Considering European Union history, they have tried with constant effort today the foundations of supranational institution. Despite this effort being talked as a stubborn try with reluctant recognition, they didn’t think that it can cause regional differences. An excellent example can be seen in the form of the Scots, the Flemish,&the Basques. The intensity of national issue (on the ground of feelings) and cultural diversity are interdependent. Economically developed areas like Western Europe knows how to indicate those aspects on a global scale.In HRM, nationality is an important concern as it acts as an instigator on human behaviour & bringing various effects on management actions and its constraints.
In consideration to British Royal Family, you will find that the more spaces in magazines and newspapers are left for them instead of using those for other important topics. Again if you consider the settings of Australia, you will find people have to go through the news of football, or the fictional settings of Erinsborough or Ramsey Street. So you can see that we all are connected with each other on a global level and function like people living in a village, having common values and tastes. However, if we remove the argumentative side, the deeply rooted aspect, in this case, remains national culture (on certain levels).
Companies working on an international dimension have HR professionals and managers who make it a point to enforce a job as per the international standards. But what they do not try to foresee the influences that can occur in these management practices related to various national cultures.
If management practices are seen on practical grounds,details related to cultural diversity are extremely tough to comprehend.
Differences in national cultures
It was during 1980 when Hofstede read and evaluated 116,000 questionnaires. Those questionnaires were spread across 70 countries and designed mainly for IBM employees. As his assessment, it was found out that there are 4 factors related to national cultures.
Role divisions related to either sex are seen on a different scale in various societies. If considered for the role of women, their roles are more caring and highly service oriented. They are seen having a positive value with concerns more on quality of life and environment. In addition to these, women are considered keeping relationship values higher than value of money.
Now, when the role of man is considered, they are seen as dominating species which are responsible for making up organisations to make money and achieve visible benefits for companies.
- Uncertainty avoidance
Be it business or life; it will always remain uncertain. Nevertheless, there are certain societies who encourages member to accept this truth and move on with the fact of taking risks in a positive way. With socialising on an international or domestic level, they are made curious and buoy up to use and compensate via technology, religion, law or security.
- Power distance
Power is unevenly distributed in the society. The extent of its inequality is measured by this factor. Most of the huge corporations do follow those tactics to implement autocratic leadership and exercise its power. It is with this factor can such companies regulate authority with degrees of centralization.
It describes how individuals are concerned for their families and themselves. Where tight social framework comes into picture, it becomes collectivism. In this case, the expectations of people are basically tied to the responsibilities on a wider social level. They provide support to others and discharge their responsibilities. Those people following collectivism think to be a loyal and firm support to their group.
Other than these, there are other cultural differences that are highlighted in the table below and are found by Hofstede.
Clusters of national cultures and organisational principles
It was another British study on a large scale from where the findings of Hofstede were compared. These comparative readings were related to the operation of companies that were prevalent on the 1970s. Added to these findings that were offered by Hickson and Pugh in 1976, few MBA students’ unpublished analysis at INSEAD was also taken. As per the reports, irrespective of the reports of Hofstedeconcerning2dimensions, the others stated of the coinciding nature of the various organisational principles with that of grouped national cultures. As already stated, about 2 dimensions of Hofstede, they are – power distance and uncertainty avoidance.
Again, he presents an argument where the emphasis of his concern is related to strong uncertainty avoidance as well as power distance on which hierarchy mainly dependents up on. In this case, pyramid of people are the ones who give clear orders.
Those countries who adopt those 2 factors (highlighted above) and use them in their companies are basically the ones who are dependent completely on clear structure, procedures, and rules and regulations. This aspect is called functioning like a well-oiled machine.
Similar to a village market, various models used by different companies do rely on weak uncertainty avoidance and small power distance. Such companies have ready-madead hoc solutions and try to shove issues as HR problems.
There is a 4th group country that follows the combination of weak uncertainty avoidance and large power distance. Organizational issues are solved similar to how a father resolves issues in a family.
This explains various organisation models that are apropos as per countries in the form of organisation models classification.
