Culture and Management:

What effect does national culture have on staffing in subsidiaries

and headquarters?

Bhavna Gulati

Project Supervisor: Frances Jørgensen

A M.Sc. International Business Thesis, Management Department

June, 2009, Aarhus School of Business

Acknowledgement

This dissertation could not have been written without Ms. Jørgensen who not only

served as my supervisor but also encouraged and challenged me throughout the

dissertation process. She guided me never accepting less than my best efforts. I would

also like to take this opportunity to thank my mother who has been like the rock of

Gibraltar, comforting and soothing me all the way. Without the care and

understanding of my family and blessings of Almighty I would not have been able to

reach where I am today. This is also for my dearest papa who always wanted me to

excel in everything I did, who I know can see me and will continue to bless me from

his abode in heaven.

S. No. Topic Page No.

1. Introduction 1

2. Theoretical background

2.1 Culture and National Culture 4

2.2 Understanding National Cultures 8

2.3 National Culture and Staffing – the connection 16

2.4 Staffing 16

2.5 Theoretical Model Explaining Staffing in Different Cultural

Contexts

22

3. Central Research Question 24

4. Research Methods - Quantitative Vs Qualitative 24

4.1 Reliability, Validity, Generalization 28

4.2 Samples 29

5. Collecting the Data

5.1 Locating the Companies 29

5.2 Contacting the Companies 30

5.3 Conducting Interviews 31

6. Findings

6.1 Table 35

6.2 Description 36

7. Discussion 39

8. Conclusion 42

9. References 44

10. Appendix

Introduction

People often say that the world is getting rapidly smaller. Be it the time taken to travel

across the globe, or to communicate with someone at the other end of the world,

things have changed considerably. The world we knew is shrinking fast. In the

backdrop of powerful trade and business interests, political boundaries are tumbling,

geographical obstacles are being levelled down and cultural barriers are being won.

Economic integration among regional blocks is emerging one after another and

political boundaries are transcended by collaborations and cooperation among nations,

governments and business houses.

There is a fundamental transformation of business underway. Forged by digitization,

ubiquitous connectivity, and globalisation, this transformation has radically altered

the very nature of the firm and how it conducts its day to day business. No industry is

immune to this trend. Coming to terms with the implications of this change is critical

for survival and growth. Yes, globalisation is the new buzzword used to describe the

establishment and maintenance of various cross border economic, political and socio-

cultural relations happening in the world today. With the world beginning to work as a

unit and the boundaries disappearing, we seem to be en route to what Marshall

McLuhan (1968) has called the global village.

Synchronous to the changes in the global economy, there is reciprocation by the

managements of various companies around the world which are no longer national

firms, but have subsidiaries in many countries becoming Multi-national Enterprises.

This implies that firms from any country now compete with firms operating not only

from their domestic market but also the international market. The companies are

becoming less tied to specific locations and their operations and allies are spread

around the world, as they source resources and coordinate activities all around the

world. For these multinational enterprises, the world seems a playground with their

processes spread all across the globe.

This expansion of the global economy with ever-increasing sense of chaos and

unpredictability requires that the management develop knowledge, skills and

experience in the international arena to be able to succeed in the dynamic and ever

changing business environment. In response to this widening business tapestry, is the

emergence of a new globalised professional, who is well-educated, trained executive

in the business field, holding important managerial positions in the multinational

enterprises. These executives travel internationally, think in cosmopolitan than in

national terms and speak the globalised business language – English. These citizens of

the world are seen as a force for pursuing the business agenda of further globalization.

It is on the shoulders of these management executives that the responsibility of

successful international management lies.

However, in this convergence of the world brought about by gloablisation, there is

also a divergent streak, which brings out various differences among the nations.

Though the world is claimed to be becoming culturally homogeneous, still very

significant differences exist between different national cultures. The globalisation of

economy has made the differences among nations more resonant than ever since now

the uniqueness of a nation presents a challenge to the other nations of the world,

making it a little hard to deal with it. There are certain factors in the national

environment that distinguish a nation from another especially when it comes to doing

business.

These dissimilarities in the nations arise out of the distinctness in their political,

social, economic, cultural and administrative environments. It is in accordance with

the national environment that the firms, both national and multinational conduct their

business. It is imperative for the multinational enterprise to get to grips with the

substantial differences that exist between national cultures to develop an effective

understanding of different norms, values and assumptions, which are prerequisites for

successfully doing business in different nations. So, to be effectual, a thorough study

of the national environment must be made by a multinational enterprise before

establishing a subsidiary in a particular nation.

Among the different aspects of national environment, culture has a strong bearing on

business. Culture influences people’s behaviour in critical ways. This is so because

culture plays a fundamental role in forming values, which interact with the needs,

attitudes and norms of the individuals and groups and result in different behaviours.

This connotes that a thorough understanding of culture is very important for

international managers, especially where cultural differences exist between the host

country and the home country of the multinational enterprise. An understanding of the

cultural differences enables not only effective management by ensuring that people

behave in ways appropriate for the organisation but also correctly interpret the

behavioural differences and thereby interact effectively to avoid misunderstanding

and be accepted by others.

The success of the subsidiary operations significantly depends on how the opposing

forces of conforming to norms of the host country environment are balanced with the

norms followed in the home country or the best practices learnt in other foreign

subsidiaries. The complex role of managing international operations demands a

contingency approach to the dynamic environment of the subsidiaries, each of which

has its own unique requirements. Within the larger context of global trends and

competition, the rules of the game for global manager are set by each country.

While the global nature of business may call for increased consistency, the variety of

cultural environments call for differentiation. To survive locally, the management

needs to adapt to specific cultural requirements of different societies.

Setting up and operating a subsidiary in a foreign country requires high degree of

interaction with the local environment as the subsidiary derives its resources from the

local settings and surroundings. Apart from all the material resources, the human

resource or the employees play a key role in the success or failure of the subsidiary as

they are the ones who turn the plans into actions by the use of the physical resources

like machinery, technology, finance etc. Being mandated by local regulations and

legislations, the Human Resource practices are shaped by local conventions. Also, in

most instances the employees are hired from the competitive local labour markets,

hence conforming to local norms aids effective subsidiary operations.

The national culture with its values, beliefs and attitudes lays down norms for

acceptable social behaviour. It indirectly dictates the behaviour of people, their

preferences and perceptions. As a result, with the sourcing of the employees from the

local pool of talent creep in the characteristics of the national culture. Hence, a study

of national culture plays an important role in subsidiary establishment and operation.

Keeping this in mind, the present study attempts to understand the effect of national

culture on the staffing patterns of subsidiaries. Owing to the differences in national

cultures, the staffing practices followed in the home country and host country may

differ greatly. To analyse this, first we try to understand what culture is, what is meant

by culture of a country, what is staffing and how staffing may differ in different

cultural contexts.

Culture and National Culture

To be able to understand national culture and the extent of its influence, it is important

to first understand culture in its most basic form.

The construct of culture has caused a lot of confusion. Although there are multiple

definitions, they tend to be vague and overly general (Adekola and Sergi, 2007). Even

the various disciplines interested in the study of culture add to confusion. Though

looking at the puzzle of culture from different perspectives enriches the information

we have on it, but this does not necessarily increase clarity. The various paradigms

and research methodologies make it increasing difficult to arrive at a common

definition of culture (Schneider and Barsoux, 1997). In a business environment where

everything is based on precise calculations and expressions in numbers, culture is seen

as a too vague, too soft and a hard concept to grasp.

Scholars have produced many definitions of “culture”. In the words of world

renowned Professor Emeritus – Hofstede (1984), “Culture is the collective

programming of the mind which distinguishes the members of one human group from

another…Culture in this sense, includes a system of values; and values are the

building blocks of culture.”

This implies that:

A culture is particular to a group and not others

Culture includes a system of values, which are basis of culture

Anthropologists Levi-Strauss (1971) and Geertz (1973) define culture as “systems of

shared meaning or understanding (“web of signification”) which drive or explain the

behaviour observed. This connotes that:

Culture is shared by a group of people who understand it in the same way

The understanding shared by the group explains the behaviour exhibited by

them.

