The aim of this paper is to examine how culture affects the domestic and international HRM functions of an organization and to discuss why it is a vital element to be considered while utilizing human resources effectively and to the benefit of the organization. Since HRM relates to activities carried out by the organization in making the best use of its people it is important to outline the set of such activities. HRM entails human resources planning, labor relations, training and development, staffing, compensation and benefits, and performance management. All such activities are directly influenced by the culture prevailing within the organization as also by the culture of the society prevalent in the location of the organization. Hence it is important to ascertain how culture becomes an important variable in influencing the HRM policies of an organization.
Culture has several definitions and the term is normally used in describing a shaping procedure. People of a specific community or group lead a particular lifestyle and share common behaviors, attitudes, and values which are passed on gradually in an active process. According to Phatak, “A person is not born with a given culture: rather she or he acquires it through the socialization process that begins at birth: an American is not born with a liking for hot dogs, or a German with a natural preference for beer: these behavioral attributes are culturally transmitted” (Phatak, 1995). Culture is a delicate procedure that does not immediately reflect on the behaviors, attitudes, and values of people. To have a feel of its effect one has to be faced with different cultures such as the experience one gets when traveling to different regions or countries by way of cultural differences of attitude towards time, dress, food, and language. Although such experiences may be perceived as enjoyable and novel, when required to reside and work under changed circumstances, the variation may become difficult to cope with. Under such conditions, workers experience what is called culture shock. The changed environment entails a lot of adjustment which has to be made in a short time thus making it difficult for people to maintain their sense of balance in the working environment. This results in a shock reaction with the repeated instances of facing a new culture (Hugh Scullion et al, 2007).
According to Harris and Moran (1979), culture shock can create strong negative attitudes about the people and organization in the new location and workers may start looking at returning to their original environment. The movement of workers across the country as also internationally is a common practice, hence organizations must appreciate the need to consider cultural differences while preparing and training employees for the functions to be performed by them. The cultural environment thus becomes an important aspect to be researched in understanding it as a vital element that moderates domestic and international HRM. However, there are several complications associated with research in this regard since culture is more of a collection of variables that represent a variety of political, economic, historical, and societal issues. In most cases, culture serves as a synonym for the country, but the fact remains that there are inherent cultural differences within a nation too which have a strong bearing on the compatibility and willingness of workers to work in a new environment. Hence there is a need for researchers to be specific about the meaning of culture instead of just assuming that only national differences entail cultural variations (Vladimir Pucik et al, 1998).
A key variable that distinguishes domestic and international HRM pertains to the complications in regard to the operation in different nations and the employment of workers of different nationalities. Additionally, there are other variables that moderate the variations between domestic and international HRM, such as the cultural environment, industries with which the company is involved, the amount of dependency of a multinational company on the domestic market of its home country, and the attitude of the senior management. As compared to domestic HRM international HRM entails a wider perception in regard to the HR initiatives. The nature of IHRM actions is very challenging since international HR managers have to handle matters such as international repositioning and orientation, international taxation, selection, appraisal and training of employees, and other administrative provisions to expatriates. They have to also effectively manage the cordial relationship with authorities in the host countries (Elaine Farndale et al, 2007).
Cross-cultural research in this regard also relates to emic and etic distinctions (Teagarden & Von Glinow, 1997). Emic relates to concepts of behavior in regard to culture-specific issues and etic relates to culture common aspects. Both of these are linguistic terms and are legitimate research orientations. Problems may arise if the etic approach is used in assuming that cultures are universal, especially in the absence of evidence in this regard. This approach was widely used as the convergence hypothesis in the US and Europe in the 1950s and 1960s by assuming that principles of positive management held ground irrespective of national backgrounds. Another assumption pertained to management practices being universal which would enable communities to become alike. Despite the methodological issues in regard to cross-cultural research, it is believed that attitudes in organizations that are not culturally sensitive are highly inappropriate and often lead to the failure of businesses (Connie Zheng, 2008).
Awareness in regard to the cultural differences thus becomes imperative on the part of the HR Manager at the corporate office as also in the host country. Activities of rewarding, promoting, hiring and dismissal have to be followed in keeping with the prevalent practices in the host country and must be based on a value system that is specific to the culture of the host country. For example, a company can have a General Manager who is an expatriate but the HR Manager in the host country must be appointed locally because he will be aware of the local culture. Problems arise when expatriates and their families have to adjust to the new cultural environment.
A key activity for HR managers pertains to helping expatriate employees. Multinational companies that understand such issues can considerably influence the impact of the cultural environment on well being and performance of employees.
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