A Human Resource Approach to Cross-Cultural Management

Table of Contents

Executive Summary        2

Introduction        3

Culture        4

National Culture        4

Organisational Culture        5

Recruitment and HR Planning        6

Communication        7

Motivation        8

Managerial Style        9

Training        10

Conclusion and Recommendation        12

References        15

Executive Summary

International human resource management practices play an important role in multinational corporations in terms of increased productivity, performance improvement and survival of the organization. Although HRM across nations can be beneficial to organizations, problems such as cultural differences and managerial style are bound to occur, which hinders the operations of the organization. This paper examines the recognized issues currently faced in Manners Europe, issues like culture, recruitment and HR Planning, communication, motivation and managerial style, and contemporary theories are being applied to analyse the issues in place. Strategies such as cross-cultural training, attractive incentives like holiday trips for local employees, new reward system, employment of Dutch employee, implementation of trainee program, expatriate training, mechanisms for effective communication, more participative management style, strengthening M.B.O strategy and transparent decision making process are recommended to John on how issues should be addressed. This would prepare John and other American managers prior to their arrival in the Netherlands and to conclude, an overall understanding of the host-country environment, culture, laws, and ethical behaviour of employees should be taken into consideration before planning on expanding overseas.  

Introduction

Due to market globalization, organizations are searching for ways to be highly competitive in the market. One possible way for organizations to achieve this strategy is to adopt a multinational way of doing business. This is beneficial to companies because it allows them benefit from economies of scale, allows for creation of wealth and jobs worldwide (George, 2012). Although there are benefits for multinational companies, problems like language and cultural barriers, rules and regulations of the host country, communication, etc. can disrupt multinational operations (Jager, 2011). Nonetheless, it is not the problem that matters, but how multinational organizations manage these problems and still succeed internationally.

Manners Europe is a subsidiary of a large United States corporation. Majority of annual sales from the company originate from manufacturing wholesale, and retail activities in the United States which involves lumber and forest-related products. The Managing Director and Director of Finance, John Wilman and Tom Steiger are faced with difficulties adapting and understanding the way business is run in the Netherlands. The main purpose of this report is to identify the main problems John Wilman is facing in his role as Managing Director of Manners Europe, with provision of recommendation at the end of the report as to how these problems should be addressed in the future.

Culture

Culture is divided into macro (national culture) and micro (organizational culture). “Hofstede in his classic quote viewed culture as the collective programming of the mind that distinguishes the members of one group or category of people from another” (Hofstede, 2001 p.9).  His definition is applicable to both national and organizational culture.

National Culture

National culture consists of underlying value systems, particularly specific to a society or group whereby individuals are motivated to behave in certain ways (Hofstede, 2001).  Hofstede in his study identified five major cultural dimensions; 1) Power Distance is the extent whereby individuals in an organization and institution accept that power is distributed unequally. 2) Uncertainty avoidance is a situation whereby individuals in an organization are threatened by the occurrence of uncertainties and ambiguous situations and strive to avoid these uncertainties by imposing and relying on established rules and social norms so that the operations of the organization are not be affected. 3) individualism/collectivism where individualistic organizations are interested on task achievement and recognition of personal values at the expense of interpersonal relationships, and collectivist culture, where individuals are less differentiated from others, and tend to pursue group goals rather than individual goals. 4) Masculinity/Femininity- in a masculine environment, men are tough, competitive and more focused on material possessions and success while women are soft, modest, maintain personal relationships and are concerned with the quality of life. 5) Long-term/Short-term orientation- companies work towards building strong positions in their markets, and managers are given considerably good amount of time and resources to deliver their own contributions whereas in short-term oriented companies, control systems focuses on past performances and managers are constantly judged based on this.  The diagram below clearly shows the comparison of Hofstede’s national culture between Netherlands and the US.

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                                                                                (Source: http://www.geert-hofstede.com)

The diagram shows that there’s a huge difference between both countries in terms of masculinity and femininity. This significant difference is evident in the case where it was difficult getting an employee to work overtime on the weekend because he had to leave for a tennis lesson with his wife, who wouldn’t go without him. Such an attitude from the case would be difficult to relate to, from the perspective of the American directors, because in America, achievement comes first before social life and managers are more interested in getting the job done on time. This difference in culture should not lead to lack of motivation or continuity for John, but an understanding and appreciation of different cultures should be considered. According to Hall’s study, USA in this context is considered to be a high-context country where Tom was only concerned about getting the job done. There should be a creation of work life balance for Dutch employees.