Module - 2

The Context of
International Human
Resource Management
 2.1 Social and Cultural
Context

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 Culture

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 Culture
Culture is the thought and behavior patterns that
member of a society learns through languages
and other forms of symbolic interaction – their
customs, habits, beliefs and values, the common
viewpoint which bind them together as a social
entity.
• Social and cultural factors in various countries of
the globe affect the IHRM.
• Factors include attitude of the people to work,
attitude to wealth, family, marriage, religion,
education, ethics, human relations, social
responsibilities, etc.
• Cultures change gradually picking up new ideas
and dropping old ones. Free template from www.brainybetty.com
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 Culture is...
• Derived mostly from the climatic
conditions of the geographical region and
economic conditions of the country
• A set of traditional beliefs and values
which are transmitted and shared in given
society
• A total way of life and thinking patterns
that are passed from generation to
generation
• Norms, customs, art, values, etc
• Culture: Socially shared, Learned,
Subjective, Cumulative and Dynamic
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 Why do cultures differ?
• Determined by economic level,
conditions, climate of region/country
• Physiological needs are similar but
way to fulfil it is differ because of
region
• For example, food pattern of people
from coastline and from dessert area

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 Cultural sensitivity
Cultural sensitivity is to have the empathy to
accept cultural differences without allowing
one’s own value to surface in unproductive or
confrontational ways.
• One has to sensitive towards host country's
culture
• All cultures are good and therefore employees
and manager of global company should avoid
ethnocentric/parochial behaviour

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Cultural attitude and international business
• Dressing habits, living style, eating habits,
consumption pattern and priority of need
influence by culture
• Some Chinese and Indian don’t consume
beef
• Eating habits vary widely
• Foreign cultures has started to adopt food of
various culture
• Dressing habits also vary
• International businessman has to adopt
culture accordance to host country and that
help to formulate customer oriented strategy
and reduce the chances of failure
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 Guidelines for the businessman when
they launch their business in foreign
country
1. Resist to conduct business immediately on
landing, and at all time
2. Offer favours as a business tool to generate
allies
3. Contact, cultivate and conduct field work
among at least one sample client to serve as
an initial testing centre for the firm’s product
4. Introduce the product line into the sample
group by local firms of cause related
marketing
5. Extend product acceptance beyond the
sample client into related market segment
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Cross cultural communication
process and negotiation
• Countries like USA, Canada, Germany and
Switzerland the message is more of explicit
and clear. Called low context culture
• Countries like India, Japan, Saudi Arabia and
other middle Eastern Arab countries the
message is mostly indirect and expressive
and that create complexity. Called high
context culture
• Acc to Hall, the culture also vary based on
manner of information processing
• Monochromic - Direct manner
• Polychromic – Indirect manner
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 Cultural Universal
Irrespective of the religion, race, region,
caste, etc. all of us have more or less the
same needs. These common needs are
referred to as ‘cultural universal’
• Murdock has identified cultural universals
like athletic, sports, bodily adornment,
cooking, dancing, singing, education, joking,
kin groups, status differentiation and dream
interpretation
• It enables businessman to market product in
many countries with modification

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 Communication through
languages
• Languages is the basic medium of
communication
• More than 5000 spoken languages in the
world
• Same word in the same language may
mean different things in the different
regions in the country

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 Safe rules in international
communication
• Over – punctuate, when you are in doubt
• Keep ideas separate, making only one point
at a time
• Confirm discussion in writing
• Write down all figures using the style of
the person you are talking to
• Adjust your language to the level of your
foreign counter part
• Use visual ads whenever possible
• Avoid technical, sports and business jargon

