International Human Resource Management: Managing Cultural Differences in a Multinational Company

This report discusses the importance of managing cultural differences in a multinational company, using the case study of MERICO. It highlights the need for HR to understand the unique culture of each location and eliminate cultural differences. The report also explains Hofstede's five cultural dimensions and how they can be used to solve problems between MERICO's American HQ and its Mexican subsidiary.

International Human
Resource Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Awareness of cultural differences is an essential for point as the HR consultant to look at..3
Hofstede’s five cultural dimensions to explain to MERICO the main differences between
MERICO’s American HQ and its Mexican subsidiary..........................................................5
CONCLUSION................................................................................................................................6
REFERENCES:...............................................................................................................................8
Books and Journals.................................................................................................................8
Online.....................................................................................................................................8

INTRODUCTION
International human resource management means managing the workforce of an
organisation that has operations around the globe. It is necessary to provide best working
conditions to the employees so that they are able to work effectively (Caligiuri and et.al., 2020).
This report is based on MERICO the organisation deals in commercial air-plane engines and
fuselages worldwide. The company has around 1000 employees. The headquarters are in
America. The employees of their new manufacturing plant that is established in Mexico are
facing several issues. There is discussion related to the ways in which HR will help the
employees to deal with the situation. The manager as well as employees to understand each other
and maintain working environment that will help the company to achieve success. In the end of
this report there is use of two Hofstede’s five cultural dimensions is done to identify the ways of
solving the problems.
MAIN BODY
Awareness of cultural differences is an essential for point as the HR consultant to look at.
Organisational culture can be defined as the beliefs, values, assumptions and the way of
interaction that is being followed in an organisation. Each and every organisation have their own
culture that is unique and helps the employees to work effectively. Cultural differences are
caused due to changes in the background of working population of the employees. It includes
various beliefs, languages, behaviours, practices and expressions considered unique to members
of a specific race, ethnicity or national origin (Cooke and et.al., 2019). It is seen that these
cultural differences causes problems in communication and that impacts the business
organisation in negative manner.
In regard to MERICO the organisation has opened a new manufacturing unit at Mexico.
There are around 200 employees being hired there. The company is planning to maintain same
culture in all the organisations that they have. They have hired an American manager their. They
want to maintain standard and accepted practices throughout. There is problem in
communication seen. Being a HR consultant, I understand that it is a major problem that is faced
by the company. The background of employees and manager is different and due to this reason
they are unable to understand each other (Agarwal and Al Qouyatahi, 2018)peration and more
chances of miscommunication. The main reasons of differences is due to place of origin as well

as the ways of working. The employees are unable to accept the management pattern that is
being used. Both the employees and the manager of the organisation are having disputes with
each other.
The manager complaint's that the employees of Mexico are not ready to understand and
follow the culture of MERICO. They are not following the guidance and instructions that are
being given by the American manager. He says that the employees in America are more
dedicated and keep on comparing them (Liu, Cooper and Tarba, S., 2019). The manager also
complaint's that the employees at Mexico do not share anything that they feel. They keep things
in mind but do not speak and that enhances miscommunication over there. Al this impacts the
production and operations of the company in an adverse manner.
It is analysed that the employees of the company are also facing certain issues. Being a
HR consultant it is important to understand the problem of both the manager and the employees.
The main issue that is being faced by the employees of the place is regarding the ways of training
and instructions used (Reiche, Lee, and Quintanilla, 2018). They employees complaint that the
manager ask them to read the manual and understand the process by their own. They are not
getting any direct communication and that is the reason they are unable to work effectively. It is
necessary to note that the employees have to sit for longer duration of time and deal with all the
issues. This enhance their working hours and they are unable to reach late at meetings. This also
cause issues among the manager and the employees.
It is analysed that there is need to conduct a meeting where all the employees of the
company and the manager will be made part. The importance of cultural difference. The
company that wants of achieve success must understand each other. It is necessary to build
relations among the employees and manager. It will help all of them to achieve goals and
objectives together and in an effective manner (Thite, 2018). The manager has to understand the
problems of employees and provide them proper training. First of all the manager needs to know
about the culture that is followed in Mexico so that they are able to provide proper working
environment to the employees. They must enhance the interaction. Afterwards the employees
must become ready to accept the culture of MERICO. There are difference but they need to
focus and work in an effective manner so that they are able to adjust and work in such a manner
that the productivity of the organisation enhances. It is also important that employees share each
and every thing that they face so that the manager is able to understand them and take necessary

