HRM and Cultural Differences - Assignment Example

HRM and culture "Cultural difficulties can be difficult to manage, even if they are anticipated" (SchulerR et al 2004). Discuss this assertion in relation to how managers can overcome problems arising from cultural differences of employees. The simplest method for an HR manager to control cultural conflict and the differences in culture between various employees is through the use of the HR policies which are created, maintained and enforced by the company. To show differences in culture based management, a variety of examples can be given from companies spread across various countries to form a better answer. Fundamentally, globalisation has made the world smaller than what it used to be and the HR managers are often placed in companies which might have distributed teams in different countries. A Company can have a head office in London while the production or development work is carried out in Beijing or Delhi. The cultural differences between the three cities and respective countries are therefore enormous challenges which the HR manager has to overcome. This means that there are new issues which must be addressed by HR managers who can now be called on to create company wide policies which affect the people working in London as much as they affect employees working in other parts of the globe. Introduction Implementing an HR policy, while observing cultural differences, is a rather difficult task. The HR manager who is assigned to the job may have to balance several cultural, national and business systems related issues within the same policy. Cultural differences are perhaps the largest set of problems since the expression is used as a general term for all the disparities which people may have in their workplaces from country to country and city to city. In fact, I think that the removal or at least the lessening of cultural differences could be the best course of action a HR manager could take. However, it must be realised that culture is sometimes essential for an individual and care must be taken in not offending or demoralizing any employees. This problem is actually at the heart of the definition of globalisation and a new world order for business where we are moving towards a combination of cultures that represent us as humans. A company wide HR policy manual can be a document which sets up the culture of the company even as an isolated bubble in a place where the outside culture is totally different. It must be done carefully because this could also be dangerous as going with policies which are against local cultures can create bitterness and even a loss of human capital. GE was one such company which experienced these issues when they setup their operation in Hungary and found it difficult to export their American brand of competitiveness to the Hungarians (Welch, 2005). Multiple Cultures The effort is made more difficult by the fact that international companies by their character and description may have origins in countries other than their main operations base (Edwards & Kuruvilla, 2005). Microsoft originated in the U.S. and it is still its home, yet the bulk of their software is produced in India. Wipro started from India, yes has established offices in Sweden and London. An HR manager should consider the global nature of the company and the diversity of the employees before the HR policy is formed (Faulkner, et. al. 2002). The concept of working on the international level must be paramount for the HR manager who seeks to resolve cultural differences in employees. This is because the creation of a universal policy to fit every employee would be asking too much from a document. However, in many cases companies overlook this important aspect of the creation of HR policies and the resulting situation has managers based in the company head office creating policies for the global locations of the company without being aware of local cultures and customs. Strategic HR related decisions could be made in isolation by the nationals of the home country and these decisions are handed down to line managers in offices abroad (Edwards & Kuruvilla, 2005). Such a policy creation system would have a negative effect towards the HR practices and hurt the net cultural influence of the company. It stretches the concept of globalisation to its very end and can have more disadvantages than advantages for the HR managers. Successful Management of Different Cultures The effective creation and implementation of an international HRM policy is a complicated matter which depends most on how far the company is willing to go to get its policies accepted. GE is one such company which went all the way and summarily removed people from service who had a cultural mismatch with the company (Welch, 2005). While that is one way to handle cultural differences, it takes time, effort and extensive resources before a company is able to create its own culture even in a different country and often most companies would not have the budgets which GE controls. In that case, a company can use elements like interactions between policy makers, levels of decision making in the company, the nature of the business, willingness of culturally different employees to accept the polices, personal connections between individuals at the home and branch offices, level of diversity within the company and several other important aspects which can all be used to make the policy a shining success or a stunning disappointment. These elements form an integral part of the basic human resource policies and can be used to ensure that a company has effective means of management in case there are conflicts. The factors listed above can not be given importance ratings since all are important for any multicultural company. However, each element can be case dependant as per the needs of the company and the situation it finds itself in. Cultural Challenges Culture has several definitions and in the context of global HR management as well as management where multiple cultures are involved, the definition has to be broadened. An HR manager has to be aware of the culture of the organisation as well as the culture of countries where the company operates. S/he must also examine the differences in national cultures which have a definite impact on the HR operations of a company. It is possible to say that the culture of the organisation will be more important within the walls of the office; Laurent believes that the effect will be nothing more than an illusion and will be detrimental to the enforcement of HR policies (Laurent, 1986). On the other hand, the example of GE stands in complete contrast to what was