Managing HR in International Organizations: Cultural Context Essay

This essay delves into the critical role of cultural context within International Human Resource Management (IHRM), particularly in the age of globalization. It emphasizes the necessity for businesses to adapt their HR practices to diverse cultural environments, highlighting factors like legal requirements and cultural norms. The essay extensively analyzes Hofstede's cultural dimensions, including power distance, individualism vs. collectivism, and uncertainty avoidance, to illustrate their impact on IHRM strategies. It explores the practical applications of Hofstede's theory in managing global teams, international negotiations, and marketing. The essay also acknowledges the limitations of Hofstede's model, such as its reliance on specific data and potential for oversimplification, providing a comprehensive overview of the complexities involved in managing human resources across international borders and cultures.

Running Head: IHRM
Managing HR in International Organization
Essay
System04104
11/27/2018

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The Cultural Context of IHRM
In today’s business environment and in the time of globalisation, internationalisation
of business becomes more important for any business organisation for the future growth and
development of the business organisation. However, for doing global operations of any
business usually requires some changes and adoption in the human resource management.
Especially it is essential when a business organisation operates their business in a different
culture and social environment. It is essential for any business organisation to plan their
business operation according to the culture in which it has been operated. Factors that require
change and modifications during international operations of a business organisation are
modifications in legal requirements and culture change. Cultural of a country includes value,
norms, beliefs, attitudes, and behaviour of local people (Hofstede, Hofstede, & Minkov,
2010). However, these factors affect the policies and procedure of a company in their human
resource practices. This research paper of Hofstede, Hofstede, & Minkov (2010), best analyse
the concept of cross-cultural practices in different location of the world, thus it has been
considered as the key research paper for this essay. This research paper also analyses the role
of culture and its impact on international human resource management with the help of its six
dimensional concept of culture and serve as the basis for other research.
What is Culture?
Cultural and social factors affect international HRM. Culture can be defined as value,
norms, perception, customs, beliefs, attitudes, and habits of people of a society that helps
people to bind them together to form a social entity and they learn this from each other
through language and other forms of symbolic languages. According to Fischer (2009),
culture is not fixed in any society or country rather it gradually changes by adopting new
ideas and thoughts and dropping old ones. Culture is (1) Prescriptive: Culture is prescriptive
because it determines the behaviour of people and ensures which behaviour is acceptable or
not in the society. (2) Socially shared: Culture is based on shared values and norms which is
acceptable to the whole society and based on social interaction and creation. (3) Learned:
According to Minkov & Hofstede (2011), culture is normally acquired by learning and it is
not adopted by any people by birth neither can it be inherited genetically (Minkov &
Hofstede, 2011). (4) Subjective: Every society or people have their own culture and
thoughts. People who belong to different culture may have a different idea or opinion about

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same object or situation. (5) Dynamic: Culture is not immune to change rather new ideas are
adopted by the people and old ones dropped by them.
Why do Cultures differ?
Culture is determined by a set of factors that differ from each other and each set of
factors has its own characteristics and culture such as the different climate of a region,
behaviour of people, religion, economic conditions, and level of economy, type of people
produce different cultures (Fischer, 2009). Basic needs like food, shelter, water, clothing, and
security are common for everyone. Hence, their behaviour has common features, but there are
disparities in these features due to the availability of various sources of food, clothing, house,
and climatic conditions (Al-Sarayrah, Obeidat, Al-Salti, & Kattoua, 2016). Similarly,
thinking of people, their living style, thoughts, behaviour pattern, and decision-making style
are different country to country or we can say region to region.
Hofstede Theory and Its implications on Contemporary IHRM
To get deep insight about the impact of culture on IHRM, Geert Hofstede’s theory is
the base for all other research on culture and its impact on the organisation. According to
Hofstede theory, there are six dimensions of national culture, which can also be considered
and applied to the various international organisations and culture. According to Hofstede
theory, culture can be elaborated as collective programming of mind of one group of people
or category of people from another. Hofstede carried out a large number of surveys in more
than 50 countries all over the globe on "the collective programming of mind" (Hofstede,
2011). He worked upon a statistical analysis, which is based upon the answers given by IBM
employees in different countries (Đorđević, 2016). He identified several problems across the
countries where he researched about the culture such as social inequality, the relationship
between a group and an individual, masculinity and femininity, and culture problems related
to aggression and expression of emotions etc. Hofstede named those problems as a power
distance, individualism vs. collectivism, Masculinity vs. Femininity, uncertainty avoidance,
long-term and short-term orientation, and indulgence vs. restraint (Zhang, 2013). Hofstede
studies shows significant characteristics of national culture and its impact on other culture
(international culture) prepare a comparison scale to provide them rating acordingly.

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Source: CLEVERISM (2015)
Vaiman & Brewster (2015) describes in their article that Hofstede's work serves as the
basis for other researches in cross-culture psychology and helps to understand the different
culture within and across the boundary of a nation. Hofstede theory suggests that people from
different culture behave differently and the way they percept the object or situation may be
different from other culture people. The result of Hofstede’s work was that culture has a
positive connection between an individual and society as a whole.
Dimensions of National Culture
There are six dimensions given by Hofstede to determine the impact of culture in
different countries with different people. Hofstede's cultural dimensions theory provide basis
for other cross-cultural communication and in its studies. (1) Power Distance Index:
According to Hofstede first cultural dimension, less power member of a family or of an
organisation think or expect that power distributed unequally among them. However, people
who keep low power distance expect and accept power relations that are consultative or
democratic. (2) Individualism vs. Collectivism: This is the second dimension of Hofstede
theory that focuses on the individual vs. collectivism approach of people. According to
Brewer & Venaik (2011), the focus of this dimension is on the question that people want to
live lone and take care of their self or want to live in a network or society (Brewer & Venaik,
2011). (3) Uncertainty Avoidance index: Through this third cultural dimension of Hofstede

