Convergence and Divergence in Personnel Management

1. International Human Resource Management (KMBHR05)
Topic- Convergence and divergence in personnel management
in developed and developing economics
Dr. Pooja Tiwari
ABES EC, Ghaziabad
AKTU, Lucknow
Dr. Pooja Tiwari, ABES EC, AKTU Lucknow

2. Introduction
 Human resource management is more complex at the international stage where
national cultures and laws may make it necessary to modify operational
approaches to promote productivity. The choices to be made are on whether to
use approaches such as convergence, divergence or a hybrid system. The
convergence theory focuses on establishing best practices applicable across the
board while the divergence theory focuses on establishing management systems
that conform to the specific circumstances of each country. The choice on which of
the approaches to HRM is determined by the goals as well as the circumstances of
the organisation.
Dr. Pooja Tiwari, ABES EC, AKTU Lucknow

3. Theory of Convergence
 The convergence theory in HRM can also be referred to as the Universalist theory
which is founded on the belief that certain best practices can yield excellent fruits if
applied across organisations in different countries.
 This theory was most dominant in the 1950s and 1960s in the developed world
(Europe and USA) with the thinking being that universal application of good
management practices was an important factor in making societies to be more
alike across national boundaries.
 According to Rowley (1998), the development of best practices is an evolution
process where different practices are in place and results of each dimension is
weighed before the most effective ones are picked. The free flow of information
across national boundaries is among the factors that are expected to lead to the
generation of best practices across different countries as experiments with different
systems are weighed against their outcomes and decisions made regarding their
suitability.
Dr. Pooja Tiwari, ABES EC, AKTU Lucknow

4. Cont…
 The main driving force for convergence is the need for excellence and superior
economic output. This drives managers to settle for management approaches that
have been proven to be effective in the past as it also helps in minimising risk. The
other driver of convergence is cultural ethnocentricism among managers who may
believe that their home practices are best and superior. This leads them to the
conclusion that it is only their systems that can work best.
 The other driving factor could be the growth of international organisations such as
regional and international labour organisations which push organisations towards a
common approach to remuneration and provision of good working conditions.
 The main advantage of this approach to HRM is that it creates room for the
improvement of management practices across national boundaries.
Dr. Pooja Tiwari, ABES EC, AKTU Lucknow

5. Theory of Divergence
 Divergence theory emphasises the need to adopt different management
approaches depending on the circumstances and the goals of the organisation. It
can be explained using two theories: the cultural theory and the institutional
theory. The two theories also represent the driving factors behind this theory.
 The divergence theorists in HRM practice hold that there is no ideal approach to
management for all circumstances and it is therefore important to embrace agility
and modify systems to suit different circumstances in order to yield the desired
results.
 Proponents of the divergence theory hold that even though the level of human
interactions across cultures has been on the rise, cultural differences have
continued to be significantly different.
Dr. Pooja Tiwari, ABES EC, AKTU Lucknow

6. Cont…
 Hofstede provides dimensions of national cultures where are divided into 5
elements namely power distance, masculinity index, individualism/collectivism,
uncertainty avoidance, and long term orientation. This brings to the fore the
question of culture distance and its influence on HRM practices. The culture gap is
the difference between cultures in different countries and it plays a role in
determining whether it would be necessary to modify management practices to
suit a new culture. Where the culture distance is low, the modification may not be
necessary.
Dr. Pooja Tiwari, ABES EC, AKTU Lucknow

7. Example of China and UK
 The difference in power distance is high with the index for China being higher than
UK.
 There is also a high cultural gap on the individuality index element. The Chinese
national culture is heavily collectivist while that of the UK is heavily individualist.
 The second factor that promotes the use of a divergence approach to HRM is the
institutional structure where different subsidiaries are autonomous and at liberty to
develop their own systems.
Dr. Pooja Tiwari, ABES EC, AKTU Lucknow

8. Thank You
Dr. Pooja Tiwari, ABES EC, AKTU Lucknow