reported by Laurent (1986). GE’s culture was based on individuals and intrinsic motivation which helps its employees seek benefits for the company while they seek benefits for themselves. As outlined by Jack Welch in his management related book Winning (2005), GE rewards those employees who are instrumental in helping GE grow and achieve the corporate vision and punishes those who are not performing to the highest level. In fact, layoffs and quarterly removal of lowest performing employees is an essential part of the management style employed at GE. However, when it is difficult to find individuals in great numbers who have intrinsic motivation as well as the spirit to be absorbed in the company’s culture, GE’s management style would be difficult to implement. I believe that the ideas given by Laurent are closer to the truth about management across multiple cultures. Especially those ideas which are connected to the international management of HR. He compares the culture of the office in the host nation as opposed to the culture of the host nation itself and describes circumstances where there is a possibility of a significant culture clash in terms of various cultural relationships that exist between the employer and the employees in terms of work performance (Laurent, 1986). That is one of the reasons which led GE to lay off those employees who could not understand the culture at GE in terms of individual performance evaluations. One of the most important cultural differences between individuals and countries is the language spoken by them. It has been commonly accepted that language is an essential part of the culture of a place and the differences between languages can create problems which translations of HR policies might not be able to cover. This is particularly true for production and industrial facilities where the labour being employed may not be as fluent in English as compared to the managerial positions where English is more or less mandatory (Bardhan, 2006). In such cases, HR policies might need to be created in the language they are enforced rather than translated from a different tongue. The second cultural norm is the living standard to which the people are accustomed to in various countries. Individuals in Europe may value their free time more than the money they would earn while working. Additionally, Europeans have had a high living standard for several decades while the majority of Indian or Asiatic workers have lived in relative poverty. Such cultural norms can create differences in the way incomes, bonuses or salary increments are handled at two different locations within the same company. However, the concept of low wages and low standard of living could be moving towards extinction in developing nations since a twenty year time period study for china shows that between 1981 and 2001 the percentage of people living on less than $1 a day was reduced from 79 to 27 percent (Bardhan, 2006). Even then, the historic legacy of having less exists in certain countries and must be carefully treated as should the idea of high wages for certain positions within the company across the board. Personal Norms It is often proposed that the employees in host countries may adjust their working cultures to head office specifications (Welch, 2005), but the culture in which they had been born and raised could never be completely taken out of them (Kidger, 1991). Deeper personal and societal norms of individuals and cultures may be utilized to change the meaning they take from company values and mission statements which might at the end of the day give the company altered/unexpected outcomes from their strategic management and human resource policies. Therefore, Laurent (1986) recommends that the national culture of the country should be given attention and should be made a part of any HR policies. He says that the purpose of international human resource management is to use all that the managers know about the conflicting cultures across the company and come up with solutions to a create an equation between the national and organizational cultures. A British company which wants to setup a business in India would have to conform to some of the same norms and regulations which are followed by the Indians as a part of their culture. The Indian office of the company would therefore take HR cues both from the culture of India as well as the culture of the company in Britain. This is true to the extent that importing HR policies from different cultures also becomes difficult. Kidger (1991) says that British managers are often told to learn from the management styles of other nations which are thought to be better in HR management than the managers in the U.K. Policies are imported from America, Sweden, Germany or Japan to handle international HR issues in Britain without taking into account the cultural differences of the countries and often lead to failed implementation. Therefore, any manager who wants to consider bringing in a HR policy or idea from one country to another has to consider national culture differences (Kidger, 1991). At the same time, there are critics who say that national culture should not be given too much importance since it gives the branch offices too much power as compared to the home office and the political equation is destroyed. HR managers should look at other influences like the company’s links within the country and division of labour for management decisions. Additionally, since culture is hard to define in a perfect sense and the definition it self can often change quickly as per external pressures, Edwards & Kuruvilla, (2005) suggest that the internal politics and the workings of the organization will have a greater effect on the human resource policies than the cultures the company is connected with. Organizational Politics An understanding of politics, in terms of how it shapes the intercultural relationships of members of the company is an essential requirement for HR management. Formalised roles remain the main source of power in an international company but power can also be obtained by individuals or branch offices that control the resources within a company. In most cases, the home office controls resource allocation so power resides at the centre and the work culture of that centre radiates outwards to branch offices. However, this also creates resentments towards the policies given by the home office and HR management may suffer due to the internal politics of a widely distributed company (Edwards & Kuruvilla, 2005). In fact, the situation may get to the point that managers at the local level may seek to negate corporate HR policies or any HR related