Relevance of Cultural Theories to the Study of International HRM - Assignment Example

?Running head: Critically evaluate the relevance of cultural theories to the study of International HRM. Research paper Insert Insert Grade Course 21st. March. 2011 Relevance of Cultural Theories to the Study of International HRM Introduction Cultural theories According to Barach (1989, p. 496), “a theory is a system of constructs and variables in which the constructs are related to each other by propositions and variables are related to each other by hypothesis; it is more of a linguistic device used to organize a complex empirical world.” Culture theories emerge from the study of viewing cultures; hence, cultures are systems that relate individual communities to their ecological settings. There are several theories that relate to culture including globe theory, Hofstede theory and Trompenaar theory. The Hofstede theory is retrieved from the research of a Dutch researcher Geert Hofstede, who derived his model from studying employee’s behavior at the work place. Some cultures value equality among people, while others value power. However, Geert focuses on five cultural dimensions that include power distance index, individualism, masculinity, uncertain avoidance index, and long-term orientation. In power distance index, the junior staff expectations are for the power to be distributed appropriately and equally, since they do not have authority in the organization or in the society. According to Hillebrand (2008 pp 3), in Low power distance model, people tend to see the members of the society as equal such as the western cultures. They believe that power should be equal and that managers or leaders should not have a lot of power compared to the subordinates; this applies to countries like Israel. However, the high power distance reveals that those in authority should have more power than the subordinates; this is applicable in Malaysia. Nevertheless, societies cannot be equal; there is always an element of un-equality among them (Jais, 2007, pp 34). Individualism dimension interests are divided into two - individual and group interests. In the society, every individual has a duty of looking after himself and his nuclear family. Collectivism come in where the extended family is involved, in which, one has the duty of taking care of them due to the strong ties in the family. This dimension only focuses on family interests. The third dimension is the masculinity verses femininity dimension, which focuses on the femininity concentrating on the distribution of duties between the two genders, male and female. The study shows that women and men values differ. For instance, male are believed to value material wealth and money, they also work hard to pursue their expected goals in life; it could be buying a Mercedes. In fact, most men in different countries are competitive when it comes to the way of living. However, in comparison, women have a strong value for the quality of life, social interactions and they have concern about the welfare of others; for instance, most women contribute to charity concerning children. The fourth dimension is the long-term versus short-term orientation, in which long-term orientation mainly concentrates on relationships, Work, and life and it involves the perseverance value. If a culture is willing to work for the long-term goals, then the culture has long-term orientation (Torun, 2007 pp 10). This orientation involves hard work and dedication. Short-term orientation is mainly concerned with the past and the present, whereas its values involve fulfilling of social obligation and respecting the values of tradition, in addition to protecting one’s image. This orientation is common in the Philippines (Bhagat and Steers, N.d). The fifth and final dimension is the uncertain avoidance index, this index deals with the level of uncertainty and to which level can it be tolerated and its impact on decision making in a society (Hofstede G, 1983 pp 83). Cultures that avoid uncertainties implement measures such as implementing strict rules and regulation and security measures this include countries like, Spain. However, the uncertainty accepting cultures have a high level of tolerance and have only few rules to constrain uncertainties and they do not express their emotions easily. Jamaica falls in this category (Bhagat and Steers, N.d). The Trompenaar's theory is related to culture as well, and it was retrieved from Fons Trompenaars and Hampden-Turner. This theory emphasizes on the difference between national culture and how it can be measured. Their research revealed that cultural differences might lead to a competitive advantage to companies. The dimensions of culture in this theory includes; Universalism vs. Particularism, Analyzing vs. Integrating, Individualism vs. Communitarianism, Inner-directed vs. Outer-directed, Time as sequence vs. Time as synchronization, Achieved status vs. Ascribed status, Equality vs. Hierarchy. The Universalism vs. Particularism dimension involves applying rules and policies in the society. The universalism dimension relies on formal rules and policies that are usually applied equally. Particularlism dimension involves finding exceptions where no rule can fit. It does not force an existing rule to fit instead it finds another way to deal with the issue. Individualism vs. Communitarianism dimension deals with the question of where people derive their identity. It describes how people in a culture view themselves, either as individuals or members of a group, Johann R, (2008 pp 6). Individualism focuses on self-achievement and his independence, while communitarism involves the right of a group in the society. It describes individualism as self-centered. Inner-directed vs. Outer-directed dimension focus on people believe that the environment can be controlled vs. believing that the environment can control humans. In the inner –directed, the mind is viewed as critical tool that helps people think and make judgment with their minds. It also indicates that nature can be controlled with by the right mechanisms, since people believe that they can dominate nature. The outer- directed seeks information from outside it argues that people should research on their own and make their own decisions. Time as sequence vs. Time as synchronization whereby time as a sequence describes events as separate items in time, sequence after another. The actions are arranged according to the time they took place. People hence do things one at a time, while synchronized events are seen as parallel and people do several things at once. Another dimension is specific vs. diffuse, it defines the extent to which roles are integrated. Alternatively, assigned, people’s lives are well divided and interactions between