[Excerpt] Despite the rapid growth in the diversity of service consumers—both abroad and domestically—theoretical developments regarding this diversity in the service world have lagged far behind those that have characterized the world of manufacturing. With regard to international services, Knight (1999) conducted a review of the literature and concluded that there is an alarming paucity of research on international services management despite the importance of services in the global economy. A large proportion of the research that has been conducted on international services has focused on marketing issues rather than human resource management (HRM) issues. This means that little is known about the cross-cultural applicability of service HRM theories, which have hitherto been developed and tested almost exclusively within the West (mostly within the U.S. context). Similarly, there has been little research on the HRM implications of the growing diversity of service consumers within the U.S. domestic market. Again, much of the research focuses on the challenges associated with simultaneously marketing services to a multicultural customer base, with little or no work focusing on the implications of these challenges for HRM in service firms.
Thus, the purpose of our chapter is to introduce a preliminary discussion of the HRM implications of both increased internationalization and domestic diversity for service firms. We begin by presenting a brief synthesis of the services management literature that has been established to date. Readers will note in the synthesis that a number of contingencies with regard to HRM practices have already been introduced especially via definitions of what constitutes service and the role of customers in service production and delivery. We then discuss the potential cross-cultural applicability of these services management principles abroad, and when doing so, we focus primarily on the aspects of services management theories that are laden with Western cultural principles. Next, we discuss parallel challenges faced by service firms as a result of increased diversity within the domestic marketplace and we conclude with some thoughts about the necessity to more explicitly explore the contingent nature of HRM practices.