The Growth and Development of International Trade - Essay Example

? Impact of Culture on international recruitment, selection and communication Introduction The growth and development ofinternational trade has lead to the emergence of different economies into one large operational unit managed from one central point. Different countries and regions have differing cultural and traditional practices that affect significantly how they conduct business and relate with people. Culture plays an integral role in every society and it has developed into distinct and non-identical feature of every human being. Globalization and the development of international trade have led to the emergence of borderless trade that involves the transfer of capital, goods, service and human resource. This has created significant opportunities to different people across the globe and has increased the scales of operation for different companies whose market has been significantly grown (Denison, Adkins & Ashley, 2011). The emergence of international trade has led to the development of multinational corporations whose scale of operations and management practices goes beyond the domestic borders. Most multinationals adopt different human resource management approaches depending on their domestic culture and practices. However, the expansion into the international business environment has presented a major challenge to multinational in developing more flexible and effective human resources practices that suit cross-cultural settings (Claus, 2008). The choice of human resource management approach adopted by an organization will influence largely its success in the global market, thus making it highly important a management practice. Companies use different models of human resource management, including the use of expatriates, local managers or a mixture of both. This is influenced by the MNCs approach to managing cross-cultural differences that arises in the international context (Tabrizi, Ali & Safar, 2012). In order to help illustrate the essence of adopting better human resource management approaches in cross-cultural setting, this paper will use a case study of Samsung. Samsung is an electronic company based in Seoul, in South Korea but with significant global presence. It is currently considered as one of the leading electronic manufacturers across the globe and thus controls significant global market ratio. The cross-cultural human resource management practices adopted by the multinational company that has enabled it to register the significant growth will be evaluated (Denison, Adkins & Ashley, 2011). Putting in mind the diversification of cultures, societal values and cultural norms, will greatly enhance management of human resource in a setting where a company is set. For instance, if an American company decides to start a company in Japan, it has to consider the aspect of interpersonal relations given the fact that Japanese shake hands and do not make body contacts in public yet America is a free society where no one minds how you interact on corporate issues. Corporate and organizational cultures Organizational culture influences the behaviour of employees towards each other within the organization and the way they represent the organization in market. Organizational culture is defined as a set of behaviour that is nurtured and encouraged within an organization as identical set of behaviours and codes. Within the multinational setting, organizational culture is influenced by the company headquarter and this depends on the cultural setting and behaviour within the country. Different organizations and multinationals define employee relationship and behaviour towards each other and towards the top management in different ways. The hierarchal system of management and authority in an organization is also determined by the organizational culture and behaviour and this depends on the societal culture and power distance (Van Der Westhuizen, Pacheco & Webber, 2012). Corporate cultures within organization differs and this is significantly influenced by the cultural setting within the domestic headquarter of the multinationals. Organisational and corporate culture scholars have identified four different corporate classes that affect the human resource management approach adopted by such a multinational in global markets. Organisations thus have either the family, Eiffel tower, guided missile or the incubator cultures and these depends on the home culture as illustrated in the differences found in South Korea and the United States. Multinationals with the family model of corporate culture believes in the adoption of frameworks that encourages doing the right thing at the right time as opposed to doing this right. The expansion of such an organization into the global setting will affect its behaviour especially if the foreign culture adopts new corporate culture (Froese & Peltokorpi, 2013). It is thus essential for human resource managers whose organizations practice the family model of corporate culture to understand the implication of the cultures within the global scales of operation. This is because such a culture may not favour some human resource practices for example the payment based on performance, which may be viewed as a threat to family bonds and ties. South Korea uses the family corporate culture and thus agitates for the adoption of practices, which results into doing the right thing, an approach that differs significantly with those adopted by other cultures within the global market (Lirio, et al, 2007). Within the Eiffel tower corporate culture, behaviour is guided by the roles assigned to different positions within the organization resulting into viewing of the employees as cash and resources. Such a cultural setting is common in countries such as German where human resource management strategies involves proper workforce planning and the development of proper appraisal system. Within this context, the performance of every employee is appraised individually resulting into a system that encourages individual performance and growth that in turn affects the position you hold in the organization. Multinationals must understand this system in developing appraisal systems which are acceptable within such a society in order for them succeed (Weir, Mangaliso & Mangaliso, 2010). Other corporate cultures encourage egalitarian systems that revolve around personal and task oriented position of an individual as found within the United States and the United Kingdom. Such cultures have the human resource departments setting goals, which are used to influence the behaviour and approaches, used towards different employees within different levels in the society. Payment in such systems is not based on position, influence on mere engagement with the organization but rather on individual performance and capabilities. These systems thus encourage individual development, performance and effort as opposed to the adoption of human resource approaches that encourages teamwork and collectivism (Weir, Mangaliso & Mangaliso, 