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International HRM Day 3 – The Cultural Approach

Thursday 16th February 2017

Paul Hunter Email: [email protected]

Day 2 Review  Structural forms of international organisations and the decision

making differences.

 Integrated Framework for IHRM and associated advantages and

disadvantages of this model.

 The American and European perspective on IHRM.

 Convergence & divergence strategies, when best to apply and use.

 Institutional differences i.e. labour market and regulatory

Day 3

The Cultural Approach

Culture – Distinguishes Human Groups From One Another

‘Culture is the collective programming of the human mind that distinguishes members of one human group from those of

another. Culture in this sense is a system of collectively held values’ (Hofstede, 1984:51)

 HSBC Cultural Advertisements

https://www.youtube.com/watch?v=GOHvMz7dl2A

 Important to remember that different does not mean worse. We should be considering ‘what can we learn?’

Cultural Differences

 Differences can often be identified between cultures and between local contexts in:

• The values people have and consider fundamental;

• How people experience and interpret behaviours and events;

• Extent of influence of powerful individuals & groups.

 Culture differences are a frequent component of issues managers

now deal with in their work.  It is suggested it is one of the main reasons why a MNC experiences

difficulties internationally due to the culture differences evident within the organisation.

Cultural Effects on Business and Managing

 Trompenaars & Hampden-Turner (2004) researched the impact of people’s cultural differences on business and managing.

 They found that people from different countries expressed their emotions differently.

 Suggested that in general: • British, Northern Europeans & Chinese = More reserved.

• Spanish, Italian, Central & Southern America = More openly expressive.

 What impacts would this have from a MNE perspective?

National Cultural Dimensions

 Researchers have tried to understand the dimension of national culture:

a. Relationships and control of nature;

b. Relationships with each other;

c. Extent of whether people are distinctive;

d. How they express their feelings;

e. Attitudes to time;

f. Long term plans and the impact on their behaviours. (Crawley et al, 2013)

Cultural Communication - Body Language & Gestures

 It is important for IHRM professionals to understand the impact of communication on global staffing.

 Body language & gestures can contribute to communication of a message with very different meanings within different cultures.

 Feelings of negativity are rarely shown in the UK and Asia. In Spain and America people tend to show their negative feelings much more openly.

 In Asia it is usual for people to have lengthy introductions or acknowledgements of rank before beginning with official meetings.

Transferring Culture & Stereotyping

 It is important for HR to remember that not all members of the host countries culture will be the same.

“Individuals in any society may not display the same characteristics or

behaviours as the majority of their socio-economic background, education and exposure to economic and political events”

(Fischer, 2009:27)

 Awareness of education is an important factor which shapes the development of personal cultural behaviours.

 Consider here your international student experiences.

Culture – National/Regional

 Hofstede (2001) analysed the following:

• Regional Spheres

• Different Industrial Sectors recruit in different ways

• Understand the nature of diversity

• Impact on/of religion.

 Important need for sensitivity.

Culture - Organisations

 A good starting point to understand culture is the following definition: ‘the way we do things around here’ (Deal & Kennedy 1982:4)

 In organisations the basis of culture is based on the mission statement which describes the organisations values and goals.

‘Organisation culture is the collection of relatively uniform and enduring values, beliefs, traditions and practices, shared by the

organisations members, learning by new recruits and transmitted from one generation of employees to the next’

(Buchanan & Huczynski (2010:643)

Cultural Impacts for Organisations

“Cultural considerations also inform staffing decisions and the choice of managers and executives from the parent company developing

countries or the host country to work in subsidiaries” Colakoglu et al (2009: 1293)  Harry and Nakajima (2007) suggest that MNE's are still trying to

implement cultural policies from overseas that are different from the host countries culture.

 Hofstede (1994) developed a framework to understand the patterns of global workplace behaviour looking at:

• Power Distance

• Uncertain Avoidance

• Masculinity

• Long or Short Term Orientation

https://www.youtube.com/watch?v=DqAJclwfyCw Hofstede on Power Distance

https://www.youtube.com/watch?v=fZF6LyGne7Q Hofstede on Uncertainty Avoidance

Power Distance Index

The degree to which inequality is accepted in society.

Power Distance Countries

High Power Distance Smaller Middle Class, Larger Lower Class

Low Individualism

• Russia, most Asian, Arab and South American Countries

• France & Italy

Low Power Distance Larger Middle Class, Smaller Lower Class

High Individualism

• Scandinavian Countries

• USA, UK, Australia, Germany & Denmark

Impact for HR Management?

Uncertainty Avoidance  The extent to which the members of culture and national society feel

threated by unknown situations/uncertainty (Hofstede, 2015).

Uncertainty avoidance societies

Russia, France, Mexico, Italy, Arab

nations, Japan

• Feel threats & differences must be fought. • Have more stress and anxiety. • A need for rules and regulation. • Wealthy perceived as being more corrupt. • Require more facts.

Uncertainty accepting societies

Netherlands, Australia,

Germany, UK, India, Nordic countries

• See uncertainty as being normal. • Less stress and anxiety. • Difference develops curiosity. • Not accepting of rules and a need for less regulation. • More tolerant of people who are different. • Can delegate to staff more. • Less corrupt countries. • Are attracted by convenience & ready made products.

HR Awareness - Link Between PDI and UA Societies Thoughts on Organisations

Low Power Distance & Uncertainty Acceptance

Organisations are market places where people interact, nothing is fixed for ever.

Low Power Distance & Uncertainty Avoidance

People imagine organisations as a machine, which operates by itself well. Hierarchical instruction not needed all the time.

High Power Distance & Uncertainty Avoidance

People imagine an organisation to be very hierarchical, this is how it will functional effectively.

High Power Distance & Uncertainty Acceptance

The organisation is like a family. Many family owned organisations employ family members. i.e. India & China

IHRM Practices (Crawley et al, 2013)

Analysing Hofstede’s Views - Group Exercise

1. Do you agree with Hofstede’s views on Power Distance and Uncertainty Avoidance?

2. Is this a framework we can utilise effectively in IHRM

management or do other factors come into play as well, i.e. the impact of mass migration in Europe on this framework?

3. Taking into consideration the increasingly multicultural

workforce in the UK, is cultural awareness not just a topic for IHRM but also for HRM?

National Culture - Expatriates

 National culture awareness is important for IHRM due to MNE’s transferring their employee(s) to their oversea offices.

 Employees who are transferred to oversea’s offices are called Expatriates.

 Increasing volume of expatriates assignments evident over the past couple of years.

 Short term assignments or assignments for a couple of years.  Seen as adding value to organisation i.e. transferring knowledge

(two way), technical and soft skills development, adding cultural diversity (two way).

National Culture - Expatriates

 Expatriates success in settling in to a new country and culture will determine their success or failure.

 Expatriates normally take family members with them.

 Puck et al (2008:2183) suggests that: 'expatriate adjustment is the degree psychological adjustment

experienced by the individual within a new society or the degree of psychological comfort and familiarity perceived within a new

environment'

Expatriate – Processes of Adjustment

 Referred to as the U-curve - this drives a period of:

 Fascination, excitement and honeymoon

 Disillusionment

 Frustration

 Culture Shock

 Humour

 Adaption

Expatriate – Processes of Adjustment

 But not all expatriates reach the adaption stage as they cannot accept the host culture.

 Gabel et al (2005) suggests this could be linked to Emotional Intelligence (EI).

“Emotional Intelligence links strongly with concepts of love and spirituality: bringing compassion and humanity to work”

(Goleman, 1995)

 Language is a key link to the process – linked to social identity.

Day 4

Global Staffing