International Culture and Multinational Corporations - Essay Example

Introduction

Culture is the tool that governs the principles applied in daily lives and determines the attitudes, values and the behaviours in the society. Organizational culture stipulates the unique ways in which the employees and the managers conduct themselves or carry out the activities of the organization. The culture in an organization is also influenced by a bigger proportion by the individual cultural orientation of the members. According to Bakir et al. (2015 p.226), culture can be described as the socially transmitted patterns of behaviours, beliefs, norms and the values of an organization and therefore it is usually viewed as an origin of conflict rather than the needed synergy. These forms of conflict are expected to arise when people from different cultures interact, and since multinational corporations rely on international human resource input, then the success or the failure of these organizations depend on the nature of the organizational culture.

Organizational culture is critical in the management of the global and international workforce dynamics. Cultures in an organization can be divided into two categories that include national cultures and the organizational culture (Wong et al. 2016 p.138). These two have a strong influence on the aspects of global workforce management and also differ across different organizations. The success of MNCs does not rely on the difference in the cultures, but it depends on the manner in which the cultural issues are handled in the organization. The effective management of the diversity in cultural attributes dictates the direction in which the organizations are headed. Some of the issues that need to be managed in human resource when it comes to international settings where culture is an important attribute include training, recruitment, retention and remuneration and the exit strategies.

National Culture and Human Resource Management Practices

The universal nature of human resource management has been out under constant doubt since the principles under human resource as applied in one setting cannot be fully applicable in another setting. National cultures have a major influence on the leadership styles and the decision making in an organization including approaches to human resource management such as performance appraisal terms. In the cultures where there is high power distance, obedience, and loyalty to their seniors or in higher positions it should be the norm. In such scenarios, the management uses performance appraisal on the basis of behavioural criteria instead of results based criteria. Hofstede’s typology provides for that a nation's culture can greatly impact on the performance of an organization.

In the United States, power distance scores are at 40 meaning that there is a moderate acceptance of the differences in hierarchy and status. India has a score of 77 in comparison to the global average of 56.5 suggesting a higher recognition of the difference in status and hierarchy. This implies that in India there is a higher likelihood of acceptance of upward communication and feedback compared to USA (Harzing, Pudelko & Sebastian Reiche, 2016 p.679). MNCs that may engage in business in the two countries should be prepared to adapt to different management practices as well as the feedback strategies as senior managers in India would less likely conform to downward feedback. It is evident that different human resource practices have distinct characteristics in relation to different countries. Another example that can be used in the elucidation of this is the lifetime employment policy that is highly commended in Japan, but to the contrary, in the US it is less regarded. This policy makes most of the Japanese companies to spend relatively higher amounts on recreational activities and social activities compared to the US companies (Tang et al. 2017).

Organizational Culture and Human Resource Management

The environmental factors and the organizational culture which surround or build up an organization determine the manner in which the firm shall be managed. The association that exists between human resource management and the organizational culture can be derived from the human behaviour in the prevailing norms and cultures in an organization. Once the employees and the managers in an organization internalize the culture in an organization, then they are also able to select the behaviours that fit the organizational activities (Wong et al. 2016). Considering the fact that human resource management practices are not universal than the activities and the organizational requirements set the tone for the mode of management to be implemented.

Hofstede’s cultural approaches to managing people in MNCs

The term culture is defined by Geert Hofstede as a group of collective beliefs and values that differentiate individuals of one nationality from the other. Hofstede certain aspects of the international cultures that may have significant impacts on the management of people in MNCs (Bakir et al. 2015 p.230).

Uncertainty avoidance

The aspect refers to the need for individuals to feel comfortable when they are put in situations that may seem uncertain. When the aspect of minimal uncertainty avoidance is depicted in a society, the people are risk-takers and the nature of flexibility and informality within the region. On the other hand, high uncertainty avoidance aspect within a community tends to make the people be risk-averse because of the rigidity and formalities in the workplace. Therefore, tolerating of the uncertain situations has essential implications at the micro level and the macro level. For instance, looking into the macro concept it may cause innovativeness because of the need to tolerate the risks involved and changes. At the micro level or the company level, societies having a high level of uncertainty avoidance that consists of numerous internal formalities and regulations tend to gain more control of the work progress (Moran, Abramson, and Moran 2014).

Power Distance

Power distance refers to the ability of different individuals to acquire equal distribution of power. Cultures that contain a large power distance, the power is usually concentrated at the top management while the individuals at the bottom highly rely on the decisions and guidelines outlined by their managers. Thus, when the cultural set-up in a certain region contains minimal power distance, the power is usually distributed to all members (Yuan and Zhou 2015, p. 998). Employees working in foreign countries may be put in different power distance set up that either involves delegating detailed duties to the subordinate or organizational setting that has no hierarchy of power and minimal centralization. Low power distance can cause lack if employee interaction, less emphasis on regulations and lateral communication.

Individualism vs. Collectivism

The perspective is mostly concerned with the integration of people into groups. The concept of individualism refers to the ability of individuals to seek and protect their personal interests over the common objective of the community and their role in the community. An individualistic culture may allow individuals from different nationalities to be comfortable because they acquire the authority for decision-making based on the interests of the individual (Saad, Cleveland, and 2015, p. 580). In an individualist community, the workers are provided with a lot of freedom and independence. In a collectivistic culture, individuals tend to belong to a certain group and often look after the interests of each other in exchange for loyalty. In this case, the collective cultures do not permit a lot of freedom and autonomy to the employees.

