Institutional fit of Strategic Human Resource Management: Myth, limitation or advantage?

Abstract

Purpose: Current research explores what determines corporate Human Resource Management strategy (SHRM), proposing that external institutional pressure can limit firms’ freedom of choice. Design/methodology/approach: The illustrative context is the banking industry in Russia. With a focus on the disclosed SHRM, the research helped to ensure that a) most of the banks indeed were similar in SHRM, despite possibility of the alternative options; b) successful banks were more self-determined in SHRM choice; c) in both cases, this choice was not associated with the competitive advantage of the banks. Key methods: theoretical thematic analysis on a latent level and Human Capital Disclosure Index. Findings: Example of the Russian banking industry helped illustrating that institutional fit of SHRM was not a myth and should not be neglected. However, successful banks partly overcame high institutional predetermination: they recognized and utilized lack of coherence in the institutional system; therefore, institutional barriers became advantageous for them. Originality/value: The research shifted from a traditional positivist perspective with its practice-based approach to the interpretivist perspective, treating SHRM as a combination of three latent referent standards. It allowed shifting from the ongoing debate about what form of SHRM has higher influence on performance, intended or perceived; and about operationalizing its variety. Research implications: The results contribute to a wide range of research in Strategic Human Resource Management. The context plays illustrative role, thus findings can be tested outside the banking industry and Russian institutional environment.