The explanation is not that easy as it seems because of relative similarities between the clusters. We cannot entirely be dependent on Hofstede’s study as its agreement is not similar to that of the findings of Shenkar and Ronen (1985). However, if we want to read the findings in the form of 4 way classification, it can prove to be expedient but not totally dependable. The main reason for this is being the same; where there had been radical changes after 1970 (this was a time when the materials and details were collected.
‘Confucian dynamism’ was the concept that Hofstede explained in his 2nd book. Here he explained short-term versus long-term orientation in association with uncertainty avoidance dimension. This was the terminology that he gave in 1991. But after few years, he changed it and renamed it as ‘time orientation.’
With orientation and cultural bias in combination, from the United States or Western Europe, a majority of management researchers are taken. In a new study, Hofstede combined his researches with Michael Bond, who had Canadian origin. For are vealing cultural variable, that too from the original, both of them collaborated and used a survey technique with Chinese value.
This orientation was of longer term where the dimensions scored high in countries like South Korea, Japan, Taiwan,Hong Kong, and China. 9th place was occupied by Singapore. economic grow that a dramatic rate was seen in 5 countries (exclude China) which later was called ‘5 Dragons’ in the 80s.
Another argument by Hofstede stated that there were primarily3 religions on which the culture of West derived. Those were Islam, Christianity, and Judaism. Preachings of these religions are established on the acceptance of truth and true believers. But if you look at the Eastern countries, you will find that the proclamation is based on that fact that a human fraternity has faith in and embraces.
Perseverance is an inclusion in long term orientation related to the values of Confucian. As per the values, the assertion is based on sense of shame, thrift, and differential status. These values are also considered important on social or business level in the form of entrepreneurial initiative. This acts a pressurising element on those people who refuse to meet any form of obligations. Aside to this, this also encourages investment and savings. Again, these factors do give suggestions to organization to use the strategies and activities as what is done in the East. A certain expert comment on international HR problems looked something like:
This comment was mainly stated for the anthropologists, as most western investigators didn’t recognise the features of Eastern culture which they could have used for their management development. Now, this persistence from the world dominating countries like the United States and Europe justified the speculations. As they affected the commerce of the world, it is an accepted fact that they do have a better understanding of business and management aspects that are accepted universally.
A number of Eastern European countries, People’s Republic of China, as well as Russia are some of the countries where Hofstede did not consider projecting his workings. Where HRM progression is still seen in the difficult culture area, management at the global level is considered to be more realistic.
Strategic implications of cultural diversity
There a number of implications if HRM is seen from cultural diversity and strategic standpoint. There are mainly 6 pointers related to the implications of management approaches and its influences on the society. Those pointers from Hodgetts and Luthans are:
- Long term or short term orientation
As per the Eastern predilection that is recognised by Hofstede, strategic decisions are affected by those activities occurring in a company. In this case, the thinking related to long term approach is taken to be apropos.
- Loyalty towards organisation
Loyalty towards company is something that can be seen in Japan. But this is not visible in countries like US or Britain as there they sense of individuality is more than that for a specific company. A company’s long-term reliability declining at a swift rate is the reason that the loyalty towards a job is seen to be important than a company.
The culture related to working like well-oiled machine is based on strict rules and of hierarchies related to people following pyramid approach. The approach towards societies following village market type is of stark contrasts when it comes to ad hoc actions and informal relations.
In the 1st study by Hofstede, he stated that one of the huge discrimination amongst various cultures is risk taking attitude. This marks uncertainty avoidance and its variances.
- Competition and rewards
If a certain country receives less amount that another country, there may be issues regarding financial rewards. This is because a subtle differentiation can be accepted but not a huge one. Yet again there is another issue regarding individual recognition where the culture favours those conventions believes in reward systems in groups.
- Systematization related to decision making
Whichever society it may be, important decisions for a company is mainly taken by those managers who belong to the senior level. It is seen amongst the people from pyramid type. Those following the village type follow a decentralised decision making structure. In case there are dissimilar societies, it becomes important for management systems to identify both these approaches and special means have to be adopted by them to understand both these cultures.
From the above table, you can have an idea regarding different classification and national cultures. Via this, we can also have an idea of the orientation for a longer term on Confucian dynamism. This acts as a guiding tool in international management to comprehend various strategic problems.