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Managing cross-cultural differences: Testing human resource models in Latin
America
ArticleinJournal of Business Research · December 2012
DOI: 10.1016/j.jbusres.2011.10.037
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University Carlos III de Madrid
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Managing cross-cultural differences: Testing human resource models in
Latin America ☆
Jaime Bonache
a,b,
⁎, Jordi Trullen
c,1
, Juan I. Sanchez
d,2
a
Universidad Carlos III de Madrid, Spain
b
ESADE Business School (Ramon Llull University), Department of People Management and Organisation, Mateo Inurria, 25-27, 28036 Madrid, Spain
c
ESADE Business School (Ramon Llull University), Department of People Management and Organisation, Av. Pedralbes, 60-62, 08034 Barcelona, Spain
d
Florida International University, Department of Management and International Business, 11200 SW 8 Street, RB 343 A, Miami, FL 33199, United States
abstractarticle info
Article history:
Received 1 September 2010
Received in revised form 1 April 2011
Accepted 1 August 2011
Available online 21 November 2011
Keywords:
Human Resource Management (HRM)
Latin America
Cross-cultural differences
Local adaptation
This study examines whether firms should adapt their Human Resource Management (HRM) practices to
cross-cultural differences. The authors introduce three different positions, namely, the culturalist, the univer-
salist, and an integrated position that reconciles the former two named the culturally-animated universalist
position. The study compares the effectiveness of these three positions in a sample of 138 firms located in
Latin-America. Results suggest that, contrary to common wisdom in the International HRM literature, firms
following a universalist approach outdo those using a culturalist one. However, the effect of universal HR
practices on HR performance is also contingent on the country's performance orientation. The authors advo-
cate the culturally-animated universalist position.
© 2011 Elsevier Inc. All rights reserved.
1. Introduction
Should firms adapt their human resource management practices to
cross-cultural differences? A review of the literature on International
Human Resource Management (IHRM) reveals two opposite and ap-
parently mutually exclusive answers to this question. The first answer,
which the authors term hereafter as the culturalist position, argues for
HRM practices that are adapted to the local environment. This position
assumes that employees prefer practices that conform to local usages
and that, as a result, such practices lead to higher performance. In sim-
pler words, “When in Rome, do as the Romans do”(Newman & Nollen,
1996).
In contrast, the second answer represents a view that is antagonistic
to the first one, arguing that prevailing HRM practices are not necessar-
ily the most effective ones. Indeed, this universalist position maintains
that firms should ensure that their HRM practices conform to a set of
principles –known as High Performance Work (HPW) principles –
whose effectiveness has been empirically supported by several studies
both in the US (e.g., Arthur, 1994; Delaney & Huselid, 1996; Huselid,
1995; Huselid, Jackson, & Schuler, 1997; Lawler, Anderson, Buckles,
Ferris, & Rosen, 1995) and elsewhere (Bae & Lawler, 2000; Guthrie,
2001; Hartog & Verburg, 2004; Katou & Budhwar, 2007). The underly-
ing assumption is that these principles have universal reach and should
help us manage people regardless of national environment.
A third answer, that can be named as the culturally-animated
universalist position, is more nuanced than the previous two. This
third position defends the existence of a set of globally applicable HRM
principles but, unlike the universalist position, the culturally-animated
universalist position maintains that culture interacts with HRM practices
in ways that prevent the same practices from having identical results in
different countries. The culturally-animated position represents a way of
thinking that has already been influential in sociology (Weber, 1904;
Fukujama, 1995) and in global leadership (Javidan, Dorfman, Sully de
Luque, & House, 2006).
The present study compares and contrasts these three theoretical
positions (i.e., culturalist, universalist, and culturally-animated uni-
versalist) through an empirical test conducted in a Latin American
context. Differently from other areas of the world such as North
America, Europe or Asia, HRM research in Latin America is scarce
and often theoretical (Montaño, 1991; Sanchez, Gomez, & Wated,
2008), and has tended to focus on single countries and on compari-
sons to the US (Davila & Elvira, 2009; Elvira & Davila, 2005a, 2005b;
Gómez & Werner, 2004; Wated, Sanchez, & Gomez, 2008). Multi-
country empirical HRM research capable of providing broad guidance
regarding the effectiveness of various HRM practices across Latin
America is lacking. This paucity of empirical evidence is particularly
Journal of Business Research 65 (2012) 1773–1781
☆The authors thank Petra de Saa (Universidad de Las Palmas de Gran Canaria), Luigi
Stirpe (Universidad Carlos III de Madrid), François Collet (ESADE Business School) and
JBR reviewers for reading and comments of an early version of this article.
