INS3023 IHRM S2 CulturalContext

SESSION 2
THE CULTURAL CONTEXT OF IHRM

OVERVIEW
o The nature and importance of culture
o Country culture vs Company culture
o Cultural convergence and/or divergence
o Impact of culture on IHRM
INE3023-International Human Resource

1
Management
ACRONYMS USED IN TODAY’S SEMINAR
HR – Human Resource
IB – International Business
IHR – International Human Resource
OB – Organisational Behaviour

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Management
INTRODUCTION
CROSS-CULTURAL MANAGEMENT
The basic assumption of cross-cultural

management is that there are differences
between management practices in various
countries and that the respective environment is
of particular significance in explaining these
differences.

3
Management
INTRODUCTION
IB ACTIVITIES & IHR RESPONSIBILITIES
Variances in people’s beliefs, and behavior patterns are critically important to:
o IB activities, specifically:
• Cross-national negotiations
• Sales interactions between people from different countries
• Management of the performance of employees from different countries
• Understanding and treatment of contracts between firms from different
countries
o IHR responsibilities, including:
• Recruiting and hiring
• Compensation
• Training
• Labour relations
• Performance management

4
Management
INTRODUCTION
DEFINITION OF CULTURE
Kluckhohn and Kroeber (1952)
 Thinking
Culture consists in patterned ways of  Feeling
 Reacting
acquired & transmitted mainly by symbols,

constituting the distinctive achievements of human groups,
including their embodiments in artefacts;
The
essential traditional ideas &
core of consists of
their attached values
culture
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Management
THREE LEVELS OF CULTURE
1. National culture: the dominant
culture within the political
boundaries of the nation-state.
2. Business culture: norms, values,
and beliefs that pertain to all
aspects of doing business in a
culture.
– Tells people the correct, acceptable
ways to conduct business in a society.
La Trobe Business School

(CONT.)
3. Occupational and organizational culture
 Occupational culture: the norms, values, beliefs, and
expected ways of behaving for people in the same
occupational group.
 Organizational culture: the set of important

understandings that members of an organization
share.


UNDERSTATING THE CULTURAL CONTEXT OF IHRM
UNDERSTANDING CULTURE AS LAYERS OF MEANING
Surface or explicit culture (the
outside layer): things that can
be readily observed, such as
dress, food and ways of eating,
architecture, and customs
Hidden culture (the middle

layer): values, religions, and
philosophies about things like
child rearing, views of what is
right and wrong
Invisible or implicit culture

(the core): the culture’s
universal truths, the bases for
all of a culture’s values and
beliefs (convictions,
perceptions, thoughts &
feelings)
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Management
UNDERSTANDING
THE CULTURAL
CONTEXT OF IHRM
DEVELOPMENT
OF CROSS-
CULTURAL
COMPETENCES

10
Management
THE NATURE & IMPORTANCE OF CULTURE
GOALS OF CROSS-CULTURAL MGMT. STUDIES
Describe
OB within/between
Compare countries & cultures
Explain & improve interaction between

employees, customers, suppliers or business
in different countries & cultures
INE3023-International Human Resource Management 11

CROSS-CULTURAL MANAGEMENT STUDIES
HOFSTEDE’S 5 CULTURE DIMENSIONS
1. Power distance (high or low)

2. Uncertainty avoidance (high or low)
3. Femininity vs. masculinity
4. Individualism vs. collectivism
5. Confucianism or long-term orientation

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Management
CULTURAL DIMENSIONS (HOFSTEDE)
Power distance: the extent to which the less powerful members of institutions and
organizations within a country expect and accept that power is distributed
unequally
Individualism: The degree of interdependence a society maintains among its

members (I or We)
Masculinity: what motivates people, wanting to be the best (Masculine) or liking

what you do (Feminine)
Uncertainty avoidance: The extent to which the members of a culture feel

threatened by ambiguous or unknown situations and have created beliefs and
institutions that try to avoid these. A society's tolerance for ambiguity
Long term orientation: How every society has to maintain some links with its own
past while dealing with the challenges of the present and future
Indulgence: The extent to which people try to control their desires and impulses
VIETNAM-US CULTURAL DIMENSIONS

