CULTURAL DIVERSITY

Cultural and environmental diversity is a key issue in international HRM. As Haley (1999) remarks:

In cultures where people are emphasized, it is the quality of interpersonal relationships which is important. In cultures where ideologies are emphasized, sharing common beliefs is more important than group membership. In cultures where action is emphasized, what is done is more important than what is said.

Hofstede (1980) emphasizes that there are a number of cultural dimensions that affect international operations. His framework has been adapted by Bento and Ferreira (1992) to produce the following cultural dualities:

● equality versus inequality; 

● certainty versus uncertainty; 

● controllability versus uncontrollability; 

● individualism versus collectivism; 

● materialistic versus personalization.

Sparrow and Hiltrop (1997) note the following HR areas that may be affected by national culture:

● decisions on what makes an effective manager; 

● giving face-to-face feedback; 

● readiness to accept international assignments; 

● pay systems and different concepts of social justice; 

● approaches to organizational structuring and strategic dynamics.

A performance management system based on openness between manager and subordinate, each explaining plainly how they feel the other has done well or badly in the job, may work in some European countries, but is unlikely to fit with the greater hierarchical assumptions and ‘loss of face’fears of some of the Pacific countries.

Sparrow (1999a) gives examples of different approaches to managerial qualities. The Anglo-Saxon sees management as something separate and definable, based on general and transferable skills, especially interpersonal skills. In Germany, an entirely opposite view is adopted: value is placed on entrepreneurial skills, technical competence, functional expertise and creativity, and managers rely more on formal authority than in other European countries. In France, management is seen as an intellectually demanding task and management development systems are elitist. 

Brewster (1999) comments that the ‘universalistic’ approach to HRM prevalent in the USA is rejected in Europe where the basic functions of HRM are given different weights between countries and are carried out differently. If a convergent and therefore universalistic approach is adopted by a US international company, it might be difficult to get it accepted in Europe. Divergences to respect cultural differences may be more appropriate if the full potential of the overseas company is to be realized.