Title of the submission

Influence of Cross-Cultural Diversity

On

Human Resource Management

Submitted To

International Conference

Organized by

Department of Management Sciences (PUMBA)

University of Pune, M.S., India

Name of the author

Parag Arun Narkhede

Department and affiliation

Faculty & Placement Co-ordinator

Department of Management Studies, North Maharashtra University, Jalgaon

Mailing address

A-68,69 Co-operative Industrial Estate, Ajanta Road, Jalgaon 425003

E-mail address

paragnarkhede@yahoo.com, parag.narkhede@gmail.com

Phone number(s)

+91-9422778876, +91-257-2210474(R), +91-257-2257462(O)

fax number(s)

+91-257-2258403/406

INFLUENCE OF CROSS-CULTURAL DIVERSITY ON HUMAN RESOURCE

MANAGEMENT

Abstract

The cultural diversity of organizations all over the globe has increased as a result of the

globalisation of the world economy. Recent estimates indicate that there are over 1000,000

firms with international operations, and they have annual revenues in excess of $3500

billion. Not surprisingly, the growth in the number of firms with international operations has

been accompanied by an increase in the cultural diversity of their employees.

All aspects of organizational functioning reflect permeable national boundaries. Yet much of

our personal and interpersonal interactions are guided by cultural values, expectations, and

attitudes. Some values transcend cultural boundaries and are mutually reinforcing. Other

cultural values create interactions with high potential for conflict, misunderstanding, poor

performance, and ultimately, individual and organizational ineffectiveness or failure. The

increase in cultural diversity of Indian firms may lead to substantial benefits, including

increased creativity, improved decision making, and broader markets for products. However,

more cultural diversity also may pose important challenges for these firms, whether or not

they have multinational operations. For instance, as cultural diversity increases, firms may

need to develop new strategies for managing and motivating their employees. Other cultural

values create interactions with high potential for conflict, misunderstanding, poor

performance, and ultimately, individual and organizational ineffectiveness or failure. Such

problems are influencing HR practices in many organizations.

This paper handles some of the issues pertaining to human resource practices with respect to

cross culture that contribute towards the efficiency and effectiveness of organizations and the

performance and well-being of their members.

Keywords: Cross Culture, Diversity, Human Resource, Globalization

Introduction

It is well recognized in studies of managerial behavior that a manager’s effectiveness highly

depends upon their success in dealing with interpersonal relationships. An effective manager

should be able to “manage” not only his/her subordinates and co-workers but also superiors.

In other words, to effectively accomplish work through interpersonal networks, managers

must succeed in influencing the behavior of others, including their superiors. Likewise, given

the increasing numbers of transnational and multinational corporations in the global economy

and the migration of workers from one country to another, more and more managers, whether

employed abroad or working domestically, have to work with superiors and subordinates

from other cultures(Tong, Raltson, 2002). Developing a more informed understanding of the

dynamics of intra-organizational influence behavior from a cross-cultural perspective,

undoubtedly should help to improve organizational and managerial effectiveness in

multinational corporations.

MNC’s and the World Wide Web play a special role, not only in building cross-cultural

bridges among home and host nations, but also in providing innovative multicultural

understanding through their informational and practical knowledge-based resources.

Multicultural expectation has brought people’s thoughts, efforts, and natural resources toward

more effective, efficient, and productive managerial outcomes. Because of the rapid growth

of such multinational e-commerce and the World Wide Web, people around the globe are

becoming more culturally interdependent. Global interdependence is no longer a matter of

belief, ideology, or choice; it is an inescapable reality. Multicultural synergy is a provocative

effort by modern humans to create innovative thoughts and methods through application of

international value systems. Multiculturalism is making possible all human efforts to create

an understanding among all cultures.

What is Culture

Culture refers to an organization's values, beliefs, and behaviors. In general, it is concerned

with beliefs and values on the basis of which people interpret experiences and behave,

individually and in groups. Cultural statements become operationalized when executives

articulate and publish the values of their firm which provide patterns for how employees

should behave (Kotelnikov, 2007). Culture is to society what memory is to individuals

(Kluckhohn, 1954). We can distinguish material and subjective culture. The tools, dwellings,

foods, clothing, pots, machines, roads, bridges, and many other entities that are typically

found in a culture are examples of material culture. Subjective culture includes shared ideas,

theories, political, religious, scientific, economic, and social standards for judging events in

the environment (Triandis, 1972). The language (e.g., the way experience is categorized and

organized), beliefs, associations (e.g., what ideas are linked to other ideas), attitudes, norms,

role definitions, religion, and values of the culture are some of the elements of a cultural

group’s subjective culture. Ideas about how to make an item of material culture constitute

subjective culture as well (e.g., mathematical equations needed to construct a bridge), so the

two kinds of culture are interrelated. Cultures emerge because ecologies (climate, geographic

features, ways of making a living) are different from place to place. Cultural diversity

emphasizes dissimilarities among people; it emphasizes this notion that we are more different

than we are similar. The difference between cultural diversity and multiculturalism is the

distinction between classes of people according to their original sociopolitical and cultural

ideologies. In cultural diversity, there are majority and minority groups, but in

multiculturalism there is no stratification of people on the basis of race, color, ethnicity, and

nationality. (Parhizgar, 2002).

