Does the Universal Practice Model of HRM Exist - Term Paper Example

INTERNATIONAL HRM On The cusp of the present millennium, influential social commentators were unequivocal; the phenomenon of globalization was reshaping our lives (Giddens, 1999) regardless of human consequences (Bauman, 1998). Simultaneously, Managers of the organizations on the receiving end of extravagant claims for the universal applicability of a best practice model of HRM, implying one recipe for successful HR activity (Purcell, 1999; 26). Every organization is faced with the problem of utilizing human resources, and hence managing them in some way, from which it may be inferred that HRM is universal (Brewster, 2001; 255) when business conducted across national and cultural borders, the operationalization of an enterprises becomes a little bit more complex. Although people involved in international businesses activities face many issues in the domestic business but due to different social political economic and legal environment, multinationals will need to develop different practices. One of the challenges is to select expatriates and their ability to manage with integrity. Companies have to monitor the social performance of its expatriate managers to ensure that as managers become familiar with the cultural aspects of the country. Here we will take up an organization which is truly of global nature to discuss various HR issues. Ingvar Kamprad opened his furniture retailer IKEA in 1950; it now employs around 70, no. people, operates in thirty countries and generates a turnover of 11 billion Euros. Since its inception in 1950's IKEA has had to deal with the problem of maintaining its unique 'Swedishness' as a competitive advantage and at the same time having to adopt this to the different national cultures in which it has been working. IKEA has over the last 25 years become a global player this is unusual in furniture industry, which is often remains national in character. It has established itself all over Europe including the south and East and in North America. Its biggest single markets are Germany, Sweden and France. It has recently taken over Habitat, its main rival in UK and France. It has adopted the culture and philosophy of consensus decision making. Human resource management practices have reflected the strong Swedish approach with a belief that people like to participate in decision making, like to be respected and take on responsibility. But the company is working in multinational brand its human resource management policies are bound to face some problems. National culture is one such area. A national culture involves a complete system of customs, habitat rules values and belief shared by an overwhelming majority of the countries in habitants. People from different cultures view aspects of life in contrasting ways. Cultures even view time differently; some emphasize punctuality while others reflect little sense of urgency. There is considerable literature in cross cultural management. Hofstede is one of the most known theorists in this field. Hofstede's 1981 study, cultures consequences of culture dimensions constructed cultural dimensions; so that culture could be measured along four scales i.e. power distance, uncertainty avoidance, individualism/collectivism and masculinity/femininity. Hofstede's after work (2001) includes a fifth dimension, long-term/short-term orientation. Trompenaars and Hampden-turner's (1997) model examine culture with three main domains: relationships and rules, attitudes to time and attitudes to environment. Apart from these theories we have to remember that cultures are not static and change overtime. As countries become more affluent their population becomes more individualistic (Triandis, 2004). International assignees have to learn to work in three different cultures- national organizational and professional and these cultures shift in over time. Different cultures hold different conceptions and assumptions about organizations and their management. Hofstede's dimensions of culture can be applied to business practices in different countries to gain some understanding of how and why management is conducted in a particular fashion. For example, France has a relatively high score for power distance. Structures are typically hierarchical and communication flow downwards from the top of the organization via the hierarchy. An expatriate manager from relatively low power distance country such as Sweden, working in France would need to understand that the authoritarian management style used there is likely to be more respected and effective than the Swedish consultative or participative approach. As in the case of IKEA, people are recruited on the basis of good communication skills, open minds, positive work attitudes and good potential without necessarily having formal qualifications. Swedish managers are expected to be ambassadors, and explain the IKEA way to non-swedish co-workers in overseas operations. This has proved relatively easy in the Netherlands, but not so in Germany and France. In the United States older workers seem more at ease with Swedish manage4rs than American Managers. Younger American managers show a lack of equalitarian spirit towards employees. IKEA's management of people in Germany, France and USA encountered the problem. In Germany there were problems of addressing managers using first name undermining managers' authority; doing exactly as the managers ask and not using one's own initiative. IKEA concepts were regarded as too vague, while managers' suggestions were interpreted as orders; there were also problems with regarding Swedish as more result oriented but without properly assessing risk before taking action; and with the lack of formal rules and the need to reduce bureaucracy. In France there were problems in informality being seen as a sign of weakness or indecisiveness, meaning that employees could do what they liked; a problem with keeping subordinates informed; with the lack of a formal job description and written procedures as well as general flexibility; with status not being recognized, causing identity problems and being lost in the crowd; the trade union distrust o IKEA's consensus management approach. In the United States people felt uncomfortable with the Swedish lack of showing emotion; avoiding conflict and not setting them apart by avoiding self promotion. Mostly, IKEA has had to operate outside Sweden, in countries that may be seen as having a higher power distance. Dealing with people in different cultures, shows importance of communication- which could be face- to face, indirect, oral or written using body language, and using technology such as e-mail and videoconferencing. Hall and Hall (1990) consider communication in terms of low and high-context cultures. Americans, Australians and British are examples of low-context cultures- they communicate directly and to the point with communication placing value on straight line logic. Communication is explicit. /at the other extreme are the Japanese and Chinese, who are high context communicators- they value a more