mateo Inurria, 25-27, 28036 Madrid.
Tel.: +34 913 597 714; fax: +34 917 030 062.
E-mail addresses: jaime.bonache@esade.edu (J. Bonache), jordi.trullen@esade.edu
(J. Trullen), juan.sanchez@u.edu (J.I. Sanchez).
1
Tel.: +34 932 806 162; fax: +34 934 952 077.
2
Tel.: +1 305 348 3307.
0148-2963/$ see front matter 2011 Elsevier Inc. All rights reserved.
doi:10.1016/j.jbusres.2011.10.037
Contents lists available at SciVerse ScienceDirect
Journal of Business Research
troubling for multinational corporations (MNCs) wishing to operate
in Latin American markets. Foreign MNCs play a crucial role in Latin
America (Casanova, 2005), and scholarly research in the area is much
needed (Brenes, Metzger, &Requena, 2011). The study describedherein
joins an emerging stream of multi-country studies focused on Latin
America that should begin to ll this gap (e.g., Bonache, Sanchez, &
Zarraga-Oberty, 2009).
2. Literature review
Inessence, eachof the three positions to be comparedhere represents
a different answer to the so-called diversity thesis. This thesis is descrip-
tive, simply registering the fact that people's values differ across societies.
This thesis seems undisputable and is backed by a number of research
streams (e.g., Fukujama, 1995; Hofstede, 1984; Inglehart & Baker, 2000;
Trompenaars, 1993). Next, the authors review the theoretical underpin-
nings of each one of these three positions (see a summary in Fig. 1).
2.1. Theoretical underpinnings of the culturalist position
The culturalist position, as its name indicates, emphasizes culture as
the essential situational element that stands inthe way of global homoge-
neity inHRMprinciples or practices. This positiondoes not only acknowl-
edge differences in practices and values, as stated by the diversity thesis,
but also argues that everything depends on the local context and, there-
fore, that universal management principles do not exist.
Three theoretical premises in the culturalist position distinguish
this position very clearly from the universalist view: the persistence,
the dependence, and the adaptation premises. These premises have
a parallel in relativist philosophy (e.g. Putman, 1981; Rorty, 1991),
where they are used in regard to cognitive (there are no universal
truths) or ethical issues (there are no universally valid moral prin-
ciples). Next, the authors further discuss each one of these premises.
2.1.1. The persistence premise
Culturalists emphasize the divergence and persistence of tradi-
tional values despite economic, organizational and political changes.
As stressed by authors such as Schuman and Scott (1989), genera-
tions have collective memories acquired during adolescence and
youth, and such memories persist throughout their life cycle. These
collective memories are hard to change and are also relatively inde-
pendent of economic conditions (DiMaggio, 1994) and organizational
practices (Hofstede, 1983).
Drawing on these arguments, culturalism predicts that conver-
gence around some set of modern practices and values is ineffective
and that, even when economic and institutional conditions change a
great deal, traditional values and practices will continue to exert
their independent inuence upon local usages. This prediction is not
without empirical support. For example, longitudinal analysis of the
World Values Surveys (Inglehart, 1977, 1990, 1997) indicates that al-
though values do change, they also show the cultural heritage of a
particular society. And this is so because despite facing different eco-
nomic conditions and institutional pressures, those countries with a
similar cultural heritage (e.g., Anglo-Saxon, Protestant, English-
Speaking), continue to cluster around similar value systems.
2.1.2. The dependence premise
According to this premise, all HR principles and practices derive
their effectiveness from cultural acceptance (e.g., Newman & Nollen,
1996). Therefore, the most widely accepted practices in a given cul-
ture are those that best suit the national culture. The logic behind
this dependence premise implies that (a) culture determines those
HRM practices that are prevalent in a society, (b) these culturally de-
rived practices are widely viewed by the members of that society as
the correct way to perceive, think and feel (Schein, 1985), and (c)
when HRM practices are at odds with the national culture, employees
are likely to feel dissatised and uncommitted and, as a result are less
able or less willing to perform well (Newman & Nollen, 1996; p. 755).
2.1.3. The local adaptation premise
According to this premise, universally effective principles or prac-
tices do not exist, because the most sensible and effective ones are al-
ways those that best t local values and norms. For instance, as
known by any minimally perceptive traveler, driving in England
HR
Principles
P1
P2
.
.
Pn
HR Performance
HP
Principles
P1
P2
.
.
Pn
HR Performance
National
Culture
HR Performance HR System a
HR Performance HR System b
HR Performance HR System n
National Culture a
National Culture b
National Culture n
