Socio Cultural Contexts of IHRM

We know the main challenge was to convince the mangers that the culture is different, the social system is different, the legal principles are different etc. Overall it’s a completely new environment and it is a challenge for the international HR manger to identify these changes and adopt accordingly. This is the main difference between HR and IHRM, in IHRM the manager operates in an alien environment which makes decision making and implementation much difficult. Thus the recruitment and training of these mangers, communication between the head office and the subsidiary becomes more important than in a local operation.

The IHRM is focuses more on how to select, recruit and retain managers for international operations, rather than focusing on how to manage international employees.

Now , we moved along, “expatriates”. An expatriate is an employee who is working and temporary residing in a foreign country (Dowling & Welch, 2004, p.g.5). The fundamental difference between domestic HR and IHRM is that staff are moved across national boundaries, thus expatriates e are born. Hence it is natural in an IHRM subject to focus more on handling these expatriates.

There can be three types of employees in an international firm. Employees from where the firm is headquarted is known as Parent Country Nationals, employees from where the subsidiary is located are known as Host Country Nationals, other country nationals are known as Third Country Nationals (Dowling & Welch, 2004, p.g.5).

Now it started to make sense, IHRM is more complex and complicated than domestic HRM, because now you not only have to have a thorough understanding about the host country, you also need to decide who are we going to use as employees HCN’s, PCN’s or TCN’s, or a mixture of them. If so in what proportions? How can the organization select the right person? How is training, compensating and other activities are carried? we hope to find answers for these questions during the report.

Cross-cultural communication

Similarly, among various countries cross-cultural communication is very necessary so that they can understand each others through religion ,culture, art , literature, foreign policies ,fiscal polices ,etc. such type of bridges of understanding will help to lessen and minimize the gap between two culture. Thirukkural , a noted tamil poet ,who has been translated in more than twenty five languages and who had been famous for ethical themes and brevity, has very aptly remarked on power of speech:

The goodness called goodness of speech

IS goodness which nothing can reach

Since gain or ruin speeches brings

Guard against the slips of tongue

Weight the words and, speak, because

No wealth or virtue words surpass.

They overspeak who do not seek

A few and flawless words to speak

(Gupta .reprint 2004)

It is said that speech is grater than words ,mind is greater than speech ,will is grater than mind consciousness is greater than will ,meditation is greater than will and power of understanding is greater than meditation.sanakumara ,surmonzing narad atma vidya or brahmavidya (knowledge of the supreme) says : power of understanding beings sine quo non for proper meditation ,that’s is greater than meditation . if we cannot correctly understand and discriminate good and bad ,truth and untruth and discriminate between good and bad ,truth and untruth , and the like pairs of opposites ,how can we meditate? Thus there is no doubt that the power of understanding is linked with speech ,one of the tools of communication.

Cultural Differences

That culture played a major role in IHRM as it involves understanding and handling a new culture and a new social system. what aspects should an international HR manager should focus on and how he should respond to cultural differences in an international arena. But the topic had lot more to offer than what I initially anticipated.

Culture is the way in which a group of people solves problems and reconciles dilemmas (Trompenaars & Turner, 2002, p.g.02). There are so many elements in a culture and there is no one way of understanding or defining a culture. But it was evident that having a thorough knowledge about it was essential for those who are engaged in IHRM.

In order to give meaning and understanding to the culture there were several models discussed. However the one that looked most promising and attractive was the Hofstede’s five dimensions. He developed a model that focused ways of measuring a national culture and how these measures might work differently in different context. The cultural values that are important in a national culture, could be reflected in the way business within that country are operated and organized (Hofstede, 2006).

According to the Hofsted’s there are 5 cultural damnations.

Power distance – this is the extent to which power is distributed unequally among the employees in between the higher positions and the lower positions. Eg- India is a high power distance culture ( even have a cast system) and USA is a lower power distance culture.

Individualism vs collectivisms

In a individualistic country people would priorities them self ( USA) where as collectivism country people would priorities group needs.

Uncertainty avoidance

People would try to minimize risk they face in a situation ( avoiding paralysis through analysis ) usually countries with long history and traditions have a high uncertainty avoidance. Countries such as USA well come higher risks.

Masculinity / femininity

Masculine- tough value dominant Eg; success, money, satiates, competition

Feminine- tender values dominant such as personal relationships, care for other’s, quality of life etc. When we take Sri Lanka for a example I think we have feminine culture even though have many masculinity futures. The best example for this is during the tsunami situation whole county get together to help the tsunami victims within ours.

This is an excellent model where you can get a quick idea about something complex as a national culture. we believe this simplicity itself is the major short coming of this model. Hofstede selected a country and gave marks to each dimension, thinking that the culture is static. But we all know that in today’s context culture is anything but static, it changes at a rapid pace, thus a country which was once collectivist could now be individualistic due to many reasons such as economic pressure, government policies etc.

And also Hofstede never took into account the complexity of the task. For an example USA is an individualistic culture, but certain complex projects and operations may force an individual to work as a group to succeed in that particular project. Thus the complexity of the task has forced someone with individualistic character to be collectivistic.

But overall the model is excellent to get a glimpse of what an unknown culture would look like, but we do not believe that you can make sound business decisions based on this model.

Now we had understanding about how to analyze a national culture, and also the importance of culture to employees and international HR managers. It was evident that this should be the starting point of any international HR plan. Decisions should be taken where culture is kept at the center, as the success of implementation will depend on how well international employees accept your plans.