Culture and Human Resource Functions within a MNC Analysis

This essay delves into the critical role of culture in shaping human resource management (HRM) practices within multinational corporations (MNCs). The paper begins by highlighting the significance of cultural differences, referencing Geert Hofstede's cultural dimensions to illustrate how societal values influence employee behavior and organizational effectiveness. It then explores the challenges of managing talent globally, focusing on the key HR functions of recruitment, training and development (T&D), and performance appraisal. The essay examines how cultural gaps can lead to inefficiencies in recruitment, affecting candidate suitability and retention. It discusses how T&D practices vary across cultures and how cost-cutting measures can impact training effectiveness. Furthermore, the paper analyzes the impact of cultural values on performance appraisal systems, emphasizing the importance of considering power distance and its effects on employee perceptions. The conclusion reinforces the pivotal role of culture in HRM, emphasizing the need for a new outlook on IHRM practices to achieve profitability and competitive advantage in the global business environment.

Running head: CULTURE AND HUMAN RESOURCE FUNCTIONS WITHIN A MNC.
Culture and human resource functions within a MNC
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1CULTURE AND HUMAN RESOURCE FUNCTIONS WITHIN A MNC
Cultural differences often lead to misunderstandings and can obliterate an individual’s
career. The various dimensions of culture as per Greet Hofstede are distance, power, uncertainty,
individualism, avoidance, masculinity, collectivism and femininity. These dimensions describe
the impact of societal culture on the candidate’s values and behaviour. Studies show that culture
has significant impacts on organizations effectiveness (Altaf, 2011) Thus, it can be said that
culture acts as a vital tool in facilitating international human resource management practices.
(Vo, 2014)
The main aim of human resource management is to achieve organisational effectiveness.
This paper deals with the challenges of managing talent globally. It is essential for a global
enterprise to resolve cultural issues and manage its employees.
Recruitment is the most important and risky function of human resource. Cultural gaps
lead to inefficiency and incompetence of even the best of employees. Their candidature becomes
questionable if they are unable to deliver. The cultural values of the recruiter and the cultural
preferences and values of the applicant might differ according to the countries they come from,
thus creating a gap. Moreover, the selection process might differ. It is essential to look for a
candidate who can be well-suited to the culture of the nation otherwise they might not get along
due to communication gap and lifestyle differences and thus end up feeling alienated.
Furthermore, recruiting the right candidate can give an added benefit of long term employee
retention. When employees feel engaged, it imbues a sense of belonging and thus leads to
increased efficiency and productivity.
Training and development is done to inculcate the qualities required by the organisation
within the employees. Furthermore, T&D indicates shifting of industry requirements and the
need to gain competitive advantage. Culture is helpful in defining the way things are taught, how

2CULTURE AND HUMAN RESOURCE FUNCTIONS WITHIN A MNC
candidates grasp it, what they expect from it and how well the teachings are communicated.
(Ugoani, 2016) Different countries depict different cultural values. A study shows that managers
in Asian countries are content and satisfied with training and development in their organisation.
Moreover, managers in Australia, Canada and America, highlighted deficiency in showing softer
and proactive training and development skills. (Ananthram & Chan, 2013) This was so because
the work culture in Asia is collectivist wherein the employees are incorporated into strong in-
groups that protect them and in exchange the employees provide unquestionable lifetime loyalty.
Furthermore, in Canada, Australia and America, the technology is mostly service driven, which
calls for training and development to improve employee skill sets. However, gaps may arise
when companies opt for cost cutting techniques and outsource training at times of economic
crisis. Besides, there is limited training needs evaluation performed in America and elsewhere
thus bringing up new challenges. More to add, it also reflects the collectivist thought process of
Asian managers who are unwilling to report gaps in their organisations training program.
Therefore, we can say that universally there is no familiarity in T&D practices due to the
difference in work culture.
Performance appraisal is a human resource management practice, wherein an employee’s
performance is recorded and assessed. It is an instrument used by companies to measure
employee performance in terms of quantity, cost, quality and time. According to Hofstede,
power distance plays an important role here. Cultures having high power distance have increased
inequality levels and willingly accept the appraisal, however, cultures having low power distance
show reduced levels of inequality and may question the managers regarding their appraisal
decisions. There are two major issues associated with performance appraisal. Firstly, the effect of
national cultural practices on the performance appraisal undertaken by the enterprise, secondly,

3CULTURE AND HUMAN RESOURCE FUNCTIONS WITHIN A MNC
the contribution of the level of similarity between national culture and the characteristics of an
enterprise’s performance appraisal to turnover and absenteeism. PA is different in different
countries as per the national culture and values. An employee from a different cultural
background might find difficulties in adhering to values and practices of the host country thus
leading to absenteeism and reduction in productivity. Hence, we can conclude by saying that
culture plays a pivotal role in human resource functions in a multinational corporation. (Fletcher
& Williams, 2013)
Employees with comprehensive training are seen to deliver more than ones with little or
no training. Diversity in the work field is preferred by many organisations as they see it in a way
of pooling down the competencies. Culture should be construed as an important element in
recruitment, training and development and performance appraisal functions. A new outlook for
IHRM practices may concentrate our thoughts more towards conducting business in the 21st
century to earn profits and gain competitive advantage in the pressure packed international
environment.

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