------------------------------------------------------------------------------
Universalist
Approach
Culturist
Approach
The culturally
animated
Universalist
Approach
Fig. 1. Culture and HR effectiveness.
1774 J. Bonache et al. / Journal of Business Research 65 (2012) 17731781
following the Continental convention of using the right lane is neither
sensible nor efcient. Dressing in black clothes to attend a funeral in
China, where people dress in white at this type of event, is not
going to be welcomed. Similarly, if the objective is to manage people
in different cultural contexts, the most effective one will be to adapt
to dominant, local ways of managing, since these adapt well to local
workforce preferences.
The local adaptation premise is implicit in many studies in the inter-
national management literature (e.g., Adler, 1986; Adler & Jelinek,
1986; Black & Porter, 1991; Cox & Cooper, 1985; Dowling, Schuler, &
Welch, 1994; Gmez Meja & Welbourne, 1991; Luthans, Marsnik, &
Luthans, 1997; Mamman, Sulaiman, & Fadel, 1996; Newman & Nollen,
1996; Schneider, 1988), as well as in HR textbooks such as Gmez
Meja, Balkin, and Cardy (1995), who build on Hofstede's cultural di-
mensions to conjecture what practices may be more suitable to differ-
ent countries depending on their cultural proles. For example, in a
high power distance country like Venezuela, the local adaptation pre-
mise would recommend introducing a reward system that includes a
large pay differential between higher and lower level jobs, visible re-
wards that project status, and plenty of discretion to supervisors and
business units in pay allocations. If the target is a Scandinavian country
with lowpower distance, the practices should probably be the opposite.
The aforementioned premises serve as the basis for the rst hypothesis:
Hypothesis 1. Firms that implement idiosyncratic HR practices will be
more effective in attracting, retaining and motivating a local workforce
than those which do not implement such idiosyncratic HR practices.
2.2. Theoretical underpinnings of the universalist position
The universalist approach does not necessarily deny the diversity
thesis. In fact, this position afrms the existence of some general prin-
ciples that have universal validity, regardless of cultural differences.
For instance, according to the universalist position, and despite that
the level of gender egalitarianism differs across nations (e.g.,
Inglehart & Baker, 2000), following the principle of equal employ-
ment opportunity for women is a sound recipe for organizations
wishing to improve its HR performance. This recipe should hold
even in a culture that has a lowlevel of gender egalitarianism. Univer-
salism rests on three major assumptions.
2.2.1. A core HR system that is universally effective exists
All organizations, regardless of their cultural context, face the
same basic problem: the need to attract, motivate, and retain talent
to attain the organizations' objectives. Many studies both in the Unit-
ed States (e.g., Arthur, 1994; Delaney & Huselid, 1996; Huselid, 1995;
Huselid et al., 1997; Lawler et al., 1995) and elsewhere (Bae & Lawler,
2000; Guthrie, 2001; Hartog & Verburg, 2004; Katou & Budhwar,
2007) support the existence of a core set of HR principles that im-
proves organizational performance.
2.2.2. Global convergence in HR systems
Authors often conceptualize the core HR system discussed in the
previous section as a High Performance Work System or HPWS (e.g.
Baron & Kreps, 1999; Pfeffer, 1998). Although the literature is not
clear on a single set of principles that best represents HPWS, such prin-
ciples usually include careful and extensive systems of recruitment, se-
lection and training; formal systems for sharing information with the
individuals who work in the organization; clear job design; local level
participation procedures; monitoring of attitudes; performance ap-
praisals; properly functioning grievance procedures; and promotion
and compensation schemes that promote the recognition and nancial
rewarding of high-performing members of the workforce (United
States Department of Labor, 1993; quoted by Brewster, 2007, p. 777).
HPWS intends to promote the commitment of employees to their
organizations as well as the rms' ability to acquire, develop and
retain the best workforce (Bae & Lawler, 2000). Another often-
mentioned benet of HPWS is exibility. That is, the increased com-
plexity of contemporary business environments forces companies to
rely much more than before on the involvement and discretion of
their employees, which improves their ability to react to environmen-
tal changes rapidly and effectively. Overall, the idea underlying HPWS
is that employees, as human capital, can be a source of competitive ad-
vantage, and that HRpractices should therefore facilitate the emergence
of their unique talent (Guthrie, 2001). In fact, the resource-based view
of the rm is the perspective that many of these authors (Becker &
Huselid, 1998; Huselid, 1995; Katou & Budhwar, 2007) refer to when
they establish a theoretical framework for their arguments.