However, according to management scholar Schein (1985) culture is “a set of basic

assumptions – shared solutions to universal problems of external adaptations (how to

survive) and internal integration (how to stay together) – which have evolved over

time and are handed down from one generation to the next”. This means that:

Culture with its set of assumptions provides answers to universal problems,

which not only guide how to survive in the world but also direct how to stay as

a group.

These assumptions have developed over years (by virtue of experience)

The guidelines are handed from one generation to another.

From these varied definitions of culture, a few common characteristics can be derived.

These characteristics will present a clearer picture of culture which will enable a

better understanding of the concept. They are:

Culture is shared by a group of people. It is particular to and characteristic of a

group of people. It is a collective phenomenon which involves shared values

and meanings.

Culture has systems or values which are assumptions about how the members

of a cultural group must behave and understand the world around them.

Culture is relative i.e. different cultures perceive the world differently and

have different ways of doing things.

Culture is passed from one generation to another. It is derived from one’s

social environment and not from one’s genetic make-up.

Hence culture provides the members of a group with a sense of who they are, of

belonging and of how they should behave. It also provides them with the capacity to

adapt to circumstances by defining the appropriate behaviour in a particular

circumstance and to transmit this knowledge to succeeding generations.

Another approach to understanding culture is in the form of layers. The figure below

presents culture as a series of concentric circles with multiple layers. The model of

Schein (1985), Harris and Moran (1999), Trompenaars (1995) enables a better

understanding of the cultural puzzle by representing it on three levels:

Surface, explicit culture: behaviours and artefacts – this is the symbolic and

observable level of culture which includes things that are readily visible like

dress, food, architecture, etiquettes, body language, gestures etc.

Hidden culture: beliefs, norms and values – this second layer reflects the

norms, values and beliefs of the group. It is here that the views of good and

bad, right and wrong are determined. The standards shared by a group too are

defined at this level.

Invisible culture: underlying assumptions – this layer represents the core of the

culture presenting its universal truths. This level reflects the assumptions about

their existence by prescribing ways of perceiving. These underlying

assumptions are the basis of the values which guide behaviour at the explicit

level.

The layers of the culture model provides a way to understand culture as a series of

layers, with each layer, moving from outside to inside, representing less and less

visible values and assumptions but correspondingly more and more important values

and beliefs for determining attitudes and behaviours. These levels are arranged

according to their visibility such that behaviour and artefacts are the easiest to

observe, while the underlying assumptions need to be inferred. To understand what

the behaviours or beliefs actually mean, the underlying assumptions have to be

brought to the surface. This is most difficult since assumptions are taken for granted.

The terms culture and national culture are quite often used interchangeably. The term

culture as seen above is more general than the term national culture. Whereas culture

explains the behaviour of a group, national culture specifically explains the behaviour

of people belonging to a nation/ country. Hence, from the above definition of culture,

national culture can be understood as a set of beliefs, assumptions and norms that

guide the behaviour of the people belonging to a country and it is this behaviour that

marks them as different from some other people belonging to a different country and

culture. Several studies (Hofstede, 2001; Hall, 1990; Harris and Moran, 1996;

Rosseau, 1990) also tend to use the term culture and nationality interchangeably, thus

implying that nation states comprise of populations with a shared history and

experience.

Understanding National Cultures

It is observable that people from different cultures act differently in similar life

situations. People may have different problems and they may think differently about

the same problems. This makes it imperative to compare cultures; not to explain the

phenomenon of culture, but to examine how culture influences individual action and

thinking.

There are two long standing approaches to understanding the role of culture:

a) the inside perspective describing a particular culture in its own terms and;

b) the outside perspective which attempts to describe differences across cultures.

Throughout the history of the study of cultures, there has been a dispute among those

stressing the unique aspects of a culture and those stressing the comparable aspects.

The first group of researchers claim that it is impossible to compare something as

different as for example apples and oranges because of their unique attributes.

Whereas, the second group of researchers argue that apples and oranges are both fruits

and so have something in common.

To distinguish between the unique and the comparable, the specific and the general,

cross-cultural psychologists have adopted the words: emic and etic. The emic

approach believes that cultures are different and issues related to one culture should

be understood through the particular cultural context. On the other hand, the etic

approach advocates constructing measures that are culture free and can be used in

cross-cultural studies without posing equivalence or comparability problems. In this

case, constructs and measures developed in one country can be used without any or

minimum adjustment to cultural differences.

Many of the cross cultural studies make use of the etic approach to study analyse and

generalise across cultures. Some of the most famous etic cross cultural studies include

those undertaken by Hofstede, Trompenaars. However the famous GLOBE study

makes use of both the etic and emic approaches to study cultures as those collecting

the data about the culture belong to the culture (emic) and generalise the data so that it

can be compared to such data about other countries (etic).

Increasingly researchers are assessing whether or not the wide variety of cultures

around the world can be reduced to a more limited set of cultural clusters with similar

characteristics. The studies conducted by Hofstede (1984, 1999, 2000),

Trompenaars (1993), House et al (1999) are a step in that direction.

The research of Geert Hofstede

One of the most important studies which attempted to establish impact of cultural

differences on management was conducted by Geert Hofstede. This study, now

considered a classic is based on employee opinion survey about their preferences in

terms of management style and work environment. It is the best known and the first

major study of cultural values in a large sample of countries in the subsidiaries of the

major multinational – IBM in fifty three countries spanning about 116,000 employees.

In particular this study focused on identifying country differences and regional

similarities on the basis of a series of work-related factors. Hofstede’s research

furthers how national culture affects the values of the workplace. The following

provides a short summary of the factors identified in his research:

Power Distance (high/ low): the distance between individuals at different

levels of a hierarchy.

According to Hofstede, organisations in countries with high power distance

would tend to have more levels of hierarchy (vertical differentiation), a higher

proportion of supervisory personnel (narrow span of control) and more

centralised decision-making. Status and Power would serve as motivators and

leaders would be revered or obeyed as authorities.

Uncertainty Avoidance (more or less): the tolerance for ambiguity.

In countries with high uncertainty avoidance, organisations would tend to have

more formalisation evident in greater amount of written rules and procedures.

Also, there would be greater specialisation evident in the importance attached

to technical competence in the role of staff and in defining job and functions.

Managers would avoid taking risks and would be motivated by stability and

security. There would be a strong emphasis on planning, organising,

coordinating and controlling.

Individualism Vs Collectivism: the relation between the individual and his

fellows.

In countries with a high collectivist orientation, there would be a preference

for group as opposed to individual decision making. Consensus and

cooperation would be more valued than individual initiative and effort.

Motivation is derived from a sense of belonging and rewards are based on

being part of a group (tenure and loyalty). The emphasis in such cultures is on

furthering team effort and integration.

Masculinity Vs Femininity: the division of roles and values in the society.

In countries ranking high on masculinity, the management style is likely to be

more concerned with task accomplishment than nurturing social relationships

(femininity). Motivation is based on acquisition of money and things than

quality of life (femininity). In masculine cultures emphasis is on profits,

meeting challenges and targets. However, in feminine cultures the emphasis is

on well- being and social responsibility.

Long Vs Short term orientation: temporal orientation towards life.

This dimension was developed in 1987 and is also known as Confucianism as

at both poles, the values seem to be taken straight from the teachings of

Confucius. Cultures with long-term orientation demonstrate the values of

persistence; ordering relationships by status and observing this order; thrift

and having sense of shame. Cultures with short-term orientation demonstrate

values of personal values of personal steadiness and stability; protecting one’s

face respect for tradition; reciprocation of greetings, favours and gifts.

Hofstede found not only that certain countries consistently show similarities based on

the presence of these characteristics but also that there were also major differences

between the various groups the countries were placed into.

