Cross-Cultural Human Resource Management - Essay Example

CrossculturalHRM Patrick Dowd, a management consultant from New York, with impressive track record, was engaged by Jim Johnson, General Manager of95 rooms West Indies Yacht Club Resort in British Virgin Islands, to observe, evaluate, assess and recommend improvements for an overall face lift of the resort. Jim Johnson had realised that the resort was steadily deteriorating and complaints from the customers were increasing. Resort was positively sagging under inefficient work force and its efforts to revert back to the earlier glory had been pitifully inadequate and disoriented. After spending valuable time at the Resort as the trouble shooter and discussing various dimensions of resort work and its improvement, with the employees and other members of the staff, listening to all complaints of customers of the once-well-run resort, Patrick Dowd came to the conclusion that the problem plaguing the resort is that of inadequate and inefficient application of International Human Resource Management. In his Report to Jim Johnson, Patrick Dowd would make suggestions in the following mode, depending on his knowledge of International Human Resource Management and application of pertinent theories to the present case. International Human Resource management focuses on Human Resource Management practices across the countries mainly in multinational firms, or in organisations where people of different cultures work. There is very little difference between Internal Human Resource Management and Cross Cultural Human Resource management as both deal with the problems posed by employees drawn from various cultures. There is no definite criterion or stringent guidelines for cross cultural management. It alters according to the cultures involved and the requirements under given circumstances, as the circumstances and situations decide the rules. Here cultural diversities are accepted and honoured, not defied, and an attempt is made not only to avoid cultural clashes, but also to find a suitable way of functioning without challenging the cultures involved. Here exists no desire to see all cultures look identical and the 'lesser' cultures adopt the ways of the 'better' culture. Today the context of human resource management is constantly changing with the new and persistent demands of globalisation. Human resource management of today has a global sense based on the new trend of global business. Businesses like the West Indies Yacht Club Resort, even though not a particularly overwhelming international business house in the accepted sense, welcomes guests from all parts of the world and employs people from different background and age group. When the Resort came under clouds, both the General Manager Jim Johnson and Patrick Dowd, the chosen consultant felt that this was a case of cross cultural human resources mismanagement. British Virgin Islands are not really called 'happening' places, but quiet places where resorts were built for people who need relaxation. Local people still are living in a cocooned culture hardly being exposed to international ways of living. It is difficult to find employees with exemplary educational background and efficient motivity in the islands. Efficient staff had to be drawn from different cultures and places, mainly from United States main land. British Virgin Islands, so remotely placed and lacking all diverse academic facilities for growing up children, and entertainment or business facilities for grown ups, people usually either got bored, or felt inadequately equipped for the future, frequently resigned in search of better pastures and none of the employees stayed for a long time. This created an impossible situation for the Resort of perpetually training new people; getting adjusted to them and getting them adjusted to the Islands. When the management heaves a sigh of relief that the new unfamiliar staff is trained enough to handle the situations, the well-trained staff decides to move and management had been frustrated on this issue for a long time. The resort was famous as an eco-conscious resort with fantastic aquatic recreational activities. It always had two major occupancy cycles of high peaks and low valleys, either overstaffed or barely able to meet the satisfaction of guests crowding into the Resort. This means, while being overstaffed, resort might have terminated the services of a few employees, creating unpleasant reputation for itself, though fully logical in its way of thinking. During high peaks of occupancy, it might have taken people at random, resulting in wrong recruitment. Over the years, Resort activities have been tremendously expanded. When the management of the resort felt that guests could not recall children in the resorts and thought that resort was not family friendly, they immediately launched on new marketing strategies in 1990 for families and children. Gatherings and parties for Christmas, thanksgiving etc. were organised with gusto. Cruising, sailing, harbour sunset cruises, family weeks all became part of the new strategy; but the management could not get over the feeling that somewhere the resort management was slipping and concerned staff were not particularly involved in the betterment of the situation. This had also been the complaint of many old customers who were satisfied by the services available at the resort a few years ago. They had come all the way to relive those moments again, but were disappointed that the earlier efficient resort is just a distant memory today. They complained that the 'staff does not seem