Cross-Cultural Human Resource Management - Coursework Example

Cross-Cultural Human Resource Management 2009 Cross-Cultural Human Resource Management The origins of human resource management as a separate discipline can be traced back to the beginning of the last century. Throughout the last century theorists and practitioners worked intensively to discover the theories explaining human behaviour at workplace in order to raise effectiveness of labour. As Alan Price (2000) states, HRM hasn’t come out of nowhere: there is a long history of “…efforts to improve our understanding of factors that affect human behaviour in the workplace” (p.62). Though many of modern HRM principles had been developed by that time, the year of the discipline’s official birth was 1981, when Harvard Business School introduced a special course that served a blueprint for global spread of human resource planning and management (Price, 2000). The basic principles of modern HRM represent a synthesis of ideas taken from the two major approaches to organisational culture: hard side and soft side. The hard side approach is associated with the American schools of management, particularly with F. Taylor’s school of ‘scientific management’ and E. Mayo’s school of ‘human relations’. Frederick Taylor was among the first practitioners to underlay business practice with significant theoretical findings. Taylor assumed that material side is not the foremost motivation of the employees and that personnel should be properly managed in order to improve effectiveness of labour. Consequently, he proposed the policy of stick and carrot based on the principles of punishments for poor performance and appraisals for better working efficiency. The Taylorian model is based upon the belief that the average employee is by default lazy, ignorant and passive and employs the following principles of organizational control over the employees: Ceaseless control over the work of each employee through organization the system of supervisors, inspectors, quantity-surveyor, etc Control over the work of the workshops Promotion of stimulating and competitive organizational culture which may provide excessive control over the employees (Drucker, 1985) Over the 1930s, this ‘hard’ paradigm was gradually replaced by the ‘soft side’ approach (Quinn, 1988). Elton Mayo undertook one of the most known revisions of Taylor’s ideas. During his longitudinal Hawthorne experiments Mayo discovered that salary is not the best motivation for people. Instead, he found out that people are sociable by their nature and they work effectively if they receive positive feedbacks from the management. Other pivotal findings of Mayo were (i) personnel’s need for communication, (ii) existence of informal groups and (iii) group morale (Gillespie et al, 1993). Later on Mayo’s views were further elaborated by D. McGregor, W. Ouchi, J. Burns, M. Stalker, A. Maslow, and others. The war between these major paradigms highlighted the most important factors that contributed to increasing importance of HRM in modern organisational environment. Firstly, the “hard side” approach reflected the attitudes which dominated domestic and international organisational culture over the first half of 20th century. In those days people were considered to be at the same level of organizational resources as machinery. Raise organizational productivity was to be achieved only through pressure on the employees and their permanent control. Such view of strong and healthy organizational culture might be acceptable in the stable environment of those days, but it is at odds with modern constantly changing organizational environment. Strict and rigid organizational culture diminishes company’s abilities to adapt and change facing external and internal challenges. Strict culture and excessive control also reduces creativity of the employees, their eagerness to innovate and accept new ideas and perspectives. The essence of this important consideration is perfectly explained by Collins and Porras (1994). They claim that the idea of strict culture is not at all irrelevant; moreover, it is often beneficial for modern business. However, today’s organizations, characterized by swiftly changing conditions need an organizational culture which is less pervasive, instructive and controlling, and doesn’t prescribe particular norms and behavioural patterns of the past. Competitive successes of Japanese companies following the principles soft side (Z-approach) in 1970s-1980s have emphasized attention in the US and Europe on group-work, team identification and loyalty, group-consciousness, decision-emerging process, and outlined the value of employees’ participation in organizational development. As a result, hard side has been dispersedly shifted by participative management strategies emphasizing the value of the employees and insisting on less control over their functions. It has been identified that participatory work strategies better fit the demands of the global economy as they provide the optimal way to create essential flexibility and worker commitment (Markowitz, 1996). Modern business is first of all a competition of human resources. Excessive control diminishes people’s initiative, their level of creativity as well as openness to the new ideas and tendencies. Lack of employees’ initiative