9) The Implications of BRICS Formation on Global HRM and SHRM: A Theoretical Perspective

- By Amal Piyasena


The Implications of BRICS Formation on Global HRM and SHRM: A Theoretical Perspective


The formation of BRICS, an association of five major emerging economies - Brazil, Russia, India, China, and South Africa, has drawn significant attention from both political and economic arenas. While BRICS is primarily an economic and political alliance, its formation has profound implications for Human Resource Management (HRM) and Strategic Human Resource Management (SHRM) in both member and non-member countries. Drawing upon established HRM theories, this article endeavors to unpack the potential impacts and benefits of BRICS on the new world HRM.


Table on HRM Theories and BRICS Implications:



1. Universalistic vs. Contingency HRM Theories


Universalistic Perspective: This theory posits that there's a universal set of HR practices beneficial for every organization (Delery & Doty, 1996). Under the BRICS alliance, there could be a convergence of best HR practices, allowing member nations to adopt universally acclaimed HR techniques, thus standardizing practices across borders.


Contingency Perspective: Contrary to the universalistic perspective, this theory stresses that HR practices should align with an organization's external environment and strategy (Boxall & Purcell, 2000). Given the diverse economic and cultural landscapes of BRICS countries, a 'one-size-fits-all' approach might not be ideal. Instead, customization of HR practices to suit the local contexts might be more effective.

For instance, while the hierarchical structure is predominant in Chinese organizations (reflecting Confucian values), flat structures might work better in India due to its democratic and diverse culture.

2. Resource-Based View (RBV) and HRM


The RBV emphasizes the strategic role of unique organizational resources and capabilities in achieving competitive advantage (Barney, 1991). BRICS nations, with their distinct socio-cultural and economic landscapes, offer a wealth of unique HR capabilities.

Example: India's vast IT talent pool and China's manufacturing prowess can be considered unique resources. Collaborative initiatives between BRICS nations can lead to a strategic pooling of these HR capabilities, driving innovation and enhancing global competitiveness.

3. Institutional Theory in HRM

This theory underscores the role of socio-cultural, political, and economic institutions in shaping HR practices (Scott, 2008). The formation of BRICS can lead to the sharing of institutional knowledge, helping countries understand and navigate the unique institutional landscapes of member nations.

For instance, understanding the intricacies of labor laws in Russia can help an Indian MNC in making informed decisions when setting up operations in Russia.

4. Social Exchange Theory

This theory emphasizes the mutual exchange of value between employees and employers (Blau, 1964). As BRICS nations collaborate on various fronts, there will be increased opportunities for employee exchanges, international assignments, and cross-border training programs. Such initiatives can lead to enriched employee experiences, fostering loyalty and commitment.


Megatrends and their impact on HRM in the BRICS countries



https://www.researchgate.net/figure/1-Megatrends-and-their-impact-on-HRM-in-the-BRICS-countries_tbl1_362398344


Real-world Example: Chinese tech giant, Tencent, in collaboration with South African media group Naspers, could offer cross-border training programs for their employees, leveraging best practices from both nations.


Certainly! When considering the implications of BRICS on global HRM or SHRM, several academic revelations emerge:

  1. Decentralized HRM Systems: With BRICS countries having distinct cultural, social, and economic backgrounds, a one-size-fits-all HRM approach may not be effective. This might lead organizations to adopt more decentralized HRM systems, tailored to each country's unique context (Pudelko, M., & Harzing, A.W. 2007).


  3. Mobility and Diversity Challenges: Cross-border employee movement within BRICS could increase. While this fosters diversity, it also brings challenges in managing such diversity and ensuring seamless integration of employees from diverse backgrounds (Shen, J., Chanda, A., D'Netto, B., & Monga, M. 2009).


  5. Innovation through Resource Pooling: The collaboration of BRICS countries can lead to pooling unique HR capabilities, resulting in innovative HR practices that can be a model for the rest of the world (Farndale, E., Pai, A., Sparrow, P., & Scullion, H. 2014).


  7. Ethical HRM Practices: Given the socio-economic disparities within BRICS nations, organizations might face challenges in ensuring consistent ethical HRM practices. However, it also offers an opportunity for BRICS to collectively set higher standards (Boselie, P., Dietz, G., & Boon, C. 2005).