motivated enough any more.' A remark like this, spreading from customer to customer could be an easy death knell for the sinking resort and the management was particularly worried about disreputation. Started by Joe Kimball, who bought the property in the British Virgin Islands, in the most beautiful spot possible, where he was in command of immense water and beach space with brilliant and far reaching possibilities and plans, nobody was astonished when he started the resort in right earnest and managed it for a few years flawlessly. In his venture, he was helped by Armin Duboise who always liked the islands enough to live there permanently. Duboise was an extremely eccentric man and ran a small resort without any sophistication and when Kimball enquired, sold the whole property to him without a second thought. When the fully equipped Resort started working under Kimball's guidance and leadership, it saw a few years of undiminished glory. But, as the business expanded he started living more in United States. He thought with Resort firmly established he could afford to spend time away from it and visited resort less and less and Kimball who knew each employee by name and instilled a sense of pride and belonging in them when he discussed matters with them in his usual 'we against the world' way, today could hardly remember any of them and found it difficult to be close to them once again in his inimitable old style. This distanced him from the staff and vice versa. Joe Kimball seems to have made the biggest mistake by staying away from his resort, as the resort needed him like no other. He was the heart and soul of the resort and it was his brainchild. He knew every dimension of it, every problem and solution, as the entire thing took shape after his fertile imaginations and dreams. He had the personal touch management and had a way in personalising and every more and thus motivating the rest of the group. In his absence, it could be clearly deduced that staff lacked the encouragement and leadership so easily provided by him on everyday basis. He was in the islands for a long time and as he owned the property, locals had come to regard him as one of their own and this element was lacking in his representatives, as they were regarded as people from a distant big country, staying here for the sake of their jobs, without any sense of belonging. Tom Fitch, the marketing and special promotion director was from Connecticut, whereas Jim Johnson, trained and academically well qualified, with a Masters degree from Cornell University, in Hospitality Management, was from United States and he mostly worked from home from Miami, Florida. Jim Johnson, who should have filled the vacuum created by Joe Kimball's departure, could not do that, being nothing more than a visiting General Manager. Even though he spent half of the month in the resort, he was unavailable during the crises and this distanced him further in the eyes of the local staff. The major part of the staff was local employees noticeably different from qualified and trained people from the big cities. They not only looked different, but also acted in different way and the work culture of both the groups could not be identified together. They were not particularly comfortable with the theorised management styles of the bosses, always trying to experiment on one thing or other and altering working routine unnecessarily, or so, it seemed to the local staff. They always preferred the easygoing attitudes and ways of handling crises. They believed in the rural ways of response like 'raising to the occasion, when such an occasion arose.' Highly technical way of working with organised lists and reports baffled them, whereas slightly unorganised style, leading to errors and mutual blaming, lows of tensions and highs of achievements in a conspiratory way, appealed to them. The bosses from United States could not recognise this style of functioning, as this was not one of the styles in which they dealt with or which they studied. Kent Mawhinney, the property manager, second in command who managed another resort for six years, too was from United States and was treated as a foreigner. Kristin Singiser, Rooms Division manager, born and raised in Midwestern US, was respected for her willingness to mix with local people, honour their culture and learn their ways of living. She always had a sympathetic ear for every person in trouble and this attitude earned accolades for her without fail. But recently she had been thoroughly frustrated in her work that lacked direction and motivation. Perhaps Kimball's staying away from the islands was one of the reasons for her frustration. Kimball was a source of inspiration and leadership for all around him and naturally all members of the staff were deprived of it today and this killed their spirit of aspiring for height. Steve Lucas came from a resort in California, United States and is the Food and Beverage Director. Nick Smith, Marine Director, is different from the usual lot of employees, for he has worked continuously in the resort for fifteen years and lived on the property with his family. Even though not a commanding or inspiring person, Nick was famous among the employees, as usually he was the only person available to solve any immediate problems in the resort. Enrick Harrigan, Water Sports director, a famous windsurfer from Dominica, was responsible for the fleet of small and big boats in resort and was ambitious about the water sporting facility the resort provided. This facility brought a lot many tourists over Earlier, this post belonged to