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Organization Human Resources

Literature review:

Human Resources (HR) are usually considered as one of the most valuable asset in an organization, but only few organizations can generate real benefit out of their human resources (Pfeffer, 1998 [3]). According to the resource based view of the firm, which poses that superior performance is the result of proper and timely mix of corporate resources, HR practices may lead to higher firm performance and can act as sources of long-lasting competitive advantage because these practices are usually ambiguous, often unique and difficult to imitate (Wright, Duford and Snell, 2001 (3)). A growing body of empirical research has found that HR practices are not always source of sustained competitive advantage unless they are aligned with cultural, as well as, other contextual factors arises from the globalness of the MNCs (Guest, Ahmad, and Schroeder (3)).

Globalization has accelerated the transfer of not only product and services, but alos corporate management practices. The transfer of HR practices occurs mostly from developed countries to the developing ones (5). MNCs operating in many countries with different socio-economic and cultural orientations face serious challenges in implementing Western Human Resource Management (HRM) practices (Jaeger and KM (5). Effective implementation of HR practices is largely dependant on the extent to which the practices are perceived to be appropriate by managers and their subordinates (Eveg and E qile, 1993 (5)). Therefore, a thorough understanding of the culture where HR practices are being implemented is a must in order to maximize the outcome.

In Spite of the general applicability of MRM theories, HR practices carry significant amount of local flavors. In a particular nation, HRM practices are rooted in the country’s historical, political, social, as well as, political differences (8). Tayeb (1998 (8)) claims that, as opposed to universal aspects, locally meaningful aspects of HRM are based on employees’ work-related values and attitudes. These deep rooted values and attitudes have strong association with the employees’ occupational, cultural and social backgrounds. In other words, these values are rooted in their societies.

Due to deep anchoring of HR practices in the historical, political, economic, social and cultural environment of a country, the import or transfer of HRM practices from developed to the developing countries risk resulting in superficial changes (8). When economic liberalization started (1990s) in many East European countries, despite ownership changes in many big firms, HR practices remained almost similar because the legacy of the previous institutional environment continued to play a vital role in the successful operations of these corporations under new ownership and management (Taplu and 1999 (8)).

The relationship between culture and organizational practices has opened several avenues for research investigation. General system theory, societal effect theory and institutional theory offer useful explanations about the ways in which social and organizational context influence HRM practices in the organizations (Jackson and Schuler, 1995 (5)). Tayeb (1995 (5)) suggested that the ‘what’ question in HRM might be universal, but the ‘how’ question is definitely culture specific. Rather than affecting directly, culture has a moderating effect on organizational practices. Even though the contingent factors help determine the organizational structure, culturally driven preferences influence the selection of appropriate practices (Child, 1985 (5)).

Kanungo and Jaeger (1990 (5)) prposed the theoretical model of culture fit (MCF) which explicitly link culture to organizations HRM practices. The model proposes that the internal work culture is based on managerial beliefs and assumptions about two basic organizational elements: the task and the employees. Managers implement HRM practices based on their perceptions of the nature of task and of employees. These perceptions are rooted in the socio-cultural context of the employees’ (Kanungo and Jaeger, 1990).

A number of studies has been conducted to study the relationship between employees’ cultural orientations and organizational HRM practices (5). Sparrow and Wu (1998 (5)) used the cultural orientation framework to predict HRM preferences of Taiwanese employees’. Nyambegara et al. (2000) used the cultural orientation framework to explore the impact of cultural orientations on individual HRM preferences in the Kenyan context. Both studies concluded that significant relationship exists between employees’ cultural orientations and their preference for HR practices. However, there studies have also found that there are certain HRM practices that are culture neutral and can be implemented globally.

Bangladeshi Culture:

Culture in general is a broad concept. One of the generalizations of culture is that culture consists of patterned ways of thinking, feeling and reacting. It is acquired and transmitted mainly by symbols, constituting the distinctive achievements of human groups (Kluckhohn, 1951 (30)). The essential core of culture consists of traditional ideas and especially their attached values (Kluckhohn, 1951). According to Geert Hofstede (1980), one of the pioneer in the field of studying worldwide culture, defined culture as,

“The collective mental programming of the people in an environment. Culture is not a characteristic of individuals; it encompasses a number of people who were conditioned by the same education and life experience. When we speak of the culture of a group, a tribe, a geographical region, a national minority, or a nation, culture refers to the collective mental programming that is different from that of other groups, tribes, regions, minorities or majorities, or Nations.”

Since culture is a collective mental programming, it is often difficult to change culture provided that it is changeable at all (Hofstede 1980). This is mainly because culture is shared by a group of people and it usually crystallized in the social institutions these people build as a group: family structures, religious organizations, educational structures, forms of government, law, literature and work organizations (Hofstede, 1980). Distinctive cultures give birth to different socio-cultural contexts throughout the world.