The research of Fons Trompenaars

Fons Trompenaars (1995) undertook a similar large-scale study of over 15,000

employees in over fifty countries. Even though Trompenaars focussed on different

aspects of culture – such as how different cultures accord status to the members of

their culture, the varying attitudes toward time and nature and differing attitudes

towards individuals and groups and resulting relationships between members of

society, his overall conclusions are quite similar to those of Hofstede.

According to Trompenaars, every culture distinguishes itself from others by the

specific solutions it chooses to certain problems. These problems are classified under

three heads: those which arise from our relationship with other people; those which

come from the attitude to time and those which relate to the environment. Based on

the solutions different cultures have chosen to these universal problems, Trompenaars

identifies seven fundamental dimensions of culture. First five out of the seven come

from the first category. The seven dimensions are mentioned below:

Universalism Vs Particularism: emphasis on rules or emphasis on

relationships

In Universalist cultures whatever is good and right can be clearly defined and

always applies. However, in Particularist cultures greater attention is given to

obligations of relationships, unique circumstances and less attention is given to

abstract societal codes and norms.

Collectivism Vs Individualism: personal interest of an individual or the

interests of the group

This value dimension tries to understand how people relate to others. Is it that

people regard themselves primarily as individuals or primarily as part of a

group? Do they relate to others by discovering what they individually want

and then try to negotiate differences or is it that they place the shared concept

of public and collective good ahead of their individual wants.

Neutral Vs Emotional: the extent to which displaying of emotions is

accepted/ regarded as right

In neutral cultures reason dominates emotions and there is controlling of

feelings. However, in the affective/ emotional cultures the emotions dominate

the reason and people attempt to find immediate outlets of their feelings.

Diffuse Vs Specific: extent of involvement with other people

Closely related to how we express our emotions, this dimension deals with

whether people in a culture engage with others in specific areas of life and

single levels of personality or diffusely in multiple areas of life at several

levels of personality. In simpler words, is the access to life spaces guarded,

hard to enter, requiring permission for admittance with small public space

(diffuse) or is the public space more than the private space, segregated into

sections with easier admittance (specific). In specific cultures anyone entering

either of the spaces (public or private) is not necessarily close or life time

buddy but in diffuse cultures when people admit someone, they let them nearly

to all their private place.

Achievement Vs Ascription: according of status to other people

While some societies accord status to people on the basis of their achievement

(achievement), others ascribe it to them by virtue of their age, class gender etc.

(ascription). In cultures bent towards achievement, people are judged on what

they have accomplished. While in the cultures bent towards ascription, status

is conferred on the basis of a person’s being.

Attitude towards time: achievements of past Vs plans for future

In some societies the past achievements create a greater impression as

compared to those of the present. However in other societies, the achievements

of the past are not as important as the plans of the future.

Attitude towards environment:

Some cultures see the major focus affecting their lives and the origins of vice

and virtue as residing within the person. Hence, they derive motivations and

values from within. While other cultures see the nature and world as more

powerful than the individual. They see nature as having its own course and as

something to be feared or emulated.

GLOBE Study

GLOBE is an acronym for Global Leadership and Organisational Behaviour

Effectiveness Research Program. GLOBE is a worldwide, multiphase, multi-method

project which was undertaken with the objective to explore the fascinating and

complex effects of culture on leadership, organisational effectiveness, economic

competitiveness of societies and the human condition of members of the societies

studied.

House et al. (2004) report the results of a ten-year research program based on the

responses of about 17,000 managers from 951 organisations functioning in 62

societies over the world. The study measured culture at different levels with both

practices and values (what is done Vs what ought to be done) and proceeded to study

how culture relates to societal, organisational and leadership effectiveness. This was

done by first differentiating between the attributes of societal and organisational

cultures. The analyses led to identification of nine major attributes of culture, which

when quantified are referred to as cultural dimensions. Following are the definitions

of the core GLOBE cultural dimensions:

Uncertainty Avoidance: it is the extent to which members of the society or

organisation strive to avoid uncertainty by relying on established social norms,

rituals and bureaucratic practices.

Power Distance: it is the degree to which members of a society or

organisation expect and agree that power should be stratified and concentrated

at higher levels of government or organisation.

Institutional Collectivism: it is the degree to which societal or organisational

practices encourage and reward collective distribution of resources and

collective action.

In-group collectivism: it is the degree to which individuals express pride,

loyalty and cohesiveness in their organisations or families.

Gender Egalitarianism: it is the degree to which a society or organisation

minimises gender role differences while promoting gender equality.

Assertiveness: it is the degree to which individuals in societies or organisations

are assertive, confrontational and aggressive in social relationships.

Future Orientation: it is the degree to which individuals in societies or

organisation engage in future oriented behaviours such as planning, investing

in future and delaying individual and collective gratification.

Performance Orientation: it is the degree to which society or organisation

encourages and rewards group members for performance improvement and

excellence.

Humane Orientation: it is the degree to which individuals in societies or

organisation encourage and reward individuals for being fair, altruistic,

friendly, generous, caring and kind to others.

These cultural dimensions have their origins in the dimension identified by

Hofstede (1980), Kluckhohn and Strodtbeck (1961), McClelland (1961) and

Putnam (1993). It was found that there is wide variation in the various practices

relevant to the nine core dimensions.

Since the potential number of different national and ethnic cultures is so great, the

efforts by Hofstede, Trompenaars and studies like GLOBE to cluster countries with

similar cultural profiles identifying a limited set of variable with which cultural

differences can be understood have been welcomed. Though they simplify the

complexity of understanding national cultures, however isolating country variances

and minimising variables provide little understanding about the sub-cultures that may

exist within a country. Also, over reliance and emphasis on such approach could pose

a danger of oversimplification by overlooking other important aspects of cultures that

make it the way it is.

National Culture and Staffing – the connection

Responding to the competition, organisations are setting up offices in different

countries across the globe. Operating in several countries, the organisations regardless

of their size, location or scope of activity are influenced by the varying cultures in the

different countries. Cultures with their system of values explain the attitudes,

behaviour of people and the choices people make. So, deriving their resources

especially human from the host country makes the host country culture a significant

factor in the subsidiary operations.

Setting up offices and finding the right people to manage the operations and functions

could be an important challenge especially in the new host country environment.

Being new and unfamiliar with the available human resources, nature of local labour

market, labour laws etc. the task of finding candidates competent enough to perform

well on their job while contributing to the global competitiveness of the multinational

organisation could prove to be a herculean task. This problem could be compounded

by the fact that different cultures with their underlying assumptions stress on different

values and behaviours that get reflected in the way organisations are managed and

controlled. To understand how staffing can be influenced by culture, the following

section provides a description of staffing followed by a theoretical model that helps

understand staffing in different cultural contexts

Staffing

According to Heneman and Judge (2005), staffing is the process of acquiring,

deploying, and retaining a workforce of sufficient quantity and quality to create

positive impacts on the organization’s effectiveness. This definition brings to light the

following points about staffing:

It is a process or system

It involves quantity and quality issues

The process must have a positive impact thus on the effectiveness of the

organisation.

Staffing or resourcing the organisation is seen as essentially involving assessing,

appraising, grading, tracking, sorting, sifting and placing employees. The staffing

objectives are concerned with ensuring than an organisation is able to call on the

services of sufficient number of staff to meet its objectives. This implies that staffing

is a process involving steps by which the organisation finds the required quantity and

quality of people.

However, Mathis and Jackson (1999) state that staffing includes attracting and

choosing potential jobholders. They further go on to define the part of attracting the

candidates/ potential jobholders as recruitment and the part of choosing from those

candidates as selection. Thus, the recruitment and selection process is concerned with

identifying attracting and choosing suitable people to meet an organisation’s human

resource requirements.