the much admired Canadian, Bill Jones, whose rather easy going style sat well with the local staff and they were prepared for any sacrifice for him. But unfortunately, Bill Jones returned to Canada after a while and Harrigan, who came to the job after his departure, was forever being compared with the dashing Jones, usually to the disadvantage of Harrigan. Harrigan was obviously neither impressive in his work, nor the born leader like Bill Jones. He was also accused of granting too much of liberty and free time to people working for him. Dave Pickering was from Cleveland, United States. He was a businesslike person, with an eye on making money, but was ready to work hard and honestly for that money. And this combination definitely should have taken him very far. He realised that there was a tremendous difference between his attitude and the attitude of the local staff. He could never stop marvelling at the unwillingness of the local employees who regarded taking tips from the customers as beneath their dignity. They neither liked the idea nor wanted to work so hard, in spite of being egged into it by Pickering, who made nearly $100 by tips alone every day. His mind, tuned to success and money had been unable to understand the philosophy of the locals, who were definitely poor and undoubtedly were in need of more money; but were unwilling either to work extra or to take tips that had been looked down upon in disdain. Patrick Dowd noticed that Harrigan allowed his staff Mohammed, Mitchell, a local, Fergus, to take things easily and wander off during peak time and this attitude of Harrigan surprised him. He noticed another disadvantage to the resort. He took notice that local staff was more reserved and not over courteous to the resort guests, however important they were. When people belonging to two or more different cultures come into contact, the overall management tends to become awkward and less effective. Cross cultural human resources management has to be applied under such circumstances, by rethinking and reshaping it, so that cultural clash do not take place is the main requirement of the new trend. Good personal relationship is important for a good communication. Casual conversation is important to build up a good personal rapport. Blunt direct style of communication is unappreciated by many cultures, and especially so, by eastern cultures. Coming to the point abruptly had never been appreciated and always thought to be rude. Personal communication with understanding of the local ways is important and this shows why Joe Kimball was successful in building a good supporting group initially. The nearness of the employer motivated the staff. Whether superior, peer or subordinate, recognising cultural differences, understanding how cultural priorities influence communication styles is very important. Cross cultural Human Resource Management is like walking on a tight rope and one has to be vigilant all the time. One has to plan and communicate management messages so that they make most sense to members of the other culture, understand the intended meanings of the messages sent by members of yet another culture. This involves overcoming communication problems resulting from language difference. Members of diverse culture also have to overcome communication problems resulting from language difference. Hofstede's (1980) defined culture as: "the collective programming of the mind which distinguishes the members of one human group from another the interactive aggregate of common characteristics that influences a human group's response to its environment." It also refers to an aspect of national or ethnic grouping, distinctive, culture-specific management style. It also refers to corporate culture and mental attributes mentioned by Hofstede. Virtually all business conducted today is global business in a way, as all discoveries, technologies, concepts, services, products and personnel are crossing the national boundaries. Businesses and organisations are not based on the home culture any more. Earlier tourism and hospitality business was not particularly important. With the shrinking of the world geography and with the expansion of mobility of people, this particular business has taken shape and is expanding with leaps and bounds. In this business, one cannot aspire to serve people of home culture. It will attract people from all cultures from the various regions of the world. Naturally, it will also have staff from different cultures. Hence, the necessity of controlling the human resources and personnel according to cross cultural management becomes imperative. With the globalisation, cultural wars have started and clashes are becoming a huge disappointment especially in organisations, where it is absolutely impossible to understand the people from another culture and responding to them in a positive way. Managing across borders had been greatly challenging and abnormally frustrating both. This particular Resort, though based in British Virgin Islands was employing people from different parts of the world. It also aims at satisfying its customers from various spots of the world. The culture found in the Virgin Islands is not highly motivating for Americans. Their capitalistic ways of thinking, treating money as the ultimate God and opportunities as the next one, are not shared by the locals. Local people targeting at a comfortable life, with a comfortable, but not too demanding kind of a work to earn this lifestyle. They were neither greatly ambitious, nor were interested in amassing wealth. These two absolutely opposite guiding