⁎Corresponding author at: ESADE Business School (Ramon Llull University), Depart-
ment of People Management and Organisation, Mateo Inurria, 25-27, 28036 Madrid.
Tel.: [phone]; fax: [phone].
E-mail addresses: [email protected] (J. Bonache), [email protected]
(J. Trullen), juan.sanchez@fiu.edu (J.I. Sanchez).
1
Tel.: [phone]; fax: [phone].
2
Tel.: [phone].
0148-2963/$ –see front matter © 2011 Elsevier Inc. All rights reserved.
doi:10.1016/j.jbusres.2011.10.037
Contents lists available at SciVerse ScienceDirect
Journal of Business Research

Author's personal copy
troubling for multinational corporations (MNCs) wishing to operate
in Latin American markets. Foreign MNCs play a crucial role in Latin
America (Casanova, 2005), and scholarly research in the area is much
needed (Brenes, Metzger, & Requena, 2011). The study described herein
joins an emerging stream of multi-country studies focused on Latin
America that should begin to fill this gap (e.g., Bonache, Sanchez, &
Zarraga-Oberty, 2009).
2. Literature review
In essence, each of the three positions to be compared here represents
a different answer to the so-called diversity thesis. This thesis is descrip-
tive, simply registering the fact that people's values differ across societies.
This thesis seems undisputable and is backed by a number of research
streams (e.g., Fukujama, 1995; Hofstede, 1984; Inglehart & Baker, 2000;
Trompenaars, 1993). Next, the authors review the theoretical underpin-
nings of each one of these three positions (see a summary in Fig. 1).
2.1. Theoretical underpinnings of the culturalist position
The culturalist position, as its name indicates, emphasizes culture as
the essential situational element that stands in the way of global homoge-
neity in HRM principles or practices. This position does not only acknowl-
edge differences in practices and values, as stated by the diversity thesis,
but also argues that everything depends on the local context and, there-
fore, that universal management principles do not exist.
Three theoretical premises in the culturalist position distinguish
this position very clearly from the universalist view: the persistence,
the dependence, and the adaptation premises. These premises have
a parallel in relativist philosophy (e.g. Putman, 1981; Rorty, 1991),
where they are used in regard to cognitive (“there are no universal
truths”) or ethical issues (“there are no universally valid moral prin-
ciples”). Next, the authors further discuss each one of these premises.
2.1.1. The persistence premise
Culturalists emphasize the divergence and persistence of tradi-
tional values despite economic, organizational and political changes.
As stressed by authors such as Schuman and Scott (1989), genera-
tions have collective memories acquired during adolescence and
youth, and such memories persist throughout their life cycle. These
collective memories are hard to change and are also relatively inde-
pendent of economic conditions (DiMaggio, 1994) and organizational
practices (Hofstede, 1983).
Drawing on these arguments, culturalism predicts that conver-
gence around some set of “modern”practices and values is ineffective
and that, even when economic and institutional conditions change a
great deal, traditional values and practices will continue to exert
their independent influence upon local usages. This prediction is not
without empirical support. For example, longitudinal analysis of the
World Values Surveys (Inglehart, 1977, 1990, 1997) indicates that al-
though values do change, they also show the cultural heritage of a
particular society. And this is so because despite facing different eco-
nomic conditions and institutional pressures, those countries with a
similar cultural heritage (e.g., Anglo-Saxon, Protestant, English-
Speaking), continue to cluster around similar value systems.