Both recruitment and selection are integrated such that where recruitment stops and

selection begins is debatable; nevertheless scholars have provided several definitions

of recruitment and selection. Whitehill (1991) describes the recruitment process as a

positive one, ‘building a roster of potentially qualified applicants’, as opposed to the

‘negative’ process of selection which ‘rejects from this list the non suitable

candidates.’ Another useful definition of recruitment is ‘searching for and obtaining

potential job candidates in sufficient numbers and quality so that the organisation can

select the most appropriate people to fill its job needs’ (Dowling and Schuler, 1990);

whereas selection is concerned more with ‘predicting which candidates will make the

most appropriate contribution to the organisation both now and in future’ (Hackett,

1991)

According to Foot and Hook (2005), the processes of recruitment and selection are

closely linked. Both activities are directed towards obtaining suitably qualified

employees and recruitment activities lay the groundwork for the selection process by

providing a pool of applications from which selections are made. However, though

the two activities are closely connected, each requires separate range of skills owing

to the different steps and stages involved and in practice may be fulfilled by different

staff members. Hence it seems more appropriate to study them separately.

Staffing Process

The need for staffing arises when there is a vacancy in the organisation. The vacancy

may be a new post that has been identified as a result of the strategic plan i.e may be

the corporate strategy involves expanding operations and so people are required to

work in the new operations or the vacancy may have arisen because an employee has

resigned, retired or dismissed.

The key stages of a systematic staffing approach can be summarised as: defining the

vacancy, attracting the applicants, assessing candidates and making the final decision.

In the words of Beardwell et al. (2004) the staffing process can be expressed in the

form of a series of questions:

Who do we want?

How can we attract them?

How can we identify them?

How do we decide whom to choose?

A short description of each stage is provided below.

Who do we want?

To be able to decide who do we need to fill a job position, it is required that we know

what the duties and responsibilities of the job are. A short description of the post, its

purpose and location in the organisation provides an understanding of what the

jobholder’s activities are and what they are meant to achieve. This statement

providing the summary of a job is known as Job Description. The next step involves

drawing up a person specification based on the job description, which identifies the

personal characteristics required to perform the job adequately. This document

outlines the knowledge, skills and qualities a person would need to have in order to be

able to do the tasks mentioned in the job description. The person specification is a

vital part of the recruitment and selection process as it provides the groundwork for

the next stages.

How do we attract them?

Once it has been determined that there is a vacancy to be filled and the job description

and person specification are drawn out, the next step involves deciding the best way to

let people know about it. At this point, a decision has to be made whether to fill the

vacancy through internal or external labour markets, also known as the internal and

external sources of recruitment. In many cases a mix of both the labour markets may

be preferred by the organisation to maximise the advantages and minimise the

disadvantages of the individual approaches.

Some organisations prefer to fill vacancies from within the organisation making use

of the existing employees, also known as the internal labour market. This is done by

way of providing the employees with opportunities for promotions and transfers.

Also known as the ‘soft’ approach (Beardwell et al, 2004), this approach increases the

morale, loyalty and commitment of the existing employees towards the organisation.

Alternatively, organisations could pursue a ‘hard’ approach (Beardwell et al, 2004) to

recruitment by searching for new employees in the external labour markets. By doing

so, new skills, ideas and experiences are added in the organisation helping it to deal

better with the rapidly changing environment that it operates in. Searching for new

employees in the external labour market can be done by advertising the job in

newspapers, journals, taking external assistance, making use of the employee

networks and referrals, participating in career fairs, and approaching university

campuses etc. The use of internet too has been an increasing source of external

recruitment. Over the years, both recruiters and job hunters have been increasingly

using corporate and external websites to advertise the job vacancies and accept CVs.

How can we identify them?

The stages described above constitute recruitment and are primarily concerned with

generating a sufficient pool of applicants. This stage onwards we deal with selection

where we concentrate on assessing the suitability of the candidates so attracted.

To be able to choose the best candidate for the position, it is required that the mass of

applications be reduced to a manageable number, a process known as short listing

(Foot and Hook, 2005). So the initial step in selection is categorising candidates as

probable, possible or unsuitable (Beardwell et. al, 2004). This is done by comparing

the information provided on the application form with the pre determined selection

criteria. Short listing is also seen as a matching process where the gaps between

candidates’ job related knowledge, skills and abilities and the requirements of the job

are common factors that lead to rejection of the applicant.

A preliminary evaluation of most of the skills of the applicant can be made at the

short listing stage, but it is not possible to judge an applicant’s personal qualities for

instance based on the information contained in the application form. Hence, the next

stage involves an assessment of these elements through various selection techniques

like interviewing, psychological testing (ability, personality, intelligence tests etc.),

work samples, assessment centres, references etc.

Interviewing is universally popular as a selection tool. Torrington et al (2002)

describe an interview as ‘a controlled conversation with a purpose’. Interview is a

face to face interaction designed to assess job-related knowledge, skills and abilities

and clarify information from other sources like tests, references etc. Interview is

usually the last step in selection process and it integrates all the information from

application forms, tests and reference checks so that a valid selection decision can be

made. However, over the years research has been unable to show that interviews have

predictive validity (Murphy and Davidshofer 2001; Smith and Robertson 1993) and

are seen as being overly subjective, prone to interviewer bias and therefore unreliable

predictors of future performance. But, whether interview is a valid selection tool

depends on whether the interview results are related to the individual’s job

performance that follows the selection decision.

The use of psychological testing, work samples and other techniques are seen as

providing information supplementary to the information gained about a candidate

during the interview besides countering an interviewer’s bias. The focus of these tests

is on specific job-related aptitudes and skills. The choice of the selection methods for

every job position/ vacancy is different as different techniques provide different kind

of information about the candidate which may or may not be related to the

requirements of the job vacancy.

How do we decide whom to choose?

After all information: subjective and objective has been gathered about the candidate

through interviews, tests, references etc, the next step involves making use of this

information to take a decision about whom to choose for the available job position.

The aim of the staffing process is to provide enough information to enable recruiters

to differentiate between those who can do the job and those who can’t. The final

decision involves measuring each candidate against the selection criteria defined in

the person specification as this will enable in deciding whether the person will be able

to perform the job or not.

The combined use of different selection methods enhances the quality and quantity of

information about each candidate, allowing the recruiters to make a more valid choice

from among the available candidates. However, since a variety of selection techniques

are used, it must be decided in advance what and how much each method should

contribute to the overall assessment. Some things will carry more weight than others

on account of being the essential prerequisites, while the lack of others may be

counter balanced by the presence of something else.

Usually this recruitment and selection process is standard among organisations but

sometimes it might get affected by the contemporary situation, factors like culture in

the external environment of the organisation, employers’ desire for flexibility etc. The

next section provides a framework that links the various stages of recruitment and

selection to the national culture, providing an explanation on how staffing could differ

in different cultures.

Theoretical Model Explaining Staffing in Different Cultural Contexts

Cross-cultural Human Resource management (HRM) is a newly evolving field that

may be considered under the broader area of international HRM. The primary

objective of the field is to examine the role of cultural context in design and

implementation of HRM practices. More specifically, cross-cultural HRM is

interested in the ways in which and the extent to which culture impacts on HRM

vis-a-vis other contingencies external and internal to the organization.

Aycan (2005) provides a systematic analysis of how culture affects HRM practices in

six key areas: Recruitment and Selection; Performance Appraisal; Training and

Development; Job Analysis; Human Resource Planning and Career management; and

Compensation and Reward management. By identifying the underlying cultural forces

leading to the differences in HRM practices in different countries, a framework is

provided which can be applied generally to any country or organisational context.

However, only the part of the framework relating to recruitment and selection is

described here as it is just this part that is the purview of the present study.

As an attempt to explicate the role of culture in HRM practices, a theoretical model,

the Model of Culture Fit (MCF) was proposed by Kanungo and his associates

(Kanungo and Jaeger, 1990; Mendonca and Kanungo. 1994; Aycan et al, 1999). The

model was tested in ten countries, Canada, the US, Germany, Israel, Romania, China,

Pakistan, India, Turkey and Russia, with the participation of 2,003 managers and

employees (Aycan et al., 2000). The MCF assessed culture at two levels: societal (i.e.

the socio cultural context) and organizational (i.e. internal work culture).

The framework provides the working definition of socio-cultural context as including

values, belief systems, assumptions and behavioural patterns that differentiate one

group of people from another. Culture is conceptualized and measured through

various value dimensions (e.g. Hofstede, 1980; House et al., 1999; Trompenaars.