Source: geert-hofstede.com
VIETNAM-CHINA-JAPAN CULTURAL
DIMENSIONS

Source: geert-
hofstede.com
VIETNAM-FRANCE-GERMANY CULTURAL DIMENSIONS

Source: geert-
hofstede.com
HOFSTEDE’S MODEL APPLIED TO
ORGANIZATIONS AND MANAGEMENT
Management practices considered in the

discussion of Hofstede’s model include:
1. Human resources management
Management selection
Training
Evaluation and promotion
Remuneration

HOFSTEDE’S MODEL APPLIED TO
ORGANIZATIONS
2. Leadership styles
3. Motivational assumptions
4. Decision making and
organizational design
5. Strategy

POWER DISTANCE
Power distance concerns how cultures deal with inequality
and focuses on
 Norms that tell superiors (e.g., bosses) how much they can determine
the behavior of their subordinates
 Values and beliefs that superiors and subordinates are fundamentally
different kinds of people

POWER DISTANCE (CONT.)
High power distance countries have norms, values,

and beliefs such as:
 Inequality is fundamentally good.
 Everyone has a place: some are high, some are low.
 Most people should be dependent on a leader.
 The powerful are entitled to privileges.
 The powerful should not hide their power.

POWER DISTANCE (CONT.)
La Trobe Business School http://scholarworks.gvsu.edu/orpc/vol2/iss1/8/

EXHIBIT 2.2: MANAGERIAL IMPLICATIONS FOR
POWER DISTANCE

VN-US
POWER DISTANCE (70 VS 40)
High hierarchy order

High centralization in organization
High dependence of subordinates
Parents teach children obedience
Older people are both respected and feared
Teacher-centered education

UNCERTAINTY AVOIDANCE
Norms, values, and beliefs regarding

tolerance for ambiguity:
 Conflict should be avoided.
 Deviant people and ideas should not be
tolerated.
 Laws are very important and should be followed.
 Experts and authorities are usually correct.
 Consensus is important.

http://scholarworks.gvsu.edu/orpc/vol2/iss1/8/
EXHIBIT 2.3: MANAGERIAL IMPLICATIONS OF

VN-US UNCERTAINTY AVOIDANCE (30 VS 46)
Working in order to live
Consensus, people value equality, solidarity
Conflicts resolved by compromise and negotiation
Incentives such as free time and flexibility are favoured
An effective manager is a supportive one, and decision
making is achieved through involvement
Ease, lower stress, self-control, low anxiety
Teachers may say ‘I don’t know’
Changing jobs no problem

INDIVIDUALISM/COLLECTIVISM
Focus is on the relationship between the
individual and the group.
Countries high on individualism have norms,
values, and beliefs such as:
 People are responsible for themselves.
 Individual achievement is ideal.
 People need not be emotionally dependent on
organizations or groups.

Collectivist countries have norms, values, and
beliefs such as:
 One’s identity is based on group membership.
 Group decision making is best.
 Groups protect individuals in exchange for their
loyalty to the group.


http://scholarworks.gvsu.edu/orpc/vol2/iss1/8/
VN-US INDIVIDUALISM (20 VS 91)
Collectivistic society, loyalty
Close long-term commitment to the « member » group.
Languages in which the word "I" is avoided
Offence leads to shame and loss of face
Harmony should always be maintained
Employer/employee relationships are perceived in moral
terms (like a family link), hiring and promotion take
account of the employee’s in-group.
Management is the management of groups (Opinions and
votes predetermined by in-group)

MASCULINITY
Tendency of a culture to support traditional
masculine orientation.
High masculinity countries have beliefs such as:
 Gender roles should be clearly distinguished.
 Men are assertive and dominant.
 Machismo/exaggerated maleness in men is
good.
 Men should be decisive.
 Work takes priority over other duties.
 Advancement, success, and money are
important.

MASCULINITY

MASCULINITY

VN-US MASCULINITY (40 VS 62)
Working in order to live, Balance between family and work
Consensus, people value equality, solidarity
Many women in elected political positions
Conflicts resolved by compromise and negotiation
Incentives such as free time and flexibility are favored
An effective manager is a supportive one, and decision making is
achieved through involvement

LONG-TERM (CONFUCIAN) ORIENTATION
Orientation towards time that values patience.
 Managers are selected based on the fit of their personal and

educational characteristics.
 A prospective employee’s particular skills have less importance

in the hiring decision.
 Training and socialization for a long-term commitment to the

organization compensate for any initial weaknesses in work-
related skills.