Many researchers have conceptualized and measured culture through various value dimensions (e.g. Hofstede 1980, House et al. 1999 (30)). Despite various shortcomings and criticisms, this dimension based approach is common and convenient because identified cultural dimensions show validity; establish a link between individual, organizational, as well as, societal level phenomena (Aycan, 2005). In his seminal work that started with 116,000 questionnaire completed by technology giant IBM executives from 40 different countries in 1980, Hofstede studied how cultures differ across nations (Hofstede 1980, 2001; Hofstede et al, 1990). Hofstede initially identified four major cross-cultural dimensions to describe culture of a particular country. The four cross-cultural dimensions are power distance, uncertainty avoidance, individualism – collectivism and masculinity- Femininity. Later Hofstede (1993) added another dimension based on further study. The fifth dimension is termed as short-long term orientation.

Bangladeshi Culture in the light of Hofstede’s study:

Hofstede’s (1980) famous study didn’t include Bangladesh. But, two big neighbors of Bangladesh: India and Pakistan were included in the study. Despite differences Bangladeshi culture have lot of similarity to Indian and Pakistani culture due to historical and religious bindings amongst the people of these countries. Bangladesh was once part of undivided Indian subcontinent then became part of Pakistan for over two decades (1947 to 1971). Pakistan, a predominantly Muslim country with more than 90% Muslim population (CIA Factbook, 2008) has many common practices with Bangladeshi Muslims in terms of their societal practices. On the other hand, India where Islam and Hinduism both religions are quite well represented also possess cultural similarity with Bangladesh. (Arian traditions)

Table 1: Predicted cultural dimensions of Bangladesh based on Hofstede’s (1980, 1993) study

Cultural Dimension

Description of the dimension

Hofstede’s findings on India and Pakistan

Most likely cultural dimensions for Bangladesh

Power distance (Hofstede, 1980)

Refers to the extent that individuals accept differences between people as legitimate and expected. Cultures high on power distance see difference between superiors and their subordinates as distinct with wide status differentials. Individuals in low power distance cultures see fewer difference between subordinates and superiors, superiors are more accessible, and differences between the sexes with respect to social status is less pronounced (Hofstede, 1984)

India – Large power distance

Pakistan – Large power distance

Uncertainty avoidance

(Hofstede, 1980)

Refers to the degree that people are comfortable with ambiguity. Individuals who are high uncertainty avoider place great emphasis on stability and certainty, and favor a variety of Mechanisms that increases a sense of security. . Individuals low in this dimension are more comfortable with risk taking and are more willing to move forward without knowing what lies ahead (Hofstede, 1980)

India – Weak uncertainty avoidance

Pakistan – Strong uncertainty avoidance

Individualism – Collectivism

(Hofstede, 1980)

Refers to the extent that individuals focus on individual needs and wants as opposed to the needs of the group. Cultures that lean towards the individualism side of the cultural continuum stress responsibility and achievement by individuals. In collectivist cultures emphasize group efforts, teamwork, and group membership (Wagner and Hollenbeck, 2005, Hofstede, 1984)

India – Collectivist

Pakistan - Collectivist

Masculinity – Femininity

(Hofstede, 1980)

Refers to the degree that individuals exhibit masculine behaviors like: dominance, independence or feminine values and behaviors like: openness, interdependence. In high masculine cultures differentiated sex roles, independent performance, achievement, and ambition are clearly visible. In feminine cultures equal sex roles, quality of life, and helping others are more emphasized (Wagner and Hollenbeck, 2005, Hofstede, 1984)

India – Masculine

Pakistan - Masculine

Short – long term orientation

(Hofstede, 1993)

Short-term orientation focuses on the present or the past, honors traditions, and consumes resources to meet the current needs. On the other hand, long-term oriented cultures, resources are saved to meet long-term or future vision of the society (Hofstede, 1984)

Impact of religion in Bangladesh Culture:

In most countries of the world, with either secular or religious constitutions, religions have certain degree of influence on the socio-cultural characteristics of their people and their institutions (Tayeb, 1997 (5)). While other religions are present, most of the people of Bangladesh are followers of two major religions: Islam (83%) , Hinduism (16%) (CIA Factbook, 2008). Although Bangladeshi constitution is based completely secular ideology which supports religious tolerance and freedom of thought and belief, impact of Islam and Hinduism is fairly visible in the daily lives of the Bangladeshi people.

A number of authors have refereed to and studied the affect of Islam on management practices (Ali, 1996, Purnell and Hatem, 1999, Yousef, 2001 (11). Islam is a very comprehensive religion which includes social, political, economic, as well as, spiritual aspects of individual behavior (11). Islam also provides an ethical framework for business and administration purposes (Hickson and Dush, (11). Since Bangladesh is an overwhelmingly Muslim majority (83%) country where Islam is deeply rooted in the hearts and minds of mass population, there are reasons to believe that Islam affects work-related values, as well as, the behavior and approach of management practices in Bangladesh.

