Globalisation is a phenomenon which has changed the scope of international organisations in their competition for customers. The customer’s expectations for performance, quality and cost have produced an adaptation of the Human Resource Management to cater to the changing needs and greater value (Morrison, 2005). Specific models have been used to overcome national cultural differences shrewdly (Friedman, 2007). Apart from this, “the knowledge of global business trends, cultural sensitivity, business knowledge, understanding local employment practices, technical skills and innovation” are also indicated by Friedman (2007).
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The international scene has seen the fast movement of goods and services to the tune of $7.9 trillion (Ulrich and Brockbank, 2005). The disappearance of trade barriers have seen the flourishing of free trade zones in the major continents of Europe, North America and Asia and the establishment of the European Union, the North American Free Trade Agreement (NAFTA) and Association of South East Asian Nations (ASEAN). One major booster in international trade is the reduced labour and costs of production in underdeveloped countries. The high demand for products which are in demand across cultures and nations like mobile phones and computers is another reason for globalization (Friedman, 2007). Technological advancements like the Internet have made living and working overseas a minor hazard. Another facilitator is the reduced global transportation costs.
Programme in Intercultural Awareness and Skills
Having assumed the role of International Director preparing expatriate assignments, the subject of intercultural awareness and how to convey the appropriate message to the new expatriate managers has become my obsession for the past few days. The objective is to provide an exhaustive program of training in intercultural skills to the expatriate managers selected for overseas postings. Extending a company’s operations appears easier with all the facilitating conditions but the efforts taken must be sufficient to convert them into competitive advantage. Human resources need to heed the opinions of investors, line managers and employees.
Human resource management has to define its functions and contributions to the organization. Several researchers have vouched for the influence of International HR to financial performance: Taiwan (Ling and Jaw, 2006) and India (Khandelhar and Sharma, 2005). The best practices however may not always help to dissolve local market differences or effectively transfer knowledge and technology cross-culturally (Friedman, 2007).
Global trends have shown that increased cross-cultural awareness has a major impact on the competitive advantage as evidenced in Asia (Schram, 2006). US has successfully increased the exporting of white collar jobs and manufacturing and recognized the significance of employment laws of the European Commission (Schram, 2004). The cheap labour in outsourcing allows work to be done at $10 per hour while the US counterpart would have done it for $60. The Internet and innovative telecommunication technologies have favoured outsourcing (Noe et al, 2006). Above all, it would worthwhile remembering that cheap labour alone does not produce a competitive organization.
The HRM practices vary from country to country (Friedman, 2007). Severance payments, benefit surcharges, vacation allowances, family and medical leave are different by nation. Expatriate compensation and benefits are definitely higher than in the employees’ home country. Arranging compensation may be another difficult proposition as preferences and perceptions of employees vary. Unionism tends to differ in different nations and so the claims may vary. Some unions may fight for wages, benefits and terms of employment. Still others may dictate other issues like political causes, holidays and family leave (Maidment, 2004). Work rules and grievance procedures also form arguments for some.
The HR or Expatriate Manager is the right person to ensure that employees are motivated to work well and committed to producing their best for the organization. The HRM model proposed by Ulrich (1997) elaborates the four roles of an HR Manager: strategic partner, change agent, administrative expert and employee champion. Hofstede and Trompenaars have proposed two models of culture dimension which are accepted and followed by many HRMs. Researchers have worked upon the dimensions and bettered some of them.
Hofstede’s theory of cross-cultural differences
Hofstede described five dimensions: uncertainty avoidance, masculinity-femininity, individualism-collectivism, power distance and short-long-term orientation. Hofstede reached his five dimensions by working on 116000 questionnaires filled by IBM executives (Friedman, 2007). Researchers later have built up more cultural dimensions. People who believe highly of uncertainty avoidance are uncomfortable with ambiguity. They are particularly worried about the maintenance of stability and certainty. The mechanisms that promote certainty are incorporated in the detailed work plans. The people who think lowly of this dimension prefer risks and are prone to move forward in uncertain situations. They are ready to face whatever situation looms up before them.
Character features like dominance and independence are expressions of masculinity while interdependence, empathy and frankness are those of femininity. Masculine cultures exhibit obviously their sex roles and performance which is independently influenced. Achievement and ambition are at the foremost of their thoughts. Feminine cultures are understood by the equality of the sex roles, quality of life and showing compassion to others (Wagner and Hollenbeck, 2005).
The individualism-collectivism dimension elaborates the extent to which the individuals focus on individual needs and do not consider the needs of the group. Cultures that are more of the individualistic type stress the characteristics of responsibility and achievement. Those that lean towards collectivism place stress on group efforts, teamwork and group membership (Wagner and Hollenbeck, 2005).
Power distance is the acceptance of “differences between people as legitimate and expected” (Friedman, 2007). The cultures which are higher in power distance see a big status difference between the subordinates and supervisors. In cultures with lesser power distance, there is little status difference. The supervisors are more approachable and gender differences are also less (Friedman, 2007).