1993; Schwartz and Bilsky, 1990). According to Aycan (2005) using value

dimensions in operationalizing culture is not without criticisms, but this approach is

common and convenient, because cultural dimensions show validity; they are at the

right level between generality and detail; they establish a link among individual,

organizational and societal level phenomena; and they are easy to communicate.

The theoretical model puts forth four cultural contingencies that generalise how

recruitment and selection takes place in cultures with different cultural dimensions.

The propositions provided are as follows:

Proposition 1: Recruitment and selection are based on "hard criteria"(i.e. job related

knowledge, competencies, technical and cognitive skills) in cultures

that are high on Performance Orientation or Universalism. 'Soft

criteria"(e.g. social and interpersonal skills, social class, age) are used

in cultures that are high on Femininity, low on Performance

Orientation.

Proposition 2: Internal recruitment is preferred to external recruitment in cultures that

are high on Uncertainty Avoidance or Collectivism.

Proposition 3: Recruitment channels and methods are informal and network-based in

cultures that arc high on Uncertainty Avoidance, Oriented towards

Ascribed status or Collectivistic. Recruitment channels and methods

are formal, structured and widespread in cultures that are high on

Universalism or Performance Orientation.

Proposition 4: Selection methods are standardized and job specific in cultures that

are high on Performance Orientation or Universalism. Whereas they

are not standardized, broad-ranged and rely on face-to-face

interactions in cultures that are high on Particularism or Femininity.

Through these propositions, the framework explains how staffing could differ in

different cultures. An analysis of the different dimensions of the culture in which an

organisation operates provides an indication of the preferences people may have for

different channels of recruitment, methods employed for staffing, standard candidate

profile etc. Hence by understanding culture and its underlying assumptions values and

beliefs it is possible to understand who to hire, how to hire and from where.

Central Research Question

Basis for the research question has already been laid down in the previous section.

Hence, the central research question has been formulated thus:

What effect does culture, manifested in the form of cultural dimensions have on the

staffing pattern followed in the Indian subsidiaries of Danish companies as compared

to the staffing pattern followed at the headquarter in Denmark?

To answer this question it was required that a research be undertaken. However it

remains to be seen which research method would prove to be most appropriate. To be

able to ascertain the research method and techniques that would best answer the

research problem, first an understanding of what the available research methods and

techniques are is imperative. The following section attempts the same.

Research methods – Qualitative Vs Quantitative

Research methods refer to systematic, focused and orderly collection of data for the

purpose of obtaining information from them to solve/ answer a particular research

problem or question (Ghauri and Gronhaug, 2007). Research methods can be

classified in various ways; however one of the most common distinctions is on the

basis of the methods of data collection and analysis: quantitative and qualitative.

Quantitative research attempts precise measurement of phenomenon, attitudes and

behaviour and answers questions related to how much, how often, how many, when

and who (Cooper and Schindler, 2007). Quantitative research involves coding,

categorization and reduction of the gathered data to numbers so that statistical

analysis can be conducted based on the quantitative tallying of events or opinions,

called frequency of response.

Qualitative research on the other hand aims to achieve an in-depth understanding of a

situation by using techniques that seek to describe, decode, translate and explain the

meaning, not the frequency of the occurring phenomena (Ghauri and Gronhaug, 2007)

Qualitative research seeks to develop an understanding by gathering data which

provides a detailed description of events, situations and interactions among people

and things providing depth and detail.

The main difference between quantitative and qualitative research is not of ‘quality’

but of procedure. In qualitative research, findings are not arrived at by statistical

methods or procedures of quantification. Normally, the basic distinction between

quantitative and qualitative research is considered to be that quantitative researchers

employ measurement and qualitative researchers do not (Layder, 1993; Bryman and

Bell, 2003).

In a qualitative research, the researcher is significantly involved in collecting and

interpreting the data. By contrast, with quantitative studies, the researcher who

interprets data and draws conclusions from it, may or may not be the data collector

and often has no contact at all with the participant. The involvement of researcher

with the collection of data has both advantages and disadvantages. On the one hand

where involvement with data collection could lead to biased results, on the other it

allows greater detail and better understanding. One potential advantage of using

quantitative research is that the results so obtained can be generalised to a larger

population, which is amiss in the qualitative research owing to comparatively smaller

sample sizes. Both the research methods have their advantages and disadvantages and

neither is better than the other. The use of either or both in combination is context

dependent.

The choice of data collection depends on the overall judgement of which type of data

is needed to answer a research problem. So, it is the type of answers that we are

looking for which decide the type of analysis to be undertaken. In words of Jankowicz

(1991), which methods and techniques are most suitable for which research (project)

depends on the research problem and its purpose.

Usually when the research problem is concerned with building the theory, qualitative

methods of analysis are chosen. The reason behind this choice is that these methods

allow uncovering and understanding of a phenomena about which little is known. This

may also be the case when studying the phenomena is difficult through quantitative

methods. However, use of quantitative methods is most preferable when the emphasis

is on testing different hypothesis that were build using the qualitative research

methods. Quantitative methods allow acceptance or rejection of these hypothesis in a

logical, consistent manner by studying/ testing it on a large population.

As described earlier, the qualitative research methods allow the researcher to explore

and probe deeply into the attitudes and behaviours, providing a better understanding

of a given context and underlying assumptions. Being flexible and unstructured (as

compared to quantitative methods), the qualitative methods employ a limited number

of observations trying to explain different aspects of the problem area with an in-

depth analysis.

The present study is undertaken with a view to understand how the staffing pattern

differs in the subsidiary compared to the headquarters due to the effect of social

culture of a country. This requires understanding why people take the decisions they

do (meaning) and how do they do it (process). And since this requires studying

people’s intentions, motivations and subjective experiences related to culture and

staffing, qualitative data would best answer the problem at hand. To be able to gather

data about the people’s experiences, beliefs and values which influence the staffing

decisions, it is required that various other factors leading to these values and attitudes

be studied and examined. The multiplicity of the dimensions and relationships

involved would require providing rich and detailed descriptions of the particular

contexts illuminating important issues of the specific cases.

There are a number of techniques and methods for quantitative data collection, among

which case studies, surveys, focus groups, interviews are the most commonly used.

As said earlier, different methods are suitable for different types of studies and it is

the research problem and the research objectives that indicate the type of method to be

used (Ghauri and Gronhaug, 2007).

Case studies are used for descriptive and explorative research, when the phenomena

under investigation are difficult to study outside their settings and when the variables,

which are usually many, are difficult to measure. In a case study, the primary sources

of data collection include verbal reports, personal interview and observation. Case

studies are the preferred approach when questions relating to how and why are to be

answered.

Focus group is a small group of people interacting with each other to seek information

on a small (6-10), focussed number of issues under the direction of a moderator

(Stewart and Shamdasani, 1990; Bryman and Bell, 2003). The use of focus group as

data collection is most suitable when the opinions and views of people about a set of

topics/ issues is to be determined. Though quick, flexible and inexpensive, this

method could lead to argument and biased views, influenced by those in the group.

Surveys refer to a method of data collection that utilizes questionnaires or interview

techniques for recording the responses. This is the most preferred tool when the

opinions, attitudes of the respondents are to be understood. Surveys usually make use

of structured questionnaires and hence leave little or no room for the respondents to

add to the information sought from them.

Interviews are often considered as the best data collection methods because they

involve real interaction between the researcher and the respondent. Interviews refer to

face-to-face verbal exchanges in which one person: the interviewer, attempts to obtain

information, opinion or beliefs from another person: the interviewee (Ghauri and

Gronhaug, 2007). Being directly involved in the data collection, the researcher

through interviews is able to obtain information about personal, attitudinal and value

laden material.

