CROSS

CULTURAL
HUMAN
RESOURCE
MANAGEMENT
Dr. Ramila Devi
 LEARNING OBJECTIVES

1. Identify the Global Staffing Pressure and sources of HRM

2. Identify factors that contributes to failure of International Assignments
3. Describe criteria to select and compensate International Managers
4. Explain factors that contributes to culture shock
5. Repatriation of International Managers
6. Describe International Labour relations
7. Comparison of different cultures
CROSS CULTURAL HUMAN RESOURCE MANAGMENT 3

STAFFING IN GLOBAL
ORGANIZATIONS
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Cross Cultural Human Resource Management

GLOBAL STAFFING PRESSURES

• Global Staffing Pressures
 –Candidate selections
 –Assignment terms
 –Relocation
 –Immigration
 –Culture and language
 –Compensation
 –Tax administration
 –Handling spouse and dependent matters
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Cross Cultural Human Resource Management

SOURCES OF HRM

• Host-Country Nationals
 Local managers who are hired by the MNC
 Used in middle- and lower-level management positions
 Nativization
• Requirement of host-country government that
mandates employment of host-country nationals
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Cross Cultural Human Resource Management

SOURCES OF HRM

• Third-Country Nationals (TCNs)

 Citizens of countries other than the one in which
the MNC is headquartered or the one in which
the managers are assigned to work by the MNC
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Cross Cultural Human Resource Management

FAILURE RATES OF INTERNATIONAL ASSIGNMENTS

• International assignment failure can cost hundreds of thousands of euros
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WHY INTERNATIONAL

ASSIGNMENTS FAIL?
• Personality
• Person ’ s intentions
• Family pressures
• Lack of cultural skills
• Other non-work
conditions like living and
housing conditions, and
health care
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WHY INTERNATIONAL ASSIGNMENTS FAIL?

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IMPROVING FAILURE RATES OR SOLUTION

• Provide realistic previews

• Have a careful screening
process
• Improve orientation
• Provide good benefits
• Test employees fairly
• Shorten assignment length
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SELECTING INTERNATIONAL MANAGERS

Test for traits that

predict success in Job knowledge and
Relational skills
adapting to new motivation
environments

Flexibility and Extra-cultural

Family situation 
adaptability openness
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PREDICTIVE TRAIT BREAKDOWN

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COMPENSATING EXPATRIATES
• The “Balance Sheet Approach”
 Home-country groups of expenses—income taxes, housing,
goods and services, and discretionary expenses—are the
focus of attention.
 The employer estimates what each of these four expenses is
in the expatriate’s home country, and what each will be in the
host country.
 The employer then pays any differences such as additional
income taxes or housing expenses.
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Cross Cultural Human Resource Management

THE NEW WORKPLACE: SENDING

WOMEN ABROAD
• In the US only 6% filled overseas positions compared
to 49% domestic
• One survey found inaccurate stereotypes:
–Not as internationally mobile
–Might have a tougher time building teams
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Cross Cultural Human Resource Management

CULTURE SHOCK

• Disorientation upon entering a new cultural environment

• Normal use of own cultural filter fails
–interpretation of perceptions
–communication of intentions
• All people experience culture shock... Past experience and
training can shorten its length
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CULTURE SHOCK
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Cross Cultural Human Resource Management

CULTURE SHOCK
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CULTURE SHOCK
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Cross Cultural Human Resource Management

REPATRIATION OF EXPATRIATES

• Repatriation
 Return to one ’ s home country from an overseas management assignment
• Reasons for returning
 Formally agreed-on tour of duty is over
 Expats want their children educated in the home country
 Unhappiness with foreign assignment
 Failure to perform well
• Readjustment problems
 Permanent position upon return constitutes a demotion
 Lack opportunity to use skills learned abroad upon return
 Salary and benefits may decrease upon return
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RETURNING HOME CULTURE SHOCK AGAIN?