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 Non – verbal communication
• People also communicate through non-verbal
medium
• It mean differently in different situation
“Prolonged eye to eye contact is polite in the USA
and rude in the Japan, Indian, Lino culture”
Some other non-verbal communication clues:
• Sitting at a table around a corner signals
cooperation and active listening
• Sitting straight across from one another signals
confrontation
• Sitting side by side makes conversations awkward
• Standing in presence of the elders and superiors
signals respecting them in India
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 • Indians offer food and beverages to guest first
after the guests they start eating. Indian respect
guest even treat them as God and they respect
teacher also. They greet guest, elders & teachers
with the folded hands
• Americans and Europeans generally not offer even
not water & they eat in presence of guest without
offering them
• Indonesians are polite one. They are not known
for punctuality so one should offended, if your
function start on time or if your guest arrive late.
They avoid use of left hand while offering food or
other object as it regard as unclean hand and
consider finger point out as rude
• So it is always appropriate to appreciate the
cultural differences in language(both verbal and
non-verbal)
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 Time and culture
• Has different meaning in different culture
• Asian do not need appointment to meet someone
but American, Europeans and African need prior
appointment
• Friday in middle east just like suday in the west
• Time is money for both leisure and work in
America
• In non-western society, there is no urgent work
• Swedish are very prompt
• Chinese are very punctual for social occasion and
appointment
• In India, auspicious time is more important for
business deal, admission in college, travel, starting
a new project/work
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 Space and culture
• Space between one person and another
person plays important role in
communication
• Latin Americans are comfortable with few
inches of distance
• Asian needs subsequent conversational
distance and no physical contact and
followed strictly in case of opposite gender
• American need more distance from third
person for privacy and not important for
Indians

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 Culture and agreement
• USA is a very legalistic society and are very
specific and explicit in their terms and
agreement
• Opposite in Asian countries
• South Korean or an Indian consider
contract for their flexibility and adjustment

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 Culture of friendship
• American develop friendship even in a short
time and don’t develop deep personal ties
• China and Japan first develop friendship
through eating together then transact
business
• American use first name but French people
and northern European feel it offensive
• In Germany, only relative and close friends
use first name
• In Australia and Venezuela, waiting time
could be 5 minutes, in Argentina, Germany
and France 1 year, in Switzerland 3 year and
in Japan a decade
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 Culture and negotiation
• Americans are straightforward
• Chinese negotiation are tough
minded, well prepared and use tactics
to secure the best deal

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 Culture and superstitious
• Superstitious beliefs like fortune telling,
palm reading, dream analysis, birth date
and time analysis, vaastu are more
prominent in Asian and African countries
• Americans knock on wood, cross their
fingers and feel uneasy when a black cat
crosses their path

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 Culture and gifts
• Gifts are given first in India and Japan
• But in Europe, after a personal relation
developed
• International businessman should study
the customs of the society in offering gift
• Clocks are poor choice of gifts in china and
Taiwan
• Knife is poor choice in France, Russia,
Germany and Thailand, Italy, Brazil and
Venezuela

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 Social Environment

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 Social Environment
• It consist of religious aspects, language,
customs, traditions, beliefs, taste and
preferences, social institutes, living habits,
eating habits, dressing habits, etc.
• Study helps in deciding the product type
and market

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 Religion
• Important social institutions influencing
business
• Protestants influence is dominant in USA,
Canada and Australia
• Roman Catholics dominate in Latin
America, Southern European countries
• Buddhism and Hinduism dominate in Asia
and it has high spiritual values, low values
of material goods and emphasize on ethics
and moral values

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 Family system
• In Islamic countries, women play less
significant role in the economy as
well as in family
• In Latin American country role is
better compare to Islamic country
• In European and North American
countries role is dominant
• Joint family is more prevailing in
Islamic and Hindu religion and it
reduce demand of goods and services

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 Behavioural factors affecting business
• Cultural factors influence human behaviour
• Cultural difference of various country create
variation in behaviour
• Business should consider behavioural pattern of
social group in hiring, marketing and in selecting
suppliers
• Behavioural pattern can be studied based on:
1. Ascribed group membership is based on gender,
age, family, caste, community, ethics, racial and
nation of origin
2. Acquired group membership based on religion,
political affiliation, professional and social
association