and people’s poor adaptation to the demands of environment may result in bankruptcy of a company. Hence, unconstrained demands on people, act as barriers to organizational and personal adaptation and change. Therewith, only human resource management incorporating the principles of development, stimulation, adaptation and promotion of people is the warranty of success in the modern business environment. The increased importance of correct HRM approaches was highlighted by a series of important discoveries made by psychologists over the last decades of 20th century. They proved that people are not literally the same parts of organizational process as machines – the view which had been previously adopted by the School of scientific management. Instead, as the role of human personality was emphasized, it was widely recognized that employees work better when they are not excessively pressed or controlled (Drucker, 1985). The ongoing globalization of business and intensive development of international market has brought the issue of cross-national HRM research into the focus of academic interest. The company’s ability to effectively manage diverse activities is perhaps the most important prerequisite of its overall success in the contemporary market. The process of cross-cultural Human Resource Management (HRM) has become the subject of numerous studies the aim of which is to throw light on the algorithm of effective running business. Despite the recent rise spread of globalism, overwhelming shift toward standardization, and the prevalence of Western management theories, the idea that management principles which work in the West should also work in other countries of the world is now facing rather strong opposition (Newman and Nollen, 1996). Under the influence of alien cultures Western principles of management undergo serious changes – the process which leads to emergence of absolutely new rules and practices. Even superficial analysis of management practices in two culturally different countries, such as the United States and China, illustrates validity of this thesis. Culture functions at various levels, including the style of management, functions and expectations of managers are greatly influenced by national culture (Hofstede, 1980). Thus, China is a bright example of collectivistic culture that de-emphasizes personal goals and accomplishments in favour of collective interests of the community. By contrast, the United States apparently belongs to highly individualistic societies where individual achievements are given primary attention. This difference is the major factor which determines predominant management styles in both countries. Management practices that stimulate personal competition are traditional for the United State, while Chinese managers prefer more liberal practices placing the major emphasis on collective efforts. As a result, the number of employees directly subordinated to the average Chinese manager significantly exceeds that of the average American manager: one comprehensive survey conducted three years ago found out that while 176 US managers on average had 7.8 direct subordinates, 204 Chinese managers were responsible for 19.7 employees (Neelankavil et al, 2000). Geert Hofstede’s model is arguably the best attempt to classify and measure cross-cultural differences up to date. Instead of listing thousands of distinctions that characterize any culture in the world he outlines five major cultural dimensions: Power Distance Index (PDI), Individualism (IDV), Masculinity (MAS), Uncertainty Avoidance Index (UAI), and Long-Term Orientation (LTO). Each of these dimensions is measured with the help of standard scale developed by Hofstede. Comparison of Hofstede’s scores reveals serious cultural dissimilarities between Ireland and Japan on each dimension: a. Power Distance Index (PDI) – Japan scores nearly twice as many as Ireland on this dimension: 54 as compared to 28. The PDI demonstrates the degree of equality, or inequality, between people in the country’s society. If this index is high, than inequalities of power and wealth are allowed to grow within the society: societies that rank high on this index are more likely to follow a caste system that does not allow considerable upward mobility of citizens. By contrast, if the PDI is low, the society tends to smooth the differences between citizen’s power and wealth: equality and opportunity for everyone is particularly important for members of such societies (Hofstede, 2003); b. Individualism (IDV) – on this dimension Ireland significantly outscores Japan: 70 against 46. This index reveals the degree the society reinforces individual or collective achievement and, correspondingly, interpersonal relationships. In case the IDV index is high, individuality and individual rights are stressed within the society: citizens in such societies rely primarily upon themselves, and form a little number of closer relationships. If the IDV is low, the society is characterized by high degree of collectivism and closer relationships between individuals: such societies reinforce extended families and collectives with responsibility being shared between all members (Hofstede, 2003); c. Uncertainty Avoidance Index (UAI) – Ireland has nearly three times lesser score than Japan on this dimension: 35 against 92. The