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Week2Lecturenotes.docx
International Human Resource Management: BUSMGT 761
Week 2: 28
th
June 2021
The cultural context
of IHRM
Week 1 observed that international HRM differs from nationally-oriented HRM predominantly in the complexities that result from employees of various national origins working in different countries. People who work in internationally operating companies, as well as customers, suppliers, or representatives of government institutions in the host country, often face very different cultural and institutional environments due to differing socialization experiences.
Week
1
recap
Definition
of HRM and IHRM
Complexity
involved in operating in different
countries and employing different national
categories of employees is a key variable
differentiating domestic and IHRM
Other
variables that moderate differences
between domestic and IHRM
:
overall global
complexity; the cultural environment; the
industries; the extent of reliance of the
multinational on its home
-
country domestic
market; and the attitudes of senior management
A
model of SHRM
in multinational enterprises
This week focuses the role of culture in IHRM.
What do you understand from this picture?
Countries differ widely in their culture – in other words, in the basic values and assumptions. Peoples’ values and assumptions tend to drive what they do, and so cultural differences manifest themselves in how people in different countries think and act. For example, in France, employees don’t think it is necessary to mention what’s right because they know what they have done right. Whereas there is a tendency for U.S managers to sugercoat what’s wrong. In China, heads of companies are inclined to see employees as members of their family, but in turn demand much of them.
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What is Culture?
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‘Culture’ refers to a shared and sustained set of understandings, values, and beliefs that influence behaviour… the characteristic way of behaving and believing that a group of people have developed over time and share |
Workers around the world tend to have differing attitudes toward authority. With respect to authority, countries range from egalitarian to hierarchical. For example, in the more egalitarian United States and Canada, managers emphasise worker empowerment and soliciting input, while hierarchical countries like Saudi Arabia and Russia authority clearly resides in top managers. Similarly, differences in how they make decisions characterise cultures around the world. Thus, in the United States, top-down decision-making tends to be the rule, while in Sweden and Japan the emphasis is on consensus decisions. Such differences can cause problems for multinational employers. For example, employees in hierarchical countries like
Indonesia might react negatively to a manager from the U.S. soliciting their opinions.
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Similarly, employees in egalitarian countries like Sweden might react negatively to a boss from abroad who emphasises their bossiness.
(Dessler, 2020)
Kluckhohn & Kroeber’s
concept of culture
•
The essential core of culture consists of traditional ideas
and their attached values
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Culture consists of patterned ways of:
•
Thinking
•
Feeling
•
Reacting
"By culture we mean all those historically created designs for living, explicit and implicit, rational, irrational, and nonrational, which exist at any given time as potential guides for the behaviour of men. “
Kluckhohn, C., & Kelly, W.H. (1945). The concept of culture. In R. Linton (Ed.). The Science of Man in the World Culture. New York. (pp. 78-105).
Schein’s concept of culture
A Culture has 3 levels:
•
Artefacts
–
visible
•
Values
–
intermediate level of
consciousness
•
Underlying assumptions
–
invisible,
unconscious
In the 1980s, psychologist Edgar Schein of the Sloan School of Management developed a model for understanding and analysing organizational culture. Schein divided an organization’s culture into three distinct levels: artifacts, values, and assumptions.
Artifacts are the overt and obvious elements of an organization. They’re typically the things even an outsider can see, such as furniture and office layout, dress norms, inside jokes, and mantras. Yes, football and free food are also artifacts. Artifacts can be easy to observe but sometimes difficult to understand, especially if your analysis of a culture never goes any deeper.
Espoused values are the company’s declared set of values and norms. Values affect how members interact and represent the organization. Most often, values are reinforced in public declarations, like the aptly named list of core values, but also in the common phrases and norms individuals repeat often. Herb Kelleher was famous for responding to a variety of proposals from Southwest colleagues with the phrase “low-cost airline,” reaffirming the espoused value of affordability.