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 Behaviour based on group membership
• USA reward people based on
performance
• Malaysia reward people based on ethnic
group in addition to performance
• Egalitarian societies do not discriminate
employment of people’s based on sex
• Arabian countries discourage females
for seeking employment
• Family membership is important in
societies like India, China and Southern
Italy
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 Motivation and Achievement
• Eco. development of country depends upon
motivation to do work hard and desire of
achievement
• Hindu religion preach that people should
concentrate on non-materialistic need for
salvation and resulted into low eco. growth
• Employee’s work attitude may change by eco. gain
• People with high interest in career are having
more chance of success and vice-versa
• People from poor country motivated by
compensation
• People from rich country motivated by more
responsibility and recognition

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 Hofstede’s Model of Four
Cultural Dimension
1. Power distance
2. Uncertainty avoidance
3. Individualism
4. Masculinity

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 Strategies for Dealing with
Cultural Differences
• Making adjustment, where ever necessary
• Dimensional relationships and
externalities
• Communication
• Culture and business ethics
• Impact of culture on consumer behaviour

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 Religions and economic
implications
• Christianity
• Islam
• Hinduism
• Buddhism
• Confucianism

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2.2 Managing Culture Diversity

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 Culture
• Taylor defined culture as
“that complex whole which includes
knowledge, belief, art, morals, law, customs
and other capabilities and habits acquired
by man as a member of society”

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 Cultural factors

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 • Knowledge
• Beliefs
• Values
level 1: Reactive
level 2: Tribalistic
level 3: Egocentrism
level 4: Conformity
level 5: Manipulative
level 6: Sociometric
level 7: Existential
• Attitude
Cognitive
Affective
Behavioural
• behaviour
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 Cross cultural differences in
the workplace
• People with different cultural background
behave differently even at the workplace
• e.g.: people of eastern culture don’t seek
appointment to meet superior, where
western culture require prior permission
• Culture sometime clash due to different
behavioural expectations
• Eastern culture resolved conflict in closed
door where western culture in public and
face to face so when manager from 2
region work together resulted in cultural
conflicts
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 Reaction to cultural
improprieties
• Culture impose norms for people’s behaviour in
different situation and feel uneasy, anxious and
threatened when they violate norms
• People who don’t follow rules are punish and
condemned in followed ways:
1. The extent to which the rule is widely shared
among the people of the same culture
2. The extent to which the rule is deeply held and
viewed as being important sacred
• People should learn the cultural rules and degree
to which the people of the culture hold them,
when working with people of other culture

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Degree of condemnation associated
breaking different
Widely shared, Shallowly held
types of cultural rules
Example: One should not burp after
meals in the presence of others
Condemnation: Minor
condemnation. May be socially
ostracized and viewed as a “nerd” or
social misfit
Narrowly shared, Shallowly held
Example: One should not jaywalk
Condemnation: Slight or none. A
few people might become somewhat
annoyed at seeing a jaywalker, but
most would simply ignore the
behaviour
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with
Widely shared, Deeply held
Example: One should not steal
money from bank
Condemnation: Sever punishment
(e.g. imprisonment)
Narrowly shared, Deeply held
Example: One should not light up a
cigarette without asking permission
from those nearby.
Condemnation: Disapproval or
censure. Feeling the “wrath” of at
least one
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 Workforce Diversity
• Workplace in MNCs today are highly
diversified with the employees of different
countries, different age group, religious,
races, ethnic groups, colour and gender.
• People from various countries and
societies bring varied culture to the
workplace in addition to the best talent

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 Best Talent Across the Globe
All

All Religions
All Education
Background Two Gender

All Best All

World Talent Races
Colours ffffffff

All Age All Income

Groups All Ethnic Groups
Groups
CountriesFree template from www.brainybetty.com

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 Factors of Diversity
• Increasing diversity among employees in MNCs is a
reflection of increasing educational facilities and
increasing educational level of people in various
developing countries
• After 1990s enhancement in career opportunities
for women
• Increase in educational opportunities vis-a-vis
increase in number of employees from developing
countries

