Critical Evaluation of Cultural and People Management Issues in International HRM

This report analyzes the cultural and HRM issues faced by UK business organizations when locating a call center operation in Japan. It evaluates major cultural issues and people management issues in international HRM, discusses theories and models about culture, and provides a critical evaluation of the models and theories used. The report also highlights major challenges and issues in international HRM practice and suggests the use of contingency theory and matching model of HRM for effective HRM operations.

International HRM

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
A. Critical Evaluation of Cultural Issues......................................................................................3
A.1 Major Cultural Issues Faced by Business in their International HRM operations...............3
A.2 Theories and Models About Culture.....................................................................................4
A.3 Linking Theory.....................................................................................................................5
A.4 Critically Evaluating Used Models and Theories.................................................................6
B. Critical Evaluation of People Management Issues...................................................................6
B.1 Major Issues Relating to International HRM practise..........................................................6
B.2 Models and Theories about International Management People Management......................7
B.3 Linking Used Models............................................................................................................8
B.4 Critically Evaluating Used Models and Theories.................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Human resource management is a strategic business operation through which a business
organisation makes use of formal systems in order to effectively manage the all the people that
are involved in the various operations of the business organisation. International HRM relates to
human resource management operations conducted at an international level. Globalisation is the
process through global business organisations, governments and individuals interact and
integrate with one another (Farndale and et.al., 2017). Internationalisation of business
organisation refers to the business organisation expanding its overall operations to global
markets in an effort to diversify their operations and grow their customer base, market share,
operational and financial performance. This report analyses the cultural and HRM issues faced
by UK business organisations when locating a call centre operation in Japan.
MAIN BODY
A. Critical Evaluation of Cultural Issues
A.1 Major Cultural Issues Faced by Business in their International HRM operations
Whenever a business organisation conducts operations internationally across different
countries such as when a UK business organisation locates a call centre in Japan, it faces
numerous issues and challenges in relation to its international HRM operations. One major issue
or challenge that a business organisation faces towards effective human resource management
functions of its international operations relates to the cultural issues which stem from the
differences in cultures of the various individuals (Cooke and et.al., 2019). Such cultural issues
are not only limited to the cultural diversity, background and upbringing of the distinct
individuals operating within a business organisation, but also are related to the different
organisational cultures that different international business organisations possess, which poses
several major issues and challenges to international HRM operations. The major cultural issues
pertaining to international HRM are as follows:

Communication: Communication between individuals and business organisations belonging to
different cultural backgrounds is a major problem (Horwitz, 2017). As businesses nowadays
contain a diverse employees who belong to various different cultural backgrounds and
upbringings, it is a major challenge for the communication operations between them to be
conducted in an effective manner, while taking into account not to hurt the cultural customs and
mannerisms of individuals belonging to diverse cultures.
Optimum Performance: Culture also has a direct impact on the business and individual’s
operational performance and efficiency (Bader and Reade, 2018). It is a major challenge to
achieve optimum levels of operational performance and efficiency by the business when its
employees belong to diverse cultures and are accustomed to operating with respect to those
cultures.
Conflict Resolution: Another major issue towards international HRM operations of a business
organisation relates to resolving the conflicts that occur between individuals belonging to diverse
cultural backgrounds, as it is not uncommon for an individual in a business organisation to
accidentally offend or abuse unknowingly the cultural customs and prejudices of and individual
that belongs to a totally different cultural background.
A.2 Theories and Models About Culture
In order to better understand the impact of culture in international HRM, we can make
use of the strategic model of Charles Handy relating to organisational cultures. Handy’s model of
organisational cultures details the different organisational cultures that different business
organisations may possess and how these impact upon the motivation, job satisfaction,
operational performance and efficiency metrics of its employees. Based on Handy’s model, there
exist four main types of organisational cultures:
Power Culture: In this type of culture, the power within a business organisation is held by a
select or group of few individuals, whose influence spreads throughout the business organisation.
These select few individuals are responsible for creating and implementing all the organisational
policies of the business, without consulting any other employees for their inputs (Caligiuri and
et.al., 2020). These select few individuals also undertake all the decision making operations of
the business organisation by themselves, making the workforce of the business organisation feel