Why Should Organizations Care About culture?

Culture is a basic framework through which one views the world as a community of people.

The fundamental idea behind multiculturalism is that everyone is individual and that we are

more similar than we are different. This notion is based upon a civic ideology that all

subcultures within a society encompass all similar values and people from all ethnicities,

religious faiths, political ideologies, and traditions should be treated the same.

When members of multiple cultures are organized together, how they see the situation will

differ; this potentially leads to conflict, dissonance, and ultimately team process losses. For

example, the importance of understanding multiculturalism in the workplace has also been

emphasized by Stone (2003), who state that individuals have differing work scripts (i.e., ideas

about the appropriate sequence of events within a given situation) and behavioral

expectations based on cultural differences. This will ultimately impact the organization in

that goals may not be reached (e.g., loss of productivity and profits, accidents in the

workplace, failed mergers). In this context, training can be applied to help individuals

understand cultural differences that may be present in the work scripts and to help smooth

differences in organizational expectations. Multiculturalism means a healthy environment in

which everyone has an appropriate place in that particular society according to his or her

personal qualifications. People respect each other regardless of their differences and/or group

affiliation. Therefore, multiculturalism is the means of collaborative participation among

multiple cultures in one social system to share their mutual understanding for pacing the

whole social system toward a meaningful achievement for all (Parhizgar, 2002).

Influence of cross-cultural diversity on HRM

The success of HRM activities across cultures is largely dependent on managers’ abilities to

understand and balance the dichotomy of various culture values and practices. If the practices

and values of a subsidiary do not fit locally, or expectations of local employees are

incongruent with organization practices, the results are often more destructive than

constructive. While some research has focused on adaptation to the norms and behavior of a

foreign culture as much as possible (Tung, 1991), normative integration is seen to be a useful

means of exposing a subsidiary’s employees to the corporate culture and to help them

develop a corporate perspective (Dowling et.al 1999). At the level of the subsidiary, it is clear

that the subsidiary needs to align HRM practices such as election, appraisal, rewards and

compensation with organizational values. A subsidiary is a value-adding entity in a host

country which can perform a single activity (such as marketing) or an entire value chain of

activities (Dunning, 1994. The various approaches of the multinational subsidiary

management should depend on the different activities (roles) taken by the subsidiaries

(Birkinshaw & Morrison, 1995). Various country cultures with different values may lead to

different strengths and capabilities (Trompenaars, 1993).Therefore, a multinational subsidiary

should use cultural differences problem solving styles to perform value-added activities and

(hence) create sustainable competitive advantages (Hoecklin, 1994). Therefore, at the level of

subsidiary, MNCs should compare the cultural advantages of home country with host country

in terms of various value-added activities to determine the dependence of subsidiary on

parents’ resources or local cultural resources.

Recruitment process

Organizations have long been concerned with attracting highly talented employees. One

reason for this is that organizational performance is often influenced by the knowledge, skill,

and ability levels of their members. Another reason is that there is a growing shortage of

highly talented employees in the labor force, and organizations are increasingly competing to

attract these individuals.

Selection Process

Cross-national comparisons of the specific techniques of selection reveal large differences

across nations in the use of selection procedures to gather information about applicants.

These studies show that many of the standardized selection practices that are identified as

“best practices” in Western research are used infrequently in many other cultures. Some

procedures seem almost universal in their use. These include the application form and

unstructured interviews. Among Western nations, France seems to stand out as a country that

makes less use of the interview than others with only 45 percent reporting their use in one

survey (Shackleton & Newell, 1994). Another exception is China, where employers seldom

use the interview (Von Glinow & Chung, 1989). Even among countries where the use of the

interview, application, and references is widespread, there are large variations in the

information asked of the applicants. Questions about personal background and family are

allowed in many countries like India but are often considered illegal or inappropriate in the

United States.

Job Design

Jobs will be designed for individuals in individualist cultures, but in collectivist cultures some

job assignments will be made to groups. Erez (1997) suggests that enriching individual jobs

will be the goals of managers in horizontal individualist cultures, and placing individual jobs

in a hierarchy of authority and responsibility will be the goals of vertical individualist

managers. Horizontal collectivist managers will emphasize autonomous work groups, self-

managed teams, and quality circles, whereas vertical collectivist cultures will emphasize team

work controlled by top management teams but will also use quality circles.

