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Handbook of Research in International Human Resource Management

Edited by Günter K. Stahl and Ingmar Björkman

In providing an insightful overview of a wide range of global human resource issues facing MNCs, this pathbreaking Handbook highlights emergent topics and new research findings that could shape the field of future IHRM research. Theoretical discussion of the variables and processes that affect IHRM policies and practices is provided by renowned contributors with widely differing academic backgrounds, paradigmatic orientations, and theoretical and methodological approaches.
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Chapter 24: International Human Resource Management Research and Institutional Theory

Ingmar Björkman


Ingmar Björkman Until the early 1990s, international HRM researchers made few references to institutional theory. However, in their influential paper on organizational theory and strategic HRM, Wright and McMahan (1992) discuss institutional theory and argue: ‘the idea of institutionalization may help in understanding the determinants of HRM practices’ (p 313). Since this was written, institutional theory has been used in international HRM research mostly to examine the HRM practices found in foreign-owned subsidiaries of multinational corporations (MNCs) (for example, Rosenzweig & Nohria, 1994; Hannon, Huang & Jaw, 1995; Björkman & Lu, 2001; FentonO’Creevy, Gooderham & Nordhaug, 2004). Institutional arguments have also been used in comparative studies of HRM practices across countries (for example, Gooderham, Nordhaug & Ringdal, 1999). Nonetheless, this chapter argues that institutional theory is still underexploited in IHRM research, and that the application of this theory could significantly augment our understanding of a range of important research questions. Below, I provide an overview of key aspects of institutional theory and review work carried out within an institutional theory framework. The main objective is to propose ways in which this theory can be used in future research on MNCs, while questions related to comparative international HRM research are examined elsewhere in this Handbook (Brewster, 2005; for recent reviews, see also Budhwar & Sparrow, 2002; Schuler, Budhwar & Florkowski, 2002). Institutional theory Although theorists differ in their views of institutional theory (DiMaggio & Powell, 1991; Scott, 1987, 2001; Tolbert & Zucker, 1996), most scholars today share ‘an interest in understanding the bases of stability...

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