Cross-cultural Training - Essay Example

? Cross-cultural Training: An In-depth Look Introduction The purpose of this literature review is to develop a thorough understanding of a contemporary issue of increasing importance in Institutional Human Resource Management. The topic basically focuses on cross-cultural training emphasizing on the role of human resources in globalisation. Globalisation has resulted to a number of changes with respect to the manner by which people do business. In these days, people, products and services no longer came from the country of origin. With the onset of globalisation, companies are allowed to transfer their operations offshore, otherwise known as outsourcing. Outsourcing is often defined as that process wherein a certain company or organisation is set up abroad but the same is manned by locally trained staff yet nevertheless ensuring that the products and services that they offer continue to meet the standards of quality followed by the company before they went through the said process (Dove 2002). Outsourcing poses a number of advantages to so-called host countries as this provides job opportunities for the local residents. In addition thereto, the local governments also earn revenues because of taxes and trade. Consequently, outsourcing is also poses a number of advantages for the company in question, because of this process, a new structure is provided for these organisations which enable them to cut down their productivity costs. To ensure maximum benefits related thereto, human resources employed by these multinational countries must be trained appropriately in order to conform to the business needs, Doye (2002) discusses. More often than not, when a company is outsourced, a qualified local resident or an expatriate is commissioned by the company to conduct the training and ensure that the company is properly set up in the host countries. According to Wittingslow (n.d.), the local headhunters must work hand in hand with the company in order to find suitable people to fill in the vacancies. This is deemed of paramount importance as the human resource officers are necessary in order to ensure that contracts and job offers are put together to remain competitive in the existing job market (Wittingslow n.d.). It is usually because of the abovementioned that outsourced companies face problems with respect to cultural diversity in the workplace. These multinational companies, in the process of outsourcing usually have a set of human resource policies that are in place. Nevertheless, these laws are usually tailored in order to comply with the labor laws of the host countries wherein they are placed. In addition thereto, the abovementioned situation also results to serious problems as regards the matter by which human resource management must be crafted in order to cater to this set up. Given this, the paper focuses on the role of cross-cultural training. Thus, to ensure a more extensive discussion of the topic at hand, this literature review shall be divided into the following sections: (1) Introduction, (2) Human Resource Management in the Twenty First Century: HRM and Outsourcing; (3) Cultural Distance: An Overview; and finally, (4) Barriers to the Workplace and Cross-Cultural Training. Human Resource Management in the Twenty First Century: HRM and Outsourcing Human Resource Management is often defined as the manner by which human talent is effectively and efficiently used in order to achieve the goals of the organisation (Mathis and Jackson 2007). It is the essential art of the process by which the organisation focuses on the people who belong to the latter. Tayeb (2005) mentions that whilst the aforementioned is usually the accepted definition of human resource management, the manner by which the same is carried out differs from one country to another. The traditional concept of human resource management has however, evolved. With the outsourcing of labor Tayeb (2005) believes that the human resource department plays a much bigger role. Generally, there are two cases by which the human resource department caters to the needs of the company involved in the outsourcing process: first, the instance wherein they help the employees deal with cultural diversity and second, to ensure that employees are receptive to change, most especially those employees in the home country who fear that they may lose their jobs due to the outsourcing process (Mathis and Jackson 2007). Cultural Distance: An Overview As earlier mentioned Human Resource Management is different now from the manner by which the functions were carried out previously most especially with respect to the fact that globalisation has resulted to outsourcing which means that a number of companies transfer their operations to other countries to maximize their productivity costs. More or less, problems related thereto concern to the fact that these human resources must be managed properly in order to comply with the requirements of the company yet nevertheless ensure that they are treated in accordance with the dominating culture of the home country. In this respect, the issue of cultural distance must be properly examined. Cultural distance is often referred to as the gap that usually exists between the cultures of two different groups (Mead and Metraux 2000; Shenkar 2001; Sahay, Nicholson and Krishna 2003). Manev and Stevenson (2001), on the other hand, defines this as the degree of variance between the cultural norms of two countries. This basically stems out of the argument that notes that every nation in the world has its own distinctive, influential and describable culture that is responsible for shaping all the aspects of its society (McSweeney 2002). Hofstede basically