The dual nature of informal networks for HRM practices in Latin America: the role of compadrazgo at MNCs in Mexico

Moez Ben Yedder, Fadi Alsarhan, Sabine Jentjens and Lynda Espinosa

International Journal of Manpower, 2025, vol. 46, issue 6, 1049-1068

Abstract: PurposeInformal networks play a critical role in shaping economic, social, and organizational dynamics in Latin America, where cultural and institutional factors foster reliance on personal relationships over formal structures. Investigating their impact on HRM is essential, as informal networks often affect hiring practices and employee development by circumventing formal HRM procedures or protocols. For MNCs, understanding these informal dynamics is crucial to navigating cultural complexities when aligning global HR policies with local practices.Design/methodology/approach25 semi-structured in-depth interviews were conducted with Mexican employees across hierarchical levels at MNCs operating in Mexico. These interviews were analyzed using the Gioia method.FindingsThe findings suggest that compadrazgo, the Mexican informal network, is particularly influential due to the prevalence of collectivist values and trust-based interactions, as well as their impact on employee behavior and HRM issues. Although these networks promote cultural alignment and institutional congruence, they may undermine formal HRM standards implemented locally by MNCs, particularly in terms of recruitment and career development. Though a common practice, compadrazgo and the wider use of informal networks are perceived negatively when those benefiting do not live up to the requirements and are regarded as detrimental to the firm’s performance.Originality/valueThis study heeds the call for greater contextualization in international HRM research by accounting for cultural nuance. It also contributes to the growing body of literature on informal networks, focusing on the underexplored context of compadrazgo in Mexico. By examining compadrazgo within the realm of HRM, this study bridges a gap in understanding how informal dynamics influence organizational practices in this unique setting and how MNCs deal with local characteristics.

Keywords: Informal networks; Compadrazgo; Mexico; HRM; Recruitment; Promotion (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijmpps:ijm-11-2024-0825

DOI: 10.1108/IJM-11-2024-0825

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