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REPATRIATION PROBLEM
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INTERNATIONAL LABOUR RELATIONS

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CHINESE VS. AMERICAN CULTURE

In this example, we have an American company selling
high-end technical goods to a potential Chinese buyer.
Relations have been going well and the Chinese have been
invited for a factory tour in anticipation of the contract
between the two companies finally being signed.
The evening after the tour, the Americans host the Chinese
delegation for a dinner at a local restaurant.
Upon entering the restaurant, the head of the Chinese
delegation is greeted by a junior member of the US team.
He asks where he should sit, to which he is told to, “sit
where you like”.
The next day the Chinese delegation left the USA without
signing any contract. Days later the US team received word
that the Chinese felt humiliated and were reconsidering the
business relationship.
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SO, WHAT HAPPENED?

• Well the cultural misunderstanding comes down to a few things. In Chinese culture, hierarchy
is really important, whereas in American culture, it's more about equality and displays of
hierarchy aren’t culturally comfortable.
• So, when the head of the Chinese delegation was only greeted by a junior member of the team,
rather than the most senior, he immediately felt a loss of face.
• To add insult to injury he was then told to ‘sit anywhere’ – when, ideally, he should have been
given the seat at the head of the table next to the most senior member of the US team. In
Chinese culture, people tend to hide their feelings. For this reason, the team did not say
anything at the time. 
• The US team had to work hard to repair the damage. This cultural misunderstanding led to an
8-month delay in the signing of the contract.
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Cross Cultural Human Resource Management

DUTCH VS. BRITISH CULTURE

• In this example, we have a Dutch national who has
recently moved to the UK.
• This individual really struggles to understand the
British. For example, when they prepare a report or a
presentation and show it to their manager for feedback
they are told, “it’s fine”.
• However, after handing in the report or making the
presentation they discover the manager is not pleased as
things are missing.
• They can’t understand why they are being told
something is fine, to only find out later, it is not fine. This
along with other communication challenges is really
bothering the Dutch national.
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SO, WHAT’S GOING ON HERE?

• Well, it’s all about how different cultures communicate. The Dutch are used to being open, frank and
honest when giving opinions. If you say something is ‘fine’, then it’s fine.
• In the UK however, the British communication culture is very different. You need to listen to much more
than the words in the UK. People say one thing but mean another. Saying something is “fine” in the UK
really means it is not fine – it’s the exact opposite.
• Among Brits, they understand what ‘fine’ means – it means it’s 'not good enough' and that changes need
to be made. The Dutch national however took the meaning literally – big mistake!
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AUSTRALIAN VS. THAI CULTURE

• In this example, we have an Australian national who
moved to work in Bangkok, Thailand.
• Within a very short time, the Thai nationals in the
office were not very impressed with their new
addition. Complaints were being made against him
for inappropriate behaviour.
• Most notably many of the Thais said he was rude to
them. He was being given the cold shoulder by his
Thai colleagues and not feeling welcome.
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SO, WHAT WENT WRONG?

• In this example of a cultural misunderstanding, the Australian was trying to make friends through
humour. He would make jokes about his Thai colleagues in front of other people. Now in Australia this is
an acceptable way of making friends.
• ‘Banter’ between colleagues is normal and people will make jokes about one another as a means of
showing friendliness.
• In Thailand however, this simply does not translate. You don’t make jokes about people in front of others,
especially work colleagues. As a result of his behaviour, all the Thais in the office thought that the
Australian was extremely rude and insensitive; in fact, he was just trying to be friendly.
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CONCLUSION
• Cultural Misunderstandings and Values
• As we see in all three examples of cultural misunderstandings, both sides have not understood that their
culture, and their way of doing things, doesn’t work in the new culture.
• Much of this comes down to values and how cultures are shaped by the values they prioritise.
• For example, the Chinese value hierarchy whereas the Americans value equality. The Dutch value
transparency whereas the Brits value subtlety and diplomacy.
• The Thais value face, reputation and formality whereas the Australians value humour, friendship and a
much more informal approach to business.
• All cultures prioritise different values and a lot of the time when we see examples of cultural
misunderstandings its usually a case of one culture looking at another culture through their own 
cultural lens.
THANK YOU