Introduction to IHRM

What is IHRM?

International HRM is the interplay among the three dimensions of: Human Resource Activities (Procure, Allocate, Utilize) Type of employees (Host-country nationals, parent-country

nationals, and third country nationals)

Countries of Origin (Host, Home, Other) - Morgan

Journey of IHRM

Initially, IHRM was mainly concerned with expatriate management and its associated challenges for international managers and MNEs

Concept of IHRM has changed over the period

Approaches of IHRM Cross-cultural Management: Examining human behavior within

organisations from an international, or more specifically, the intercultural perspective

Describe, compare, and analyze HRM systems in various countries

Seeks to focus on aspects of HRM in multinational firms: Includes issue of expatriate management as well as the challenges of global standardisation and local adaptation of HRM in the multinational enterprise

Domestic & Intl activities of HRM function

The cultural Environment

The industry (or industries) within which the multinational is primarily involved

Complexity involved in operating in diff countries and employing different national categories of employees

Attitudes of senior management

Extent of reliance of the multinational on its home-country or domestic market

Variables that Moderate differences between Domestic and International HRM

Index of Transnationality

Developed by United Nations Conference on Trade and Development (UNATAD)

Is a survey of FDI Is an average of ratios of foreign assets to total assets; foreign

sales to total sales; and foreign employment to total employment

Critical to success of all organizations, in increasingly global marketplace is the ability to plan to, attract, develop, and retain capable and committed employees, whether this human talent is found at home or abroad

Factors Influencing Global Workforce Management

External Factors 1. Economy 7. Intergovermental Organizations (UN, ILO, 2. Social Preferences (OECD, WTO, IMF) 3. Competition 8. Employee- Interest Org. (Labour Unions, 4. Demographics Employer & Prof. Associations, NGOs) 5. Innovation (Technology, Mgt. Practices) 6. Governments (Individual Govt, Multilateral Agreements, G-20, G-77)

Internal MNC Factors Company Culture Company Climate Company Strategy Organizational Structure

Global Workforce Management

CULTURE

What is Culture .The pattern of basic assumptions that a given group has invented, discovered, or developed in learning to cope with its external adaptation and internal integration, and that have worked well enough to be considered valid, and therefore, to be taught to new members as correct way to perceive, think, and feel the relation to those problems.

Source: Toyota Culture: The Heart and Soul of the Toyota Way

What is Culture

The collective programming of the mind distinguishing the members of one group or category of people from others.

- Greek Hofstede

Artifacts

And

Behavior

Norms and value

Underlying Assumptions

What we see: What a newcomer, visiotor or consultant would notice (e.g. dress, orga. Culture, charts, physical layout, degree of formality, logos, mission statements)

What they say: What we would be told is the reason why things are the way they are and should be. Company philosophy, norms and justifications

What they deeply believe and act on: Unconscious, taken-for-granted beliefs and about the organization and its work/purpose, about people, rewards and punishments Three Levels of Culture (Schein; 1984)

Norms

- Accepted rules of behaviour. - Generally not written down, but everyone knows basic

rules of behaviour (e.g. how to dress, what is appropriate to say in meetings)

Values

- Principles we live by

Underlying Assumptions

- What do we assume about the nature of organization and our role in it?

Culture is like an

Iceberg

Culture is Learned

Rather than inherited biologically Enculturation: The transmission of culture from

one generation to the next .

Culture is Shared

By members of a society and produces behavior that is intelligible (able to be understood) to other members of that society

Society vs. Culture Society: An organized group or groups of interdependent people who

generally share a common territory, language, and culture and who act together for collective survival and well-being.

There can be no culture without a society, there are no known human societies that do not exhibit culture.

Cultural Anthropologists focus on the Cultural aspect of society. The study of society itself is Sociology (very closely related discipline to Cultural Anthro).

Subcultures

Cultural variation between subgroups in societies that share an overarching culture.

Ex: Ethnic group (A type of subculture). People who collectively and publicly identify themselves as

a distinct group based on various cultural features such as shared ancestry and common origin, language customs and traditional beliefs.

