Do Cultural Differences Influence Human Resources Management Practices - Literature review Example

Do cultural differences influence HRM practices? Name Professor Institution Course Date Do cultural differences influence HRM practices? With globalization taking place so fast in the business platform people of different cultures are now forced to interact more often than before (Chang, Wilkinson & Mellahi 2007, p.404). People no longer do their work and live in an inward-oriented market; they are presently part of a worldwide market with competition arising from roughly every continent. Gelfand (2000, p.30) posits that the business form of interaction has compelled multinational companies to re-think their strategies on how employees deal with customers to satisfy their ever changing demands. Because the human resource practice is a core component of the organization, managers tries to put it among the front agendas with reference to customer satisfaction. In a nutshell, if the human resource company is not standard and consistent with cross cultural issues, it will very difficult for such company to satisfy the needs of its diverse customers (Awasthi, Chow & Wu 2001, p.292). Based on this realization, this essay believes that cultural difference influences HRM practices. The essay will use Hofstede cultural dimension to show that cultural differences influence HRM practices. Fields, Chan & Akhtar (2000, p.265) explain human resource management as “a set of policies that are formulated to enhance the organizational cooperation, employee’s flexibility, commitment and the qualities of work”. Inherent to the idea of cultural influence the view that societies are regarded to differ with reference to the structure which their organizations and institutions are made of, and that these differences reflect their unique traditions, attitudes, values and historical undertakings. As such, Hofstede (2000) defined culture as the “crystallization of history in the feeling, thinking and acting like the present generation” so as to allow integration. However, in the actual sense culture means values, behavior, attitude, norms and beliefs. Nyambegera, Sparrow & Daniels (2000, p.640) argue that an organization’s Human Resource Management practices are dictated by national, international and organizational cultures. According to Aycan, et al. (2000, p.200) research demonstrates that diverse cultural values and identities can mediate the manner in which workforce in the organizations value, perceive and respond to things like SHRM practices and the amount of time and dedication they put in the organization and their jobs. MNCs have to be responsive to the existing attitudes and values in that particular country. For a manager, understanding the reality of cultural values ought to be a practical question, not just a priority assumption. The insinuation is that human resource department accepts human resource function as a critical in the creation of the organization’s strategies including in the adoption of these strategies by means of HR practices (Budhwar & Katou, 2005). Issues concerning cross-national exchange of HRM practices, individual, individualism at work, and organizational change, are more likely to be influenced by the society they grew up in. Just sustaining diverse workforce is no longer satisfactory, Aycan et al. (2000, p.203) claim that, for a business to do well in the current challenging economy, it must not simply satisfy the demands of a complicated market, it ought to respect the diverse cultures and ideas. In organizational viewpoint, diversity in culture normally means a number of human resources, customers in reference to educational background, income, sexual orientation, geographic location, gender, physical qualities and abilities, suppliers, (Budhwar & Katou, 2005). The effect of that kind of limitations, especially in the center of an ever more globalized society, is of certain significance with the continuous rise of Multinational Corporations (MNCs). The values emerge with a vast range of cultures globally are greatly diverse, and so, with organization operations no longer restrained by the geographical boundaries, multinational companies have to recognize this diversity and its successive on the management practice (Awasthi, Chow & Wu 2001, p.306). Whilst the permeability of international obstacles is extensively recognized, the transferability of human resource management practices from the native country to those of the contributors is burdened with difficulties, and thus, the influence of culture for organizations, as stressed by Hofstede’s model of the national cultural diversities, are indispensible for the multinational companies management (Chang, Wilkinson & Mellahi, 2007, p.10). Chang, Wilkinson & Mellahi (2007, P.79) claim that based on studies carried out at IBM and its far-off subsidiaries, Hofstede stated that diversities between the norm, beliefs and values of national cultures can be classified to four dimensions. As one tries to understand the manner in which national cultural attributes influence organizations generally and HRM to be specific, researchers emphasize the reality that the cultural background is considered not to be external to companies but permeates them. Gelfand (2000, p.30) claims that the systems of the social control “are strongly associated with the patterns and values of social relationships”, shown in the organizations. In the same way Awasthi, Chow & Wu (2001, p.297) argue that “the norms, beliefs, rules and ideas are not simply ‘out there’ but as well ‘in here’. Participants, customers, elements all take part in and are considered carriers of culture”. This implies that companies and organizational culture inter-infiltrate. This process of inter-infiltration focuses on numerous foundations of cultural influences on intention and execution of the HRM practices and policies. According to Hofstede, Hofstede & Minkov (2010) national culture are believed to influence its members’ fundamental assumptions. People who assume managerial positions in a certain culture are therefore socialized alongside the same beliefs and values (Gelfand, 2000, p.31) and will air the same opinions views concerning the managerial role itself including the significance of and the choice between alternative the organizational human resource practices. The long standing attributes of culture assist endlessly to integrate new members in the generation and reinforce the leading cultural norms and values (Gelfand, 2000, p.29) which, as a result, influence the liking people have for a given HRM practices and the extent to which the practices can work effectively in a particular cultural system. Accordingly, whilst the ‘what’ factor of HRM could be widespread across different cultures, the ‘how’ issue which determines the given design and configuration of a particular instrument and the degree to which the needed outcome is attained is culture-specific (Nyambegera, Sparrow & Daniels, 2000, p.643). Consistent with social cognition theory, personal