undervalued and demotivated. This type of organisational culture is suitable to business
environments where the workforce isn’t particularly skilled and require assistance.
Role Culture: This type of organisational culture determines the power of an employee on the
basis of their position or role within the hierarchical structure of the business organisation. This
type of organisational culture is used in business organisations which are highly controlled,
where following mandated rules in essential. All the employees of the business are consulted for
the decision making operations of the business, making them feel valued and increasing their
motivation and job satisfaction metrics.
Task Culture: Organisations operating on task culture place immense importance on the
achievement of a particular task and makes use of organisational team that consist of various
employees, operating towards the shared objectives of accomplishing the desired task. The
power within the business resides with the team leaders and team members and depends a lot on
the team dynamics within the business (Syed and Pio, 2017). This culture provides the
employees with significant autonomy and creativity and innovative freedom increasing their job
satisfaction and motivation metrics.
Person Culture: In businesses operating on person culture, the individuals employees come to
see themselves as more significant, important and superior to the parent business organisation,
with the parent business existing simply to facilitate the individual operations of their various
independent employees. This culture provides immense autonomy and freedom to the employees
but also cannot be used in organisations that require teamwork and cooperation of their
employees for its operations.
We can also apply Hofstede’s cultural dimensions model through which we can analyse
cross cultural behaviour within business organisation. The four main dimensions of Hofstede’s
cultural dimensional theory are as follows:
Power Distance: This dimension relates to less powerful members of a society accepting and
expecting unequal distribution of power.
Uncertainty Avoidance: This dimension refers to the extent to which members are at ease with
uncertainty and ambiguity.

Individualism Vs Collectivism: This dimension focuses on whether people like operating
individually or wish to operate as part of a group.
Masculinity vs Femininity: Masculinity relates to member’s preference for achievement,
assertiveness and material rewards for accomplishing success, while femininity refers to
members preference towards modesty quality of life, cooperation etc.
A.3 Linking Theory
On the basis of the Handy’s model of organisational cultures, the UK business organisations that
are locating call centre operations in Japan need to implement role type of organisational culture,
as this culture informs all the employees of their specific individual roles within a business and
also consults the employees for all the decision making operations of the business allowing for
their employees to possess high levels of motivation and job satisfaction metrics, through which
they can effectively increase their operational performance and efficiency (Almond, 2016).
A.4 Critically Evaluating Used Models and Theories
The advantages of making use of Handy’s model of organisational cultures relates to its
simple and easy to understand nature. Handy’s model of organisational culture also is beneficial
to business organisations as it takes into account the operational business environment and
operational situations of the business organisation and dictates the type of culture that it needs to
possess depending on these factors in order for the business to possess motivated and satisfied
employees capable of operating to optimum standards (Brewster, Mayrhofer and Smale, 2016).
The drawbacks of this model relate to its complex practical application when applied to real life
business environments.
B. Critical Evaluation of People Management Issues
B.1 Major Issues Relating to International HRM practise
There are various issues and challenges relating to the international HRM practice or its
people management operations. The most significant issues relating to international HRM
operations are as follows:

International Laws: One of the most significant international HRM practise issues relates to the
HRM employees of a business organisation having to adhere to numerous different international
laws and regulations that are mandated by various different countries in which the business
organisation might be operating (Brewster and et.al., 2016). As a business organisation is
required to adhere to several different mandated rules and regulations such as labour laws,
employment laws, taxation laws etc., with these also being different in distinct international
countries, adhering to all such different international laws is one of the most significant
challenge towards international HRM operations.
Operational Changes: International business organisation that operate in various different
countries across the globe, requiring international HRM operations tend to face huge challenges
when undertaking strategical management and operational changes such as change of
organisational employees, structure, roles, operational processes etc., as these also have to be
conducted on an international scale (Wilkerson and Seers, 2019). This change of management is
also a major issue for the international HRM operations, as this requires the HRM employees to
undertake a variety of additional responsibilities depending on the type of operational change.
Relationships: Creation of interpersonal professional relationships amongst the various
employees of a business organisation is of immense importance towards the employees being
motivated and satisfied within an organisation (Millar, Chen and Waller, 2017). But when
employees of a business belong to various different nationalities, cultures, races, backgrounds,
religions, genders etc., it becomes difficult for them to create meaningful interpersonal
professional relationships with one another. This lack of human connection is also a major issue
towards international HRM operations.
B.2 Models and Theories about International Management People Management
There exist various theories and models which can be used in relation to international
HRM operations in a cross border setting. The most significant theory that can be made use of
relates to the Contingency theory. According to the creators of the contingency theory, its use
can indicate the relationship that primarily exists between the relevant independent
organisational variables of a business and the relevant dependable variables of the business
organisation such as the operational location, size, scope, employee skills, operational industry
etc., of the business organisation (Harney, 2016). The contingency theory implies various