Shared basic assumptions are the bedrock of organizational culture. They are the
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beliefs and behaviors so deeply embedded that they can sometimes go unnoticed. But basic assumptions are the essence of culture. Zappos call center employees share a strong belief that providing outstanding service will result in loyal customers, so much so that employees send potential customers to other retailers if Zappos doesn’t have the item in stock. Basic assumptions manifest themselves in a variety of ways. Sometimes they’re reflected in the espoused values and in artifacts, sometimes not. But when basic organizational assumptions don’t align with espoused values, trouble arises. Enron produced a 64-page manual outlining the company’s mission and espousing its core values but judging by their very “creative” accounting practices, it’s questionable if the executives at the top had ever read it.
https://hbr.org/2014/12/how-to-tell-if-your-company-has-a-creative-culture
Schein’s Iceberg
Artefacts
Values
Assumptions
Visible
Invisible
Basic assumptions are the hardest to see, but it’s the basic assumptions of an organization’s culture that produce a real affect on the creativity of its members. Creative organizations have basic assumptions about creativity being a process, rather than a eureka moment, or that not all conflict needs to be resolved because sometimes it can yield more innovative thinking. They share beliefs that creativity thrives under constraints, or that the best work is done using constantly evolving teams. Sharing ideas openly, allowing for limited risk taking, and celebrating failures as learning opportunities are all basic beliefs of creative organizations. You may recognize a creative culture when you see it, but you won’t truly understand it until you dig below the surface.
https://hbr.org/2014/12/how-to-tell-if-your-company-has-a-creative-culture
Schein’s 6 underlying
assumptions
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Nature of reality & truth
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Time dimension
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Effect of spatial proximity and distance
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Nature of being human
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Type of human activity
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Nature of human relationships
1. Nature of reality and truth: What is real and what is not? Do members of a culture assume more of an experimental position, where decisions about true and false depend upon experiment, or do they follow more traditional convictions?
2. The time dimension: How is the time dimension defined and calculated? How important is time? Do members of a culture live more in relation to the past or to the future? Are they oriented more to the long-term or the short-term?
3. The effect of spatial proximity and distance: How is space attributed to members of a society? What objects and locations are private and what are public? What role does spatial distance play in evaluating relationships e.g., in regard to level of intimacy?
4. The nature of being human: What does it mean to be human? Is human nature marked more by good or bad intentions? Can people change and develop, even as adults?
5. The type of human activity: How is the relationship to the environment evaluated? Is the environment considered more compelling or overpowering? Are
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the members of a society more passive in their fate or do they try to actively change it?
6. The nature of human relationships: What ideas about criteria of social order dominate in a society (e.g., age, origins, success)? What characterises relationships between people? Is team success or individual success important?
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Introduction to cross-cultural management · Research began in the early 1960s · Increasing international complexity of the global economy · Problems experienced by managers · Conflicts and low performance · Insight that management knowledge is not easily transferable |
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Goals of cross-cultural management studies
Describe and compare
Explain and improve |
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The common features of these studies are: · Basic assumption that there are differences between management practices in various countries and; · That the respective environment is of particular significance in explaining these differences; · This perspective rejects the universalistic, culture-free approach to management · Critique focused on the absence of a common theoretical foundation and methodological weakness
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Although these studies have come up with different dimensions, there are many similarities too.
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· Initial study conducted at IBM between 1967 and 1973 · Across 74 countries / 116,000 participants · Culture is the “collective programming of the mind that distinguishes one category of people from another” · Six dimensions in total: · Four cultural dimensions produced in the initial study · The last two dimensions (long-term vs short-term orientation and indulgence v/s restraint) were identified in subsequent studies Geert Hofstede Interview 2011 |
Geert Hofstede, assisted by others, came up with six basic issues that society needs to come to term with in order to organize itself. These are called dimensions of culture. Each of them has been expressed on a scale that runs roughly from 0 to 100.
