BOOK REVIEW: The art of managing people

Handbook of Human Resource Management in Emerging Markets, Edited by Frank Horwitz and Pawan Budhwar

PROFESSOR Frank Horwitz, formally of the University of Cape Town, leads the International Human Resource Management at the top UK Business School at Cranfield University. Together with his co-editor, Professor Pawan Budhwar, they have produced an essential work for every senior human resource practitioner.

There is no shortage of books on Human Resource Management (HRM). The first question anyone picking up this book could ask, (I did!) is why we should think HRM in emerging markets is so different to developed markets? Perhaps, just a little behind, but fundamentally different? As this book makes very clear, the answer is that HRM is profoundly different.

Business is highly competitive, and every business has to use every available resources effectively and efficiently.  Every organisation has to place its human resource front and centre of this effort.

HRM is a function of the context of the enterprise. As such the culture of the country with its unique diversity, the institutional structures available and unavailable, the labour market dynamics, as well as the business environment, will inform how HRM is practiced.

Even a casual comparison between business friendly Rwanda or Mauritius, and South Africa’s legalistic restrictions and red tape, makes this clear.

Compare ex-trade unionist, Lula da Silva’s Brazil, with the Russian experience of the wholesale looting of state assets. India’s highly politicised labour movement, determines what can and cannot be changed rapidly, in contrast to China’s centrally planned economy, with its predetermined wages and state-appointed managers, and highly vulnerable workers. The beneficiaries of South Africa’s freedom are a relatively small elite, with the large unskilled and semi-skilled still left behind.

While the BRIC grouping consists of the largest intercontinental powerhouses of emerging middle-income economies, there are many other important Emerging Markets, from Egypt to Turkey, from Malaysia to Korea.

Emerging Markets as a collective, matter significantly. According to a Goldman Sachs study, Emerging Markets will produce 70% of the world’s GDP growth, and are expected to reach US$80 trillion in the future. The combined GDP of BRICs will be six times that of the US by 2050.

According to an International Labour Organisation report there are 3 billion employees in the world, with 2.8 billion in the developing and emerging markets. As such the Human Resource requirements will need significant attention – training to improve productivity, for example, justify wage increases.

The literature on HRM and management in Africa as elsewhere, is no longer “scarce, scanty and sketchy,” making addressing real issues much easier.

Africa is growing strongly with meaningful inflows of investments, management systems, and an increasingly educated workforce.
It is difficult to talk about “Africa” as it is 53 countries, multicultural, multilingual, multi-ethnic, and multi-regional. That said, Africa offers a fine example of the HRM issues in emerging markets.

SMEs are the main “employers” of labour on the continent which is not the case in mature markets. 15% of Ghana’s labour force work for SMEs, and 65% of Nigeria's labour force are in the informal sector. The extent to which African enterprises are applying best HRM practices is a problematic, and might well be relevant only to large firms and state controlled ones, and not to the informal and SMEs sectors. As such, there are dual labour markets coexisting.

Careers have traditionally been defined as an accumulation of role experiences over time. Would this be relevant to South Africa in the post-apartheid era, or to Russia after the fall of communism? Even a fundamental concept as an individual’s career planning would have to be thought of as vastly different to what it might have been in a mature market, or in countries with different social-political or economic structures.

This, and many other pertinent HRM issues are addressed in this wide ranging volume.

The failure rate of mergers and acquisition in mature markets is probably 50%, if you mean not losing shareholder value, and higher if you are referring to “meeting expectations”. How much more complex would it be if the merger took place between a Mature Market company and an Emerging Market company?

Expatriate integration and performance has always posed worrying problems for Human Resource practitioners who leave a domestic, known market, for an overseas posting. One needs only consider how this problem is compounded when an senior manager leaves Korea to work in South Africa with the language, cultures, work ethic and other profound differences. Most of the research in this area has been on Mature Markets with only scant work on Emerging Markets to date.

The expatriation issue is not one-directional; there are now significant multinational companies that began in emerging markets. The shift in economic power from mature markets to emerging markets is already evident in the multinational companies that have grown in emerging markets.

Some well-known examples are Acer (Taiwan), Samsung (Korea), Tata (India), Hauwei (China), Embraer (Brazil), Sasol (South Africa) and many, many more. Expatriation issues are no less concerning when a manager moves from an emerging economy to a mature one.

This Handbook is an academic work and this has two important implications. The book deals with every issue very thoroughly. It is not padded with anecdotes or superficial, half-page “case studies”. Each chapter has four or more pages of references to the work on which each assertion is made.

Many of the subjects covered in the Handbook will be of profound interest to anyone who has responsibility for HRM. Subjects range from those touched on above to negotiations, employee engagement, performance management, compensation, national differences, and future trends.

Each chapter can be read in isolation as and when the subject is of concern.  However, chapters one to four, and chapter twenty one should not be missed. From there on, the order should not be an issue.

The book has two characteristics that should give it pride of place on your desk: It is a collection of the work of serious scholars, and there is nothing like it available. This book is highly recommended to Human Resource academics as well as all serious Human Resource practitioners.

Readability       Light ----+ Serious
Insights         High +---- Low
Practical        High -+--- Low

(I do recommend the hard copy over the ebook as work not available in Kindle.)

*Ian Mann of Gateways consults internationally on leadership and strategy and is the author of Strategy that Works. Views expressed are his own.

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