Note that for this position, what gives rms a competitive advan-
tage is the implementation of all the principles underlying HPWS in
combination, rather than separately. While competitors can easily
replicate a single HR practice, the distinctiveness and inimitability
that comes from implementing an entire set of practices are the
ones providing the rm with a competitive advantage (Wright,
Dunford, & Snell, 2001). Therefore, the implementation of HPWS
practices can have synergic effects, as the joint effect of these prac-
tices is greater than the sum of the individual practices acting alone.
2.2.3. Focus on selection to manage cross-cultural differences
The existence of cultural differences among countries, as the di-
versity thesis points out, can create problems in the implementation
of the core HPWS principles, since some of these principles may
clash with the idiosyncratic cultural traits of a particular country.
The solution that universalism offers to this potential conict is to ex-
ercise a tight control of the entrance gates to the organization by
recruiting those people in any given country who most closely t
the HPWS principles (Arthur, 1994; Delaney & Huselid, 1996;
Huselid, 1995). This type of employee selection seems feasible, be-
cause even the authors that emphasize the existence of cross-
cultural differences (e.g., Hofstede, 1984; Trompenaars, 1993) ac-
knowledge that a nomothetic characterization of a country cannot
apply equally to every member of its population. Furthermore, despite
the proclaimed moral superiority of the culturalist view, which is pre-
sumably derived from its emphasis on tolerance for alternate ways to
do things and the resulting need to keep an open mind, employees in
multinational companies may prefer HPW systems. Employees may
value the fact that, once they have been selected, HPW systems bear
the implied promise of equal opportunity and merit-based rewards,
thus removing some of the subjectivity that can encourage employees
manipulate their bosses for what they want. Taken together, the argu-
ments expressed above suggest that rms that implement the core set
of HR principles will obtain the best results. Hence,
Hypothesis 2. Firms that implement a high-performance HRsystemwill
be more effective in attracting, retaining and motivating a local workforce
than those which do not implement such high-performance HR system.
2.3. Theoretical underpinnings of the culturally-animated universalist
approach
As explained, universalism and culturalism share the diversity
thesis, but they also have important differences. While universalism
underscores universal principles, convergence towards those princi-
ples, and the need to carefully monitor the organizations' entrance
gate (i.e., rigorous selection), culturalism highlights the relative char-
acter and divergence of management practices, as well as the need to
adapt those to local contexts.
The third position, labeled as the culturally-animated approach, is
best described as a combination of the previous two positions. A weak
form of universalism informs the culturally-animated position. That
is, even though some generic HR principles (e.g., high performance
recognition and reward) enjoy universal effectiveness, the different
1775 J. Bonache et al. / Journal of Business Research 65 (2012) 17731781
interpretations represented by the various solutions to this general
principle are not uniformly effective across all geographical areas
(Caligiuri, Lepak, & Bonache, 2010). In this vein, Colbert (2004) notes
that the same HR principle can be implemented through relatively dif-
ferent policies and practices. For example, offering family-related bene-
ts may be more effective in low income countries than in rich
countries, given the relevance that family has in the former group of
countries (Inglehart & Baker, 2000). Or individual performance-based
nancial rewards will be more effective in the US, which has a very in-
dividualistic culture where individuals crave recognition for their con-
tributions, than in countries with more collectivistic cultures, where
group-incentives may have better results (Gmez Meja et al., 1995).
Three core premises underlie the culturally-animated position: the
level of analysis, the differential convergence, and the culturally animat-
ed premises.
2.3.1. The level of analysis premise
Researchers can analyze HR activities at different levels of abstrac-
tion (e.g., Becker & Gerhart, 1996; Colbert, 2004). One may argue that
whereas universalism focuses on the level of universally desired HR
principles, culturalism focuses on the presumably lower level of spe-
cic HR practices. From this vantage point, the universalist position
accepts that cultural differences are legitimate and needed at this
lower level of HR practices. As shown in Fig. 2, which illustrates the
practices that characterize the culturalist approach, different prac-
tices constitute a valid representation of the same principle of
performance-related pay in different countries.
2.3.2. The differential convergence premise