2.1.2. The dependence premise
According to this premise, all HR principles and practices derive
their effectiveness from cultural acceptance (e.g., Newman & Nollen,
1996). Therefore, the most widely accepted practices in a given cul-
ture are those that best suit the national culture. The logic behind
this dependence premise implies that (a) culture determines those
HRM practices that are prevalent in a society, (b) these culturally de-
rived practices are widely viewed by the members of that society as
the correct way to perceive, think and feel (Schein, 1985), and (c)
when HRM practices are at odds with the national culture, employees
are likely to feel dissatisfied and uncommitted and, as a result are less
able or less willing to perform well (Newman & Nollen, 1996; p. 755).
2.1.3. The local adaptation premise
According to this premise, universally effective principles or prac-
tices do not exist, because the most sensible and effective ones are al-
ways those that best fit local values and norms. For instance, as
known by any minimally perceptive traveler, driving in England
HR
Principles
P1
P2
.
.
Pn
HR Performance
HP
Principles
P1
P2
.
.
Pn
HR Performance
National
Culture
HR Performance HR System “a”
HR Performance HR System “b”
HR Performance
HR System “n”
National Culture a
National Culture b
National Culture n
------------------------------------------------------------------------------
Universalist
Approach
Culturist
Approach
The culturally
animated
Universalist
Approach
Fig. 1. Culture and HR effectiveness.
1774 J. Bonache et al. / Journal of Business Research 65 (2012) 1773–1781

Author's personal copy
following the Continental convention of using the right lane is neither
sensible nor efficient. Dressing in black clothes to attend a funeral in
China, where people dress in white at this type of event, is not
going to be welcomed. Similarly, if the objective is to manage people
in different cultural contexts, the most effective one will be to adapt
to dominant, local ways of managing, since these adapt well to local
workforce preferences.
The local adaptation premise is implicit in many studies in the inter-
national management literature (e.g., Adler, 1986; Adler & Jelinek,
1986; Black & Porter, 1991; Cox & Cooper, 1985; Dowling, Schuler, &
Welch, 1994; Gómez Mejía & Welbourne, 1991; Luthans, Marsnik, &
Luthans, 1997; Mamman, Sulaiman, & Fadel, 1996; Newman & Nollen,
1996; Schneider, 1988), as well as in HR textbooks such as Gómez
Mejía, Balkin, and Cardy (1995), who build on Hofstede's cultural di-
mensions to conjecture what practices may be more suitable to differ-
ent countries depending on their cultural profiles. For example, in a
high power distance country like Venezuela, the local adaptation pre-
mise would recommend introducing a reward system that includes a
large pay differential between higher and lower level jobs, visible re-
wards that project status, and plenty of discretion to supervisors and
business units in pay allocations. If the target is a Scandinavian country
with low power distance, the practices should probably be the opposite.
The aforementioned premises serve as the basis for the first hypothesis:
Hypothesis 1. Firms that implement idiosyncratic HR practices will be
more effective in attracting, retaining and motivating a local workforce
than those which do not implement such idiosyncratic HR practices.
2.2. Theoretical underpinnings of the universalist position
The universalist approach does not necessarily deny the diversity
thesis. In fact, this position affirms the existence of some general prin-
ciples that have universal validity, regardless of cultural differences.
For instance, according to the universalist position, and despite that
the level of gender egalitarianism differs across nations (e.g.,
Inglehart & Baker, 2000), following the principle of equal employ-
ment opportunity for women is a sound recipe for organizations
wishing to improve its HR performance. This recipe should hold
even in a culture that has a low level of gender egalitarianism. Univer-
salism rests on three major assumptions.
2.2.1. A core HR system that is universally effective exists
All organizations, regardless of their cultural context, face the
same basic problem: the need to attract, motivate, and retain talent
to attain the organizations' objectives. Many studies both in the Unit-
ed States (e.g., Arthur, 1994; Delaney & Huselid, 1996; Huselid, 1995;
Huselid et al., 1997; Lawler et al., 1995) and elsewhere (Bae & Lawler,
2000; Guthrie, 2001; Hartog & Verburg, 2004; Katou & Budhwar,
2007) support the existence of a core set of HR principles that im-
proves organizational performance.
2.2.2. Global convergence in HR systems
Authors often conceptualize the core HR system discussed in the
previous section as a High Performance Work System or HPWS (e.g.
