Purpose
The industry-wide adoption of a novel practice is often considered to be an institutional change. Although research on institutionalization has been accumulating, how and why embedded actors in the field become motivated to embrace change that remains sidelined. Viewing the introduction of a new human resource management practice, the recruitment of non-compulsory certified manpower, which is still in its infancy in the service sector of Taiwan, as a new institution, the purpose of this paper is to identify the distinct motives behind firms’ hiring decisions, and examine the extent to which such hiring decisions are contingent on institutional conditions and firm attributes.
Design/methodology/approach
The data used to test the hypotheses were drawn from a survey on service firms in Taiwan in the second half of 2011. Hypotheses were examined through moderated hierarchical regression analyses in a sample of 254 Taiwanese service firms across major sectors.
Findings
Integrating the resource dependency and social contagion views, the study contends that resource scarcity drives, or legitimacy enables, service firms to deviate from traditional hiring patterns and instead adopt new preferences toward certified manpower. The study not only shows that social factors should be incorporated into the diffusion of a new HR recruitment practice in the service sector, which is traditionally based upon economic considerations, but also sheds light on the context-dependent nature of the process of institutional innovation.
Originality/value
This study is an attempt not only to test a dual-theoretical model on the extent to which a service firm’s new hiring pattern is influenced by two distinct types of motivation, but also to evidence how an institutional innovation, in terms of the regime of service manpower certification, takes root and spreads in the field. The managerially discretional account of the resource dependence theory needs to be reconciled with social contagion theory, which highlights the influence of collective actions and so provides a better understanding of the diffusion of new HR recruitment practices in the service industry.
Deep Institutional Innovation for Sustainability and Human Development