The fifth long-short term dimension of Hofstede indicates that short-term focusing just satisfies present needs. Cultures with long-term orientation believe in saving resources for future contingencies.
Scoring the different nations by the five dimensions provides nation profiling or cultural profiles that may be used by expatriate managers to gain insight into effective practices. Hofstede’s five cultural dimensions permits expatriate managers to tailor their job functions to suit the occasion and nation (Friedman, 2007).
Strengths of Hofstede model
Hofstede derived his model after empirical research on 88000 IBM managers in 60 countries. The framework for analysis is general and can be easily applied to any everyday intercultural situation. Complexities of culture and its interactions are easily broken down to five dimensions which are again easily understood.
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Weaknesses of Hofstede model
Data from the research was based only on a few questions and were incomplete as not all countries were covered. Moreover they are now outdated. Dimensions are too abstract to apply to real intercultural situations. They only serve as a rough orientation. To expect one behaviour, all dimensions must be considered. The values have little meaning. The culture that has been addressed is Western while the evolution of present day cultures may be much different from the earlier days. Dimensions may not be valid anymore. Even if the characteristics of the culture may be known, it would be difficult to predict behaviours or actions. It is not sure whether the attitudes addressed in the questionnaires are relevant to intercultural situations now.
Frans Trompenaars’ cultural framework was similar to Hofstede’s in that a number of bipolar dimensions attempted to elaborate the essence of national culture (Rarick, 2008). The five dimensions that he described were universalism versus particularism, communitarism versus individualism, neutral versus emotional, specific versus diffuse and achievement versus ascription. Universalism is the uniform application of principles regardless of the individual situation.
Particularism is the uneven application of principles based on relationships. Communitarism is the situation where a culture focuses on the group while individualism focuses on the individual. Neutral cultures do not express emotion while emotional cultures do so. Specific cultures separate work and personal life; diffuse cultures blend the two. Achievement cultures provide recognition for achievement while ascription cultures provide recognition for personality and basic character (Rarick, 2008).
Data is based on a limited number of questions. Only selective documentation has been done and the work cannot be considered scientific. All data are not freely available as the company owns them.
Comparison of other theories with Hofstede’s model
Edward T. Hall’s model of high context and low context concepts of culture is concerned with how information is transmitted or communicated. The receiver or setting contains the pre-programmed information in high context transactions and the transmitted message contains only little information. The exact opposite is seen in the low context transactions where much of the information is in the transmitted message.
GLOBE, a project by scientists in 60 countries, extended the Hofstede model further including more dimensions: Power distance, uncertainty avoidance, Societal Collectivism/In-group collectivism, Gender egalitarism/assertiveness, Future orientation, Performance orientation and Humane orientation
How the expatriate manager can use the two models
The Strategic partner (expatriate manager) helps to adjust HR activities and results with company goals. On a global level, the partner paves the way for management to involve in mergers and acquisitions. He manages to transfer the best practices from home country and adopts local practices. The sophistication that the HR exhibits should help him in International HR planning. The building up of organizational capability and cutting across borders, cultures and languages are ensured (Friedman, 2007).
The HR manager may want to invest with high strategic value. In high uncertainty cultures, detailed plans may be necessary to coordinate activities with business objectives. The HR manager needs to cultivate a particular leadership style that conforms to the masculine or feminine nature of the cross culture. He must be an independent and achieving type if the culture in the local nation is masculine (Friedman, 2007). In a feminine culture, he may be more collaborative.
In high power distance cultures, the partnering effort should be at the top rungs as centralized power is more significant. In low power distance cultures, partnering effort should lie at many levels. Short-term oriented cultures require short-term based strategic business proposals. Long-term ones require proposals with long-term benefits (Friedman, 2007). Similar care is taken when the HR manager as change agent or administrative expert or empel.loyee champion carries out his duties.
Hannay has described the servant leadership theory using Hofstede’s model. The servant leaders keep the power distance low by participation and interpersonal interaction with the employees. They grow through feedback on strengths and weaknesses and do not resent the feedback from their subordinates. This theory would not work in a nation where the power distance is high. Teamwork is the rule in servant leadership theory in the dimension of individualism (Hannay, 2009). Success would be due to a combined effort.
In the third dimension of masculinity-femininity, this theory would be more of femininity. A personal connection and understanding the feelings and needs of the employees helps the servant leader to build trust and loyalty. The person rather than the performance is accepted. A better chance of boosting performance through change helps maintain quality performance in an environment of trust (Kolp and Rea, 2006).
The fourth dimension of uncertainty avoidance would be low in the servant leadership theory. The employees would be responsible due to the closeness to the leader and they set their own targets for achievement (Hofstede, 1993). New leaders would be sculpted through experience. The servant leader is able to keep the employee satisfied for his short-term needs but encourages lengthening the potential of the employees through compensations, training and career development. A more committed employee who becomes a leader in his own right is evolved.
Organisational leadership has changed from a top-down management control with obedience to orders and task orientation to a relationship which seeks to empower employees, encourages their development and teamwork (Hannay, 2009). Research may in future be assessed in terms of empowerment of the employee, employee training and development, communications from senior managers, recognition and personal and professional development.