Interviews may be structured or unstructured. Structured interviews follow a standard

interview format with questions coded beforehand and fixed response categories. On

the other hand, unstructured interviews allow full liberty to the interviewee to discuss

reactions, opinions, experiences etc. The questions usually are unstructured and not

coded beforehand. While it is easy to analyse structured interviews, the unstructured

are usually difficult not only to analyse but also generalize. Another variant, semi

structured interviews differ from the regular interviews in the sense that the topics and

issues to be covered, sample sizes, people to be interviewed and questions to be asked

are determined beforehand. As a result, semi structured interviews allow uniformity

while striking a balance between detail and structure.

Interviews can be conducted face to face, via telephone or through the internet.

Advantages of telephone interviews among others are that the interviewer can take

notes and work actively during the interview without distracting the interviewee.

Another advantage is that telephone interviews increases the likelihood of finding a

time and date from the tight schedule of the interviewee when he/ she can be

interviewed. However, a potential drawback of telephone interviews is the threat of

not having 100% of the interviewee’s attention since the person could also be working

on other things simultaneously. But, due to the relatively low degree of complexity in

the interview the advantages of telephone interviews were decided to outweigh most

disadvantages.

The research question here, as stated earlier requires in-depth understanding of the

phenomena based on the behaviour, values, attitudes of the people so the most

appropriate technique is interviewing as it allows understanding the phenomena in the

context of the participants and the meaning they attach to different aspects, in their

own words and expressions.

Reliability, Validity, Generalization:

Given the small number of companies involved, naturally, the reliability of the

empirical work in terms of generalization value is low. This is true for most

qualitative and/or explorative/experimental studies. This would probably not have

been any different with 10, 15 or even 30 companies since qualitative data due to its

depth has a low generalisation value. The validity of the empirical work is considered

high due to the first hand data collection by the researcher, which is common for most

qualitative studies. Qualitative studies typically aim at producing valid results.

Furthermore, the interviews were recorded and the interview transcripts were later

sent to the interviewees as an attempt to increase validity of data so collected. A

further indication of high validity is that interviewees dedicated enough time and

focus to the interviews in order to produce solid information. All the interviews were

conducted at times most convenient to the interviewees and where they were

undisturbed and had good time to reflect over their answers. Furthermore, the

interview form of telephone interview made it possible to make notes and comments

about replies without disturbing the interviewees.

Samples:

When conducting a research it is impossible to collect data from everyone concerned

with the thesis topic unless the research population is very small e.g. a small group of

people. Hence collecting data from portion of the population and inferring something

about the larger group/ population is sampling. Hence, the basic idea of sampling is

that by selecting some of the elements in the population, conclusions are drawn about

the entire population, where a population is the total of all elements about which we

wish to make some inferences. The appropriate number of samples depends on type of

research question, type of qualitative approach, available resources etc. Since the

qualitative research attempts focusing in great depth on few phenomena hence the

sample sizes are small.

The present study involves studying the staffing procedure in Indian subsidiaries of

Danish companies and the headquarters in Denmark. Hence, from among all the

subsidiaries a sample of six was chosen and interviews were conducted with the

respective people. The following section provides a description on how the companies

were located, contacted, selected and interviewed both at the subsidiaries in India at

the headquarters in Denmark.

Collecting the data

Locating the Companies

In order to collect primary data companies that fitted the criteria for the project had to

be identified. The criteria on the basis of which the companies were selected was that

they should have a subsidiary office in India, with headquarter office in Denmark and

also that the subsidiary office should have been operational for at least five years. The

time dimension was added with a view that the subsidiary office would have enough

experience about staffing and hence would be able to contribute to the quality of data

so collected.

To obtain a list of organisations that match the criteria mentioned above, an email was

sent to the commercial department at the Embassy of Denmark in New Delhi, India,

with a short description of the objective of the undertaken study. A list of total 63

organisations with additional information about them was sent to me, from among

whom 18 matched the laid down criteria. From among these 9 were selected after

making a short study of their backgrounds, fields of work etc. After making the

selection, next step was contacting the companies.

Contacting the companies

It was considered more appropriate to call the organisations than sending an email as

it would be better to explain the objective of the study verbally than in writing and

also address concerns and questions about the same in a better manner. Out of the

chosen 9, 3 responded in the negative with an excuse of not being interested in

participating in the study. Out of the 6 companies who were interested in being a part

of the study, the concerned people from the headquarter of one of the organisations

opted out due to lack of sufficient time and hence only 5 companies were interviewed.

The next step involved conducting the round of interviews with the concerned people

in the remaining companies who were interested in being a part of the study.

The method in which the interviews were conducted varied on a case to case basis,

though the structure of the interviews remained the same. This was not only due to the

busy schedules of the people being interviewed but also as the companies were

scattered all over the country, especially in India making it not so viable to travel all

that long a distance. Hence the interviews so conducted were a mix of personal and

telephonic. In the case where interviews were conducted on phone, a dictaphone was

used to record them (by permission) so that none of the details from the interview are

missed.

Conducting the interviews

Two rounds of interviews were conducted with the concerned people. The first round

of interviews conducted were unstructured, with slight prompting to get an

understanding of the organisation, its setting and the staffing procedure so followed.

The second round of interviews were based on a structured format (included in the

appendix) to enable gathering data that could be compared to each other. Later, a

transcript of the interviews so conducted was sent to the interviewees to ensure that

their responses had been understood correctly. Following is the list of companies

contacted and interviewed with a brief about their field of work, number of employees

and other relevant information regarding the interviews so conducted.

Company A

A leading northern European consulting group which provides services within

the fields of engineering, environmental science and economics

Subsidiary is involved with IT, software, digital mapping and remote systems

With companies and offices in 36 countries, it employs about 4,800 people

world over of which 2,500 are a part of headquarter and about 315 are

employed at the subsidiary office

Human resources department at the headquarter is fully developed with about

60 people catering to the various Human Resource needs

The Human Resources department at the subsidiary employs about 20 people

who work in close consultation with other employees to cater to the Human

Resource needs

To collect data about the staffing procedure of the subsidiary, the head of Human

Resources department was interviewed. Both the rounds of interview were conducted

in person and though the unstructured interview lasted about an hour, the second,

structured interview being specific, took a little more than 30 minutes. At the

headquarter, a human resource executive specialising in recruitment and selection was

interviewed. Here, both the first and second interviews were telephonic and while the

unstructured interview took about 45 minutes, the structured interview was over in 25

minutes.

Company B

Working within the field of energy optimisation through catalytic

processes in chemical plants

With offices in 9 countries, it mainly employs experienced and skilled

professionals within mechanical engineering, and technical services

The organisation has more than 2000 people working with it of which 90 are

employed at the headquarter and about 60 form a part of the Indian subsidiary

The Indian subsidiary office is responsible for the completion of the projects

outsourced to it by the headquarter

The Human Resources department at the headquarter is small with just 9

people involved with catering to the various Human Resource needs

The Indian subsidiary has a very small (just 3 people) Human Resource

department, with the subsidiary head being the ultimate authority

The Human Resources manager was interviewed at the subsidiary to collect data

about the staffing process. Here, the unstructured interview was conducted face to

face and took about 45 minutes however the structured interview had to be conducted

via telephone due to the busy schedule of the interviewee and lasted about 25 minutes.

At the headquarter an assistant Human Resources manager was the interviewee. Both

the unstructured and structured interviews were telephonic due to the lack of time and

lasted for 45 and 30 minutes respectively.

Company C

Global and independent research and development organisation dedicated to

work within the fields of water, environment and health

Offices (including subsidiary) in about 23 locations across the major

continents

About 750 employees worldwide majority being professional engineers and

scientists

There are about 450 employees working at the headquarter and about 50 in the

Indian subsidiary

Human Resources department at the headquarter is not very developed

performing the very basic Human Resource functions

The subsidiary in India has no Human Resources department, with the

subsidiary head being responsible for staffing decisions

In the absence of a Human Resources department at the subsidiary, the subsidiary

head was interviewed regarding the staffing practices so followed. The unstructured

and structured interviews were conducted in person and lasted about 45 and 30

minutes respectively. At the headquarters, Head of human Resources department was

the interviewee. Both the unstructured and structured interviews had to be conducted

via the telephone as the time for a personal appointment could not be spared. While

the former interview took about 40 minutes, the latter was wrapped up in 25 minutes.

