Human resource (HR) management is not the workers' "police" but a facilitator and agent for change. Referring to Appendix A (attachment) on Paine & Co.'s dilemmas faced, cultural differences between countries are larger than those within countries, an international approach is necessary. The absence of HR personnel in their foreign offices may have hampered the transfer of skills and communication, eg. Noida office delaying their performance appraisal submission. Not encouraging the interchange of people between subsidiaries, eg. staff exchange programmes, deprives staff gaining job experience and cultural adaptation.
Consultants are recruited on a "can start earning revenue" approach and not on the basis of known recruitment techniques, such as competency-based interviews and unique selection criterias, eg. psychometric testing for "best fit" candidates. Other attributes were also not used as a guide whereby a past study stating staff characteristics highlighting differences in age, skill and the country of residence has a higher impact on functional flexibility and job satisfaction (Origo and Pagani, 2008). Prejudiced and weak assessment recruitment methods attract negative work environments, eg. Noida office recruiting family members in preference.
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Given no induction and formal training deprives a new staff of a warm welcome, sense of belonging and development, irrespective of location. Building unique resources following a Resource-Based HR strategy, key to this Systems Integration business, eg. the VRIO (Value, Rareness, Imitability and Organisation) framework (Barney, 2002) and, leadership building, eg. GLOBE Research Project (House, 1992; House, 2004), for teamwork and competitive advantage, were relatively non-existant. The lag in succession planning and compensation planning also went unnoticed.
Their unbalanced rewarding for performance recognition may have prevented consultants' manipulation for financial gains in the company, and the young women consultants leaving for competitors, according to Maslow's (Heylighen, 2007) "esteem needs" (4th) level in motivation. Performance appraisal is purely "observation and judgement" (Cascio, 1991), enabling the identification of training and development needs, and compensation decisions to be made. Human capital are the internal performance drivers, and organisations need to look at applying non-financial performance measures (Gates and Langvin, 2009) instead of the traditional financial approach.
The lag in communication, especially transparency on the centrally controlled pay and bonus system, epitomises dissatisfaction and mistrust among consultants, eg. those in the Frankfurt and Paris offices. An interorganisational network of differentiated units where good communication and knowledge flows right across the organisation is relied upon for the effectiveness of this network (de Brentani, 1989; Edvardsson et al., 1995; Lindsay et al., 2003). This weakness may have negated the grapevine, picked-up by the employment market and creating difficulty in recruiting staff, as faced by their Frankfurt office. Distance and time zone differences, not provided for, may have also contributed to this inadequacy.
International expansion rests on benefits of location specific advantage (Porter, 1990). The company's strategy for expansion gives little mention of these factors. Also, a study of the five cultural dimensions (Hofstede, 1980, 2001) and relative differences (Trompenaars and Hampden-Turner, 1997) would have exposed culture-adapting routes for the upscaling of their Frankfurt office, expansion of the Paris and Noida offices, and, new countries like Singapore and China. Further research on territorial differences will stress on the U.S.A.'s hagemony standpoint preferring the constructs of universality and standardisation (Claus, 2003).
1.1 An indepth analysis
The HQ should pursue the HR management strategies, policies and practices in response to the internationalisation of their business (Scullion and Linehan, 2005). This pursuit also deals with recruitment, training, reward and repatriation of expatriates (Welch, 1994) plus managing multicultural teams and diversity and, managing performance (Iles, 1995). Local HRM practices varies from that of IHRM by the presence of differring challenges of international territories, eg. cultural, societal, political. For a start, the company gave no indication of a strong organisational structure and configuration settings (Mintzberg, 1983) backing-up their IHRM framework. Reference to Figure 1 below, showing some preferred configurations of countries, can assist in the building of this structure. Having this structure in place, their IHRM can safely construct applicable and workable principles, within aligned boundaries.
However, they run decentralised (refer to Figure 2 below) in a multinational company approach (Bartlett and Ghoshal, 1992), and a mix of ethnocentric in France, for parent-country control and, polycentric in the other foreign offices (Perlmutter, 1969), for the local's knowledge of local culture, employment relations and legal issues to HR management (Suutari and Brewster, 1969). Attributes supporting these entry-level typologies must also be followed through for effects.
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Recruitment and Selection : As no international recruitment and selection framework was used, the question of uncertainty is imminent. Over time, this uncertainty may develop into dilemmas, if not duly curtailed. Reference to International recruitment methods, (eg. The Chartered Institute of Personnel and Development (CIPD)) that deals with full awareness on equal opportunities legislation and understanding discrimination can help guide them in this crucial stage of building effective manpower. Perhaps, their "loose" selection method also explains the consistent disengagement of women consultants, especially in the Frankfurt office.
The company did not indicate using necessary recruitment criterias, eg. skills, the length of previous experience(s) and staying power, related key achievements, core competencies, human-relations capabilities, leadership values, in ensuring a strong framework is in place (Garcea, Isherwood and Linley, 2011). Another guide also ignored is the consideration for variables, eg. work technical competence, personal traits/relational abilities, and the propensity to cope with environmental variables and family situation (Tung, 1981).
