Edited by Frank Horwitz and Pawan Budhwar
Chapter 17: Human resource management in a kinship society: the case of Latin America
Business organizations and the general economy in Latin America have been characterized as embedded within the larger social system based on complex social kinship networks (Elvira and Davila, 2005; Jones, 2005; Martinez and Dorfman, 1998). Scholars argue that these networks tend to be a source of competitive advantage (Sargent, 2005). Such networks usually consist of compact and homogeneous social groups – for example, political and labor classes (Camp, 1989; Davis and Coleman, 1986; Murillo and Schrank, 2005) – which are reproduced over time in part because of cultural values. This social structure has important consequences for organizational practices in Latin American firms, especially from the viewpoint of human resources management (HRM). Because of the accelerating economic development of this region and its attractiveness for foreign investment, there is a need to understand how HRM practices perform best within the particular Latin American social structure, and to provide guidelines for managing such practices effectively. Human resource (HR) practices are highly influenced by strong-tie social networks – kinship composed of relatives and close friends, or colleagues of the same socio-economic group (Elvira and Davila, 2005). Existing research indicates, for instance, that staffing practices are primarily based on employees’ referrals, which typically include relatives and close friends belonging to the same social strata (Davila and Elvira, 2005; Hualde, 2001). A similar mechanism is used for promotions (Abarca, Majluf, and Rodriguez, 1998).
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