An assessment of the moderating role of employees’ cultural orientations amongst foreign manufacturing multinational companies in Kenya

Beatrice A Dimba,Robert Rugimbana

doi:10.4102/sajhrm.v11i1.453

Abstract

Orientation: This article investigates the question, of whether culture really matters in implementing international strategic human resource management (SHRM) practices.Research purpose: Specifically, this study sought to investigate the extent to which employee cultural orientations moderate the link between SHRM practices and firm performance in large foreign manufacturing multinational companies in Kenya. Motivation for the study: Large foreign multinational companies have generally applied SHRM practices without adaptation when trying to improve employee performance even though resource based perspectives argue for the consideration of employees’ cultural orientations. Research design, approach and method: SHRM practices were conceptualised as independent variables measured through distinct practices. Organisational performance as a dependent variable was measured using constructs of image, interpersonal relations, and product quality. Cultural dimensions adopted for this study were power distance, uncertainty avoidance, individualism or collectivism, and masculinity or femininity. The above conceptual framework was tested by the use of both quantitative and qualitative techniques with data from fifty (50) large foreign multinational companies operating in Kenya. Main findings: Findings indicated that the relationship between SHRM practices and firm performance depend to a greater extent on employee cultural orientations when power distance is considered. Power distance (PD) refers to the extent of people accepting that power in institutions and organisations when distributed unequally. The greater the PD, the greater the acceptance of this inequality. Practical/managerial implications: The study supported the notion that the relationship between SHRM practices and firm performance is moderated by power distance through motivation but not by the other three bipolar dimensions namely, Uncertainty Avoidance, Masculinity or Femininity and Individualism or Collectivism. Contribution/value-add: This is the first large-scale empirical article that has focused on the moderating role of employees’ cultural orientations in large foreign manufacturing companies operating in Kenya.

Highlights

Over the last ten years or so, significant differences of opinion have emerged around two related issues
This implies that if at all there was a link between these strategic human resources management (SHRM) practices and performance, it was indirect through another variable which is not part of this study
The applicability of Western nations’ models of SHRM practices in multinational companies (MNCs) operating in developing countries does raise important questions, because the relationship between the use of SHRM practices and firm performance did not hold across the five bundles of what were considered to be ‘high performance work practices’ (HPWP)

Summary

Introduction

Over the last ten years or so, significant differences of opinion have emerged around two related issues. How to adequately implement strategic human resources strategies to improve firm performance and, whether or not a ‘bundle of HR best practices’ exists that can be applied in all contexts with predictable outcomes. In regards to the first issue, the question of whether a direct link between strategic human resources management (SHRM) practices and firm performance exists, the arguments are equivocal. Some studies have demonstrated the existence of direct links between SHRM practices and firm performance (Edwards & Wright, 2001). Other studies (Dimba, 2010; Katou & Budhwar, 2006) have shown that SHRM practices do not lead directly to business performance but rather they influence employee motivation. It is employee outcomes that influence performance

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Conclusion