Institutional influences on HRM in the Asian business environment: the case of Indonesia

Abstract

Purpose

The purpose of this paper is to analyse the isomorphism phenomenon in the Indonesian HR field. It also attempts to identify characteristics of a highly isomorphic field which tend to be overlooked in institutional analysis.

Design/methodology/approach

The research was conducted within a qualitative, interpretive paradigm. Both primary and secondary data sources were utilized in this study. Primary data were obtained from more than 56 interviews, including informal talks and observations. Two types of interviews were conducted, i.e., face to face, narrative, open-ended interviews with HR professionals, consultants and academics and e-mail interviews with several of the HR professionals who were involved in several HR mailing lists in Indonesia.

Findings

HR field in Indonesia shows how institutional influences work, characterized by the diffusion and adoption of human resource practices among foreign multinational and large local companies in Indonesia. HR actors within organizations interact with multiple, and often competing, ideas within complex and overlapping multi-institutional settings and take decisions explained by the characteristics of Indonesian HRM as an isomorphic field.

Research limitations/implications

Further research is needed to be conducted in similar isomorphic fields to identify the characteristics and whether or not they confirm the results of this research. Further research into the HR field in Indonesia is also suggested to uncover deep-seated institutional logics and mechanisms that can facilitate or constrain future changes in the field. As a transitional field usually contains different, sometimes conflicting, institutional pressures in influencing the direction of change, a better knowledge of how the conflicting forces work is needed to provide understanding about how to steer a well-informed institutional change.

Practical implications

Involvement in the networks of diffusion of ideas can benefit the HR professionals of participating firms. The study suggests an active but critical participation in the networks of HR ideas diffusion to obtain greater benefits. The study has shown the existence of different channels of HR knowledge transfer. HR actors therefore need to decide which channels might be more effective in the knowledge transfer. Because the different sources of ideas may provide conflicting ideas, HR actors may need to be mindful in their participation in the different networks to take advantage of them, rather than being confused by the conflicting forces.

Originality/value

This research contributes empirically to studies of isomorphism of HRM practices by providing evidence that connects the micro-organizational and the broader organizational field levels. A significant methodological contribution of this research is the use of observations and the participation in professionally oriented electronic mail-list groups as a method of investigating knowledge diffusion within a field.

Citation

Rupidara, N.S. and Darby, R. (2017), "Institutional influences on HRM in the Asian business environment: the case of Indonesia", Journal of Asia Business Studies, Vol. 11 No. 3, pp. 262-277. https://doi.org/10.1108/JABS-07-2015-0110