An exploratory study of employer branding and its role in addressing the integration-responsiveness problem in multinationals: a signaling theory perspective

The concept of employer branding has recently gained prominence due to its involvement in talent management, reputation and the engagement agendas of organizations. This has been the result of emerging factors in the global economy, including rapid globalization, a growing skills gap (ageing population and baby boomers), global recession, intense global competition, skills shortages and the resulting talent wars. It is also believed that employer branding is an important ‘tool in the box’ for addressing the dual International Strategic Human Resource Management (ISHRM) problems of global integration and local responsiveness in complex organizations that operate globally but have to simultaneously respond to local needs. However, it is argued that employer branding’s ability to deal with the integration-responsiveness problem depends upon its authenticity; the reflection of the authentic voice of local employees in the employer brands through involving them in strategizing. In this thesis, I draw on signaling theory to help understand these problems and the limitations of current employer branding research, which has to date focused on signals transmitted from employers in the corporate headquarters to employees in the local subsidiaries (mainly top management level) but has significantly ignored the voice of employees at the local level by ignoring the ‘counter-signals’ flowing back from local employees. This provides a significant gap in the extant literature on employer branding, which I attempt to fill. In doing so, my study contributes to signaling theory in three directions: by examining how negative signals impact the signaling environment; how feedback-seeking behaviour improves the signaling process; and how signal precedence impacts receiver’s interpretation. Exploring these gaps shall help in developing new insights in signaling theory research. Since most of the employer branding literature has been developed in the West, it is relatively context-bound. Much has been written about employer branding in the SHRM literature but there is little empirical evidence concerning its relevance to global companies for dealing with the integration-responsiveness problem or its need and importance for the under-developed economies, outside of the Anglo-Saxon world. This also leaves an important gap that this study seeks to fill. To do this, the study explores the influences of different context levels upon employer branding change programs in the context of Pakistani economy, which is currently passing through its developing phase. Therefore, conducting this study in the Pakistani context has aided in examining the issue from the perspective of a developing country, which has been stressed by scholars of Strategic and International HRM as a gap that needs to be filled. In this way, the study has made several important contributions at both, theoretical and contextual levels. A case study research design was adopted comprising of qualitative semi-structured and focus group interviews and analysis of relevant company documents. These were conducted in subsidiaries of three foreign multinationals with senior managers and employees at different hierarchical levels in order to gain rich insight into the application and practice of employer branding and to explore its potential role in addressing the integration-responsiveness problem. The signaling process within each firm was also deeply examined in order to further explore the significance of signaling theory in employer branding research. My findings have significant implications for theory and practice of employer branding. They suggest that ‘authentic’ employer brands that respond to the local needs can play a crucial role in addressing the integration-responsiveness problem through adopting strategy-as-practice approach. It was also revealed that the success of this process largely depends upon the influences of different contextual factors and the efficiency and effectiveness of the signaling process; the more effective and efficient the signaling process is, the more authentic is the resulting employer brand. The study also finds that there is little possibility of designing a ‘one size fits all’ approach to employer branding, which is able to address the integration-responsiveness problem. Multinationals operate in different environments possessing their own unique characteristics and fundamental differences from others. Thus, as in most studies, context matters, and in a Muslim country such as Pakistan, context matters more due to factors such as strict religion and unique culture, which is not widely prevalent in the Western developed economies.