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Explain how Hofstede's theory of cultural differences can be used to develop more effective HR policies for both HOST and PARENT organization.
You are expected to use referred journals article to explain Hofstede's theory and its limitations when you applied to developing effective HRM policies and practices in different countries.
In our world there are many countries and all countries are having their own culture. Culture means style of living life for the country such the way that people in that country dress, food, type of entertainment such music and religion. In some country may have similar culture and some may have culture that totally difference from other country. However, in this report will focus on detail of Hofstede's theory of cultural differences and will explain how the organization for Parent and Host can use to improve Human Resource. Beside that in this report also give illustrate to show the useful of Hofstede's theory when organization want to expand their business in oversea.
Geert Hofstede (2009) spends many years in doing research on how the culture can be influence the value of the workplace. He was collect data analyzed from more than 100,000 people from 50 countries around the world so after he got all the result from his research, he had develop his own theory about difference in culture dimension that call Hofstede. However, Hofstede culture diffence model is include five dimensions that are Power Distance (PD), Individualism (IDV), Masculinity (MAS), Uncertainty Avoidance (UAI) and Short- term and long- term Orientation. (Hofstede, 2009).
Power Distance is focus on power hierarchical this mean there is an unequal to distributed power in that culture. (Noe, et al., 2006). Power Distance is shown unequal in society that person who have high power can have ability to control something. However, in organization in high power distance, all the employees that have lower position have to listen and respect all the order that the boss say that mean employees is not allow to share opinions. Countries that have high Power Distance are China, Malaysia, Philippines, and India etc… In the other hand, countries that have low Power Distance are Japan, Australia, and Denmark etc...
Individualism- collectivism is one of five dimensions in Hofstede. According to Su, Kan and Yang (2010) explain that individualism mean people who tend to focus on their own benefit or own interest more than group. In this culture people are have high personal achievements. Countries that have this culture are includes United State, UK, and Netherland etc… Conversely, collectivism is focus more in group, concern more on group benefit more than individual. People in this culture tend to help each other to do the task, share opinions among the group more than working alone. Countries that have this culture mostly are Taiwan, Colombia, and Pakistan etc…
Uncertainty avoidance means the level that employees feel threatened by unforeseen or uncertain situations. Culture that have high Uncertainty - avoidance means people in that country do not want to take high risk. Organization within this culture had design the stick rules and procedures for employees to follow so they can avoid their business from the risk and maintain stability of organization. However, there is unnecessary to follow some of the rules. In opposite, cultures that have low Uncertainty - avoidance, organization may have few rules or procedures to follow if compare to high Uncertainty - avoidance culture, people in this culture believe that some problems can be solved without formal's rule.( Tavakoli, et al., 2003).
The fourth dimension is Masculinity - Femininity. Clements, Neill and Stovall (2010) said that Masculinity is society that separate between men and women. In this society men are likely to be more assertive, strong, ambitious, materialistic and more competitive than women. In opposition, Femininity society is more focus and concern on caring other, family and quality of life. Individual are more modest, tender and nurturing. In high Masculinity, women are expected to stay at home to take care of family such as Japan and Korea.
Long-term and Short-term orientation is the fifth dimension in Hofstede culture differentiating. Long - term orientation is aim for the future reward and point out the value thrift and persistence. In the other hand, short - term orientation refer to past and present's virtues. Short-term orientation concerns on protect their own face because people that have this culture will scare to loss their face and they will maintain personal stability. Country that has long- term orientation is Korea. Moreover, USA is a country that has short- term orientation. (Self, Self, 2009).
According to discussion above, Hofstede culture dimension shows that there are many differences areas in culture that organization have to concern before organization will operate their business in oversea. Organizations have to study and analyzed the culture differences before they can operate new organization in foreign country to make sure that organization will not face the failure due to cultural conflict between Home and Host country. Hofstede's theory also necessary for organization to improve HR department to be more effectiveness in both Home and Host country, because Hofstede helps HR to understand more about the differences in culture so they can select employees that match with organization when expand in oversea. By the way, organization should not apply the same practices that Home organization process to the Host country because there are many differentiating between two countries.
In addition, there are many worldwide companies that want to expand their business in oversea to make their company get high profit. However, to success in international market, organizations have to know how to apply Hofstede's theory to help managers manage organization successfully in gobble market. Najera (2008) said to operate new branch in oversea managers have to well understand the area and have to learn the cultural differences before they enter to that country. In the article, he had give the scenario that how Mexican workers behave when they work in manufacturing. However, refer to Hofstede's theory, Mexico is a high Power Distance society that means the power gap is very wide from the top to the bottom. Workers just follow the tasks that have been set for them. Furthermore, Mexico is high Uncertainly Avoidance culture, they are concern more on security of their life and family. Mexico workers are enjoying with their current situation and enjoy what they have rather than think for what they will do in future. In addition, Mexico is a collectivism country that means people tend to work in team more than work alone. Mexican always shares their opinion with other and cares other people around them. Mexico is masculinity country, men believe that they have more ability over women and women have to stay at home to take care of family while their husbands go out for work. However, LG Electronics is a global organization that has headquartered in Korea. Use LG Electronics group as a parent organization that expand their business to Mexico. Human recourse department of LG cannot use the same strategies that home country used to select, motivate, train and retrain its employees in Mexico but they can use the understanding of Hofstede culture dimension to help to select employees in Mexico. By the way, to motivate Mexican workers, manager have to work with them by respectful and guide them on the task, work closely with them to make them feel that you are respecting them. Mexico people are happy with their current situation so manager have to motivate them by giving them some reward after finish the work to make them feel happy to work for your organization. Moreover, there is something happen manager should not let workers make a decision by themselves. Manager should make workers work in team because they can help each other and will make an increase in production line. Manager should encourage workers by show them emotion feeling that make them feel that you care them so if manager can follow this, workers will get more motivation to do their work and also make organization achieve the objects.
Hofstede's theory is very useful for organization due to it helps organization to understand the differences in culture and organization can apply this theory to manage their organization in other culture in oversea. Furthermore, Hofstede's theory also has several limitations by itself. First, Hofstede's theory used small sample size that will make the result may of research not be accurate. (Mihhailova, 2009). Second, Hofstede's theory defined the culture differences for many years ago but cultural in every countries are keeping change all the time. For example, during his research, Japan is low Individualism but in the future Japan may not be the same low Individualism. Beside that religious also one factor that can make people in one country behave indifferences way such Singapore is country that have multiple religions in one country so people that believe in Buddhism may not behave same as Christian and Muslim.
Therefore, there are many countries that have same culture and many countries that have difference culture. In term of business if organization want to successful in global market, organization must study and understanding the difference between Parent and Host's country to avoid the culture's conflict that may be bad effect for organization if there are something wrong against the Host's culture. In order to be success in foreign country, Multinational Corporations have to train employees before send to Host's country, due to they can study more on local culture to get understand the life style in that area so the manager in the Host's country can develop the effective of Human Resource because they understand the situation and culture in that country.