guidance coming from the home office. Local managers may create hurdles during policy creation or even block the policy from being enacted in the branch office without informing the base. Edwards & Kuruvilla (2005) say that this tends to happen when local managers see their own influence erode or their culture come to a clash with the larger policies of the company. Local Cultures This would certainly be an unexpected move from local managers given their place in the overall hierarchy of an international multicultural company but their strength comes from their belief that executive managers in the home office are dependant on managers in branch offices. The capacity of branch managers to confront orders from the home office will be better where corporate level managers have major communication hurdles between them and the local managers (Edwards & Kuruvilla, 2005). For all practical purposes, it should be understood that local managers can and might defy those policies which are not devised with their culture in mind. HR policy will be useless without support from local managers. They serve as the international HR managers’ best friend by being crucial mediators between the firm and the local employees since they have a high level of familiarity about the local systems in ways an outsider can never have (Edwards & Kuruvilla, 2005). However, if they choose to resist the HR policies, they can create a lot of problems which were evident in the case of Japanese automobile companies working in the UK where British managers showed extreme resistance to the company’s global policies (Broad, 1994). Home Office Managers In certain cases, even the home office managers can take a confrontational position and may actually use international HR policies as a means towards improving and solidifying their personal positions within the company. In such a toxic environment, the HR policies which are supposed to align cultures for a common purpose become weapons which are used as and when needed Edwards & Kuruvilla (2005). This idea is also supported by Martin and Beaumont (2001) who add that home office managers can also wish to create new policies or modify existing policies simply because they want to bring about a change in the way the company operates. Solutions The central objective for the multicultural policy maker should be achieving good communications with all concerned parties. Poor communications and issues in getting to an understanding between offices or individuals with different cultures will lead to many of the problems outlined above. Management personnel should look into temporary cultural transfers across business units which might help in creating effective communication systems across these units (Kamoche, 1996). A high level of positive communications will bring the various cultures of the company together and increase the likelihood of getting to culturally acceptable HR policies. Culture Sharing Additionally, a sharing of cultures can take place which can lead to an understanding of why certain policies are required for the company are not against or supportive of any particular culture which is upheld by an individual or a group within the company. While this step may not lead to an individual’s complete agreement with the company’s HR policies, people can be shown why certain policies are in place (Kamoche, 1996). With some bargaining on and explanation of the incumbent policy, the implementation of the culturally correct HR policy can be made that is broadly the same across all the various locations where the company has its offices. Local HR practices Since there are a number of problems with creating a global HR policy, it can be suggested that multiple policies for HR (depending on location and culture) might be more useful for a company which has to deal with several cultures. Localised decision making on HR policies can then take place which takes a lot of the burden away from the home office HR manager. Local managers should be able to handle human resource problems with the national culture in mind rather than trying to achieve solutions based on some other culture (Bartlett and Ghoshal, 1998). Such a situation would lead to an improvement in the decision making process as well as the company’s ability to handle local problems locally. A different local HR policy would also be beneficial since it would be compliant in legal terms to the labour code of the country where the policy is established. Employment law and contractual relationships between employers/employee may change from country to country and region to region. With a localised HR policy, not only would the cultural differences be covered in the HR policy but also the legal requirements of the region. A combination of local and international HR policy appears to be the best solution for combining various cultures within a company. The larger directives for the company could come from the head office which directs the local managers for the kind of culture they wish to create in a company. The local managers can then use the directions given to adapt the policy to work within their own cultures. The only foreseeable problem here is that the maintenance and further development of such a layered policy can become problematic if both local and international managers try to adapt the policy at the same time. Conclusion While cultures around the world have developed in opposition and seldom in collaboration to each other for many centuries, the HR managers of the world today are faced with the problem of getting different cultures to work together for the achievement of a single goal for the company. There are always limits to what can be done with culture and how far two people or offices from different cultures can work together without confrontation but with good management and effective policies conflict can be minimized and even eliminated altogether. While we have input from various sources on how differences in culture can and should be handled, it eventually comes down to the individual situation or the case which we have in front of us where particular solutions can be applied. Often, no single solution will work to solve all the problems of a company where cultures are clashing. In certain cases, the cultural clash may be great enough to provide grounds for service termination of an individual or a company pulling out of operations in a country. However, in most cases, communications, understanding and effective policy making can save the day for the HR manager who has to deal with different cultures. Word Count: 3,498 Works Cited Bartlett, C. & Ghoshal, S. 1998. 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