Eastern cultures rank highest on long-term orientation.
Value synthesis in organizational decisions.
Belief in substantial savings.
Willingness to invest.
Acceptance of slow results.
Persistence to achieve goals.
Sensitivity to social relationships.
Pragmatic adaptation.

SHORT-TERM ORIENTATION
Western cultures, which tend to have short-term
orientations, value logical analysis in their approach to
organizational decisions.
Designed and managed purposefully to respond to
immediate pressures from the environment.
Often use quick layoffs of “excess” employees to adjust to
shrinking demand for products.

LONG-TERM ORIENTATION VS. SHORT-TERM
ORIENTATION
The difference is apparent in the goals companies set in
strategic decision making.
Managers in countries (short-term) want immediate
financial returns, and fast, measurable success (e.g.,
U.S.).
Managers in countries (long-term) prioritize growth and
long-term paybacks.
Long time horizons allow managers to experiment, seek
success by developing “game plans” as they go along.

LONG-TERM ORIENTATION VS. SHORT-TERM
ORIENTATION


VN-US LONG TERM ORIENTATION (57 VS 26)
A pragmatic culture
Truth depends very much on situation, context and time (A good person
adapts to the circumstance)
An ability to adapt traditions easily to changed conditions, a strong propensity

to save and invest
Family life guided by shared tasks
Large savings quote, funds available for investment
Trying to learn from other countries
Thrift and perseverance are important goal

DISCUSSIONS
Viettel sends Mr. Hung to France as a head of its representative office.

Since first days, he encounters difficulties in managing and communicating
with local employees due to cultural issues.
Being an advisor, you are required to advise Mr. Hung to overcome his
situation.
Please set up a cross-cultural analysis, together with managerial
applications in:
-HRM practices

CULTURE DIMENSIONS
COUNTRY CULTURAL CLUSTERS
The results of several studies suggest groupings of the following
countries, based on their cultural similarities
 Anglo: Australia, Canada, Ireland, New Zealand, South Africa, United
Kingdom, United States
 Arab: Bahrain, Kuwait, Oman, Saudi Arabia, United Arab Emirates
 Far Eastern: China, Indonesia, Malaysia, Philippines, Singapore,
Vietnam, Thailand
 Germanic: Austria, Germany, Switzerland
 Latin American: Argentina, Chile, Colombia, Mexico, Peru, Venezuela
 Latin European: Belgium, France, Italy, Portugal, Spain
 Near Eastern: Greece, Iran, Turkey
 Nordic: Denmark, Finland, Norway, Sweden
 Independent: Brazil, India, Israel, Japan, South Korea

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Management
CULTURE DIMENSIONS
HOFSTEDE
STUDY: POWER
DISTANCE &
INDIVIDUALISM
VS.
COLLECTIVISM

46
Management
ACTIVITY 1 – COUNTRY COMPARISON
http://geert-hofstede.com/australia.html

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Management
ACTIVITY 1 - CONTINUED
TABLE 2.1 - IMPACT OF THE CULTURAL CONTEXT ON HRM
PRACTICES

48
Management
QUESTION:
DO YOU EVER CONSIDER THE

THINGS YOU ROUTINELY DO
MIGHT OFFEND ANOTHER
CULTURE?

49
Management
COUNTRY COMPARISON COUNTRY Vs. COUNTRY CULTURE

50
Management
7 DIMENSIONS OF TROMPENAARS & H-T STUDY
Relationships 1. Universalism vs. particularism

between 2. Individualism vs. communitarianism
people 3. Emotional vs. neutral
4. Specific vs. diffuse
5. Ascription vs. achievement
Concept of time 6. Sequential vs. synchronic

concept of time
Concept of nature 7. Internal vs. external control

51
Management
1. UNIVERSALISM V PARTICULARISM
(Rules) Vs. (Relationship)

• People place higher importance • Each relationship dictates the
on laws/rules rules they live by
• Rules come before relationships. • Their response to a situation may
• Provide clear instructions change depending on what’s
happening at the moment
• Keep promises
• All people to make their own
• Give people time to make decisions.
decisions.
• Respect other peoples needs
• US, Canada, UK, Germany,
Australia. • Russian, Latin-America, China.
Managerial Implication: One principle Vs. many different way of conducting business.