people are well established. A diffuse culture, integrates a person to various roles. While in a specific culture, there is a clear separation of someone’s duties and all elements are related. Affectivity versus Neutrality is the level to which we express our emotions. In an affective culture, people are free to express their emotions and there is no need to hide one’s feelings. Nevertheless, in a neutral culture, people are warned towards expressing their feelings and emotions. Hence, people learn to control their emotions in such a culture. However, in the achieved vs. ascribed status, focus on whether one has to proof him/herself to receive a certain status is important. However, in a culture that focuses on achieved status, people gain their status through their accomplishment. In culture with the ascribed status, someone’s status is achieved from gender, birth, age, or even wealth in this culture, achievement is not considered. One is respected due to an inherited status (Bhagat and Steers, N.d). Equality vs. Hierarchy dimension is all about equal status among people. It states that human beings all have equal right in spite of where they were born from, or whet their talent is. Hierarchy is about superiority if some people while others answer to them. These dimensions create a better understanding of cultures hence reducing the degree of cultural misunderstanding. It also creates awareness to an entrepreneur on why different clients in different countries respond differently to the same product. Trompenaar’s dimension illustrates how businesses vary from one country to another and that culture is a very important element when dealing with business worldwide. According to Needle (2010 pp 145), Hofstede theory has been criticized, since his original data is over 40 years old, hence questioning its relevance in today’s world. In addition, the culture is always cited as the cause when there is no other explanation is applicable. He later argues that, the Hofstede’s theory is limited, whereas, there are many valuables discussed in other theories. Hofstede research is from one company; however, he uses that data to explain the wide field of cultural differences. The Trompenaar’s theory has also been accused of lacking academic rigour, however, he believes that “rather than trying to reduce the cultural differences, the cultural variation can be used by organizations, as strength to gain competitive advantage through cultural synergy” (Needle, 2010 pp 146). Application of cultural theories to aspects of international HRM Trompenaars and Hofstede’s cultural theories explain how cultures vary in different countries among people, thus these theories in their dimensions reveals how such cultural differences affect a society or business. International human resources deal with worldwide business operations across different cultures. Cultures sometimes are inevitable especially in situations whereby people are brought up with the same culture since birth; it hence becomes almost impossible to change their minds. The major challenge in performing business internationally is the different cultures. When conducting business internationally, it requires an understanding of the culture diversity and cultural values. For instance, in an organization that would want to apply the femininity dimension of the Hofstede’s theory. First, the manager should consider the employees priority. According to Landy (2009 pp 40), most cultural theories have incorporated Hofstede’s dimension of individualism or collectivism. In an organization, the level to which values are shared across groups has effect on the behavior of each group. For instance, the Honda of America Corporation has four production plants in Ohio. Indeed, these firms have adopted masculinity / feminine, high power distance, collectivism, and the long-term orientation culture. The Honda organization practices this culture in all their firms wherever they may be and all its employees are trained to adopt the culture. According to Landy (2009 pp 39), Culture and Cultural theories affect human resource practices in that, in the United States, hiring of personnel, depend on their technical skills, whereas in Japan, which has adopted a collectivist culture, hiring depends on how well an applicant can fit in a group. Compensation strategy also vary across cultures, for instance, in the United States, the highest paid staff may earn 100 times more the amount of the lowest paid. While in collectivist cultures, the highest paid individual only earns 20 times more the amount paid to the juniors. In such s culture, group decision is highly valued than an individual’s decision. However, in the individualist cultures, an individual decision is always favored. This however may lead to problems in communication and decision making when such an individual is assigned to a group of people with different cultures. At the workplace, managers should be aware of the different cultures that are associated with different people; hence, they provide support towards such culture (Landy, 2009 pp 39). Human resources management may vary in different ways, for instance, there are two types of HRM, which include, soft and hard HRM. Hard approach in human resource may portray an employee as a resource or even a commodity, in which case, employees act more as human capital whose hard work and energy yields to returns. However, Banfield (2008 pp 37) elaborates that a hard approach, “emphasizes the quantitative, strategic aspect of managing people as organizational assets.” He also explains that, a soft approach in concerned with communication, leadership, motivation, work flexibility, adaptability to work, and the commitment of employees and employers. The soft approach regards an employee on been resourceful unlike the hard approach that regards employees as a resource. In the soft approach, there is enhancing of performance by motivating employees, encouraging communication and thus leading to loyalty and commitment of employees. Consideration of the extent to which cultural differences can influence work and the management of human resources According to Aycan (2000, pp 194), “managing human resource in an organization requires an understanding of both the internal and external environment.” The internal environment consists of the work culture, while the external environment focuses on the enterprise culture, which may include; resource availability, nature of industry and the market characteristics. Employee related assumptions might be influenced by characteristics of societal culture. Culture in general is beliefs that people share, this also applies in the business environment. For an organization to operate in harmony, its managers must be aware of these varying cultures. In corporate