adheres to this particular concept and has claimed to have discovered the four important dimensions of national culture which can be used in order to place the countries in hierarchical order (McSweeny 2002). Geert Hofstede is very popular for his research with regard cultural differences (Geert Hofstede- Itim, 2009). In this study, the primary data of Hofstede came from the pre-existing bank of employee attitude surveys conducted amongst subsidiaries of IBM in 66 countries (McSweeny, 2002; Geert Hofstede-Itim, 2009). Basically, the responses of the subjects to these surveys were analyzed by Hofstede, thereby naming the four dimensions of culture; these are the following: (1) Power Distance; (2) Uncertainty Avoidance; (3) Individualism vs. Collectivism; and (4) Masculinity vs. Femininity. Each of the enumerated cultural dimensions significantly affects the policies with respect to human policies. In fact, there are some which may have more meaning or importance to teh others. Notwithstanding the fact that globalisation has dominated today’s cultures as well as the set up of multinational companies outside their traditional home countries, it is expected that human resource procedures prevalent in the host country will dominate (O’Reilly et al., 1996). Various researches have undergone studies with respect to cultural distance and the effects thereof on the different multinational companies. In the study conducted by Barkema and Vermeulen (2009), the pointed out that cultural distance often bring about a number of problems to the company who has outsourced their operations. Barkema and Vermeulen (2009) recognizes the fact that cultural distance is often used as a measure by which two cultures differ depending on the four dimensions developed by Hofstede as proposed by Kogut and Singh (1988). It is then in relation to this that the two author seeks to look into the survival of international joint ventures as being dependent on the cultural distance existing between the home and host countries. Generally, their study has proven this hypothesis, thus showing that the cultural distance between the Dutch firms and their partners outside the Netherlands have been greatly affected by the survival of their joint ventures (Barkema and Vermeulen 2009). This has then rejected the proposal that way of lives all over the world have significantly altered with the onset of globalisation. Their study also pointed out that the dissolution of joint ventures is somehow related to the irreconcilable differences of the two countries as measured by the distance of their cultures (Barkema and Vermeulen 2009). Aside from Barkema and Vermeulen (2009), Hennart and Zeng (2002) also looked into the influence of cultural distance on international joint ventures. Basically, their study pointed out to the fact that joint ventures, unlike wholly owned acquiesced companies, tend to have more than one parent. As a result, the manner by which these are managed tend to be more challenging as the parent companies must work hand in hand in order to agree on common goals. In the same manner, the members of these companies must also learn how to fully integrate with each other, thereby learning how it is to work towards the accomplishment of the same objectives (Hennart and Zeng, 2002). Hennart and Zeng (2002) state that this difficulty is even exacerbated with the fact that these companies integrated with each other come from different backgrounds simply because of the fact that their management styles tend to vary with each other. Without a doubt, cultural difference between companies within an international joint venture tends to pose significant challenges for they tend to have different goals and values. As a result then, Hennart and Zeng (2002) note that it is of vital importance for international joint ventures to develop better communication lines in order to ensure that the former would work properly and efficiently in order to attain their objectives. Hennart and Zeng (2002) also point out to the tendency for international joint ventures that suffer conflicts pertaining to cultural distance to succumb to liquidation or selling to other parent companies. Thus, the study of Hennart and Zeng (2002) generally adheres to the findings of Barkema and Vermeulen (2009) who noted that the dissolution of international joint ventures are more often than not, caused by the differences of the culture from which the companies come from. According to Brock (2005), higher levels of cultural distance are often correlated with greater conflicts within an acquisition concerning their daily decisions. Apparently, the differences between the parent and the acquiesced tend to lead to cultural clashes amongst its employees due to the fact that both have diverse operational practices (Brock, 2005). Therefore, these incidents then lead to higher costs for cultural distance tend to greatly reduce the performance of the acquiesced company (Brock, 2005). On the other hand, however, there are also some researchers who believe in the fact that the cultural distance between the mother company and the acquiesced in another geographical setting can bring about benefits to each other rather than posing barriers to its operations (Brock, 2005). Ghoshal (1987) and Mayrhofer (2004) are two of the most popular researchers who support this particular perspective, Brock (2005) discusses. Apparently, the researchers coming from this perspective argue that the differences in the national cultures tend to benefit parent companies for it allows them to expand the knowledge base available, thereby allowing them to establish distinctive competencies all over the world (Brock, 2005). Still, there are other researchers who argue that