According to this premise, the core HR system represented by
High-Performance Work Systems moves organizations towards the
same goal, but given different cultural heritages, the trajectories of
these HR systems will remain divergent (Brewster, 1995). In other
words, although HPWS move all organizations in the same general di-
rection, they can move on parallel trajectories shaped by their cultur-
al heritages (Inglehart & Baker, 2000). Therefore, the introduction of
these systems lacks absolute uniformity, since country differences in
implementation will remain. For example, a rigorous or formal selec-
tion process may spread across countries, but the specic selection
practices will likely differ from country to country.
2.3.3. The culturally moderated-effect premise
The two previous premises (i.e., compatibility and differential
convergence) could suggest that culture acts only at the level of prac-
tices. However, culture can also act on principles as a moderating var-
iable. Rather than viewing culture as a variable with no effect on the
core HR system, as universalism does, or alternatively as the main
predictor of the most effective HR system, as the culturalist approach
predicts, this premise assumes that culture moderates or animates
the core HR system.
According to this premise, even if a core HR system of universal
appeal exists, its effectiveness depends on its level of congruence
with the cultural prole of the country where the rm implements
it. This idea of culture as a moderating variable is rooted in a well-
established tradition in sociology, as well as in the management liter-
ature itself. Three examples should sufce to illustrate this point.
Weber (1904) illustrates how the Calvinist Doctrine contributed to
the development of the capitalist system. More recently, Fukujama
(1995), has argued that a cultural heritage of low trust puts a soci-
ety at a competitive disadvantage in global markets because such so-
ciety is less able to develop large and complex institutions. Finally, in
the management eld, the Globe study on global leadership, while
reporting cultural differences across countries, also identies a set
of leadership proles of universal use (Javidan et al., 2006).
Therefore, the performance orientation of a country could affect
the successful implementation of a high performance system.
Javidan et al. (2006) have shown that the level of performance orien-
tation varies internationally, and the researchers employed this cul-
tural dimension to test the culturally-moderated effect premise in
the next hypothesis (see Fig. 1 too):
Hypothesis 3. The effectiveness of a high-performance HR system will
be moderatedby the extent to whichthe country inwhichthe rmoper-
ates has a performance-oriented culture, such that a high-performance
HR system will work best in performance-oriented cultures.
Table 1 summarizes how the three approaches described here dif-
fer in their views on the universality of HR potential, global HR trends,
the best way to manage cross-cultural differences, as well as their
predictions concerning the HR-Performance Link. Next, the re-
searchers describe an empirical test of the three hypotheses in the
context of Latin America.
3. Methodology
3.1. Sample
The researchers collected data through a survey distributed to
CEOs or HR managers of Latin American companies (either local com-
panies or subsidiaries of MNCs) during the spring of 2010 (question-
naire items are available under request from authors). A hundred and
thirty eight Latin American managers from 16 different countries an-
swered the survey. The researchers secured access to these managers
through their executive education assignments at well-known busi-
ness schools in Spain and Costa Rica. These executive courses aimed
at top managers and covered different HR topics. The researchers
also used snowball sampling so that managers could circulate the sur-
vey to indirect contacts. The survey asked respondents to indicate the
country in which the rm operated as well as the rm headquarters'
country of origin when the company was a subsidiary of a foreign
MNC. The survey also asked them to indicate whether the company
was family-owned or not, as well as the industry to which the rm
belonged. The researchers deleted from the sample managers who
were neither general managers nor HR managers (e.g., managers
from nance or marketing departments). Summary statistics of the
companies appear in Table 2.
3.2. Measures
3.2.1. High-performance HR system
This construct refers to the extent to which the focal company
uses a set of high-performance work principles together as previous
studies have described them (e.g., Becker & Huselid, 1998). The re-
searchers include nine different principles, which refer to the use of
Universalism
Country A
Performance based rewards
Individual Bonus
High pay disparity
C
u
l
t
u
r
a
l
i
s
m
Much discretion given
to supervisors in pay
allocations
Country B
Group Bonus
Low pay disparity
Little discretion given
to supervisors in
Dispensing pay
Principles
Practices
L
e
v
e
l

