Dowling et al., (2008 pp5) defined International Human Resource Management as the interplay among three dimensions namely: human resource activities, type of employees and countries of operation. Dowling (2008) also view IHRM broadly to cover all issues related to the management of people in an international context. The aim of this academic piece is to look at the cultural theory and its implication for International Human Resource Management (IHRM). The meaning of culture will be looked at and the perspective of Hofstede on culture will be discussed as well as a look at empirical evidences undertaken by researchers.
There is a growing support for the perception that country based elements have a significant impact on international HRM, such factors include: economic, political, legal, historical environments as well as socio cultural characteristics of the workforce and society (Laurent 1983; Torrington 1994 cited in Nyambergera 2000), chief among them being culture as it forms the basis of behaviour of people. Management in today's corporations are therefore being challenged by the cultural diversity of employees.
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Culture according to Dowling et al p.187 (2004) refers to how members of a group or society share a distinct way of life with common values, attitudes and behaviours that are transmitted over a time in a gradual, yet dynamic process. Cultural theories generally adopt a definition of national culture inspired by the everyday language: culture is the way of life of a group of people (Harzing et al 2004p142). Cultural theory studies rest on the hypothesis that implicit differences in national cultural values or assumption are related to diverging managerial beliefs and actions (Child 2002 cited in Harzing 2004). Smith (1992) cited in Nyambegera et al (2000) argues that there is a linkage between cultural values and several organizational behaviours, such as norms of acceptable behaviour, types of conflict, and preferred leadership styles thus the need for cross cultural theory or knowledge.
Although both Hofstede and Trompenaars have contributed to culture, their understanding and dimensions proposed have been different. Whereas Hofstede presents values as the core of culture; Trompenaars argues that meanings are the essential part of culture. Other contributors of culture such as Lane, DiStefano and Maznevski, hold the view that culture is best understood if we look at its value orientations (Harzing et al 2004 p142).
Hofstede defines culture as the collective programming of the mind which distinguishes the members of one group or category of people from another (Edward & Rees 2006 p29) and the interactive aggregate of common characteristics that influences a human groups response to its environment (Holden 2002 p28). Hofstede's definition of culture presents traditional ideas and especially their attached values as the essential core of culture (Kroeber and Kluckhohn, 1952 p181 cited in Harzing 2004 p 148). Hofstede's established five dimensions of national culture included: Power Distance, Uncertainty Avoidance, Individualism v Collectivism, Masculinity v Feminity and Time Orientation.
A comparative study of Japanese managers and British culture by Tayeb (1994) using interview conducted on senior managers of a UK subsidiary of a Japanese electronics firm, Hurricane Corporation, found that adoption of Japanese management techniques and leadership styles in Britain was successful where they modified and adapted to local conditions. Thus the success of management techniques in Britain depended on the subsidiary adopting local culture and formulating policies that were familiar to local British employees.
Entrekin et al (2001) examined the attitudes of Hong Kong Chinese and American managers in Hong Kong to various sources of appraisal of executive performance. The study used self addressed questionnaires. The study found that performance appraisal has been fairly accepted in these Chinese organizations, but that the practice of appraisal has been adapted to suit their cultural characteristics.
Leat et al (2007) undertook a study to identify a range of HRM practices and approaches used by a sample of Egyptian owned organisations operating in Egypt. The study used questionnaire as a data collection method on one hundred and fifty (150) human resource managers and or human resource specialist working in human resources department of Egyptian owned companies. The study found among other things that a range of Human resource management (HRM) practices and approaches normally used in Egypt are culture bound. The range of practices included job descriptions, recruitment and selection, training and development, compensation, performance appraisal and employment security.
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Zu-Ru Hsu and Mike Leat (2000) undertook a study in a sample of manufacturing industry in Taiwan. They used questionnaires concerning HRM and recruitment and selection on personnel or HR managers in five hundred (500) manufacturing companies randomly selected from the Taiwan Trade yellow pages. The study found among other things that recruitment and selection practices were culturally sensitive. However, Hofstede's (1991) finding on Taiwanese culture being relatively high on collectivism and feminity was no longer the case as there was found to be a change of culture related values towards individualism and masculinity.