Ethnicity: The expression of the set of cultural ideas held by an ethnic group

Pluralistic Society: A society in which two or more ethnic groups or nationalities are politically organized into one territorial state but maintain their cultural differences

Culture is Based on Symbols

Models of Culture

Halls Model Hofstedes Cultural Dimensions Trompenaars Cultural Dimensions

Halls Model of Culture

Context High Context Culture Low Context Culture Time Monochronic Time Polychronic Time Space High territoriality Low territoriality

High Context and Low Context

In a high-context culture, there are many contextual elements that help people to understand the rules. As a result, much is taken for granted. This can be very confusing for person who does not understand the 'unwritten rules' of the culture.

In a low-context culture, very little is taken for granted. Whilst this means that more explanation is needed, it also means there is less chance of misunderstanding particularly when visitors are present.

Factor High Context Low Context

Overtness of messages Many covert and implicit messages, with use of metaphor and reading between the lines.

Many overt and explicit messages that are simple and clear.

Locus of control and attribution for failure

Inner locus of control and personal acceptance for failure

Outer locus of control and blame of others for failure

Use of non-verbal communication

Much nonverbal communication More focus on verbal communication than body language

Expression of reaction Reserved, inward reactions Visible, external, outward

reaction

Cohesion and separation of groups

Strong diistinction between ingroup and outgroup. Strong sense of family.

Flexible and open grouping patterns, changing as needed

People bonds Strong people bonds with affiliation to family and community

Fragile bonds between people with little sense of loyalty.

Level of commitment to relationships

High commitment to long-term relationships. Relationship more important than task.

Low commitment to relationship. Task more important than relationships.

Monochronic and Polychronic Time

Monochronic time

It means doing one thing at a time. It assumes careful planning and scheduling. Monochronic people tend also to be low context.

Polychronic time

In Polychronic cultures, human interaction is valued over time and material things, leading to a lesser concern for 'getting things done' -- they do get done, but more in their own time.

Factor Monochronic action Polychronic action

Actions do one thing at a time do many things at once

Focus Concentrate on the job at

hand Are easily distracted

Attention to time Think about when things

must be achieved Think about what will be

achieved

Priority Put the job first Put relationships first

Respect for property Seldom borrow or lend

things Borrow and lend things

often and easily

Timeliness Emphasize promptness base promptness

relationship factors

High Territoriality and Low Territoriality

High territoriality

Territoriality extends to anything that is 'mine' and ownership concerns extend to material things. People high territoriality tend also to be low context.

Low territoriality

People with lower territoriality have less ownership of space and boundaries. They tend to be high context.

Hofstedes Model

Greek Hofstede found that there are six dimensions of culture that help explain how and why people from various cultures behave as they do.

Dimensions of Culture

Power Distance Uncertainity Avoidance Individualism Vs Collectivism Masculinity Vs Femininity Long term orientation Indulgence Vs Restrain

Power Distance: the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally

Uncertainty Avoidance: deals with a society's tolerance for uncertainty and ambiguity. It indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations. Unstructured situations are novel, unknown, surprising, different from usual. Uncertainty avoiding cultures try to minimize the possibility of such situations by strict laws and rules, safety and security measures, and on the philosophical and religious level by a belief in absolute Truth

Individualism Vs Collectivism: degree to which individuals are integrated into groups

Masculinity Vs Femininity: refers to the distribution of emotional roles between the genders which is another fundamental issue for any society to which a range of solutions are found. The IBM studies revealed that (a) women's values differ less among societies than men's values; (b) men's values from one country to another contain a dimension from very assertive and competitive and maximally different from women's values on the one side, to modest and caring and similar to women's values on the other.

Long Term Orientation: Long- term oriented societies foster pragmatic virtues oriented towards future rewards, in particular saving, persistence, and adapting to changing circumstances. Short-term oriented societies foster virtues related to the past and present such as national pride, respect for tradition, preservation of "face", and fulfilling social obligations.

Indulgence Vs Restrain: Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun. Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms.