actions. There is need to understand the cultural changes and accept them. The multinational
companies there own standard way of working that must be taught to the employees so that they
are able to use the same.
Hofstede’s five cultural dimensions to explain to MERICO the main differences between
MERICO’s American HQ and its Mexican subsidiary
It is identified that cultural issues are found when companies are expanding their business
in other nations. The reason behind this is every nation has different culture which creates
conflicts between employees. In the case of MERICO, they has headquartered in America and
they established a new manufacturing plant in Mexico. Due to this, it is identified that employees
and managers are not able to coordinate their relationships (Boxall, 2018). This can be better
understand with the help of Hofstede's five cultural dimensions. In this model, there are five
dimensions found that are power index, individualism, uncertainty avoidance, masculinity and
long term orientation. In order to found the gap between these countries, two important
dimensions of Hofstede's cultural dimensions that are power distance and individualism. The
explanation of both dimensions are mentioned below and also assists in identifying that why
gaps are found between MERICO’s American HQ and its Mexican subsidiary:
Power Distance
It is identified that this individual is dealing with the fact that all individual are not equal
in society. It shows the country's perspectives in terms of inequalities. In the case of power
distance, it is found that every nation has their own perspective regarding the inequality. High
power distance index shows that a society is accepting unequal and hierarchical distribution of
power. On the other hand, low score of power distance is the situations when people are not
accepting the unequal situations. In the case study of MERICO, it is identified that employees of
Mexico manufacturing plant are not happy with the organisation culture. The reason behind that
is they are feeling unequal behaviour (Poór and et.al., 2019). The power distance is undertaken
because it is found in Mexico city that their employees are not treated equally. It is founds that
there is large gap of respect as American manager is not behave in a right way with the
employees of Mexico. This can be better understand with the help of an example.
For example, it is found in the case study that employees of Mexico were not getting any
training programs in order to develop necessary skills and knowledge. If they want to get some
training then at that time the American manager of Mexico subsidiary told that they should learn

from the employees' manual which is totally unfair and unequal behaviour with the employees. It
is also found that they are not treated well as they were comparing by the members of America
which is also a part of unequal behaviour. This is the reason that this dimension is undertaking in
order to understand the real problem which assists an organisations to take right step.
Uncertainty avoidance
This dimension culture is describing the power of individual that how they are coping
with anxiety. In the case of high score in uncertainty avoidance, people are trying to control all
the situations and if they found that they are not able to control their life then they stop to try
(Reiche, Lee and Allen, 2019). There is difficulty in co-o. Whereas in low score, people are very
relax and found to be very open and inclusive. In the case of MERICO, it is identified that the
employees of Mexico subsidiary are found to be open with change but American manager is not
try to change something. Manager always told that they are not acting like good employees of
America which is not good. The employees of Mexico found that they are ready to accept change
and that's why they file a complaint that their manager is not taking any action for the
development of employees (Suder and et.al., 2019). This dimension is undertaken because it
helps to show the emergence of situation. In the current case of Mexico's employees, they are
sensing a need of urgency in which they want immediate action in order to survive in the
organisation. In this dimension, people are stop to try if they are nit get any results and leave on
God. But in the case of Mexico's employees, they are trying to solve their issues which occurs
due to the different culture between manager and employees(Hofstede’s Cultural Dimensions
Theory, 2021).
After analysing both dimension culture, it is found that Mexico's employees need
immediate course of action as they are unable to match with the expectation of American
manager. With the assistance of this model, company is able to find real problem and then take
step accordingly which helps to solve their issue.
CONCLUSION
From the above report, it is analysed that it is necessary for HR of an organisation to
maintain balance in the company. The organisations that are working at international level must
understand the culture of the places and try to eliminate the cultural differences. It will help the
employees to adjust in the working environment and achieve success. This report was based on a
case study related to cultural differences. The importance of understanding the differences and

eliminating them so that the employees are able to work effectively. In the end of this report,
there is discussion regarding two aspects of Hofstede’s five cultural dimensions that will help to
solve the problems MERICO HQ and its Mexican plant. .

REFERENCES:
Books and Journals
Agarwal, S. and Al Qouyatahi, K.M.S., 2018. HRM Challenges in the Age of Globalisation.
International Research Journal of Business Studies, 10(2), pp.89-98.
Boxall, P., 2018. The development of strategic HRM: reflections on a 30-year journey. Labour
& Industry: a journal of the social and economic relations of work, 28(1), pp.21-30.
Caligiuri and et.al., 2020. International HRM insights for navigating the COVID-19 pandemic:
Implications for future research and practice.
Cooke and et.al., 2019. How far has international HRM travelled? A systematic review of
literature on multinational corporations (2000–2014). Human Resource Management
Review, 29(1), pp.59-75.
Liu, Y., L. Cooper, C. and Y. Tarba, S., 2019. Resilience, wellbeing and HRM: A
multidisciplinary perspective.
Poór and et.al., 2019. Internationalisation of human resource management: focus on Central
and Eastern Europe. Nova Science Publishers.
Reiche, B.S., Lee, Y.T. and Allen, D.G., 2019. Actors, structure, and processes: A review and
conceptualization of global work integrating IB and HRM research. Journal of
Management, 45(2), pp.359-383.
Reiche, B.S., Lee, Y.T. and Quintanilla, J., 2018. Cultural perspectives on comparative HRM. In
Handbook of research on comparative human resource management. Edward Elgar
Publishing.
Suder and et.al., 2019. Mind the gap: The role of HRM in creating, capturing and leveraging rare
knowledge in hostile environments. The International Journal of Human Resource
Management, 30(11), pp.1794-1821.
Thite, M. ed., 2018. e-HRM: digital approaches, directions & applications. Routledge.
Online
Hofstede’s Cultural Dimensions Theory, 2021. [Online] Available through:
<https://corporatefinanceinstitute.com/resources/knowledge/other/hofstedes-cultural-dimensions-
theory/>

Online
. [Online] Available through: <>