o
f

a
n
a
l
y
s
i
s
Fig. 2. Two level analysis.
1776 J. Bonache et al. / Journal of Business Research 65 (2012) 17731781
formal recruiting methods, formal performance appraisals, prot
sharing policies, career development programs, multifunctional train-
ing, teamwork training, employee participation in decision making
and information sharing policies. The survey asked respondents to
state on a scale from 1 to 5 the extent to which they agreed that
their company was implementing these HR principles. To compute
an overall measure of high-performance HR system the researchers
used z scores for each of the nine principles to obtain an overall aver-
aged value for each company. All items loaded on a single factor.
Cronbach's alpha for this scale was .86.
3.2.2. Idiosyncratic HR practices
The researchers measured this construct using four HR practices
that the literature describes as consistent with prototypical Latin
American cultural values, and that at the same time are in contradic-
tion with a high-performance HR system. These four practices are (1)
promotions based on seniority, (2) promotions based on popularity
or tting in, (3) lack of individual reward recognition, and (4) use
of status symbols by top management.
Latin American countries score high on Hofstede's power dis-
tance, uncertainty avoidance, and collectivism dimensions
(Davila & Elvira, 2005). Gmez Meja et al. (1995) provide a descrip-
tion of HR stafng, appraisal, and reward practices that are expected
to be effective based on Hofstede's cultural dimensions. Among
those, seniority-based promotions and rewards are recognized as
being well adapted to both collectivist and uncertainty avoidance na-
tional cultures. Gmez Meja et al. (1995) also describe tting-in as
a crucial aspect that is taken into account in collectivistic cultures
when it comes down to stafng and appraisal decisions. Finally, lack
of individual reward recognition is common in collectivist societies.
All these practices (i.e., seniority and t-based appraisals as well as
lack of individually-based rewards) are good examples of HR prac-
tices that are in line with the underlying Latin American values and
that contradict the emphasis on performance-based rewards and
Table 1
Comparison among the three approaches.
Culturalist approach Universalist approach Culturally-animated universalistic approach
HR-
performance link
The dependence thesis: HR principles derive
their efciency from cultural acceptance
The core HR system thesis: there is a determinate
set of HR principles that are universally valid
and efcient
The level of analysis thesis: universalism at the
level of principles and open to culturalism
in practices
Global trend in
HR Systems
The persistence thesis The global convergence thesis The differential convergence thesis
Basic way to
manage cross-cultural
differences
Adapt HR principles and practices to the local
way of doing things
Focus on Selection and apply HPW principles The success of HPW principles will be
moderated by culture
Hypothesis H1. Firms that implement idiosyncratic HR
practices will be more effective in attracting,
retaining and motivating a local workforce than
those which do not implement such
idiosyncratic HR practices.
H2.Firms that implement a high-performance HR
system will be more effective in attracting, retaining
and motivating a local workforce than those which
do not implement such high-performance HR system
H3. The effectiveness of a high-performance HR
system will be moderated by the extent to which
the country in which the rm operates has a
performance-oriented culture, such that a high-
performance HR system will work best in
performance-oriented cultures.
Table 2
Sample.
Categories Percentage
Country Mexico 17.9
Argentina 0.7
Puerto Rico 0.7
Peru 11.2
Costa Rica 18.7
Nicaragua 12.7
Panama 6.0
Ecuador 6.7
El Salvador 5.2
Paraguay 1.5
Honduras 7.5
Guatemala 7.5
Colombia 0.7
Bolivia 1.5
Uruguay 0.7
Chile 0.7
Family business? Yes 44
No 56
Number of employees Less than 100 17.8
100 to 500 35.6
500 to 1000 13.3
More than 1000 33.3
Industry Agriculture and Fishery 4.3
Energy, manufacturing, construction 15.9
Wholesale and retail trade; hotels; catering; repairs 6.5
Transport and Communications 5.8
Banking; nancial services; insurance; business services 23.2
Public Administration 2.2
Others 42.0
Subsidiary of MNC? Yes 42.3
No 57.7
1777 J. Bonache et al. / Journal of Business Research 65 (2012) 17731781
career policies that characterize HPW systems. Finally, the use of sta-
tus symbols such as expensive cars or large ofces as management re-
wards is, according to Gmez Meja et al. (1995), consistent with high
power distance cultures such as the Latin American, while clearly
against the more egalitarian approach adopted in high-performance
HR systems. Hence, this item was also included as an example of a
culturalist HR practice.
In addition to the four HR practices mentioned, the researchers
also included as culturalist two high performance work practices,
reversely coded from their original wording in the questionnaire.
These practices were participation in decision making (which re-
versed was a proxy of hierarchical decision making) and formal
search methods (which reversed was a proxy of informal or grape-
vine based search methods). Newman and Nollen (1996) describe
lack of participation in decision making as typically associated with
high power distance cultures, such as Latin American. As for lack of
or limited formal search methods, this practice is also consistent
with high power distance cultures, where the emphasis is on personal
