Informal 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.
25 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.
The 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.
This 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.
