Risks of Cultural Homogeneity for Organizations - Essay Example

? Critically analyse Schneider’s proposition that human beings seek out cultural similarity. Consider why person/environment fit is important for employers & employees. What are risks of cultural homogeneity for organizations competing in contemporary economies? Introduction In the face of globalization, the world has become a small place and has ensured that people interact with persons from different nationalities and cultures in day to day life. This is particularly more relevant in corporate organizations, academic and educational institutions. Culture can be defined as a system that brings about share meanings for individuals and common ways of viewing events and objects. It is this culture more than nationality that differentiates people and has a bearing on their behaviour, beliefs and values. In industrial and organizational psychology, organizations need to focus on cultural differences related to nationalities. Culture influences the way s person thinks, acts and behaves in a particular situation. Differences in culture influence people’s meanings and interpretations to an event or object. As a result, industrial and organizational psychology places a lot of importance on cultural influences. Globalization has rendered the present day workplace a diverse setting with people from different nationalities and cultures working together. This brings about more possibilities of conflicts and misunderstandings due to cultural differences in the organization. A number of studies and research reports have highlighted the differences in thinking and behaviour of American and non-American personnel. In a globally diverse work setting, American workers and managers interact with people of different nationalities with different sets of thinking, behaviour, beliefs and values. The task of analyzing the impact of culture on people’s behaviour is made complex by the fact that culture, behaviour and values are not influenced by nationality alone. People tend to simultaneously adopt different cultures and subcultures. This is referred to as cultural mosaic where each individual is a composite of varied cultural influences. People’s behaviour is influenced not solely by their birthplace and origin, but also by the environment in which they grow, study and work. People’s culture, beliefs and value systems have an influence on the way their behaviour and interaction in the workplace. In industrial and organizational psychology, it is important to have understanding of the differences in culture. Without an understanding of the cultural differences of employees, it becomes very difficult to interpret their behaviour and actions in an appropriate manner. Impact of globalization Globalization has brought about a dramatic change in the business and economic landscape of countries worldwide. A majority of companies have expanded their operations beyond their home market and entered foreign markets. Some significant examples of this are highlighted below: Over 100,000 US companies have invested more than $1 trillion in worldwide ventures. US companies have invested a significant amount of capital in foreign shores totalling approximately $400 billion and employ more than 60 million overseas employees. One in five American jobs is linked directly or indirectly to international trade. Another significant statistic is that approximately one-third of the top management jobs in large US companies are held by foreigners. In Europe-based firms, Americans hold nearly one-fourth of the top management positions. The disintegration of the former Soviet Union and formulation of the European Union (EU) has triggered mass movements of people across borders. The formation of economic blocs has facilitated the easy movement of goods and people across national borders. Some of the blocs include the North American and Central American Free Trade Agreements (NAFTA and CAFTA), EU, Association of Southeast Asian Nations (ASEAN), Southern Cone Common Market (MERCOSUR) and the Economic Community of West African States (ECOWAS). This shows that it is no longer practical or feasible for a country to remain in economic isolation and not have trade ties with other countries. This applies to all countries irrespective of their size, location, economic status and power. Even before the advent of globalization, there existed connections between countries. But in the aftermath of globalization, the ties have widened in scope and become more complex in nature. In the organizational context, this means that employees and managers have to function in a job environment that has influences from different cultures. Employees from different cultures have to interact and perform as a common unit in the organization. This certainly needs some mechanisms to be put in place to ensure work harmony. The challenge becomes more difficult in a virtual work environment where employees have no direct physical contact but interact via electronic media, such as e-mail, teleconferences, video conferences and webcasts. The bigger challenge for the organization is to design and implement functional systems for training, development, recognition, reward and motivation that is compatible for employees from different cultures. There could be a number of mutually exclusive requirements in a diverse workplace with significant cultural differences amongst employees. For example, individual rewards for outstanding performance is most suited for American employees whereas their Swedish or Japanese counterparts favor team rewards over individual recognition for good performance. In human resources management, it is critical for employers to develop systems that have the cultural fit so that they can implement organization-wide across locations in different countries. Importance of person/environment fit for employers and employees People react to situations differently depending on their culture system, values and beliefs. Employees working at the same level in an organization act behave and react in situations in a varied manner. It is therefore important to understand the background of the cultural differences before attempting to interpret employee behaviour. Without a proper understanding of the differences in culture, it is difficult to have an