It may be good to note that the common selection criteria used are technical competence and knowledge of company's systems (Barham and Devine, 1990; Brewster, 1998; Harvey, 1985; Mendenhall et al., 1987; Miller, 1972; Tung, 1981) althogh there may be the element of difficulty in identifying and measuring the relevant interpersonal/cross-cultural skills and condoned self-interest for low personal risk of the selectors in choosing the right candidate but not succeeding on the job.
It is useful to note a study that indicated several reasons why employees leave an organisation (see Figure 2 below).
It exposes weak recruitment and selection methods used as one of the culprits. Taking the necessary precautionary measures helps in the avoidance of probabilities of intents in staff disengagement, from an overall aspect. Following recommended international recruitment and selection rules can strengthen their search for an effective workforce to become the preferred systems integration consultant and, staying ahead of competitors.
ii) Training and development : As no formal training is planned and conducted by the company, uncertainty of development of their workforce cannot substantiate the competitive edge needed in this specialised systems integration business. Over the course of time, this competitive edge is the determining factor for their global positionig and expansion.
Adding salt to injury is the non placement of HR personnel in their foreign offices in building HR expertise and maintaining proper communication, transfer of skills, adherence to corporate governance rules, succession and compensation planning. Such a "freehand" weakness is a carrot to manipulation unless vigilantly managed. The young women consultants moving to competitors may have also been caused by this weakness. In this specialised and profitable business, such loss may diffuse contracual information secrecy and, possible industrial espionage by competitors scrambling for competitive advantage.
Leadership building is crucial for this type of international systems integration business. A key structure via a Resource-Based HR strategy, eg. the VRIO (Value, Rareness, Imitability and Organisation) framework (Barney, 2002) and, leadership building guide, eg. GLOBE Research Project (House, 1992; House, 2004), for teamwork and competitive advantage, could have been used in accentuating a strong and effective workforce.
Providing for expatriate adaptation by the role of anticipatory adjustments can have an important impact on in-country adjustments (Harzing an Ruysseveldt, 2004). However, the perennial culture of "the French hating the English"-manager issue (McRobbie, 2009) may not support this, eg. relationship strains seen by the consultants side-stepping the local manager on pay issues. It may be best to have a local manager to handle the Paris office setup in this case. Contributions of other dimensions in expatriate acculturation, although inconclusive (Mendell and Oddou, 1985), are :
~ Self-orientation : strengthening the expatriate's self-esteem, self-confidence and mental hygiene;
~ Other's orientation : enhancing the expatriate's ability to effectively interact with locals;
~ Perceptual : understanding and correcting attributions to foreigners' behaviours; and
~ Cultural toughness : adjusting to the very different/tough culture of the foreign country.
These acculturation transitions are necessary provisions for their leadership and internationalisation programme. In this "global challenge", they need to look at managing geographically-dispersed workforces, global leadership development and managing change in an international context in building sustainable competitiveness (Evans et al., 2002). Overcoming this challenge may perhaps build the needed recognition and resolve the long-standing "Branding" issue yearned by the clients and staff in the Frankfurt office.
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Practicing proven IHRM concepts and principles and improvements matching changes in international pressures, over time, may have resolved their dilemmas. This strategy advocates best practice and competitive advantage necessary in securing profitable projects from big internationally-operating clients preferring local expertise coupled with familiarity in a trusted systems integration partner. The epitome is receiving "The Malcolm Baldrige National Quality Award" and ultimately, commanding international presence, respect and recognition.
2.0 Yes, research into the national cultures of countries involved in the company's expansion gives better insight to various cultural and societal pressures. Organisations operating in a foreign country is faced with complexities like features of multiculturalism (Harzing, 2004) combined with geographical dispersion in that country (Bartlett et.al., 2007). Cultural integration, from the perspective of a "high" or "low" context differs in societies, within and from country to country.
Research would show the likelihood of resistance for a corporate culture imposed for existing and new countries. However, past studies have argued that cultures do change very slowly (Hofstede, 1980), eg. Russia's collectivist stand with high uncertainty avoidance after the collapse of the USSR, with the emergence of a market economy. On the other hand, there have been instances where national culture may influence human resource policies and practices (French, 2007) with Hassi and Stortie (2010) citing in a research that, as how organisational culture is, national culture can also be as strong a determinant of individual behaviour (Hofstede, 2001; Jacobs, 2003).
i) Power distance.
Nations can be distinguish by the way they deal with inequalities. In any society, inequality do exists. Power distance is how the less powerful members of organisations in a country accept that power is distributed unequally (Hofstede and Hofstede, 2005). However, systematic diference in effectiveness between organisations in large power distance against small power distance countries has not yet been proven by research. The management needs only to utilise the strengths of the local culture.