complex interactions between various HRM principle variables such as performance indicators,
contingency factors etc., and that best practice approach that is used by various HRM employees
towards their tasks and functions within a business organisation is not the effective approach to
conduct HRM operations as these are inherently dependent on various other organisational
factors which are required to be considered when undertaking HRM operations for them to be
successful.
The contingency theory defines and expresses various organisational attributes such as
aims, mission, objectives, policies, rules, operational procedures etc., in order to list the various
organisational activities and analyse the inherent role that human resource management
operations play. The contingency theory mandates that the role of HRM within a business
organisation is only valid if it is related to the operational environment and situations that the
business organisation faces. Contingency theory is primarily concerned with how business
organisations adapt and adopt in response to recurring changes and external trends in economic
socio political situations and to the technological developments (Keegan, Brandl and Aust,
2019). Contingency theory provides organisations with a situational viewpoint which allows for
the business organisation to face any kind of external trend, changes, challenges and
opportunities.
Contingency theory inherently believes that for the international human resources
operations of a business organisation, there does not exist any singular, universally accepted
principle or operational practice, instead contingency theory proposes that the managers and
leadership of the business organisation is required to the business environment of the
organisation which includes various internal and external forces having an effect on the
operations and functions of the business organisation (McGrandle, 2017). Contingency theory
mandates that for the HRM operations of a business organisation to be effective, they need to be
consistent and consider tee internal and external environment of the business organisation. This
theory believes that a best practice approach or one size fits all perspective is not applicable
towards the effective HRM operations which are dependent on various factors.
Matching model of HRM states that HR systems within a business organisation and its
organisational structure are required to be managed with a congruent strategy. The four main
processes of matching model are as follows:

Selection: This relates to matching the available talent in external markets with relevant jobs in
business organisation.
Appraisal: This refers to managing the performace of employees to meet optimum standards and
efficiency.
Rewards: This relates to providing rewards and incentives to deserving employees who operate
towards optimum levels.
Development: This relates to training and developing the talent in the business organisation so
that they can develop professionally.
B.3 Linking Used Models
On the basis of the principles of the Contingency theory, the business organisations of
UK that are locating call centre operations in Japan are required to thoroughly analyse their
internal and external environment and take the resulting factors into consideration for all of their
international human resource management operations, as one of the basic tenets of the
contingency theory states that there does not exist a best fit or a one size fits all approach when
the HRM operations of UK business locating call centres in Japan, are required to be undertaken
in an effective manner (Farndale and Sanders, 2017). The UK business organisation are required
to consider all the forces and factors present in the business environments of the organisation and
mould their international HRM operations accordingly, in order for them to be effective and
successful towards desired goals and objectives. For example, the strategies used by UK
businesses towards reducing the negative impacts of organisational changes in UK, will not work
when the same strategies are applied to reducing negative impacts of organisational changes
within Japanese call centres. Instead they are required to effectively analyse the external and
internal factors present in business environment and mould their HRM strategies accordingly.
B.4 Critically Evaluating Used Models and Theories
The main advantages and benefits of making use of the contingency theory for HRM
operations relate to its adaptive nature, which allows for businesses to become flexible and create
transforming policies and strategies based on their changing environments. Another advantage of
the contingency theory is that it takes into account the business environment of the organisation
in order to create well developed HRM strategies (Boselie, 2016). The disadvantages of the

contingency theory relate to its complex and time consuming nature, which requires a different
HRM approach based on the business environment of the organisation for all the international
HRM operations. Another disadvantage of contingency theory relates to the viewpoint that it is
not always possible for the manager and HRM employees to realistically consider all the factors
present in the business environments in order to conduct their international HRM operations in
an effective manner.
CONCLUSION
Based on the findings of the report, it can be concluded that there are various different
issues that a UK business organisation faces when locating a call centre operations in Japan. This
report analyses the major issues and challenges that are faced by a business organisation relating
to cultural element and management of individuals. Then the report makes use of dedicated
models and theories for both culture and management of individuals in international HRM.
Further the report links the dedicated models and theories to the topic of the report. Finally the
report analyses and critically evaluates the advantages and disadvantages of the models used.

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