Influence of National and Organizational Culture on HRM Practices in an international company: a conceptual model proposal

Abstract

This study delves into the intricate nexus between national culture, organizational culture, and local institutional frameworks in the setting of multinational corporations. We present a novel conceptual schema that explicates their reciprocal interactions, to enrich comprehension of this multifaceted relationship. Contrary to the pervasive presumption suggesting international firms can mold host country institutions to fit their demands, our model underscores the contrary, indicating this belief is largely erroneous. The research unravels the mixed blessings offered by the interaction of national culture, organizational culture, and local institutions, which both pose challenges and present opportunities for firms aspiring to harmonize their organizational culture with local norms and regulations. Our findings accentuate the success companies attain when they amalgamate comprehension of local culture and institutional norms into their human resource management (HRM) practices, thus empowering them to tackle diverse cultural environments and modify their organizational culture effectively. This study holds substantial value due to its contribution to the extant literature on international business and organizational behavior, by illuminating the intricate interplay between the three variables. It extends actionable insights for managers, advising on effective integration the of local cultural and institutional factors into HRM tactics. Firms, acknowledging constraints on their influence over host country institutions, can augment their cultural intelligence, thereby leveraging local norms and regulations to build thriving operations and foster congenial relationships in their host countries. In essence, our research conducts an exhaustive examination of the relationship between national culture, organizational culture, and local institutional environment in global companies, stressing the significance of integrating local cultural and institutional understanding into HRM practices. This integration aids corporations in maneuvering through diverse cultural contexts, enhancing their prospects of succeeding in international operations.

Key words: National culture, Institutional settings, Organizational culture, Human resource management, international companies, Multinational companies.

JEL Classification : Z1 P5 M14 M5 F23

Paper type: Theoretical Research