Nyambegera et al (2000) undertook a study on the impact that individual national culture value orientations have on the preference for the design of Human resource (HR) policies and practices using questionnaire on two hundred and seventy four (274) Kenyan employees from eight (8) manufacturing or processing organisations. The study found among other things that the hypothesis that cultural value orientations influence individual HRM preferences was supported throughout all HRM policies and practice preference was influenced by cultural value orientations. It was evident from the study that the four factors that emerged such as human resource involvement or participation, predictability of rewards and human resource empowerment were related to cultural values while performance versus loyalty-related HRM practices came out as value free. The study shows that, overall, HRM preferences reflect a cultural interpretation as there was significant associations between cultural values and three HRM factors, thus presuming the value orientations of people in developing countries without delineating the cultural domain is inappropriate(Nyambergera et al 2000).
A study by Alavi and Yasin (2003) to examine the value priorities of Iranian managers as well as to know whether Iranian managers tended to be more individualistic or collectivistic in their orientation used survey based methodology and assessed two general categories of human values. The survey was conducted on 2,200 managers working in both public and private organisations in Iran and found among other things that there is a strong influence of the Islamic revolution on the values of the Iranian managers. The influence of religion and conservative culture is manifested in a managerial value profile characterized by collectivist values. The study also found that Iranian managers in larger firms tended to be more inner directed and individualistic in their values whiles smaller enterprise managers were collectivist in their values, a case which supports Hofstede's collectivist versus individualistic dimension of culture. Also Kanungo and Jaeger (1990) cited in Jackson (2002) depicted the organizational situation in developing countries as relatively high in uncertainty avoidance (low tolerance for risk and ambiguity), low in individualism, high in power distance (reflected in a lack of consultative or participatory management) and low in masculinity (a lack of competitiveness and achievement orientation and low centrality of work) and this represents Hofstede's five dimension in practice in Africa.
In contrast Spector (2001) undertook a study to measure the internal consistency (coefficient alpha) of Hofstede's five dimensions of culture using 6,737 employees' mostly in administrative or managerial positions from 23 nations or provinces. All 23 samples answered the same questionnaire from the VSM 94 which assesses five culture values or dimensions proposed by Hofstede. The study found among other things that there is no internal consistency of the VSM 94 questions across the sample and concluded that the "Construct validity of the five VSM scales is suspect, and that they should be used with caution". They also found that Hofstede's data are almost 20years older and that values have drifted in some countries over a generation and this supports a critique by Sondergaard (1994) and Boyacigiller et al (2002) cited in Harzing et al (2004) that Hofstede's theory is obsolete and no longer useful. They also found that Hofstede's data all came from a single US multinational (Hofstede 1984a, 1984b cited in Spector et al 2001).
Buttler et al undertook a study to explore whether British and Kenyan employees of Barclays Africa differ in their perceptions of temporal relatedness and temporal dominance. They used Cottle (1967)'s work on the relationship between past, present and future and involved 65 UK Barclays employees engaged in management and 500 employees of Barclays bank in Kenya. The study found among other things that the Kenyans lack a perception of the future and have a strong perception of the past. The survey also found that Trompenaars and Hampden-Turner's (1997) application of the Cottle circle to specific cultures did not cover African possibilities.
IMPLICATIONS OF KNOWLEDGE OF CULTURE ON IHRM
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Firstly, knowledge of culture and localization of HR staff positions will ensure that local customs and host government employment regulations are followed (Dowling et al 2004 p 189). Also the knowledge of culture is important as they influence the beliefs and behaviours of managers (Harzing et al 2004 p. 142). Finally culture helps to identify cultural behaviour as well as knowledge about implicit aspects of work which are difficult to identify (Harzing et al 2004 p.164).
In conclusion, the primary causes of failure in multinational ventures stem from a lack of understanding of the essential differences in managing human resources, at all levels, in foreign environments thus culture contributes to international human resource management (IHRM). Cross-cultural management does not aim at identifying purely cultural behaviour but rather it helps to acquire knowledge about implicit aspects of work (Harzing et al 2004 p 164) which are difficult to identify. Knowledge of culture dimensions helps to raise cultural aspect of a situation and to provide tailor made solutions to them.