Baron & Kreps, 1999; Pfeffer, 1998). Although the literature is not
clear on a single set of principles that best represents HPWS, such prin-
ciples usually include “careful and extensive systems of recruitment, se-
lection and training; formal systems for sharing information with the
individuals who work in the organization; clear job design; local level
participation procedures; monitoring of attitudes; performance ap-
praisals; properly functioning grievance procedures; and promotion
and compensation schemes that promote the recognition and financial
rewarding of high-performing members of the workforce”(United
States Department of Labor, 1993;quotedbyBrewster, 2007,p.777).
HPWS intends to promote the commitment of employees to their
organizations as well as the firms' ability to acquire, develop and
retain the best workforce (Bae & Lawler, 2000). Another often-
mentioned benefit of HPWS is flexibility. That is, the increased com-
plexity of contemporary business environments forces companies to
rely much more than before on the involvement and discretion of
their employees, which improves their ability to react to environmen-
tal changes rapidly and effectively. Overall, the idea underlying HPWS
is that employees, as human capital, can be a source of competitive ad-
vantage, and that HR practices should therefore facilitate the emergence
of their unique talent (Guthrie, 2001). In fact, the resource-based view
of the firm is the perspective that many of these authors (Becker &
Huselid, 1998; Huselid, 1995; Katou & Budhwar, 2007) refer to when
they establish a theoretical framework for their arguments.
Note that for this position, what gives firms a competitive advan-
tage is the implementation of all the principles underlying HPWS in
combination, rather than separately. While competitors can easily
replicate a single HR practice, the distinctiveness and inimitability
that comes from implementing an entire set of practices are the
ones providing the firm with a competitive advantage (Wright,
Dunford, & Snell, 2001). Therefore, the implementation of HPWS
practices can have synergic effects, as the joint effect of these prac-
tices is greater than the sum of the individual practices acting alone.
2.2.3. Focus on selection to manage cross-cultural differences
The existence of cultural differences among countries, as the di-
versity thesis points out, can create problems in the implementation
of the core HPWS principles, since some of these principles may
clash with the idiosyncratic cultural traits of a particular country.
The solution that universalism offers to this potential conflict is to ex-
ercise a tight control of the entrance gates to the organization by
recruiting those people in any given country who most closely fit
the HPWS principles (Arthur, 1994; Delaney & Huselid, 1996;
Huselid, 1995). This type of employee selection seems feasible, be-
cause even the authors that emphasize the existence of cross-
cultural differences (e.g., Hofstede, 1984; Trompenaars, 1993) ac-
knowledge that a nomothetic characterization of a country cannot
apply equally to every member of its population. Furthermore, despite
the proclaimed moral superiority of the culturalist view, which is pre-
sumably derived from its emphasis on tolerance for “alternate ways to
do things”and the resulting need to keep an open mind, employees in
multinational companies may prefer HPW systems. Employees may
value the fact that, once they have been selected, HPW systems bear
the implied promise of equal opportunity and merit-based rewards,
thus removing some of the subjectivity that can encourage employees
manipulate their bosses for what they want. Taken together, the argu-
ments expressed above suggest that firms that implement the core set
of HR principles will obtain the best results. Hence,
Hypothesis 2. Firms that implement a high-performance HR system will
be more effective in attracting, retaining and motivating a local workforce
than those which do not implement such high-performance HR system.
2.3. Theoretical underpinnings of the culturally-animated universalist
approach
As explained, universalism and culturalism share the diversity
thesis, but they also have important differences. While universalism
underscores universal principles, convergence towards those princi-
ples, and the need to carefully monitor the organizations' entrance
gate (i.e., rigorous selection), culturalism highlights the relative char-
acter and divergence of management practices, as well as the need to
adapt those to local contexts.
The third position, labeled as the culturally-animated approach, is
best described as a combination of the previous two positions. A weak
form of universalism informs the culturally-animated position. That
is, even though some generic HR principles (e.g., high performance
recognition and reward) enjoy universal effectiveness, the different
1775J. Bonache et al. / Journal of Business Research 65 (2012) 1773–1781