cognition is greatly influenced by a person’s cultural background. Particularly, culture could influence the manner in which people “scan, choose, interpret and authenticate information from the setting so as to recognize, prioritize and sort out issues” (Budhwar & Katou, 2005). In short, culture greatly determines in how individual performance challenges are observed and the way their resolutions with regards to employee development intrusions are made, evaluated and implemented. Awasthi, Chow & Wu (2001, p.307) contend that as a mirror, cultural frames color both the mechanisms and execution of human resource management in that particular socio-cultural framework. Specifically, cultural norms and values influence the manner in which individuals evaluate justice criteria and rules in the workplace (Fields, Chan & Akhtar, 2000, p.274). Because making sure fairness or justice is regarded one of the major challenges of HRM, the culture-based approval of justice will, as a result, influence how major human resource management practices like the recruitment, evaluation, promotion and compensation are formulated and executed in a given society. Hofstede, Hofstede & Minkov (2010) claim that the culture can be perceived to cast an influence on building the social institutions and organizations in the society, that subsequently offer value frameworks for people in the socio-cultural environments to learn the form of behaviors and views are rewarded and the ones that are punished. For instance, cultures can include idiosyncratic social elites and the pressure groups. The presence of those kinds of groups can make the adoption of specific HRM practices socially and politically unacceptable (Budhwar & Katou, 2005). Even though it is generally understood that the connection between institutions and culture is mutual and that no obvious compromise has been arrived at concerning which should come first, the impact of culture on human resource management by means of its influence on organizations is also thought to be a critical mechanism. The influence the culture has on the human resource management can be viewed in the context of Hofstede cultural dimension that is Masculinity, versus Femininity (Gray & Marshall 1998, p.10). This dimension implies to how emotional roles are distributed between the different genders, that is another basic problem for many societies. The sex’s duality is considered a fundamental reality where various societies handle in different manners. Organization and businesses exist in society and interact with different people from different cultural background (Nyambegera, Sparrow & Daniels, 2000, p. 655). Therefore the management must implement human resource practices which the society believes is right. Many societies believe in employing men because they think they are muscular and work harder and better. However, the merging cultural practices now also believe femininity can compliment Masculinity, so they employee women and men, as long as they are qualified and can perform. Another dimension of culture used by Hofstede to study cultural influence on HRM practices is power distance (Hofstede, 2000). This is the extent to which the less powerful members of organizations and institutions accept and expect that power is distributed unequally. The fundamental concern involved is the level of human disparity that holds the functioning of every given society. In Hofstede’s study, power distance is determined by a Power Distance Index (PDI) and the attitudes and values established at the national level differ between “low-PDI nations” and “high-PDI nations” (Hofstede, 2000. However, some nations lie in between. He established the High PDI nations consisted of Malaysia, Panama, Guatemala, East Africa and Mexico while the Low PDI nations comprised of the Austria, the US, Denmark and Sweden (Gray & Marshall, 1998, p.79. The organization where there is high power distance, employees tend not to be close to the leaders, and as such they are less motivated. This is because they feel the leaders are not easy to access to therefore no one listens to their plight. On the other hand in cultures where there is a low power distance, employees anticipate and accept power relationship which is more democratic. Gray & Marshall (1998, p.10) assert that workforce in cultural collectivism nations like Kenya expect companies to take care after them just like a member of a family. They believe that organizations should defend their individual interests. The employees also believe in group recruitment and promotion decisions and that this should be done in accordance with seniority. In conclusion, generally, the research on cultural differences and their influence on HRM practices encourage much optimism concerning ever changing consumer behavior. These researches make it obvious that culture is a critical determinant of numerous factors of organizational culture and behavior. Similarly, they offer a “wake-up call” in the field of HRM to pay attention to current theoretical and practical pitfalls and of the desire for increased focus on cross-cultural influence on HRM. References Awasthi, V. N., Chow, C. W., & Wu, A. (2001). Cross-Cultural Differences in the Behavioural Consequences of Imposing Performance Evaluation and Reward Systems: An Experimental Investigation. The International Journal of Accounting, 36, 291-309. Aycan, Z., Kanungo, R.N., Mendonca, M., Yu, K., Deller, J., Stahl, G., & Kurshid, A. (2000). Impact of Culture on Human Resource Management Practices: A 10-Country Comparison, Applied Psychology: An International Review, 49(1), 192-221. Budhwar, P. & Katou, A. (2005). The effect of human resource management systems on organizational performance in Greek manufacturing: A mediating model. EURAM 2005 Conference, Munich. Chang, Y.Y., Wilkinson, A. & Mellahi, K. (2007). HRM strategies and MNCs from emerging economies in the UK. European Business Review, 19(5), 404-419. Fields, D., Chan, A & Akhtar, S. (2000). Organizational Context and Human Resource Management Strategy: A Structural Equation Analysis of Hong Kong Firms International, Journal of Human Resource Management, 11(2), 264-277 Gelfand, MJ. (2000). Cross-cultural Industrial and Organizational Psychology: Introduction to the Special Issue. Applied Psychology: An International Review, 49(1), 29-31. Gray, K.R & Marshall, K. P. (1998). Kenyan and Korean Management Orientations on Hofstede’s Cultural Values. Multinational Business Review, 6(2), 10-79. Hofstede, G. (2000). Culture’s consequences: comparing values, behaviors, institutions, and organizations across nations. 2nd ed. Thousand Oaks: Sage Publications. Hofstede, G., Hofstede, GJ. & Minkov, M. (2010). Cultures and Organizations: Software of the Mind, 3rd ed. New York: McGraw-Hill. Nyambegera, S.M., Sparrow, P. & Daniels, K. (2000). The impact of cultural value orientations on individual HRM preferences in developing countries. Lessons from Kenyan organizations. International Journal of Human Resource Management, 11(4), 639-663 Read More