  9. HRM Technology Adoption and Data Protection: With the digital transformation wave hitting BRICS nations, there's an increased adoption of HRM technologies. However, it's vital for these countries to have robust data protection regulations in place to ensure employee data privacy (Stone, D. L., Deadrick, D. L., Lukaszewski, K. M., & Johnson, R. 2015).


  11. Talent Retention in Emerging Markets: As BRICS nations emerge as major global players, talent retention becomes crucial. HRM strategies will need to pivot towards practices that cater specifically to retaining talent in these high-growth markets (Tarique, I., & Schuler, R. S. 2010).


  13. Redefining Leadership Training: With the formation and strengthening of BRICS, there's a potential shift in global economic power. This may necessitate a redefinition of leadership training programs to cater to a more diverse and inclusive global viewpoint (Caligiuri, P. 2014).

Conclusion

The formation of BRICS presents both challenges and opportunities for HRM and SHRM. While it offers the potential for shared learning, collaboration, and pooling of HR capabilities, it also underscores the need for a nuanced understanding of diverse institutional landscapes. To harness the full benefits of this alliance, HR professionals must strike a balance between standardization and localization of HR practices. 
While the formation and strengthening of BRICS introduce a plethora of opportunities for reimagining global HRM practices, they also present a set of challenges that HR professionals need to navigate adeptly. The academic community has a pivotal role in researching and guiding these evolving HRM dynamics in the BRICS context.

References:


Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of management, 17(1), 99-120.
Blau, P. M. (1964). Exchange and power in social life. New York: Wiley.
Boxall, P., & Purcell, J. (2000). Strategic human resource management: where have we come from and where should we be going? International Journal of Management Reviews, 2(2), 183-203.
Delery, J. E., & Doty, D. H. (1996). Modes of theorizing in strategic human resource management: Tests of universalistic, contingency, and configurational performance predictions. Academy of management Journal, 39(4), 802-835.
Scott, W. R. (2008). Institutions and organizations: Ideas and interests. Sage.

Comments

  1. NiroSeptember 1, 2023 at 12:13 AM

    Interesting topic Amal. Yes, I agree with your conclusion. The BRICS alliance is a complex and ever-evolving economic and political bloc, and it presents both challenges and opportunities for HR professionals.
    What are the specific cultural differences that HR professionals need to be aware of when working in the BRICS alliance, given that these are 5 different nations?

    ReplyDelete
    Replies
    1. Amal PiyasenaSeptember 2, 2023 at 4:20 AM

      Thank you for your insightful comments on the blog. I appreciate your acknowledgment of the complexity and dynamism inherent to the BRICS alliance, a sentiment echoed by many scholars (Swart & Kinnie, 2010).

      To address your query on cultural differences within the BRICS nations, it's indeed a pertinent aspect for HR professionals to consider. Each BRICS member - Brazil, Russia, India, China, and South Africa - comes with its unique cultural fabric that influences business norms, interpersonal relationships, management styles, and communication patterns.

      For instance, while Russia and China might lean towards a hierarchical structure in corporate settings, reflecting their historical and societal influences, Brazil and India might display a mix of hierarchy and collectivism (Hofstede, 2001). South Africa, on the other hand, with its diverse ethnicities, presents a mosaic of cultural norms.

      Communication styles can also vary. Whereas Indians might often use indirect communication to convey disagreement or refusal, the Chinese might rely on non-verbal cues. Brazilians, conversely, might prefer more direct communication but with an emphasis on building personal relationships (House et al., 2004).

      Understanding these cultural nuances is pivotal for HR professionals to facilitate effective communication, teamwork, and leadership within the BRICS alliance. Culturally attuned HR practices can not only reduce potential conflicts but can also harness the strengths of diverse perspectives, fostering innovation and collaboration (Jackson, 2002).

      I hope this provides a brief overview of the cultural dynamics within BRICS. Further exploration on this topic can yield deeper insights, which can be instrumental for HR practitioners working within this alliance.

      Delete
  2. Hisshanthi WanasingheSeptember 1, 2023 at 9:27 AM

    Nice article. The formation of BRICS has significant implications for global Human Resource Management (HRM) and Strategic HRM (SHRM). It underscores the need for HR practitioners to adapt strategies to accommodate diverse cultural, economic, and regulatory contexts within these member nations. Understanding these nuances is crucial for effective global talent management.