Cross-cultural training

Robert et al. (2000) found that training would be valued more by individualists, who would

view this practice as an opportunity for advancement in terms of job knowledge and, by

extension, position in the organization. However, their results showed that continuous

training was positively related to job satisfaction across the Indian, Mexican, and American

subsidiaries. A major concern is how to train expatriates to work in another culture. When

collectivists and individualists come into contact, those who are bicultural (have lived a long

time in another culture) are high in both individualism and collectivism, whereas Western

samples tend to be high only on individualism and Eastern samples tend to be high only on

collectivism. Thus, the bicultural individuals will require less training. Much training is

required when there is a large cultural distance between the culture of the trainees and the

culture of the place they are assigned to. Indians are ready work in any country allover the

world compared to people in other countries. The greater the cultural distance there is, the

greater the culture shock from visiting another culture is likely to be (Ward et al., 2001).

Also, when there is a large discrepancy between the personality of the visitor and the hosts,

adjustment is more difficult and depression is more likely (Ward et al., 2001).

Conflict Resolution

Research suggests there are different levels of conflict avoidance in different national

cultures. For instance, Japanese are much more likely than the Americans to avoid conflicts.

Japanese participants avoid conflict in more situations than American participants (Triandis

et al., 1988). Gabrielidis et.al. (1997) also propose that collectivists display more concern for

others than individualists so that the conflict can be more avoided. These findings, of course,

are consistent with the view that collectivist cultures are more apt to emphasize harmonious

relations, at least with other in-group members, than individualist cultures.

Superior–Subordinate Relations and Employee Evaluation

Communalists often control the expression of unpleasant emotions in the presence of other

people, so as not to disturb the relationship. For example, Stephan, Stephan, and de Vargas

(1996) found strong support for the proposition that people in collectivist cultures feel less

comfortable expressing negative emotions than do people in individualist cultures. The data

came from Costa Rica and the United States. People in Latino cultures, and possibly in all

collectivist cultures, expect others to be “nice” during their interactions and become upset

when the other person is insufficiently supportive (Triandis et al., 1984). Thus, supervisors in

collectivist cultures may have to express their criticism indirectly. Nevertheless, several

studies suggest that vertical collectivists accept a critical supervisor more than do

individualists.

Leadership

Good leaders among collectivists are warm, supportive, and also production oriented.

However, the specific behaviors that are considered “warm” are not the same in every culture

(Smith & Peterson, 1994). For example, criticizing an employee in Japan requires much

greater concern for “saving face” than it does in the West. A warm supervisor does not

criticize directly but rather conveys the critical information though a trusted close friend of

the employee to be criticized. Being nurturing first and then demanding high production is

the right way to lead in India (Sinha, 1996). The similarity between leadership style and

culture is critical for good performance by the leader’s subordinates. The ideal leader in

horizontal cultures would be a resourceful democrat; the ideal leader in vertical cultures

would be the benevolent autocrat. Promotions from within will be more common in

horizontal cultures, and leadership appointments from the outside or from a high status group

will be more common in vertical cultures. In horizontal cultures leadership may rotate, and

leaders may treat subordinates as equals. In vertical cultures leadership reflects the cultural

hierarchy (e.g., upper class or caste results in leadership even when the individual does not

merit the position). Leaders in individualist cultures tend to focus on the behavior of

individuals, whereas in collectivist cultures they tend to focus on the behavior of groups. The

distance between leader and followers is small in the horizontal and larger in the vertical

cultures.

Empowerment

Robert et.al. (2001) notes that the outcomes associated with empowerment are quite different

across countries based on horizontality-verticality. For example, Robert et al. (2000) discuss

the fit of empowerment and national culture based in part on power distance and also on

collectivism. They argue that power distance should moderate the relationship between job

satisfaction and perceived empowerment. Employees in the United States, Mexico, and

Poland were found to have more favorable views of their supervisors when perceived

empowerment is high, whereas Indian employees rate their supervisors low when

empowerment is high. However, the relationship in Mexico (like India, a high-power-

distance country) was weaker than in the United States and Poland (both low power-distance

countries). The reasoning is that workers in higher-power-distance cultures would be less

comfortable with acting autonomously and their superiors less supportive of empowerment

efforts, thus leading to conflict and tension.

Conclusion

It is clear that organizations are becoming more culturally diverse, and a better understanding

of multiculturism and its impact on organizations is to be focused. If a company has a well-

defined corporate culture, it can create an environment that leads to success and that can see

it through difficult times. As this paper indicates, there is much diversity within a given

culture as well as across national cultures. Much of our knowledge of human resource

management (HRM) practices in organizations is based upon research conducted in single

cultures or about diversity within a given country (e.g., United States, India, Mexico or

China). There is a need for more discussion and research about the influence of multiple

cultures on HRM practices.

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