Hofstede’ theory of cross-cultural dimensions or cross-national values has been adopted to predict consumer confidence in advertising (Zinkhan and Balazs, 1998). The consumer’s advertising confidence was predicted by 3 dimensions of Hofstede : uncertainty avoidance, masculinity and individualism (Zinkhan and Balazs, 1998). It has been understood that economic development sees advertising across cultures as a powerful force which serves to globalize the economic activity. This force paves the way for consumer well-being and overall improved quality of life. Customer confidence has been viewed by communication managers as the means of attaining objectives (Zinkhan and Balazs, 1998).
In distance learning
An integrated perspective of Hofstede’s dimensions have been used with distance learning (Gaspay and Legoretta, 2009). The effectiveness of distance learning was found mediated by cultural practices and learning models. Distance learning is an effective vehicle of knowledge globalization provided the practitioners use flexibility in their technology.
Work place aggression
Cross-cultural awareness training needs to include work place aggression as important to organizational harmony (Irani et al, 2009). The global marketplace is wrought with immense pressures on expatriate managers due to cultural diversity. Seamless interaction is just one major issue facing these global organisations. Aggressive behaviours have been caused by the non cooperation of people from different states in a nation like the US so there is no question of it being absent in a cross-cultural situation. The inequality of opportunity causes frustration resulting in aggression in high power distance cultures. The less powerful members will show peer-directed aggression (Irani et al, 2009).
The more powerful members show downward aggression, sometimes overt aggression, towards the less powerful. Society accepts this in a high power distance culture. The chances of retaliation to this downward aggression are less in such a culture. In low power distance cultures, equality and retaliation are both accepted (Irani et al, 2009).
In conflict situations, high individualistic cultures accept aggressive behaviour more and tend to give preference to individuals rather than groups; the low individualistic or collectivistic cultures believe in group harmony (Bergeron and Schneider, 2005). Aggressive behaviour is not accepted or is frowned upon by collectivists. A masculine culture was more assertive and prone to aggression. Feminine cultures never tolerate overt aggression. Aggression is more a feature of high uncertainty avoidance cultures. The low uncertainty avoidance cultures are more accepting of others’ opinions leaving less space for disagreement (Irani et al, 2009). Expatriate managers need to be aware and trained to recognize workplace aggression and resolve the issues.
Small and medium sized firms
The Hofstede model helps one to make predictions based on cultural considerations (Luczak and Mohan-Neill, 2009). Small and medium sized firms are also influenced by Hofstede’s model. The same conclusions for global firms may be used for small and medium sized firms. Luczak and Mohan-Neill have claimed that the cultural background of a small scale entrepreneur has influenced his market orientation and social networking; he would reap the benefits from the network.
The Burmese culture is particular, individualistic, neutral, diffuse and ascription oriented by Trompenaars’ model (Rarick, 2008). Myanmar makes exceptions to rules and regulations based on relationships. There are many rules regarding behaviour but enforcement of these rules are selective and decided according to situation. Social standing may also influence them. Basically a collectivist community, individualism has crept in due to the bankruptcy of the earlier institutions which had gone out of business.
This neutral country shows plenty of emotion (Rarick, 2008). Work and play are combined as a diffuse culture. Work life and personal life are intermingled on many an occasion. Social status based on ascription is the feature of Burmese culture. Respect for age and lineage are important. Educational performance is another main area where titles are used.
Issues of manager from one culture working in another culture
When an expatriate manager reaches the new country, he would find that he does not know much about the new culture. If he desires to be a success in his new position, he has to take steps to adapt to the situation. An HR manager from an individualistic country like the United States may have difficulty in meeting the requirements of the local culture at Taiwan which is collectivist. The manager is used to individual achievement and accountability (Friedman, 2009).
The Taiwanese will be more comfortable with team-based quality programs and team building. Hannay has suggested that servant-leadership theory is a good one for cultures with low power distance and low-to-moderate individualism and moderate to long-term orientation (2009). She has applied Hofstede’s five cultural dimensions to the servant leadership theory. This theory helps the expatriate manager in influencing and developing followers in his organization (Hannay, 2009). Empowering the followers to use their talents, skills and resources and completing their work in a timely manner is what the HR manager should strive for (Donnelly and Konopaske, 2006).
Decision-making employees would be found where previously the management was doing it. Taiwan is of low uncertainty avoidance, exhibiting femininity, with low power distance and believe in proposals of moderate to long-term orientation. The implementation of strategic initiation by the new manager will be affected by the individualism-collectivism cultural dimension. The manager as strategic partner needs to endeavor to change his strategic plans to suit the different culture. His incentives should be group-based rather than individual. Ethical and legal problems must be avoided at all costs. As a change agent he must be expertly handling his employees who must be a motivated group who would do their best by the organization. The interventions for change must match the culture. To garner local and political support, he needs to understand the local trends. Barriers must be removed. Corporate social responsibility must be evident by participating in local needs.
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