    ReplyDelete
    Replies
    1. Amal PiyasenaSeptember 2, 2023 at 4:21 AM

      Thank you for your insightful comment. You're absolutely right; the BRICS formation emphasizes the dynamism within global HRM and SHRM practices. As each member nation brings a unique socio-economic and cultural perspective, it necessitates a nuanced approach to HR strategies (Brewster, C., Mayrhofer, W., & Smale, A., 2016). Such cross-cultural adaptability can lead to improved talent acquisition, retention, and management, especially when dealing with a workforce spread across different countries. It also underscores the importance of continuous learning and adaptability for HR practitioners who want to ensure success in an increasingly interconnected global economy (Farndale, E., Pai, A., Sparrow, P., & Scullion, H., 2014). Your feedback is much appreciated, and it adds depth to the ongoing conversation on this topic.

      Delete
  3. Nipuni WeerasuriyaSeptember 2, 2023 at 7:55 AM

    Indeed, the emergence of BRICS as a collaborative bloc in the global landscape brings HRM and SHRM both opportunities and challenges. The potential for shared learning and collaboration is promising, but the diverse institutional contexts within BRICS nations require HR professionals to adapt their practices accordingly. Striking the right balance between standardization and localization will be key to harnessing the full benefits of this alliance. Academic research plays a vital role in guiding HRM strategies within the BRICS context and ensuring effective global HRM practices.

    ReplyDelete
    Replies
    1. Amal PiyasenaSeptember 2, 2023 at 11:01 AM

      Hi Nipuni, Thank you for sharing your insightful perspective on the matter. I wholeheartedly agree with your emphasis on the dual possibilities—both opportunities and challenges—that the rise of the BRICS bloc presents for HRM and SHRM professionals. Your point about the intricate balance between standardization and localization resonates deeply. As Budhwar and Varma (2010) note in their work, multinational corporations operating in different institutional and cultural settings often grapple with the dilemma of whether to standardize their HR practices or adapt them to the local context. Within the BRICS alliance, this challenge is amplified given the rich diversity and varying institutional contexts among member nations.

      Your mention of academic research's pivotal role is also apt. Continuous research will help shed light on best practices, illuminate pitfalls to avoid, and provide a roadmap for navigating the complex terrain of global HRM within the BRICS framework. Your comments serve as a valuable reminder of the importance of knowledge, adaptability, and continuous learning in harnessing the potential of such global alliances. I appreciate your contribution to this discourse and welcome further academic exchanges on this evolving subject.

      Delete
  4. Prasadini JinadasaSeptember 2, 2023 at 10:08 AM

    This paper offers a stimulating examination of the effects of BRICS creation on international HRM and SHRM via the prism of recognized HRM theories. It provides insightful information about the advantages and difficulties that might exist in this changing environment. The debate is deepened by the scholarly discoveries and real-world examples, making it a thorough and enlightening read. Particularly noteworthy is the article's examination of decentralized HRM systems and the possibility for innovation through resource sharing. Overall, a thorough and instructive viewpoint on a subject that is becoming more and more important.

    ReplyDelete
    Replies
    1. Amal PiyasenaSeptember 2, 2023 at 11:04 AM

      Thank you for your thoughtful feedback on the paper. I'm pleased to note your appreciation for the integration of academic findings and real-world examples. Indeed, the formation of the BRICS alliance presents a unique context for HRM and SHRM, and understanding this through the lens of established HRM theories provides a comprehensive view of the possible ramifications (Taylor, Beechler & Napier, 1996).

      Your observation regarding the examination of decentralized HRM systems is particularly insightful. As Sparrow et al. (2004) highlighted, decentralization allows for more localized decision-making, which can be especially vital in a diverse alliance like BRICS where member nations have varied cultural, economic, and institutional backgrounds. This can indeed foster innovation and enhance the potential for resource sharing, as you rightly pointed out.

      I appreciate your engagement with the paper and the recognition of its significance in the current global HRM discourse. The objective was to elucidate the complexities and opportunities of HRM practices in the BRICS context, and I'm glad to see it resonated with informed readers like you.

      Delete

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