2010). Multinationals with incubator cultures are however aligned towards the development of the individual as opposed to the benefits the organization derives from him. Such organizations thus invest a lot of its resources on its employees with the hope of incubating their management and leadership skills at the expense of the benefits that the organization gets from such an individual. Multinationals and organizations with international operational scale must therefore understand the corporate culture practiced within the international market and access how this will affect its internal organizational behaviour and culture (Lirio et al, 2007). Communication culture and international human resource management Communication plays an integral role in the success of any organization in the domestic and global market. The growth and emergence of international businesses has resulted into the fusion of different language cultures, which significantly influences the success of international human resource management practices. Mergers of companies located within different cultural settings create significant fusion of two culturally different organizations and this increases the challenges of language barrier. Constant communication and the transfer of information within an organizational hierarchy influence the success of different policies adopted by the organization. This makes effective communication an essential of part of human resource management, which makes it an important concern for researchers in international business, and human resource management (Weir, Mangaliso & Mangaliso, 2010). The development of international human resource management practices must consider the impacts of communication and language of use within cross-cultural setting. Samsung develop policies that are implemented by its subsidiaries in different parts of the world. As a company with its head office in South Korea the language used to write these policies is Korean but is translated to different languages before being passed to different heads of the subsidiaries within the global arena. This approach of multi-lingual communication of policies by multinationals as adopted by Samsung was borrowed from Colgate Palmolive, a household goods manufacturer. After developing a framework for employee behaviour and conduct for all its subsidiaries within the global market, Colgate Palmolive translated the documents to over 10 languages and this gave the company a positive international image and rating (Kim & Leung, 2007). Non-verbal communication cues are also affected by different cultural settings and this influences the success of the relationship and communication between the employee and the employer. International human resource management approaches must seek to bridge the gap that exists within the non-verbal cues used by employees in a foreign subsidiary. Within the Indian context, head gestures used in affirmative resembles those used within the western context for no. this has created significant confusion for human resource managers of western based multinationals with operations in India and other parts of the Asian continent (Weir, Mangaliso & Mangaliso, 2010). Companies must therefore take time to understand cultural implications of the differences that arise from the use of common non-verbal communication signs, which may affect the process of passing down information. The adoption of English as the international language of communication has led to the development of international version of English that is used across different cultural settings. This language is devoid of cultural metaphors, similes and figurative languages that cause confusion in cross cultural settings (Kim & Leung, 2007). Cross cultural management theories on selection and training processes Effective human resource management needs to base on the cross-cultural experiences which occur in different forms , for instance, encounters with people from different cultural backgrounds, short visits to international forums, and long-term immersion in a new cultural environment in terms of business (Adler, 2001; Mintzberg & Gosling, 2002). In Kim & Leung (2007), Hall ad Hall (1973) attribute effective communication approaches to the success to any cross cultural management approach. In their theory, they considered the adoption of effective communication approaches as the best tool in achieving cross-cultural success especially in companies with multinational operational scales. Hall and Hall categorised organisational cultural differences into two, which included high context culture, and low context cultures, both of which required differential approaches in selection and recruitments. European countries have low context cultures that may be easy to adapt to in case of a managerial assignment or communication ease between employees and the managers. Asian countries and the Arab world have strong cultural and religious beliefs, which may affect the way employees, and the managers relate enhancing the impact on culture and communication in international business ventures. Korea, which is Samsung’s parent home, follows this kind of cultural integration that makes its follow the appropriate communication channels. The expansion of Samsung operations to international markets such as the United States resulted into the merger of two culturally identical regions, individualism, which concentrates on the use of individual skills, power and knowledge in the development of a plan or the implementation of a policy, to enhance cultural diversification. Low context culture identifies the use of formal modes of communication like writing and most recently electronic communications as seen in the United Kingdom and the United States where communication is always highly coded, indirect and bases on slight paralinguistic devices like facial expressions to derive meaning. These are the new markets for Samsung and its success in these countries despite the cultural difference and competition can be attributed to the adoption and respecting of the cultural significance of the society. Geert Hofstede (2002. p. 58), has theories on cross-cultural management and selection processes that numerous multinational and global business have extensively relied on due to their relevance to the current business environment. In his theory, Hofstede proposed that culture can be classified into different dimensions at the national level including power distances, masculinity/femininity, individualism collectivism, long term versus long-term inclinations and the uncertainty avoidance. Understanding of different cultural structures has helped international human resource managers to understand the sources of miscommunication and cultural conflicts that can arise within this context. Zhu, Nell & Bhatt, (2006 p. 320), highlighted the need for international human resource managers to understand the different cross-cultural dimensions that exist in the different parts of the world. There are two sets of cultural dimensions, which significantly affect the