Human resource function, unions and varieties of capitalism: Exploring their impact on human resource management practices based on CRANET data

The purpose of this paper is to explore varieties of capitalism (VoC) as a moderator of the effect of: the strategic HR function role; and the level of union presence on the adoption of different human resource management (HRM) practices categorized as either person-centered or performance-centered.

The authors use data on both multinationals and locally owned firms from 14 OECD countries, collected through the Cranet 2009 survey. The hypotheses of the proposed model were tested using hierarchical multiple regression analysis.

Evidence shows that the strategic HR function is positively related to the adoption of both types of HRM practices, whereas higher levels of union presence inhibit the adoption of performance-centered practices and promote the adoption of person-centered practices. In addition, although VoC does not show any significant direct effects on HR practices, there is a moderating effect of VoC on the HR function role – HRM practices and union presence – HRM practices relationships.

The use of survey data with single respondents might produce reliability problems. Additionally, the data used are cross-sectional, which means that causality cannot be determined.

Managers in multinationals corporations and local firms must be aware of the distinct effects of the strategic HR function and trade union presence in different market economies. In particular, special attention must be paid when a firm expands globally, “outside the reach” of the national market economy or type of capitalism, and operates in different VoC.

The present paper contributes to better understanding the influence of VoC, not only on HRM practices, as in previous research, but also on the relationships between the HR function role and the level of union presence and the types of practices promoted.