principles that made mutual understand difficult also made them unfamiliar to each other. Old cultures wonder the need for attaining more money than necessary to live a happy life, fighting for it and being eager to get it. These cultures always thought that having money more than necessary is a kind of burden in life. But Western cultures dictate a directly opposing trend. New cultures think that it is absolutely necessary to earn more money, earn from every opportunity and every occasion. Investing that money so that it could be doubled eventually is another step. They could never stop marvelling at the people from old lands that they are unambitious, unworldly and do not give more importance to the money, which they needed badly. Some cultures look down upon attaining materialistic riches, as vulgarity of the soul. Western cultures do not recognise any other God other than money and materialist achievements. Taking people from various cultural and educational backgrounds too had been an uphill task for the resort. Culture sometimes brings up more problems than it solves. Responding to another culture could be psychologically disorienting experience if one is not prepared for it and does not know how to handle it. Intra-national diversity growing with interaction with co-workers, customers and suppliers, is slowly leading the way to a global enterprise. Global competition is changing, accompanied by forces of global integration and local responsiveness. They are forming global strategic alliances and network organisations, and there are very high career implications of overseas assignments. This means that managers of today and tomorrow should possess different skills that would facilitate them to deal with multi-environmental, multi-country and multifunctional experiences. Management of human resources has to be reframed in a new and more comprehensive context and the global context of International human resource management has to take into consideration the elements that influence International human resource management policies and procedures. Mapping Human resources management in a global context is essential because International human resources management's domain is employee involvement including host country nationals and parent country nationals and third country nationals. Sometimes, these distinctions get blurred in today's network organisations; although where this particular resort is concerned they are very clear. It also concerns the activities of Human resource management that flow from the definition given by Beer (1984): "all management decisions that affect the nature of the relationship between the organization and employees - its human resources." Human resource management activities in the traditional way include recruitment and selection, training and development, performance appraisal and compensation. It also has to decide the locus of Human resource management activities. Resort had been introducing managerial staff mainly from United States without making much of an attempt to see if they could take someone efficient locally. Management has not given much of a thought about the efficiency and adaptability of managerial staff from United States. Sometimes the local knowledge could be more realistic than high degrees from well-known Universities. With the help of the local knowledge, a manager could make very effective decisions that could relate to the local staff easily. Even though Jim Johnson was very highly qualified with apt experience, he had been particularly unsuccessful as the General Manager of the resort. He could never relate himself to the local problems and to the local staff. He kept himself aloof from the local culture and their ways of living and thinking. He remained continuously an outsider, spending fifteen days of the month in his United States home and remained more of a visitor inspector who has to be avoided. Staff never went to him with their day to day problems as he was mostly unavailable. Even when available, staff knew that he would not continue to live at the islands when need crops up. Without proper control and direction, the resort staff had increasingly become irresponsible idlers and aimless speculators of the situation. It did not bother them very much if customers went back to their countries totally unsatisfied, or if the customers did not choose the Resort as their destination next time. They only wanted their salaries for minimum amount of work and responsibility. As International human resource management developed and spread into new spheres, deterministic theories were developed. Contingency Theories of organisation (Burns and Stalker, 1961, Lawrence and Lorsch, 1967) are considered to be the best theories of cross-cultural Human resource management. But they left a gaping gap when they did not take into consideration the fact that all organisations respond to their environment. Environment effect on an organisation is perhaps the most important factor in cross cultural management. Even though Contingency Theory is considered to be one of the pioneering theories of human resource management, without taking into consideration the effect of the prevailing environment, it sounds slightly shallow. Contingency perspective was successfully applied to International human resource management to use it as a framework to prescribe appropriate selection and training practices for overseas assignments. 