Question

legal and cultural considerations for human resources for an international firm in India when hiring top level management using the
Hofstedes Cultural dimensions

Answer 1

Introduction

Culture affects and governs all facets of life by influencing values, attitudes and behaviours of a society. The culture of an organisation relates to the unique modes of carrying out their activities. Furthermore, the nature of organisational culture is essentially influenced by the cultural orientations of the individuals forming it. Viewed as the socially transmitted behaviour patterns, norms, beliefs and values of a given community or organisations, culture is often seen as a source of conflict than of synergy Hofstede (1998). This conflict arises when people of different cultures interact with one another. In this light, the content of the organisational culture, which is either in line with or different from their respective cultural orientations, would determine to an outsized extent, the success or failure of the multinational business.

Culture is central in managing the present global workforce dynamics. Aguilera & Dencker (2004) have divided culture into two distinct but overlapping groups; organisational cultures and national cultures. National and organisational culture can have a pervasive and powerful influence in organisations and in various aspects of global workforce management. Each culture is unique and those who find themselves in a particular culture imbibe it and it becomes an integral aspect of their lives. Such cultures may differ slightly or significantly from one organisation to the other. A more critical issue in this categorization of cultures is that the success of mergers and acquisitions do not depend on the mere differences in culture (organisational or national); but how the cultural issues are managed (Harzing et al, 2011).

The success of mergers and acquisitions involving multinational companies to a large extent depends on the effective management of diverse cultures arising out of such ventures. For this reason, organisations engaged in cross-border mergers and acquisitions need to take into careful considerations cultural issues if they are to be successful. In managing human resources within the international settings some problems with paramount importance are; recruitment & selection strategies, training, retention & remuneration and exit strategies. In all these, culture may be a key variable and a predictor of success or failure. The assertion that if multinational companies want to be successful and maintain a competitive advantage in any international domain, they need to adopt an organisational culture that's properly suited within the context of the national culture within which they operate is premised on the assumption that leadership styles and behaviours are culture-bound.

Hofstede’s Cultural Dimensions and Managerial Implications

Geert Hofstede defined national culture because the set of collective beliefs and values that distinguish people of 1 nationality from those of another. In his original comprehensive study conducted while performing at IBM as a psychologist and involving over 100,000 individuals from 50 countries and three regions, Hofstede identified four important dimensions in national cultures. These dimensions are outlined as follows:

• Uncertainty Avoidance

This dimension refers to the extent to which individuals feel comfortable once they are exposed to an ambiguous or uncertain situation. People during a low uncertainty avoidance society are more willing to require risks and appreciate flexibility and informality within the workplace. In contrast, people during a high uncertainty avoidance society tend to be risk-averse, and favour rigid and formal decision-making processes within the workplace.
The perceived difference in tolerating uncertain situations has several important implications at both macro and micro levels. Firstly, at the macro level, the acceptance of uncertainty is essential for innovation because it requires a tolerance for risk and change. On the opposite hand, at the micro or organisational level, in high uncertainty avoidance societies, numerous formal internal rules and regulations exist to regulate the work process of employees. In low uncertainty avoidance societies, managers are allowed to exercise more latitude and discretion in their decision-making instead of counting on rigid internal rules and regulations.

• Power Distance

Power distance refers to what extent people have an equal distribution of power. In a large power distance culture, power is concentrated at the highest within the hands of relatively few people while people at rock bottom are subject to decisions and instructions given by superiors. Conversely, during a small power distance culture, power is quite equally distributed among the members of the society (House et al., 2002; 2004). Power distance as an idea has important implications within the organisational setting

Firstly, managers in high power distance societies tend to believe giving subordinates detailed instructions with little room for interpretation. Subordinates are alleged to respect the authority and superiority of upper management. Thus, the “mechanistic characteristics” of high power distance cultures, like inequality among the members within the society, lack of free communication across different levels of the hierarchy, and centralized control can all stifle employee creativity and new ideas.

In contrast, low power distance societies are including “organic characteristics,” like lack of hierarchical authority and fewer centralization which tend to market employee interaction, lateral communication, and less emphasis on the rules. Non-directive, hands-off monitoring systems have often been implemented to permit the creativity and exploration necessary for successful innovation.

• Individualism vs. Collectivism

This dimension is concerned with the degree to which individuals are integrated into groups. Individualism as an idea means people seek and protect their own interests over the common goal of the society and their role within the society. In an individualistic culture, people are comfortable with having the authority to make a decision based on what the individual thinks is best. In individualistic societies, employees are given an excellent deal of private freedom and autonomy.

However, in a collectivistic culture, people tend to belong to groups or collectives and look after each other in exchange for loyalty. Collective cultures thereby don't usually allow the liberty and independence necessary for organisational members to think creatively and, thereby, fail to cultivate an environment that fosters an innovative spirit

Innovation is additionally curtailed upon since collective cultures are reluctant to simply accept variety and variety in society. Moreover, the overwhelming and unconscious pressure for conformity and uniformity in collective cultures doesn't cultivate an environment for diversity, and provides less room for people to deviate from established norms, thus impeding the innovation process.

• Masculinity vs. Femininity

This dimension deals with the distribution of emotional roles between the genders. Hofstede believes that the masculine dimension is extremely closely associated with the concept of accomplishment motivation. A masculine culture is essentially a performance driven society where rewards and recognition for performance are the first motivational factors for achievement
This type of culture tends to offer the utmost respect and admiration to the successful achiever, who fulfills his ambition and demonstrates assertiveness and willingness to require risks so as to achieve goals. Top management positions are usually crammed with men who tend to display characteristics of dominance and assertiveness which tend to be discouraged among women by societal gender norms.
On the opposite hand, in feminine cultures people tend to stress the standard of the “whole” life instead of money, success, and social station , which are easier to quantify. They are willing to reach out to the underprivileged and share their wealth with them. Overall, organisations with a female culture aren't as competitive as those with a masculine culture, since the previous places higher priority on concern for others and tiny distinction is made between men and women in the same position.

• Confucian Dynamism

Using a different survey instrument called the Chinese Value Survey (CVS), Hofstede & Bond (1988) identified a new cultural dimension, “long-term versus short-term orientation,” that strongly reflects Confucianism, a cultural backbone of East Asian countries. Hofstede emphasized that this particular cultural dimension was missing in his original study and only relevant to countries in East Asia. Confucian dynamism may reflect a society’s look for virtue instead of truth, truth being driven by religious ethics in Western countries.

Long-term orientation captures the subsequent elements: adaptation of tradition to the fashionable context, high savings ratio driven by thrift, patience and perseverance towards slow results, and concern with respecting the demand of virtue. On the opposite hand, a short-term orientation contains the subsequent aspects: respect for traditions, lower savings rate, quick results orientation, and concern with possessing the reality .

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