A cross-cultural examination of the relationships among

human resource management practices and

organisational commitment: an institutional collectivism
perspective
Authors

Joseph C. Rode,

1.
1.

Xiaowen Huang,

o
1.

2.

Barbara Flynn

1.

First published: 17 June 2016Full publication history

DOI: 10.1111/1748-8583.12117View/save citation
Cited by: 0 articles
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Abstract
Previous research has shown that human resource management (HRM) practices vary across
cultures. However, little research has empirically compared the effects of various HRM practices
on firm-level or individual-level outcome variables across cultures. Drawing upon psychological
contract theory and the literature on cultural values, the present study examined the effects of
three organisational-level HRM practices on individual organisational commitment in a survey of
2424 individuals in 120 organisations located in four countries and three industries. Based upon
the GLOBE study, we classified the four countries into two groups high versus low
institutional collectivism. The results of our hierarchical linear modelling (HLM) analyses found
significant differences in the effects of organisational-level HRM on individual organisational
commitment across cultures for two of the three HRM practices included in our model: training
and teamwork. We also found partial support for differences across cultures for the effects of the
third HRM practice: employee involvement in decision making. Overall, our results support the
utility of theoretical and empirical models that address multiple levels of analyses to better
understand the mechanisms through which the HRM-performance link takes place across
national cultures.

Introduction
Asignificant body of research has examined differences in
human resource management (HRM) practices across nations
(Aycan et al., 2000; Bowen et al., 2002; Aycan, 2005; Peretz and

Rosenblatt, 2011; Brewster and Mayrhofer, 2012). Although

the literature has made considerable progress in identifying
the relationships between various national cultural values and
HRM configurations, research to date has largely focused on
comparing HRM practices across cultures rather than
comparing the relationships between various HRM practices
and either firm-level or individual-level outcome variables
(Reiche et al., 2012). With the exception of Andreassi and
Lawter's (2014) job satisfaction study, the few studies that
have examined the relative effects of HRM practices across
cultures have relied on small samples of relatively few
organisations within only two countries, limiting the
generalisability of findings (Lincoln and Kalleberg, 1985;
Amanthram and Chan, 2013; Caliguiri, 2014). Thus, while a
fair amount is known about how HRM practices vary across
cultures, little is known about the relative effects of HRM
practices across cultures.
Moreover, even in single country samples, most strategic
HRM research has adopted the firm as the unit of analysis
and relied on aggregate measures to evaluate the impact of
HRM practices on employee outcomes. This macro-level
approach captures outcomes at the collective level but
neglects variations among individual employees, thereby
making the implicit assumption that all employees exhibit
the same level of the outcome variable. Several recent
studies have challenged this assumption by reporting that
employee reactions to HRM practices differ both from their
managers (Liao et al., 2009) and from other employees
exposed to the same HRM practices (Nishii et al., 2008).

These results highlight the fact that HRM practices reside at

the organisational level but individual outcomes, such as
organisational commitment or job performance, reside within
the individual who is subject to those HRM practices.
Aggregating individual-level phenomena to the
organisational level significantly increases the possibility of
spurious results, indicating the need for multi-level
modelling (Raudenbush and Bryk, 2002). Indeed, multi-level
empirical models are particularly important in cross-cultural
HRM research given that one's interpretation of and
subsequent reactions to HRM practices can be significantly
influenced by the extant culture (Hofstede, 1983; Budhwar
and Sparrow, 2002; Weller and Gerhart, 2012). However,
large-scale empirical investigations of the relationships
among organisational-level HRM practices and individual
outcomes are limited because of data and methodology
constraints, and rigorous, multi-level empirical studies of the
effects of HRM practices are even fewer.
We address these gaps in the existing literature by examining
the relationships between organisational-level HRM
practices and individual-level organisational commitment
across national cultures using a multi-level dataset that
contains a multi-source sample of 2424 employees from 120
organisations located in four countries and three industries.
Our theoretical approach draws from psychological contract
theory as well as the HRM and cross-cultural values
literatures.
National culture consists of shared mental programmes that
exist within the population of a sovereign nation (Thomas

and Peterson, 2014). It shapes individuals' basic assumptions

(Hofstede, 1983) and strongly influences individual
cognition (Abramson et al., 1996). As political entities, nations
vary in their institutional norms and employment relations
systems, thus making national culture particularly relevant in
assessing the impact of HRM practices. We focus on the
institutional collectivism dimension of national culture
(House et al., 2004), or the degree to which organisational
practices are expected to value group interests over
individual interests (Gelfand et al., 2004). Given its explicit
focus on the workplace and the extent to which the self is
viewed as an independent versus interdependent entity, we
argue that institutional collectivism should play a significant
role in how individuals scan, select and interpret information
from the work environment (Budhwar and Sparrow, 2002),
which has important implications for the formation of
psychological contracts, or employees' expectations
regarding the reciprocal obligations between themselves and
their employers (Rousseau, 2000; Thomas et al., 2003).
Psychological contracts vary in the extent to which they are
viewed as transactional versus relational. Transactional
psychological contracts emphasise exchanges of economic
resources with a short-term orientation, while relational
contracts highlight exchanges of socio-emotional resources
with a long-term orientation. We posit that institutional
collectivism cultural values influence individual employees'
interpretation of HRM practices and affect the formation of
psychological contracts. The resulting differences in the
relative emphasis on transactional versus relational

