GLOBAL HR GLOBAL HR CHALLENGES-CROSS CHALLENGES-CROSS

CULTURAL INTEGRATION CULTURAL INTEGRATION

A Report A Report

Need for a Global HR Need for a Global HR International ImperativeInternational Imperative

Why organizations expand internationallyWhy organizations expand internationally• To capture enhanced market opportunities that To capture enhanced market opportunities that

foreign countries may presentforeign countries may present

• To achieve economies of scale in production and To achieve economies of scale in production and administration by expanding scope and volume of administration by expanding scope and volume of operations to international marketsoperations to international markets

• Keeping up with industry leaders may require Keeping up with industry leaders may require organization to enter foreign marketsorganization to enter foreign markets

• Acquiring ownership of foreign-based organization or Acquiring ownership of foreign-based organization or subsidiarysubsidiary

““According to Dun and Bradstreet According to Dun and Bradstreet more than 250 M&A deals were more than 250 M&A deals were concluded last year worth $46.8 concluded last year worth $46.8 Billion.Billion.…….Most of these were acquisition .Most of these were acquisition overseas by Indian companies.”overseas by Indian companies.”

Factors that Influence the Global Work EnvironmentFactors that Influence the Global Work Environment

HR ChallengesHR Challenges OrganizationalOrganizational

Global workforce Global workforce Cultural issuesCultural issues Economies Economies Technological advancement Technological advancement Work-life balanceWork-life balance

External to OrganizationExternal to Organization Global operations Global operations HR setting in Mergers acquisitions HR setting in Mergers acquisitions Cost effectiveness Cost effectiveness Strategic HRStrategic HR

Challenges % of CompaniesBenefits costs: Health & welfare 4

Benefits costs: Retirement 8

Change management 52

Compensation 16

Employee rewards 20

HR effectiveness measurement 20

HR technology selection & implementation 12

Industrial relations 12

Leadership development 36

Learning and development 20

Legal/Regulatory compliance 16

M&A integration/restructuring 12

Organizational effectiveness 8

Outsourcing 12

Staffing: International mobility of employees 4

Staffing: Recruitment and availability of skilled local labor 16

Staffing: Retention 16

Succession planning 32

Other 12

Survey of Global HR Challenges: Yesterday, today and tomorrow 15  

Areas of significant challenges forAreas of significant challenges for Global HRGlobal HR

Strategic IssuesStrategic Issues

CultureCulture Culture is a way of life of a group of people Culture is a way of life of a group of people

- Foster 1962- Foster 1962

““Culture is that complete whole which includes knowledge, Culture is that complete whole which includes knowledge, beliefs, art morals, customs and any capabilities and habits beliefs, art morals, customs and any capabilities and habits acquired as a member of a society” acquired as a member of a society”

-Taylor- 1977-Taylor- 1977

The collective programming of the mind which distinguishes The collective programming of the mind which distinguishes the members of one group from another…the interactive the members of one group from another…the interactive aggregate of common characteristics that influences a aggregate of common characteristics that influences a group of responses to its environment” group of responses to its environment”

-Hofstede 1980-Hofstede 1980

A case of euro disneyA case of euro disney Japan Vs. USJapan Vs. US France Vs. USFrance Vs. US The company it seems failed to do its The company it seems failed to do its

cultural homework on everything cultural homework on everything from french business negotiation from french business negotiation styles to employee flexibility and styles to employee flexibility and dress habits to consumer spending dress habits to consumer spending patterns and eating preferrences.patterns and eating preferrences.

Mistakes of the companyMistakes of the company Sense and sensibilitySense and sensibility

• Land of farmers or land of Mickey?Land of farmers or land of Mickey?• Negotiate with whom?Negotiate with whom?• French way or American way?French way or American way?

The devil is in the detailsThe devil is in the details• Sit down breakfast or continentalSit down breakfast or continental• Graze or set lunchtime?Graze or set lunchtime?• Family friendly or wine?Family friendly or wine?

Hospitality headachesHospitality headaches• Souvenirs?Souvenirs?• Month long vacation or one night’s stay?Month long vacation or one night’s stay?

Culture caution:Culture caution: It should be noted that for all of Disneys faults the French govt. was more It should be noted that for all of Disneys faults the French govt. was more

than happy to have them set up shop. The govt also bears some than happy to have them set up shop. The govt also bears some responsibility for not making Disneys transition smoother. The French have responsibility for not making Disneys transition smoother. The French have claimed for centuries that Americans have no culture but nowadays it claimed for centuries that Americans have no culture but nowadays it seems they believe Americans have too much and need to export some.seems they believe Americans have too much and need to export some.

Hofstede’s five dimensions of Hofstede’s five dimensions of cultureculture

IndividualismIndividualism IDVIDV Power Distance IndexPower Distance Index PDIPDI MusculinityMusculinity MASMAS Uncertainty Avoidance IndexUncertainty Avoidance Index UAIUAI Long term orientationLong term orientation LTOLTO

Trompenaar’s researchTrompenaar’s research Trompennar’s dimension of culture:Trompennar’s dimension of culture: Universalism Vs. ParticularismUniversalism Vs. Particularism Individualism vs CollectivismIndividualism vs Collectivism Neutral Vs Emotional/ AffectiveNeutral Vs Emotional/ Affective Specific Vs DiffuseSpecific Vs Diffuse Achievement vs AscriptionAchievement vs Ascription Attitudes to timeAttitudes to time Attitudes to the environmentAttitudes to the environment

Trompenaar’s organization typesTrompenaar’s organization types

EgalitarianEgalitarianFulfillment oriented culture Project oriented cultureFulfillment oriented culture Project oriented culture

GUIDED MISSILE

Task

Hierarchical

PersonINCUBATOR

FAMILY EIFFEL TOWER

Person oriented cultureRole oriented culture

Implications of culture on Implications of culture on managementmanagement

What people want from workWhat people want from work• Work centrality- Importance of work in Work centrality- Importance of work in

lifelife• Work goals differWork goals differ

Positive environmentPositive environment AutonomyAutonomy Interesting workInteresting work Good payGood pay Match between selfMatch between self Job security and jobJob security and job

Contd…Contd… Views about leadershipViews about leadership

• Who becomes leadersWho becomes leaders Class vs MeritClass vs Merit

• Role of leaderRole of leader Facilitate and motivate vs direct & provide Facilitate and motivate vs direct & provide

expertiseexpertise• Some convergence of viewsSome convergence of views

Particularly in MNCsParticularly in MNCs

Communicating across culturesCommunicating across cultures The most immutable barrier in The most immutable barrier in

nature is between one man’s thought nature is between one man’s thought and another’sand another’s

………………..William James..William James

ConclusionConclusion For the long time in India HRM only For the long time in India HRM only

meant the Industrial relationship meant the Industrial relationship Management, today they have to deal Management, today they have to deal with this challenge of cultural integration.with this challenge of cultural integration.

What they need to do is What they need to do is 1.1. Identify the problem areas proactively, Identify the problem areas proactively, 2.2. They have to develop common rather They have to develop common rather

culturally sensitive policies and culturally sensitive policies and procedures.procedures.

3.3. Build a cultural integration roadmap.Build a cultural integration roadmap.