Small Power Distance Large Power Distance

Use of power should be legitimate and is subject to criteria of good and evil

Power is a basic fact of society antedating good or evil: its legitimacy is irrelevant

Parents treat children as equals Parents teach children obedience

Older people are neither respected nor feared

Older people are both respected and feared

Student-centered education Teacher-centered education

Hierarchy means inequality of roles, established for convenience

Hierarchy means existential inequality

Small Power Distance Large Power Distance

Subordinates expect to be consulted Subordinates expect to be told what to do

Pluralist governments based on majority vote

Autocratic governments based on co-optation and changed by revolution

Corruption rare; scandals end political careers

Corruption frequent; scandals are covered up

Income distribution in society rather even Religions stressing equality of believers

Income distribution in society very uneven Religions with a hierarchy of priests

Weak Uncertainty Avoidance Strong Uncertainty Avoidance

The uncertainty inherent in life is accepted and each day is taken as it comes

The uncertainty inherent in life is felt as a continuous threat that must be fought

Ease, lower stress, self-control, low anxiety

Higher stress, emotionality, anxiety, neuroticism

Higher scores on subjective health and well- being

Lower scores on subjective health and well-being

Tolerance of deviant persons and ideas: what is different is curious

Intolerance of deviant persons and ideas: what is different is dangerous

Comfortable with ambiguity and chaos Need for clarity and structure

Weak Uncertainty Avoidance Strong Uncertainty Avoidance

Teachers may say I dont know Teachers supposed to have all the answers

Changing jobs no problem Staying in jobs even if disliked

Dislike of rules - written or unwritten

Emotional need for rules even if not obeyed

In politics, citizens feel and are seen as competent towards authorities

In politics, citizens feel and are seen as incompetent towards authorities

In religion, philosophy and science: relativism and empiricism

In religion, philosophy and science: belief in ultimate truths and grand theories

Individualism Collectivism

Everyone is supposed to take care of him- or herself and his or her immediate family only

People are born into extended families or clans which protect them in exchange for loyalty

"I" consciousness Right of privacy "We" consciousness Stress on belonging

Speaking one's mind is healthy Harmony should always be maintained

Others classified as individuals Others classified as in-group or out-group

Personal opinion expected: one person one vote

Opinions and votes predetermined by in-group

Individualism Collectivism

Transgression of norms leads to guilt feelings

Transgression of norms leads to shame feelings

Languages in which the word "I" is indispensable

Languages in which the word "I" is avoided

Purpose of education is learning how to learn

Purpose of education is learning how to do

Task prevails over relationship Relationship prevails over task

Femininity Masculinity

Minimum emotional and social role differentiation between the genders

Maximum emotional and social role differentiation between the genders

Men and women should be modest and caring

Men should be and women may be assertive and ambitious

Balance between family and work Work prevails over family

Sympathy for the weak Admiration for the strong

Both fathers and mothers deal with facts and feelings

Fathers deal with facts, mothers with feelings

Femininity Masculinity

Both boys and girls may cry but neither should fight

Girls cry, boys dont; boys should fight back, girls shouldnt fight

Mothers decide on number of children

Fathers decide on family size

Many women in elected political positions

Few women in elected political positions

Religion focuses on fellow human beings

Religion focuses on God or gods

Matter-of-fact attitudes about sexuality; sex is a way of relating

Moralistic attitudes about sexuality; sex is a way of performing

Short-Term Orientation Long-Term Orientation

Most important events in life occurred in the past or take place now

Most important events in life will occur in the future

Personal steadiness and stability: a good person is always the same

A good person adapts to the circumstances

There are universal guidelines about what is good and evil

What is good and evil depends upon the circumstances

Traditions are sacrosanct Traditions are adaptable to changed circumstances

Family life guided by imperatives Family life guided by shared tasks

Supposed to be proud of ones country

Trying to learn from other countries

Short-Term Orientation Long-Term Orientation

Service to others is an important goal Thrift and perseverance are important goals

Social spending and consumption Large savings quote, funds available for investment

Students attribute success and failure to luck

Students attribute success to effort and failure to lack of effort

Slow or no economic growth of poor countries

Fast economic growth of countries up till a level of prosperity

Indulgence Restrained

Higher percentage of people declaring themselves very happy

Fewer very happy people

A perception of personal life control A perception of helplessness: what happens to me is not my own doing