The power distance index (PDI) in Table 1 below indicates the power distance spread and values among cultures and societies of countries in their expansion programme. In general, high power distance felt is larger between the asian countries of China, India and Singapore, in a descending order, compared to the European countries. The London HQ is the least of worries, in this context.
Where the PDI is large, preceeding the choice between good and evil, legitimate or otherwise, power is seen as the basic facts of society. Between superiors and subordinates, the culture shows that they consider each other as equal, existentially. This is the hierarchical system nowadays. Relationships are frequently loaded with emotions between superiors and subordinates, and where feelings towards a superior is treated equally between like and dislikes, eg. the Indian office trying to dictate by arguing with the HQ in cutting profits/bonuses for market share and the French office's consultants side-stepping the manager issues.
Some examples of the effects of power distance differences are given in Table 1.1 below. A desire for status consistency is typical for large power distance cultures. The main source of power is the ability to use force, eg. frequency of military dictatorships in countries. Scandals involving persons in power are expected, and likewise, their cover up.
The practice of corruption affecting countries and private organisations via large amounts paid in lobbying cannot abrogate the common continuous phenomenon. In China, and many other cultures, the giving of gifts is a ritual and such motive may still constitute a bribe towards persons in power. Fewer checks and balances against power abuse stands for a larger power distance environment, eg. the shareholding given to the Noida manager may raise some resistance for future retraction of his control.
Where the PDI is small, the culture shows superiors and subordinates are pragmatic and consider each other as equal, existentially. The hierarchical system established, is just for convenience and inequality of roles. There seem to be a preference for consultation as there is limited dependence between subordinates and their bosses. Also, there is a relatively small emotional distance between these two groups and subordnates will easily confront their bosses for contradictions, eg. communication breakdown between the Frankfurt office employees and their local manager.
ii) Uncertainty avoidance.
The fact remains that all human beings cannot predict what will happen tomorrow. As the future is uncertain, we have to live by it. The extent that makes most people in a society/culture feel threatened by ambiguity or unknown situations is uncertainty avoidance.
Differences between countries on uncertainty avoidance is also linked to the dimension of power distance. Table 2 below shows the uncertainty avoidance index (UAI) value of countries relative to the company's expansion, a guide in determining the intensity of uncertainty avoidance prevalent in the various local cultures and societies. The London HQ stands somewhere close to the lower centre of the UAI, depicting an averagely acceptance towards uncertainty avoidance.
Where the UAI is high, people in such cultures look for a structure in their organisations and relationships that makes events clearly interpretable and predictable, applicable for France, Germany and the U.S.A. Other factors being equal, people look for long-term employment. In this society, people like to work hard or always busy at the least. High anxiety and xenophobia applies in this context.
Some examples of the effects of uncertainty avoidance differences can be clearly seen in Table 1.1 below.
There is more conservatism and a stronger need for law and order, eg. communication difficulties and staff disengagement experienced in the Frankfurt office. Such countries tend to harbour extremist minorities in their political landscape. However, a majority of these citizens are dependent on the expertise of the government as it is the way they feel it should be done.
Weak uncertainty avoidance stands for low anxiety. In countries with weaker uncertainty avoidance, people tend to be more liberal and there is less of a prevailing sense of urgency, eg. Noida office delaying performance appraisal forms, and unfamiliar risks are accepted, such as changing of jobs or engaging in activties for which there are no rules. A paradox is that although rules in countries with weak uncertainty avoidance are less sacred, they are often better followed. Aggressive nationalism has little appeal but their people are proud of their nationality and willing to stand for it, eg. Paris office consultants overruling their English manager.
2.1 Limitations of these approaches
Hofstede's research studies were based solely on IBM employees worldwide and this does not conclusively represent compatibility in cultural dimensions via a single organisation culture. His research used small samples and results were insufficient to represent all the nations studied and also ignored differences within clusters in the same region via intermittent sweeping comments. Hofstede's Dutch ancestry comes with the inherited culture, and he may base his findings from this cultural perspective, at first entry.
For research findings of the 80's, time has changed the world, especially China's new economic power, adding pressure to cultural acceptance for their expansion. Information and communication technologies, eg. the Internet, have evolved rapidly over the course of time and this may have a decreasing effect on power distance as compared to the original earlier findings of Hofstede (Migliore, 2009). Likewise, greater access to information/data now by people all over the world represents a new type of power distribution, eg. between London and the Asian, France and new U.S.A. offices.
For power distance, findings and results of a single score for some countries does not necessarily mean they are culturally homogeneous as the data did not allow for a splitting up into subcultures, eg. Noida and Paris offices.
Some questions used in building the UA Index had different meanings for different occupations (eg. stress, rule orientation, intent to stay) which does not correlate across occupations. Similarly, gender differences in women and men in the same countries and occupations showed similar stress levels and rule orientation but differed in their intent to stay, eg. the women consultants leaving in the Frankfurt office
Research arguments on the two cultural theories may not be conclusive at any point of time. Continous adjustments to relative components to match changes in time must be made in adapting to pressures in this global era for gaining business edge and competitiveness.