connections and who you know (Gmez Meja et al., 1995).
The culturalist practices included in the analyses did not cluster
under a single factor, which led us to treat them individually rather
than as a single culturalist HR system.
3.2.3. HR performance
This construct refers to the perceived ability of the company in
comparison to its competitors to attract, retain and motivate its work-
force. In the past, other authors have used perceptual measures
(Bjrkman & Budhwar, 2007; Delaney & Huselid, 1996; Youndt,
Snell, Dean, & Lepak, 1996) and studies show that subjective mea-
sures of rm performance correlate well with more objective mea-
sures (Geringer & Hebert, 1991; Wall et al., 2004). In addition, the
rms in the sample came from a variety of industries and countries,
were embedded in a variety of markets, and ranged in size from less
than 100 to more than 1000 employees. These broad and numerous
differences made it difcult to draw comparisons across more objec-
tive indicators. The survey asked respondents to rate on a scale from1
to 5 the extent to which their company had more (or less) ability than
the industry average to (1) attract talent to the company, (2) retain
the best professionals, and (3) obtain very productive workers. Cron-
bach's alpha for this scale was .87.
3.2.4. Control variables
Control variables included industry, country, company size (oper-
ationalized as the log of the number of employees), family ownership,
and whether the company was a subsidiary of a foreign multinational
company or not. Analyses of variance for all relevant constructs found
no signicant differences across industries or countries. Size, family
ownership, and multinational company status were control variables
in the regression analyses. None of these controls was signicant.
4. Results
Descriptive statistics and correlations for high-performance HR
principles, idiosyncratic HR practices (presented individually), HR
performance, MNC, family ownership, and company size (as the log
of the number of employees) appear in Table 3.
An examination of the bivariate correlations suggests positive as-
sociations between high-performance HR system and HR perfor-
mance, as well as a negative association with the use of three
culturalist HR practices (i.e., informal search methods, hierarchical
decision making, and promotion based on popularity). In addition,
these three HR policies as well as promotion based on seniority neg-
atively correlate with the use of high-performance HR principles. Lack
of individual reward recognition, which positively correlates with a
universalist high-performance HR system, is the exception. Finally,
being a MNC negatively associates both with family ownership and
with the use of seniority-based promotions, and positively associates
with the adoption of high-performance practices; this nding is in
line with the notion that MNCs are the main diffusers of these HR
practices (Bonache, 2000).
To test Hypothesis 1, which stated that rms implementing idio-
syncratic HR practices would be more effective in attracting, retain-
ing, and motivating employees, the researchers regressed HR
performance on the individual idiosyncratic HR practices described
earlier (i.e., informal search methods, promotion based on seniority,
promotion based on popularity, hierarchical decision making, use of
status symbols by top management, and team-based rewards). The
results appear in Model 2 (Table 4). Informal search methods, hierar-
chical decision making, and popularity-based promotion policies are
strongly and negatively associated with HR performance. Therefore,
Hypothesis 1 is not supported.
To test Hypothesis 2, which stated that the use of a high-
performance HR system would increase rms' effectiveness in
attracting, retaining, and motivating employees, the researchers
regressed HR performance on high-performance HR system. The re-
sults in Model 1 (Table 4) show that high-performance HR system
is a signicant and strong predictor of HR performance, hence sup-
porting Hypothesis 2.
To test Hypothesis 3, which stated that the extent to which the
country in which the rm operated had a performance-oriented cul-
ture would moderate the effectiveness of a high-performance HR sys-
tem, the researchers used Hierarchical Linear Modeling (HLM). The
level-2 data for the cross-level analysis came from the GLOBE study,
which reported average scores for performance orientation for differ-
ent Latin American countries (Javidan et al., 2006). Because the
GLOBE study does not include every Latin American country, the re-
searchers employed a subset of 78 rms in these cross-level analyses.
In addition, the researchers gathered GDP (adjusted per person) for
each country to control for potential confounds with cultural values.
The results (Table 5) indicated that, as predicted by Hypothesis 3,
Table 3
Correlation matrix.
Mean S.D. 1 2 3 4 5 6 7 8 9 10
1. High-perform. HR system 0 .7 1
2. Informal search methods 2.1 1.2 .65** 1
3. Promotion based on popularity 2.4 1.3 .35** .19* 1
4. Promotion based on seniority 2.7 1.4 .28** .19* .42** 1
5. Hierarchical decision making 3.1 1.1 .70** .34** .28** .09 1
6. Status symbols for top mgmt. 2.9 1.4 .03 .13 .24** .14 .11 1
7. Team-based rewards 2.7 1.1 .45** .13 .15** .09 .36** .09 1
8. HR performance 3.3 .9 .60** .43** .34** .12 .54** .05 .19* 1
9. MNC .4 .5 .23** .12 .16 .30** .12 .01 .08 .10 1
10. Size 2.7 .8 .05 .15* .01 .01 .00 .18* .07 .06 .05 1
11. Family-owned .4 .5 .17 .18* .04 .08 .09 .00 .04 .01 .06 .14
Note: n=138.