As such, the aspects of employee freedom and independence are significant to stimulating the aspect of creativity and therefore, collective culture may inhibit the workers to cultivate an environment that brings about innovativeness. Moreover, the collective cultures tend to be reluctant to accept the aspects of diversity and variety that are important factors for enabling innovation. The collective culture does not cultivate the aspect of diversity because of the unconscious pressure for uniformity and conformity.

Masculinity vs. Femininity

Masculinity and femininity deal with the aspects of emotions between genders. Hofstede denotes that the dimension of masculine is related to the aspect of achievement motivation. A culture that is dominated by the masculinity is driven by performance where the reward and recognition for job performance are basic factors for motivational achievement. The culture highly respects and admires a successful achiever and who has the ability to demonstrate the willingness and assertiveness to be risk-takers and achieve their goals. In the masculinity culture, often the top management job positions are filled with males who have the capability to display aspects of dominance (Cuddy et al. 2015, p. 622). On the other hand, feminine cultures tend to focus the equality of life rather than being concerned about the money, social status, and success. This type of culture is willing to reach out to the less fortunate and share their wealth. In essence, the organizations that embrace the feminine culture are not as competitive as those that embrace the masculinity culture.

Implications of Hofstede's Theory of Human Resource Management in MNCs

Multinational companies are involved in continuous decision making processes and establishment of new policies. Some of the policies and decisions include new adoptions by businesses or cease in some of the business engagements. In the case where the directors have low uncertainty avoidance then they mostly adopt business ideas despite their risky nature (Tang et al. 2017). On the other hand where the directors have high uncertainty avoidance, then they mostly tend to avoid engaging in the business at all.

Another implication may be in the case where leaders from high power distance cultures may be very authoritative which may result in problems in the organization. This is because in the situation where they are dealing with employees who come from low power distance cultures where they are used to interact with leaders at a similar level with them then this may lead to conflicts.

Organizations mainly rely on teamwork to achieve the set objectives and when individuals who come from collectivist and individualist cultures come together in teams problems may arise. This is because the group members have different methods of approach. For instance, members from individualistic cultures would prefer when their views are directly implemented while those from a collectivist culture may want collective ideas and collaboration (Moran, Abramson & Moran, 2014).

Feminine and masculine oriented cultures also may have issues when it comes to aspects of the objectives of the organization. The conflicts between these two individuals may arise when it comes to differentiating between short-term and the long-term objectives of the organization. Feminine cultures tend to concentrate mainly on holistic modes of approach while the masculine-oriented individuals prefer social status, achievement, success and other quantifiable aspects (Cuddy et al. 2015 p.622).

Multinational companies should be highly dynamic since they are in an environment that is highly evolving. This implies that there is a high possibility of the business to change its engagements and also ways of conducting their activities. However, there may be different orientations within the organization. Long-term oriented individuals would be willing to adopt new situations while the short-term oriented individuals would prefer maintaining the present culture and also resist any possible changes (Saad, Cleveland & Ho, 2015 p.585).

Conclusion

In summary, all the multinational companies face issues of cultural conflicts since the employees come from different regions and cultural backgrounds. The firms are faced with the complexities of dealing with different cultural orientations, and this greatly determines the success of the MNCs. Therefore as discussed for the firms to enjoy the success they must implement strategies and approaches that would help in smooth operations. The first approach that would help in addressing management issues as a result of different cultural orientations would be a hybridization of culture. This is the process where the culture of the most dominant nationals becomes interwoven with the organizational culture. The second approach as discussed in the paper would be culture adoption where one of the cultures of the parties in question is adopted. Finally, organizations may create new cultures to avoid the conflicts. This implies that no party's culture would become dominant in the organization and the employees and the managers would find common ground to administer instructions and managerial practices.

Reference List

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Cuddy, A.J., Wolf, E.B., Glick, P., Crotty, S., Chong, J. and Norton, M.I., 2015. Men as cultural ideals: Cultural values moderate gender stereotype content. Journal of Personality and Social Psychology, 109(4), p.622.

Harzing, A.W., Pudelko, M. and Sebastian Reiche, B., 2016. The bridging role of expatriates and inpatriates in knowledge transfer in multinational corporations. Human Resource Management, 55(4), pp.679-695.

Moran, R.T., Abramson, N.R. and Moran, S.V., 2014. Managing cultural differences. Routledge.

Saad, G., Cleveland, M. and Ho, L., 2015. Individualism-collectivism and the quantity versus quality dimensions of individual and group creative performance. Journal of business research, 68(3), pp.578-586.

Tang, G., Chen, Y., Jiang, Y., Paillé, P. and Jia, J., 2017. Green human resource management practices: scale development and validity. Asia Pacific Journal of Human Resources.

Wong, S.I., Solberg, E., Junni, P. and Giessner, S.R., 2016. THE ROlE Of HUMAN RESOURCE MANAGEMENT PRACTICES IN MERGERS AND ACQUISITIONS. Mergers and Acquisitions in Practice, p.138.

Yuan, F. and Zhou, J., 2015. Effects of cultural power distance on group creativity and individual group member creativity. Journal of Organizational Behavior, 36(7), pp.990-1007.