The effects of market economy and foreign MNE subsidiaries on the convergence and divergence of HRM

This study explores patterns of human resource management (HRM) practices across market economies, and between indigenous firms and foreign MNE subsidiary operations, offering a novel perspective on convergence and divergence. Applying institutional theorizing to improve our understanding of convergence/ divergence as a process and an outcome, data collected from nine countries at three points in time over a decade confirm that convergence and divergence occur to different extents in a non-linear fashion, and vary depending on the area of HRM practice observed. Patterns of adoption and convergence/ divergence are explained through the effect of institutional constraints, which vary between liberal and coordinated market economies, and between indigenous firms and foreign MNE subsidiaries. The study contributes a more graded conceptualization of convergence/ divergence, which reflects the complex dynamic reality of international business