According to Islamic work ethic, hard work is perceived as a virtue through which sins can be resolved, financial and personal growth can be achieved (Yousef, 2001). Engagement in economic activity is perceived as an obligation in Islam. The Islamic world view stresses honesty and justice, an equitable and fair distribution of wealth in society (11). It is specifically very strict about workers rights. There is no provision for reconciliation in Islam with the people who violates workers rights. Islam also encourages co-operation in work and consultation as a way of decision making. Consultative decision making process helps to overcome obstacles or avoid mistakes (11). Social relationships are emphasized in Islam. It is important to have good relationship at work with superiors and colleagues because it can foster a very congenial atmosphere (11).

(Most of the MNCs are based on Western developed countries and they are guided by the basic tenets of “Capitalism” that are “Cost minimization” and “Profit maximization”. This ideology is quite opposite to the Islamic world view which encourages fair and equitable distribution. When employees’ are admonished about the mission and vision of the company, the managers of the MNCs operating in the Muslim majority countries have to remember that what they are trying to convey to their employees are not contradictory to the Islamic world view in general.)

Like Islam, Hinduism plays a crucial role in the lives of Bangladeshi Hindus. Mutual cooperation, respect for others as also basic tenets of Hinduism. One general concept of Islam and Hinduism is that the future is best left with God almighty (11). As opposed to Western concept of non-fatalism where people are perceived to have t he power to control the outcome of an event, Hickson and Pugh (1995 (11) refers to this reliance on God as a latent fatalism, a feeling that as long as you by the religious rules as will taken care of by God. Kanungo and Jaeger (1990) also suggest that people in developing countries have a strong sense of fatalism.

Both Islam and Hinduism stresses values and practices that are generally consistent with Hofstede’s (1980, 1993) findings which include the emphasis upon the importance of relationships and cooperation that can be considered as low individualism (11). On the other hand, the emphasis upon hardwork, following rules, decision making through consultation are indications of their nature to avoid uncertainty (11). Kanungo and Jaeger (1990) have identified few criteria of personal success and achievement in developing countries that are radically different from those western countries. They have found that in developing countries, religious beliefs and moralism rather than sole material prosperity are valued more.

One of the most visible impacts of Islam on the institutions of Bangladesh is weekly Holiday. In Bangladesh Friday is the weekly holiday. Keeping Friday as weekly holiday causes Bangladeshi companies (local and foreign) to loose one day of international business dealings every single week because Sunday is the weekly holiday in most part of the world except some Islamic and Arab countries. In the past, several attempts by the government to move the weekly holiday from Friday to Sunday were vehemently resisted by the majority of Muslims as this is the day they have to perform a weekly congregational prayer. Besides weekly holiday to accommodate two major religions, Bangladesh government has no choice, but to declare so many working days as religious holidays every calendar year. These holidays also creates transactional bottleneck with the Western countries. Any attempt by the local, as well as, MNCs to curtail those holidays is guaranteed to create HRM problem for the organizations.

Impact of history and politics on Bangladeshi Culture

History and politics play an important role in the daily lives of ordinary Bangladeshi’s. Today’s Bangladesh has come into existence through a long history of political evolution. Bengal was one of the wealthiest parts of Indian subcontinent up until 16th century ( ). Bengal’s early history featured a succession of Indian empires, internal squabbling, and a tussle between Hinduism and Buddhism for dominance. Then at the end of 12th century through Bakthiar Khalzi’s capture of Bengal in 1199, Islam also emerged as a political force in Bengal. Until recently (before 1971), Bangladeshis had always been ruled by the outsiders for several hundred years. Mughals ruled them for about 400 years, colonial British Empire ruled Bengal for 190 years (1957 -1947), and West Pakistani (present Pakistan) autocratic leadership ruled them for another 24 years (1947 – 1971). Due to this eventful past, Bangladeshis have developed a national characteristic that is suspicious of activities of foreigners in their country. There is always a inner feeling amongst the mass population that the foreigners come here only to fulfill their own vested interest and they are not interested to change the condition of the local people at all. With the new tide of economic liberalization when many MNCs are venturing into Bangladesh to grab the opportunities of cheap labor and huge consumer base (158 million people), some see it as a new form of colonialism. For example when the government tried to allocate different oil and gas exploration blocks to international companies like: Shell, BP, Unocal, Occidental, Chevron; there was a open public outcry amongst the mass population against it. The most important reason behind this outcry is people’s perception about the British and American companies as part of their imperial aspirations. The memory of Robert Clive and East India Company that colonized the Bengal for 190 years is still fresh in peoples mind. However, public reactions to MNCs based on other countries are quite opposite. Mostly those companies are welcomed by the local people (e.g. the biggest company in Bangladesh in terms of revenue is Grameen Phone. 62% shares of this company is owned by a Norwayan MNC, Telenor).

Besides religion and Politics Language also plays a significant role in the lives of Bangladeshis. Bangladeshis are very proud of their language. They are the only nation in the world who fought against West Pakistani authorities to establish the rights of their language. Recently, the United Nations has recognized 21st February (National language day in Bangladesh) as the “International Mother Language Day”. Although within the organization local and foreign companies are allowed to conduct their communications in English, it a law in Bangladesh that all official correspondences with the government have to in Bengali.

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