pb.05

pb.01 two-tailed.
1778 J. Bonache et al. / Journal of Business Research 65 (2012) 17731781
the GLOBE value of performance orientation moderated the effective-
ness of high-performance HR principles, such that these practices
were most effective in rms located in performance-oriented coun-
tries. The interaction graph (Fig. 3) suggests that universalist prac-
tices are more efcient in high performance oriented countries. The
two lines represent a standard deviation above and below the mean.
5. Discussion and conclusion
The goal of this study was to answer the question of whether rms
should adapt their Human Resource Management practices to cross-
cultural differences. The authors address this question both
theoretically and empirically. Theoretically, the authors introduce
three positions inthe literature (i.e., universalist, culturalist, and cultural-
ly-animated). The universalist position states that a set of HR principles
used in combination increases HR performance regardless of the local
context where these principles are applied. The culturalist position
states the opposite, namely that such universal set of HR principles
does not exist and that the principles to be applied are dependent on
cultural work values. The third position, the culturally-animated one,
has been less explored in the HR literature comparatively to the other
two. This position partly reconciles the universalist and culturalist posi-
tions by acknowledging the existence of a body of HR principles of uni-
versal application, while arguing that culture moderates their relative
effectiveness.
The results provide support for both the universalist and the
culturally-animated universalist approaches, but fail to lend support
to the culturalist position. That is, HR performance positively associ-
ates with the use of universal high-performance HR principles. In ad-
dition, several HR practices tting core values of the Latin American
region (e.g., informal search methods, popularity-based promotion,
or hierarchical decision making) but opposing high-performance HR
principles negatively associated with HR performance, hence running
counter to the culturalist position. These results hint that the extent to
which the country in which the rm operates has a performance-
oriented culture that moderates the effectiveness of high-performance
HR principles, thereby supporting the culturally-animated position.
The ndings suggest that extreme versions of both the universalist
and the culturalist positions are unlikely to be effective. That is, while
the culturalist position original emphasis on the need to adapt to cul-
tural diversity is based on sound judgment and empirical evidence
(c.f. Newman & Nollen, 1996), this does not imply that companies
should reject certain, universally valid HR principles. Similarly,
whereas the literature has established the positive effects of high-
performance HR principles (e.g., Arthur, 1994; Delaney & Huselid,
1996; Huselid, 1995; Huselid et al., 1997; Lawler et al., 1995), this
does not imply that the same HR practices should be indistinctively
applied across all cultural contexts. The culturally-animated thesis,
which represents a more sensible position that draws from both uni-
versalism and culturalism, seems to work best.
The superiority of the culturally-animated position may stemfrom
the fact that, unlike universalism and culturalism, this position distin-
guishes among different levels of analysis (Colbert, 2004). Re-
searchers can analyze the HRM function at different levels such as
that of principles, practices, or implementation processes; whereas
principles are the broader level, implementation processes are the
most specic. One could situate on this continuum the universalist
position at the broadest level, that of basic principles. Consider for ex-
ample, the management principle that employees need to be
rewarded based on their performance. This principle may have uni-
versal validity, therefore being applicable to Latin American countries.
However, when it comes down to implementing this principle, one
could choose from a number of policies (e.g., sales commissions, per-
formance bonuses, merit increases, stock options plans) that best t
the Latin American context. In other words, the same universal HR
principle can be implemented in a number of different ways, some
of them better suited than others to the focal Latin American context.
Colbert (2004) notes that the strategic HR literature often ignores
these differences in the level of abstraction. More recently, Davila
and Elvira (2009) have noted that each HR practice consists of the
tool or instrument, the content of the tool, the management of the
process involved in using such tool, and the outcome produced (p.
181). While the basic tool used may be the same, the other elements
may vary from context to context.
The distinction among levels of abstraction is important, because
the data suggest that culture acts not only at the ne-grained level
of practices or implementation processes, but also at the level of gen-
eral principles. The results show that in countries with a higher
Table 4
Regressions on HR performance.
Independent variables Model 1 Model 2
High-performance HR system .60