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 Changing Gender Role
• Historically, women’s role has been confined to
raising children, taking care of home and assisting
men at domestic activities
• Recent time, significant change due to educational
level, positive thinking towards economic
independence and utilizing their skills
• Suitable jobs for women mostly in industries like
software, pharmaceuticals, bio-technology, bio-
informatics and R&D
• These shifts increase women employees in MNCs as
expatriates but concentrate on lower level job and
could not rise to managerial jobs
• Glass ceiling is a barrier that is strong enough to
prevent women from moving into top management
position, yet sufficiently subtle to be transparent
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 Breaking glass ceiling for
women and minorities
• Diversity training
• Training
• Counselling and mentoring
• Promotion policies

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 Globalization and mobility
of HR
• Aims of globalization is to create free flow of
all kinds of resources including human
resources across the countries in order to
meet the needs of the manufacturing
centres established throughout the worlds
• Consequently, money, material, machines
and men (people) across the countries
shifted to the new places based on demand
for skill

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Approaches to diversity in organization
Perception Accompanying Training implication Organizational
on diversity attitude to diversity implication
Diversity Neutral: “Diversity is Org. training need’s don’t No organize effort to
blindness not an issue” contain diversity training discussing the
needs opportunities and
problems of diversity

Diversity Negative: “Diversity is Promotion of “sameness” in Horizontal and vertical

hostility bad” training interventions job segregation and
“homogenise” the workforce discrimination

Diversity Positive: “Diversity is One sided “romantic” Unsubscribed to

naiveté good” training interventions espoused position on
focusing on “celebrating or diversity may be
welcoming diversity” damaged. Can lead to
unrealistic expectation
from diverse group

Diversity Realistic and functional: Active training for diverse Minority group in org.
integration “diversity does not group in diversity mgt. will be networked and
automatically lead to including the opportunities mentored.
positive or negative and problems of diversity
outcomes, but needs to
be managed and
integrated”
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 Managing diversity of workplace:
strengths and weakness
Strength Weakness

Competitive advantage Potential sources of conflict

Multi-ethnic unified societies at Delay in decision making

workplace

Efficient implementation of org. Misunderstanding and perceptual

strategies differences

Repeats undesirable unity among Communication distortions

employees

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Factors contributed to competitive advantage
Appropriate
strategies

Attraction of Creation and

resources Innovation

Marketing Competitive
Cost Saving
Advantage Advantage

Problem
Harmony
Solving skill
Flexibility
and
Adaptability
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 Strategies for managing workforce
diversity

Individual
Strategies

Organizational
Strategies National
Strategies
Managing
Diversity

Group International
Strategies Strategies

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 Individual strategies
• Understanding the cultural background of
others
• Belief that all cultures are good
• Perceive from other’s perspective
• Approach of ‘no-winning over’ other’s
culture
• Clear communication

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 Group strategies
• Knowledge sharing
• Advising and cautioning
• Cultural exchange through socialization
programs

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 Organizational strategies
• Recruitment and selection
strategies o MNCs should take up special
o Country cluster strategy training programs
o Selection tests • Breaking the glass ceiling
o Employee referrals • Formal socialization programs
• Organizational policies and • Structuring work teams
practices • Use of counsellors
o Recruitment/selection • Communication
o Payment of salary and benefits
o Work distribution • Special benefits and facilities
o Training and development for women and old peoples
o Human and industrial relations o Telecommunicating
o Flexi time
• Cultural training
o Job sharing
o Educate the employees in other’s
culture •

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 National strategies
• Legislative approach towards equal
employment opportunity
• Efforts of the cultural association/societies
• Efforts of the diplomatic missions

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 International strategies
• Economic unions and regional integration
• Efforts of international trade org. and
financial institution
• Efforts of the MNC’s headquarter

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