International Human Resource Management

Summary

Chapter Two Social & Cultural Context of International HRM 2.1 What is Culture? Social and cultural factors affect the international HRM. Culture is “the thought and behaviour patterns that member of a society learns through language and other forms of symbolic interaction – their customs, habits, beliefs and values, the common view points which bind them together as a social entity. Cultures change gradually picking up new ideas and dropping old ones. Culture is 1] prescriptive. It prescribes the kinds of behaviour that are considered acceptable in the society; 2] socially shared. It is based on social interaction and creation. In fact it is out of necessity; 3] learned . Acquired by learning but not inherited genetically. If a person learns the culture, where he is raised, that learning is called enculturing. However, some persons learn the culture of other society in which they were not raised. Such learning is called acculturation; 4] subjective. People of different culture have different idea of the same object; 5] cumulative. Uncertainty of rains, crops, and thereby income in developing countries resulted in the culture of saving; and 6] dynamic. Culture is not immune to change. New ideas are added and old ones dropped. 2.2 Why do Cultures Differ? Culture is determined by factors that differ, each set of factors has its own culture. Different economic levels, conditions and climate of a region produce different cultures.

1

International Human Resource Management

Need for food, water, clothing, housing and security are common to all. Hence their behaviour has common features, but there are variations in these features due to availability of various inputs for food, clothing, shelter and social relations together with climatic conditions. Similarly societies developed their own pattern of child bearing, husband-wife relations, family bondage, taking care of old people etc 2.3 Cultural Sensitivity By understanding cultural differences one has to be sensitive to culture of the host country and thus avoid unpleasant situations. In fact all cultures are good as they are developed over a number of years of local conditions. Cultural sensitivity is to have empathy to accept cultural differences without allowing one’s own values to surface in unproductive confrontational manner. One cannot be judgmental of the local culture. In absence of cultural sensitivity two cultures try to understand the other group negatively. Each culture has its own dressing habits, living styles, priorities, eating preferences. These have to be respected. In America, Germany and Switzerland people convey messages explicitly in clear terms. These cultures are called ‘low-context cultures.’ In India, Japan, Saudi Arabia communication is mostly indirect and, the expressive manner in which the message is delivered becomes critical. Much of information is conveyed through non-verbal communication. Such messages could be understood only with reference to context. These cultures are called ‘high-context cultures.’ Cultures which handle information in a direct , linear fashion are called ‘monochromic’ . Americans are more monochromic. In ‘polychromic culture’ people work on several simultaneously

2

International Human Resource Management

instead of pursuing a single task. Japanese & Indians belong to polychromic culture Irrespective of the religion, race, region, caste etc. all of us have more or less common needs. These are called ‘Cultural Universals’ These have been identified as athletic, sports, bodily adornment, cooking, dancing, singing, education, joking, kin groups, status differentiation and dream interpretation. Language is the basic medium of communication. There are 5,000 spoken languages in the world. The same words in the same language may mean different things in the different regions of the country. People also communicate through non-verbal medium. Non-verbal communication means differently in different cultures. e.g. eye to eye contact is polite in the USA but rude in Japan. Time has different meaning in different cultures. Asians do not need appointment to meet someone and vice versa. But Americans, Europeans and Africans need prior appointment to meet someone and vice versa. Space between one person and another person plays significant role in communication. But culture determines the distance / space between persons. Latin Americans are comfortable with a few inches of distance. Asians need substantial conversational distance and no physical contact. 2.4 Social Environment Religions play significant role in normal and ethical standards in production and marketing of goods and services. Most of the religions indicate in providing truthful and honest information. But most of the marketing practices deviate from these standards. In addition to religion, family system has its impact on international business. Business should consider the behavioural patterns of social groups in hiring, marketing and in

3

International Human Resource Management

selecting suppliers of inputs and market intermediaries. Certain societies like that in the USA reward people based on performance while other societies like Malaysia reward people based on ethnic group plus performance. Interest in career success differs from society to society. People with higher interest in career believe in ‘ live to work’ while people in low interest in career success countries also differ in the degree that individuals are assertive, confrontational and aggressive. These differences reflect in how managers react to different situations. 2.5 Hofstede’s Model of Four Cultural Dimensions This model of called four dimensions of culture was built by Hofstede after study of 116,000 IBM employees in 72 countries on cultural differences related to management. According to him, culture is the aggregate value, beliefs and customs that define common characteristics of a human group. Hofstede explained culturally based value systems as comprising four dimensions viz. power distance, uncertainty avoidance, individualism and masculinity. Businesses should identify the cultural variations in foreign countries and evaluate their influence on human resource management, marketing, stakeholder relations etc. After evaluation of the influence of cultural variations on business practices and processes, business firms should decide the nature and degree of adjustment necessary Communication plays vital role while doing business in various foreign countries. Businesses should be cautious in spoken and written language, translation and the silent language, otherwise they face serious problems in numerous transactions.

4

International Human Resource Management

Culture of country determines cost of doing business, productivity, entrepreneurship and innovations. Education enhances employee commitment increases productivity and thereby reduces cost of operations. These factors ultimately enhance competitive advantage of the business. 2.6 Religions and Economic Implications The impact of religions on business is mostly in developing attitudes of people towards work, product / service, price fixation, entrepreneurship and cost of doing business. Christianity: It is claimed that there is a relationship between Protestantism and the spirit of capitalism. Protestant ethics emphasizes the importance of hard work and creation of wealth as God feels happy when wealth is created. Protestants also believe that wealth is to be used for creating more wealth and not for consumption. Islam: According to Islam, those who pursue riches on the earth may gain them, but those who forgo worldly ambitions to seek favour of Allah, may gain in greater measure. Economic principles of Islam are pro free enterprise. Hinduism: Hindus believe they should conduct themselves in an ethical manner to observe their Dharma. They also believe karma principle which states that how ethically a person conducted activities during his / her previous incarnations determine his / her activities in the present lifetime. Buddhism: According to Buddhism life is comprised of suffering and misery is every where. It suggests for systematically following noble eight fold path of right seeing, thinking, speech, action, living, effort, mindfulness and meditation.

The End

5