Idiosyncratic HR practices
Informal search methods .27

Popularity-based promotion .19

Seniority-based promotion .05

+
Hierarchical decision making .40

Status symbols for top mgmt. .01

Lack of individual rewards .01

R
2
.36 .39
Adjusted R
2
.36 .36
F 72.54

13.34

Note: n=138. Standardized regression coefcients are shown.

pb.01.
+
pb.10.
pb.05.
Table 5
Results of HLM analyses.
Variable HR performance
Intercept 3.09

High-performance HR system .60

Performance orientation .66

High performance HR principlesperformance orientation 1.35

Note: n=78. Table entries are estimations of xed effects (s) with robust standard
errors.
pb.01 (two-tailed tests).
-0.85 -0.40 0.04 0.49 0.94
2.33
2.73
3.14
3.54
3.95
UNIVERSA
H
R
P
E
R
F
O
R
PERFOR =-0.174
PERFOR = 0.226
Fig. 3. Interaction effect between universalist practices and performance orientation.
1779 J. Bonache et al. / Journal of Business Research 65 (2012) 17731781
performance-orientation culture, high-performing HR systems are
likely to work better than in countries with a lower performance-
orientation culture. The international human resource management
literature has not fully acknowledged this moderating role of culture
at the level of principles, which is commonly found in sociology
(Fukujama, 1995; Inglehart & Baker, 2000; Weber, 1904).
In essence, this nding supports the argument that the same HR
principles can be translated into different HR practices depending
on the country. This position does not deny the existence of univer-
salist HR systems; on the contrary, the culturally-animated universal-
ist position acknowledges the relevance of national culture.
This study also contributes to a nascent stream of literature on HR
management in Latin America (Bonache et al., 2009; Davila & Elvira,
2009; Elvira & Davila, 2005a, 2005b; Montao, 1991). The study pro-
vides multi-country Latin American evidence supporting the validity
of culturally-animated, universalist HR principles. The results are
also in line with previous evidence (Gmez & Ranft, 2003; Ramirez
& Zapata-Cant, 2009) showing that foreign MNCs can successfully
adopt HPWS in Latin America, in spite of the initial difculties associ-
ated with their implementation.
This study has some limitations that are common to other quanti-
tative studies in the same area such as the use of cross-sectional data,
the use of perceptual or self-report measures, or the fact that the re-
searchers collected data from a single respondent per rm, even if
the respondent (i.e., general manager or HR manager) was always
someone very familiar with the HR system implemented in the rm.
Whereas the use of questionnaire-based measures raises the threat
of common method variance, the researchers used the Harman's
one-factor test (Podsakoff & Organ, 1986) to assess that threat. The
analysis produced multiple factors, showing that common method
variance was not pervasive in this study. Second, secondary data
were the basis for the country performance-orientation measure, sig-
nicantly limiting the study's exposure to common method bias.
Third, the most essential nding was a non-linear interaction, which
is less likely to be inated by common method variance than linear
relationships (Crampton & Wagner, 1994; Podsakoff, MacKenzie,
Lee, & Podsakoff, 2003). Despite these limitations, the study makes
seemingly important both theoretical and practical contributions.
The study makes explicit a too often latent debate in the literature be-
tween proponents of universalism and culturalism, and proposes a
synthetic position (i.e., culturally-animated) that surpasses this de-
bate by drawing from both theories.
In addition, the study ndings have practical implications for HR
managers in Latin American countries and elsewhere, as they warn
against the indiscriminate use of local HR practices when these run
counter to well-established high-performing HR principles. These
ndings suggest that these high-performing principles will not work
equally well across different contexts. Two complementary implica-
tions for practice follow from the ndings: (1) HR principles that
rms translate into HR practices in ways that are insensitive to local
culture are less likely to be effective than those that consider cultural
nuances, and (2) locally adapted HR practices that openly contradict
universal HR principles are unlikely to improve, and they may even
harm HR performance.
Further research should concentrate on shedding light on the pro-
cess through which rms should adapt high-performance HR princi-
ples to countries with very different cultural proles. This process
would require a great deal of both cultural awareness and creativity
(see Gmez & Ranft, 2003 for an example). In addition, a study exam-
ining the three positions presented in this paper not from the man-
agers' perspective, but from that of employees, would also be
interesting. The possibility that the two viewpoints are not well
aligned and that what top management nds accurate is perceived
by employees as self-justifying and delusional cannot be ruled out. Fi-
nally, extending the test of the moderating role of culture on the im-
pact of HR practices on performance to countries beyond Latin
America and to cultural values other than performance-orientation
would be useful.
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