UAI shows the level of tolerance for uncertainty and ambiguity within the society. In case the UAI is high, the culture is characterized by a low tolerance for unstructured situations: such societies are always a rule-oriented with a number of strict laws, social rules, regulations, and controls which help reduce the amount of ambiguity. By contrast, if the index is low, the society is much less concerned with potential ambiguity and uncertainty and is characterized by higher tolerance for a unstructured situations: such societies are less rule-oriented, maintain less strict rules and regulations, and readily accepts changes (Hofstede, 2003); d. Masculinity (MAS) – this index demonstrates the degree the society protects traditional patterns of masculinity-femininity. Again Japan significantly outscores Ireland on this dimension: 68 as compared to 95. Hofstede argues that if the masculinity score is high, the culture is characterized by a high degree of gender differentiation: such cultures are masculine with males dominating a significant portion of the society and power structure and females being controlled by male domination. A low score on this index demonstrates the society does not significantly differentiate between males and females: in this type of cultures females are treated equally to males in practically all aspects of the society (Hofstede, 2003); e. And finally, the Long-Term Orientation (LTO) dimension reveals the degree the culture embraces long-term devotion to traditional values. The difference between Japan and Ireland on the LTO scale is huge: 80 against 25. According to Hofstede the high LTO score shows the society emphasizes the values of long-term commitments and respect for tradition: such cultures are characterized by exceptionally strong work ethic and perception of long-term rewards as an outcome of today’s hard work. By contrast, low LTO shows the society does not emphasize long-term, traditional orientation: such societies more accept changes more readily (Hofstede, 2003). The majority of comparative HRM studies conducted up to now relate to Western Europe and North America. However, further globalization suggests that comparative approach will be gaining momentum in the future (Brewster et al. 1996; Budhwar and Debrah 2001). Thus, over the last thirty years a substantial effort has been invested in exploration of the impact of national cultures HRM policies and practices (Budhwar and Sparrow 1998; Easterby-Smith et al. 1995; Laurent 1993; Tregaskis 1997). In a highly dynamic business environment of modern world the issue of predicting employee’s behaviour is a complicated task. Therefore, cultural values are increasingly used as a factor that affects numerous differences between HRM practices in various countries and groups. These differences contribute to the significant variations in the manner organizations function in different regions of the world. References Brewster, C., Tregaskis, O., Hegewisch, A., and Mayne, L. (1996) Comparative research in human resource management: a review and an example, The International Journal of Human Resource Management 7: 586-604. Budhwar, P., and Debrah, Y. (2001), Rethinking comparative and cross national human resource management research. The International Journal of Human Resource Management 12: 497-515. Budhwar, P., and Sparrow, P. (1998), National factors determining Indian and British HRM practices: an empirical study. Management International Review 38/2: 105-121. Collins, J. C. and J. I. Porras (1994). Built to Last: Successful Habits of Visionary Companies. New York: Harper-Business Drucker, P (1985). Management: Tasks, Responsibilities, Practices. New York: Harper-Business Gillespie, R., Galambos, L., Gallmam, R (1993). Manufacturing Knowledge: A History of the Hawthorne Experiments (Studies in Economic History and Policy: USA in the Twentieth Century) Cambridge University Press Hofstede, Geert (2003), “Cultural Dimensions: Ireland”, Geert Hofstede official web site retrieved April 9, 2004, from http://www.geert-hofstede.com/hofstede_ireland.shtml Hofstede, Geert (2003), “Cultural Dimensions: Japan”, Geert Hofstede official web site retrieved April 9, 2004, from http://www.geert-hofstede.com/hofstede_japan.shtml Laurent, A. (1993), The cross-cultural puzzle of global human resource management in Globalizing management, V. Puick, N. M. Tichy and C. K. Barnett (eds.), 174-184. New York: Wiley Markowitz, Linda (1996). Employee Participation at the Workplace: Capitalist Control or Worker Freedom? Critical Sociology, Vol. 22, 2, 89-103 Neelankavil, James P., Anil Mathur, and Yong Zhang, “Determinants of Managerial Performance: A Cross-Cultural Comparison of the Perceptions of Middle-level Managers in Four Countries”, Journal of International Business Studies, 31 (1), First Quarter of 2000; pp.121-140 Newman, Karen, and Nollen, Stanley, “Culture and Congruence: The Fit between Management Practice and National Culture”, Journal of International Business Studies, 27(4), Fourth Quarter 1996; pp.753-779 Price, A (2000). Human Resource Management in a Business Context. International Thomson Business Press Tregaskis, O. (1997), The role of national context and HR strategy in shaping training and development practice in French and UK organizations. Organization Studies 18/5: 839-856 Read More