Managing cross-cultural differences: Testing human resource models in Latin America ☆ Jaime Bonache a, b, ⁎, Jordi Trullen c, 1 , Juan I. Sanchez d, 2 a Universidad Carlos III de Madrid, Spain b ESADE Business School (Ramon Llull University), Department of People Management and Organisation, Mateo Inurria, 25-27, 28036 Madrid, Spain c ESADE Business School (Ramon Llull University), Department of People Management and Organisation, Av. Pedralbes, 60-62, 08034 Barcelona, Spain d Florida International University, Department of Management and International Business, 11200 SW 8 Street, RB 343 A, Miami, FL 33199, United States abstract article info Article history: Received 1 September 2010 Received in revised form 1 April 2011 Accepted 1 August 2011 Available online 21 November 2011 Keywords: Human Resource Management (HRM) Latin America Cross-cultural differences Local adaptation This study examines whether firms should adapt their Human Resource Management (HRM) practices to cross-cultural differences. The authors introduce three different positions, namely, the culturalist, the univer- salist, and an integrated position that reconciles the former two named the culturally-animated universalist position. The study compares the effectiveness of these three positions in a sample of 138 firms located in Latin-America. Results suggest that, contrary to common wisdom in the International HRM literature, firms following a universalist approach outdo those using a culturalist one. However, the effect of universal HR practices on HR performance is also contingent on the country's performance orientation. The authors advo- cate the culturally-animated universalist position. © 2011 Elsevier Inc. All rights reserved. 1. Introduction Should firms adapt their human resource management practices to cross-cultural differences? A review of the literature on International Human Resource Management (IHRM) reveals two opposite and ap- parently mutually exclusive answers to this question. The first answer, which the authors term hereafter as the culturalist position, argues for HRM practices that are adapted to the local environment. This position assumes that employees prefer practices that conform to local usages and that, as a result, such practices lead to higher performance. In sim- pler words, “When in Rome, do as the Romans do” (Newman & Nollen, 1996). In contrast, the second answer represents a view that is antagonistic to the first one, arguing that prevailing HRM practices are not necessar- ily the most effective ones. Indeed, this universalist position maintains that firms should ensure that their HRM practices conform to a set of principles – known as High Performance Work (HPW) principles – whose effectiveness has been empirically supported by several studies both in the US (e.g., Arthur, 1994; Delaney & Huselid, 1996; Huselid, 1995; Huselid, Jackson, & Schuler, 1997; Lawler, Anderson, Buckles, Ferris, & Rosen, 1995) and elsewhere (Bae & Lawler, 2000; Guthrie, 2001; Hartog & Verburg, 2004; Katou & Budhwar, 2007). The underly- ing assumption is that these principles have universal reach and should help us manage people regardless of national environment. A third answer, that can be named as the culturally-animated universalist position, is more nuanced than the previous two. This third position defends the existence of a set of globally applicable HRM principles but, unlike the universalist position, the culturally-animated universalist position maintains that culture interacts with HRM practices in ways that prevent the same practices from having identical results in different countries. The culturally-animated position represents a way of thinking that has already been influential in sociology (Weber, 1904; Fukujama, 1995) and in global leadership (Javidan, Dorfman, Sully de Luque, & House, 2006). The present study compares and contrasts these three theoretical positions (i.e., culturalist, universalist, and culturally-animated uni- versalist) through an empirical test conducted in a Latin American context. Differently from other areas of the world such as North America, Europe or Asia, HRM research in Latin America is scarce and often theoretical (Montaño, 1991; Sanchez, Gomez, & Wated, 2008), and has tended to focus on single countries and on compari- sons to the US (Davila & Elvira, 2009; Elvira & Davila, 2005a, 2005b; Gómez & Werner, 2004; Wated, Sanchez, & Gomez, 2008). Multi- country empirical HRM research capable of providing broad guidance regarding the effectiveness of various HRM practices across Latin America is lacking. This paucity of empirical evidence is particularly Journal of Business Research 65 (2012) 1773–1781 ☆ The authors thank Petra de Saa (Universidad de Las Palmas de Gran Canaria), Luigi Stirpe (Universidad Carlos III de Madrid), François Collet (ESADE Business School) and JBR reviewers for reading and comments of an early version of this article. ⁎ Corresponding author at: ESADE Business School (Ramon Llull University), Depart- ment of People Management and Organisation, Mateo Inurria, 25-27, 28036 Madrid. Tel.: +34 913 597 714; fax: +34 917 030 062. E-mail addresses: jaime.bonache@esade.edu (J. Bonache), jordi.trullen@esade.edu (J. Trullen), juan.sanchez@fiu.edu (J.I. Sanchez). 1 Tel.: +34 932 806 162; fax: +34 934 952 077. 2 Tel.: +1 305 348 3307. 0148-2963/$ – see front matter © 2011 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2011.10.037 Contents lists available at SciVerse ScienceDirect Journal of Business Research