52
Management
2. INDIVIDUALISM V COMMUNITARIANISM
(Individual) Vs. (Group)
• People believe in personal freedom • Group takes precedence over the
• Make your own decisions and care for individual
yourself. • Group provides safety in
• Praise and reward individual exchange for loyalty.
performance. • Praise and reward group
• Link people’s needs to that of the performance.
organisation • Avoid favouritism.
• Learn from your mistakes • Don’t praise individuals publicly.
• US, Canada, UK, Australia, NZ. • Latin-America, Africa, Japan.
Managerial Implication: Personal responsibility Vs. Group consensus.

53
Management
3. EMOTIONAL V NEUTRAL
(Responsive) Vs. (Impartial)

• People want to find ways to • People hide their emotions.
express emotions at work.
• Reason influences decision
• This culture accepts displays of rather than emotion.
emotion.
• Watch your body language.
• Open up to people to build trust
and rapport. • “Stick to the point”
• Use emotion to communicate. • Manage your emotions.
• Manage conflict. • UK, Sweden, Finland, Germany.
• Poland, Italy, France, Latin-

America
Managerial Implication: Animated expression Vs. self-control.

54
Management
4. SPECIFIC V DIFFUSE
(Work Orientated) Vs. (Social)

• People keep work/personal life • People see an overlap between
separate. work and personal life.
• Relationships don’t impact on • Good work relationships are vital.
work. • Focus on building good
• Direct and to the point relationships.
• Provide clear instructions • Discuss business on social
occasions
• Don’t force them to reveal
personal life. • Argentina, Spain, Russia, India,
China
• US, UK, Germany
Managerial Implication: distinction and size difference between public and personal life.

55
Management
5. ASCRIPTION V ACHIEVEMENT
(Status) Vs. (Personal Achievements)

• Value for who you are. • You are what you do.
• Power/title are more important • Value performance.
than personal achievements.
• Good role model
• Always use titles
• Recognise and reward good
• Show respect to people in performance.
authority.
• Use titles on when relevant.
• Don’t “show up” people in
• US, Canada, Australia
authority.
• France, Italy, Japan
Managerial Implication: Merit-based performance Vs. respect for elders and titles.

56
Management
6. SEQUENTIAL V SYNCHRONIC
(Time Keepers) Vs. (Flexible)

• Events to happen in order • Work on several projects at
once.
• High value on punctuality
• Plans and commitments are
• Planning and remaining on
flexible.
schedule.
• Flexible in how you approach
• “time is money”
work
• Focus on one project at a time.
• Allow flexibility in the
• Be punctual. workplace
• Keep deadlines. • Japan, Argentina, Mexico
• Germany, UK, US
Managerial Implication: Keeping schedules Vs. flexibility.

57
Management
7. INTERNAL V EXTERNAL CONTROL
(Internal Direction) Vs. (External Direction)

• People believe they can control • Nature or environment controls
nature or their environment. the person
• Protect one’s self interest • Focus their actions on others,
avoid conflict.
• Allow people to develop their
skills and take control. • Give regular feedback
• Set clear objectives • Manage conflict
• US, UK, NZ, Australia • Provide the right resources to
achieve goals
• China, Russia, Saudi Arabia.
Managerial Implication: Internal control Vs. External control.

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Management
THE GLOBE STUDY QUESTIONS
o Are there leadership behaviors, attributes & org. practices effective
across all cultures?
o Are there leadership behaviors, attributes & org. practices effective

in some cultures only?
o How much do leadership attributes affect the effectiveness of

specific leadership behavior & its acceptance by subordinates?
o How much do behaviors & attributes in specific cultures influence

the well-being of members in the researched societies?
o What is the relationship between these socio-cultural variables & an

international competitive capacity of the various sample societies?

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Management
GLOBE’S 8 CULTURE DIMENSIONS
1. Institutional collectivism; encourage and reward
collective distribution of resources and collective action.
2. In-group collectivism; level of pride, loyalty, and
cohesiveness an individual expresses in their
organisation.
3. Uncertainty avoidance; degree to which society relies
on social norms, rules and procedures to alleviate
unpredictability.
4. Power distance; degree to which members of a
collective exert power to be distributed equally.