'This model identified contingency factors related to the task, the individual, and the environment, which influenced selection and training of people for international assignments.' Here the main criterion is considered as individual characteristics of technical competence versus relational ability and this should relate to the requirement of the host country environment. For example, if the host country is a socially traditional country, emphasis should be laid on the Chief Executive's family situation, his attitude and his communication skills that could be useful while interacting with host country nationals. A traditional country with conventional social habits would not accept a person with wild habits into their midst. No doubt things are changing in every society today. Still, it is reasonable to expect that these evolutions would take a much longer time to completely get assimilated. But this drawback need not apply to a short assignment or for the short role of a trouble-shooter (like that of Patrick Dowd), or if the assignment is to a country culturally similar to that of his own where he was raised. On these occasions, the candidate need not undergo extensive cross cultural behaviour training, as his stay will be for a short duration and it would not affect the managing of the company in any way. Under these circumstances, Organisational life cycle models could be effective. Some Organisational lifecycle models were suggested by important names like Adler, Ghadar, Milliman, Von Glinow and Nathan, and according to their models, the life cycle of the organization might be related to International human resources management practices. According to these models, the stage of development of an organisation determines the International human resources management functions and organisational life cycle. It also decides the relationship between subsidiary and headquarters and the international environment and in turn influences the success of the organisation. This was Milliman's model. This model is pertinent to the resort, because Kimball's residence in the United States is a kind of Headquarters making important decisions for the resort, as the resort at the Islands could be called a subsidiary for administrative purposes. Also it is effective in another way. The international environment of travelling and staying in a resort sometimes loses its attraction and glory. People are either busy to take such a long holiday, or the organisation might be going through a time of disreputation (stories of earlier visitors discrediting the resort) and hence, the resort has very lean periods. People might look for various kinds of locations for their stays. Some people do get tired of sea, salt water and humidity and unending sun. They long for milder mountainous climates, and evolutionally alter their destinations. Frequent media stories covering good, bad and even unnecessary news, too effect the visitors' numbers coupled with any real or imagined dangers in the vicinity or during travel. In addition, the organisation has already reached its peak and is going through a kind of 'Diminishing Returns' and obviously it needs more effort and managerial skill to revamp it. It needs concentrated managerial effort, combined with Kimball's charismatic presence (at least for some time) and his later frequent visits. It needs the General Manager to stay more on the property and take instantaneous and dynamic decisions. It needs good managers to be encouraged to make good decisions. It also needs people like Hallinger to be pulled up in discharging their duties. It needs the lady manager to be given her dues, by acknowledging that she had been a great asset to the resort all along, even though her services, more or less, went without being appreciated and this recognition would definitely lessen her frustration and motivate her. It requires many changes to be done in the managerial staff. It also requires the resort to take personal attention on the families of the staff. They might be requiring a school, or a hospital or an institute for higher education. As money would not attract the local staff much, the management has to try to look beyond the financial trappings. It needs other community needs to be fulfilled. In old cultures, community need, good for the locality and the entire population would mean a lot. A resort doing a similar work would inspire people to be proud to be connected with such a resort. It will be a matter of pride for the staff to be working for an organisation who is taking care of certain community needs and doing good for the entire community. It could be education, health, entertainment, literacy, or anything that would in some way help the local population. Once the local staff feels happy to be connected with the resort, it would not take very long for the management to launch a highly successful resort catering to the needs of customers without flaws. Adler and Ghadar (1990) presented another model 'with the additional notion that the importance of cultural diversity to IHRM will be influenced by developmental stage.' It agreed with Milliman's model, but insisted that not merely the stage, but also the internal and external source and in the initial stages, cultural diversity is unimportant because it is too early to be troubled by ethnocentric perspective as it is still going through a domestic focus and has not yet attained the international status. When it starts expanding it has to deal with the cultural diversity of the new external environment. If the organisation has to compete effectively, it should be adept in cross cultural human resource management at this stage. This explains the initial success of the resort, as it was still in its infancy. Environmental Contingency