indirect approach to communication, with emphasis on saving face. To manage communications effectively when organizing and working across different cultures it is necessary to try in the first instance to identify areas of shared practice where communication can be conducted more easily, but failing that to devise methods to reconcile difference (Trombenaars and Hampden- turner, 2004) in order that communication can progress. Now working in different cultures, most people will experience cultural surprise when interacting with other cultures and culture shock to some degree, particularly when living and working in other country/cultures. It is therefore expected, that most people will experience cultural surprise when interacting with other cultures and cultural shock, to some degree particularly when living and working in another country culture shock is a normal and predictable phenomenon, although those experiencing it may feel that they are weak or inadequate. According to Oberg (1960) feelings of strain, rejection, confusion and incompetence are common. One of the key issues involved in culture shock is the need to cope with ambiguity. Most research evidence comes from the expatriation literature, reflected in the illustration that follows, but similar considerations may apply to host country organization members too. Culture shock is stressful because it requires readjustment in coping with differences in assumption and values, pattern of thinking, behaviors and style of communication. readjustment to the new environment has been described in terms of U-curve theory (Torbioen, 1982). In this theory, expatriates arriving in a new country will experience a short "honeymoon' or tourist -phase. A longer period of culture shock or crisis follows, characterized by disillusion, disenchantment and lower morale. Moving on the same line, IKEA adapted to the need to keep its essentially Swedish management philosophy, while making its people management practices more compatible with employees' expectations in the other countries of operation. Firstly in France, the company has proved clear communication in facts and figures of IKEA's benefits compared with its competitors. Formal training program have been developed as a more credible alternatives to learning by doing. Management has also a more affirmative attitude, towards employees headed by a Frenchman (who has a Swedish wife) who has worked at the IKEA headquarters at Almhitt and has developed better relations with trade unions. The 21st century is the age of multinational executive, accompanying attempts to construct the globally networked corporation. The development of international workers/executives who are capable of transferring the enterprises commercial and operational philosophies and systems into every location in which they wish to have a profitable presence. Perlmutter's (1969) and Hennan and Perlmutter's (1979) classic models describing 'ethnocentric', polycentric, region centric and geocentric stages of internationalization are particularly helpful in guiding the evaluation of employee resourcing choices and consequences. It is important to remember in international recruitment that there are very many role specifications that involve international activity. Sparrow (1999) gives example of a wide range of international job roles, ranging from the home based managers but with a central focus on international players and markets through transnational managers who move across borders and detached from single headquarters. Other example includes members of multicultural teams , internationally mobile manager who are loyal to the parent culture and make frequent visits abroad skills and knowledge transfers, and expatriates on length assignments who represents the parent company in a limited number of countries. As in IKEA's case it has not changed significantly in Germany but people management policies has been changed for United States. Not only has the company adapted its marketing and business practices. IKEA has given more autonomy to local management. An American style performance review procedure has been initiated, requiring the documenting the performance strengths and weaknesses (so meeting with which the senior Swedish managers feel uncomfortable because of its formality and the negative feedback it gives and in practice this has resulted in little pay discrimination). The cultural differences that can emerge in the international selection process need to be considered carefully. In collectivist nations Hofstede (1994) the selection process may favor the appointment of family member over strangers. In Universalist nations, (Trompenaars and Hampden.- Turner, 1997) the pursuit of equal opportunities will be in accordance with legislative requirements. Finally, multinational managements all want to win in the global market. So almost all the international HRM requirement starting from recruitment training especially cultural aspects performance evaluation techniques, compensation etc. has to be fulfilled by the companies to remain successful in the world market IKEA has done it all to remain successful venture worldwide. References: 1. Bauman, Z. (1998) Globalization; the human Consequences, Polity Press, Cambridge. 2. Brewster, C. (2001) HRM: the Comparative dimension, in human Resource Management: a critical text, ed. J storey, PP 256-71. Thompson learning London. 3. Giddens, A. (1999) Runaway world: How globalization is reshaping our lives, Profile books, London. 4. Purcell, J. (1999) Best practices and best fit; Chimera or cut-da-sac/ Human Resource Management Journal, 9(3), PP 26-41. 5. Hall, E.T. and Hall M.R. 1990) understanding cultural differences, intercultural Press, Yarmouth, ME. 6. Hofstede G. (1981) cultural consequences: International differences in work-related values, sage, Beverly Hills, CA. 7. Hofstede G. (1991) culture and organizations. Software of the mind, Mc Graw-Hill, Maidenhead. 8. Oberg, K (1960) Culture shock: adjustment to new cultural environments, Practical Anthropologist, 7, PP 177-82 9. Torbiorn, I (1982) Living Abroad: Personal adjustment and personnel policy in the overseas setting, Wiley, New York. 10. Triandis, H C (2004) the many dimensions of culture, academy of Management Executive, 18 (1), PP 88-93. 11. Trompenaars, F and Hampden- Turner, C (1997) Riding the waves of culture, Nicholas Brearley, London. 12. Trompenaars, F and Hampden- Turner, C (2004) Managing people across cultures, Capstone, Chichester. 13. Heenan, D a and Purlmutter, H V (1979) Multinational Organization Development Addison-Wesley, Reading, Mass 14. Hofsted, G (1994) Cultures and Organizations, Harper-Collins Business, London. 15. Perlmutter, H V (1969) the tortuous evolution of the multinational corporation, Colombia Journal of world business, 4 (1), PP 9-18 16. Sparrow, P (1999) International recruitment, selection and assessment, in the global HRManager, ed. P. Joynt and B Morton, Institute of Personnel Development (IPD) London. 17. Trompenaars, F and Hampden- Turner,C. (1997) Riding the waves of culture, Nicholas Brearley, London Read More