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Abstract Argues that, whether referring to economic or bounded rationality, the notion of rationality is meaningful only in a specific cultural context. Proposes, by analogy, a culture‐driven approach for rationally managing the human resource function in a global environment. Shows how culture provides additional explanatory power for human resource management (HRM) practices – beyond what is a accounted for by political or economic structures – by comparing the USA with one of its major trading partners, Taiwan and with the People′s Republic of China (PRC), a country with which the USA has had a rather checkered relationship, on their commonly‐used practices of selection, reward systems, performance appraisal and participative management. Makes suggestions on how to reconcile cultural differences in transplanting HRM practices to China.
Huo et al. (Wed,) studied this question.