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· People in societies exhibiting a large degree of Power Distance accept a hierarchical order in which everybody has a place, and which needs no further justification. Philippines / India / France · In societies with low Power Distance, people strive to equalise the distribution of power and demand justification for inequalities of power. USA / Sweden / NZ
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Power distance represents the degree to which less-powerful people accept the unequal distribution of power in society. He concluded that acceptance of such inequality was higher in some countries (such as Mexico) than in others (such as Sweden). In turn, such differences manifest themselves in different behaviours. This dimension is thought to date from the advent of agriculture, and with it, of largescale societies. Until that time, a person would know their group members and leaders personally. This is not possible where tens of thousands and more have to coordinate their lives. Without acceptance of leadership by powerful entities, none of today's societies could run.
https://geerthofstede.com/culture
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Light shade denotes less power distance and dark shade denotes more power distance.
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Individualism can be defined as a preference for a loosely-knit social framework in which individuals are expected to take care of only themselves and their immediate families. USA / United Kingdom / Australia |
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Collectivism represents a preference for a tightly-knit framework in society in which individuals can expect their relatives or members of a particular in group to look after them in exchange for unquestioning loyalty. Japan / China / Germany |
Individualism is the extent to which people feel independent, as opposed to being interdependent as members of larger wholes.
Individualism does not mean egoism. It means that individual choices and decisions are expected. Collectivism does not mean closeness. It means that one "knows one's place" in life, which is determined socially. With a metaphor from physics, people in an individualistic society are more like atoms flying around in a gas while those in collectivist societies are more like atoms fixed in a crystal.
https://geerthofstede.com/culture
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Light shade denotes collectivist cultures and dark shade denotes individualist cultures.
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· Masculine cultures have stronger gender roles and femininity, stands for a preference for cooperation, modesty, caring for the weak and quality of life. Society at large is more consensus-oriented, value assertiveness in work and are more materialistic Japan/ Austria/ Germany · Femininity, stands for a preference for cooperation, modesty, caring for the weak and quality of life. Society at large is more consensus-oriented Sweden/ Denmark
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Masculinity is the extent to which the use of force is endorsed socially. In a masculine society, men are supposed to be tough. Men are supposed to be from Mars, women from Venus. Winning is important for both genders. Quantity is important and big is beautiful. In a feminine society, the genders are emotionally closer. Competing is not so openly endorsed, and there is sympathy for the underdog.
This is NOT about individuals, but about expected emotional gender roles. Masculine societies are much more openly gendered than feminine societies.
https://geerthofstede.com/culture
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Light shade denotes feminine cultures and dark shade denotes masculine cultures.
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· Countries exhibiting strong UA maintain rigid codes of belief and behaviour and are intolerant of unorthodox behaviour and ideas. They favour bureaucracy, hierarchy, organisational and career stability France/ Spain · Weak UAI societies maintain a more relaxed attitude in which practice counts more than principles. Open to diverse views, delegation and more flexible organisational structures Sweden/ Norway/ USA |
Uncertainty avoidance deals with a society’s tolerance for uncertainty and ambiguity. Uncertainty avoidance has nothing to do with risk avoidance, nor with following rules. It has to do with anxiety and distrust in the face of the unknown, and conversely, with a wish to have fixed habits and rituals, and to know the truth.
https://geerthofstede.com/culture
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Light shade denotes uncertainty tolerant cultures and dark shade denotes uncertainty avoiding cultures.
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· Societies who score low on this dimension, for example, prefer to maintain time-honoured traditions and norms while viewing societal change with suspicion. US/UK · Those with a culture which scores high take a more pragmatic approach: they encourage thrift, persistence and an emphasis on long-term goals as a way to prepare for the future. China / South Korea
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Long-term orientation deals with change.
In a long-time-oriented culture, the basic notion about the world is that it is in flux and preparing for the future is always needed. In a short-time-oriented culture, the world is essentially as it was created, so that the past provides a moral compass, and adhering to it is morally good. As you can imagine, this dimension predicts life philosophies, religiosity, and educational achievement.
https://geerthofstede.com/culture
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Low ranges denote long-term orientation cultures and high ranges denote short-term orientation cultures.