psychological contracts, in turn, impact the effectiveness of

HRM practices in cultivating individual organisational
commitment, or the strength of the individual employee's
bond to the organisation (Mathieu and Zajac, 1990). We
focus on organisational commitment as an initial step in this
research because it is a key factor mediating the relationship
between HRM and several important outcomes, including
turnover, organisational citizenship behaviour and
organisational performance (Mowday et al., 1982; Sturges et
al., 2005; Jiang et al., 2013).
Overall, our study makes two important contributions to the
existing literature. First, from a theoretical perspective, we
combine the cross-cultural HRM and the psychological
contract literatures to theoretically ground explanations for
how the effects of HRM practices at individual-level
outcomes may vary across cultures. Second, from a
methodological perspective, our analysis employs multi-level
modelling to more accurately reflect the relationship between
organisation-level HRM practices and individual outcomes
than previous research that has relied on aggregate measures
of individual outcomes. These contributions allow us to show
how the effects of specific organisation-level HRM practices
on individual-level employee outcomes differ across
cultures. This cultural difference has important implications
for practice and calls into question the universal applicability
of HRM practices. While the high commitment HRM
system that has received considerable research attention
(Arthur, 1994; Wood and De Menezes, 1998; Gerhart, 2012;
Jiang et al., 2013) may have some universal traits, our results

indicate that the extent to which specific HRM practices

affect individual outcomes may be culture dependent.
Specifically, we examine how the effects of employee
training, employee involvement in decision making and
teamwork on individual organisational commitment differ in
high versus low institutional collectivism cultures.

Theory and Hypotheses

While organisational commitment is often conceived of as a
multifaceted construct, research indicates that its facets are
inter-correlated to the extent that it is meaningful to study
one overall commitment construct (Morrow, 1993). The
present study follows the widely used conceptualisation and
associated measures proposed by Mowday et al. (1979), which
characterise organisational commitment as having a strong
belief in the organisation's goals and values, displaying a
willingness to exert extra effort and having a strong desire to
be a member of the organisation. This definition captures
both an individual's affective bond with the organisation and
behaviours that maintain organisational membership.
Consistent with Schein's (1980) argument that psychological
contracts are key determinants of employee attitudes and
behaviours in the workplace, scholars have noted strong
conceptual links between psychological contracts and
organisational commitment (Raja et al., 2004; Sturges et
al., 2005).

Psychological contract theory

Psychological contracts refer to individuals' beliefs regarding
the exchange agreement between themselves and the

organisation (Rousseau, 1995; Rousseau and

Tijoriwala, 1998). It is the individual's mental model
(i.e. schema) of her/his relationship to the organisation and
varies in the extent to which it is transactional versus relational
(Rousseau, 1995). Transactional contracts are characterised
by short-term, limited involvement with a focus on the
exchange of economic resources, whereas relational
contracts involve long-term, open-ended involvement and the
ongoing exchange of socio-emotional resources.
Transactional contracts are based upon pragmatic legitimacy,
emphasising the importance of tangible and positive
outcomes for both parties. In contrast, relational contracts
focus on moral legitimacy, implying an ethical obligation to
do the right thing to exchange partners, regardless of shortterm outcomes. Because of the distinctions in stability (longterm, open-ended time frame versus short-term, closed-ended
time frame) and motivation (social-emotional
driven versus purely materialistic outcome driven), relational
contracts have been theorised to be positively associated with
organisational commitment, whereas transactional contracts
are not (Rousseau, 1995; Bal et al., 2013).
Rousseau (1995) suggests that the signals embedded in HRM
practices are a primary means for organisations to shape their
employees' psychological contracts. Similarly, several HRM
scholars have argued that HRM practices serve as important
communications from the organisation to employees
regarding the organisation's intentions (Guzzo and
Noonan, 1994; Bowen and Ostroff, 2004). However, as
psychological contracts reside within individuals, they are

subject to individual cognitive differences in constructing

meaning associated with HRM practices (Morrison and
Robinson, 1997). The cognitive theory of cultural meaning
(Strauss and Quinn, 1997) proposes that the meanings
ascribed to others' behaviours depend on one's understanding
of the extant culture. Similarly, Hofstede (2001) argues that
the interpretations of the actions of others or of institutions
are widely shared among individuals with similar national
cultural values (as a result of common understanding and
expectations), but significantly different among individuals
across cultural values. Given the strong focus on cognitive
process underlying psychological contract theory and the
national culture, we would expect that the interpretation of
signals associated with specific HRM practices will differ
across individuals in distinct national cultures, resulting in
differences in the form of the psychological contracts.
Existing research has documented significant differences in
how environmental events and features impact psychological
contracts across national cultures (Rousseau and
Schalk, 2000), supporting our assertion that psychological
contracts are influenced to some extent by the extant cultural
values.