cultural distance brings about mixed effects to acquisitions. However, scholars who are coming from this perspective argue that while cultural differences do not necessarily produce barriers to the acquisitions, it prevents the latter from actually achieving their goals. Nonetheless, it does not prevent the company from actually moving forward (Brock, 2005). Brock (2005) continues on his study with his analysis of whether or not cultural distance does affect the performance of acquisitions. More specifically, his study mainly focused on the following hypotheses: first, whether more integration related problems would arise when there are cultural mismatches on the individualism/collectivism dimension or with regard to the power distance aspect of culture and second, whether differences related to the said aspects could also potential barriers and/or problems to resource sharing (Brock, 2005). Upon the commencement of data analysis, the study of Brock (2005) supported the perspective from which the first group of researchers earlier discussed came from. This is because of the fact that the results of this study shows that cultural distance in relation to two dimensions (collectivism vs. individualism and power distance) tend to bring about challenges to acquisitions with regard to integration and resource sharing. The study of Manev and Stevenson (2001) also look into the manner by which cultural distance affects the multinational enterprises as well as the companies they acquire abroad. Generally, their study focused extensively on manages and how they work together given the differences in their culture. According to these authors, cultural distance affects companies both at the micro and macro levels. At the macro level, Manev and Stevenson (2001), the effects of cultural distance are usually felt with regard to the difficulties arising from the integration of the said company and its subsidiaries. On the other hand, problems in the micro level are usually felt by managers who are trying to adapt to a different culture (Manev & Stevenson, 2001). Because of this, misunderstanding, friction and conflict among managers are experienced, thereby posing some problems to the mother company and its subsidiaries. The authors further state that this only happens when the values of cultural distance are relatively high. Nonetheless, a smooth interaction tends to result from a relatively small difference between two cultures (Manev & Stevenson, 2001). The study of Brock (2005) and Manev and Stevenson (2001) were also able to point out the different challenges brought about by cultural distance to multinational enterprises and their subsidies. As previously stated, the differences between the two in terms of values relating to power distance, uncertainty avoidance, individualism and masculinity tend to result to the development of conflicts within the companies. Once again, then, it has been considered to be of vital importance that management practices be developed in such a way that it would cater to the needs of companies who are merged together yet are culturally distant. The literature previously examined focused on the importance of cross-cultural training as the lack of focus on the difference between the cultures of the home and host countries would result to problems. In fact, there are even times when the failure to cater to the needs of cultural diversity between the company and the outsourced employees tend to result to the dissolution of their joint venture which in turn prevents both the host and home countries from reaping the numerous benefits that are associated with this particular set-up. Barriers to the Workplace and Cross-Cultural Training Obviously, the failure to cater to the needs of the employees with respect to helping the cope with the cultural diversity present in their workplace would result to a number of conflicts therein. Because of this, the researcher once again reiterates the importance of cross-cultural training processes in order to ensure proper human resource management to reduce the prevalence of these barriers to the workplace. One of the most basic and common barrier to the workplace is language. Usually, when a company outsources its products and services, they train their staff to speak either in English or in their local dialect. This is of paramount importance most especially when the company continues to provide services to the clients in their home country. Some companies often go through cost-cutting measures thereby resulting to the lack of training of its staff with regards to multi-linguism. Instead, they invest in human resource officers who make sure that the vacancies are filled by people who do not need to be trained in the language (Doye 2005). Wittingslow (n.d.) has discovered this process with respect to companies from the United Kingdom and the United States. Due to the long exposure of these countries to workforces that are diverse, they suggest the hiring of human resource managers who are bilingual and possess a better understanding of the culture of the minority group. In this event, these human resource managers are often given the tasks to help the minority group in adjusting to the workplace and ensuring their commitment to the company (Wittingslow n.d.). From the preceding paragraph, it is evident that training the employees in the language of the company and that of the host country is of paramount importance to ensure the proper delivery of the service being offered by the former. In the same manner, it would also help the company in reducing complaints from their clients in relation to the employees inability to cater to their needs. Communication breakdown that often lead to misunderstanding is