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Hofstede’s study: Long-term Orientation
· Great endurance, persistence in ❑ Personal candor & stability pursuing goals · Position of ranking based on status ❑ Avoiding loss of face · Adaptation of traditions to ❑ Respect of social without consideration & status of costs obligations modern conditions · Respect of social & status obligations ❑ Low activity savings rates & low investment within limits · High savings rates & high ❑ Expectations of quick profit investment activity ❑ Respect for traditions · Readiness to subordinate oneself ❑ Greetings, presents & courtesies to a purpose based on reciprocity · The feeling of shame |
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When Coca-Cola entered the Chinese market in 1927, they sought a spelling for the brand whose characters sounded phonetically similar to ‘’Coca Cola’’. The characters chosen however, ended up reading “Bite the Wax Tadpole” in Mandarin. Learning of the blunder, the soda-giants managed to quickly choose a new set of characters, which read as “Happiness in the Mouth”- a much more fitting depiction of the popular drink. https://www.edology.com/blog/marketing/cross-cultural-marketing-blunders/ |
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Rivals Pepsi followed in similar vein. They launched their brand into the Chinese market wielding the slogan, "Pepsi brings you back to life." A clumsy, literal translation led to the phrase being translated to “Pepsi brings your ancestors back from the grave.” A bold claim indeed for a beverage company. https://www.edology.com/blog/marketing/cross-cultural-marketing-blunders/ |
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· Societies with higher indulgence scores facilitate the pursuit of pleasurable activities and experiences manifesting in a perception of personal control Venezuela · A restrained society sees the value in curbing ones' desires where leisure is not given the same importance. Restraint requires one to align behaviour with societal norms. Russia
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Indulgence is about the good things in life.
In an indulgent culture it is good to be free. Doing what your impulses want you to do, is good. Friends are important and life makes sense. In a restrained culture, the feeling is that life is hard, and duty, not freedom, is the normal state of being.
https://geerthofstede.com/culture
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Low ranges denote restrained cultures and high ranges denote indulgent cultures.
Hofstede’s study: Comparison
Hofstede’s study: Critique Source: Hofstede: Culturally Questionable? (Jones, 2007) |
The Hofstede study is an important contribution to cross-cultural research. However, there has been an ongoing debate and critique of Hofstede’s study, from fundamental cricism of his concept of culture, described as determinist and universalist, and his approach of trying to reduce cultures to a few dimensions instead of using more sophisticated descriptions.
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The GLOBE Study · · Transnational project · 170 researchers in 62 Countries · Participants: 17,370 middle managers in 951 organisations
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The GLOBE research tries to study the complex relationships between culture, leadership behaviour, organisational effectiveness, social cohabitation conditions, and the economic success of societies.
The GLOBE Study Questions
Are there leadership behavio
u
rs, attributes & org. practices effective across all cultures?
Are there leadership behavio
u
rs, attributes & org. practices effective in some cultures
only?
How much do leadership attributes affect the effectiveness of specific leadership
behavio
u
r & its acceptance by subordinates?
How much do behavio
u
rs & attributes in specific cultures influence the well
-
being of
members in the researched societies?
What is the relationship between these socio
-
cultural variables & an international
competitive capacity?
The GLOBE Study Findings GLOBE Study 2020.
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The study is to some extent based on Hofstede’s dimensions: uncertainty avoidance and power distance. However, the dimensions are modified and expanded, leading to some confusion when Hofstede and GLOBE results are assessed and compared.
Separation of countries based on a literature analysis carried out in ten clusters:
South Asia, Latin America, North America, the Anglo cluster, Germanic and Latin Europe, Sub-Saharan Africa, Eastern Europe, the Middle East, and Confucian Asia. These cultural regions have different characteristics within the respective cultural dimensions. Unique profiles emerge when combining cultural dimension characteristics with different cultures.
The
Trompenaars &
Hampden
-
Turner Study
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Based on research in
30
different companies
in
50
countries
around the turn of
the century
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Some dimensions similar to
Hofstede / some
additional
Trompenaars Ted Talk 2013
In their book Riding the Waves of Culture Trompenaars and Hampden-Turner differentiated between seven dimensions, the characteristics of which mark the differences between cultures. They grouped these seven dimensions by three aspects: relationships between people, concept of time and concept of nature.
