Context, governance, associational trust and HRM: diversity and commonalities

Abstract

This study explores how HRM and trust are inter-related, and what this means for how we understand HRM under different varieties of capitalism. We explore the direct impact of different indicators of societal trust on intra-organisational HRM practice, using large-scale internationally comparative survey evidence. We find that countries with high levels of associational trust, such as the Nordic social democracies, are generally associated with better communication and co-determination over the setting of the employment contract. The converse was true for countries with lower levels of associational trust, such as the liberal market economies. We failed to encounter any significant effects of multi-nationality or country of origin in the case of MNCs; they did not differ significantly from their domestic peers when it came to the relationship between country of domicile levels of associational trust and HRM practice. We draw out the implications for theory and practice.

Keywords:

• Comparative capitalism
• legal origin theory
• comparative HRM
• associational trust
• trust in contracting
• governance environment
• institutional theory

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 An alternative way of approaching trust would be through comparing differences between countries according to Hofstede’s cultural categorisation (Hofstede, 2001). However, a growing body of critical research suggests that none of the dominant cultural metrics devised by Hofstede are sufficiently accurate to be adopted in a large-scale survey study (McSweeney, 2002). However, we do deploy measures of trust which in turn have been shown to depend on cultural factors such as religion and ethnolinguistic diversity (see e.g. Knack & Keefer, 1997; Zak & Knack, 2001). Hence, at least implicitly our result that trust is best at explaining differences across countries implies that culture matters.

2 The correlation matrix is not reported here, but is available on request from the authors.

3 Djankov et al. (2008) source their data from Beck et al. (2001), covering the period from 1975 to 2000.