appropriate interpretation of employee behaviour. A number of industrial and organizational research reports have looked into the influences of culture on employees’ work ethics and behaviour. These research reports have highlighted the following: The role and importance of work in life varies a great deal amongst Americans, Israelis and Germans. There is substantial difference in the way time is viewed by Asians and Americans. In China, managers decide the pay hike rates and bonus depending on the personal needs of the employee. In contrast, American managers make decisions on increments and incentives solely based on employee performance. Managers in Japan in comparison to their counterparts in US are more likely to solve strategic issues through cooperation and collaboration. They also encourage the sharing of rewards and recognition equally among employees. American managers tend to follow win-lose strategies whereas their counterparts in Japan are more likely to devise compromise solutions. Work ethics and values of Americans and Africans vary a great deal to those of Croatians and Belgians. Salespersons in Philippines feel shameful when they encounter a poor customer interaction and this motivates them to perform better, whereas a similar scenario results in de-motivation amongst Dutch salespersons. Software engineers in America tend to assist their colleagues only when they expect to seek the colleague’s help in future. In sharp contrast, Indian software engineers help and assist their colleagues whenever required without expecting any reciprocation in the future. In America, financial advisors tend to more cohesive and work as a team in undertaking complex tasks whereas financial advisors in Hong Kong are cohesive even when the task is not complex. American financial advisors place more importance on autonomy and independent action when compared to their counterparts in Hong Kong. Leaders in Japan are more likely to use power that comes from status in negotiating conflicts in comparison to leaders in America or Germany. Job security is one of the primary concerns for employees in China and less so for American employees. Different countries have employment protections or reservations for disadvantaged groups. These groups vary from country to country based on their history and culture. For example, Canada has employment protections for French-speaking people; Greece has reservations for Albanians, Bulgarians, Georgians and Romanians; Israel has protections for Palestinian Arabs, Sephardic Jews and Druze; New Zealand has protections for Maoris, and Australia has reservations for indigenous Australians. The facts above show the differences in culture of employees and their impact on organizational behaviour. Employees and managers interact with people from varied nationalities each with their own beliefs and value systems. Even though employees at a particular level in the organization may come from similar educational and economic background, there will be major differences in their language, culture, beliefs and values. They may have certain notions on objects and events. These notions are based on their cultural background. As a result, there will be certain differences in each individual employee’s behaviour in different situations. American academicians, scholars, researchers and authors have dominated certain areas of psychology. This is particularly true in industrial and organizational psychology. In this area, research and theory are based on problems that have already occurred and not anticipation. Hence research is focused on developing theories that can be applied to scenarios in the US. Not much thought and importance is given to the suitability of these theories in other countries. As a result, efforts to apply American research findings in non-American situations have not been greatly successful. It can be seen that culture has a key role to play in determining the appropriateness and fit of a human resource initiative. This knowledge is critical when theory developed in one culture has to be applied in another culture. It makes sense to modify the theory to suit the differences in culture before actually applying it in the organization. In the global environment, companies have subsidiaries operating in multiple countries across continents. Each of these subsidiaries will have a mix of employees from different regions and nationalities. When top management in the global headquarters takes important strategic decisions, it will have to be implemented across subsidiaries in all the countries the company operates in. Before implementing the strategic decisions, it is important to consider the cultural differences in each country and modify it to suit the cultural fit in that country. In order to promote fairness and equality in the workplace, employers tend to downplay the culture differences that exist in a diverse work environment with people from different nationalities and regions. This has been true of human resource practices of multinational corporations where there is a tendency to apply the same human resource methods and techniques in all the geographical locations without understanding the differences in culture. The key challenge is to recognize and understand the culture differences and their relative importance for organizational behaviour. This has to be balanced with maintaining fairness and equality in the globally diverse workplace of the 21st century. Human resource managers are becoming increasingly aware of the importance of understanding multicultural differences and their impact on employee behaviour in the organization. This is also true of analysts in the field of industrial and organizational psychology. However, this recognition has mostly been through application without the basis of theory. For instance, we can take the case of expatriates who are employees placed to work in locations outside their home country. Companies spend a fair amount of time, effort and money in getting the expatriates settled in their new work environment. Despite these efforts, some expatriates do not perform well in the new location as they did in their previous position. This results in significant loss of investment and reduced levels of productivity for the company. This occurs due to the fact that some expatriates