The purpose of this paper is to study the effect that weak enforceability of property rights has on the human resource practices of firms operating in hostile business environment.
This paper questions the role of the state as the only provider of stability and guarantor of property rights and hypothesizes that it is not governments, which tend to be weak in weak institutional settings, but private firms that act as the main force behind the protection of entrepreneurial investments. The approach consists in developing a case study about a farm (Hacienda Gavilanes) in rural Colombia.
It is found that incentives together with inclusive human resources practices and empowerment are among those strategic arrangements that contribute most to the survival and sustainability of the farm today in a setting where legal enforceability is precarious. The replication of this policy might not be easy, however, because it requires a profound shift in the way landowners perceive workers in rural Colombia and many other parts of the world.
The case presented in this paper provides valuable lessons beyond Latin America for other developing countries with similarly fragile governments and economic environments.