success of an organization in the international market. Cultures adopted are either individualism or collectivism cultural dimension approach and this is influenced by either the existence of capitalist or socialist ideals within them. Cultures that practice individualism cannot comfortably embrace the principles of teamwork that is covered within the dimensions of collectivism. It is thus essential for international human resource managers to understand the individualism and collectivism cultures that exist within the cross-cultural areas of operation before adopted a framework for employee cooperation and teamwork. From a country with a low score of individualism, Samsung moved into regions that had little recognition for collectivism and teamwork. To blend with the different cultural dimensions in the global market, Samsung international human resource practices seeks to embrace the internal practice while integrating it with domestic cultural dimension. This has enabled the company to eliminate the incidences of cultural conflicts related to individual and teamwork related roles as captured with the South Korean cultural dimension. A high power distance score, a multinational has high level of management and employee inequality within its ranks that significantly affects the communication approaches adopted by the organization. South Korea is a high power distance cultured country while the United States is a low power cultured country. The success of Samsung in the United States despite the differences in the power distances can be attributed to the adoption of better international human resource management practices. Cultures with low power levels have high interaction between the employees at different management levels thus making communication effective. In this culture, lateral and vertical communication is enhanced and the management’s ability to address different issues raised by the employees is enhanced (Holtbrugge & Mohr, 2011 p. 115). Competitive advantage from cross-cultural HRM practices The adoption of cross cultural human resource management approaches have a number of benefits to an organization operating within the global market. The need to increase the overall market control and presence within the global arena drives the need for mergers, acquisitions and the growth of multinationals into independent subsidiaries. However, the ability of a multinational to succeed within the global market is influenced by its response to cultural differences both in management, leadership and lifestyle. The understanding of cultural differences and unique qualities across different markets in the globe enables human resource managers to repackage their policies and communication channels in line with the local needs. This has a number of advantages to a business, most of which are related to the competitive advantage that it creates (Agard & Mevel-Pla, 2011 p. 70). As a foreign entity struggling to set its base in a foreign market with different cultural practices, the need to build trust and create a positive working relation is essential. This can only be achieved through the understanding of the cultural differences that exist and these affect employee behaviour and relationship (Edwards et al, 2013 p. 600). Trust and understanding can be achieved affectively using common communication channels, thus eliminating any incidences of misunderstanding among employees. Using communication, the human resource department can ensure the development of a sense of belonging and togetherness among employees from different cultural background working for the MNC. For example, western-based organizations that seek to open new units in India or acquire Indian based companies must understand the differences in their non-verbal cues and body language. This eliminates the tension and misunderstanding among employees and the human resource department arising from misunderstanding and ineffective body language (Manroop, Boekhorst & Harrison, 2013). The understanding and the adoption of effective cross-cultural human resource management approaches enables an organization to increase the development of global mindset among its employees. Having a global mindset allows employees to think and act with the international market and dynamics in mind thus leading to the development of universally accepted goods and services. Global mindset begins with the human resource managers in an organisation thus leading to the ability of the business to develop policies that can be implemented across organizations, cross cultural and functional boundaries. Developing this positive tool of growth in global business can be enhanced by the adoption of international recruitment and selection processes, which results into the hiring of more qualified and positive employees. Learning programs that are aimed at improving the understanding of cross cultural business environments also helps in the development of global mindsets (Edwards et al, 2013 p. 590). The success of mergers and acquisitions can also be enhanced through the evaluation of the cultural differences between different organizations. This assists in the development of more informed and integrative approaches of blending the two cultures thus reducing the possibility of failure due to cultural incoherence. In most organizations, cultural differences are considered after mergers and acquisition has been completed, thus increasing the failure index of such activities. The human resource management unit has a significant role in developing cultural integration and cohesion not just within management levels but also among the employees. There is need for employee understanding and respect which arises if cultural relativism is improved through integration, learning and training processes (Hoffman & Shipper, 2012). Each firm must also have a clear cultural and organizational behaviour code, which is known and practiced by all employees. This will assist in the faster integration of the cultural variations that arises due to cross cultural mergers and acquisition in global business. For example, when Henkel, a German based chemical company merged with the American based Dial in 2006, the integration of human resource practices based on the cross-cultural differences that existed enhanced the success of the merger and the acquisition. A better understanding of the American human resource management approaches gave the company headway and enabled it to reach a significant number of the American market (Sikora & Ferris, 2011 p. 112). Conclusion The continued growth of global business and the emergence of more multinationals create the need for the development of a human resource unit that understand the impacts of cross cultural business engagement to the company. Organizations with global business operations or those intending to expand their operations into the global markets must thus adopt cross cultural human resource management practices by adopting better policies and approaches to different issues. 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