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National culture play integral role in the development and effectiveness of human resource management strategies and policies because every country has its own culture. For understanding the national culture of any country where multi national companies want to penetrate its business is a big challenge for human resource professional of that company because HR department has to develop strategies by keeping in mind the national culture of that country for achieving its objectives and goals.
This view was a challenge to a study by Child et al. (2000), who examined what types of changes, would be introduced to British companies when taken over by foreign companies. In particular, the study tried to identify whether there were nationally distinct approaches to management following the acquisitions. The study found that the process of acquisition was rapidly followed by significant changes in management practice but that some practices were common to all companies while others conformed to accepted characterizations of national management practice. The national conformation was clear in the case of Japanese and US acquirers, but less so for French and German firms.
By using Hofstede's framework of national culture (power distance, individualism Vs collectivism, masculinity and femininity, uncertainty avoidance ), the objective of this essay is to analyzes the impact of national culture on development and effectiveness of human resource management strategies and policies. Above national cultural dimensions reflect human thinking and feelings of people which create basic problems that any society has to manage but it solutions vary from country to country.
Recruitment and selection is the key function of human resource management before starting this process, human resource professional has to analyze the national culture of that market. If national culture of particular country is individualism then human resource management professionals makes strategies according to its culture. In individualism dimension of national culture, human resource management professionals will sure that these types of people can be transfer any where in the country & outside the country because these types of people are concentrating only on individual career and have no care of its family except immediate family. They want progress at any case. On the other hand, if culture dimension of particular country is collectivism then human resource management professionals have to develop strategies accordingly because this category of people are family conscious.
If Taiwan MNC want to penetrate in British market then it's require to understand its national culture. Taiwan national culture is entirely different from British culture because Taiwan culture has been categorized into high in power distance, low in individualism, moderate in uncertainty avoidance and masculinity, and high in long-term. Now its recruitment and selection strategy has been developed on the basis of these dimensions of its national culture. Taiwan companies normally target its friends and relatives for recruitment. The British companies use application forms, aptitude test and panel interview for recruitment and selection. The British MNC has to develop selection & recruitment strategy by keeping in mind the national culture of Taiwan for penetrating in its market.
Training and development play key role in building competitive skills and expertise among the employees in their respective fields. For getting the desired outcomes, it is critical to design the training and development program by keeping in mind that how employees will behave towards these training programs. For designing the training programs according to the taste of employees, there is required for human management professionals to deeply understand the national culture of that market because performance of the employees link with effective training which affect the overall organizational performance. For example, the country which has high power distance dimension in national culture, the most effective training and development is to concentrate on "On the Job Training" because in high power distance countries employees consider their supervisor as father and obey all his instructions. So, human resource management professionals have to make more effective these training programs. If we look at Taiwan MNC in their home country, the human resource management professionals is concentrating on "On the Job Training" for their employees because it will be more effective. On the other hand, UK firms are mostly concentrating on different training and development programs.
Those countries which have low individualism, the Human resource management professionals has to develop compensation strategy which encourages team building and group work because these people love to work in team. The manager should be given the reward on the basis of cooperation because employees will give him importance like father. This leads to achievement of organizational objectives and goals. The human resource professional should give more intrinsic rewards for these people. Intrinsic reward will increase the motivation level and commitment of employees which result increase in employee performance as well as organizational performance. In Taiwan, the firms give the pay to its employees on the basis of team but the British firms give the reward and punishment on the basis of individual performance because this country has high individualism which has deeply impact on the development of compensation system.
Lincoln electric was very successful due to its compensation system (Piece rate) in USA. They claimed that this system can be applied globally but when the company expand its manufacturing units in the European countries. The productivity of organization was affected. This system was failed in Germany, Maxico and Korea etc. The main reason of the failure of piece rate compensation system was national culture of USA was entirely different from these countries. That's why same Human Resource Management strategies cannot be implemented in the other national cultures which have different cultural dimensions.
For developing performance evaluation system (PES), it is very important to understand individualistic culture and collectivistic culture for Human resource management professionals. If the Human resource management professionals of company develop performance evaluation system for individualistic culture then it has to focus on individual performance and it has to develop techniques which can measure individual performance. In collectivistic culture, human resource management professionals will concentrate on group performance evaluation measurement techniques. The dimensions of national culture suggest that there is correlation between the impacts of some dimensions on performance evaluation system. For example, high degree of collectivism affects the performance evaluation system in a same way as high degree of uncertainty, femininity, and high power distance. On the other hand, individualism, low power distance, muscularity and low uncertainty avoidance have same impact on the performance evaluation system. Shortly, two broad category of culture has been identified. The human resource management professionals have to identify the category of culture before developing performance evaluation system.
Job satisfaction, employee commitment, and motivation and employee involvement are important dimensions of organizational performance. It is always very big challenge for every human resource management profession to build these characters among different employee in diverse culture by developing effective human resource strategies for getting the organizational objectives. In the national culture which has dimension of individualism, the human resource management professionals will more concentrate on intrinsic reward because these types of people only running after materialistic things and human emotion have no value form them. On the other hand, where the market has collectivism dimension then the human resource management professional will more concentrate on extrinsic reward like Eid holiday, Charismas holiday, allowed compulsory leave in case of death of any member from his group because these types of people are more conscious about the group of society.
Cultural diversity also plays a prominent role in the formulation and implementation of human resource strategies. It depends on the human resource professionals that how they articulate the issues related to diversity and how they integrate diverse workforce on a single and common objective. How they convert diversity, among the individuals of the organization, into a success story towards a common organization culture and innovation. It's the basic principle of human resource management that human resources are the greatest assists for the organization and organization's success completely depends on the people belong to that organization. Through workforce diversity companies can improve their overall performance and can gain more profits but its depend on the human resource professional that how they make strategies to convert diversity into strength.
Finally, from the above discussion we can conclude that there is direct relation between national culture and development & effectiveness of human resource management strategies because human resource management strategies which are developed by keeping in mind the national culture of particular market will result increase employees motivation, employee involvement, productivity, job satisfaction and commitment towards its work which result increase their performance. Then ultimately, overall performance of organization will increase and organization will achieve its objectives and goals. As I have discussed earlier that compensation system of Lincoln electric was successful in USA market because this strategy was most suitable for national culture of USA but not for Germany, Mexico and Korea. So, national culture is the major weapon for the development of human resource management strategies and effectiveness.