National culture
Hofstede (2001) defined national culture as the collective
programming of the mind. National culture exists within the
knowledge and shared belief systems of individuals from the
same nation, which are formed during childhood and
reinforced throughout life (Strauss and Quinn, 1997). As
such, national culture tends to be stable and durable, and has

a strong impact on one's cognitive process. We focus on one

specific cultural dimension: institutional collectivism.
Collectivism is arguably the most studied cross-cultural
value dimension in organisational behaviour. While all
conceptualisations of collectivism have focused on the extent
to which group goals and identities are valued over
individual goals and identities (Markus and Kitayama, 1991;
Erez, 1994), earlier conceptualisations of the construct
defined collectivism as both unidimensional
(Hofstede, 1980) and multi-dimensional (Triandis, 1994).
Recent research conducted as part of the GLOBE project
(House et al., 2004) supports a two-dimensional view of
collectivism: institutional collectivism and in-group
collectivism. The institutional collectivism measures used by
the GLOBE project capture the extent to which group loyalty
is emphasised at the expense of individual goals, the extent
to which organisational systems emphasise collective
interests as opposed to individual interests and the extent to
which being accepted by the group and group cohesion is
valued and supported by organisations. In contrast, the
measures for in-group collectivism gauge expectations for
family attitudes and interactions (Brewer and Venaik, 2011).
We focus on institutional collectivism because it is
particularly relevant to organisation-level HRM and
psychological contracts. First, it specifically addresses
cultural expectations for organisational practices and actions
related to how one integrates with the organisation. These
expectations for organisational practices and actions, in turn,
should influence the meanings ascribed to relevant HRM

practices and, by extension, individual psychological

contracts. Second, institutional collectivism's emphasis on
the extent to which the self is viewed as an
independent versus interdependent entity has important
implications for the motives underlying the exchange
relationships upon which psychological contracts are based
(Markus and Kitayama, 1991; Thomas et al., 2003).
To date, theoretical and empirical research on institutional
collectivism in general and its role in the link between HRM
and organisational commitment in particular is quite limited,
despite its conceptual relevance. To address this gap in the
literature, we draw from previous theoretical work on
collectivism that is consistent with the defining principles of
institutional collectivism, from the psychological contract
literature and from the HRM and the organisational
commitment literatures to explore how institutional
collectivism might moderate the effects of organisation-level
HRM practices on individual-level organisational
commitment.

Hypotheses
We examined three organisation-level HRM practices:
training, employee involvement in decision making and
teamwork, all of which have been linked to organisational
commitment in previous strategic HRM research (Snell and
Dean, 1992; Kooij et al., 2010). These practices indicate the
organisation's intentions to enhance employee skills,
motivation and opportunity to contribute (Jiang et al., 2012).
Moreover, these practices are also arguably culture-bound
(Reiche et al., 2012) and directly relate to the extent to which

employees are viewed as independent versus interdependent

entities. As a result the interpretations of these practices may
depend on the level of institutional collectivism in the extant
culture.
Training
Low collectivism cultures are characterised by an
independent self. In these environments individuals'
cognition tends to focus on personal needs. Thus, individuals
in low institutional collectivism cultures are more likely to
interpret training as an organisational investment to increase
the economic benefits provided by the employee to the
organisation. A significant portion of the individuals'
attention would be drawn to the implied economic exchange
with the organisation and to the immediate benefits they may
personally gain, including improved marketability and better
job performance, among other economic advantages.
Therefore, while expected future benefits of training may be
interpreted as signalling some ongoing exchange of socioemotional benefits that would contribute towards a relational
psychological contract, individuals in low institutional
collectivism cultures are more likely to interpret training
with a pragmatic monetary focus, formulating psychological
contracts that contain a significant transactional component.
In contrast, individuals in high institutional collectivism
cultures expect organisations to actively promote
interdependent self-views among their employees. In this
case, organisational messages conveyed through training
would be interpreted as investments that allow individuals to

be more technically and socially involved in the organisation,

which are both significantly valued in collectivist cultures
(Erez, 1994). Individual attention would focus more on how
training can improve one's contribution to the organisation
and align one's behaviours with organisational goals.
Consequently, individuals within high institutional
collectivism cultures are more likely to interpret training in
relational terms, leading to more relational psychological
contracts.
In the existing literature, training is often proposed to
contribute to organisational commitment (Mathieu and
Zajac, 1990). However, the empirical evidence is
inconclusive: Some research has found no significant
relationships between training and organisational
commitment in U.S.-based studies (Fiorito et al., 2007), while
Kooij et al.'s (2010) meta-analysis found a significant
correlation between training and affective commitment. We
argue that the relationship between training and
organisational commitment will be positive and stronger in
cultures with high institutional collectivism because in these
cultures perceived psychological contracts are likely be more
relational, resulting in increased organisational commitment.