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Management
GLOBE’S 8 CULTURE DIMENSIONS
5. Gender egalitarianism; level of gender inequality.
6. Assertiveness; the degree to which individuals are
assertive, confrontational, and aggressive towards
others.
7. Performance orientation; degree to which a collective
encourages and rewards group members for
excellence.
8. Humane orientation; degree to which a collective
encourages and rewards individuals for being fair,
selfless, generous and caring.

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Management
COUNTRY CULTURE VERSUS MNE CULTURE
o Countries develop unique patterns of

ovalues
onorms
obeliefs
oacceptable behavior
o For many firms, these organizational values take
precedence over country cultures, particularly when there
is a conflict between the two

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Management
CULTURAL CONVERGENCE AND/OR DIVERGENCE
Convergence: firms adopting similar best practices

(globalisation)
Divergence: local cultural practices affecting firms’

business operations (localisation)
“Glocalisation”: optimal trade-off between

globalisation and localisation (cross-vergence)

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Management
BASIC ASSUMPTIONS OF CULTURAL
RESEARCHERS
o Universal – assuming universal cultural
characteristics existing among countries, studying
what HR practices can work anywhere in the world,
o Situational – “no best for all”, different HR practices
for different cultural situations
o Convergent – common set of HR practices in
countries with similar industrial & cultural
backgrounds, and on similar level of economy
(globalization)
64
Management
CULTURES CHANGE
There is increasing:
1. International connectedness
2. Global economy coordination
3. Harmonization of laws & regulations
4. Migration
Cultures are not confined to given territories.
This means new challenges for HRM.
How resistant are cultures to change?

Generation Y are fast, self-organized & absorbed learners
with distinct work-life balance preferences
Entire society workforces are aging
65
Management
ACTIVITY 2 – DISCUSSION QUESTIONS
1. How would you define or describe the concept of

culture?
2. How is the research of Trompenaars similar to or
different from that of Hofstede?
3. What do you consider to be the most important factors
of culture in terms of their impact on business?
4. Are national cultures converging or diverging?
(To be completed in groups)

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SESSION 2

THE CULTURAL CONTEXT OF IHRM

INE3023-International Human Resource

INE3023-International Human Resource

The basic assumption of cross-cultural

INE3023-International Human Resource

INE3023-International Human Resource

acquired & transmitted mainly by symbols,

La Trobe Business School

 Organizational culture: the set of important

La Trobe Business School

La Trobe Business School

Hidden culture (the middle

Invisible or implicit culture

INE3023-International Human Resource

Explain & improve interaction between

INE3023-International Human Resource Management 11

1. Power distance (high or low)

INE3023-International Human Resource

Individualism: The degree of interdependence a society maintains among its

Masculinity: what motivates people, wanting to be the best (Masculine) or liking

Uncertainty avoidance: The extent to which the members of a culture feel

La Trobe Business School

La Trobe Business School

La Trobe Business School

Management practices considered in the

La Trobe Business School

La Trobe Business School

La Trobe Business School

High power distance countries have norms, values,

La Trobe Business School

La Trobe Business School http://scholarworks.gvsu.edu/orpc/vol2/iss1/8/

La Trobe Business School

High hierarchy order

La Trobe Business School

Norms, values, and beliefs regarding

La Trobe Business School

La Trobe Business School

La Trobe Business School

La Trobe Business School

La Trobe Business School

La Trobe Business School

La Trobe Business School

La Trobe Business School

La Trobe Business School

La Trobe Business School http://scholarworks.gvsu.edu/orpc/vol2/iss1/8/

La Trobe Business School

La Trobe Business School

Orientation towards time that values patience.

 Managers are selected based on the fit of their personal and

 A prospective employee’s particular skills have less importance

 Training and socialization for a long-term commitment to the

La Trobe Business School

La Trobe Business School

La Trobe Business School

La Trobe Business School

La Trobe Business School http://scholarworks.gvsu.edu/orpc/vol2/iss1/8/

La Trobe Business School

An ability to adapt traditions easily to changed conditions, a strong propensity