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theory, he described the degree to which people in society are not at ease with uncertainty
and ambiguity. (4) Masculinity vs. Femininity: Masculinity can be defined as the preference
of people in society for achievement, well-reputed status, confidence, heroism, and other
material rewards. In this dimension, the difference between male and female according to
their need, preference, and value has been displayed. (5) Long-Term Orientation vs. Short-
Term Orientation: This dimension is also known as pragmatic vs. normative. It displays the
time horizon that society or people display in a country. Countries with long-term pragmatic,
modest, and are more thrifty. In short-term oriented country people more focuses on legality,
principles, rules, consistency, truth, and they are typically religious. One of the great
examples of short-term orientation country is USA. Coelho (2011) said that the major benefit
of short term-orientation is quick results, such as profit and loss statement of a company
displayed on a quarterly basis (Coelho, 2011). (6) Indulgence vs. Restraint (IVR):
Hofstede’s sixth dimension shows that people having low IVR, they more stress on
overwhelming indulgence and give more priority to rules and regulations. These types of
people strict in nature and very punctual about the work they are doing. People with high
IVR, inspire themselves and others, and satisfied what they are doing in their life. These
types of people inspire others and believe in enjoying life with fun and having fun all the
time, no matter whatever the situation.
Implications of Hofstede’s Theory on Organisations and HRM
In any MNC company, there is always a chance of making new policies and
strategies. Some of such policies or strategies involve risk factor to which company has to
decide whether they should continue with such a plan or opt out for a particular objective or
goal of the organisation. Taking leaders into considerations, those leaders who bear high
power distance cultures have a tendency to be much authorised and that create problems.
Especially this problem arises when these type of leaders are dealing with followers from low
power distance culture who expect leaders to come to the same level. Group or teamwork is
the essential key activities performed in many business organisations (Khastar, Kalhorian,
Khalouei, & Maleki, 2011). For this purpose it is essential to know the Hofstede’s theory and
its all the six dimension to handle the different cultural difference in the organisation. If in a
team both individualistic and collectivist type of people working together then it creates
problems for the team goals and they may face many challenges as their culture is different
and each side handles the issue with a different approach. For example, a person who belongs
to individualistic culture may want to have their views implemented regardless of other

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strategy, views, or thoughts. This might cause problems for the whole team. Those people
who belong to collectivist cultures would like to solve any issue or problem mutually and in
collaboration with all team members. Thus, a manager should aware about the role of
Hofstede theory and its implications on international human resource management. Thus, for
a manager, it is essential to know each and every person and their culture. Again, if we
consider the long-term and short-term orientation dimension of Hofstede's theory, we observe
the approach of the organisation to deal with the situations and their human resources. Short-
term orientation or goal of the organisation needs more dedication and hard work from the
employees to achieve the objective of the organisation (Lee, Lin, & Huang, 2017). The short-
term and long-term orientation depending on whether the persons in the organisation are a
masculine or feminine-cantered culture in nature.
Practical Applications of the theory in Contemporary IHRM
Hofstede is one of the best sociologists of culture and anthropologist if we consider
international business and culture. He shows how culture matters in international business
organisation and human resource management. His theory helps to promote international
business and to understand the cultural sensitivity. It helps people when they interacting with
each other form different country and form different cultures. It is also essential for an
organisation to manage its human capitals according to their culture and make coordination
among a different group of people having a different culture. Thus, the goal of the
organisation can be achieved effectively (Jackson, 2014). The Hofstede’s theory assists in
understanding the culture and promotes international communication among the
organisational members. People who interact in any MNC with different culture people,
Hofstede theory provide insights about other cultures. Actually, Hofstede theory helps a
manager to understand the different culture and communication style of people that is needed
for inspiring and motivating people in the organsition.
As we now that what may be considered perfectly acceptable, authentic, and real in
one country, can be confusing or even offensive in another country. To manage this type of
situation and conflicts arises in the organisation the Hofstede theory provides help to the HR
manager to effectively handle the situation using the six dimensions of the theory (Brewster&
Bennett, 2010). Apart from this, Hofstede theory promotes international negotiation and
international marketing of the organisation by providing an adequate understanding of
different culture and their bargaining power, about their beliefs, values, and norms.

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Limitations of Hofstede’s Model
Even though Hofstede's model is a globally accepted model on cultural differences
and cross-cultural organisations, it has some limitations as well which has been extensively
criticized by other scholars. One of the major drawbacks of this model is that it is based on
inconclusive research. This model has low validity and accuracy levels. According to Venaik,
& Brewer (2013), other weakness of this model is that the research of this theory is based on
a questionnaire and very small sample data, which might not apply everywhere in the world.
One of the most important drawbacks of this model is that Hofstede’s theory believes that
location does not affect employees’ reactions that might be wrong because people behave
differently in different places (Venaik & Brewer, 2013).
Summary
When a company or business organisation operate their business in different places or
countries, then these companies have to face a large number of problems, which arises
because of cultural differences among people. In such an environment, the organisation has to
face a number of conflicts. Thus, it is essential to manage the situation with a better analysis
of the different culture and their value systems. Hofstede’s model is playing a key role in
understanding the multicultural environment by analysing the culture on six dimensions of
culture. Even though it is one of the acceptable models in the world and all other researches
on culture based on this theory, some scholars criticize this model for its limitations and
validity. Although, it is the most effective and crucial model manage the people in the multi-
cultural organisations.

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References
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