Hall & Hall’s 4 Dimensions of Culture
High vs. Low Context Communication
Spatial Orientation
actual distance between people when communicating
Monochrome vs. Polychrome Time
sequential processes vs. parallel actions
Information Speed
high or low information flow during communication
Based on their own experiences as government and corporate advisors and various qualitative studies, anthropologist Edward Hall and his wife Mildred Hall have presented 4 dimensions that differentiate cultures. They do not claim that their model covers all possibilities, pointing out that other dimensions may also exist. The relationship between culture and communication is emphasised in particular, as one would not be possible without the other. The dimensions mainly involve cultural differences in communication forms and time and space concepts.
The dimensions are closely related and overlapping, and cultural regions are represented in a macro sense, such as the USA and Europe. Intracultural differences are not touched upon, but personal differences are referred to. The works by Hall and Hall, similar to that of Trompenaars and Hampden-Turner, focus on offering a practical template, allowing individuals to perceive and handle cultural differences.
Hall & Hall’s 4: Communication
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· People in different countries tend to have different assumptions and behaviours: · management style (autocratic, bureaucratic or democratic) · consultation of employees and provision of feedback · balance between employee motivation and control · management centralisation or delegation · MNCs are to a degree ‘culture bound’ · e.g. German, Japanese, US multinationals tend to have different characteristics, reflecting country of origin (‘home country’) but they need to be sensitive to ‘host country’ customs and expectations to make the operation work · Organisations as well as individual managers need cultural sensitivity
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Examples of Hofstede defined dimensions HRM
Chapter 2
Additional detail can be found in the further resource: Impact of national culture on international human resource management
,
Dordevic
(2016)
This table provides examples of how cultural context may affect selected HRM practices.
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Limitations of Cross-Cultural Research
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Evidence? Cross-cultural research is conceptually and practically difficult to conduct: · practical issues: time, expense, sampling, language · methodological issues: definition and understanding of variables/terms; use of quantitative techniques |
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Risk of overstating what may be fairly superficial differences between countries |
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Differences within cultures can understated. There may be multiple cultures (and attitudes to work) reflecting: o regions (including urban or rural)sex and age (younger may be less ‘culture bound’) o organisational and job features (organisations have strategic choice over their own practices, values and culture) |
Cross-cultural studies are generally subject to the problem of not doing justice to a dynamic, context-sensitive concept of culture. This criticism has been widely recognised in recet years. Intercultural interactions contain their own momentum and new aspects become more salient, which cannot be explained by existing cultural dimensions.
Cultural change is increasing
due to:
•
1.
International connectedness
2.
Global economy
coordination
3.
Harmonization of laws and
regulations
4.
Migration
5.
Intergenerational differences
Some researchers argue that culture is far too blunt an instrument to apply to decision processes in MNEs.
Cultures undergo changes over time. There is increasing international connectedness and the co-ordination of the global economy (convergence) or still exhibit specific cultural characteristics. Organisations around the world are becoming more similar in their processes and technologies because they are embedded in institutions that are also subject to convergence (coordination of the global economy).
Summary
Definition
and
cultural constructs
Cross
-
cultural management studies: Frameworks
for
analysing
cultural differences
and their
impact on
management practices
(
Hofstede, GLOBE, Trompenaars; Hall
)
Reflections
on the different
perspectives
and
frameworks
In summary, it can be concluded that an adequate understanding of the cultural context, as it impacts on the behavior of an organization’s employees, is of critical importance. Thus, the results of cross-cultural comparative research may provide valuable hints to managers about how to cope with employees from foreign cultures. Furthermore, these research results can form the basis for the development of intercultural training measures. These results could also be of great use to HRM in an international firm because they could assist in undertaking a structured analysis of the transferability of specific elements of a parent firm’s existing HR policy to foreign subsidiaries. In this context, it would be conceivable to decide whether incentive systems for groups or for individuals would be effective in a specific culture.
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