Company D

Family owned clothing company

17 offices around the world apart from more than 4,100 shops in 41 countries

Employs more than 39,000 people worldwide in the fields of designing,

marketing and selling with about 3,000 at the headquarter in Denmark and just

9 at the Indian subsidiary office

The subsidiary acts as a buying and liaison office for the headquarters and

works in close coordination with it

Human Resource department at the headquarter is fully developed and reports

directly to the CEO

The subsidiary does not have a Human Resource department; the subsidiary

head takes care of all the Human Resource requirements

In the absence of the Human Resources department, the subsidiary head who takes

care of all the Human Resources requirements was interviewed about the staffing

practices followed at the Indian subsidiary of organisation D. Though the unstructured

interview was conducted over the telephone lasting about an hour, the structured

interview was a face to face interaction which was over within 20 minutes. At the

headquarters, a management trainee was assigned by the head of recruitment to

answer my questions. The unstructured interview took about 50 minutes. For the

structured interview, the head of recruitment was the interviewee and the interview

lasted for a little more than half an hour.

Company E

One of the world's leading producers of food ingredients, enzymes and bio-

based solutions

A global company with activities at some 80 locations in more than 40

countries

9,200 employees in all with 350 working at the head quarter in Denmark and

50 in the subsidiary office in India, of which about 85% are scientists and

researchers

Human Resources is regarded as a corporate function and maintained by an

open dialogue across the organisation

The Human Resources department reports directly to the CEO and CFO (at

headquarters)

The subsidiary has a very small Human Resource department comprising of

just 3 people, reporting to the subsidiary head

Due to the packed schedule of the people working in the Human Resources

department of the Indian subsidiary, the subsidiary head was interviewed for both the

unstructured and structured interview which were face to face interactions lasting for

40 and 25 minutes respectively. At the head quarter, the Human Resource manager

was the interviewee. Here too both the interviews were conducted in person and lasted

about 45 and 25 minutes respectively.

Findings

Organisations

Propositions || V

Org. A

Subsidiary

Org. AHeadquarter

Org. B

Subsidiary

Org. BHeadquarter

Org. C

Subsidiary

Org. CHeadquarter

Org. D

Subsidiary

Org. DHeadquarter

Org. E

Subsidiary

Org. EHeadquarter

Recruitment and Selection Criteria:

Hard/ Soft

Mix, varying with kind &position of job

Hard criteria

Hard criteria

Mix, varying with the kind of job

Hard criteria

Hard criteria

Preference for soft criteria

Mix, varying with the kind of job

Hard criteria

Hard criteria

Sources of Recruitment:

Internal/ External

Preference for internal sources

External sources

Preference for internal sources

External sources

External sources as small and growing

External sources

Mix, depending on requirement

External sources

Preference for internal sources

External sources

Recruitment Channels and methods:

Formal/ Informal

Preference for informal and network based

Formal and structured recruitment channel and methods

Mix of formal and informal

Formal and structured recruitment channel and methods

Preference for formal recruitment channels

Formal and structured recruitment channel and methods

Preference for informal and network based

Formal and structured recruitment channel and methods

Mix of formal and informal

Formal and structured recruitment channel and methods

Selection Methods:

Job specific, standardised/Non standardised

Standardised and job specific selection

Standardised and job specific selection

Non- standardised selection methods

Standardised and job specific selection

Non-standardised selection methods

Standardised and job specific selection

Non- standardised selection methods

Standardised and job specific selection

Standardised and job specific selection

Standardised and job specific selection

As can be seen in the table above, there are some differences among the recruitment

and selection patterns not only in the subsidiaries in India and the headquarter in

Denmark, but there are also significant differences among the data collected from the

subsidiaries.

A glimpse into staffing the Indian subsidiary

The data collected from the Indian subsidiaries indicate a preference for job related

knowledge as a criterion for recruitment and selection. While the recruitment channels

and methods were a mix of network based and formal, the subsidiaries were more in

favour of filling the vacancies from within the organisation. It was also found that the

selection methods followed were non-standardised.

The foremost criterion for the subsidiaries was the job knowledge, competencies and

job related abilities. Additionally, the subsidiaries reported that while recruitment it

was ensured that the selected candidate was someone who suited the current group of

employees primarily in terms of age so as to maintain and the strengthen the in-group

feeling that the employees shared. It was tried that the mismatch brought out by age

difference among employees be avoided unless it was the requirement of the position

in question for e.g. when looking for a project head. The emphasis on job related work

experience was overlooked in the cases when due to non availability of a suitable

candidate either from the current group of employees or the employee referrals, the

organisation resorted to campus placement. According to them it was easier for them

to hire and train a fresher than hire an experienced worker and mould him/ her to suit

the organisation’s requirement.

During the interviews conducted it also came to light that the background of the

candidates was given importance and at times lead to swaying of selection decisions

especially when a candidate had studied at a renowned university/ institute.

Interviewing the candidate was a common practice when making the selection

decision and almost no use of any ability, personality tests was reported by the

subsidiaries. However, to get a better idea of the candidate’s personality, attitude and

behaviour the organisations enunciated that instead of a single interview they

conducted a two and at times even a three tier interview.

36

The exceptions:

Of the five subsidiaries interviewed two did not stress entirely on job knowledge,

competencies and job related abilities. One (organisation A) insisted on the

interpersonal, social skills being equally important for the job performance as the

work in the organisation was divided in teams requiring that employees not only

contribute within the team but also coordinate among the teams, while the other

(organisation D) thought the interpersonal skills to be a tad more important due to the

fashion and garment industry they were a part of and also since the subsidiary acted as

a buying office for the headquarter which required dealing with a lot of people.

As for the sources of recruitment, organisation C had no option but to look for

potential employees in the external recruitment market as the current employees were

not enough to handle the work pressure and so hiring from within was used only on a

temporary basis till someone qualified enough could be found. However like in other

subsidiaries organisation C too gave priority to candidates applying for the post

through personal networks. While in organisation D both internal and external sources

were preferred depending on the kind of post to be filled. According to the

interviewee the search for administrative staff was usually in the external sources like

job blogs or through personal networks but for designers the present pool of

employees was where the search began and ended.

While the subsidiaries primarily relied on interviews as a tool for selection, both

organisation A and E combined the information acquired by the candidate through

interviews with special ability tests developed at the headquarters to analyse the job

skills and competencies. In their view these tests had provided them with better

employees over the years.

The case for staffing at the Danish headquarters

The data collected at the headquarters of the multinational enterprise indicate

inclination towards external sources of recruitment, almost never utilising the internal

ones. The recruitment channels and methods are formal, wide spread and the selection

37

methods are standardised and job specific. However the organisations are not quite

unanimous on the importance they attach to the recruitment and selection criteria.

The headquarters unanimously agreed on making use of the organisation’s website,

job portals and in very few cases the print media as the source of advertising the

vacant posts. The selection decisions are not only based on the information collected

about the applicant through the conducted interviews, but the information is

supplemented by the various skill tests that predict the applicant’s on the job

performance making the selection decision more objective

Out of the five headquarters interviewed, three were outright in accepting their

preference for job knowledge, competencies and job related abilities as the

recruitment and selection criteria. However the other two: organisation B and D

favoured a mix of both job knowledge, competencies, job related abilities and

interpersonal, social skills. While in organisation B the mix was preferred due to the

presence of teams requiring contribution to and coordination among them,

organisation D settled upon a mix of both job and interpersonal skills as its area of

work required a lot of back and forth coordination among the various departments.

The comparison

From the table of findings and description above it is evident that differences exist

between the staffing in the subsidiaries in India and at the headquarters in Denmark.

While the staffing procedure is standard at the headquarters, the procedures followed

at the subsidiaries seem to be more non standardised and informal. The differences are

also evident in the subsidiaries’ inclination towards internal recruitment sources and

employee referrals and the preference of headquarters for the external labour market.