Freedom of speech seen as important

Freedom of speech is not a primary concern

Higher importance of leisure Lower importance of leisure

More likely to remember positive emotions

Less likely to remember positive emotions

In countries with educated populations, higher birthrates

In countries with educated populations, lower birthrates

Indulgence Restrained

More people actively involved in sports

Fewer people actively involved in sports

In countries with enough food, higher percentages of obese people

In countries with enough food, fewer obese people

In wealthy countries, lenient sexual norms

In wealthy countries, stricter sexual norms

Maintaining order in the nation is not given a high priority

Higher number of police officers per 100,000 population

Power Distance Uncertainty Avoidance

Individualism vs collectivism

Masculinity vs famininity

The extent to which less powerful members of institutions and organizations accept that power is distributed unequally Countries in which people blindly obey the orders of their superiors have high power distance Low Power Distance: Decentralization, flat organization, smaller proportions of supervisory personnel, lower strata of people consists of highly qualified people.

Extent to which people feel threatened by ambiguous situations, and have created beliefs and institutions that try avoid these. High Uncertainity avoidance: great deal of structuring ,more written rules, less risk taking by managers, lower labor turnover, less ambitious employees

Individualism is the tendency of people to look after themselves and their immediate family only. Collectivism is the tendency of people to belong to groups or collectives and look after each other in exchange for loyalty High Individualism: greater support from Protestant work ethic, greater individual initiative, promotions based n market values

Masculinity is a situation in which the dominant values in society are success, money, and things Famininity is a situation in which the dominant values in society are caring for others and quality of life. High Mas.: earnings, recognition, advancement and challenge, independent decision maker,

Comparison of Hofstede Model and Hall Model

Trompenaars Cultural Dimensions

Postulated by Fons Trompenaars Research conducted over 10 yrs period and published in 1994 Administered research questionnare to over 15,000 managers from 28

countries

Derived five relationship orientations that address the ways people deal with each other

Universalism vs Particularism

Individualism vs Communitarianism

Neutral Vs. Emotional

Specific vs Diffuse

Achievement vs Ascription

Universalism is the belief that ideas & practices can be applied everywhere without modification Particularism is the belief that circumstances dictate how ideas and practices should be applied. High Univ.: focus more on formal rules than on relationships, business contracts adhered to very closely, deal is a deal

Individualism refers to people regarding themselves as individuals Communitarianism refers to people regarding themselves as part of a group

In neutral culture emotions are held in check. People try not to show their feelings; they act stoically and maintain their compose In emotional culture emotions are openly expressed

In specific culture individuals have a large public space they readily let others enter and small private space they guard closely and share with only close friends and associates In diffuse culture public space and private space are similar in size and individuals guard their public space carefully, because entry into public space affords entry into private space as well

In achievement culture people are accorded status based on how well they perform their function In Ascription culture status is attributed based on who or what a person is

Time (Way people deal with concept of time)

Sequential People tend to do only one activity at a time, keep appointments

strictly, and show a strong preference for following plans as they are laid out and not deviating from them.

Synchronous People tend to do more than one activity at a time, appointments are

approximate and may be changed at a moments notice, schedules are generally subordinated to relationships

Broad Employee Mgt. issues Specific HRM Issues

Management Styles Participative Consultative Paternalistic Autocratic

Staffing Policies Recruitment and Selection process Remuneration Motivation Job Expection Training and Development Performance Appraisal Prommotion Retirement Redundancy and lay-off Industrial Relations Foreign Assignment

Authority Structure Decentralised Centralised

Organisational Structure Hierarchical Network

Leadership Style Task-Oriented Employee-Oriented

Employee Relationship with the Company Emotional Contractual

Major Cultural Attitudes and values which influence soft aspects of organization

Attitude to power Attitude to other peoples opinion

Tolerance and ambiguity Attitude to sharing info. & knowledge

Attitude to risk and risk taking Recognition of the rights of others to be consulted with

Individualism, self-orientation Preference for certain leadership behavior

Collectivism, Group Orientation Preference for independence and autonomy

Acceptance of responsibility Self confidence, self-reliance

Interpersonal Trust Achievement orientation, ambition

Attitudes to conflict and harmony Attitude to the nature of human beings

Work ethic, honesty