theory could also be applied to the present case study. It takes into consideration legal, political, economic and cultural environments of the situation, as all these factors will definitely have an impact on Human resource management. The law of the land, its legal jurisdiction would definitely play an important role in every organisation that would come under its sphere. Every organisation would respond to the legal variations, new laws and alterations, amendments and precedents and would try to be commended by them. The political situation of the country is one of greatest importance. If the Government is weak and not totally in control of the situation, and is functioning in chaos, naturally such a condition would be frightening for any organisation to effectively do any business. However effective the resort is, unless the political situation in the Islands does not offer any protection to the customers, it would extremely difficult for the resort to attract in any of the customers, due to fear and insecurity of life. For example: Kashmir that had been a travellers' paradise, in recent years, owing to the terrorism rampant there, is rarely entertained by any traveller as one of the safest destination. Military coups, frequent civil wars and difficult political situations at home can create a negative atmosphere for tourism. Government's political theory, (communist like in China, democratic like in India, military rule like in Pakistan, capitalistic like in United States-, socialistic like in Yugoslavia) and its way of functioning (steady and strong like in United Kingdom, weak, like in Nepal or religiously overwhelmed like in Iran, ruled by remote controlling by groups behind the scene like in Myanmar, or unstable and threatened by revolutions like in Bangladesh, or invisible monarchy, like in Japan) - all these will definitely effect the HRM policies of all organisations. The kind of economy (open market, globalized, closed, semi-closed, capitalistic, communist centrally managed, fiercely nationalistic), too are factors that would cast long shadows on business. A nation's culture is reflected to a large extent in its economy and political and legal perspectives. It is also the manifestation of its history and environment. British virgin islands are a protected, untouched part of the world and the staff and local people could not identify themselves with the unfamiliar culture of visitors. Staff could not relate to the management style of their bosses from different background and country. Cultural Norms: The difference between the cultural values of managers from United States and the cultural based orientation of the local staff should be appreciated. Distance cultures could create more hierarchical and centralized theories. Sometimes, singling out an employee for an award for praise could go unappreciated. Environmental Pressure: Cultural influence relies on environmental pressure to shape HRM. Social pressures from outside and organizational pressures from inside the organization dictate the type of Human resource management policies. Society in British Virgin Islands is rather conventional and staff like Mohammad would be happy in a rather conventional way of life. Hence, the management staff should never be aggressive in managing culturally diverse staff. While recruiting this point should be taken care of, as the recruiters would not hear what they usually expect to hear from the potential employees. This definitely does not mean that they are unsuitable for the job. Recognising their diversely cultured ability and suitability for the jobs would be highly challenging. Their adaptability to a multi-cultured situation too should be taken into consideration. Cultural Diversity: This can have both positive and negative effect on the resort. 'On the negative side, a culturally-diverse workforce can add to the complexity of decision making in an organization because of problems of communication, both verbal and non-verbal, and may increase the incidence of conflict stemming from differences in values and norms. On the positive side, however cultural diversity can result in more creative and higher quality HRM decisions.' Culture as evolving: As culture is not static, but evolves over time, slowly, and this dynamic nature of culture has implications for HRM. When people live for a longer period in an alien country, they accumulate more of that country's culture and go through a process of acculturation and this would at least make the people, who come from different ethnic and cultural backgrounds to understand each other. Resort should learn to accommodate its HRM practices to different patterns of communication, conflict resolution. Key contingency variable for a global perspective on Human resource management is culture, and it has a moderating effect, both internal and external to the organization and resort Human resource management should take this theory into consideration before making considerable changes. A professional Human resources Manager, qualified in cross-cultural management would be more understanding. At the same time, resort should not forget the usefulness and importance of locally available talent. BIBLIOGRAPHY: 1. Dean Tjosvold and Kwok Leung, Cross Cultural Management, Foundations and Future. 2. Nigel J. Holden, Cross-Cultural Management. 3. Desmond Graves, Management Research: A Cross-Cultural Perspective. 4. Richard Mead, Cross-Cultural Management Communication. 5. Geert Hofstede, Culture's consequences, comparing values, behaviours,institutions,and Organisations across nations. Read More