The value placed on the criterion for recruitment and selection and the selection

method vary among subsidiaries and headquarters on a case to case basis.

The following section sheds some light on the possible reasons for these differences in

the staffing procedures followed at the headquarters and at the subsidiary and also

analyses to what extent these differences are brought about by the respective cultures.

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Discussion

At the outset of this research it was assumed that the differences in the staffing

procedure followed by a subsidiary and headquarter are influenced by the respective

national cultures. To test the hypothesis, data about the staffing practices was

collected from the subsidiaries operating in India and compared with similar data

collected from the headquarters in Denmark. The findings point out that there are

differences in the staffing procedures followed by the subsidiaries and headquarters.

First the theory and findings are juxtaposed and later it is analysed whether national

culture influences staffing and if so then to what extent.

Theory Vs Findings

Applying the findings of Hofstede (1980), Trompenaars (1995), House et al (1999)

about the Indian culture to the theoretical model of Aycan (2005) it was proposed that

organisations use a mix of hard and soft criteria, rely both on internal and external

sources for recruitment, blend network based, informal and formal recruitment

channels, methods and employ both standardised and non – standardised selection

methods.

The data collected from the subsidiary offices in India indicate a preference for hard

criterion for recruitment and selection. Though the recruitment channels and methods

used were found to be a mix of formal and informal but the collected data revealed

that the subsidiaries were more in favour of filling the vacancies from within the

organisation. The subsidiaries also relied a great deal on employee referrals for filling

the vacant posts. It was also found that the selection methods followed were non-

standardised, with no use of job related tests, emphasising on interviews as a major

selection tool.

The summary of findings doesn’t seem to entirely match up to the theoretical

assumptions. The assumption about the use of a mix of hard and soft criteria for

recruitment and selection has been falsified as the subsidiaries prefer to use hard

criteria. Also, opposed to the proposition of the selection methods being a mix of

39

standardised and non-standardised, were found to be non-standardised with almost no

use of ability or personality tests to supplement the interview information. It was also

found that subsidiaries dealt with the recruitments and selections on a case to case

basis, going easy on the rules and procedures. The inclination of the subsidiary offices

for network based and informal recruitment methods and channels more or less

conformed to the assumptions.

For the headquarter offices in Denmark based on the findings of Hofstede (1980),

Trompenaars (1995), House et al (1999) according to the theoretical model of Aycan

(2005) it was proposed that the criteria used while recruitment and selection are a mix

of hard and soft, there is a preference for external recruitment sources, recruitment

channels and methods are formal, structured and the selection methods are a mix of

standardised and non-standardised with a preference for non-standardised.

The findings more or less conform to the laid down theoretical assumptions. Apart

from the criteria used for recruitment and selection and the choice of selection

methods, the assumptions about the recruitment channels, methods and sources prove

to be valid. Only two of the five organisations preferred a mix of both hard and soft

criteria for recruitment and selection. The findings also reveal that the selection

methods were highly standardised and there was a great reliance on job related tests in

addition to the interviews, which too were an important part of the whole selection

method.

To a certain extent it can be said that the assumptions about the staffing procedures

followed at the subsidiary and the headquarter hold true. This implies that the culture

of the respective countries influenced the staffing practices. However to arrive at a

conclusive answer on the role played by national culture on the recruitment and

selection patterns followed at the subsidiary and headquarters it is important to

analyse the possible reasons that could account for the differences.

An Analysis

It was observed that both at the subsidiaries and headquarters, apart from the

recruitment and selection criteria which was directly related to the job performance of

40

the candidate, the preference for sources, methods, channels for recruitment and

selection had traces of being influenced by the national cultures.

According to the findings both the Indian subsidiaries and the Danish headquarters

preferred hard criteria for recruitment and selection. This seems to be for the reasons

other than culture since the sample primarily included firms which employed a greater

degree of scientists, engineers and researchers and for whom having adequate job

knowledge, competencies and job skills was important. This was same for

organisations irrespective of the fact whether they were a subsidiary office or

headquarter. The ones who preferred a mix of hard and soft criteria or soft criteria for

recruitment and selection were those where dealing with many people and

departments was an essential part of their nature of work. However, if the sample had

probably included organisations from a different industrial sector like consumer

goods, health industry or service sector the effect of culture on criteria used for

recruitment and selection could be studied in greater detail.

While the headquarters strictly relied only on formal methods, channels and external

sources of recruitment being tolerant to uncertainty, the subsidiaries depended on

network based, informal recruitment channels and methods. Though the reasons for

relying on the internal labour market were different however the collectivist

undercurrent among the subsidiary staff became evident. In certain cases when

recruitment from the existing pool of employees was not possible, the most trusted

external sources were considered to be referrals from the people currently employed

in the organisation. On the contrary the headquarters not only detested the internal

labour market, they also reported that employee referrals or candidates from the

network were not seen as in good taste. These differences probably have their roots in

the cultural values of collectivism in the Indian culture and individualistic Danish

culture with the former being slightly more risk averse than the latter.

However, these differences could have another side to them too. The subsidiaries

being small in size do not strictly adhere to the guidelines and laid down procedures

for recruitment increasing the subjectivity of the business decisions. Also, most of the

subsidiaries being small in size either do not have a human resource department or

have a very small minimally functional department. In such a situation, the

41

subsidiaries depend greatly on their subsidiary head who is the ultimate authority for

all business decisions. This infuses greater subjectivity into subsidiary operations. The

headquarters on the other hand not only strictly adhere to the laid down guidelines but

also have fully functional human resource departments that take care of the staffing

function completely without any of the higher authorities requiring to censor the

process.

Also, at times the area of work of the subsidiaries is such that the external sources of

recruitment do not provide the human resources with the requisite skills. This leaves

them with no option but to look for employees from within the current pool or search

for the employee through the word of mouth in their professional networks. The

subsidiaries also reported that in situations when the work was more than the current

employees could handle, they had to look for new employees in the external markets,

which was also the case when they wanted to expand their operations.

The subsidiaries relied greatly on the interview as the selection tool since at times

there were no appropriate job related tests that could predict the candidate’s on the job

performance. In instances where the tests were available that could assess the

candidates for the required skills, subsidiaries reported that those tests were either not

applicable to the Indian context or did not yield desirable results.

From the above analysis it thus appears that several reasons can singularly or in

combination be attributed to help explain the differences in the findings.

Conclusion

In the converging globalising world, the divergent cultural streak is still evident.

Culture with its set of assumptions provides answers to universal problems, which not

only guide how to survive in the world but also put forth the most appropriate

behaviour for certain situations. Being ingrained in the people it is difficult to separate

them from their culture. Culture is an integral part of the environment in which an

organisation functions. However, lacking precise measurement and objectivity it

infuses a sense of uncertainty and hence is often disregarded by the multinational

enterprises as being unimportant.

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The cultural traces are evident in both the subsidiaries and the headquarters’

preferences for the sources, methods employed for recruitment and selection. The

sources and methods for recruitment and selection followed in the subsidiary were

informal, non - standardised and network based. On the contrary, the headquarters

employed standard, formal sources and methods for recruitment and selection. But,

the criteria for recruitment and selection probably being very organisation/ industry

dependent and directly related to the job, it seemed was not influenced by culture.

However to conclude that the differences in the staffing patterns followed at the

subsidiary and the headquarters are solely a product of culture would be wrong. As

elaborated in the previous section, there are other factors in the external environment

of the organisations that guide the business decisions. The presence of these factors

upon which the organisations have very little or no control, force them to take

decisions that cannot be justified by or attributed to culture alone.

Thus, from the findings and discussion it can be concluded that the culture is an

influencing factor but may or may not be the only factor based on which business

decisions are taken. Cultures guide behaviours which explain the preferences of

people. However, being too idiosyncratic and abstract culture lacks the concreteness

required to base the business decisions entirely on, especially in a fast paced and

highly competitive corporate world. In the business world where decisions are based

on precise calculations and expression in numbers, culture is too soft a concept sans

enough potential to make the objective business world bow down to its subjectivity.

43

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