another problem common between the company and its employees in the host countries. Generally, when communication breaks down, it is relatively impossible for the managers and officers to communicate their goals to their employees thus compromising the operations of the company. In view of the same, the managers of the companies must also be able to learn the language of the host country and possess an understanding of their culture to ensure that they can properly deal with the employees that are under their control, Charlotte-Mecklenburg (2002) discusses. Another common barrier in the workplace is religion. Countries usually have different holidays from the others. For instance, in the case of Western countries and Muslim countries, the former tend to have different holidays than the former. Thus, the religion of the latter compels them to take time off during regular holidays which may in turn, result to a conflict if the said days fall on normal business days in the Western countries. Also, Charlotte-Mecklenburg (2002) also notes that it is impossible for the companies to shut down their operations, most especially if they are in the service industry for this may result to lost in revenues. Because of the same, human resource managers must be able to provide a solution thereto. Managers for human resource and operations must be able to devise ways by which they could cater to the aforesaid problem. Whilst it is a common practice to provide employees with premium pay for working during the holidays, the outsourced company must take the religious needs and obligations of their employees into consideration. Torrington and his colleagues (2005) mentioned another important aspect. According to them, it is necessary for the company to provide activities by which they could enable their employees to de-stress. However, the concept of fun and relaxation based on the culture of the company may not be the same as that of the host country. For instance, whilst parties in clubs or pubs are normal for Western countries, going thereto or drinking alcoholic beverages may not be suitable to Muslim countries. In view of the same, human resource managers must be able to devise ways by which they could cater to the social and aesthetic needs of the employees without going against their cultural or religious beliefs (Torrington, et al. 2005). Traditionally, performance appraisals are also an important aspect of human resource management. This usually enables the company to determine whether or not their employees perform based on their expectations. Irani (n.d.) mentions that the importance of performance appraisal is based on the fact that employees base their decisions with respect to leaving or staying the company when they are aware that there are rewards or career growth opportunities that they may reap due to hard work. In this instance, it is thus of paramount importance to take the individualist aspect of culture into consideration. .O’Reilly and his colleagues (1996) suggests that human resource managers must be able to tailor rewards on the level of individual achievement and how they value achievements. Without a doubt, a number of barriers exist among Multinational Companies most especially if it has been outsourced to a culturally different country. In view of the same, it is deemed necessary to ensure that the proper management of the employees therein are crafted appropriately to meet the demands of the set up. Cross-cultural training is undoubtedly necessary in order to balance the needs of the employees and that of the company. The importance of human resource management and cross-cultural training, is without a doubt grounded on the fact that these enable companies that have outsourced to ensure the proper functioning of their companies notwithstanding the fact that the operations thereof have been transferred. In the same manner, these would also enable the companies’ employees to work hand in hand with the former in ensuring that their goals and standards have been complied with. References Barkema, H.G. and Vermeulen, F. 1997. What Differences in the Cultural Backgrounds of Partners are Detrimental for International Joint Ventures? Journal of International Business Studies: 28 (4), pp. 845-864. Brock, D.M. (2005). Multinational Acquisition Integration: The Role of National Culture in Creating Synergies. International Business Review: 14 (2005), pp. 269-288. Charlotte- Mecklenberg .2002. Cultural and language barriers in the workplace, Workforce Development Board, 3, 1-10 Doye, T. 2005. Globalisation and its impact on human resources in international companies, University of Applied Sciences, 1-34 Geert Hofstede-Itim 2009. Geert Hofstede Cultural Dimensions. Retrieved April 18, 2011 from http://www.geert-hofstede.com/. Hennart, J. and Zeng, M. (2002). Cross-Cultural Differences and Joint Venture Longevity. Journal of International Business Studies: 33 (4), pp. 699-716. Irani, F.S. n.d. Reactions to different levels of personalization of feedback: moderating effect of individualism, Journal of Marketing and Management Research, 94-110 Manev, I.M. and Stevenson, W.B. 2001. Nationality, Cultural Distance and Expatriate Status: Effects on the Managerial Network n a Multinational Enterprise. Journal of International Business Studies: 32 (2), pp. 285-303. 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Equal opportunities and diversity, Pearson Education Limited, Essex, England, 2nd ed., 529-552 Tayeb, M.H. 2005. International Human Resource Management: A Multinational Company Perspective. UK: Cengage Learning. Wittingslow, G. n.d., The future for HR professionals: line-manager or policy-maker, Asia Pacific Journal of Human Resources, 35:3, 104-109. Read More