are not willing to or do not have the required skills to adapt to the culture of the new location. This shows that there should be careful selection of expatriates and the process of selection must be well planned and thought out in detail beforehand. Companies also need to put in place appropriate training systems for expatriates to understand the culture, beliefs and value systems of the new location. Expatriates need to be put through this training focused on cultural differences before they are sent for the new assignment. This will help them in knowing beforehand what to expect in the foreign country. It will help the expatriates in understanding the work ethics, behaviour and environment in the new location. It will facilitate the comparison of cultures between their home country and the foreign country. They will be better placed to understand the behaviour and actions of their new colleagues. Expatriates will then be able to interpret behaviour of their peers, subordinates and seniors in the context of the differences in culture. Cultural influence and its impact on employee behaviour The fact that principles relevant to a particular culture may not be suitable to another culture is easily recognized and understood. The complex part is determining and understanding the reason for the difference. For example, a human resource manager may recognize that individual rewards are ineffective in Japan but effective in the US. However, he may not understand the reason for the difference in employee behaviour in the two countries. The main reason is that culture in Japan is a collectivist culture that places more emphasis on the group rather than the individual. In contrast, American culture is individualistic that focuses more on the individual than the group. The manager will be in a better position to take decisions regarding rewards, recognition and motivation if he had a sound understanding of the underlying cultural principles. Hofstede’s theory has laid down five primary elements on which cultures can be differentiated. The five elements are individualism/collectivism; power distance; uncertainty avoidance; masculinity/femininity, and long-term versus short-term orientation. Individualism/collectivism is the element that determines the extent to which persons are expected to take care of their own interests versus protecting the interests of the group they belong to. Power distance element is the degree which less powerful employees in the organization accept and expect an unequal distribution of power. Uncertainty avoidance is the extent to which people belonging to a culture are comfortable in new and ambiguous situations. Masculinity/femininity element is concerned with the emotional actions and the distribution of emotional roles between the two genders. Masculine cultures place a lot of importance on achievement and technical performance. In contrast, feminine cultures focus on interpersonal relationships and communication. Long-term versus short-term orientation is the degree to which people belonging to a culture expect immediate or delayed satisfaction of their material, social and emotional needs. Risks of cultural homogeneity for organizations In embracing globalization and venturing into newer markets, it becomes important for organizations to acknowledge and understand the importance of culture differences in the countries they operate in or plan to enter. It is imperative for human resources to have training systems in place that guide leaders and managers on understanding the culture differences in the diversified workplace. Culture plays a significant role in determining the motivation and drive for employees. Employees from different cultures will have varied views on how their supervisor should act, behave and lead. As a result, there should be no rule of one size fits all with respect to human resources practices of selection and training. There must be different parameters in place for selecting and training managers across cultures. Culture has an impact on many functions of the human resource management in an organization, such as recruiting, selection, staffing, training, motivation and direction. For instance, recruitment of personnel is based primarily on the candidate’s technical skills in individualistic cultures like the US. In sharp contrast, hiring decisions in collectivist cultures like Japan is based on the fitment of the candidate into the team/group. It can be seen that cultural homogeneity cannot be assumed when devising business strategies in the global organization (Landy & Conte, 2009). Conclusion The modern day economy is dominated by globalization. In such a scenario, no country irrespective of the size, economic or political power can afford to exist in isolation of other countries. Countries can be mutually benefited through viable trade and economic ties. In this global economy, companies can survive and grow only when they can diversify their operations to countries outside their shore and entering foreign markets. When companies enter and start operating in foreign markets, their workforce becomes multicultural and diverse. For the multinational company to be successful in the long run, employees need to work in harmony towards achieving the organizational goals. Managers and leaders need to have an in-depth understanding of the different cultures of their subordinates. The awareness and knowledge of the culture differences will help employers in understanding the work ethics, behaviour and motivation of their employees. The understanding gained by the organization can be used effectively to devise specific and relevant human resource strategies that fit the culture of the employees. This facilitates employees to get adapted to their work environment in an effective and swift manner. The harmony achieved in the work environment will help in bringing the best performance out of employees. This will improve organizational performance and effective. With a workforce that interacts and works well together and brings out the best of employees, organizations will truly be in a position to succeed in the competitive global environment. References 1. Landy, F.J. & Conte, J.M., 2009, Work in the 21st Century: An Introduction to Industrial and Organizational Psychology, John Wiley and Sons Read More