culture, employees work according to a certain culture, which is also taught to the new recruits. An organization culture is important especially if it involves teamwork, which involves working together. The main aim of understanding different cultures is the possibility of conducting business in different countries. Managers should try to develop cross- cultural understanding in order to be able to operate in different parts of the country. First, we should be able to understand our own culture in order to respect other cultures. An organization should train its employees on; how culture affect business, cultural dimensions, how other cultures can affect one’s behavior, have sensitivity towards other cultures. Culture to some extent can affect the way in which business is operated. For instance in some countries, even the little gestures matter a lot. For instance In the Arab countries, one should not use his left hand to offer or receive anything. If you contradict this culture, you may offend your clients. With some knowledge on cultural differences, it is possible to be sensitive to other cultures, which in turn leads to success in terms of business. An organization normally consists of a wide variety of people with different culture and different understanding of life. For these different employees to be able to work together there has to be harmony and respect. According to Barney (1986, pp 661),”for a firm’s culture to be a source of sustained competitive advantage, it must not only be valuable and rare, it must also be perfectly imitable.” Cultural differences arise from within and people become aware of them when they are exposed to the new environments with different cultures. If cultural differences are understood and appreciated, it is then easier for team works at the work place. However, if they are misunderstood and underestimated, they may create conflicts among employees and in the society as well. Cultural differences may need to be considered when dealing with communication, for instance, when communicating to a fellow colleague on the value of his work, one may need to consider if they prefer direct or indirect communication. Tanke (2000, p. 355) noted various ways in which cultural differences can influence an employee’s behavior at the place of work including communication problems in recruiting, employees counseling, work schedule, role of women and human resource policies. However, a culture sensitive manager may be able to develop an approach to such issues. He further argues that, cultural awareness helps one move out of the closet of orientation and developing a positive attitude towards the other culture, thus, helping when it comes to viewing the behavior of an ethnic employee with a sensitive culture basis. A working environment filled with culture diversity is eligible for conflicts because of cultural differences and misconception of the other cultures. With such conflicts and misconception, the organization’s productivity is affected. It is hence important for a manager to develop an understanding on interpersonal and inter-group relation. He should also ensure that there is fair treatment among all workers regardless of one’s culture background. Employees should also be encouraged to communicate, as communication is a fast way of resolving conflicts and learning about each other’s cultures (Tanke, 2000, pp 356). Human resource managers must therefore understand multicultural management in order to lead their employees towards the right direction. Companies with the knowledge of multi-cultural management are flexible and can work any where in the world. The knowledge of ethnicity, gender, and age differences are part of a multi-cultural management, of which managers should always consider. Conclusion The fact that human beings are not the same, there is cause for misunderstanding due to their cultural differences. These include different language, religion, economic values, education, and behavior (Vellnage, 2010 pp 21). Disputes are common and natural to human beings, and are said to be part of life. However, the cultural theories explain how cultures vary in different countries among people, thus these theories in their dimensions reveals how such cultural differences affect a society or business. When conducting business internationally, it requires an understanding of the culture diversity and cultural values. Cultural differences arise from within and people become aware of them when they are exposed to the new environments with different cultures. Nevertheless, if cultural differences are understood and appreciated, it is then easier for team works at the work place. However, if they are misunderstood and underestimated, they may create conflicts among employees and in the society as well. Reference List Banfield, P., 2008. An Introduction to Human Resource Management. Oxford: Oxford University press publishers. Barney, J., 1986. Organizational Culture: Can It Be a Source of Sustained Competitive Advantage. LA: University of California. Bhagat, R. and Steers, R., N.d. Cambridge Handbook of Culture, Organizations, and Work. Cultural Foundations. Cambridge University Press publishers. (Online). Available from: http://assets.cambridge.org/97805218/77428/excerpt/9780521877428_excerpt.pdf (Accessed March 22, 2011). Hofstede, G., 1983. Special Issue on Cross-Cultural Management. Journal of International Business Studies, Vol. 14, No. 2. Institute for Research on Intercultural Cooperation (IRIC). Jais, S., 2007. The Successful Use of Information in Multinational Companies: An Exploratory Study of Individual Outcomes and the Influence of National Culture. NY: DUV publishers Landy, F. and Conte, J., 2009. Work in the 21st Century: An Introduction to Industrial and Organizational Psychology. NJ: John Wiley & Sons publishers. Selley, S. An article on the importance of understanding cultural differences in business. (Online). Available from: http://www.helium.com/items/651911-the-importance-of-understanding-cultural-differences-in-business (Accessed March 22, 2011). Tanke, M., 2000. Human resources management for the hospitality industry. OH: Cengage learning publishers. Vellnagel, C., 2010. Intercultural Communication within the Tourism Industry: Cultural Differences, Misunderstandings and how to Reduce Them. Berlin: Grin publishers. Needle, D., 2010. Business in Context. OH: Cengage learning publishers. Torun, F., 2007. Knowledge Management Practices from a Culture Free and Culture Specific Perspektive. Berlin: Grin verlag publishers. Johann, R., 2008. Cross-Cultural Management: The Case of the DaimlerChrysler Merger. Berlin: Grin verlag publishers. Hellebrand, J., 2008. Cross-Cultural Competence: Analysis of a Sino-Western Negotiation Setting. Berlin: Grin verlag publishers. Read More